EXHIBIT 10.1
OUT-OF-COURT RESTRUCTURING AGREEMENT
Executed by and between,
BANCO BRADESCO S.A., with its headquarters in the City of Osasco, State of Sao
Paulo, Cidade de Deus Street, Xxxx Xxxx, enrolled with the Brazilian Taxpayer's
Registry (CNPJ) under no 60.746.948/0001-12, herein represented in accordance
with its bylaws, hereinafter referred to as "BRADESCO";
BANCO ITAU BBA S.A., with its headquarters in the City of Sao Paulo, State of
Sao Paulo, Brigadeiro Xxxxx Lima Avenue, 3.400, 4th floor (part), enrolled with
the Brazilian Taxpayer's Registry (CNPJ) under no 17.298.092/0001-30, herein
represented in accordance with its bylaws, hereinafter referred to as "ITAU
BBA"; and
HSBC BANK BRASIL S.A. - BANCO MULTIPLO, with its headquarters in the City of
Curitiba, State of Parana, Travessa Xxxxxxxx Xxxxx, 34, 4th floor, enrolled with
the Brazilian Taxpayer's Registry (CNPJ) under no 01.701.201/0001-89, herein
represented in accordance with its bylaws, hereinafter referred to as "HSBC";
BRADESCO, ITAU BBA and HSBC hereinafter referred to jointly as the
"Participating Banks";
And, on the other side,
TMT MOTOCO DO BRASIL LTDA., with its headquarters in the City of Campo Largo,
State of Parana, Xxx Xxxxxx xx Xxxxxxx Street, no 792, enrolled with the
Brazilian Taxpayer's Registry (CNPJ) under no 05.203.407/0001-30, herein
represented in accordance with its articles of association, hereinafter referred
to as "TMT"; and, as intervening parties,
TECUMSEH PRODUCTS COMPANY, a corporation organized and existing under the laws
of the State of Michigan, headquartered at 000 Xxxx Xxxxxxxxx Xxxxxx, in the
city of Tecumseh, State of Michigan, United States of America, enrolled with the
Brazilian Taxpayer's Registry (CNPJ) under no 05.719.749/0001-07, herein
represented in accordance with its articles of association, hereinafter referred
to as "Tecumseh"; and
TECUMSEH POWER COMPANY, a corporation organized and existing under the laws of
the State of a Delaware, headquartered at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx,
herein represented in accordance with its articles of association, hereinafter
referred to as "Tecumseh Power Company".
TMT, Tecumseh, Tecumseh Power Company and the Participating Banks hereinafter
referred to jointly as "Parties" and each as "Party";
WHEREAS TMT has executed, individually with each of the Participating Banks and
with certain other banks (hereinafter referred to as the "Non-Participating
Banks" and, together with the Participating Banks, the "Banks"), on different
dates, facility agreements in order to fund its industrial expansion and the
required working capital for its activities, including its export activity,
which were structured as advance on export contracts ("Facility Agreements"),
Bank Credit Bills ("Credit Bills") and the Pro-Gerem/Counter Guaranty
Agreements, as applicable, the Facility Agreements, the Credit Bills and the
Pro-Gerem/Counter Guaranty Agreements are hereinafter referred to jointly as
"Contracts";
WHEREAS on October 4th, 2006, TMT, Tecumseh and the Participating Banks executed
a Standstill Agreement whereby the signing parties agreed to continue to extend
the maturities of the respective Contracts and to jointly prepare a
restructuring plan with respect to the payment obligations of TMT under the
Contracts (the "Outstanding Balance");
WHEREAS subject to the terms and conditions hereunder, the Parties are willing
to restructure and reschedule the payment of the Outstanding Balance;
NOW THEREFORE, the Parties hereby agree to enter into this Out-of-Court
Restructuring Agreement ("Agreement"), which will be governed by the following
terms and conditions:
1. DEBT RESTRUCTURING
1.1 The Parties agree that, on the date hereof, the amounts described in Exhibit
1.1 attached hereto correspond to TMT's total Outstanding Balance with respect
to each of the Banks.
1.2 Subject to the terms and conditions of this Agreement, the Parties agree to
restructure and reschedule the payment of TMT's Outstanding Balance in
accordance with the provisions of this Agreement.
2. PAYMENT OF OUTSTANDING BALANCE
2.1 The Participating BANKS agree to grant to TMT:
2.1.1. A grace period of 18 months commencing on November 21, 2006 (the "Grace
Period"), during which no payment of principal can be demanded by the
Participating Banks from TMT under the Contracts. During the Grace Period,
interest on the Outstanding Balance will be paid on arrears by TMT on a
quarterly basis commencing on January 1st, 2007 at an annual rate of Libor plus
3 % Interest will accrue computed on the basis of a year of 360 days and actual
days elapsed.
2.2 After the Grace Period, the Outstanding Balance will be divided into 18
monthly equal installments, which will be paid by TMT commencing on June 21,
2008. After the Grace Period, interest accruing on the Outstanding Balance will
be paid monthly in arrears.
2.2.1 As long as this Agreement has not been homologated by the Court of Campo
Largo, the Banks shall have the option to apply any principal payment amounts
received under
this Agreement as payment for interest under the existing Contracts, provided
that any principal amount payment received and used to pay interest will cause
the succeeding payments of interest to be considered payments of principal up to
the amount previously converted into interest payment and the Outstanding
Balance will be reduced to off-set the increase of interest this swap will
generate. The swap authorized shall not generate any increase in the amounts and
in the flow of payments of TMT stipulated in this Agreement, even after the
homologation of the Agreement by the Campo Largo Court.
2.3. In case there is a material change in the US dollar/real conversion rate,
compared to the current conversion rate, TMT shall prepay certain amounts of its
Outstanding Balance to the Banks according to the formula described in Exhibit
2.3 and, apply such payment adjustments against the earliest payments of
principal due under this Agreement.
2.4 Should any of the dates on which any installment is to be paid hereunder be
a non-business day in the City of Sao Paulo, Brazil, such payment shall be made
on the next succeeding business day, without accrual of additional interest for
such non-business day.
2.5 Should TMT default in the payment of any Installment hereunder when such
payment becomes due and payable, default interest on the rate of 1% per annum
over the agreed interest rate (Libor + 3% per annum) shall accrue on the
principal of such defaulted amount until it is paid in full. In the event of any
late payment hereunder by TMT to the Participating Banks, a penalty of 2% over
such late payment amount shall be immediately due and payable by TMT to the
Participating Banks, unless such payment is fully made within the cure period
pursuant to the terms of this Agreement. In addition to that, if such payment is
not cured and the Outstanding Balance is accelerated pursuant to the terms of
this agreement, then such 2% penalty shall be immediately due and payable over
the entire Outstanding Balance.
3. SUPPLY AGREEMENT
3.1 TMT and Tecumseh Power Company will enter into a supply agreement for the
purchase of LV156/195, OV195 and OV490 type engines and kits, including new
developments on these engines (the "Engines") from TMT by Tecumseh Power Company
(the "Supply Agreement") in the form of Exhibit 3.1 hereto.
3.2 In connection with the Supply Agreement, TMT and the Banks will enter into
an agreement (the "Pledge Agreement") in the form of Exhibit 3.2 hereto whereby
TMT will assign to the Banks, as a security for the payment of the Outstanding
Balance, the amounts owed by Tecumseh Power Company to TMT, after the deduction
of the amounts owed by TMT to Tecumseh Power Company for the supply of
components and parts used by TMT in the manufacture of the Engines, all in
accordance with the Supply Agreement.
3.3 The purchase price of the Engines will be calculated based on the effective
prices received by Tecumseh Power Company from its customers in accordance with
the Supply
Agreement.
3.4 All income generated by TMT as a result of the Supply Agreement will be
deposited in a bank account designated from time to time by the Participating
Banks, which will be operated freely by TMT, except that if a default occurs,
the Participating Banks may fully exercise their rights under the Pledge
Agreement. TMT authorizes the Banks to have full access to the account
information of said account and, if a default occurs, to debit such account for
the purpose of allowing the Participating Banks to receive their credits.
4. NEW INDEBTEDNESS (NOT INCLUDED REFINANCING OF EXISTING INDEBTEDNESS)AND
DIVIDEND OR PROFIT DISTRIBUTION
4.1 The Parties agree that during the period of this Agreement and thereafter
TMT may enter into new financial facility agreements with BNDES and/or with the
Banks or other institutions (excluding refinancing of existing indebtedness) for
purposes of development of new products by TMT and payment of some or all of the
Outstanding Balance or other specific debts, provided any such new indebtedness
and/or any new guarantees instituted to the benefit of any creditor shall be
previously approved by the Banks representing 60% of the then Outstanding
Balance (such approval not to be unreasonably withheld). Notwithstanding the
stipulation of this section, credit operations in the normal course of business
may continue to be carried out, provided they are limited in the aggregate to R$
500,000.00 on a revolving basis.
4.2 Until all the Participating Banks will have received fully their credits
which are the object of this Agreement or are otherwise satisfied that the
Outstanding Balance is being paid as scheduled and that TMT has recovered from
its financial difficulties, at the reasonable discretion of the Banks which
represent more then 60% of the then outstanding credits, TMT shall not pay any
dividend, interest over capital or profit distribution directly or indirectly to
its parent company or to any other third party and shall not grant any loan to
its parent company or to any other affiliated (controller, controlled or
colligated) company unless such payment or loan is approved by the Banks
representing 60% of the then Outstanding Balance.
