EXHIBIT 4.2 EXECUTION VERSION
AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT
AMENDMENT NO. 2 (this "Amendment"), dated as of November 3, 2006,
among TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the "Borrower"), the
Lenders party hereto, and CITICORP USA, INC., as administrative agent and
collateral agent for the Lenders (in such capacities, the "Administrative
Agent"), amends certain provisions of the SECOND LIEN CREDIT AGREEMENT, dated as
of February 6, 2006 and amended as of May 5, 2006 (as further amended hereby and
as the same may be further amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the financial institutions
from time to time party thereto as lenders (the "Lenders") and the
Administrative Agent.
WITNESSETH:
WHEREAS, the Borrower has requested, and the Administrative Agent
and each Lender signatory to an Acknowledgement and Consent have agreed to amend
certain amendments of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions hereinafter contained, the parties hereto hereby agree
as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined
herein but defined in the Credit Agreement are used herein as defined in the
Credit Agreement.
2. AMENDMENT TO THE CREDIT AGREEMENT. As of the Second Amendment
Effective Date (as defined in Section 4), the Credit Agreement is hereby amended
as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
deleting the following existing definitions in their entirety and inserting the
following in lieu thereof:
"EBITDA" means, with respect to any Person for any period,
(a) Consolidated Net Income of such Person for such period plus (b)
the sum of, in each case to the extent deducted in the calculation of
such Consolidated Net Income but without duplication, (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items, (iv) any aggregate loss from the sale, exchange
or other disposition of capital assets by such Person outside the
ordinary course of business, (v) depreciation, depletion and
amortization expenses, (vi) non-cash expenses in respect of Fourth
Quarter 2005 Reserves; provided, however, all such non-cash expenses
in Fourth Quarter 2005 Reserves shall not exceed an aggregate amount
of $8,500,000, (vii) certain cash and non-cash restructuring expenses
in connection with the closing or consolidation of certain facilities;
provided, however, the cash portion of such restructuring expenses
shall not exceed an aggregate amount of $2,500,000 in any consecutive
four Fiscal Quarter period, (viii) all other non-cash charges and
non-cash losses for such period that are not payable in cash in any
subsequent period and (ix) certain fees payable to (x) Rothschild
Inc., a financial advisor to the Loan Parties, in connection with
certain corporate services provided by or to be provided by Rothschild
Inc. to the Loan Parties, (y) BBK, Ltd., a financial advisor to the
Loan Parties, in connection with certain financial services provided
or to be provided by BBK, Inc. to the Loan Parties and (z) the Second
Lien Advisors in connection with certain financial due diligence and
monitoring services provided to
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or to be provided by such Second Lien Advisors to the Lenders and the
Second Lien Secured Parties following the Second Amendment Effective
Date for so long as such professional fees and costs are being borne
by the Loan Parties; provided, however, all such fees and costs
payable under clauses (x), (y) and (z) do not exceed $ 2,400,000 per
Fiscal Quarter minus (c) the sum of, in each case to the extent added
in the calculation of such Consolidated Net Income but without
duplication, (i) any credit for income tax, (ii) interest income,
(iii) gains from extraordinary items for such period, (iv) any
aggregate gain from the sale, exchange or other disposition of capital
assets by such Person outside the ordinary course of business and (v)
any other non-cash gains or other items which have been added in
determining Consolidated Net Income, including any reversal of a
charge referred to in clause (b)(viii) above by reason of a decrease
in the value of any Stock or Stock Equivalent. For the avoidance of
doubt, the anticipated Brazilian Tax Benefit shall not constitute a
non-cash gain or other item which have been added in determining
Consolidated Net Income for purposes of clause (c)(v) above.
"Net Cash Proceeds" means proceeds received by any Loan
Party after the Closing Date in cash or Cash Equivalents from any (a)
Asset Sale, other than an Asset Sale permitted under clauses (a), (b),
(c)(i), (d), (e) or (h) of Section 8.4 (Sale of Assets), net of (i)
the reasonable cash costs of sale, assignment or other disposition,
(ii) taxes paid or reasonably estimated to be payable as a result
thereof and (iii) any amount required to be paid or prepaid on
Indebtedness (other than the Obligations) secured by the assets
subject to such Asset Sale, provided, however, that evidence of each
of clauses (i), (ii) and (iii) above is provided to the Administrative
Agent in form and substance satisfactory to it, (b) Property Loss
Event, (c)(i) Equity Issuance (other than any such issuance of common
Stock of Borrower occurring in the ordinary course of business to any
director, member of the management or employee of the Borrower or its
Subsidiaries) or (ii) any Debt Issuance (other than any Debt Issuance
permitted under clauses (a) through (k) of Section 8.1
(Indebtedness)), in each case net of brokers' and advisors' fees and
other costs incurred in connection with such transaction; provided,
however, that in the case of this clause (c), evidence of such costs
is provided to the Administrative Agent in form and substance
satisfactory to it or (d) US Tax Receivable.
"Term Loan Maturity Date" means the third anniversary of the
Second Amendment Effective Date (as defined in Amendment No. 2 to the
Credit Agreement).
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding the following defined terms in alphabetical order:
"Amendment No. 2 to the Credit Agreement" means that certain
Amendment No. 2 to Second Lien Credit Agreement, dated as of November
3, 2006, entered into among the Borrower, the Administrative Agent and
the Lenders party thereto.
"Brazilian Tax Benefit" means the anticipated increase in
the Borrower's net income (not to exceed an aggregate amount of
$7,000,000) resulting from the
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reversal of non-cash tax charges associated with the "PIS" and
"COFINS" taxes under Brazilian Law accrued prior to June 30, 2006.
"Disposition Adjustment" means those adjustments, if any, to
Minimum EBITDA as set forth on Annex A hereto.
