EXHIBIT 4.1 EXECUTION COPY
AMENDMENT NO. 3 TO FIRST LIEN CREDIT AGREEMENT
AMENDMENT NO. 3 (this "Amendment"), dated as of November 13, 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 and the Issuers (in such capacities, the
"Administrative Agent"), amends certain provisions of the FIRST LIEN CREDIT
AGREEMENT, dated as of February 6, 2006 (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"), the financial institutions from time to time party
thereto as issuing banks (the "Issuers") and the Administrative Agent.
WITNESSETH:
WHEREAS, the Borrower has informed the Administrative Agent of its
desire to pay in full all of the outstanding loans under the Second Lien Credit
Agreement and to terminate such Second Lien Credit Agreement and to enter into a
new credit facility with Tricap Partners LLC, as the administrative agent and as
a lender and Citicorp USA, Inc., as the collateral agent, in the aggregate
principal amount of $100,000,000 ("New Second Lien Facility");
WHEREAS, the Borrower requested the Administrative Agent and each
Lender signatory to an Acknowledgment and Consent to agree to the New Second
Lien Facility and to agree to each other amendments requested hereunder; and
WHEREAS, the Borrower requested, and the Administrative Agent and each
Lender signatory to an Acknowledgement and Consent have agreed to 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 Third 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:
"Availability Reserve" means the sum of (a) the Permanent Availability
Reserve and (b) effective upon receipt of written notice of any
determination thereof to the Borrower by the Administrative Agent such
amounts as the Administrative Agent may from time to time establish against
the Facility, in the Administrative Agent's sole discretion and in
accordance with customary business practices for comparable asset based
transactions, in order either (i) to preserve the value of the Collateral
or the Collateral Agent's Lien thereon or (ii) to provide for the payment
of unanticipated liabilities of any Loan Party arising after the Closing
Date; provided, however, for purposes of determining the Applicable Margin,
the Permanent
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Availability Reserve shall not be in included in the calculation of the
Quarterly Available Credit.
"Available Credit" means, at any time, (a) the Maximum Credit minus
(b) the aggregate Revolving Credit Outstandings at such time.
"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) US Tax Receivable or (d) Extraordinary Receipts.
"Second Lien Agent" means Tricap Partners LLC under and as defined in
the Second Lien Credit Agreement.
"Second Lien Credit Agreement" means that certain Second Lien Credit
Agreement, dated as of the Third Amendment Effective Date, among the
Borrower, the Second Lien Agent, the Collateral Agent and the financial
institutions party thereto as lenders. All reference to "Second Lien
Secured Obligations", "Second Lien Facility", "Second Lien Lenders" and
"Second Lien Secured Parties" shall mean "Secured Obligations", "Facility",
"Lender" and "Secured Parties" respectively, as defined in the Second Lien
Credit Agreement.
(b) Section 1.1 of the Credit Agreement is hereby amended by adding
the following defined terms in alphabetical order:
"Amendment No. 3 to the Credit Agreement" means that certain Amendment
No. 3 to First Lien Credit Agreement, dated as of November 13, 2006,
entered into among the Borrower, the Administrative Agent and the Lenders
party thereto.
"Extraordinary Receipts" means any proceeds (net of any income,
excise, or punitive taxes or other penalties) received by any Borrower or
any other Loan Party from Title IV Plan or any other pension plan.
"Intercompany Loans" means any loans made by either the Borrower or
any Guarantor to any Material Foreign Subsidiary or the Thai Subsidiary.
"Permanent Availability Reserve" means an amount equal to $10,000,000
which shall be applied at all times until all the Obligations have been
paid in full and the Revolving Credit Commitments have been terminated
unless (x) the Second Lien Secured Obligations have been paid in full and
(y) the Administrative Agent has determined in its sole discretion that
there has been no Liquidity Event Period occurring for 8 consecutive weeks,
at which time the Administrative Agent shall terminate the Permanent
Availability Reserve; provided, however, for purposes of
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determining the Applicable Margin, the Permanent Availability Reserve shall
not be included in the calculation of the Quarterly Available Credit.
