EXHIBIT 4.2
AMENDMENT NO. 2 TO
AMENDED AND RESTATED SECOND LIEN CREDIT AGREEMENT
Amendment No. 2 (this "Amendment"), dated as of April 9, 2007, among
Tecumseh Products Company, a Michigan corporation (the "Borrower"), Tricap
Partners II L.P., as Lender (the "Lender"), Tricap Partners II GP L.P. as
Administrative Agent (the "Administrative Agent") and Citicorp USA, Inc., as
Collateral Agent for the Secured Parties (in such capacity, the "Collateral
Agent"), amends certain provisions of the Amended And Restated Second Lien
Credit Agreement, dated as of November 13, 2006 (as the same has heretofore been
amended, as amended hereby, and as it may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the Administrative Agent and the Collateral Agent.
WITNESSETH:
WHEREAS, the Borrower has informed the Lender that (A) a TMT
Enforcement Remedy has occurred and is continuing and (B) on March 22, 2007, TMT
commenced a bankruptcy proceeding in Brazil, which in the case of each of clause
(A) and (B) above constitutes an Event of Default under Section 9.1(e) and
Section 9.1(f) of the Credit Agreement, respectively (collectively, the
"Existing Defaults"); and
WHEREAS, the Borrower has requested that the Administrative Agent and
the Lenders constituting the Requisite Lenders waive the Existing Defaults; and
WHEREAS, the Borrower has informed the Lender of its desire to enter
into certain agreements or take certain action in connection with TMT and the
TMT Indebtedness; and
WHEREAS, the Lender and the Administrative Agent have agreed, subject
to the conditions herein provided, to waive the Existing Defaults; and
WHEREAS, the Borrower has requested, and the Lender, the
Administrative Agent and the Collateral Agent have agreed, subject to the
conditions herein provided, to amend the Credit Agreement as set forth below;
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 adding
the following defined terms in alphabetical order:
"Additional Cash Rate" means: 2.5 % per annum.
"Amendment No. 2 to the Credit Agreement" means that certain
Amendment No. 2 to Amended and Restated Second Lien Credit Agreement, dated
as of April 9, 2007, entered into by the Borrower, the Lender, the
Administrative Agent, and the Collateral Agent.
"CEO" means the new chief executive officer of the Borrower.
"Cross-Over Vendors" means those certain vendors of TMT that are
also vendors to (i) the Borrower's U.S. engine business or (ii) TdB.
"Effective Date" means April 9, 2007.
"Operations Advisor" means (i) AlixPartners or AP Services, LLC
or (ii) a nationally recognized financial operations consulting or
management firm acceptable to the Administrative Agent.
"Professional Fees" means all fees, costs and expenses of each of
AP Services, LLC (other than those payable in consideration of the services
of Xxx Xxxxxxx as interim chief operating officer), BBK, Ltd., Rothschild
(other than transaction based fees, when and as paid, payable upon
completion of the sale of assets for which it was engaged), Xxxxxxxx,
Brazilian consultant engaged in connection with TdB financing, and other
material financial and investment banking service providers. Borrower has
previously delivered to Lender copies of the engagement letters for all
material financial and investment banking service providers engaged by the
Borrower or its Subsidiaries as of the date hereof, together with a
description of the terms of their engagements.
"Restructuring Payments" means all amounts advanced, or directly
incurred and paid by the Borrower or any of its Subsidiaries (other than
TMT) in connection with the TMT Restructuring, including specifically (i)
the reasonable fees and costs of Brazilian restructuring counsel and
financial advisors for TMT and (ii) payments of liabilities of TMT,
provided that (1) no Restructuring Payments are made prior to the date that
they are legally required to be paid; (2) funds of TMT are not otherwise
available to make such Restructuring Payments; (3) Restructuring Payments
are either (A) required to be made in order to avoid personal liability of
TMT management or liability of TdB for claims against TMT, or (B) otherwise
reasonably necessary for the orderly administration of the TMT
Restructuring; (4) such payments or advances are structured to the fullest
extent possible to permit recovery thereof by Borrower and its Subsidiaries
as priority claims in the TMT Restructuring; and (5) the aggregate amount
of all Restructuring Payments shall not exceed $6,500,000.