"Master Global Manufacture and Supply Agreement" means that
certain Master Global Manufacture and Supply Agreement, substantially
in the form attached hereto as Exhibit D, by and between the Borrower
and TMT.
"Minimum EBITDA" means, for each reporting period set forth
in Section 5.2 hereof, that amount of EBITDA set forth opposite such
period in Section 5.2.
"Second Lien Advisors" means and includes each Person
providing or to provide certain financial due diligence and monitoring
services to the Second Lien Secured Parties following the Second
Amendment Effective Date.
"Subject Units" means the business lines and concomitant
entities set forth on Annex A.
"Target Date" has the meaning ascribed thereto in Section
2.4.
"Target Date Delta" means an amount calculated as follows:
(A) for the July 1, 2007 Target Date, the difference
between (x) the outstanding principal amount of the Term Loans on such
Target Date and (y) $33,600,000; and
(B) for each of the October 1, 2007 and January 1, 2008
Target Dates, the difference between (x) outstanding principal amount
of the Term Loans on such Target Date and (y) the applicable Target
Date Principal Reduction Goal; provided, however, that in no event
shall (A) the Target Date Delta for the October 1, 2007 exceed
$15,300,000 or (B) the Target Date Delta for the January 1, 2008
exceed $18,300,000.
"Target Date Principal Reduction Goal" means, with respect
to each Target Date, the amount set forth opposite the applicable
Target Date in Section 2.4.
"TMT" means TMT-Motoco do Brasil Ltda.
"TMT Brazilian Out-of-Court-Restructurings" means any
agreement between TMT and any creditor in Brazil holding 60% or more
of the aggregate outstanding amount of TMT Indebtedness which share a
common element among them, as defined by applicable Brazilian
Legislation (Law 11.101) of February 9, 2005.
"TMT Debt Documents" means those certain debt agreements set
forth on Annex B hereto.
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"TMT Debt Document Arbitration Proceedings" means any
arbitration proceedings instituted in Brazil in accordance with the
provisions of the agreements set forth on Annex B hereto.
"TMT Enforcement Remedies or TMT Enforcement Remedy" means
the filing of an enforcement action or any ordinary collection law
suit or of a bankruptcy request or other formal proceedings, in each
case filed or instituted in Brazil and arising from, or in connection
with, any indebtedness having a principal amount in excess of
$100,000; provided, however, that such action is not effectively
stayed by a TMT Brazilian Out-of-Court Restructuring or an order of a
court of competent jurisdiction within ten (10) days of the
commencement thereof.
"TMT Indebtedness" means the Indebtedness of TMT outstanding
in an amount equal to $121,373,599.80 on the Second Amendment
Effective Date incurred in connection with certain agreements set
forth on Annex B attached hereto.
"PIK Margin" means, in respect of any Loan outstanding from
and after the Second Amendment Effective Date (as defined in Amendment
No. 2 to the Credit Agreement) a rate equal to 2.00% per annum.
"US Tax Receivable" means a United States income tax refund
with respect to the 2003 tax year of any Loan Party in the amount of
up to $14,000,000.
(c) Section 2.4 of the Credit Agreement is hereby amended by
inserting the letter "(a)" at the beginning of the first sentence thereof and
inserting the following new clause (b) at the end of such section:
(b) If the outstanding principal amount of the Term Loans on
each date set forth below (each a "Target Date") exceeds the amount
set forth opposite such date, (x) on such Target Date, the
Administrative Agent shall notify in writing the administrative agent
under the First Lien Credit Agreement to include an Additional Reserve
(as such term is defined in the First Lien Credit Agreement) until
such time as the Term Loan has been reduced to or below the Target
Date Principal Reduction Goal set forth opposite the applicable Target
Date for which such Additional Reserve was instituted (at which time
the Administrative Agent shall promptly notify the administrative
agent under the First Lien Credit Agreement to remove such Additional
Reserve) and (y) on such Target Date, the Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with
its Ratable Portion, a fee (the "PIK Fee") equal to 10% of the Target
Date Delta for such applicable Target Date, which fee shall be payable
in kind and added to the principal amount of the Term Loans on the
applicable Target Date and shall bear interest as if such PIK Fee were
a Term Loan funded on the applicable Target Date:
July 1, 2007 $33,600,000
October 1, 2007 $18,300,000
January 1, 2008 $ 0
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(d) The third sentence in Section 2.6 (a) of the Credit Agreement
is hereby amended in its entirety and inserting the following in lieu thereof:
Notwithstanding the foregoing, the Prepayment Premium shall
not apply to any optional prepayment made with proceeds of (x) the
sale of Little Giant Pump Company as long as such sale is consummated
on or prior to July 31, 2006, (y) the sale of all or any part of any
entity or combination of parts or entities comprising the Subject
Units on or prior to December 31, 2007 and (z) US Tax Receivable.
(e) Section 2.7 (a) and (b) of the Credit Agreement are hereby
amended in their entirety and inserting the following in lieu thereof:
(a) Subject to clause (c) below, upon receipt by the
Borrower or any Loan Party of Net Cash Proceeds arising from an Asset
Sale (other than any Asset Sale permitted by Section 8.4(j)), Property
Loss Event, Equity Issuance, Debt Issuance or US Tax Receivable, the
Borrower shall immediately prepay the Loans in an amount equal to 100%
of such Net Cash Proceeds; provided, however, that no such prepayment
shall be required under this Agreement to the extent the First Lien
Available Credit (without giving effect to any Additional Reserve
established pursuant to Section 2.4(b)) would be less than $25,000,000
after giving effect to such prepayment.
(b) Upon receipt by the Borrower or any Loan Party of Net
Cash Proceeds arising from an Asset Sale permitted under Section
8.4(j), the Borrower shall prepay the Loans in an amount equal to the
amount of Net Cash Proceeds specified in clause (ii) below.
