EXHIBIT 4.1
TECUMSEH PRODUCTS COMPANY
$300,000,000
ADJUSTABLE RATE SENIOR GUARANTEED NOTES DUE MARCH 5, 2011
As of August 5, 2005
TO EACH OF THE CURRENT NOTEHOLDERS
NAMED IN ANNEX 1 HERETO:
Ladies and Gentlemen:
TECUMSEH PRODUCTS COMPANY, a Michigan corporation (together with any
successors and assigns, the "COMPANY"), ▇▇▇▇▇▇ agrees with each of you as
follows:
1. PRIOR ISSUANCE OF NOTES, ETC.
The Company issued and sold three hundred million dollars ($300,000,000)
in aggregate principal amount of its 4.66% Senior Guaranteed Notes due March 5,
2011 (the "EXISTING NOTES", and as amended pursuant to this Agreement, and as
may be further amended, restated, modified or replaced from time to time,
together with any such notes issued in substitution therefor pursuant to Section
13 of the Note Purchase Agreement, the "NOTES") pursuant to the Note Purchase
Agreement dated as of March 5, 2003 between the Company and the purchasers named
in Schedule A thereto, as amended by that certain Amendment and Waiver No. 1 to
Note Purchase Agreement (the "FIRST AMENDMENT AGREEMENT") dated as of June 30,
2005 (as amended by the First Amendment Agreement, the "EXISTING NOTE PURCHASE
AGREEMENT" and, as amended pursuant to this Agreement and as may be further
amended, restated or otherwise modified from time to time, the "NOTE PURCHASE
AGREEMENT"). The Company represents and warrants to each of you that the
register kept by the Company for the registration and transfer of the Notes
indicates that each of the Persons named in Annex 1 hereto (collectively, the
"CURRENT NOTEHOLDERS") is currently a holder of the aggregate principal amount
of the Notes indicated in such Annex.
2. REQUEST FOR CONSENT TO AMENDMENTS
The Company requests that each of the Current Noteholders agree to the
amendment of certain provisions of the Existing Note Purchase Agreement as
provided for by Section 5 of this Agreement (the "AMENDMENTS").
3. WARRANTIES AND REPRESENTATIONS
To induce the Current Noteholders to enter into this Agreement and to
agree to the Amendments, the Company warrants and represents to you, as of the
Effective Date, as follows (it being agreed, however, that nothing in this
Section 3 shall affect any of the warranties and representations previously made
by the Company in or pursuant to the Existing Note Purchase
Agreement, and that all of such other warranties and representations, as well as
the warranties and representations in this Section 3, shall survive the
effectiveness of the Amendments).
3.1. NO MATERIAL ADVERSE CHANGE.
Since the date of the financial statements of the Company filed with the
Securities and Exchange Commission with the Company's Quarterly Report on Form
10-Q for the period ended March 31, 2005, and except as reflected in or
contemplated by the financial forecasts provided to the Current Noteholders on
June 16, 2005 (the "PROJECTIONS"), other than the circumstances and financial
conditions giving rise to the failure of the Company to comply with the
provisions of Section 10.3 of the Existing Note Purchase Agreement as at the end
of the fiscal quarter ended June 30, 2005, there has been no change in the
business operations, profits, financial condition, properties or business
prospects of the Company except changes that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
3.2. FULL DISCLOSURE.
Neither the financial statements and other certificates previously
provided to the Current Noteholders pursuant to the provisions of the Existing
Note Purchase Agreement nor the statements made in this Agreement nor the
Projections furnished by or on behalf of the Company to the Current Noteholders
in connection with the proposal and negotiation of the Amendments, taken as a
whole, contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein and herein, taken as a whole,
not misleading. There is no fact relating to any event or circumstance that has
occurred or arisen since June 16, 2005 that the Company has not disclosed to the
Current Noteholders in writing that has had or, so far as the Company can now
reasonably foresee, could reasonably be expected to have, a Material Adverse
Effect. All pro forma financial information, financial or other projections and
forward-looking statements delivered to the Current Noteholders have been
prepared in good faith by the Company based on reasonable assumptions.
3.3. 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). Neither the Company nor the Subsidiary
Guarantors is 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 Effective Date, indebted, or
(b) incur debts that would be beyond any of their ability to pay as
they mature.
3.4. NO DEFAULTS.
Except for the Event of Default which was the subject of the waiver set
forth in the First Amendment Agreement, no event has occurred and no condition
exists that, upon the execution and delivery of this Agreement and the
effectiveness of the Amendments, would constitute a Default or an Event of
Default.
3.5. NO BANKRUPTCY FILING.
Neither the Company nor any Subsidiary (a) is contemplating either an
Insolvency Proceeding with respect to it or the liquidation of all or a major
portion of it's assets or property following the Effective Date and (b) has any
knowledge of any Person contemplating an Insolvency Proceeding against it. As
used herein, the term "Insolvency Proceeding" means any proceeding commenced by
or against any Person under any provision of the United States Federal
Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for
the benefit of creditors, formal or informal moratoria, compositions, or
extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
3.6. TITLE TO PROPERTIES.
The Company and its Subsidiaries have good and sufficient title to or the
legal right to use their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet of the Company delivered pursuant to the provisions
of Section 7.1 of the Existing Note Purchase Agreement (except as sold or
otherwise disposed of in the ordinary course of business) 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 from Liens not permitted by the Note Purchase Agreement.
3.7. TRANSACTION IS LEGAL AND AUTHORIZED; OBLIGATIONS ARE ENFORCEABLE.
(a) The execution and delivery of this Agreement by the Company and
compliance by the Company with all of its respective obligations
hereunder:
(i) is within the corporate powers of the Company;
(ii) is legal and does not conflict with, result in any breach
in any of the provisions of, constitute a default under, or result
in the creation of any Lien upon any Property of the Company or any
Subsidiary under the provisions of, any agreement (other than the
loan agreements evidencing the Specified IRB Debt that have been
waived pursuant to the IRB Waiver Letters), charter instrument,
bylaw or other instrument to which it is a party or by which it or
any of its Property may be bound; and
(iii) does not give rise to a right or option of any other
Person under any agreement or other instrument, which right or
option could reasonably be expected to have a Material Adverse
Effect.
(b) This Agreement has been duly authorized by all necessary action
on the part of the Company and has been executed and delivered by one or
more duly authorized officers of the Company, and each constitutes a
legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except that such enforceability may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
3.8. CERTAIN LAWS.
The execution and delivery of this Agreement by the Company and the
consummation of the transaction contemplated hereby:
(a) is not subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as
amended, the Transportation Acts, as amended, or the Federal Power Act, as
amended, and
(b) does not violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.
3.9. LITIGATION; OBSERVANCE OF AGREEMENTS.
(a) Other than the matters disclosed in the consolidated financial
statements of the Company and its Subsidiaries for the fiscal year ended
December 31, 2004 and the fiscal quarter ended March 31, 2005 (and the
footnotes thereto), 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) Other than the matters disclosed in the consolidated financial
statements of the Company and its Subsidiaries for the fiscal year ended
December 31, 2004 and the quarter ended March 31, 2005 (and the footnotes
thereto), neither the Company nor any Subsidiary is in default under any
term of 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.
3.10. CHARTER INSTRUMENTS; OTHER AGREEMENTS.
Neither the Company nor any Subsidiary is in violation in any respect of
any term of any charter instrument or bylaw. Upon the execution and delivery
hereof and the effectiveness of the
Amendments as provided herein, neither the Company nor any Subsidiary is in
violation or default in any material respect of any term in any agreement (other
than the loan agreements evidencing the Specified IRB Debt, which defaults have
been waived pursuant to the IRB Waiver Letters) or other instrument to which it
is a party or by which it or any of its material property may be bound or
affected. The execution, delivery and performance by the Company of this
Agreement will not conflict with or result in the 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 violate any provision of any statute or other rule or regulation of any
Government Authority applicable to the Company or any Subsidiary.
3.11. 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 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 the Subsidiaries in respect of federal, state or
other taxes for all fiscal periods are adequate.
3.12. GOVERNMENTAL CONSENT.
Neither the Company or any Subsidiary thereof, nor the nature of any of
its or their respective businesses or properties, is such so as to require a
consent, approval or authorization of, or filing, registration or qualification
with, any governmental authority on the part of the Company as a condition to
the execution and delivery of this Agreement.
3.13. FEES.
Neither the Company nor any Subsidiary thereof has paid (or promised to
pay) any amendment fee or any other direct or indirect compensation to any
lender party to the Credit Agreement (in its capacity as a lender) or to any
other creditor of the Company or any Subsidiary (other than the Current
Noteholders) in connection with the transactions contemplated hereby other than
an amendment fee payable to the lenders under the Credit Agreement in the amount
of $100,000.
3.14. INDEBTEDNESS; LIENS.
Schedule 3.14 to this Agreement correctly describes all Indebtedness of
the Company and its Subsidiaries as of the date hereof. Schedule 3.14 to this
Agreement correctly describes all outstanding Liens securing Indebtedness in an
amount greater than $1,000,000 and all other material Liens on property of the
Company or its Subsidiaries as of the date hereof. 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 listed on Schedule 3.14 hereto and no event or
condition exists with respect to any Indebtedness of the Company or any
Subsidiary listed on such schedule 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, other than any such conditions under the
Credit Agreement or the loan agreements with respect to the Specified IRB Debt,
in each case, giving rise to the amendment thereof to be entered into, in the
case of the Credit Agreement, contemporaneously herewith, and in the case of
such loan agreements, as specified in the IRB Waiver Letters.