"Settlement Agreement" means that certain Settlement and Release
Agreement, dated as of April 2, 2007, entered into by the Borrower, the
Xxxxxxx Entities (as defined therein) and the Defendant Directors (as
defined therein) attached hereto as Exhibit C.
"TdB" means Tecumseh do Brasil Ltda.
"TMT Restructuring" means and includes any or all of: (a)(i)
TMT's commencement of a voluntary case under the bankruptcy laws or
equivalents thereof (as now or hereafter in effect) of Brazil, (ii) TMT's
filing of a petition seeking to take advantage of any other laws, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, (iii) TMT's consent to, or failure
of TMT to contest, any petition filed against it in an involuntary case
under such bankruptcy laws or other laws, (iv) TMT's application for or
consent to, or failure to contest, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself or
of a substantial part of its property, domestic or foreign, (v) TMT's
admission in writing of its inability to pay its debts as they become due,
and (vi) TMT's making of a general assignment for the benefit of creditors.
"TPIL" means Tecumseh Power International Limited, a company
incorporated under the laws of the United Kingdom
"Warrants" means warrants in substantially the form attached
hereto as Exhibit A to purchase a number of shares of Class A Common Stock
equal to 7% of the fully diluted Common Stock of Borrower, at a per share
price equal to 65% of the lowest daily closing price of the Class A Common
Stock for the period commencing March 27, 2007 and ending twelve months
following the Second Amendment Effective Date, which warrants shall expire
unless exercised on or before the fifth anniversary of the Second Amendment
Effective Date.
(b) Clause (b) in the definition of "Change of Control" is hereby
deleted in its entirety and replaced with the following in lieu thereof:
or (b) during any period of twelve consecutive calendar months,
individuals who, as of the Effective Date, constituted the board of
directors of the Borrower (together with any new directors whose election
by the board of directors of the Borrower or whose nomination for election
by the stockholders of the Borrower was approved by a vote of at least
two-thirds of the Independent Directors (as such term is defined in
Marketplace Rule 4200(a)(15) of The NASDAQ Stock Market LLC ("Nasdaq"), or
a comparable successor rule of Nasdaq, whether or not the securities of
Borrower are listed on Nasdaq) then still in office who either were
Independent Directors at the beginning of such period or whose elections or
nomination for election was previously so approved) cease for any reason
other than death or disability to constitute a majority of the directors
then in office.
(c) The definition of "EBITDA" in Section 1.1 of the Credit Agreement
is hereby amended as follows:
(i) by deleting clause (b)(ix)(y) in its entirety and inserting
the following in lieu thereof:
(y)(a) BBK, Ltd. and AP Services, LLC, financial advisors to
the Loan Parties and Korn/Ferry International, in connection with
certain financial and management search services provided to the
Loan Parties, (b) financial advisors to the First Lien Lenders,
and (c) Wachovia, Felsberg E Associados, Rothschild Inc., Miller,
Canfield, Paddock and Stone, P.L.C., expenses of counsel to the
First Lien Lenders and First Lien Administrative Agent, Xxxxxxxx
& Xxxxx LLP, and Squire, Xxxxxxx & Xxxxxxx L.L.P., in each case
under this clause (y)(c) for work performed in March and April
2007 but prior to the Effective Date and
(ii) by deleting the proviso to clause (b)(ix) which reads
"provided, however, all such fees and costs payable under clauses (x),
(y) and (z) do not exceed $2,400,000 per Fiscal Quarter" and inserting
in lieu thereof "provided, however, all such fees and costs payable
under clauses (x), (y) and (z) do not exceed (i) $6,000,000 in the
Fiscal Quarter ending Xxxxx 00, 0000, (xx) $4,500,000 in the Fiscal
Quarter ending June 30, 2007, and (iii) $2,400,000 per Fiscal Quarter
for each Fiscal Quarter thereafter";
(d) The following existing definitions are hereby deleted in their
entirety from the Credit Agreement:
"TMT Guaranty Agreement" and "TMT Guaranty Conditions".