Notwithstanding anything herein to the contrary, such Net Cash
Proceeds shall be applied as follows: (i) first, the Borrower shall
immediately prepay that portion of the outstanding revolving loans
(and provide cash collateral in respect of letters of credit) under
the First Lien Credit Agreement in an amount equal to that portion of
the First Lien Available Credit created solely by the inclusion of the
assets subject to such Asset Sale in the Borrowing Base (as defined in
the First Lien Credit Agreement) immediately prior to the consummation
of such Asset Sale and (ii) second, the Borrower shall apply the
remaining balance of Net Cash Proceeds after giving effect to the
application of such proceeds made under clause (i) above as a
mandatory prepayment of the Loans.
(f) Sections 2.8 (a) and (b) of the Credit Agreement are hereby
amended in their entirety as follows:
(a) Rate of Interest. All Loans (including any interest added to
the principal amount of the Loans pursuant to clause (b) below) and the
outstanding amount of all other Obligations shall bear interest, in the
case of Loans, on the unpaid principal amount thereof from the date such
Loans are made or in the case of any interest added to the principal amount
of the Loans, including but not limited to any PIK Fee, from the date such
interest or fee is so added and, in the case of such other Obligations,
from the date such other Obligations are due and payable until, in all
cases, paid in full, except as otherwise provided in clause (c) below, as
follows:
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(i) if a Base Rate Loan or such other Obligation, at a
rate per annum equal to the sum of (A) the Base Rate as in effect
from time to time, (B) the Applicable Margin for Term Loans that
are Base Rate Loans and (C) in the case of the Term Loans only
(including any PIK Fee or interest added to the principal amount
of the Term Loans pursuant to Section 2.4(b)), the PIK Margin;
and
(ii) if a Eurodollar Rate Loan, at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the
applicable Interest Period, (B) the Applicable Margin in effect
from time to time during such Eurodollar Interest Period and (C)
in the case of Term Loans only (including any PIK Fee or interest
added to the principal amount of the Term Loans pursuant to
Section 2.4(b)), the PIK Margin.
(b) Interest Payments. (i) Interest accrued on each Base Rate
Loan (other than in respect of the PIK Margin) shall be payable in arrears
(A) on the first Business Day of each calendar month, commencing on the
first such day following the making of such Base Rate Loan, (B) upon the
payment or prepayment thereof in full or in part and (C) if not previously
paid in full, at maturity (whether by acceleration or otherwise) of such
Base Rate Loan, (ii) interest accrued on each Eurodollar Rate Loan (other
than in respect of the PIK Margin) shall be payable in arrears (A) on the
last day of each Interest Period applicable to such Loan and, if such
Interest Period has a duration of more than three months, on each date
during such Interest Period occurring every three months from the first day
of such Interest Period, (B) upon the payment or prepayment thereof in full
or in part and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan and (iii) interest
accrued on the amount of all other Obligations shall be payable on demand
from and after the time such Obligation becomes due and payable (whether by
acceleration or otherwise). Notwithstanding the foregoing, interest accrued
on each Loan in respect of the PIK Margin shall be payable in kind on the
last day of each calendar quarter (based on the average daily principal
amount of the Loans outstanding during such quarter) and such interest
shall automatically be capitalized and added to the outstanding principal
amount of the Term Loans on such date and such capitalized amount shall
bear interest on the same basis as if such capitalized amount were a Term
Loan funded on the Closing Date. Any such capitalized amount shall become
due and payable in cash on the Term Loan Maturity Date.
(g) Section 4.19 (c) is hereby amended by deleting the word "No"
at the beginning such clause and inserting the following:
(c) Except with respect to the Real Property located at 0000
Xxxxxxxx Xxx., Xxxxxx, Xxxx, 00000 (and set forth on Schedule 4.19),
no
(h) Section 5.2 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.2 Minimum EBITDA
Subject to any applicable Disposition Adjustment, the
Borrower shall have, on the last day of each period set forth below,
EBITDA for such period of not less than the amount set forth opposite
such period:
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PERIOD MINIMUM EBITDA
------ --------------
October 1, 2006 through December 31, 2006 ($14,900,000)
October 1, 2006 through March 31, 2007 ($8,000,000)
October 1, 2006 through June 30, 2007 $ 19,800,000
October 1, 2006 through September 30, 2007 $ 55,000,000
January 1, 2007 through December 31, 2007 $ 86,900,000
(i) Section 6.1 of the Credit Agreement is hereby amended by
inserting the following new clause (i) immediately following the existing clause
(h) to read as follows:
(h) Cash Flow Forecast. The Borrower shall deliver on or
prior to the Second Amendment Effective Date (as defined in Section
4), and thereafter as soon as available and in any event not later
than Tuesday at 5:00 pm (New York time) of each week until the earlier
of (x) the date that the Administrative Agent determines in its sole
discretion that there has been no Liquidity Event Period (as defined
under the First Lien Credit Agreement) occurring for 8 consecutive
weeks under the First Lien Credit Agreement and (y) end of the Fiscal
Year of 2007, a 13-week rolling cash flow forecast detailing cash
receipts and cash disbursements on a weekly basis for the next 13
weeks, the information and calculations contained in which shall be
reasonably satisfactory to the Administrative Agent, certified by a
Responsible Officer of the Borrower that such forecast has been
prepared in good faith.
(j) Section 7.6 of the Credit Agreement is hereby amended by
inserting the following immediately following the last sentence thereof:
In addition, the Borrower shall authorize (and hereby does
so authorize) its and its Subsidiaries' investment bankers and other
financial advisors to discuss with the Administrative Agent or any
Lender, during reasonable business hours, the status of the sale of
the Subject Units and such other matters relating thereto.