3.15. AMENDMENT TO CREDIT AGREEMENT.
The Company has delivered to each of the Current Noteholders a true and
correct copy of each of the Credit Agreement and the Specified IRB Documents,
together with, in each case, any and all amendments, modifications and waivers
in respect thereof.
4. COLLATERAL COVENANT
4.1. COLLATERAL.
(a) In consideration for the Required Holders agreeing to the
Amendments contemplated by Sections 5.1 and 5.2 hereof, the Company hereby
agrees and covenants that it will, and will cause each Subsidiary
Guarantor to, on or before September 30, 2005, enter into and deliver such
agreements, documents or instruments of any kind (including, without
limitation, security agreements, mortgages, deeds of trust, UCC financing
statements and opinions of nationally recognized counsel covering such
matters as the Required Holders or the Collateral Agent may reasonably
request), in each case reasonably acceptable to the Collateral Agent and
the Required Holders, granting perfected first priority Liens (subject
only to those Liens permitted under clauses (a) through (k) of Section
10.8) in favor of the Collateral Agent securing Permitted Senior Secured
Debt on (a) all present and future personal property (subject to any
exclusions approved by the Required Holders) of the Company and each
Subsidiary Guarantor located in the United States whether now held or
hereafter acquired by the Company or any such Subsidiary Guarantor,
together with the real property and improvements described in Annex 2 (the
"REAL ESTATE"), and (b) 65% of each class of the issued and outstanding
capital stock of each Material Foreign Subsidiary, in each case, to secure
the Permitted Senior Secured Debt.
For purposes hereof, "Material Foreign Subsidiary" means, at any time, any
Foreign Subsidiary that satisfies one of the following conditions:
(i) the portion of Consolidated Total Assets, as of the end of
the most recently ended fiscal quarter of the Company, attributable
to such Foreign Subsidiary in accordance with GAAP is at least five
percent (5%) of Consolidated Total Assets at such time; or
(ii) the portion of Consolidated EBITDA, for the then most
recently ended fiscal quarter of the Company, attributable to such
Foreign Subsidiary in accordance with GAAP is at least five percent
(5%) of Consolidated EBITDA for such period.
(b) The mortgages or deeds of trust granting Liens on the Real
Estate (the "MORTGAGES") shall contain, among other things, customary
representations and warranties as to title to the Real Estate secured
thereby, as to lack of Liens thereon not permitted by the Financing
Documents, and as to release of Mortgages upon a sale (made in accordance
with Section 10.10 of the Note Purchase Agreement) of the Real Estate
secured thereby; provided, that title insurance (or commitments therefor),
surveys and environmental reports with respect thereto shall not be
required. The Company shall deliver a copy of each deed evidencing the
ownership of the Real Estate by the Company or the applicable Subsidiary.
(c) The Company and each Subsidiary Guarantor shall promptly execute
and deliver to the Collateral Agent each Security Document reasonably
required by the Required Holders or the Collateral Agent.
(d) If the Liens of the Collateral Agent have not been duly
perfected on or prior to September 30, 2005, an Event of Default shall
exist; provided, however, that so long as the Company and its Subsidiaries
have complied, and continue to comply, with all of the terms of this
Section 4.1 and the Security Documents, the failure to perfect the Liens
of the Collateral Agent upon the capital stock of a Material Foreign
Subsidiary shall not result in an Event of Default.
5. AMENDMENTS
5.1. NOTE PURCHASE AGREEMENT AMENDMENTS.
Subject to the satisfaction of the conditions set forth in Section 6, the
Existing Note Purchase Agreement is hereby and shall be amended in the manner
specified in Exhibit A to this Agreement.
5.2. AMENDMENT OF NOTES.
The Existing Notes are hereby and shall be deemed to be, automatically and
without any further action, amended and restated in their entirety as set forth
on Exhibit B; except that the date, registration number and principal amount set
forth in each Existing Note shall remain the same; provided, however, that, at
the request of any Current Noteholder, the Company shall execute and deliver a
new Note or Notes in the form of such Exhibit B in exchange for its Existing
Note, registered in the name of such Current Noteholder, in the aggregate
principal amount of Notes owing to such Current Noteholder on the date hereof
and dated the date of the last interest payment made to such Current Noteholder
in respect of its Existing Notes. Each reference to the "4.66% Senior Guaranteed
Notes due March 5, 2011" in the Existing Note Purchase Agreement, the Guaranty
Agreement and each Joinder Agreement is hereby deleted and replaced with a
reference to the "Adjustable Rate Senior Guaranteed Notes due March 5,
2011". Each other reference to "4.66%" in any of such agreements is hereby
deleted and replaced with the phrase "the Applicable Interest Rate".
5.3. NO OTHER AMENDMENTS; CONFIRMATION.
Except as expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this Agreement, (b) the terms of this
Agreement shall not operate as a waiver by any Current Noteholder of, or
otherwise prejudice any Current Noteholder's rights, remedies or powers under,
the Existing Note Purchase Agreement, the Existing Notes or any other Financing
Document or under any applicable law, and (c) the terms and provisions of the
Existing Note Purchase Agreement, the Existing Notes and each other Financing
Document shall continue in full force and effect.
6. CONDITIONS TO EFFECTIVENESS
This Agreement shall, become effective as of August 5, 2005 "EFFECTIVE
DATE") at such time as the Company and the Required Holders shall have indicated
their written consent hereto by executing and delivering the applicable
counterparts of this Agreement in accordance with Section 17.1 of the Existing
Note Purchase Agreement. It is understood that any Current Noteholder may
withhold its consent for any reason or for no reason, and that, without
limitation of the foregoing, any Current Noteholder hereby makes the granting of
its consent contingent upon satisfaction of each of the following conditions:
(a) the Company shall have delivered to each of the Current Noteholders a
true and correct copy of:
(i) any amendment or waiver to the Credit Agreement entered into on
or prior to the date hereof (to the extent not previously delivered by the
Company), and, in the case of the First Amendment to Credit Agreement to
be entered into on the date hereof, in the form attached hereto as Exhibit
C (the "CREDIT AGREEMENT AMENDMENT"); and
(ii) a waiver by 100% of the holders of each tranche of the
Specified IRB Debt of all defaults or events of default (A) then existing
or (B) arising in connection with the execution and delivery of this
Agreement and the Credit Agreement Amendment, as set forth in the separate
letter agreements evidencing such waiver with respect to such tranche, in
the forms attached hereto as Exhibit D (the "IRB WAIVER LETTERS");
(b) the Company shall have delivered to each Current Noteholder a
certificate of one of its Senior Financial Officers (i) attaching a copy of the
Initial Projections, (ii) acknowledging that such Initial Projections are the
"Initial Projections" referred to in the Note Purchase Agreement and (iii)
certifying that such projections contained therein have been prepared by the
Company on the basis of assumptions which the Company reasonably believed were
reasonable when made in light of the historical performance of the Company and
its Subsidiaries and reasonably foreseeable business conditions, in form and
substance (including the Initial Projections) satisfactory to the Required
Holders;
(c) the Company shall have delivered legal opinions of ▇▇▇▇▇▇, Canfield,
▇▇▇▇▇▇▇ and Stone, PLC and of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, general counsel to the Company,
each in the forms attached hereto as Exhibit E and Exhibit F, respectively;
(d) the Company shall have paid all unpaid fees and disbursements of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel to the Current Noteholders, as reflected
in an invoice presented to the Company on or before the date hereof;
(f) the Company shall have paid all unpaid fees and disbursements of
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, prior special counsel to the Current Noteholders, as
reflected in an invoice presented to the Company on or before the date hereof;
(g) the Company shall have reimbursed ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ & Co. LLC,
financial advisor to the Current Noteholders, for all of its reasonable
out-of-pocket expenses in connection with the transactions contemplated hereby,
as reflected in an invoice presented to the Company on or before the date
hereof; and
(h) the Company shall have paid an amendment fee to the Current
Noteholders in the aggregate amount of $150,000, to be paid by wire transfer of
immediately available funds in accordance with the wiring instructions set forth
on Annex 3 (by their execution and delivery hereof, the Current Noteholders
hereby consent to such fee being paid in such manner).
Any amendment entered into in connection with the transaction contemplated
hereby shall be in form and substance satisfactory to the Required Holders,
provided that execution and delivery of this Agreement by the Required Holders
shall be deemed to be an affirmation that such amendment is so satisfactory.
7. DEFINED TERMS
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the Note Purchase Agreement.
8. EXPENSES
Whether or not any of the Amendments becomes effective, the Company will
promptly (and in any event within thirty (30) days of receiving any statement or
invoice therefor) pay all fees, expenses and costs relating to this Agreement,
including, but not limited to, (a) the reasonable cost of reproducing this
Agreement and the other documents delivered in connection herewith, (b) the
reasonable fees and disbursements of the Current Noteholders' special counsel,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, incurred in connection with the preparation, negotiation
and delivery of this Agreement and related documentation, to the extent not paid
pursuant to Section 6(e) above and (c) up to $100,000 of fees, costs and
expenses of the Collateral Agent (on behalf of the Current Noteholders and the
Lenders) incurred in connection with the perfection of the Liens of the
Collateral Agent (under applicable law of jurisdictions other than the United
States) on the capital stock of Material Foreign Subsidiaries. This Section 8
shall not be construed to limit the Company's obligations under Section 15.1 of
the Note Purchase Agreement.