(e) Article II Section 2.7(e) is hereby amended by deleting the
existing Section 2.7(e) in its entirety and inserting the following in lieu
thereof:
(e) Additional Interest; Payments.
(i) If Borrower shall not have disposed of its Engine and
Powertrain Products Segment (as reported on the Financial
Statements) on or before December 31, 2007, additional PIK
interest shall accrue on the Loan at the Additional PIK Rate from
and after January 1, 2008.
(ii) If the Borrower shall not have engaged and have in
place the CEO on or before May 1, 2007, additional cash interest
shall accrue on the Loan at the Additional Cash Rate during the
period beginning on May 1, 2007 and ending on that date on which
the CEO assumes his duties with the Borrower, provided, however,
that no such cash interest shall accrue if the failure to meet
such deadline is as a result of (x) the inability of an engaged
candidate to undertake his duties by such date due to a personal
emergency on the part of the candidate or (y) the inability to
reach
agreement with a candidate on the terms of employment despite the
Borrowers best commercially reasonable efforts to do so.
(iii) Interest (a) accrued at the Additional PIK Rate under
this clause (e) will be added to the principal amount outstanding
under the Loan on the last day of each calendar month and (b)
accrued at the Additional Cash Rate shall be payable in cash on
the last day of each calendar month.
(f) Article V (Financial Covenants) of the Credit Agreement is hereby
amended as follows:
(i) Section 5.2 of the Credit Agreement is hereby amended as
follows:
(1) by deleting the number "$50,000,000" set forth opposite
September 30, 2007 in the table under the heading "Minimum
Cumulative EBITDA" and inserting "$40,000,000" in lieu
thereof; and
(2) by deleting the number "$80,000,000" set forth opposite
December 31, 2007 in the table under the heading "Minimum
EBITDA and inserting "$60,000,000" in lieu thereof
(ii) Section 5.3 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.3 Capital Expenditures
(a) The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures (it being understood that any Capital
Expenditures financed solely through the proceeds obtained from
property loss insurance shall not be covered under this Section 5.3),
during the four Fiscal Quarters ending on the last day of each Fiscal
Quarter set forth below to be, in the aggregate, in excess of the
maximum amount set forth opposite such Fiscal Quarter:
FISCAL QUARTER MAXIMUM CAPITAL EXPENDITURES
-------------- ----------------------------
March 31, 2007 $52,100,000
June 30, 2007 $49,300,000
September 30, 2007 $46,500,000
December 31, 2007 $40,000,000
March 31, 2008 $43,800,000
June 30, 2008 $47,500,000
September 30, 2008 $51,300,000
December 31, 2008 $55,000,000
March 31, 2009 $58,800,000
June 30, 2009 $62,500,000
September 30, 2009 $66,300,000
(b) For purposes of Section 5.3(a), the aggregate Capital
Expenditures in connection with the acquisition, construction and
startup of the new plant to replace the Hyderabad facility covered by
this Section 5.3 and counted toward the limits established in Section
5.3(a) above shall be equal to the amount calculated as follows:
X - Y = CCE
Where
X is the aggregate Capital Expenditures in connection with the
acquisition, construction and startup of the new Hyderabad Indian
plant;
Y is the Net Cash Proceeds from the sale of the current Hyderabad
Indian plant and realty; and
CCE is the amount of Capital Expenditures charged against the
amounts set forth opposite the applicable period in the chart in
Section 5.3(a) above;
provided, however, that (1) in no event shall the Capital Expenditures
amount set forth above for any period be increased in the event CCE is
a negative number and (2) in no event shall the aggregate Capital
Expenditures in connection with the acquisition, construction and
startup of the new Hyderabad Indian plant exceed $25,000,000 and (3)
all such Capital Expenditures shall be funded solely by financial
institutions located in India.