(k) Article VII (Affirmative Covenants) is hereby amended by
inserting a new Section 7.15 immediately after the existing Section 7.14 to read
as follows:
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, duly pay and discharge in accordance with each Loan
Party's customary business practices in respect thereto, all current
debts, obligations and Accounts payable as they become due in
accordance with such customary business practices ("Current Payment
Terms"); provided, however, under no circumstances shall the Borrower
or any Subsidiary of the Borrower, willfully or otherwise, extend,
modify or change the Current Payment Terms for the purpose of
redirecting or redeploying cash toward repaying the Revolving Credit
Outstandings (as defined under the First Lien Credit Agreement) in an
effort to temporarily inflate Available Credit.
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(l) Section 8.1(f) of the Credit Agreement is hereby amended in
its entirety as follows:
(f) Indebtedness arising from intercompany loans (i) from
the Borrower to any Guarantor, (ii) from any Guarantor to the Borrower
or any other Guarantor, (iii) from any Non-Guarantor Subsidiary to the
Borrower or any Guarantor, (iv) from a Brazilian Subsidiary to any
other Brazilian Subsidiary; provided, however, the aggregate
outstanding principal amount of all such Indebtedness permitted under
this clause (iv) and under Section 8.1(k)(iii)(y)(B) shall not exceed
$10,000,000 or (v) from the Borrower or any Guarantor to any
Non-Guarantor Subsidiary; provided, however, that, in the case of this
clause (v), the Investment in such intercompany loan to such
Non-Guarantor Subsidiary is permitted under Section 8.3(e)(iv)
(Investments);
(m) Section 8.1(k) of the Credit Agreement is hereby amended in
its entirety as follows:
(k) Indebtedness (not otherwise permitted under this Section
8.1) (i) incurred in connection with the Brazilian Receivables
Transactions; provided, however, that the Dollar Equivalent of the
aggregate outstanding principal amount (or equivalent repurchase
obligation) of all such Indebtedness incurred pursuant to this clause
(i) shall not exceed $150,000,000 at any time, (ii) incurred by any
Material Foreign Subsidiary; provided, however, that the Dollar
Equivalent of the aggregate outstanding principal amount of all
Indebtedness permitted under this clause (ii) shall not exceed
$25,000,000 at any time and (iii) incurred by Tecumseh do Brasil Ltda
solely for the purpose of (x) paying a dividend to the Borrower or (y)
making a capital contribution in or a loan to TMT; provided, that, the
Dollar Equivalent of the aggregate outstanding principal amount of all
Indebtedness permitted under this clause (iii) shall not exceed (A)
$25,000,000, in the case of clause (x) above and (B) $10,000,000, in
the case of clause (y) above; provided, further, the outstanding
principal amount of all Indebtedness permitted under this clause (iii)
shall not exceed $25,000,000 at any time.
(n) Section 8.3 (e)(iv) of the Credit Agreement is hereby amended
by adding the following immediately preceding the semi colon at the end of such
clause (e)(iv):
(other than Investments permitted under Section 8.1(f) and
8.1(k))
(o) Section 8.4(h) of the Credit Agreement is hereby amended in
its entirety to read as follows:
(h) the sale of certain Investment Property set forth on
Schedule 8.4(a) in an aggregate Net Cash Proceeds of which shall not
exceed $500,000 so long as such sale is consummated on or prior to
January 1, 2007; and
(p) Section 8.4 of the Credit Agreement is hereby amended by
deleting the word "add" appearing at the end of clause (h) and inserting "and"
at the end of clause (i) and inserting a new subsection (j) immediately
following the existing subsection (i) to read as follows:
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(j) as long as no Default or Event of Default is continuing
or would result therefrom, an Asset Sale for Fair Market Value (i)
payable in cash or (ii) payable in a combination of cash and other
consideration; provided, however, (A) at least 85% of all the
consideration received from such Asset Sale shall be in cash (except
for Asset Sales of certain Subject Units set forth under clause III on
Annex A hereto for which the greater of (x) 25% of the total purchase
price and (y) an amount equal to that portion of the Available Credit
created solely by the inclusion of the assets comprising the Subject
Units set forth under clause III on Annex A hereof included in the
Borrowing Base immediately prior to the consummation of such Asset
Sale, shall be in cash and the balance of the purchase price shall be
permitted to be in the form of the assumption of Indebtedness by the
purchaser of such assets) and (B) the Net Cash Proceeds received from
such Asset Sale is in an amount sufficient to satisfy the Second Lien
Obligations, in respect of the Stock or assets of all or any part of
any entity or combination of parts or entities comprising the Subject
Units; provided, further, that such Net Cash Proceeds from such sale
are applied to the Obligations as set forth in, and to the extent
required by, Section 2.7(b).
(q) Section 8.7 of the Credit Agreement is hereby amended by
adding the following at the end of clause (a)(i):
(other than with any other Loan Party),
(r) Section 8.9 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (e)(i) and inserting "and" at the
end of clause (e)(ii) and inserting a new clause (e)(iii) immediately following
the existing clause (e)(ii) to read as follows:
(iii) a Master Global Manufacture and Supply Agreement
between Tecumseh Power Company and TMT, in connection with the
restructuring of the TMT Indebtedness, with terms and conditions that
are as favorable to the Borrower as those that could be obtained in a
comparable arm's length transaction with a Person not an Affiliate of
the Borrower.
(s) Article VIII (Negative Covenants) is hereby amended by
inserting a new Section 8.19 immediately after the existing Section 8.18 to read
as follows:
Section 8.19 Permanent Availability Reserve and Additional
Reserve
Neither the Borrower nor any of its Subsidiaries shall
change or amend the First Lien Credit Agreement for the purposes of
deleting the definition of "Permanent Availability Reserve" or
"Additional Reserve" or terminating the applicability of such
Permanent Availability Reserve or "Additional Reserve" under the First
Lien Credit Agreement so long as the First Lien Credit Agreement is in
effect. The Administrative Agent hereby agrees and acknowledges that
the administrative agent under the First Lien Credit Agreement shall
have no obligation to hold any Additional Reserve in trust for or for
the benefit of the Lenders.