5. REPRESENTATIONS AND WARRANTIES
5.1 TMT hereby represents and warrants as follows:
a) TMT will not sell, without the consent of the Banks representing 60% of the
then Outstanding Balance (such approval not to be unreasonably withheld), any of
its fixed assets the value of which in the aggregate exceeds five hundred
thousand Brazilian Reais (R$ 500,000), except for the transfer of assets
foreseen in section 5.1(d)(i); and
b) The Banks will have at any time access to all information concerning TMT's
business and financial situation, including the examination of TMT's plant
operations, inventory, agreements, and accounting books or records and TMT will
keep the Banks updated regarding any new material information or material
changes in the information provided.
c) TMT will maintain during the entire term of this Agreement a positive cash
flow, before debt service, calculated in accordance with the projections
contained in Exhibit 5.1.c). to be confirmed by quarterly financial information
which will be supplied to the Banks.
d) Simultaneously with the signature of this Agreement, and the advisory
services provided as of such date, TMT will execute with the Participating Banks
the following contracts and will effect the following payment of principal due:
i) the agreement attached hereto as Exhibit 5.1 (d)(i) ("Payment-in-Kind")
contemplating the transfer of certain assets by TMT to the Banks under certain
conditions. The amounts received from the sale of the assets which eventually
correspond to the share of the Non Participating Banks will be deposited by TMT
in Court, so that the Court may determine the amounts due to each Bank, in order
to off-set the amounts received by the Non Participating Banks during the Stand
Still Period. The value of the assets transferred to the Participating Banks in
accordance with the Payment-in-Kind will be deducted from the Outstanding
Balance with respect to each Bank. Once the proceeds deriving from the sale of
assets become available, the amount which corresponds to the share of the
Non-Participating Banks will be deposited in court so that the payments received
by the Non-Participating Banks during the Stand Still Period can be taken into
account in the calculation of the amount which is owed to each Bank.
ii) the agreements attached hereto as Exhibits 5.1(d)(ii)(a) and 5.1(d)(ii)(b)
("Chattel Mortgage Agreements") granting security to the Banks in the form of a
chattel mortgage for the payment of the Outstanding Balance of TMT with respect
to such Banks.
iii) the Conditional Guaranty defined and stipulated below and
iv) an amount to be paid by TMT to the Banks proportionally to their respective
credits of the equivalent in reais to one million five hundred dollars (US$
1,500,000) to be converted in accordance with the official exchange rate valid
for the date of payment (PTAX 800- option 5) and paid on or before January 15th,
2007 to be deducted from the Outstanding Balance.
v) TMT will not pay any of the amounts owed to its affiliates resulting from
inter-company debt incurred before the signature of this Agreement, except if
such payments are effected with resources which result from foreign exchange
gains and provided the limits stipulated in Exhibit 2.3. are duly observed,
without prejudice of the stipulation contained in section 5.1.c).
5.2 Tecumseh hereby represents and warrants as follows:
a) Tecumseh acknowledges that the payment terms hereunder have been granted to
TMT in reliance upon, among other things, Tecumseh's direct or indirect stock
ownership and managerial control of TMT;
b) Tecumseh's quotaholding interest in TMT represents more than 99% on the date
hereof
of the total issued and outstanding quotas of TMT. Tecumseh agrees that the sale
or transfer of stock of TMT shall require the prior written approval of the
Banks which represent 60% or more of the then Outstanding Balance.
c) All of the financial obligations granted to TMT are not in violation of
Tecumseh's corporate powers or of the applicable laws of its state of
incorporation;
d) As long as TMT is bound by the terms of this Agreement, Tecumseh will take
commercially reasonable steps to ensure that TMT is managed in a financially
prudent and business-like manner and that its assets and earnings shall not be
inappropriately depleted;
e) Tecumseh will notify the Banks immediately after the occurrence of, or
expectation to occur, any fact or event of which Tecumseh has actual knowledge
that: (i) may adversely affect the ability of TMT to continue its normal
business activities; or (ii) represents or may come to represent a material
adverse change in the financial or other conditions of TMT, Tecumseh and
Tecumseh Power Company; and
f) Tecumseh will keep the Banks informed regarding any material adverse changes
or defaults related to Tecumseh's secured credit facilities in the United States
of America and any amendments to the covenants and other conditions contained in
the secured credit facilities in the United States of America. In addition,
Tecumseh's shall provide to the Participating Banks on a timely manner its 10Q
and 10K reports and Tecumseh Power Company shall provide to the Participating
Banks on a quarterly basis its Executive Report and Financial Statements.
g) Subject to the Condition Precedent contained in section 6.1 below, Tecumseh
shall enter into a guarantee (the "Conditional Guaranty") in favor of the
Participating Banks for the payment of the Outstanding Balance with respect to
the payment of the Outstanding Balance owed to the Banks on such future date as
all of the following conditions have been satisfied (and in no event shall there
be any liability of Tecumseh and no claim shall be made against Tecumseh on
account of the foregoing Conditional Guaranty unless all such conditions have
been satisfied: (i) the Outstanding Balance owed to the Banks shall be unpaid
and outstanding (ii) Tecumseh's second lien debt facility (as amended, modified,
restated or refinanced) shall have been paid in full in cash and terminated
(iii) the required number of lenders under Tecumseh's first lien debt facility
shall have consented to the entry into such Conditional Guaranty on or before
December 7, 2006 and (iv) entering into such Conditional Guaranty shall not
otherwise breach the terms of Tecumseh's first lien debt facility. The
obligation of Tecumseh under this Agreement to enter into the Conditional
Guaranty shall survive any voluntary or involuntary bankruptcy of TMT if, at the
time of the commencement of such proceeding, the conditions to the grant of the
Conditional Guaranty
as set forth in this Section 5.2(g) shall not have been met. Notwithstanding
anything in this Agreement or otherwise to the contrary, the obligation, if any,
of Tecumseh to enter into the Conditional Guaranty shall not survive, and shall
terminate and be of no force and effect, upon (x) the commencement of, a
voluntary or involuntary bankruptcy or insolvency proceeding of Tecumseh and
Tecumseh Power Company, unless at the time of the commencement of such
proceeding, the conditions to the grant of the Conditional Guaranty as set forth
in this Section 5.2(g) shall have already been met, (y) conversion or exchange
(whether implemented as part of an in court or out of court restructuring) in a
distressed situation of all or any portion of Tecumseh's first lien debt
facility or second lien debt facility (in each case as amended, modified,
restated or refinanced) into equity interests (whether common, preferred or
otherwise) of Tecumseh or any of its United States affiliates, or (z)
consummation of a sale, transfer or other disposition of all or a substantial
portion of the equity interests in (or assets of) TMT in which the purchaser or
transferee thereof assumes the obligations of TMT with respect to the
Outstanding Balance, provided that such sale has been approved by the Banks in
accordance with this Agreement.
h) The terms and conditions of the Conditional Guaranty are contained in Exhibit
5.2.h.
i) Tecumseh agrees to exercise its commercially reasonable efforts to sell the
assets contemplated under Tecumseh's second lien debt facility in accordance
with a time line and a procedure to be mutually agreed and upon terms consistent
with Tecumseh's first lien debt facility and the second lien debt facility, in
order to allow Tecumseh to pay in full its second lien debt facility in the
first quarter of 2008.
j) Notwithstanding anything to the contrary contained herein, the effectiveness
and binding effect of each of the representations, warranties and agreements of
Tecumseh and Tecumseh Power Company contained in this Agreement are conditioned
on obtaining the consent of the lenders under Tecumseh's first lien debt
facility and the consent of the lenders under Tecumseh's second lien debt
facility, and such representations, warranties and agreements of Tecumseh will
not be legally binding if each of such consents has not been obtained by
December 7, 2006. Tecumseh shall notify in writing the Participating Banks on or
before December 7, 2006 in order to inform them whether or not such consent was
obtained from Tecumseh first and second lien lenders.
5.3 Tecumseh Power Company hereby represents and warrants as follows:
a) Tecumseh Power Company will honor the Supply Agreement, and shall not amend
or vary any of its terms and conditions without the express prior written
approval of the Banks which represent 60% or more of the then Outstanding
Balance; and
b) As long as TMT is bound by the terms of this Agreement, Tecumseh Power
Company commits not to source its Engines (as defined in the Supply Agreement)
from any other third party other than TMT, which will be the exclusive supplier
of the Engines.
5.4 The Participating Banks hereby jointly and severally represent and warrant
as follows:
a) The Participating Banks are in agreement with the financial restructuring
being sought by TMT and Tecumseh and this Agreement is not - and shall not be
considered - an event of default under the Standstill Agreement and the
Contracts; and
b) As of the date of execution hereof, the terms and conditions of the
obligations contained
in this Agreement shall prevail over the conditions contained in the Contracts
and schedules attached hereto, to the extent they are inconsistent with this
Agreement.
c) This Agreement will be filed with the Court of Competent Jurisdiction in
order to bind the Non-Participating Banks. Any stipulation in favor of the
Participating Banks which is extended to the Non-Participating Banks shall be
net of any payments or advantages received by such Non Participating Banks
during the term of the Standstill Agreement and shall not result in any
additional obligation to TMT, Tecumseh or Tecumseh Power Company. The
Out-of-Court Restructuring Plan shall contain a provision authorizing any
unsecured operational creditor (which is not an affiliate of TMT, Tecumseh and
Tecumseh Power Company), whose credit is in excess of R$ 100,000.00, to exercise
the option to participate proportionally to its credit in the Plan, provided
such option is exercised within 30 days of the publication of the notice of
Out-of-Court Restructuring by the Campo Largo Court such creditor accepts to
restructure its credit and assume the same rights and obligations as the
Participating Banks, except for the payment of principal provided for under
section 5.1(d) above and provided further that this event does not affect the
payment or transfer of the amounts due to the Participating Banks. Any
difference of payment resulting from the exercise of such option by operational
creditors will be immediately paid by TMT. A creditor wishing to exercise such
option must do so for its entire credit.
6. CONDITION PRECEDENT AND ACCELERATION
6.1. Condition Precedent: Any representation, warranty, agreement or obligation
of Tecumseh and/or Tecumseh Power Company under this Agreement and exhibits
hereof will only come into force upon approval of the Tecumseh first and second
lien lenders, provided such approval is given on or before December 7, 2006, and
of the Board of Directors of Tecumseh, provided such approval is given on or
before November 24, 2006. If such approvals are not given by such dates, this
Agreement shall have no force and effect whatsoever in respect of the US
parties, except that such date may be extended if all Parties hereto agree in
writing to extend the period during which the condition precedent herein
established may be complied with.