(c) In the event that the Borrower completes the sale or
disposition of one or more Subject Units, the Borrower shall promptly
provide Lender with a schedule of the budgeted Capital Expenditures
for such Subject Units for the periods following the date of
consummation of such sale, and the amounts set forth for such periods
in clause (a) above shall be, subject to the prior review by and
approval of the Administrative Agent, correspondingly reduced
(g) by inserting a new Section 5.4 immediately after the existing
Section 5.3 to read as follow:
5.4 Professional Fees
For each Fiscal Quarter during the period beginning on the Second
Amendment Effective Date and ending on that date on which the CEO
assumes his or her duties with the Borrower, neither the Borrower nor
its Subsidiaries, on a consolidated basis, shall make or incur, or
permit to be made or incurred, Professional Fees during each Fiscal
Quarter set forth below, in excess of the maximum amount set forth
opposite such Fiscal Quarter. Notwithstanding the introductory
paragraph to this Article V, any amendments to or waivers of the
provisions of this Section 5.4 shall not require the consent of the
Requisite Lenders but only of the Administrative Agent.
FISCAL QUARTER ENDING MAXIMUM PROFESSIONAL FEES
--------------------- -------------------------
June 30, 2007 $7,431,000
September 30, 2007 $3,160,000
December 31, 2007 $1,683,000
(h) Article VII (Affirmative Covenants) of the Credit Agreement is
hereby amended as follows:
(i) by deleting the introductory paragraph therein and inserting
the following in lieu thereof:
The Borrower agrees with the Lenders and the Administrative
Agent to each of the following (except that the following shall
have no application to (x) Tecumseh Italy as long as the Borrower
is diligently pursuing the dissolution or liquidation of Tecumseh
Italy, (y) TMT so long as there is a TMT Restructuring or (z)
TPIL so long as any Loan Party is pursuing the discontinuance of
operation and liquidation of TPIL provided such discontinuance
and liquidation is funded entirely from existing funds available
to TPIL or funds from the proceeds of the sale or liquidation of
TPIL's assets), as long as any Obligation remains outstanding
and, in each case, unless the Requisite Lenders otherwise consent
in writing:
(ii) by inserting the following immediately after the term
"Borrower" and immediately preceding the period in Section 7.14(a)
, it being understood that the Borrower shall not engage a
new CEO unless such person shall have been recommended to the
Borrower's board of directors by a majority of the membership of
the Advisory Board
(iii) by deleting in its entirety Section 7.14(b) and inserting
the following in lieu thereof:
(b) Concurrently with the Borrower's engagement of the CEO,
any person holding such position shall resign, or the Borrower's
board of directors shall remove such person, from the position of
chief executive officer.
(iv) by inserting a new section 7.14(c) immediately after the
existing Section 7.14(b) to read as follows:
(c) At all times prior to the engagement of a new CEO, the
Borrower shall maintain an interim chief operating officer of the
Borrower who shall be a person from a nationally recognized
operations consulting
or management firm and the Borrower shall provide the
Administrative Agent with not less than thirty (30) days' advance
notice of such change in staffing of the chief operating officer
position, which notice shall include the name of the person to
serve and the company that will be providing his services.
(v) by inserting a new section 7.14(d) immediately after the
existing Section 7.14(c) to read as follows:
(d) From and after the Second Amendment Effective Date the
Borrower undertakes and agrees to use all reasonable efforts to
engage the CEO and have him or her in place on or prior to July
1, 2007 and, in the event the CEO is not engaged and in place by
such date, the Borrower will continue to use all reasonable
efforts until the CEO is engaged and in place.