(t) Section 9.1(m) of the Credit Agreement is hereby amended in
its entirety to read as follows:
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(m) there shall have occurred an "Event of Default" under,
and as defined in, the First Lien Credit Agreement and such Event of
Default shall not have been cured or waived for a period of (A) 30
consecutive days for any "Event of Default" occurring as a result of
any failure to comply with Section 5.2 (Minimum EBITDA) under, and as
defined in, the First Lien Credit Agreement and (B) 45 consecutive
days for any other "Event of Default" under the First Lien Credit
Agreement, in each case in accordance with the terms of the First Lien
Credit Agreement.
(u) Schedule 4.19 to the Credit Agreement is hereby amended by
adding that certain property set forth on Annex C hereto.
(v) Schedule 8.4(b) to the Credit Agreement is hereby amended by
adding that certain property set forth on Annex D hereto.
3. CONSENT AND WAIVER. (a) As of the Second Amendment Effective
Date (as defined in Section 4) and until the earlier of (i) ninety (90) days
from the date that TMT has failed to make a payment that is due and payable
under any TMT Debt Document (as in effect on the date hereof) or has otherwise
failed to comply with the terms of any TMT Debt Document (as in effect on the
date hereof), and (ii) the date that any TMT Enforcement Remedy has occurred,
the Administrative Agent and each Lender signatory to an Acknowledgement and
Consent hereby waive any Default or Event of Default under (A) Section 9.1(e)
(Events of Default) arising from TMT's failure to make any payment on any TMT
Indebtedness when the same becomes due and payable, and (B) Section 9.1(f)
(Events of Default) with respect to TMT solely in connection with any Brazilian
Out-of-Court Restructuring or any TMT Debt Document Arbitration Proceeding that
may occur or be instituted.
(b) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the Borrower's request of a one time extension of the
delivery date of the (x) monthly report solely for the fiscal month of September
2006, due within 30 days after the end of such fiscal month pursuant to Section
6.1(a) (the "September Reporting"), and (y) Borrowing Base Certificate solely
for the fiscal month of September 2006 due no later than 10 Business Days after
the end of such fiscal month pursuant to Section 6.10(a), in each case in clause
(x) and (y) above, to November 14, 2006.
(c) Each Lender signatory to an Acknowledgement and Consent
hereby waives any Default or Event of Default under (i) Section 5.2 of the
Credit Agreement that may have arisen from the Borrower's expected failure to
meet the minimum EBITDA requirement for the Fiscal Quarter ending September 30,
2006 and which will be reflected in the September Reporting to be delivered to
the Administrative Agent by November 14, 2006, (ii)(A) Section 4.1(b) of the
Credit Agreement that may have arisen due to the Borrower's failure to disclose
the property set forth on Annex C in Schedule 4.19 and (B) Section 4.19(c) and
(iii) Section 6.1(a) of the Credit Agreement that may have arisen due to the
Borrower's failure to deliver the monthly report for the fiscal month of August
2006 at the appropriate delivery date.
(d) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the terms contained in Amendment No. 2 to the First Lien
Credit Agreement.
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(e) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the terms contained in Amendment No.1 to the Intercreditor
Agreement, in form set forth hereto as Exhibit A.
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall become effective on the date (the "Second Amendment
Effective Date") when the Administrative Agent shall have received all of the
following, each of which shall be in form and substance satisfactory to the
Administrative Agent:
(a) Certain Documents. The Administrative Agent shall have
received each of the following, in form and substance satisfactory to the
Administrative Agent:
(i) this Amendment, executed by the Borrower, the
Administrative Agent and the Requisite Lenders;
(ii) an Acknowledgment and Consent, in the form set
forth hereto as Exhibit B, duly executed by each of the Requisite Lenders;
(iii) the Consent of Guarantors, in the form set forth
hereto as Exhibit C, executed by each Guarantor;
(iv) an amendment to the Intercreditor Agreement
substantially in the form of Exhibit A hereto, duly executed and delivered to
the Administrative Agent;
(v) written evidence that the Borrower has engaged a
reputable financial advisor, acceptable to the Administrative Agent, to assist
the Borrower and the other Loan Parties on strategic corporate initiatives and
related matters; and
(vi) such additional documentation as the
Administrative Agent or the Lenders may reasonably require.
(b) Second Amendment Effective Date - First Lien. The Second
Amendment Effective Date (as defined in Amendment No. 2 to the First Lien Credit
Agreement) shall have occurred.
(c) Payment of Fees, Costs and Expenses. The Administrative
Agent shall have received payment of all fees, costs and expenses, including,
without limitation, all fees, costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Administrative Agent and counsel for the Lenders) in
connection with this Amendment, the Credit Agreement and each other Loan
Document, as required by Sections 8 and 9 hereof.
(d) Representations and Warranties. Each of the
representations and warranties contained in Section 5 below shall be true and
correct.
(e) No Default or Event of Default. After giving effect to
this Amendment and Amendment No. 2 to the First Lien Credit Agreement, no
Default or Event of Default shall have occurred and be continuing.
11
5. REPRESENTATIONS AND WARRANTIES. On and as of the date hereof,
and as of the Second Amendment Effective Date, after giving effect to this
Amendment and Amendment No. 2 to the First Lien Credit Agreement, the Borrower
hereby represents and warrants to the Lenders as follows:
(a) Each of the representations and warranties contained in
Article IV of the Credit Agreement, the other Loan Documents or in any
certificate, document or financial or other statement furnished at any time
under or in connection therewith are true and correct in all material respects
on and as of the date as if made on and as of such date, except to the extent
that such representations and warranties specifically relate to a specific date,
in which case such representations and warranties shall be true and correct in
all material respects as of such specific date; and
(b) No Default or Event of Default has occurred and is
continuing.