6.2. Duration. This Agreement shall come into force and effect on the date
hereof, without prejudice to the Condition Precedent established in the
preceding clause and shall terminate after the payment of the Outstanding
Balance by TMT in accordance with the provisions of this Agreement.
6.3 Events of Default. This agreement may be terminated upon the occurrence of
any of the following events of default:
a) If any of the Parties breach any representation, warranty, covenant or
agreement contained in this Agreement or in any of the other agreements attached
hereto as Exhibits, which breach cannot be or is not cured within 5 business
days after receipt of a notice by the non defaulting Party specifying the
default, and provided that such breach shall not be caused by action or omission
of the non defaulting Party; or
b) If TMT, Tecumseh and/or Tecumseh Power Company file for bankruptcy or any
other insolvency proceeding, in which case the cure period provided for in the
preceding section shall not apply; or.
c) if TMT, Tecumseh and or Tecumseh Power Company take, or omit to take, any
action the effect of which results in the impairment or reduction or the non
perfection or the irregular perfection of any guarantee stipulated in this
Agreement; or
d) if the Supply Agreement. does not generate an income compatible with the
projections of Exhibit 5.1 "c" and is not supplemented by other sources of
income in a timely manner; or
e) If the approvals referred in section 6.1 are not granted as provided for in
this section,
6.3.1 In case this Agreement is terminated in accordance with this section, the
Participating Banks will be entitled to accelerate payment of the entire
Outstanding Balance and TMT will be obligated to pay such amount within 72 hours
after the receipt of a notice to this effect, together with all the accrued
interest and penalty as provided for in Section 2.5. of this Agreement and, when
applicable, reasonable attorney's fees. Notwithstanding the termination of the
Agreement, any payments made or the performance of any other act in accordance
with this Agreement until the date of termination shall be considered valid and
final.
7. MISCELLANEOUS
7.1. The Participating Banks are authorized to assign their rights under the
present Agreement and its Guarantees to third Parties, which are not
competitors, suppliers or clients of TMT, Tecumseh or Tecumseh Power Company.
Any Assignee must agree in writing prior and as a condition for the
effectiveness of the assignment, to be bound by the same restrictions in order
to validate such assignment and will have access to the information which the
Participating Banks are entitled to receive to the extent there is no conflict
of interest on their part.
7.1-A. Confidentiality. Unless required by applicable legislation or upon TMT's
consent, the Banks and their respective directors, officers, employees,
attorneys-in-fact and representatives shall keep confidential and not disclose
to any third party: (i) all information, documents and materials related to TMT,
Tecumseh and Tecumseh Power Company disclosed or obtained by the Banks during
the relationship between the Parties and (ii) the object, rights and obligations
of the Parties under this Agreement.
7.2. Notices. Except if a notice of change of address has been previously
provided pursuant to the provisions hereof, any notice required or permitted by
this Agreement shall be addressed as follows:
a) If to the BANKS:
BRADESCO:
Xx. Xxxxxxxx, 0.000, 0 xxxxx
00000-000 - Xxx Xxxxx - SP
At.: Xxxx Xxxxxxxx Xxxxxx
Telephone: 0000-0000
Facsimile: 2178-4501
E-mail: 0000.xxxxxxxx@xxxxxxxx.xxx.xx
ITAU BBA:
Al. Dr. Xxxxxx Xxxxxxxx, 417 - 25 andar - cj. 2501
00000-000 - Xxxxxxxx - Xxxxxx
Xx.: Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxx
Telephone: (00) 0000-0000
Facsimile: (00) 0000-0000
E-mail: xxxxxxxxx@xxxxxxx.xxx.xx
HSBC:
Xxxxxxxx Xxxxxxxx Xxxxx, 00, X/xxxx - Xxxxxx
00000-000 - Xxxxxxxx - Parana
At.: Xxxxxxxx Xxxxxxxxxx
Telephone: (00) 0000-0000
Facsimile: (00) 0000-0000
Email: xxxxxxxxxxx@xxxx.xxx.xx
b) If to TMT:
TMT MOTOCO DO BRASIL LTDA.
Rua Xxx Xxxxxx xx Xxxxxxx, 000
Xxxxx Xxxxx, Xxxxxx do Parana
At.: Sr. Xxxxxxx Xxxx Xxxx
Telephone: (00) 0000-0000
Facsimile: (00) 0000-0000
E-mail: xxxxx@xxx-xxxxxx.xxx.xx
c) If to Tecumseh:
TECUMSEH PRODUCTS COMPANY
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxx xx Xxxxxxxx
Xxxxxxxx, X.X.X.
At: Xxxxx X. Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
d) If to Tecumseh Power Company:
TECUMSEH POWER COMPANY
000 Xxxxx Xxxxxx, Xxxxxxx
Xxxxxxxxx, X.X.X.
At: Xxxxx X. Xxxxxxx
Telephone: 000 000-0000
Facsimile: 000 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxx.xxx
e) With a copy to:
Felsberg. Xxxxxxxx, Mannrich e Aidar Advogados
Xx. Xxxxxxxx, 0000 - 0 xxxxx
Xxxxxxxxx Xxxxx
CEP 00000-000 - Xxx Xxxxx, XX, Xxxxxx
At.: Xxxxxx FelsbergTelephone: (00 00) 0000-0000
Fac-simile: (00 00) 0000-0000
E-mail: xxxxxxxxxxxxxx@xxxxxxxx.xxx.xx
7.2.1 Any notice required or permitted hereunder shall be in writing and
personally delivered and/or sent by registered mail, except if by fax or e-mail
and shall be deemed effective on the date of the receipt thereof. The date of
receipt shall be evidenced by the mail receipt, in the event of registered
letter, or signed receipt, if it is personally delivered, or by electronic means
if by fax or e-mail. Either party may change its address indicated above, at any
time, by sending the other party a written notice to that effect, as provided
herein.
7.3 Language. This Agreement has been written in the Portuguese and English
languages. In the event of inconsistencies, the Portuguese version shall prevail
in case of any dispute involving the Brazilian Parties and the English version
shall prevail in case of any dispute involving only the US parties and the
Banks. The Parties will also sign a Portuguese version of this Agreement, which
will be used for filings in Brazil.
7.4 Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of Brazil without giving effect to the conflict of laws
principles thereof.
7.5 Choice of Forum and Arbitration. Any disputes between the Participating
Banks and TMT will be submitted to the courts of city of Sao Paulo, unless the
matter falls under the jurisdiction of the Campo Largo Court in accordance with
Law 11,101/2005, until the homologation of this Agreement.
7.5.1 Arbitration. Any controversy or claim with respect to any U.S. affiliate
of TMT, including Tecumseh and Tecumseh Power Company, arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rule,
including the Optional Rules for Emergency Measures of Protection, and judgment
on the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The written decision of the arbitrator or arbitrators
shall state the reasons on which it is based and shall be without appeal. The
arbitral award shall be final and binding upon all Parties. The place of
Arbitration shall be at a location in New York, NY or otherwise as agreed to by
the Parties.
7.6. Amendment and Entire Agreement. This Agreement and its Exhibits represent
the entire agreement of the Parties relating to the subject matter hereof. No
provision of this Agreement may be amended, modified, waived or discharged
unless such amendment, modification, waiver or discharge is agreed to in writing
and signed by TMT, Tecumseh and Tecumseh Power Company and by the Banks which
represent more 60% of the then Outstanding Balance.
7.7. Successors. This Agreement is binding upon the contracting parties and
their successors pursuant to the law and assignees, except as otherwise provided
herein.
7.8 Notwithstanding anything in this Agreement or otherwise to the contrary,
Tecumseh and Tecumseh Power Company (i) are parties to this Agreement and
"Parties" in each case solely for purposes of Sections 3, 5.2 and 5.3,
respectively, and for purposes of Sections 6.1, 6.2, 6.3(b) and 6.3(c) and
Section 7 (other than the heading of Section 7.5), and (ii) shall in any event
have no obligation or liability hereunder if the conditions referred to in
Section 6.1 are not satisfied by the date referred to in Section 6.1.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in eight (8) counterparts of equal contents and effects, before the 2 (two)
undersigned witnesses, on the date referred to below.
Sao Paulo, November 21, 2006.
BANCO BRADESCO S.A.
By/Por:
--------------------------------------
Name/Nome: Xxxx Xxxxxxxx xx Xxxxxx Xxxx Xxxxxx
-----------------------------------
Position/Cargo:
------------------------------
By/Por:
--------------------------------------
Name/Nome: Marco Xxxxxxx xx Xxxxxxxx
-----------------------------------
Position/Cargo:
------------------------------
BANCO ITAU BBA S.A.
By/Por:
--------------------------------------
Name/Nome: Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxx
-----------------------------------
Position/Cargo:
------------------------------
By/Por:
--------------------------------------
Name/Nome: Haddrey Xxxxxxxxx Xxxxxx
-----------------------------------
Position/Cargo:
------------------------------
HSBC BANK BRASIL S.A. - BANCO MULTIPLO
By/Por:
--------------------------------
Name/Nome: Xxxx Xxxxxxx Xxxxxxxxxx
Position/Cargo:
TMT MOTOCO DO BRASIL LTDA.