(c) Section 2.9(a) of the Credit Agreement is hereby amended in its
entirety and inserting the following in lieu thereof:
(a) Upon receipt by the Borrower or any other Loan Party of Net Cash
Proceeds, the Borrower shall immediately prepay the Loans (or provide cash
collateral in respect of Letters of Credit) in an amount equal to 100% of
such Net Cash Proceeds. Any such mandatory prepayment shall be applied in
accordance with clause (c) below; provided, however, that, subject to the
Intercreditor Agreement (x) no prepayment of the Second Lien Secured
Obligations from Net Cash Proceeds arising from any Asset Sale shall be
permitted if, after giving effect to the application of such Net Cash
Proceeds to the Obligations, the Available Credit is less than $40,000,000,
(y) upon receipt by the Borrower or any other Loan Party of Net Cash
Proceeds arising from any Loan Party's receipt of US Tax Receivable, such
Net Cash Proceeds shall be applied as follows: (i) first, the Borrower
shall immediately prepay the outstanding Loans to the extent that Available
Credit is less than $40,000,000, and (ii) second, to the extent that
Available Credit is greater than $40,000,000, the Borrower shall apply such
Net Cash Proceeds as a mandatory prepayment of the loans under the Second
Lien Facility and (z) upon receipt by the Borrower or any other Loan Party
of Net Cash Proceeds arising from any Asset Sale permitted under Section
8.4(j), such Net Cash Proceeds shall be applied as follows: (i) first, the
Borrower shall immediately prepay that portion of the outstanding Loans
(and provide cash collateral in respect of Letters of Credit) in an amount
equal to that portion of the Available Credit created solely by the
inclusion of the assets subject to such Asset Sale in the Borrowing Base
immediately prior to the consummation of such Asset Sale; (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 under the Second Lien
Facility provided, however, that no such prepayment under this clause (ii)
shall be permitted if Available Credit would be less than $40,000,000 after
giving effect to such prepayment, and (iii) then, as long as no Liquidity
Event Period is in effect, the Borrower or such Loan Party shall be
entitled to retain any remaining Net Cash Proceeds.
(d) Article IV (Representations and Warranties) is hereby amended by
inserting new Section 4.20 immediately after the existing Section 4.19 to read
as follow:
Section 4.20 Brazilian Subsidiaries
(a) The only Brazilian Subsidiaries that currently exist are Tecumseh
do Brasil Ltda. ("TdB") and TMT.
(b) Each Brazilian Subsidiary is a separate legal entity that is
operated separately from the other Brazilian Subsidiary. Neither Brazilian
Subsidiary holds any equity interest in the other Brazilian Subsidiary nor
has the right to obtain any equity interest in the other Brazilian
Subsidiary. Neither Brazilian Subsidiary has any capital contribution in
the other Brazilian Subsidiary on behalf of itself, the
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Borrower or any other Affiliate or Subsidiary of Borrower. There is no
commingling of assets of the Brazilian Subsidiaries. Neither Brazilian
Subsidiary is a joint debtor with the other Brazilian Subsidiary on any
debt, and neither Brazilian Subsidiary otherwise has agreed to undertake
any obligation or responsibility for any claims by third parties against
the other Brazilian Subsidiary, including, but not limited to, claims
related to labor or tax matters. Neither Brazilian Subsidiary has in place
(i) a guarantee of the debt of the other Brazilian Subsidiary, pledged any
of its assets as security for the debts of the other Brazilian Subsidiary
or (ii) any commitments or undertakings that could reasonably be expected
to give rise to an obligation for any claim against the other Brazilian
Subsidiary. The standard forms of debt documents provided by the lenders to
each of the Brazilian Subsidiaries and generally used as the basis for the
definitive debt documents related to the Indebtedness of each of the
Brazilian Subsidiaries do not specifically identify a default by the other
Brazilian Subsidiary under any of its Indebtedness as a cross-default, and
Borrower is not aware that any such specific cross-default provision is
included in any of the actual definitive debt documents related to
Indebtedness of either of the Brazilian Subsidiaries. Since January 1,
2003, no member of management of either of the Brazilian Subsidiaries is,
or has been, a member of the management of the other Brazilian Subsidiary,
with the exception of Xxxxxx Xxxxxxxxx and Xxxxxxxx Xxxxxxx, who both
served as the managers for both Brazilian Subsidiaries for, with respect to
Xxxxxx Xxxxxxxxx, approximately 120 days during 2005-2006 and, with respect
to Xxxxxxxx Xxxxxxx, approximately 90 days during 2005-2006. There are
currently no agreements between the Brazilian Subsidiaries other than the
inter-company loans made by TdB to TMT and payables and receivables arising
from transactions in the ordinary course of the respective businesses of
TdB and TMT. All material transactions and agreements between the Brazilian
Subsidiaries have been entered into on "arm's length" fair market terms.