6. CONTINUING EFFECT; NO OTHER AMENDMENTS. Except as expressly
amended hereby, all of the terms and provisions of the Credit Agreement and the
other Loan Documents are and shall remain in full force and effect. The
amendments and consents contained herein shall not constitute an amendment or a
waiver of any other provision of the Credit Agreement or the other Loan
Documents or for any other purpose except as expressly set forth herein.
7. LOAN DOCUMENTS. This Amendment is deemed to be a "Loan
Document" for the purposes of the Credit Agreement.
8. COSTS AND EXPENSES. The Borrower agrees to pay on demand all
reasonable and documented (x) out-of-pocket costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment and other instruments and documents to be delivered pursuant
hereto, including the reasonable and documented fees and out-of-pocket expenses
of counsel for the Administrative Agent and counsel for Lenders with respect
thereto and (y) fees and expenses of the Second Lien Advisors; provided, that
from and after the date on which the outstanding principal amount of the Term
Loans has been reduced to an amount equal to or less than $18,300,000, the Loan
Parties shall have no further responsibility or obligation with respect to the
payment of any fees and costs of the Second Lien Advisors.
9. FEES. As consideration for the execution of this Amendment,
the Borrower agrees to pay to the Administrative Agent, for the account of each
Lender from which the Administrative Agent shall have received (by facsimile or
otherwise) an executed Acknowledgment and Consent with respect to this Amendment
by 5:00 p.m. (New York time) on November 3, 2006, a fee equal to 2.50% of the
outstanding principal amount of the Loans owing to such Lender.
10. GOVERNING LAW; COUNTERPARTS; MISCELLANEOUS.
(a) This Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
(b) This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, each of
which counterparts
12
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
(c) Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
(d) From and after the Second Amendment Effective Date, all
references in the Credit Agreement to the "Agreement" shall be deemed to be
references to such Agreement as modified hereby and this Amendment and the
Credit Agreement shall be read together and construed as a single instrument.
[signature pages follow]
13
IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment No. 2 to the Credit Agreement to be effective for all purposes as of
the Second Amendment Effective Date.
Borrower
TECUMSEH PRODUCTS COMPANY
as Borrower
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President, Treasurer and
Chief Financial Officer
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
Administrative Agent
CITICORP USA, INC.,
as Administrative Agent and Collateral
Agent
By: /s/ Sebastien Delasnerie
------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
Lenders
ABLECO FINANCE LLC,
as Lender, on behalf of itself and its
affiliated assigns
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
*indicates information omitted pursuant to a request for
confidential treatment and filed separately with the
Securities and Exchange Commission.
ANNEX A
SUBJECT UNITS
I. *
II. * and
III. *
CERTAIN DEFINITIONS RELATING TO DISPOSITION ADJUSTED SET FORTH IN SECTION 5.2
"Reporting Period" has the meaning specified on Annex A.
"Electrical Segment" has the meaning specified on Annex A.
"Engines Segment" has the meaning specified on Annex A.
"Segment" means, individually, each of *, * and * as shown on Annex A.
"Cumulative EBITDA Covenant Adjustment" means, with respect to each Reporting
Period, that number set forth opposite such Reporting Period under the heading
"Cumulative EBITDA Covenant Adjustment" in the chart on Annex A.
"Cumulative Sales Projection" means, with respect to each Reporting Period, that
number set forth opposite such Reporting Period under the heading "Cumulative
Sales Projection" in the chart on Annex A.
"Quarterly Projected EBITDA Covenant" means, with respect to each quarter
specified in the applicable chart on Annex A, that number set forth opposite
such quarter under the heading "Quarterly Projected EBITDA Covenant" in the
chart on Annex A.
"Sales Projection" means, with respect to each quarter specified in the
applicable chart on Annex A, that number set forth opposite such quarter under
the heading "Sales Projection" in the chart on Annex A.
In the event of an Asset Sale of a Subject Unit permitted under Section 8.4(j),
Minimum EBITDA shall be adjusted downward, for each reporting period specified
in Section 5.2 (each a "Reporting Period") (other than Reporting Periods ended
prior to the date of the Asset Sale being examined), by the Cumulative EBITDA
Covenant Adjustment amount set forth opposite each of (x) the Reporting Period
in which the Asset Sale takes place for the applicable Segment below and (y)
each Reporting Period subsequent to the Reporting Period in which the Asset Sale
takes place for the applicable Segment below; provided, however, that
(A) in the event the subject Asset Sale is of less than the entire
Segment, then the Cumulative EBITDA Covenant Adjustment specified below for each
Reporting Period shall be an amount equal to the product obtained by multiplying
(x) the Cumulative EBITDA Covenant Adjustment specified for such Reporting
Period by (y) a fraction (i) the numerator of which is that portion of the
Segment's Sales Projection attributable to the assets being sold and (ii) the
denominator of which is Sales Projection for the subject Segment set forth
opposite such Reporting Period; and
(B) shall be further adjusted in accordance with GAAP accounting standards
to reflect the timing of the Asset Sale to reflect the EBITDA contribution to