By/Por:
--------------------------------
Name/Nome: Xxxxxxx Xxxx Xxxx
Position/Cargo: Director
TECUMSEH PRODUCTS COMPANY
By/Por:
--------------------------------
Name/Nome: Xxxxx X. Xxxxxxxxx
Position/Cargo: Vice President,
Treasurer and Chief
Financial Officer
TECUMSEH POWER COMPANY
By/Por:
--------------------------------
Name/Nome: Xxxxx X. Xxxxxxx
Position/Cargo: President
WITNESSES/TESTEMUNHAS:
-------------------------------------
NAME/NOME: Xxxxxx Xxxxxxx
ID/RG:
------------------------------
-------------------------------------
NAME/NOME: Xxxxx Alfa Canaes
ID/RG:
------------------------------
ANEXO 1.1 Saldo Devedor Total da TMT
STARTING EXPIRE PRINCIPAL VALUE
CREDIT LINE BANK CONTRACT DATE DATE IN U$DOLARS FX EX TOTAL R$
--------------------- -------- --------------- ---------- ---------- --------------- ------ -------------
ACC Alfa 06/001123 5/9/2006 11/15/2006 515,662.50 2.1593 1,113,470.04
ACC Alfa 06/001132 5/10/2006 11/15/2006 563,963.40 2.1593 1,217,766.17
ACC Alfa 06/001292 5/23/2006 11/19/2006 824,678.97 2.1593 1,780,729.30
ACC Alfa 06/001332 5/29/2006 11/25/2006 1,662,775.75 2.1593 3,590,431.68
ACC Alfa 06/001387 6/7/2006 12/4/2006 691,798.08 2.1593 1,493,799.59
ACC Alfa 06/001388 6/7/2006 12/4/2006 826,173.78 2.1593 1,783,957.04
ACC Alfa 06/001408 6/14/2006 12/11/2006 70,232.52 2.1593 151,653.08
ACC Alfa 06/001773 8/28/2006 12/11/2006 1,330,489.31 2.1593 2,872,925.57
-------------- -------------
SUB-TOTAL ALFA 6,485,774.31 14,004,732.47
============== =============
ACC Bradesco 06/005075 6/28/2006 12/25/2006 465,842.89 2.1593 1,005,894.56
ACC Bradesco 06/005170 6/30/2006 12/27/2006 514,379.44 2.1593 1,110,699.53
ACC Bradesco 06/005231 7/3/2006 12/30/2006 374,088.26 2.1593 807,768.78
ACC Bradesco 06/005453 7/10/2006 1/6/2007 302,852.90 2.1593 653,950.27
ACC Bradesco 06/005452 7/10/2006 1/6/2007 739,311.60 2.1593 1,596,395.54
ACC Bradesco 06/005607 7/13/2006 1/9/2007 687,430.05 2.1593 1,484,367.71
ACC Bradesco 06/006530 8/9/2006 2/5/2007 547,862.47 2.1593 1,182,999.42
ACC Bradesco 06/006531 8/9/2006 2/5/2007 408,171.33 2.1593 881,364.36
ACC Bradesco 06/006532 8/9/2006 2/5/2007 102,062.86 2.1593 220,384.34
ACC Bradesco 06/006649 8/11/2006 2/7/2007 458,844.50 2.1593 990,782.93
ACC Bradesco 06/006650 8/11/2006 2/7/2007 461,812.61 2.1593 997,191.97
ACC Bradesco 06/006778 8/16/2006 2/12/2007 152,892.00 2.1593 330,139.70
ACC Bradesco 06/006779 8/16/2006 2/12/2007 152,892.00 2.1593 330,139.70
ACC Bradesco 06/006780 8/16/2006 2/12/2007 152,892.00 2.1593 330,139.70
ACC Bradesco 06/006781 8/16/2006 2/12/2007 152,892.00 2.1593 330,139.70
ACC Bradesco 06/006782 8/16/2006 2/12/2007 152,861.88 2.1593 330,074.65
ACC Bradesco 06/006784 8/16/2006 2/12/2007 101,907.92 2.1593 220,049.76
ACC Bradesco 06/006785 8/16/2006 2/12/2007 152,831.75 2.1593 330,009.60
ACC Bradesco 06/006786 8/16/2006 2/12/2007 101,887.83 2.1593 220,006.40
ACC Bradesco 06/006979 8/23/2006 2/19/2007 152,681.13 2.1593 329,684.35
ACC Bradesco 06/006980 8/23/2006 2/19/2007 508,836.67 2.1593 1,098,731.01
ACC Bradesco 06/006981 8/23/2006 2/19/2007 452,775.26 2.1593 977,677.62
ACC Bradesco 06/007140 8/28/2006 2/24/2007 508,334.58 2.1593 1,097,646.87
ACC Bradesco 06/007141 8/28/2006 2/24/2007 304,940.50 2.1593 658,458.02
ACC Bradesco 06/007559 9/11/2006 3/10/2007 202,811.67 2.1593 437,931.23
ACC Bradesco 06/007561 9/11/2006 3/10/2007 202,811.67 2.1593 437,931.23
ACC Bradesco 06/007562 9/11/2006 3/10/2007 101,385.75 2.1593 218,922.25
ACC Bradesco 06/007563 9/11/2006 3/10/2007 998,451.82 2.1593 2,155,957.01
ACC Bradesco 06/007764 9/13/2006 3/12/2007 2,045,096.15 2.1593 4,415,976.11
-------------- -------------
SUB-TOTAL BRADESCO 11,661,841.48 25,181,414.31
============== =============
ACC Itau-BBA 05/020684 11/17/2005 11/12/2006 1,169,715.56 2.1593 2,525,766.80
ACC Itau-BBA 05/020968 11/21/2005 11/16/2006 318,920.42 2.1593 688,644.86
ACC Itau-BBA 05/021502 11/25/2005 11/20/2006 425,200.00 2.1593 918,134.36
-------------- -------------
SUB-TOTAL ITAU-BBA 1,913,835.98 4,132,546.02
============== =============
ACE Itau-BBA 05/018001 10/6/2005 11/16/2006 633,583.64 2.1593 1,368,097.15
ACE Itau-BBA 05/018536 10/17/2005 11/16/2006 1,122,148.13 2.1593 2,423,054.46
ACE Itau-BBA 05/019934 11/4/2005 11/16/2006 426,386.67 2.1593 920,696.74
-------------- -------------
SUB-TOTAL ITAU-BBA 2,182,118.44 4,711,848.35
============== =============
1/2
STARTING EXPIRE PRINCIPAL VALUE
CREDIT LINE BANK CONTRACT DATE DATE IN U$DOLARS FX EX TOTAL R$
--------------------- -------- --------------- ---------- ---------- --------------- ------ -------------
ACC HSBC 06/039810 5/22/2006 11/18/2006 161,901.61 2.1593 349,594.15
ACC HSBC 06/086768 10/27/2006 11/26/2006 644,093.89 2.1593 1,390,791.94
ACC HSBC 06/087711 10/31/2006 11/30/2006 301,206.67 2.1593 650,395.56
ACC HSBC 06/087713 10/31/2006 11/30/2006 501,910.56 2.1593 1,083,775.47
ACC HSBC 06/087716 10/31/2006 11/30/2006 580,979.54 2.1593 1,254,509.12
ACC HSBC 06/089666 11/8/2006 12/8/2006 551,332.83 2.1593 1,190,492.98
ACC HSBC 06/089669 11/8/2006 12/8/2006 400,888.56 2.1593 865,638.67
ACC HSBC 06/089674 11/8/2006 12/8/2006 683,377.26 2.1593 1,475,616.52
ACC HSBC 06/074200 9/14/2006 12/13/2006 796,159.05 2.1593 1,719,146.24
ACC HSBC 06/049962 6/22/2006 12/19/2006 545,040.96 2.1593 1,176,906.94
ACC HSBC 06/051829 6/29/2006 12/26/2006 569,302.44 2.1593 1,229,294.76
ACC HSBC 06/077936 9/27/2006 12/26/2006 1,310,132.88 2.1593 2,828,969.93
ACC HSBC 06/079685 10/3/2006 1/2/2007 504,765.28 2.1593 1,089,939.67
ACC HSBC 06/079687 10/3/2006 1/2/2007 621,745.91 2.1593 1,342,535.94
ACC HSBC 06/055126 7/11/2006 1/7/2007 359,226.39 2.1593 775,677.54
ACC HSBC 06/081982 10/11/2006 1/9/2007 554,461.11 2.1593 1,197,247.87
ACC HSBC 06/081983 10/11/2006 1/9/2007 863,603.66 2.1593 1,864,779.38
ACC HSBC 06/056736 7/17/2006 1/13/2007 67,693.63 2.1593 146,170.86
ACC HSBC 06/057958 7/20/2006 1/16/2007 512,284.72 2.1593 1,106,176.40
ACC HSBC 06/057962 7/20/2006 1/16/2007 507,886.78 2.1593 1,096,679.92
ACC HSBC 06/083807 10/18/2006 1/16/2007 493,179.56 2.1593 1,064,922.62
ACC HSBC 06/084158 10/19/2006 1/17/2007 655,092.26 2.1593 1,414,540.72
ACC HSBC 06/059007 7/25/2006 1/21/2007 601,854.75 2.1593 1,299,584.96
ACC HSBC 06/060457 7/28/2006 1/24/2007 758,805.48 2.1593 1,638,488.67
ACC HSBC 06/062166 8/3/2006 1/30/2007 116,485.20 2.1593 251,526.49
ACC HSBC 06/063032 8/7/2006 2/5/2007 520,858.75 2.1593 1,124,690.30
-------------- -------------
SUB-TOTAL HSBC 14,184,269.73 30,628,093.63
============== =============
TOTAL IN U$ 36,427,839.93 78,658,634.77
============== =============
BNDES Finame Safra 32108874-3 12/07/05 4/15/2008 409,015.05
BNDES Finame Safra 32108523-0 30/12/04 1/16/2008 428,379.27
BNDES Exim Bradesco 2004018 19/04/05 2/17/2008 49,016,779.57
BNDES Progerem Unibanco 05203061013 23/08/05 8/15/2007 33,850,791.24
Duplo indexador (CCB) Itau-BBA 106306110026500 17/11/06 11/20/2006 28,249,321.22
--------------
TOTAL EXPRESSA R$ 111,954,286.35
==============
TOTAL GERAL IN R$ 190,612,921.12
==============
BRADESCO 74,198,193.88
ITAU-BBA 37,093,715.59
HSBC 30,628,093.63
UNIBANCO 33,850,791.24
ALFA 14,004,732.47
SAFRA 837,394.32
--------------
190,612,921.12
TMT-Motoco do Brasil Ltda. expressly represents that it agrees to the amounts
above described/listed, recognizing the same as precise, certain and due, on
this base date of November 20, 2006.
------------------------------------
TMT-Motoco do Brasil Ltda.
2/2
EXHIBIT 2.3
Material Change in U$ dollar / real Conversion Rate Formula
This calculation will be done on a semiannual basis, starting on May 21st of
2007.