9. MISCELLANEOUS
9.1. PART OF NOTE PURCHASE AGREEMENT, FUTURE REFERENCES, ETC.
This Agreement shall be construed in connection with and as a part of the
Existing Note Purchase Agreement and, except as expressly amended by this
Agreement, all terms, conditions and covenants contained in the Existing Note
Purchase Agreement, the Existing Notes and the other Financing Documents are
hereby ratified and shall be and remain in full force and effect. Any and all
notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this Agreement may refer to the Note
Purchase Agreement without making specific reference to this Agreement, but
nevertheless all such references shall include this Agreement unless the context
otherwise requires.
9.2. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF MICHIGAN, UNITED STATES OF AMERICA,
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.
9.3. DUPLICATE ORIGINALS, EXECUTION IN COUNTERPART.
Two (2) or more duplicate originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and shall become effective at the time provided in Section 6
hereof, and each set of counterparts that, collectively, show execution by the
Company and each consenting Current Noteholder shall constitute one duplicate
original.
9.4. BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit of the
Company and the Current Noteholders and their respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; NEXT PAGE IS SIGNATURE PAGE.]
If this Agreement is satisfactory to you, please so indicate by signing
the applicable acceptance on a counterpart hereof and returning such counterpart
to the Company, whereupon this Agreement shall become binding among the Company
and you in accordance with its terms.
Very truly yours,
TECUMSEH PRODUCTS COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Treasurer and
Chief Financial Officer
Accepted:
NEW YORK LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
BY: NEW YORK LIFE INVESTMENT MANAGEMENT LLC, ITS INVESTMENT MANAGER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT
BY: NEW YORK LIFE INVESTMENT MANAGEMENT LLC, ITS INVESTMENT MANAGER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
STATE FARM LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President -- Common Stocks
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President -- Common Stocks
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Investment Officer
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Investment Officer
EMPLOYERS REINSURANCE CORPORATION
BY: GE ASSET MANAGEMENT INCORPORATED, ITS INVESTMENT MANAGER
BY: GENWORTH FINANCIAL ASSET MANAGEMENT, LLC, ITS INVESTMENT ADVISOR
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
FIRST COLONY LIFE INSURANCE COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Investment Officer
GE LIFE AND ANNUITY ASSURANCE COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Investment Officer
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Ass't. V.P., Investment
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Ass't. V.P., Investment
LONDON LIFE AND CASUALTY (BARBADOS) CORPORATION
BY: ORCHARD CAPITAL MANAGEMENT, LLC, AS INVESTMENT ADVISER
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Ass't. V.P., Investment
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Ass't. V.P., Investment
LONDON LIFE INSURANCE COMPANY
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Authorized Signatory
THE GREAT-WEST LIFE ASSURANCE COMPANY
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Authorized Signatory
PACIFIC LIFE INSURANCE COMPANY
(NOMINEE: MAC & CO.)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
▇▇▇▇▇▇▇▇▇-PILOT LIFE INSURANCE COMPANY
By: ___________________________
Name:
Title:
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
By: ___________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇ PILOT LIFEAMERICA INSURANCE COMPANY
By: ___________________________
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
BY: BABSON CAPITAL MANAGEMENT LLC, AS INVESTMENT ADVISER
By: ___________________________
Name:
Title:
C.M. LIFE INSURANCE COMPANY
BY: BABSON CAPITAL MANAGEMENT LLC, AS INVESTMENT SUB-ADVISER
By: ___________________________
Name:
Title:
MASSMUTUAL ASIA LIMITED
BY: BABSON CAPITAL MANAGEMENT LLC, AS INVESTMENT ADVISER
By:
---------------------------
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By:
---------------------------
Name:
By:
---------------------------
Name:
Authorized Signatories
AMERICAN HERITAGE LIFE INSURANCE COMPANY
By:
---------------------------
Name:
By:
---------------------------
Name:
Authorized Signatories
NATIONWIDE LIFE INSURANCE COMPANY
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
NATIONWIDE MUTUAL INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
TRANSAMERICA LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Sr. Vice President
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Sr. Vice President
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Sr. Vice President
HARTFORD LIFE INSURANCE COMPANY
BY: HARTFORD INVESTMENT SERVICES, INC., AS AGENT AND ATTORNEY-IN-FACT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
HARTFORD UNDERWRITERS INSURANCE COMPANY
BY: HARTFORD INVESTMENT SERVICES, INC., AS AGENT AND ATTORNEY-IN-FACT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VP, Private Placements
PIONEER MUTUAL LIFE INSURANCE COMPANY
BY: AMERICAN UNITED LIFE INSURANCE COMPANY, ITS AGENT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VP, Private Placements
THE STATE LIFE INSURANCE COMPANY
BY: AMERICAN UNITED LIFE INSURANCE COMPANY, ITS AGENT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VP, Private Placements
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:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Fixed Income Securities
The undersigned Guarantors hereby acknowledge and agree to the terms and
provisions contained herein, agree to be bound by the terms of Section 4 hereof,
and consent to the Company's execution hereof:
CONVERGENT TECHNOLOGIES INTERNATIONAL, INC.
▇▇▇▇▇▇▇ HOLDINGS, INC.
▇▇▇▇▇▇▇ PRODUCTS, INC.
EUROMOTOR, INC.
EVERGY, INC.
FASCO INDUSTRIES, INC.
LITTLE GIANT PUMP CO.
MANUFACTURING DATA SYSTEMS, INC.
MP PUMPS, INC.
TECUMSEH CANADA HOLDING COMPANY
TECUMSEH COMPRESSOR COMPANY
TECUMSEH INVESTMENTS INC.
TECUMSEH POWER COMPANY
TECUMSEH PUMP COMPANY
▇▇▇ ▇▇▇▇▇ GEAR COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ PROPERTY COMPANY, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
ANNEX 1
CURRENT NOTEHOLDERS AND PRINCIPAL AMOUNTS
OUTSTANDING PRINCIPAL
AMOUNT OF NOTES HELD
NAME OF CURRENT NOTEHOLDER AT JUNE 30, 2005
------------------------------------------------------------------ ---------------------
New York Life Insurance Company $ 23,333,333.33
New York Life Insurance and Annuity Corporation $ 13,750,000.00
New York Life Insurance and Annuity Corporation $ 416,666.66
Institutionally Owned Life Insurance Separate Account
State Farm Life Insurance Company $ 31,666,666.67
State Farm Life and Accident Assurance Company $ 1,666,666.67
Hare & Co. $ 12,500,000.00
(as nominee for General Electric Capital Assurance Company)
Hare & Co. $ 4,166,666.67
(as nominee for GE Capital Life Assurance Company of New York)
▇▇▇▇ & Co. $ 4,166,666.67
(as nominee for Employers Reinsurance Corporation)
Hare & Co. $ 4,166,666.67
(as nominee for First Colony Life Insurance Company)
Hare & Co. $ 4,166,666.67
(as nominee for GE Life and Annuity Assurance Company)
Great-West Life & Annuity Insurance Company $ 12,500,000.00
London Life Insurance Company $ 8,333,333.33
Mac & Co. $ 4,166,666.67
(as nominee for The Great-West Life Assurance Company)
London Life and Casualty (Barbados) Corporation $ 4,166,666.67
Mac & Co. (as nominee for Pacific Life Insurance Company) $ 20,833,333.33
Jefferson-Pilot Life Insurance Company $ 7,500,000.00
Jefferson Pilot Financial Insurance Company $ 5,833,333.33
Jefferson Pilot Life America Insurance Company $ 3,333,333.34
Massachusetts Mutual Life Insurance Company $ 13,583,333.32
C.M. Life Insurance Company $ 2,666,666.67
▇▇▇▇▇▇▇ & Co. $ 416,666.67
(as nominee for MassMutual Asia)
Allstate Life Insurance Company $ 10,000,000.00
Allstate Life Insurance Company of New York $ 4,166,667.00
American Heritage Life Insurance Company $ 2,500,000.00
Nationwide Life Insurance Company $ 7,500,000.00
Annex 1
OUTSTANDING PRINCIPAL
AMOUNT OF NOTES HELD
NAME OF CURRENT NOTEHOLDER AT JUNE 30, 2005
------------------------------------------------------------------ ---------------------
Nationwide Life and Annuity Insurance Company $ 6,250,000.00
Nationwide Mutual Insurance Company $ 2,916,666.67
Transamerica Life Insurance Company $ 6,250,000.00
Transamerica Occidental Life Insurance Company $ 3,125,000.00
Transamerica Life Insurance and Annuity Company $ 3,125,000.00
Hartford Life Insurance Company $ 6,666,666.66
Hartford Underwriters Insurance Company $ 3,333,333.33
American United Life Insurance Company $ 6,250,000.00
Pioneer Mutual Life Insurance Company $ 625,000.00
The State Life Insurance Company $ 625,000.00
Ameritas Life Insurance Corp. $ 1,666,666.67
Chimebridge & Company $ 833,333.33
(as nominee for Acacia National Life Insurance Company)
Ameritas Variable Life Insurance Company $ 833,333.33
Annex 1
ANNEX 2
REAL PROPERTY
PROPERTY LOCATION
--------------------------
CITY STATE GROUP
------------- -------- ----------------------
Tecumseh Michigan Compressor
Cassville Missouri Electrical Components
▇▇▇▇▇ Missouri Electrical Components
▇▇▇▇▇ Rapids Michigan Electrical Components
Salem Indiana Engine and Power Train
Oklahoma City Oklahoma Pump
PROPERTY LOCATION
----------------------------------
ADDRESS CITY STATE DESCRIPTION
------------------ -------- -------- ----------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporate Office
Annex 1
ANNEX 3
AMENDMENT FEE WIRING INSTRUCTIONS
Bank of America
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA Routing No.: ▇▇▇▇-▇▇▇▇-▇
Account No.: 94210-65313
Annex 1
EXHIBIT A
AMENDMENTS TO EXISTING NOTE PURCHASE AGREEMENT
1. Section 7.1(g) of the Existing Note Purchase Agreement is hereby amended
by relettering such section as Section 7.1(j), and new Sections 7.1(g),
(h) and (i) are hereby added to Section 7.1 immediately following Section
7.1(f) to read in their entireties as follows:
"(g) Revised Business Plan - (i) not later than February 28, 2006, a
revised business plan for the fiscal years of the Company 2006 through
2008 (the "Revised Business Plan"), and (ii) thereafter, upon the request