such Segment's Cumulative EBITDA Covenant Adjustment that was projected for the
Segment (or portion thereof) that was the subject of the Asset Sale as set forth
in the Quarterly Projected EBITDA Covenant table below:
*
CUMULATIVE CUMULATIVE SALES
CUMULATIVE REPORTING EBITDA COVENANT ADJUSTMENT PROJECTION
PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
*
CUMULATIVE EBITDA COVENANT
ADJUSTMENT CUMULATIVE SALES PROJECTION
REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
*:
CUMULATIVE CUMULATIVE SALES
EBITDA COVENANT ADJUSTMENT PROJECTION
REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2
TO FIRST LIEN CREDIT AGREEMENT]
ANNEX B
LIST OF BRAZILIAN DEBT DOCUMENTS
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Banco Nacional De BNDES Facility Agreement No. 05.2.0306.1 dated August 12, 2005 36,803,000
Brasil Ltda Desenvolvimento
Economico E Social -
BNDES ("BNDES"),
Unibanco - Banco Nacional De Guarantee Letter dated August 22, 2005 (re BNDES Financing Contract NIHIL
Uniao De Bancos Desenvolvimento No. 05.2.0306.1)
Brasileiros Economico E Social -
S.A. BNDES ("BNDES"),
TMT Motoco do Unibanco - Uniao De Guarantee Agreement dated August 22, 2005 (re BNDES Financing Contract NIHIL
Brasil Ltda Bancos Brasileiros S.A. No. 05.2.0306.1)
TMT Motoco do Banco Alfa De Advance on Export Contract ACC 06/001123 dated 9.5.2006 1.114.495
Brasil Ltda Investimento S.A. Advance on Export Contract ACC 06/001132 dated 10.5.2006 1.216.821
Advance on Export Contract ACC 06/001292 dated 23.5.2006 1.777.961
Advance on Export Contract ACC 06/001332 dated 29.5.2006 3.581.056
Advance on Export Contract ACC 06/001387 dated 7.6.2006 1.487.333
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
SECOND LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
Advance on Export Contract ACC 06/001388 dated 7.6.2006 1.775.920
Advance on Export Contract ACC 06/001408 dated 14.6.2006 150.791
Advance on Export Contract ACC 06/001773 dated 28.8.2006 2.853.609
==========
13,957,986
TMT Motoco do Banco Bradesco S.A. Advance on Export Contract ACC 06/005075 dated 30.6.2006 1.107.708
Brasil Ltda Advance on Export Contract ACC 06/005170 dated 30.6.2006 1.107.214
Advance on Export Contract ACC 06/005231 dated 3.7.2006 805.555
Advance on Export Contract ACC 06/005452 dated 10.7.2006 1.591.311
Advance on Export Contract ACC 06/005453 dated 10.7.2006 651.995
Advance on Export Contract ACC 06/005607 dated 13.7.2006 1.479.922
Advance on Export Contract ACC 06/006530 dated 9.8.2006 1.179.705
Advance on Export Contract ACC 06/006531 dated 9.8.2006 878.737
Advance on Export Contract ACC 06/006532 dated 9.8.2006 219.684
Advance on Export Contract ACC 06/006649 dated 11.8.2006 988.201
Advance on Export Contract ACC 06/006650 dated 11.8.2006 994.789
Advance on Export Contract ACC 06/006778 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006779 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006780 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006781 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006782 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006784 dated 16.8.2006 219.385
Advance on Export Contract ACC 06/006785 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006786 dated 16.8.2006 219.385
Advance on Export Contract ACC 06/006979 dated 23.8.2006 328.619
Advance on Export Contract ACC 06/006980 dated 23.8.2006 1.095.396
Advance on Export Contract ACC 06/006981 dated 23.8.2006 974.903
Advance on Export Contract ACC 06/007140 dated 28.8.2006 1.094.305
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
SECOND LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
Advance on Export Contract ACC 06/007141 dated 28.8.2006 656.583
Advance on Export Contract ACC 06/007559 dated 11.9.2006 436.499
Advance on Export Contract ACC 06/007561 dated 11.9.2006 436.499
Advance on Export Contract ACC 06/007562 dated 11.9.2006 218.250
Advance on Export Contract ACC 06/007563 dated 11.9.2006 2.149.759
Advance on Export Contract ACC 06/007764 dated 13.9.2006 4.403.264
Advance on Export Contract ACC 06/074200 dated 14.9.2006 1.714.276
Advance on Export Contract ACC 06/077936 dated 27.9.2006 2.819.470
==========
29,745,876
TMT Motoco do HSBC Bank Brasil S.A. Advance on Export Contract ACC 05/070072 dated 1.11.2005 7.330.707
Brasil Ltda - Banco Multiplo Advance on Export Contract ACC 05/073442 dated 16.11.2005 4.125.818
Advance on Export Contract ACC 06/031332 dated 25.4.2006 2.308.042
Advance on Export Contract ACC 06/035254 dated 10.5.2006 2.328.943
Advance on Export Contract ACC 06/038119 dated 17.5.2006 445.846
Advance on Export Contract ACC 06/039810 dated 22.5.2006 1.336.562
Advance on Export Contract ACC 06/049962 dated 22.6.2006 1.161.796
Advance on Export Contract ACC 06/051829 dated 29.6.2006 1.225.224
Advance on Export Contract ACC 06/055126 dated 11.7.2006 773.469
Advance on Export Contract ACC 06/056736 dated 17.7.2006 145.724
Advance on Export Contract ACC 06/057958 dated 20.7.2006 1.102.863
Advance on Export Contract ACC 06/057962 dated 20.7.2006 1.094.040
Advance on Export Contract ACC 06/059007 dated 25.7.2006 1.295.680
Advance on Export Contract ACC 06/060457 dated 28.7.2006 1.634.136
Advance on Export Contract ACC 06/062166 dated 3.8.2006 250.734
Advance on Export Contract ACC 06/063032 dated 7.8.2006 1.120.984
==========
27,680,568
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
SECOND LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Banco Itau BBA S.A. Advance on Export Contract ACC 05/018001 dated 6.10.2005 2.447.495
Brasil Ltda Advance on Export Contract ACC 05/018536 dated 17.10.2005 2.410.372
Advance on Export Contract ACC 05/019934 dated 4.11.2005 918.237
Advance on Export Contract ACC 05/020684 dated 17.11.2005 2.522.189
Advance on Export Contract ACC 05/020968 dated 21.11.2005 687.399
Advance on Export Contract ACC 05/021502 dated 25.11.2005 916.092