(+) AR Payments - Actual Rate
(-) AR Payments - Forecasted Rate (Nov 17th 2006)
-------------------------------------------------
= NET IMPROVEMENT / DEFICIT
(-) Net Improvement / Deficit Prior Periods
(-) Debt Payment (Principal Only)
=================================================
= FX GAIN TO SHARE / DEFICIT
If the resulted FX GAIN TO SHARE number is a positive number, 30% of this FX
GAIN TO SHARE number will be used to anticipate coming bank debt payments to the
banks. The other 70% of the FX GAIN TO SHARE number will be used to pay the
total Parent Company support given after the debt restructuring agreement was
signed. After the company support given after the debt restructuring agreement
was signed is paid down, 70% of FX GAIN TO SHARE number will be used to
anticipate coming bank debt payments and TMT may use the remaining 30% to pay
down Intercompany debts
EXHIBIT 3.1
SUPPLY AGREEMENT
This Agreement ("Agreement") is entered into this 21ST DAY OF NOVEMBER,
2006, ("Effective Date") by and between Tecumseh Power Company, a Delaware
corporation, with offices at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000
("Tecumseh"), and TMT Motoco, a corporation with its main offices at 792 Xxx
Xxxxxx xx Xxxxxxx Street, Campo Largo, Parana, ("Supplier"). In this Agreement,
Tecumseh and Supplier are sometimes called the "Parties," or a "Party."
WHEREAS, Supplier is engaged in the business of manufacturing of LV156,
LV195 and OV195 engines for export to the customers of Tecumseh. In addition,
Supplier manufactures a kit for the OV490 engine. Such engines and kits were
developed by Tecumseh, or in the case of the LV156 are based upon Tecumseh owned
designs. Due to emissions and other characteristics, these engines are not able
to be sold into California, USA and Tecumseh must bring the engine into
environmental compliance.
WHEREAS, Tecumseh desires to designate Supplier as a source for the
Products (complete engines or kits for the LV156, LV195, OV195 and OV490,
including new developments on these engines or kits), for Tecumseh and Supplier
will sell the Products to Tecumseh on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is agreed by the Parties as
follows:
1. Designation of Supplier. Tecumseh hereby designates Supplier as supplier
for the Products. Tecumseh will purchase 100% of their requirements for the
Product, except when Supplier can not produce parts matching Tecumseh's customer
requirements.
2. Term. The term of this Agreement (the "Term") shall commence on the
Effective Date, shall remain in effect for a term of three years (the "Initial
Term") and shall renew automatically for successive renewal terms of one year
each, unless either Party with one year's notice signifies its intent not to
renew. Tecumseh shall have the right to terminate this Agreement at any time
without cause on 18 months prior written notice to Supplier. The termination or
expiration of this Agreement shall not relieve Supplier of its obligations to
manufacture, deliver Products for which purchase orders are issued prior to
termination, payments and credits hereunder, product liability,
indemnifications, parts availability, sales record retention, insurance
requirements, or product recall obligations. If this Agreement is terminated for
any reason, Tecumseh shall retain all rights in and to any Products, and any
special tooling.
3. Products. The Products covered by this Agreement are manufactured by
Supplier and conform to the product specifications and performance criteria
provided by Tecumseh from time to time. Tecumseh may change the Specifications
from time to time. Supplier shall not materially change the Products'
Specifications unless Supplier has provided Tecumseh with at least ninety (90)
days' prior written notice stating the type of material change to be made to the
Products. If Tecumseh is not satisfied with the material changes, the parties
shall then meet within fifteen (15) days and negotiate in good faith to
reconcile their differences. Routine, incremental changes shall not be
considered to be material changes. Specifications given by Tecumseh shall not
constitute a warranty, express or
EXHIBIT 3.1
implied, by Tecumseh to Supplier against any claims whatsoever; and Tecumseh
shall not be responsible to Supplier in any way, as indemnitor otherwise, for or
on account of any such claims or liability.
4. Purchase Prices; Purchase Orders. The purchase price for the Products
purchased by an Account for the Initial Term of this Agreement shall be the
amounts set forth on Schedule A attached hereto and incorporated herein (the
"Purchase Price"). All prices shall be stated in United States dollars. Supplier
shall maintain the Purchase Price unchanged during the Initial Term.
Supplier acknowledges and agrees that Tecumseh shall be solely responsible
to Supplier for payment of the Purchase Price.
Supplier shall sell to Tecumseh, and Tecumseh shall purchase from Supplier,
such quantity of Products as Tecumseh shall determine pursuant to a purchase
order ("Order") submitted to Supplier from time to time during the term hereof.
Tecumseh shall transmit orders for Products by written Order delivered to
Supplier specifying the quantities of the Products to be purchased, the date for
shipment and place of destination. Tecumseh will place all Orders for Products
utilizing its BPICS system, which is linked to Supplier. In the event of any
conflict between the terms and conditions of any Order or any standard purchase
order form, and the terms and conditions of this Agreement, this Agreement shall
govern.
5. Authorized Representative. Supplier shall appoint an Authorized
Representative, acceptable to Tecumseh, to act on behalf and with the authority
to bind Supplier.
6. Notices. Notices permitted or required to be given hereunder shall be
deemed effective if made in writing (including telecommunications) and delivered
to the recipient's designated address or facsimile number by any of the
following methods: (a) hand-delivery; (b) registered or certified mail, postage
prepaid with return receipt requested; (c) first class or express mail, postage
prepaid; or (d) Federal Express or like overnight courier service. Notice made
in accordance with this section shall be deemed delivered on receipt of delivery
by hand or on the third business day after mailing if mailed by first class,
registered or certified mail, on the date of delivery if sent through an express
or overnight courier service. Any notices or other communications required or
permitted hereunder shall be addressed as follows: If by Supplier-to the
President of Tecumseh, If by Tecumseh-to Managing Director of Supplier.
7. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of Brazil.
8. Arbitration. Any disputes arising out of or in connection with this
agreement shall be definitively resolved by Arbitration (Law No. 9,307/96),
under the Rules of the Arbitration Center of the American Chamber of Commerce to
Brazil - Sao Paulo (Regulamento do Centro de Arbitragem xx Xxxxxx Americana de
Comercio para o Brasil - Sao Paulo).
8.1 The Parties may each appoint an arbitrator to participate in the
arbitration, and they shall choose a third arbitrator by mutual agreement to
make up the arbitration panel. The arbitration tribunal
EXHIBIT 3.1
will be appointed according the rules of the Arbitration Center of American
Chamber of Commerce to Brazil - Sao Paulo.
8.2 The venue for the arbitration will be the City of Sao Paulo, State of
Sao Paulo, Brazil.
8.3 The arbitration proceedings should be conducted in the English
language.
8.4 To settle the disputes, the arbitrators shall apply the Law,
exclusively, and especially the provisions contained in this Agreement and the
applicable Brazilian legislation.
8.5 For the purpose of avoiding any doubt as to the choice of arbitration
as the means for resolving possible disputes arising from this Agreement, the
Parties expressly warrant that this clause is set down for the purposes of
Article 4 of Law No. 9,307, dated September 23, 1996.
8.6 The arbitral decision shall be final and binding on the Parties, and
shall be handed down within the timeframe stipulated by the Arbitration Panel.
8.7 The costs and expenses of arbitration shall be borne by the losing
Party.
9. Entire Agreement. All agreements between the Parties for the sale of the
Products shall be governed exclusively by the terms and conditions set forth
herein, with all exhibits and schedules annexed hereto, except as the Parties
may otherwise agree in a writing duly executed by their respected duly
authorized representatives which expressly references this Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed by its duly authorized representative.
TECUMSEH POWER COMPANY TMT MOTOCO
By: By:
--------------------------------- ------------------------------------
Authorized Signature Authorized Signature
Name: Xxxxx Xxxxxxx Name: Xxxxxxx Xxxx
Title: President Title: Managing Director
EXHIBIT 3.1
Schedule A
PRODUCT PRICES AND OTHER TERMS AND CONDITIONS
1. Cost Adjustment. The initial purchase price for the Products purchased
by Tecumseh for the Initial Term of this Agreement shall be equal to the amount
which Tecumseh receives from its customers for the Products, less 15%, except
for the first year of this Agreement for which the 15% reduction shall not apply
(the "Purchase Price"). Supplier shall maintain the total Purchase Price
unchanged for 6 months after the effective date of this contract. Thereafter,
Product prices can be adjusted once every six months to reflect changes in
aluminum raw material costs using the formulas and baselines shown below. Prices
will only be changed when the Change in Aluminum Price/kg as described below
exceeds + /- 5 % from the baseline. The first adjustment can occur 6 months
after the effective date of this contract. The Product cost price adjustment
formula and definitions are found below.
FORMULA
Adjusted Price = (Baseline Price) + [(Change in Aluminum Price/kg) x (kg
Aluminum in Product)
DEFINITIONS
Change in Aluminum Price/kg = (New Aluminum Price/kg) - (Baseline Aluminum
Price/kg)
Kg Aluminum in Part = Actual, as agreed from time to time.
Baseline Price = See above
Baseline Aluminum Price / kg: US $1.08
New Aluminum Price / kg = Primary aluminum (99.7%) at LME for cash purchase
2. Invoicing; Pricing. The purchase price for Supplies, under this Order,
include storage, handling, packaging, freight, insurance, transportation, and
all other expenses, costs and charges of Supplier to produce Supplies. All
invoices under this Order must reference the purchase order number, amendment or
release number, Tecumseh's part number, Supplier's part number where applicable,
quantity of pieces in the shipment, number of cartons or containers in the
shipment, Supplier's name, and the Tecumseh assigned "supplier number," xxxx of
lading number, and other information required by Tecumseh. Under no
circumstances will Tecumseh be liable for any of Supplier's taxes.