(e) Section 5.1 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.1 Minimum Fixed Charge Coverage Ratio
The Borrower shall maintain a Fixed Charge Coverage Ratio, determined
on the last day of each Fiscal Quarter set forth below for the four Fiscal
Quarters ending on such date, of at least the minimum ratio set forth below
opposite such Fiscal Quarter:
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Minimum Fixed Charge
Fiscal Quarter Coverage Ratio
-------------- --------------------
December 31, 2007 1.10 to 1
March 31, 2008 1.15 to 1
June 30, 2008 1.15 to 1
September 30, 2008 1.20 to 1
December 31, 2008 1.20 to 1
March 31, 2009 1.20 to 1
June 30, 2009 1.20 to 1
September 30, 2009 1.25 to 1
(f) 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:
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 $ 17,000,000
October 1, 2006 through September 30, 2007 $ 52,000,000
October 1, 2006 through December 31, 2007 $ 82,000,000
(g) Section 5.3 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.3 Capital Expenditures
The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures (it being understood that any Capital
Expenditures financed solely through the proceeds obtained from property
loss insurance shall not be covered under this Section 5.3), during the
four Fiscal Quarters ending on the last day of each Fiscal Quarter set
forth below to be, in the aggregate, in excess of the maximum amount set
forth opposite such Fiscal Quarter:
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Maximum Capital
Fiscal Quarter Expenditures
-------------- ---------------
December 31, 2006 $76,900,000
March 31, 2007 $68,900,000
June 30, 2007 $66,700,000
September 30, 2007 $59,700,000
December 31, 2007 $52,700,000
March 31, 2008 $57,700,000
June 30, 2008 $62,700,000
September 30, 2008 $67,700,000
December 31, 2008 $72,700,000
March 31, 2009 $77,700,000
June 30, 2009 $82,700,000
September 30, 2009 $87,700,000
(h) Article VII (Affirmative Covenants) is hereby amended by (A)
deleting in their entirety Sections 7.16 and 7.17 and (B) inserting the
following new Sections 7.16, 7.17 and 7.18 immediately after the existing
Section 7.15, each to read as follows:
Section 7.16 Transfer and Termination of Title IV Plans
(a) Borrower shall provide Collateral Agent with not less than 30
days' notice prior to the transfer to any Person or the termination of any
Title IV Plan sponsored or maintained by Borrower or its Subsidiaries.
(b) If Borrower receives any cash recoupment (net of any resulting
income, excise, or punitive taxes or other penalties) from the termination
or transfer (other than as part of an Asset Sale) of a Title IV Plan
sponsored or maintained by Borrower or its Subsidiaries, then subject to
observance of any requirements of the plan document or ERISA, the full
amount of such cash recoupment (net of taxes, penalties and other direct
costs and expenses) shall be paid by Borrower to the Collateral Agent for
the benefit of the First Lien Lenders and the Lender, and shall be
distributed by the Collateral Agent to the First Lien Lenders and the
Lender in accordance with the terms of the Intercreditor Agreement, the
First Lien Credit Agreement and the Second Lien Credit Agreement and
applied to the payment of the First Lien Secured Obligations and the Loan
in accordance with Section 2.9 hereof.
(c) If a Title IV Plan sponsored or maintained by Borrower or a
Subsidiary is transferred to a Subsidiary the Stock of which has not been
previously pledged to the Collateral Agent for the benefit of the First
Lien Lenders and the Lender, other than in connection with the consummation
of an Asset Sale, then the Borrower or the transferring Subsidiary, as
applicable, shall, concurrent with such transfer, pledge and deliver the
Stock of the transferee Subsidiary to the Collateral Agent for the benefit
of the First Lien Lenders and the Lender.
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Section 7.17 Reporting on Brazilian Subsidiaries Restructuring
(a) The Borrower shall promptly, but in any event within 5 days,
inform the Lenders (which may be effected by a conference call) of any and
all material developments with respect to the progress of the restructuring
of the TMT Debt Documents and otherwise on the business and financial
condition of the Brazilian Subsidiaries.
(b) Until the Secured Obligations are paid in full, each of the
Borrower's Brazilian Subsidiaries shall maintain their respective: (a)
product distribution capabilities; (b) quality of product; and (c) ability
to meet the purchase requirements of the Borrower or its affiliates, as the
case may be, at not less than the same levels as in existence as of the
Third Amendment Effective Date as each may be adjusted to take into account
the re-sourcing of such products by the Borrower or its affiliates. The
Borrower shall promptly notify the Administrative Agent of the failure of
any Brazilian Subsidiary to satisfy one or more of these requirements and
shall have 14 calendar days from the date of such notice to cure any such
non-compliance. Failure to cure within the 14 day period shall result in an
Event of Default.
Section 7.18 Equity Issuance
The Borrower and each of its Subsidiaries shall provide written notice
to the Administrative Agent no later than thirty days prior to the sale or
issuance of any Stock of the Borrower or any Subsidiary of the Borrower by
the Borrower or any Subsidiary of the Borrower to any Person, which notice
shall include the terms of such proposed sale or issuance including, in
connection with any such sale of Stock of Borrower or any Subsidiary of
Borrower, the proposed purchaser of such Stock, the price for which such
Stock shall be sold, and the class of Stock being sold.
(i) 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 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) $15,000,000, 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.