(vi) by inserting a new Section 7.20 immediately after the
existing Section 7.19 to read as follows:
On or before the Effective Date, the Borrower's President
and Chief Operating Officer shall deliver to the Lender a letter
with regard to the Borrower's efforts to address certain
operational items. During the period beginning on the Effective
Date and ending on the date on which the CEO assumes his or her
duties with the Borrower, the Borrower shall deliver to the
Lender copies of all reports (other than any portions thereof
containing attorney-client or other privileged information)
regarding the items set forth in the above-referenced letter
prepared by outside professionals engaged in connection therewith
or by management of the Borrower or its Subsidiaries within 3
Business Days of delivery of the same to the Borrower's board of
directors.
(vii) By inserting a new Section 7.21 immediately after the new
Section 7.20 to read as follows:
Section 7.21 Retention of the Operations Advisor
The Borrower shall retain the services of an Operations Advisor,
at all times after the Effective Date, and through the date on which a
new Chief Executive Officer of the Borrower has been appointed (and
such Chief Executive Officer has commenced his/her duties) and for so
long thereafter as the Chief Executive Officer shall determine in good
faith to be necessary or advisable.
(i) Article VIII (Negative Covenants) of the Credit Agreement is
hereby amended as follows:
(i) by deleting the introductory paragraph therein and inserting
the following in lieu thereof:
The Borrower agrees with the Lenders and the Administrative
Agent to each of the following (except that (A) the following
shall have no application to (x) Tecumseh Italy as long as the
Borrower is diligently pursuing the dissolution or liquidation of
Tecumseh Italy or (y) TPIL so long as any Loan Party is pursuing
the discontinuance of the operation and liquidation of TPIL
provided such discontinuance and liquidation is funded entirely
from existing funds available to TPIL or from the proceeds of the
sale or liquidation of TPIL's assets and (z) TMT so long as there
is a pending TMT Restructuring, provided, however that (B)
neither the Borrower nor any of its Subsidiaries shall be allowed
to provide any financial, credit or other support to TMT pursuant
to the exceptions to the restrictions imposed on the Borrower and
its Subsidiaries under Article VIII (Negative Covenants), except
as expressly provided in Section 8.20), as long as any Obligation
remains outstanding and, in each case, unless the Requisite
Lenders otherwise consent in writing:
(ii) by (A) striking the word "or" immediately following the
semicolon in clause (k) of Section 8.1, (B) striking the period at the
end of clause (l) of Section 8.1 and inserting "; and" in lieu
thereof, and (c) inserting a new clause (m) to read as follows:
(m) Indebtedness (not otherwise permitted by this Section
8.1) incurred by TdB at any time after the Effective Date;
provided, however, such Indebtedness shall not exceed an
aggregate amount of $40,000,000 and, provided, further, that not
less than $25,000,000 of such Indebtedness shall be utilized to
refinance the TdB BNDES facility that matured in March 2007.
(iii) by (A) striking the word "and" immediately following the
semicolon in clause (g) of Section 8.2, (B) striking the period at the
end of clause (h) of Section 8.2 and inserting "; and" in lieu
thereof, and (c) inserting a new clause (i) to read as follows:
(i) Liens on the assets of TdB securing additional
Indebtedness of TdB permitted under Section 8.1(m)
(iv) By inserting the following new Section 8.20 immediately
after the existing Section 8.19 to read as follows:
Neither the Borrower nor any of its Subsidiaries shall (i)
in respect of TMT, incur or suffer to exist any Indebtedness
(other than Indebtedness existing immediately prior to the
Effective Date), (ii) make any additional Investment in TMT or
transfer of assets to TMT (other than payments made (x) to
Cross-Over Vendors described in clause (i) of such definition so
long as such payments do not exceed in the aggregate $2,500,000,
(y) to Cross-Over Vendors described in clause (ii) of such
definition so long as such payments do not exceed in the
aggregate
$1,000,000, and (z) for purchases of inventory and equipment by
the Borrower or any of its Subsidiaries from TMT so long as such
purchases are made for Fair Market Value and on a basis no less
favorable to the Borrower or, as the case may be, such Subsidiary
thereof as would be obtained in comparable arm's length
transactions with a Person that is not an Affiliate of TMT, (iii)
pay any Indebtedness or other obligations of TMT, or (iv)
otherwise provide any additional funding, financing or credit to
TMT; provided, however, that the foregoing prohibition shall not
limit the ability of the Borrower or any of its Subsidiaries to
make the Restructuring Payments.