3. Quantities; Delivery. Time is of the essence. Unless otherwise agreed in
writing by Tecumseh and Supplier, Supplier agrees to 100% on-time delivery of
the quantities, at the times specified by Tecumseh. Failure to meet agreed
delivery and quantities shall be considered a breach of this agreement and
Supplier shall pay to Tecumseh any damages or expenses imposed upon or incurred
by Tecumseh as a result of such breach. Tecumseh may change the rate of
scheduled shipments or direct temporary suspension of scheduled shipments,
neither of which entitles Supplier to modify the price for Product covered by
this agreement. Tecumseh is not obligated to accept early deliveries, late
deliveries, partial deliveries, or excess deliveries.
EXHIBIT 3.1
4. Premium Freight; Shipping Costs; Related Costs. If, as a result of
Supplier's failure to comply with shipping or delivery requirements, Tecumseh
incurs any costs or expenses, including, without limitation, costs charged by
Tecumseh's customer(s) to Tecumseh, Supplier shall pay such costs and expenses.
Tecumseh is not liable for premium freight costs or expenses.
5. Defective and Nonconforming Supplies. Unless Tecumseh otherwise notifies
Supplier, if defective or nonconforming Products are shipped to and rejected by
Tecumseh, the quantities under any order will not be reduced by the number of
such nonconforming or defective Products. Supplier will replace any such
rejected nonconforming or defective Products without a new order or release from
Tecumseh.
In addition to other remedies available to Tecumseh:
(i) Supplier agrees to authorize return, at Supplier's risk and expense at full
invoice price, plus transportation charges
(ii) Supplier will reimburse Tecumseh for all reasonable expenses that result
from any rejection or correction of nonconforming and defective Supplies.
Payment for defective or nonconforming Supplies is not an acceptance of such
Supplies by Tecumseh, does not limit or impair Tecumseh's right to assert any
legal or equitable remedy, and does not relieve Supplier's responsibility for
latent defects.
6. Payment. Payment shall be made net five (5) days from date that
Tecumseh's customer payments are due In case the Product is for Tecumseh's
utilization, payment shall be made thirty 30) days from the date that Supplier
ships the Product. Payment will be made in U.S. dollars.
7. Warranties. (a) Supplier warrants to Tecumseh, to Tecumseh's assigns and
customers, and to user's of Tecumseh's products, that all Products delivered to
Tecumseh will: (i) conform to the specifications, standards, drawings, samples,
descriptions, and revisions as furnished to or by Tecumseh; (ii) be merchantable
and free of defects in design (to the extent designed by Supplier), materials
and workmanship; and (iii) be selected, designed (to the extent designed by
Supplier), manufactured or assembled by Supplier based upon Tecumseh's intended
use and be fit and sufficient for the purposes intended by Tecumseh. The
foregoing warranties are in addition to those available to Tecumseh by law. (b)
The warranty period for the Products shall be the longer of (i) any warranty
period provided by applicable law or (ii) that provided by Tecumseh to its
customer.
8. Remedies. The rights and remedies reserved to Tecumseh in this agreement
shall be cumulative with, and additional to, all other legal or equitable
remedies. Tecumseh will notify Supplier if any Products fail to conform to the
warranties set forth herein. Supplier will participate in and comply with any
warranty reduction or related programs of Tecumseh or (to the extent directed by
Tecumseh) Tecumseh's customer(s). In any action brought by Tecumseh to enforce
Supplier's obligation to sell Products, the parties agree that Tecumseh does not
have an adequate remedy at law, and that Tecumseh is entitled to specific
performance of Supplier's obligations under this agreement. Fulfillment of all
terms and conditions, formal, procedural, substantial, or otherwise, is
prerequisite to fulfillment of this Order, including, without limitation, the
right to receive payment of the purchase price.
EXHIBIT 3.1
9. Indemnification. To the fullest extent permitted by law, Supplier will
defend, indemnify, and hold harmless Tecumseh, Tecumseh's officers, directors,
representatives, and agents, Tecumseh's successors and assigns and dealers, and
users of the Products sold by Tecumseh against all damages, claims, or
liabilities and expenses (including, without limitation, attorney's fees and
other professional fees, settlements and judgments) arising from or resulting in
any defective Products or from any negligent or wrongful act or omission of
Supplier, or Supplier's agents, representatives, employees or subcontractors, or
any breach or failure by Supplier to comply with any of the Supplier's
representations or other terms and conditions of this Order.
10. Product Recall and Retrofit. Supplier hereby agrees to comply with the
recall and/or retrofit procedures reasonably established from time to time by
Tecumseh. Furthermore, Supplier agrees to bear all costs and expenses incurred
by it in complying with such recall or field retrofit procedures.
11. Insolvency. To the extent that Tecumseh no longer owns the majority of
the outstanding quotas of Supplier, this agreement may be terminated immediately
by Tecumseh without liability to Supplier upon the occurrence of the following
events, or any other comparable events, and Supplier shall reimburse Tecumseh
for all costs incurred by Tecumseh in connection with any of the following,
including, without limitation, attorney's and other professional fees: (a)
Supplier becomes insolvent; (b) Supplier files a voluntary petition in
bankruptcy; (c) an involuntary petition in bankruptcy is filed against the
Supplier; (d) a receiver or trustee is appointed for Supplier; or (e) Supplier
needs accommodations from Tecumseh, financial or otherwise, in order to meet its
obligations under this agreement; (f) Supplier executes an assignment for the
benefit of creditors.
12. Termination for Breach or Nonperformance. Tecumseh reserves the right
to terminate all or any part of this agreement, without liability to Supplier,
if Supplier is no longer in a position to manufacture and deliver the Products
in accordance with the requirements of Tecumseh or, to the extent that Tecumseh
no longer owns the majority of the outstanding quotas of Supplier, if Supplier:
(a) repudiates, breaches, or threatens to breach any of the terms of this
agreement, (b) fails to perform or threatens not to perform services or deliver
Supplies as specified by Tecumseh; (c) fails to make progress so as to endanger
timely and proper completion or delivery of Products and does not correct the
failure or breach within ten (10) days (or such shorter period of time if
commercially reasonable under the circumstances) after receipt of written notice
from Tecumseh specifying the failure or breach; or (d) sells, or offers to sell,
a substantial portion of its assets used for the production of Products for
Tecumseh, or sells or exchanges, or offers to sell or exchange, an amount of its
stock or other equity interests that would result in a change in control of
Supplier.
13. Termination. In the event of Termination of this contract for any
reason, Supplier shall immediately ship all tooling and Tecumseh owned equipment
utilized in the manufacturer of the Products. Pricing for tooling not owned by
Tecumseh or its customers shall be the lower of its fair market value (as
determined by independent appraisal) or its amortized cost. Pricing for such
tooling shall be determined within 30 days of Termination. Such tooling shall
become the sole property of Tecumseh.
EXHIBIT 3.1
14. Force Majeure. Any delay or failure of either party to perform its
obligations hereunder shall be excused if, and to the extent, that it is caused
by an event or occurrence beyond the reasonable control of the party and without
its fault or negligence. This includes acts of God; terrorism, fires; floods;
windstorms; explosions; riots; natural disasters; or wars. Immediate written
notice of such delay (including the anticipated duration of the delay) must be
given to the other party as soon as possible after the occurrence. During the
delay or failure to perform by Supplier, Tecumseh, at its option, (a) may
purchase Supplies from other sources and reduce its outstanding orders and
Releases to Supplier by such quantities, without liability to Supplier; or (b)
may ask Supplier to deliver to Tecumseh at Tecumseh's expense all finished
goods, work in process and parts and materials produced or acquired for Products
under this agreement. In addition, Supplier, at its expense, shall take all
necessary actions to ensure the supply of Products to Tecumseh for a period of
at least ninety (90) days during any anticipated labor disruption or resulting
from the expiration of Supplier's labor contracts. Events, Force Majeure or
otherwise, which cause supply interruption for a period of 30 days or more may
terminate this agreement.
15. Service and Replacement Parts. Supplier agrees to sell each component
or part at a price that equals its cost plus 10%, but, never in the aggregate
(of all components in the Product) more than the price of the Product.
16. Supplier's Property. Supplier, at its expense, shall furnish, keep in
good condition, and replace when necessary, all machinery, equipment, tools,
jigs, dies, gauges, fixtures, molds, patterns, and items other than Tecumseh's
Property that are necessary for the production of Products ("Supplier's
Property").
17. Set-Off; Recoupment. In addition to any right of setoff or recoupment
provided by law, all amounts due to Supplier shall be considered net of
indebtedness of Supplier to Tecumseh and its affiliates Motoco. Tecumseh shall
have the right to set off against or to recoup from any payment or other
obligation owed to Supplier, in whole or in part, any amounts due to Tecumseh
and Motoco.
18. Non-Assignment; Supplier Change in Control. Supplier may not assign or
delegate its obligations under this agreement without Tecumseh's prior written
consent. Tecumseh will have the right to assign any benefit or duty under this
agreement to any third party upon notice to Supplier with or without consent.
19. Severability. If any term of this agreement is invalid or unenforceable
under any statute, regulation, ordinance, executive order or other rule of law,
the term shall be deemed reformed or deleted, as the case may be, but only to
the extent necessary to comply with applicable law. The remaining provisions of
this agreement shall remain in full force and effect.
20. Survival. The obligations of Supplier to Tecumseh survive termination
of this agreement, except as otherwise provided in this agreement.
21. No Implied Waiver. The failure of either party at any time to require
performance by the other party of any provision of this agreement shall in no
way affect the right to require performance at any later time, nor shall the
waiver of either party of a breach of any provision of this agreement constitute
a waiver of any later breach of the same or any other provision of this
agreement.
EXHIBIT 3.1
22. Sales Tax Exemption. Tecumseh certifies that Supplies purchased under
this agreement and identified as industrial processing are eligible for state
and federal sales tax exemption under the federal identification number provided
by Tecumseh.
23. Tooling. Unless otherwise agreed in writing by Tecumseh, payment by
Tecumseh to Supplier for tooling shall be due within 30 days of the later of (a)
PPAP approval of the tooling or Supply, (b) following Tecumseh's successful
product validation testing given an approved PPAP submission for the Supply, and
(c) in the case of reimbursable tooling (e.g., tooling to be paid for and owned
by Tecumseh's customer), receipt of payment by Tecumseh from Tecumseh's
customer. All tools and equipment are to be made to Tecumseh's specifications
(or, where directed by Tecumseh, those of Tecumseh's customer). Exceptions are
to be issued in writing by an appropriate representative of Tecumseh.