of any holder of Notes, a copy of the most recent business plan of the
Company, in each case approved by the board of directors of the Company,
setting forth in reasonable detail income statements, balance sheets and
statements of cash flow with respect to the Company and its Subsidiaries
on a consolidated and consolidating basis, and for each of the Company's
reporting segments, in each case prepared in a manner consistent with the
Initial Projections and otherwise containing substantially the same kind,
type and detail of information as was supplied to and reviewed by ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ & Co. LLC, financial advisor to the holders of Notes
("CDG") in connection with the Second Amendment;"
"(h) Specified Covenant Compliance Period Deliveries -
(i) not later than 30 days after the end of each fiscal month
of the Company ending during the Specified Compliance Period, a
reporting package which sets forth in reasonable detail income
statements, balance sheets and statements of cash flow with respect
to the Company and its Subsidiaries on a consolidated and
consolidating basis, and for each of the Company's reporting
segments, and including a variance report, in each case prepared in
a manner consistent with its practices on the Second Amendment
Effective Date and containing substantially the same kind, type and
detail of information as was supplied to and reviewed by CDG on
reports of such type delivered to CDG by the Company in connection
with the Second Amendment;
(ii) not later than 45 days after the end of each fiscal
quarter of the Company occurring during the Specified Compliance
Period, a report explaining variances from the Initial Projections
or (after the delivery thereof) the Revised Business Plan, as
applicable, with respect to such fiscal quarter, in each case
prepared in a manner consistent with its practices on the Second
Amendment Effective Date and containing substantially the same kind,
type and detail of information as was supplied to and reviewed by
CDG on the report of such type delivered to CDG by the Company in
connection with the Second Amendment;
(iii) promptly, and in any event within 5 Business Days of
receipt thereof, each report delivered by AlixPartners LLC to the
Company's board of directors or any committee thereof from time to
time during the Specified Covenant Compliance Period; and
Exhibit A-1
(iv) on September 1, 2005 and on the first day of each
succeeding fiscal month (or the first Business Day thereafter) of
the Company occurring during the Specified Compliance Period, a
rolling 6 week treasury cash flow forecast which sets forth in
reasonable detail projected cash receipts and disbursements of the
Company and its Subsidiaries, together with the outstanding
principal balances of the loans and availability under the Credit
Agreement and an explanation of any borrowings, payments and other
activity of the Company and its Subsidiaries under the Credit
Agreement;"
(i) (A) not earlier than January 1, 2006 and not later than February
28, 2006, and (B) not earlier than July 1, 2006 and not later than August
31, 2006, in each case, projections (collectively, the "Supplemental
Projections") prepared by the Company and in the form submitted to its
board of directors setting forth Projected EBITDA for each Business
Segment and Projected Consolidated EBITDA, in each case for each fiscal
quarter of the immediately following period of six fiscal quarters of the
Company, such projections to be prepared in a manner consistent with the
Initial Projections, and certified by a Senior Financial Officer of the
Company as having been prepared by the Company on the basis of assumptions
stated therein which the Company reasonably believed were reasonable when
made in light of the historical performance of the Company and its
Subsidiaries and reasonably foreseeable business conditions; and"
2. Section 7.2(a) of the Existing Note Purchase Agreement is hereby amended
by inserting "and Section 10.12 through Section 10.15" immediately
following "Section 10.2 through Section 10.10" in the third line thereof.
3. Section 8.1 of the Existing Note Purchase Agreement is hereby amended by
inserting "or 8.8" after "8.3" in the fifth line thereof.
4. Section 8.4 of the Existing Note Purchase Agreement is hereby amended by
inserting "or 8.8" after "Section 8.3" in the second line thereof.
5. Section 8.7 of the Existing Note Purchase Agreement is hereby amended by
(a) inserting "or Section 8.8" after each reference to "Section 8.2"
therein; and
(b) amending and restating the definition of "Remaining Schedule
Payments" set forth therein to read in its entirety as follows:
""Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal
and interest thereon (calculated as if the Applicable Interest Rate
were 4.66% per annum) that would be due after the Settlement Date
with respect to such Called Principal if no payment of such 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
Exhibit A-2
pursuant to Section 8.2, 8.8 or 12.1 (assuming such interest accrued
at the rate of 4.66% per annum)."
6. A new Section 8.8 is hereby added immediately following Section 8.7 to
read in its entirety as follows:
"Section 8.8 Prepayments From Proceeds of Special Prepayment Events.
(a) If in connection with any Special Prepayment Event in any
fiscal year, the Net Proceeds Amount received by the Company or any
Subsidiary with respect to such Special Prepayment Event plus the
aggregate of all Net Proceeds Amounts received by the Company or any
Subsidiary in such fiscal year, exceeds $15,000,000 (the amount of
any such excess being referred to herein as the "Excess Proceeds
Amount") the Company or such Subsidiary shall offer to prepay each
outstanding Note in accordance with the procedures set forth in
Section 8.2 hereof, in a principal amount which, when added to the
Make-Whole Amount applicable thereto, equals the Ratable Portion of
such Note. Unless any holder of a Note rejects such offer of
prepayment in writing at least 3 days prior to the date specified
for prepayment in the notice given in accordance with the procedures
set forth in Section 8.2 hereof, such holder will be deemed to have
accepted such offer (for purposes of the preceding sentence only,
the Company nevertheless will be deemed to have paid an amount equal
to the Ratable Portion of any Note for which the Company has
received such a rejection notice). "Ratable Portion" for any Note on
any date means an amount equal to the product of (x) the Excess
Proceeds Amount on such date multiplied by (y) a fraction the
numerator of which is the outstanding principal amount of such Note
on such date and the denominator of which is the Secured Debt
Exposure Amount.
(b) Deposit of Bank Proceeds to Cash Collateral Account. If
and to the extent the Company's application of any net proceeds of
asset dispositions, casualty losses and condemnation events to the
payment of outstanding loans under the Primary Credit Facility would
permanently reduce the aggregate commitment of the lenders party
thereto to an amount less than $75,000,000, the amount of such net
proceeds the payment of which would result in such a reduction in
commitment shall not be paid to such lenders and shall instead be
paid directly to the Bank Cash Collateral Account."
7. Section 9.6 of the Existing Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 9.6. Further Assurances.
(a) Guarantees. 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 Primary Credit Facility, (iii) is
a Material Domestic Subsidiary, or (iv) directly or indirectly
guarantees or becomes obligated under any Indebtedness
Exhibit A-3
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.
(b) Collateral. The Company will promptly notify the
Collateral Agent and the holders of Notes of the formation,
acquisition or existence of any Subsidiary that is or should be a
Subsidiary Guarantor that has not executed Security Documents
pledging all of its property or the acquisition of any assets on
which a Lien is required to be granted and that is not covered by
existing Security Documents. The Company will promptly execute and
deliver, and cause each Subsidiary Guarantor to execute and deliver,
promptly upon the request of the Required Holders or the Collateral
Agent, such additional Security Documents, Guaranties and other
agreements, documents and instruments, each in form and substance
satisfactory to the Required Holders and (in the case of the
Security Documents) the Collateral Agent, sufficient to grant the
Guaranties and ▇▇▇▇▇ contemplated by this Agreement and the Security
Documents. The Company shall deliver, and cause each Subsidiary
Guarantor to deliver, to the Collateral Agent all original
instruments payable to it with any endorsements thereto required by
the Collateral Agent. Additionally, the Company shall execute and
deliver, and cause each Subsidiary Guarantor to execute and deliver,
promptly upon the request of the Required Holders or the Collateral
Agent, such certificates, legal opinions, lien searches,
organizational and other charter documents, resolutions and other
documents and agreements as the Required Holders or the Collateral
Agent may reasonably request in connection therewith. The Company
shall use its best efforts to cause each lessor of real property to
the Company or any Subsidiary Guarantor where any material
collateral securing the Senior Secured Debt is located to execute
and deliver to the Collateral Agent an agreement in form and
substance reasonably acceptable to the Required Holders and the
Collateral Agent duly executed on behalf of such lessor waiving any
distraint, lien and similar rights with respect to any property
subject to the Security Documents and agreeing to permit the
Collateral Agent to enter such premises in connection therewith. The
Company shall execute and deliver, and cause each Subsidiary
Guarantor to execute and deliver, promptly upon the reasonable
request of the Required Holders or the Collateral Agent, such
agreements and instruments evidencing any intercompany loans or
other advances among the Company and its Subsidiaries, or any of
them, and all such intercompany loans or other advances shall be,
and are hereby made, subordinate and junior to the obligations of
the Company and its Subsidiaries under the Financing Documents and
no payments may be made on such intercompany loans or other advances
upon and during the continuance of an Event of Default unless
otherwise agreed to by the Required Holders."