(j) Article IX of the Credit Agreement is hereby amended as follows:
(i) by deleting the introductory clause thereof and inserting the
following in lieu thereof:
Each of the following events shall be an Event of Default
(except that the following shall have no application to (x)
Tecumseh Italy as long as the Borrower is diligently pursuing the
dissolution or liquidation of Tecumseh Italy, (y) TPIL so long as
any Loan Party is pursuing the discontinuance of the operation
and liquidation of TPIL provided such discontinuance and
liquidation is funded entirely from existing funds available to
TPIL or from the proceeds of the sale or liquidation of TPIL's
assets or (z) TMT so long as a TMT Restructuring is pending):
(ii) by deleting in clause 9.1(d)(i) the word "or" immediately
before "Article VII (Negative Covenants)" and inserting immediately
after "Section 7.18 (Transfer and Termination of Title IV Plans)" and
prior to "or Article VII (Negative Covenants)" the following:
or Section 7.21 (Retention of the Operations Advisor)
(iii) by deleting the word "or" following the semicolon in clause
(l) of Section 9.1; and:
(iv) by deleting the period at the end of clause (m) of Section
9.1 and inserting "; or" in lieu thereof; and
(v) by inserting a new clause (n) in Section 9.1 to read as
follows:
(n) There shall occur a breach of the provisions of Sections
1, 2, 3 or 5 of the Settlement Agreement which breach shall
remain unremedied for 30 days.
(k) Annex A to the definition of Disposition Adjustment is amended by
deleting the charts on the existing Annex A thereto and inserting the charts on
attached Annex A in lieu thereof.
3. WAIVER AND CONSENT.
(a) As of the Second Amendment Effective Date, the Lender and the
Administrative Agent hereby waive the Existing Defaults.
(b) The Administrative Agent and the Lender hereby waive any default
interest chargeable on the Loans pursuant to Section 2.7 (f) solely in respect
of the Existing Defaults
(b) The Lender hereby consents to the Borrower's request for a one
time extension of the delivery date of the annual report for the Fiscal Year
ended December 31, 2006, due within 90 days after the end of such Fiscal Year
pursuant to Section 6.1(c) of the Credit Agreement, to April 15, 2007.
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT. This
Amendment shall become effective as of March 31, 2007 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 and the Collateral
Agent;
(ii) the Consent of Guarantors, in the form attached hereto as
Exhibit B, executed by each Guarantor;
(iii) Amendment No. 5 to the First Lien Credit Agreement,
executed by the Borrower and the First Lien Secured Parties;
(iv) the Warrants; and
(v) such additional documentation as the Lender may reasonably
require.
(b) Payment of Fees, Costs and Expenses. The Administrative Agent
shall have received payment of all fees, costs and expenses as required by
Sections 9 and 10 hereof, 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) in connection with this Amendment, the Credit Agreement and each other
Loan Document.
(c) Expense Deposit. The Administrative Agent shall have received a
deposit in an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) to
be applied by the Administrative Agent to the payment of fees, costs and
expenses payable to the Administrative Agent under Section 11.3 of the Credit
Agreement following the Second Amendment Effective Date, 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).
(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. 5 to the First Lien Credit Agreement, no Default or
Event of Default shall have occurred and be continuing.