EXHIBIT 3.2
RECEIVABLES PLEDGE AGREEMENT
This Receivables Pledge Agreement (the "Pledge Agreement") is entered into by
and among the following parties:
I. TMT MOTOCO DO BRASIL LTDA., with its headquarters in the City of Campo Largo,
State of Parana, Xxx Xxxxxx xx Xxxxxxx Xxxxxx, Xx. 000, enrolled with the
Brazilian Taxpayer's Registry (CNPJ) under no 05.203.407/0001-30, herein
represented in accordance with its articles of association, hereinafter referred
to as "TMT";.
II. BANCO BRADESCO S.A., with its headquarters in the City of Osasco, State of
Sao Paulo, Cidade de Deus Street, w/out No., Xxxx Xxxx, enrolled with the
Brazilian Taxpayer's Registry (CNPJ) under no 60.746.948/0001-12, herein
represented in accordance with its bylaws, hereinafter referred to as
"BRADESCO";
III. BANCO ITAU BBA S.A., with its headquarters in the City of Sao Paulo, State
of Sao Paulo, Brigadeiro Xxxxx Lima Avenue, 3.400, 4th floor (part), enrolled
with the Brazilian Taxpayer's Registry (CNPJ) under no 17.298.092/0001-30,
herein represented in accordance with its bylaws, hereinafter referred to as
"ITAU BBA";
IV. HSBC BANK BRASIL S.A. - BANCO MULTIPLO, with its headquarters in the City of
Curitiba, State of Parana, Travessa Xxxxxxxx Bello, 34, 4th floor, enrolled with
the Brazilian Taxpayer's Registry (CNPJ) under no 01.701.201/0001-89, herein
represented in accordance with its bylaws, hereinafter referred to as "HSBC" and
together with BRADESCO and ITAU BBA, the "Banks";
WHEREAS
(i) TMT has executed, individually with each of the BANKS on different dates,
facility agreements in order to fund its industrial expansion and the required
working capital for its activities, including its export activity, which were
structured as advance on export contracts ("Facility Agreements"), Bank Credit
Bills representing Loans ("Credit Bills") and the Progerem/Counter Guaranty
Agreements, as applicable (the Facility Agreements, the Credit Bills and the
Guaranty Agreement are hereinafter referred to jointly as the "Contracts");
(ii) On October 4th, 2006, TMT, Tecumseh Products Company (a company organized
and existing under the laws of the State of Michigan, headquartered at 000 Xxxx
Xxxxxxxxx Xxxxxx, in the city of Tecumseh, State of Michigan, United States of
America, enrolled with the Brazilian Taxpayer's Registry (CNPJ) under no
05.719.749/0001-07), BRADESCO, ITAU BBA and HSBC executed a Standstill Agreement
whereby the Banks agreed to continue to restructure the maturities of the
respective Contracts and to jointly prepare a plan with respect to the payment
obligations of TMT under the Contracts (the "Outstanding Balance");
(iii) Pursuant to an Out-of-Court Restructuring Agreement dated as of 21.11.2006
entered into between TMT, Tecumseh Products Company and Tecumseh Power Company
and the Banks (the "Restructuring Agreement"), the Banks have agreed to
restructure and reschedule the payment of the Outstanding Balance, under the
terms and conditions therein set out, including the following ones, which are
summarized below in order to comply with the requirements of Article 1424 of the
Brazilian Civil Code:
(a) TMT's total Outstanding Balance: The amounts described in Exhibit 1.1
of the Restructuring Agreement, correspond to TMT's total Outstanding Balance
with respect to each of the BANKS.
(b) Grace Period: TMT has been granted a grace period of 18 months
commencing November 21, 2006 (the "Grace Period"), during which no payment of
principal can be demanded by the Banks from TMT under the Contracts without
prejudice of the provision of section 2.2.1 of the Restructuring Agreement.
(c) Interest: During the GRACE PERIOD, interest on the Outstanding Balance
will be paid on arrears by TMT on a quarterly basis commencing on January 1st,
2007 at an annual rate of Libor plus 3%. Interest will accrue computed on the
basis of a year of 360 days and actual days elapsed, without prejudice of the
provision of section 2.2.1 of the Restructuring Agreement.
(d) Payment: After the Grace Period, the Outstanding Balance will be
divided into 18 equal installments, which will be paid by TMT in arrears on a
monthly basis, plus interest at an annual rate of Libor plus 3% which will be
paid on a monthly basis in arrears and accrue computed on a basis of a year of
360 days and actual days elapsed.
(iv) To secure the payment of the Outstanding Balance and accrued interest to
the Banks, TMT agrees to pledge in favor of the Banks certain accounts
receivable held by TMT under a supply agreement in the form of Exhibit 3.1. of
the Restructuring Agreement (the "Supply Agreement"), entered into by and
between TMT and Tecumseh Power Company, a company organized and existing under
the laws of the State of a Delaware, headquartered at 000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx, for the purchase by Tecumseh Power Company from TMT of LV156/195,
OV195 and OV490 type engines and kits, including new developments on these
engines and kits (the "ENGINES").
NOW THEREFORE, the above-mentioned parties agree to the following which shall
irrevocably and irreversibly bind the parties and their successors and assigns.
CLAUSE 1
1.1. In order to secure the payment of the Outstanding Balance and accrued
interest to the BANKS as provided in the Restructuring Agreement, TMT hereby
pledges to the BANKS, pursuant to Article 1451 et seq. of the Brazilian Civil
Code, the accounts receivable held by TMT for the amounts owed by Tecumseh Power
Company to TMT, after the deduction of the amounts owed by TMT to Tecumseh Power
Company for the supply of components and parts used by TMT in the manufacture of
the Engines, all in accordance with the Supply Agreement (hereinafter the
"COLLATERAL").
1.2 Tecumseh Power Company signs this Pledge Agreement, as an intervening party
hereto, solely for the purpose of acknowledging the pledge of the Collateral to
the BANKS, as provided in Article 1453 of the Brazilian Civil Code.
CLAUSE 2
2.1 In case of a default of any of the obligations assumed by TMT under the
Restructuring Agreement, Banks may exercise with respect to Collateral any and
all rights and remedies conferred by this Pledge Agreement and the law, in
particular the rights provided by Article 1459 of the Brazilian Civil Code.
2.2 As long as no event of default has occurred under the Restructuring
Agreement, TMT may receive and collect any amounts owed by Tecumseh Power
Company to TMT under the Supply Agreement, as pledged hereunder to the BANKS. If
an event of default under the Restructuring Agreement occurs, TMT's
authorization to receive such payments shall immediately cease upon the
occurrence of a default under the Restructuring Agreement and thereafter all
such TMT's rights shall be automatically transferred to the Banks and any
payments made by Tecumseh Power Company under the Collateral shall be used by
the Banks to settle the outstanding amounts due by TMT and applied under the
Restructuring Agreement.
2.3 Upon the occurrence of an event of default under the Restructuring
Agreement, the Banks shall be entitled to dispose the COLLATERAL by private or
public sale, assignment, transfer or by any other means, the BANKS being duly
authorized and empowered by TMT to perform any of the aforementioned acts,
including without limitation, the power to sign receipts, grant releases and
execute agreements, public deeds and all instruments without requirement of any
judicial or extra-judicial measures, so as to permit the BANKS to recover any
and all outstanding amount owing under the Restructuring Agreement.
CLAUSE 3
3.1. This Pledge Agreement constitutes a security interest regardless of the of
any other security interest or guaranties that may possibly be held by the Banks
for TMT's obligations due or to become due under the Restructuring Agreement.
3.2 Upon payment in full of all of TMT's obligations under the Restructuring
Agreement, then the Banks shall release the charge created by this Pledge
Agreement on the Collateral by a release in writing.
CLAUSE 4
4.1 TMT covenants:
(i) to warrant and defend the Bank's rights to the Collateral against any claims
and demands of any third parties;
(ii) not, without Bank's prior written consent, to sell, assign, transfer,
pledge or encumber in any manner any part of the Collateral or permit to exist
any other encumbrance on the Collateral, in addition to the lien resulting
herefrom;
(iii) from time to time promptly to execute and deliver all such other
assignments, instruments and documents (including any amendments to this Pledge
Agreement), and take any further action, that may reasonably be necessary or
requested by the BANKS, in order more fully to evidence and perfect, and protect
the security interest granted by this Pledge Agreement or to enable the Banks to
exercise and enforce their rights and remedies under this Pledge Agreement; and
(iv) promptly to provide to the BANKS any additional information or documents
which the BANKS may reasonably request concerning the Collateral.
4.2 TMT represents and warrants that:
(i) it is the legal and beneficial owner of the Collateral;
(ii) the Collateral is free and clear from any lien, burden, debt, or adverse
claim other than the lien created hereby;
(iii) TMT has full corporate power and authority to enter into this Pledge
Agreement and perform the obligations provided hereunder; and
(iv) the execution and performance of this Pledge Agreement by TMT shall not
violate or contravene its Articles of Association, any provision of any
applicable law, judgment or award of any court or governmental authority, or any
contract to which TMT is a party or which may be binding upon it or any of its
respective properties, and shall not result in the creation or imposition of any
lien or security interest ("direito real de garantia") in any of its relevant
properties, except solely the lien created hereunder.
CLAUSE 5
5.1 In order to be valid and effective, any amendments to this Pledge Agreement
shall be in writing and signed by the parties hereto.
5.2 TMT shall not assign or transfer this Pledge Agreement without prior written
consents from the other parties.
5.3 This Pledge Agreement neither constitutes a novation nor modifies any TMT's
obligations to the Banks under the Restructuring Agreement.
5.4 Any notice required or permitted hereunder shall be in writing and addressed
and delivered as provided in the Restructuring Agreement.
5.5 This Pledge Agreement has been written in the Portuguese and English
languages. In the event of inconsistencies, the Portuguese version shall
prevail.