(j) Section 8.6 (b) of the Credit Agreement is hereby amended by
inserting a new proviso immediately at the end of clause (b)(vii) to read as
follows:
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; provided, further, no prepayment of the Second Lien Secured
Obligations with proceeds of any Equity Issuance or Debt Issuance (as such
terms are defined under the Second Lien Credit Agreement) shall be
permitted if Available Credit is less than $75,000,000.
(k) Section 9.1 (d) of the Credit Agreement is hereby amended by
inserting immediately after "or Section 7.14 (Real Property)" and prior to "or
Article VII (Negative Covenants)" appearing on the fifth line in that clause (d)
the following:
or Section 7.16 (Transfer and Termination of Title IV Plans)
(l) Section 9.2 of the Credit Agreement is hereby amended by inserting
immediately after "Section 9.1(f) (Events of Default)" appearing on the eleventh
line in that Section the following:
(other than with respect to TMT)
(m) Annex A to the definition of Disposition Adjustment is amended by
deleting the existing Annex A thereto and inserting Annex A attached hereto.
3. CONSENT AND WAIVER. (a) As of the Third Amendment Effective Date
(as defined in Section 4) and until the earlier of (i) the date that any TMT
Enforcement Remedy has occurred; and (ii) 180 days from the earlier of (x)
December 15, 2006 and (y) 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),
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 Default or
Event of Default that may arise from any Brazilian Out-of-Court Restructuring or
any TMT Debt Document Arbitration Proceeding that may occur or be instituted;
provided, however, that 90 days following the earlier of (x) December 15, 2006
and (y) 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), and thereafter,
and upon at least 10 calendar days written notice to the Borrower, either (x)
Requisite Lenders under this Agreement or (y) lenders having more than fifty
percent (50%) of the principal amount of all loans outstanding under the Second
Lien Credit Agreement may, in their sole discretion, elect to terminate any
waiver under this Section 3.
(b) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the terms contained in the Second Lien Credit Agreement and
the making of the Loans (as defined in the Second Lien Credit Agreement) under
and subject to the terms of the Second Lien Credit Agreement and the
Intercrediotor Agreement.
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT. This
Amendment shall become effective on the date (the "Third 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:
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(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
Administrative Agent;
(ii) an Acknowledgment and Consent, in the form set forth
hereto as Exhibit A, duly executed by each of the Requisite Lenders;
(iii) the Consent of Guarantors, in the form set forth
hereto as Exhibit B, executed by each Guarantor; and
(iv) such additional documentation as the Administrative
Agent or the Requisite Lenders may reasonably require.
(b) 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) in connection with this Amendment, the Credit
Agreement and each other Loan Document, as required by Sections 8 and 9 hereof.
(c) Representations and Warranties. Each of the representations
and warranties contained in Section 5 below shall be true and correct.
(d) No Default or Event of Default. After giving effect to this
Amendment and Amendment No. 3 to the Second 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 Third Amendment Effective Date, after giving effect to this Amendment
and Amendment No. 3 to the Second 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
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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 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 with respect thereto.
9. 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 Third 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]
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IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment No. 3 to the Credit Agreement to be effective for all purposes as of
the Third 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. 3 TO FIRST LIEN CREDIT AGREEMENT]
Administrative Agent
CITICORP USA, INC.,
as Administrative Agent, Collateral
Agent, Dollar Swing Loan Lender, Issuer
and as a Lender
By: /s/ Sebastien Delasnerie
------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO FIRST LIEN CREDIT AGREEMENT]
ANNEX A
* indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
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
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO FIRST LIEN CREDIT AGREEMENT]
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 * *
10/1/06-12/31/07 * *
QUARTERLY PROJECTED EBITDA SALES PROJECTION
QUARTER COVENANT ($ 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 * *
10/1/06-12/31/07 * *
QUARTERLY PROJECTED EBITDA SALES PROJECTION
QUARTER COVENANT ($ IN MILLIONS) ($ IN MILLIONS)
------- -------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO FIRST LIEN CREDIT AGREEMENT]
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 * *
10/1/06-12/31/07 * *
QUARTERLY PROJECTED EBITDA SALES PROJECTION
QUARTER COVENANT ($ IN MILLIONS) ($ IN MILLIONS)
------- -------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO FIRST LIEN CREDIT AGREEMENT]
EXHIBIT A
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. 3 to First 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 13, 2006
EXHIBIT B
CONSENT OF GUARANTORS
Dated as of November 13, 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. 3, 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. 3 TO FIRST LIEN CREDIT
AGREEMENT]
TECUMSEH PRODUCTS OF CANADA LIMITED,
as Canadian Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FASCO MOTORS COMPANY,
as Canadian Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 3 TO FIRST LIEN CREDIT
AGREEMENT]