Exhibit A-4
8. Section 10.2 of the Existing Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 10.2. Consolidated Net Worth. The Company will not:
(a) at any time during the Specified Compliance Period, permit
Consolidated Net Worth to be less than $950,000,000; and
(b) at any other time, permit Consolidated Net Worth to be
less than the sum of (i) $750,000,000, plus (ii) an aggregate amount
equal to 50% of Consolidated Net Earnings (but, in each case, only
if a positive number) for any completed fiscal quarter of the
Company beginning with the fiscal quarter ending March 31, 2003."
9. Section 10.3 of the Existing Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 10.3. Core Financial Covenants.
(a) Consolidated Total Debt. The Company will not:
(i) at any time during the Specified Compliance Period,
permit Consolidated Total Debt to exceed the result of (A)
$460,000,000, multiplied by (B) the Remaining Business
Percentage at such time; and
(ii) as at the end of each fiscal quarter of the Company
ending at any other time, permit the ratio of Consolidated
Total Debt at such time to Consolidated Operating Cash Flow
for the period of four complete consecutive fiscal quarters of
the Company ending on such date (taken as a single accounting
period) to exceed 3.00 to 1.00; and
(b) Minimum EBITDA. The Company will not, on the last day of
any fiscal quarter of the Company ending during the Specified
Compliance Period, permit Consolidated EBITDA for the period of four
complete consecutive fiscal quarters of the Company ending on such
day (taken as a single accounting period) to be less than the result
of (i) 90% of Projected Consolidated EBITDA for such period,
multiplied by (ii) the Remaining Business Percentage on such date."
10. Section 10.6 of the Existing Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 10.6. Priority Debt. The Company will not,
(a) at any time during the Specified Compliance Period, permit
Priority Debt to exceed $80,000,000, and
Exhibit A-5
(b) at any other time, permit Priority Debt to exceed 20% of
Consolidated Net Worth determined as of the end of the then most
recently ended fiscal quarter of the Company.
Notwithstanding the foregoing, the Company will not, and will not permit
any Subsidiary to, incur any Priority Debt at any time during the
Documentation Period, other than (i) Indebtedness under existing working
capital credit facilities in accordance with the terms thereof on June 30,
2005, including the maximum amounts permitted to be borrowed thereunder,
and (ii) any Indebtedness of Brazilian Subsidiaries incurred in connection
with the refinancing of certain term loans in favor of Unibanco Brazil,
Itau BBA and Banco Alfa (the "Existing Brazilian Credit Facilities");
provided (A) the proceeds of such refinancing are promptly applied to the
payment in full and cancellation of such Existing Brazilian Credit
Facilities, (B) such refinancing is on terms and conditions at least as
favorable to each Brazilian Subsidiary as those contained in the Existing
Brazilian Credit Facility to which it is a party, and (C) the amount of
Indebtedness incurred under such refinancing does not exceed the amount of
Indebtedness outstanding under the Existing Brazilian Credit Facilities
immediately prior to the prepayment thereof in full."
11. Section 10.7(c) of the Existing Note Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) Indebtedness of one or more Special Purpose Subsidiaries
incurred in connection with a Permitted Foreign Receivables Securitization
Program; and"
12. The reference to "Section 10.3" in the second line of Section 10.7 of the
Existing Note Purchase Agreement is hereby deleted and replaced with the
reference "Section 10.3(a)".
13. Section 10.8 of the Existing Note Purchase Agreement is hereby amended by
relettering clause (j) of such section as Section 10.8(l), by adding new
clauses (j) and (k) to such section immediately following clause (i) of
such section and by amending and restating the last sentence of such
section (which was added pursuant to the terms of the First Amendment
Agreement), in each case, to read in their entireties as follows:
"(j) Liens securing Permitted Senior Secured Debt in favor of the
Collateral Agent; and"
"(k) Liens on assets located outside of the United States owned by
any Foreign Subsidiary securing Indebtedness for borrowed money owing by
such Foreign Subsidiary to banks or other similar financial institutions,
in an aggregate amount for all such Foreign Subsidiaries not to exceed
$40,000,000 at any time, provided that such Indebtedness is otherwise
permitted under Section 10.7."
"Notwithstanding the foregoing the Company will not, and will not permit
any Subsidiary to, incur any Priority Debt at any time during the
Documentation Period other than as permitted under Section 10.6."
Exhibit A-6
14. Section 10.9(a) of the Existing Note Purchase Agreement is hereby amended
by inserting "(the "Successor Corporation") after the phrase "as the case
may be" in the fifth line thereof and by deleting the phrase "this
Agreement and the Notes" in the fifth line from the bottom of such section
and replacing it with "the Financing Documents".
15. Section 10.9(b) of the Existing Note Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(b) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing and the
Successor Corporation is in compliance with Sections 10.3(a)(ii), 10.3(b)
and Section 10.4 (assuming such transaction occurred as of the beginning
of the immediately preceding fiscal quarter of the Company)."
16. Section 10.10 of the Existing Note Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"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 is in compliance with Sections 10.3(a)(ii), 10.3(b) and
Section 10.4 assuming such Asset Disposition occurred as of the end
of the immediately preceding fiscal quarter and the results of
operations of the assets which were the subject of such Asset
Disposition were not included in determining such compliance;
(d) the Company has complied with its obligations under
Section 8.8 with respect to such Asset Disposition;
(e) if such Asset Disposition is made during the Specified
Compliance Period and the Net Proceeds Amount received by the
Company or any Subsidiary with respect thereto plus the Net Proceeds
Amount received with respect to all Specified Prepayment Events
during the then current fiscal year exceeds $15,000,000, the Company
shall have obtained the prior written consent of the Required
Holders (which consent will not be unreasonably withheld) to make
such Asset Disposition; and
(f) if such Asset Disposition is made at any other time and
the sum of (A) the Disposition Value of the property subject to such
Asset Disposition, plus
Exhibit A-7
(B) 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 exceeds 15% of
Consolidated Total Assets determined as of the end of the most
recently ended calendar month preceding such Asset Disposition, the
Company shall have obtained the prior written consent of the
Required Holders (which consent will not be unreasonably withheld)
to make such Asset Disposition."
17. Section 10.12 of the Existing Note Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"Section 10.12. Restricted Payments. The Company will not, and will
not permit any Subsidiary to:
(a) make any Restricted Payment during the Specified
Compliance Period other than quarterly dividends paid by the Company
to holders of its class A and class B common stock (the terms of
which are as constituted as of the Second Amendment Effective Date)
in respect of the performance of the Company and its Subsidiaries in
any fiscal quarter, in an amount not to exceed:
(i) with respect to the fiscal quarter of the Company
ending September 30, 2005, $6,000,000; and
(ii) with respect to each fiscal quarter of the Company
ending thereafter, an amount equal to the lesser of (A)
$6,000,000, and (B) the Excess EBITDA Amount in respect of
such fiscal quarter;
provided, in each case, that no Default or Event of Default, and no
"Unmatured Default" or "Default" under the Credit Agreement, exists
and is continuing at the time any such payment is made; or
(b) prior to January 1, 2008, redeem or otherwise acquire
capital stock or other equity interests (or warrants, rights or
other options to purchase such stock or other equity interests) of
the Company and its Subsidiaries (other than any such acquisition
from, or redemption in favor of, the Company or any Subsidiary),
except solely in exchange for capital stock or other equity
interests of the same Person being redeemed or acquired.
Notwithstanding the foregoing, the Company will not, and will not permit
any Subsidiary to, make any Restricted Payment at any time during the
Documentation Period; provided that the Company may declare the common
stock dividend contemplated to be declared by the Company on or about
August 31, 2005, and pay such dividend, if it has complied with all of its
obligations under Section 4.1 of the Second Amendment."
18. Section 10.13 of the Existing Note Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"Section 10.13. Bank Credit Facility.
Exhibit A-8
(a) Commitment. The Company will not, at any time, permit the
aggregate commitment of the Lenders under its Primary Credit
Facility to be:
(i) less than $75,000,000 at such time;
(ii) greater than $100,000,000 at any time during the
Specified Compliance Period; and
(iii) greater than $200,000,000 at any other time."
(b) Refinancing of Bank Credit Facility. The Company and its
Subsidiaries will be permitted to (and shall, on or prior to
December 21, 2009) refinance the credit facilities provided under
the Credit Agreement, but shall do so only in accordance with the
terms of the Intercreditor Agreement."
19. A new Section 10.14 is hereby added to the Existing Note Purchase
Agreement immediately following Section 10.13 thereof to read in its
entirety as follows:
"Section 10.14. Limitation on Capital Expenditures. The Company will
not at any time during the Specified Compliance Period permit Consolidated
Capital Expenditures for the period beginning on July 1, 2005 and ending
on the last day of the fiscal quarter of the Company then most recently
ended to exceed 110% of Projected Consolidated Capital Expenditures for
such period."