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. 5 to the First Lien Credit Agreement, the Borrower hereby
represents and warrants to the Lender 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 or were 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. RELEASE. Each of the Borrower and each Guarantor (A) acknowledges and
agrees that it has no defenses, counterclaim or offset to the amounts
outstanding under the Credit Agreement or the other Loan Documents and that it
has no actual or potential claim or cause of action against the Administrative
Agent or any Lender with respect to any matters through the Effective Date, and
(B) hereby waives and agrees not to assert any claims or causes of action
against the Administrative Agent, any Lender or any of their Affiliates, or any
of their respective officers, directors, employees, attorneys and agents, on any
theory of liability, whether known or unknown, matured or contingent,
including, without limitation, for special, indirect, consequential or punitive
damages, arising by virtue of any actions taken, actions omitted, or the
occurrence of any event prior to the Effective Date, arising out of or relating
to, or in connection with, this Amendment No. 2, the Credit Agreement, the use
of the proceeds of any Loan, the other Loan Documents or any of the transactions
entered into in connection therewith or contemplated thereby.
7. 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,
waiver and consents contained herein shall not constitute an amendment, waiver
or consent to any other provision of the Credit Agreement or the other Loan
Documents or for any other purpose except as expressly set forth herein.
8. LOAN DOCUMENTS. This Amendment is deemed to be a "Loan Document" for the
purposes of the Credit Agreement.
9. FEES. As consideration for the execution of this Amendment, the Borrower
agrees (a) to pay on the Second Amendment Effective Date to the Lender a fee
equal to $750,000, and (b) to issue the Warrants to the Lender on the Second
Amendment Effective Date.
10. COSTS AND EXPENSES. The Borrower agrees to pay on demand on the Second
Amendment Effective Date all costs and expenses of the Administrative Agent
incurred from and after the Closing Date through and including the Second
Amendment Effective Date and payable to the Administrative Agent under Section
11.3 of the Credit Agreement, including, without limitation, all reasonable and
documented 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 and
financial advisor (including financial advisory fees and expenses payable
pursuant to the invoice presentable for
payment on April 15, 2007 in the amount of $252,252.57) for the Administrative
Agent with respect thereto.
11. 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
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.
(e) Delivery of an executed signature page of this Amendment by
facsimile or by email in portable document format (.pdf) shall be effective as
delivery of an original manually executed counterpart hereof.
[signature pages follow]
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]
Lender
TRICAP PARTNERS II L.P.
as Lender
By: Tricap Partners II GP L.P.
Its: General Partner
By: Tricap Partners Ltd.
Its: General Partner
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Its: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
Administrative Agent
TRICAP PARTNERS II GP L.P.
as Administrative Agent
By: Tricap Partners Ltd.
Its: General Partner
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
Collateral Agent
Citicorp USA, Inc.,
as Collateral Agent
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT A
WARRANTS
(SEE ATTACHED)
[EXHIBIT A TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT B
CONSENT OF GUARANTORS
Dated as of April 9, 2007
Each of the undersigned companies, as a Guarantor under the Guaranty
dated November 13, 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]
GUARANTOR CONSENT TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT
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: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
EUROMOTOR, INC.
as U.S. Guarantor
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX PROPERTY COMPANY, LLC
Tecumseh do Brasil USA, LLC
as U.S. Guarantors
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
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: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FASCO MOTORS COMPANY,
as Canadian Guarantor
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2
TO SECOND LIEN CREDIT AGREEMENT]
EXHIBIT C
[SETTLEMENT AND RELEASE AGREEMENT]
[EXHIBIT C TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
ANNEX A
SUBJECT UNITS
* Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
***:
CUMULATIVE CUMULATIVE SALES
EBITDA ADJUSTMENT PROJECTION
CUMULATIVE 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 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[ANNEX A TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
**:
CUMULATIVE CUMULATIVE SALES
EBITDA 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 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[ANNEX A TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
**:
CUMULATIVE SALES
CUMULATIVE PROJECTION
REPORTING PERIOD EBITDA ADJUSTMENT ($ 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 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[ANNEX A TO AMENDMENT NO. 2 TO SECOND LIEN CREDIT AGREEMENT]