=========
9,901,784
TMT Motoco do Banco Itau BBA S.A. Bank Credit Bills representing Dual Index Loans Contract 106306091100100
Brasil Ltda dated 11.9.2006 8.999.761
Bank Credit Bills representing Dual Index Loans Contract 106306091301500
dated 13.9.2006 5.364.066
Bank Credit Bills representing Dual Index Loans Contract MC6.63/12
dated 15.9.2006 1.581.902
Bank Credit Bills representing Dual Index Loans Contract 106306092000100
dated 20.9.2006 4.678.354
Bank Credit Bills representing Dual Index Loans Contract 106306092200100
dated 22.9.2006 6.617.995
Bank Credit Bills representing Dual Index Loans Contract EC5.63/01 B
dated 25.9.2006 1.135.968
==========
28,378,046
TMT Motoco do Banco Safra S.A. BNDES Facility Agreement 32106591-3 dated 412.106
Brasil Ltda BNDES Facility Agreement 32108874-3 dated 07.12.2005 460.138
BNDES Facility Agreement 32108523-0 dated 30.12.2004 491.226
==========
1,363,470
TMT Motoco do Banco Bradesco S.A. BNDES Facility Agreement (proposal no 2004018) dated 19.04.2005 49,493,000
Brasil Ltda
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
SECOND LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Fleet National Bank Brazilian Pre-Export Financing Agreement 03/023970 dated 18.6.2003 2.174.207
Brasil Ltda d.b.a BankBoston, N.A Brazilian Pre-Export Financing Agreement 03/027035 dated 10.7.2003 2.610.858
Brazilian Pre-Export Financing Agreement 03/031835 dated 8.8.2003 2.590.933
Brazilian Pre-Export Financing Agreement 03/033941 dated 22.8.2003 2.575.366
Brazilian Pre-Export Financing Agreement 04/018926 dated 31.3.2004 3.261.303
Brazilian Pre-Export Financing Agreement 04/026608 dated 6.5.2004 3.660.592
==========
16,873,259
TMT Motoco do Tecumseh do Brasil Loan Agreement dated June 22, 2004 48,798,000
Brasil Ltda Ltda.
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
SECOND LIEN CREDIT AGREEMENT]
ANNEX C
PROPERTY TO BE ADDED TO SCHEDULE 4.19
OWNER/LESSEE
FACILITY (LESSOR) STREET ADDRESS
-------- -------------------------------- ---------------------------
Toledo, Ohio Owner:
Tecumseh Products Company 0000 Xxxxxxxx Xxx., Xxxxxx,
Xxxxxx: Ice Investments, Inc. Ohio 43607
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
ANNEX D
PROPERTY TO BE ADDED TO SCHEDULE 8.4(b)
00000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxx, XX 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT A
AMENDMENT NO.1 TO THE INTECREDITOR AGREEMENT
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT B
ACKNOWLEDGEMENT AND CONSENT
To: CITICORP USA, INC., as Administrative Agent
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE:
TECUMSEH PRODUCTS COMPANY
Reference is made to the CREDIT AGREEMENT, dated as of February
6, 2006, as amended (as the same may be further amended, supplemented, restated
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
TECUMSEH
PRODUCTS COMPANY, a Michigan corporation (the "BORROWER"), the Lenders and
Issuers party thereto and CITICORP USA, INC. ("CITICORP"), as administrative
agent and collateral agent for the Lenders and the Issuers (in such capacity,
the "ADMINISTRATIVE AGENT"). Unless otherwise specified herein, all capitalized
terms used in this Waiver shall have the meanings ascribed to such terms in the
Credit Agreement.
The Borrower has requested that the Lenders consent to amend the
Credit Agreement on the terms described in Amendment No. 2 to Second Lien Credit
Agreement (the "AMENDMENT"), the form of which is attached hereto.
Pursuant to Section 11.1(a) (Amendments, Waivers, Etc.) of the
Credit Agreement, the undersigned Lender hereby consents to the terms of the
Amendment and authorizes the Administrative Agent to execute and deliver the
Waiver on its behalf.
Very truly yours,
----------------------------------------
[Name of Lender]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated as of November 3, 2006
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT C
CONSENT OF GUARANTORS
Dated as of November 3, 2006
Each of the undersigned companies, as a Guarantor under the
Guaranty dated February 6, 2006 (the "Guaranty") in favor of the Secured Parties
under the Credit Agreement referred to in the foregoing Amendment, hereby
consents to such Amendment and hereby confirms and agrees that notwithstanding
the effectiveness of such Amendment, the Guaranty is, and shall continue to be,
in full force and effect and is hereby ratified and confirmed in all respects,
except that, on and after the effectiveness of such Amendment, each reference in
the Guaranty to the "Credit Agreement", "thereunder", "thereof" or words of like
import shall mean and be a reference to the Credit Agreement, as amended by such
Amendment.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have consented to this
Amendment No. 2, as of the date first written above.
CONVERGENT TECHNOLOGIES INTERNATIONAL,
INC.
TECUMSEH TRADING COMPANY
EVERGY, INC.
FASCO INDUSTRIES, INC.
MANUFACTURING DATA SYSTEMS, INC.
M. P. PUMPS, INC.
TECUMSEH CANADA HOLDING COMPANY
TECUMSEH COMPRESSOR COMPANY
TECUMSEH POWER COMPANY
XXX XXXXX GEAR COMPANY
as U.S. Guarantors
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
EUROMOTOR, INC.
as U.S. Guarantor
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX PROPERTY COMPANY, LLC
TECUMSEH DO BRASIL USA, LLC
as U.S. Guarantors
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2 TO SECOND LIEN
CREDIT AGREEMENT]
TECUMSEH PRODUCTS OF CANADA LIMITED,
as Canadian Guarantor
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
---------------------------------
FASCO MOTORS COMPANY,
as Canadian Guarantor
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
---------------------------------
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2 TO SECOND LIEN
CREDIT AGREEMENT]
EXHIBIT D
MASTER GLOBAL MANUFACTURE AND SUPPLY AGREEMENT