20. A new Section 10.15 is hereby added to the Existing Note Purchase
Agreement immediately following new Section 10.14 thereof to read in its
entirety as follows:
"Section 10.15. Most Favored Lender Status. If at any time the
Company or any Subsidiary is a party to or shall enter into any agreement,
instrument or other document relating to the Indebtedness of the Company
or any Subsidiary (each such agreement, instrument or other document
herein referred to as a "More Favorable Lending Agreement"), which
agreement, instrument or other document includes covenants (whether
affirmative or negative, and whether maintenance or incurrence ) or
defaults or events of default that are more restrictive than those
contained in this Agreement or are not provided for in this Agreement
(each such covenant, default or event of default herein referred to as
"More Favorable Provision"), then the Company shall promptly, and in any
event within 5 Business Days of entering into any such instrument,
agreement or other document (or within 5 Business Days of obtaining
knowledge of any existing agreement, instrument or other document which
contains such a provision), so advise and notify each holder of a Note in
writing. Such writing shall include a verbatim statement (together with an
English translation thereof, if applicable) of such More Favorable
Provision. Thereupon, unless waived in writing by the Required Holders
within 5 Business Days of the holders' receipt of such notice, such More
Favorable Provision shall be deemed incorporated by reference in this
Agreement as if set forth fully herein, mutatis mutandis, effective as of
the date when such More Favorable Provisions became effective under such
other agreement, instrument or document (each such More Favorable
Provision as incorporated herein is herein referred to as an "Incorporated
Provision") and no such Incorporated Provision may thereafter be waived,
amended or
Exhibit A-9
modified under this Agreement without the prior written consent of the
Required Holders; each such Incorporated Provision shall be deemed
incorporated by reference into Section 11(c) of the Agreement as if fully
set forth therein. Thereafter, upon the request of the Required Holders,
the Company and the Required Holders shall enter into an additional
agreement or an amendment to this Agreement (as the Required Holders may
request), evidencing the incorporation of such Incorporated Provision
substantially as those provided for in such More Favorable Lending
Agreement. Each Incorporated Provision shall (i) remain unchanged herein
notwithstanding any subsequent waiver, amendment or other modification of
the More Favorable Provision giving rise to such Incorporated Provision
(except to the extent any such amendment or other modification makes such
More Favorable Provision more restrictive) and (ii) be deemed deleted from
this Agreement at such time as the applicable More Favorable Lending
Agreement shall be fully terminated and no amounts shall be outstanding
thereunder so long as at the time such More Favorable Lending Agreement
shall have been so terminated no Default or Event of Default exists under
the Agreement. Upon the request of the Company or the Required Holders,
the Company and the Required Holders shall enter into an additional
agreement or an amendment to this Agreement (as the Company or the
Required Holders may request) evidencing any of the foregoing referenced
actions."
21. A new Section 10.16 is hereby added to the Existing Note Purchase
Agreement immediately following new Section 10.15 thereof to read in its
entirety as follows:
"Section 10.16. Other Documentation Period Restrictions. The Company
will perform its obligations set forth in the Second Amendment and at no
time during the Documentation Period will the Company or any Subsidiary
(a) repay or prepay any Indebtedness (other than (i) regularly scheduled
payments in the ordinary course of business pursuant to the terms of such
Indebtedness in effect on June 30, 2005, (ii) payments of principal under
the Credit Agreement so long as the outstanding principal balance due
thereunder remains no less than the outstanding principal balance
thereunder at the close of business on June 30, 2005, except to the extent
any such payment is made solely from proceeds of the sale of inventory in
the ordinary course of business, and (iii) any prepayment in full of the
Indebtedness of any Brazilian Subsidiary in connection with a refinancing
of such Indebtedness permitted under Section 10.6), (b) acquire, either
directly or by merger or otherwise, the assets or capital stock of any
ongoing business for consideration in an amount that, when added to the
aggregate consideration paid for all such other acquisitions consummated
in the Documentation Period, exceeds $1,000,000 or (c) transfer any assets
to a Special Purpose Subsidiary."
22. A new Section 10.17 is hereby added to the Existing Note Purchase
Agreement immediately following new Section 10.16 thereof to read in its
entirety as follows:
"Section 10.17. Management of Engine and Power Train Group. The
Company will continue to retain AlixPartners LLC (or a similar firm
acceptable to the Required Noteholders) as interim operating managers of
the Engine and Power Train Group (in accordance with the terms of the
contracts governing the terms of its engagement filed with the Company's
Form 8-K referred to below) until December 31, 2006, to perform such
duties and tasks as are consistent with (a) the scope of engagement set
forth in the
Exhibit A-10
implementation plan set forth in that certain report, dated June 20, 2005,
prepared by AlixPartners LLC and delivered to the holders of Notes, and
(b) the Company's Form 8-K, dated July 20, 2005, filed with the Securities
and Exchange Commission."
23. Section 11 of the Existing Note Purchase Agreement is hereby amended as
follows:
(a) clause (c) thereof is hereby amended and restated in its entirety to
read as follows:
"(c) the Company defaults in the performance of or compliance with
any term contained in Sections 10.2 through 10.10 and Sections 10.12
through 10.16 or in Section 4.1 of the Second Amendment; or"
(b) clause (d) thereof is hereby amended and restated in its entirety to
read as follows:
"(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) or in any other Financing Document 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"
(c) clause (e) thereof is hereby amended and restated in its entirety to
read as follows:
"(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 any Financing Document 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"
(d) clause (f) thereof is hereby amended and restated in its entirety to
read as follows:
"(f) (i) (A) 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
Other Senior Secured Debt that is outstanding beyond any period of
grace provided with respect thereto, or (B) the Company or any
Subsidiary is in default in the performance of or compliance with
any term of any evidence of any Other Senior Secured Debt 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 Other Senior Secured Debt has become, or has been declared (or
one or more Persons are entitled to declare such Other Senior
Secured Debt to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (C) 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 any Other Senior Secured Debt before its regular maturity or
before its regularly scheduled dates of payment or one or more
Persons have the
Exhibit A-11
right to require the Company or any Subsidiary so to purchase or
repay such Other Senior Secured Debt; or
(ii) (A) 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 (B) 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 (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (C) 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 one or more Persons have
the right to require the Company or any Subsidiary so to purchase or
repay Indebtedness in such aggregate principal amount; or"
(e) clause (j) thereof is hereby amended and restated in its entirety to
read as follows:
"(j) any Security Document shall cease to be in full force and
effect for any reason whatsoever (other than in accordance with its terms)
or shall be declared by any court or other Governmental Authority of
competent jurisdiction to be void, voidable or unenforceable against the
grantor thereunder; (ii) the validity or enforceability of any Security
Document against the grantor thereunder shall be contested by such
grantor; (iii) any grantor under any Security Document shall default in
the performance of any obligation under such Security Document or shall
deny that it has any liability or obligation under, or shall contest the
validity or enforceability of, such Security Document, or (iv) any
Security Document shall fail or cease to create a valid and perfected and,
except to the extent permitted by the terms hereof or thereof, first
priority Lien for the benefit of the holders of Notes on any collateral
purported to be covered thereby, or (v) the Company or any Subsidiary
challenges the validity, perfection or priority of any such Lien; or"
24. Section 15.1 of the Existing Note Agreement is hereby amended and restated
in its entirety to read as follows:
"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
Exhibit A-12
such transactions and in connection with any amendments, waivers or
consents under or in respect of any Financing Document (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 any
Financing Document (including, without limitation, any such costs and
expenses of the holders of Notes or any collateral agent acting on their
behalf in connection with any enforcement of or realization against
collateral securing the obligations of the Company and its Subsidiaries
under the Financing Documents) or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with
any Financing Document, 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 by the Financing Documents. 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."
25. Section 17.1 of the Existing Note Agreement is hereby amended by deleting
the first sentence thereof to, but not including, the second comma
appearing therein and replacing it with "The Financing Documents may be
amended, and the observance of any term thereof may be waived (either
retroactively or prospectively)".
26. Section 17.2 of the Existing Note Agreement is hereby amended by deleting
the phrase "hereof, the Guaranty Agreement or the Notes" appearing in
clause (a) and clause (b) thereof and replacing it with "the Financing
Documents".
27. Schedule B to the Existing Note Purchase Agreement is hereby amended by
amending and restating or adding the following definitions, in each case
to appear in their proper alphabetical order:
""Applicable Interest Rate" means (a) prior to the Second Amendment
Effective Date, 4.66% per annum, and (b) on and after the Second Amendment
Effective Date, 6.60% per annum, provided, if the Applicable Rate Reduction
Criteria have been met, such rate shall be reduced to 6.15% per annum
effective on March 8, 2007."
""Applicable Rate Reduction Criteria" means that both of the following are
true:
(a) the Company shall have met the Specified Covenant Reversion
Condition; and
(b) no Default or Event of Default exists and is continuing on
December 31, 2006 and March 8, 2007."
""Bank Cash Collateral Account" means a deposit account with a bank or
other financial institution pledged to the Lenders under the Primary Credit
Facility (or a collateral agent acting on their behalf) to which the Company
will deposit net proceeds of Asset Dispositions otherwise payable to such
Lenders in accordance with Section 8.8(b)."
Exhibit A-13
""Brazil Export Debt" means Indebtedness of Brazilian Subsidiaries owing
to the government of Brazil in an aggregate amount not to exceed the lesser of
(a) $50,000,000 or (b) the aggregate amount of cash and cash equivalents of the
Brazilian Subsidiaries."
""Brazilian Subsidiaries" means Subsidiaries organized under the laws of
Brazil."
""Business Segment" means, at any time, any one or more businesses of the
Company and its Subsidiaries the results of operations of which are reported as
a separate segment in accordance with GAAP and on the Form 10-K of the Company
and its Subsidiaries then most recently filed with the Securities and Exchange
Commission."
""Collateral Agent" means the collateral agent appointed under the
Intercreditor Agreement, in its capacity as collateral agent for the holders of
Permitted Senior Secured Debt, and any successor collateral agent appointed in
accordance with the terms of the Intercreditor Agreement."
""Capital Expenditures" means, with respect to any Person, any direct or
indirect expenditures (by way of acquisition of securities of a Person or the
expenditure of cash or the transfer of property or the incurrence of
Indebtedness) by such Person that in accordance with GAAP are or should be
included in "property, plant and equipment" or in a similar fixed asset account
on the balance sheet of such Person."
""Consolidated Capital Expenditures" means, for any period, the total
amount of Capital Expenditures made by the Company and its Subsidiaries during
such period, determined on a consolidated basis in accordance with GAAP."
""Consolidated EBITDA" means, with respect to any period, Consolidated Net
Earnings for such period plus (without duplication and only to the extent
deducted to calculate Consolidated Net Earnings for such period):
(a) Interest Expense;
(b) provisions for federal, state and local income taxes;
(c) depreciation and amortization, all in accordance with GAAP;
(e) non-cash charges; and
(f) expenses for legal, consulting and advisory services related to
the Second Amendment taken during the fiscal quarters of the Company
ending September 30, 2005 or December 31, 2005, in an aggregate amount not
to exceed $2,000,000."
""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, but excluding:
Exhibit A-14
(a) goodwill impairment charges taken by the Company and its
Subsidiaries for the fiscal quarters of the Company ending June 30, 2005
through (and including) December 31, 2005, but only to the extent such
charges do not exceed $150,000,000,
(b) restructuring charges taken by the Company and its Subsidiaries
during the period of six (6) fiscal quarters of the Company ending
December 31, 2006 in connection with the restructuring of the Engine and
Power Train Group and the Electrical Components Group, but only to the
extent such charges do not exceed $30,000,000; and
(c) valuation allowances recorded by the Company against deferred
tax assets for the fiscal quarters of the Company ending September 30,
2005 and December 31, 2005, but only to the extent such allowances do not
exceed $20,000,000."
""Consolidated Total Debt" means, without duplication, all Indebtedness of
the Company and its Subsidiaries (excluding Indebtedness of Special Purpose
Subsidiaries under a Permitted Foreign Receivables Securitization Program and
Brazil Export Debt), including current maturities of such obligations,
determined on a consolidated basis in accordance with GAAP."
""Credit Agreement" means that certain Credit Agreement, dated as of
December 21, 2004, among the Company, the lenders listed on Schedule 1 thereto,
and JPMorgan Chase Bank, N.A., as Agent, as amended by the First Amendment to
Credit Agreement, dated the Second Amendment Effective Date, and as may be
further amended, modified or supplemented from time to time in accordance with
the terms of the Intercreditor Agreement."
""CDG" is defined in Section 7(g)."
""Default Rate" means that rate of interest that is the greater of (i) the
Applicable Interest Rate plus 2% or (ii) 2.00% over the rate of interest
publicly announced by JPMorgan Chase Bank, N.A. in Chicago, Illinois as its
"base" or "prime" rate."
""Documentation Period" means the period commencing on the Second
Amendment Effective Date and ending on the date the Security Documents, the
Intercreditor Agreement and related documents contemplated by Section 4.1 of the
Second Amendment are fully executed and delivered, but shall in no event be
later than September 30, 2005."
""Electrical Components Group" means the Business Segment described as
such on the Form 10-Q of the Company most recently filed with the Securities and
Exchange Commission on the Second Amendment Effective Date."
""Engine and Power Train Group" means the Business Segment described as
such on the Form 10-Q of the Company most recently filed with the Securities and
Exchange Commission on the Second Amendment Effective Date."
""Event of Loss" means, with respect to any property of the Company and
its Subsidiaries, any loss, destruction or damage of such property or any
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such property, or confiscation of such property or the requisition
of the use of such property."
Exhibit A-15
""Excess EBITDA Amount" means, with respect to any fiscal quarter of the
Company, the greater of (a) zero (0) and (b) and amount equal to the result of
(i) Consolidated EBITDA for the period beginning July 1, 2005 and ending on the
last day of such quarter, minus (ii) Projected Consolidated EBITDA for such
period."
""Excess Proceeds Amount" is defined in Section 8.8."
""Existing Brazilian Credit Facilities" is defined in Section 10.6."
""Financing Documents" means and includes this Agreement, the Notes, the
Guaranty Agreement, the Intercreditor Agreement, the First Amendment, the Second
Amendment, the Security Documents and each amendment to any of the foregoing, in
each case as amended or modified from time to time."
""Foreign Receivables Securitization Program" means one or more
transactions wherein a Foreign Subsidiary transfers under a true sale
transaction receivables of such Foreign Subsidiary to a Special Purpose
Subsidiary which issues or incurs Indebtedness secured solely by such
receivables."
""Foreign Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction other than the United States of America."
""Incorporated Provision" is defined in Section 10.15."
""Initial Projections" means the financial projections with respect to the
Company and its Subsidiaries delivered to the holders of the Notes pursuant to
Section 6(b) of the Second Amendment."
""Intercreditor Agreement" means the intercreditor agreement to be entered
into by the holders of Notes, the lenders under the Credit Agreement, the
holders of the Specified IRB Debt and the Collateral Agent on the terms and
conditions contemplated by the Second Amendment."
""Lender" means a lender under the Primary Credit Facility."
""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
or any Subsidiary to perform its obligations under the Financing Documents, or
(c) the validity or enforceability of the Financing Documents."
""Material Domestic Subsidiary" means, at any time, any Domestic
Subsidiary that satisfies one of the following conditions:
(a) the portion of Consolidated Total Assets, as of the end of the
most recently ended fiscal quarter of the Company, attributable to such
Domestic Subsidiary in accordance with GAAP is at least five percent (5%)
of Consolidated Total Assets at such time; or
Exhibit A-16
(b) the portion of Consolidated EBITDA, for the then most recently
ended fiscal quarter of the Company, attributable to such Domestic
Subsidiary in accordance with GAAP is at least five percent (5%) of
Consolidated EBITDA for such period."
""More Favorable Lending Agreement" is defined in Section 10.15."
""More Favorable Provision" is defined in Section 10.15."
""Net Proceeds Amount" means, without duplication (a) in connection with
any Asset Disposition, the Net Sales Amount with respect to such Asset
Disposition, and (b) in connection with any settlement by the Company or any
Subsidiary, or receipt of payment in respect of, any property insurance claim or
condemnation award, the amount of cash proceeds received by the Company and its
Subsidiaries (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Collateral Agent for the benefit of
the holders of Senior Secured Debt) and other customary fees actually incurred
in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof."
""Other Senior Secured Debt" means Senior Secured Debt other than the
Indebtedness of the Company and its Subsidiaries under and in respect of the
Financing Documents."
""Permitted Foreign Receivables Securitization Program" means one or more
transactions wherein a Foreign Subsidiary transfers under a true sale
transaction receivables of such Foreign 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 the result of (A) $100,000,000 multiplied by (B)
the Remaining Securitization Segments Percentage and (iii) at the time of any
such transaction and immediately after giving effect thereto, no Default or
Event of Default would exist and, after giving effect to such transaction, the
Company would be in compliance with Sections 10.3 and 10.4."
""Permitted Lender Swaps" means any interest rate and currency swaps and
other hedging transactions for which a Lender or any of its Affiliates is the
counterparty, entered into, in each case, (i) to hedge bona fide business risks
and (ii) not for speculative purposes or effected outside the ordinary course of
business."
"Permitted Senior Secured Debt" means and includes any Indebtedness of the
Company and its Subsidiaries under the Financing Documents, the Specified IRB
Documents and the Primary Credit Facility; provided, in the case of the Primary
Credit Facility, the aggregate amount of such Indebtedness does not at any time
exceed the sum of (a) (i) during the Specified Compliance Period, $100,000,000,
and (ii) at any time thereafter $200,000,000, plus (b) the amount of "Banking
Services Obligations" (as defined in the Credit Agreement) outstanding at
Exhibit A-17
such time, and provided further that the holders of all such Indebtedness and
Banking Services Obligations are a party to (and such Indebtedness and Banking
Services Obligations are subject to) the Intercreditor Agreement."
""Primary Credit Facility" means the credit facility provided by the
lenders under the Credit Agreement or any replacement facility entered into with
one or more banks or other financial institutions in compliance with Section
10.13."
""Priority Debt" means the sum, without duplication, of (i) Indebtedness
of the Company secured by Liens not otherwise permitted by Section 10.8(a)
through Section 10.8(j); and (ii) all Indebtedness of all Subsidiaries (other
than Indebtedness of Special Purpose Subsidiaries under a Permitted Foreign
Receivables Securitization Program) not otherwise permitted by clauses (a), (b)
or (c) of Section 10.7."
""Projected Consolidated Capital Expenditures" means, with respect to any
period, Consolidated Capital Expenditures projected for such period in the
Initial Projections."
""Projected Consolidated EBITDA" means, with respect to any period,
Consolidated EBITDA projected for such period as set forth in (a) for purposes
of determining the Required Business Percentage and the Required Securitization
Segments Percentage prior to the delivery of the Supplemental Projections, the
Initial Projections, (b) for such purposes after the delivery of the
Supplemental Projections, the most recent of the Supplemental Projections, and
(c) for all other purposes of this Agreement, the Initial Projections."
""Projected EBITDA" means, with respect to any Sold Business for any
period, that portion of Projected Consolidated EBITDA attributed to such Sold
Business and projected for such period as set forth in (a) prior to the delivery
of the Supplemental Projections, the Initial Projections and (b) after the
delivery of the Supplemental Projections, the most recent of such Supplemental
Projections."
""Remaining Business Percentage" means, at any time, the result (expressed
as a decimal) of:
(a) one (1); minus
(b) the result of
(i) Projected EBITDA for each Sold Business for the
period beginning on the first day of the first fiscal quarter
beginning after such time and ending on last day of the last
fiscal quarter for which such projections have been prepared
under (A) prior to the delivery of the Supplemental
Projections, the Initial Projections and (B) after the
delivery of the Supplemental Projections, the most recent of
the Supplemental Projections, divided by
(ii) Projected Consolidated EBITDA for such period."
Exhibit A-18
""Remaining Securitization Segments Percentage" means, at any time, the
result (expressed as a decimal) of:
(a) one (1); minus
(b) the result of
(i) Projected EBITDA for each Sold Business containing a
Foreign Receivables Securitization Program for the period
beginning on the first day of the first fiscal quarter
beginning after such time and ending on last day of the last
fiscal quarter for which such projections have been prepared
under (A) prior to the delivery of the Supplemental
Projections, the Initial Projections and (B) after the
delivery of the Supplemental Projections, the most recent of
the Supplemental Projections, divided by
(ii) Projected EBITDA for each Business Segment
containing a Foreign Receivables Securitization Program for
such period."
""Revised Business Plan" is defined in Section 7.1(g)."
""Second Amendment" means Amendment No. 2 to Note Purchase Agreement dated
as of August 5, 2005 by and among the Company and the Required Holders."
""Second Amendment Effective Date" means August 5, 2005."
""Secured Debt Exposure Amount" means, at any time, the sum of:
(a) the aggregate outstanding principal amount of the Specified IRB
Debt; plus
(b) the aggregate outstanding principal amount of the Notes; plus
(c) the lesser of:
(i) the aggregate commitment of the Lenders under the Primary
Credit Facility to lend at such time, and
(ii) either (A) if such time is during the Specified
Compliance Period, $100,000,000, and (B) at any other time,
$200,000,000; plus
(d) the lesser of:
(i) the Termination Value at such time with respect to all
Permitted Lender Swaps; and
(ii) $10,000,000."
Exhibit A-19
""Security Documents" means, and is a collective reference to, each
security agreement, mortgage, deed of trust, financing statement, control
agreement, collateral assignment and each other document, agreement, instrument
creating (or purporting to create) any Lien in favor of the Collateral Agent for
the benefit of the holders of Permitted Senior Secured Debt securing the
obligations of the Company and its Subsidiaries under the Financing Documents,
in form and substance reasonably acceptable to the Required Holders."
""Senior Secured Debt" means and includes any Indebtedness of the Company
and its Subsidiaries under the Financing Documents, the Primary Credit Facility
and the Specified IRB Documents; provided the holders thereof are a party to
(and such Indebtedness is subject to) the Intercreditor Agreement."
""Sold Business" means a Business Segment disposed of by the Company or
any Subsidiary after the Second Amendment Effective Date in accordance with the
provisions of Section 10.10."
""Special Prepayment Event" means any Asset Disposition or Event of Loss."
""Special Purpose Subsidiary" means a Wholly-Owned Subsidiary 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)."
""Specified Compliance Period" means the period beginning on the Second
Amendment Effective Date and ending on either (a) March 30, 2007, if the
Specified Covenant Reversion Condition shall have been met and no Default or
Event of Default then exists, or otherwise on (b) the date of payment in full of
the Notes."
""Specified Covenant Reversion Condition" means compliance by the Company
in all respects with the terms and conditions of this Agreement at all times
during the period beginning on (and including) the Second Amendment Effective
Date and ending on (and including) December 31, 2006."
""Specified IRB Debt" means, the indebtedness and other liabilities owing
by the Company and its Subsidiaries under the Specified IRB Documents."
""Specified IRB Documents" means all agreements, instruments and other
documents executed in connection with the following Mississippi Business Finance
Corporation Industrial Development Revenue Bonds issued by the Borrower: (i)
1994 Series A Bonds issued by the Borrower, with a current principal balance of
$4,199,106.50 as of the Second Amendment Effective Date, and (ii) 1997 Series A
Bonds issued originally by the Company (now transferred to Evergy, Inc., a
Wholly Owned Subsidiary of the Company, and guaranteed by the Company, with a
current principal balance of $6,605,662.62 as of the Second Amendment Effective
Date."
""Successor Corporation" is defined in Section 10.9(a)."
""Supplemental Projections" is defined in Section 7.1(i)."
Exhibit A-20
""Termination Value" means, at any time in respect of any one or more
Permitted Lender Swaps, after taking into account the effect of any legally
enforceable netting agreement relating to such Permitted Lender Swaps, (a) at
any time on or after the date such Permitted Lender Swaps have been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) at any time prior to the date referenced in clause (a), the
amounts(s) determined as the mark-to-market values(s) for such Permitted Lender
Swaps, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in hedging arrangements
of the type permitted under the definition of "Permitted Lender Swaps"."
28. Schedule B to the Existing Note Purchase Agreement is hereby amended by
deleting the following definitions appearing therein:
Debt Prepayment Application
First Amendment Effective Date (originally added pursuant to the
First Amendment)
Property Reinvestment Application
Senior Debt
Temporary Waiver Period (originally added pursuant to the First
Amendment)
29. The Existing Note Purchase Agreement is hereby amended by deleting each
surviving reference to "Permitted Receivables Securitization Program"
occurring therein and replacing it with "Permitted Foreign Receivables
Securitization Program".
30. The Existing Note Purchase Agreement is hereby amended by deleting each
surviving reference to "this Agreement, the Guaranty Agreement and the
Notes" (other than the reference appearing in Section 5.19 thereof) and
replacing it with "the Financing Documents".
Exhibit A-21
EXHIBIT B
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
TECUMSEH PRODUCTS COMPANY
ADJUSTABLE RATE SENIOR GUARANTEED NOTE DUE MARCH 5, 2011
No. [R-__] [Date]
$[_______] PPN: [_________]
FOR VALUE RECEIVED, the undersigned, TECUMSEH PRODUCTS COMPANY (herein
called the "COMPANY"), a corporation organized and existing under the laws of
the State of Michigan, hereby promises to pay to [________________], or
registered assigns, the principal sum of [________________] DOLLARS on March 5,
2011, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the Applicable Interest Rate from
the date hereof, payable semiannually, on the fifth day of each March and
September in each year, commencing with the March 5 or September 5 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) the Applicable Interest Rate plus 2% or
(ii) 2% over the rate of interest publicly announced by JPMorgan Chase Bank,
N.A. from time to time in Chicago, Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Bank One, NA or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below.
This Note is one of a series of Senior Guaranteed Notes (herein called the
"NOTES") issued pursuant to the Note Purchase Agreement, dated as of March 5,
2003 (as from time to time amended, the "NOTE PURCHASE AGREEMENT"), between the
Company and the Purchasers named therein and is entitled to the benefits
thereof. The payment and performance hereof is unconditionally guaranteed
pursuant to the Guaranty Agreement dated as of March 5, 2003 of the Subsidiary
Guarantors named therein, and is entitled to the benefits thereof. Each holder
of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) to have made the
Exhibit B-1
representation set forth in Section 6.2 of the Note Purchase Agreement, provided
that such holder 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 holder of any Note will not constitute a non-exempt
prohibited transaction under section 406(a) of ERISA.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such ▇▇▇▇▇▇'s attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates and
in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
This Note 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.
TECUMSEH PRODUCTS COMPANY
By: ___________________________
Name:
Title:
Exhibit B-2
EXHIBIT C
[CREDIT AGREEMENT AMENDMENT]
Exhibit C
EXHIBIT D
[IRB WAIVER LETTERS]
Exhibit D
EXHIBIT E
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ OPINION]
Exhibit E
EXHIBIT F
[GENERAL COUNSEL OPINION]
Exhibit F
SCHEDULE 3.14
EXISTING INDEBTEDNESS AND LIENS
DEBT EXISTING ON 06/30/05 MATURITY CURRENT DEBT
------------------------- ---------- ------------
TEC DO BRASIL
DISCOUNT EXPORT DRAFTS CURRENT
EXIM EXPORT FINANCING CURRENT 147,131
INCENTIVE EXEMPTION
TMT MOTOCO
CURRENT DEBT
PRE-EXPORT/TERM 48,473,669
BNDES, ETC. ** 26,000,000
INTERCO FROM CORP (12,000,000)
-----------
62,473,669
TEC EUROPE
BANK LOC'S & OVERDRAFTS CURRENT 937,633
GOVERNMENT SUBSIDIES 03-10 234,644
TEC INDIA
BANK W/C LOANS CURRENT 14,409,023
TEC EUROPA
BANK W/C LOANS CURRENT 10,358,223
GOVERNMENT SPONSORED 03-12 1,984,751
TEC FASCO THAILAND
BANK W/C LOANS CURRENT 8,276,463
-----------
subtotals 98,821,537
TEC CORPORATE
SERIES A & B IRB'S 03-18 10,804,769
INTERCO TO TMT 12,000,000
OTHER 4,082,573
SENIOR NOTES 03-19 250,000,000
-----------
375,708,879
===========
This debt is secured by certain CNC machines of TMT Motoco.
Schedule 3.14