5.6 This Pledge Agreement shall be construed and interpreted in accordance with
the laws of Brazil. Any disputes between the Banks and TMT will be submitted to
the courts of the city of Sao Paulo.
IN WITNESS WHEREOF, the parties hereby have executed 12 (twelve) identical
copies of this Pledge Agreement duly witnessed.
Sao Paulo, November 21st, 2006
TMT MOTOCO DO BRASIL LTDA.
By/Por:
--------------------------------
Name/Nome:
-----------------------------
Title/Cargo:
---------------------------
BANCO BRADESCO S.A.
By/Por:
--------------------------------
Name/Nome:
-----------------------------
Title/Cargo:
---------------------------
BANCO ITAU BBA S.A.
By/Por:
--------------------------------
Name/Nome:
-----------------------------
Title/Cargo:
---------------------------
HSBC BANK BRASIL S.A. - BANCO MULTIPLO
By/Por:
--------------------------------
Name/Nome:
-----------------------------
Title/Cargo:
---------------------------
TECUMSEH POWER COMPANY
By/Por:
--------------------------------
Name/Nome:
-----------------------------
Title/Cargo:
---------------------------
WITNESSES/TESTEMUNHAS:
------------------------------------- ----------------------------------------
NAME/NOME: NAME/NOME:
-------------------------- -----------------------------
ID/RG: ID/RG:
------------------------------ ---------------------------------
EXHIBIT 5.1
TMT-MOTOCO DO BRASIL LTDA
BUSINESS PLAN PROJECTIONS PACKAGE 2006-2011 - NOVEMBER 2006
CASH
IN LC ENGINES VOL 789.489 1.211.866 1.279.127 1.534.127 1.609.127 1.619.127
PARTS VOL 2.423.148 677.804 851.772 851.772 851.772 851.772
XXX - 0000 XXX - 0000 XXX - 0000 XXX - 2009 YTD - 2010 YTD - 2011
----------- ----------- ----------- ----------- ----------- -----------
RECEIPTS
TPC 169.189.055 228.548.570 284.567.753 367.036.396 384.757.835 418.068.974
Domestic sales 4.790.681 3.623.971 4.845.305 5.343.241 5.458.150 5.515.604
Forward gain 5.722.762 -- -- -- -- --
Capital Infusion 9.354.787 -- -- -- -- --
Recoverable tax 5.708.284 12.999.885 17.054.189 22.451.102 24.798.366 26.549.872
----------- ----------- ----------- ----------- ----------- -----------
TOTAL RECEIPTS 194.765.569 245.172.426 306.467.247 394.830.739 415.014.351 450.134.450
DISBURSEMENTS
RAW MATERIALS
Aluminum 27.337.967 -- -- -- -- --
Tecumseh Prod Co. 2.812.023 21.780.353 27.241.098 29.657.741 32.171.661 33.640.957
Tecumseh do Brasil 7.878.521 16.206.497 23.089.438 31.691.888 35.417.551 37.136.023
Others 56.577.786 137.739.264 171.635.013 216.513.154 241.997.221 245.372.977
----------- ----------- ----------- ----------- ----------- -----------
TOTAL RAW MATERIALS + TAX 94.606.297 175.726.115 221.965.550 277.862.782 309.586.434 316.149.957
WAGES AND BENEFITS
Salaries 15.383.772 21.841.486 23.229.536 27.655.831 29.516.505 30.255.244
Temps 500.546 -- -- -- -- --
Social Charges 7.806.281 8.132.768 8.877.322 10.565.411 11.288.216 11.582.226
Benefits 3.671.981 6.143.410 6.563.736 7.856.182 8.239.873 8.307.035
----------- ----------- ----------- ----------- ----------- -----------
TOTAL WAGES AND BENEFITS TAX 27.362.581 36.117.664 38.670.594 46.077.423 49.044.594 50.144.506
CPMF 1.454.915 995.106 1.301.315 1.630.404 1.469.617 1.507.400
Federal Tax 499.521 -- -- -- -- --
State Tax 137.107 -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
TOTAL TAX 2.091.543 995.106 1.301.315 1.630.404 1.469.617 1.507.400
OTHER OPERATING 25.422.026 25.878.339 26.232.854 30.085.849 34.604.531 38.894.451
INTEREST 13.333.919 19.843.469 15.815.454 6.087.297 6.218.206 6.283.661
CAPEX 9.812.312 5.294.093 6.004.973 5.592.027 4.191.091 3.866.719
----------- ----------- ----------- ----------- ----------- -----------
TOTAL DISBURSEMENTS 172.628.679 263.854.786 309.990.741 367.335.783 405.114.473 416.846.694
----------- ----------- ----------- ----------- ----------- -----------
NET SOURCE (USE) 22.136.890 (18.682.359) (3.523.494) 27.494.957 9.899.878 33.287.756
Cash Beginning of Period 267.000 6.849.609 66.674 (40.378.139) (90.787.775) (80.887.896)
Debt Loan (Repay) (15.554.281) 11.899.424 (36.921.319) (77.904.592) -- --
ROUNDING
----------- ----------- ----------- ----------- ----------- -----------
CASH END OF PERIOD 6.849.609 66.674 (40.378.139) (90.787.775) (80.887.896) (47.600.140)
----------- ----------- ----------- ----------- ----------- -----------
FX RATES 2,17 2,25 2,30 2,35 2,40 2,40
EXHIBIT 5.2(h)
(DRAFT FORM OF GUARANTY AGREEMENT TO BE EXECUTED ONLY UPON SATISFACTION OF
CONDITIONS PRECEDENT AS SET FORTH IN THE OUT-OF-COURT RESTRUCTURING AGREEMENT)
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty") dated as of November 21, 2006,
among Tecumseh Products Company, a corporation organized and existing under the
laws of the State of Michigan ("Guarantor"), and the financial institutions that
are party to the Out-of-Court Restructuring Agreement referenced below and
listed on the signature pages hereof (collectively, the "Guarantied Parties").
WITNESSETH:
WHEREAS, GUARANTOR entered into that certain Restructuring Agreement dated
as of November 21, 2006 (as entered into on such date, the "Out-of-Court
Restructuring Agreement"), with TMT - Motoco do Brasil Ltda. ("TMT") and the
Guarantied Parties (among others), pursuant to which Guarantor agreed to enter
into this Guaranty upon the satisfaction of certain conditions precedent, which
conditions precedent have all been met.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
GUARANTY
SECTION 1.01 THE GUARANTY. The Guarantor hereby guaranties to each
Guarantied Party and their respective successors and assigns the prompt payment
when due (whether at stated maturity, by required prepayment, declaration,
demand, by acceleration or otherwise) of the Outstanding Balance from time to
time owing to the Guarantied Parties by TMT, in each case strictly in accordance
with the terms of the Restructuring Agreement (such obligations being herein
collectively called the "Guarantied Obligations"). The Guarantor hereby agrees
that if TMT or any other guarantor of the Guarantied Obligations shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the Guarantied Obligations, the Guarantor will promptly pay the same in
cash, upon notice to and demand on the Guarantor, and that in the case of any
extension of time of payment of any of the Guarantied Obligations, the same will
be promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension.
SECTION 1.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantor
under Section 1.01 to the fullest extent permitted by applicable law are
absolute, irrevocable and unconditional, irrespective of any substitution,
release or exchange of any other guarantee of or security for any of the
Guarantied Obligations. To the extent not prohibited by law, the Guarantor
hereby expressly waives diligence, presentment and protest, and any requirement
that any Guarantied Party exhaust any right, power or remedy or proceed against
any other guarantor of any of the Guarantied Obligations. To the extent not
prohibited by law, the Guarantor waives any and all notice of the creation,
renewal, extension, waiver, termination or accrual of any of the Guarantied
Obligations and notice of or proof of reliance by any Guarantied Party upon this
Guaranty or acceptance of this Guaranty. This Guaranty shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the
1
GUARANTOR and its successors and assigns, and shall inure to the benefit of the
GUARANTIED PARTIES, and their respective successors and assigns.
SECTION 1.03 REINSTATEMENT. The obligations of the Guarantor under this
Article I shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of TMT or any guarantor in respect of the
Guarantied Obligations is rescinded or must be otherwise restored by any
Guarantied Party, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
SECTION 1.04 CONTINUING GUARANTY. The guaranty in this Article I is a
continuing guaranty, and shall apply to all Guarantied Obligations whenever
arising, and shall terminate on payment in full of the Guarantied Obligations
(other than contingent or indemnifications obligations for which no claims have
been made). The obligations of Guarantor under this Guaranty shall survive any
voluntary or involuntary bankruptcy of TMT. Notwithstanding anything in this
Guaranty or otherwise to the contrary, the obligations of Guarantor under this
Guaranty (x) shall be pre-petition date, unsecured obligations of Tecumseh in
any voluntary or involuntary bankruptcy or insolvency proceeding of Tecumseh or
any of its United States affiliates and (y) shall not survive, and shall
terminate and be of no force and effect following, (1) conversion or exchange
(whether implemented as part of an in court or out of court restructuring) of
all or any portion of Tecumseh's first lien debt facility and/or second lien
facility (as amended, modified, restated or refinanced) into equity interests
(whether common, preferred or otherwise) of Tecumseh or any of its United States
affiliates, or (2) consummation of a sale, transfer or other disposition of all
or a substantial portion of the equity interests in (or assets of) TMT in which
the purchaser or transferee thereof assumes the obligations of TMT with respect
to the Outstanding Balance, subject to the consent of the Participating Banks
stipulated in the Restructuring Agreement.
SECTION 1.05 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any applicable state, federal
or foreign bankruptcy, insolvency, reorganization or other applicable law
affecting the rights of creditors generally, if the obligations of the Guarantor
under Section 1.01 would otherwise be held or determined to be void, voidable,
invalid or unenforceable, or subordinated to the claims of any other creditors,
on account of the amount of its liability under Section 1.01, then,
notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by the Guarantor or any other
person, be automatically limited and reduced to the highest amount that is valid
and enforceable, not void or voidable and not subordinated to the claims of
other creditors as determined in such action or proceeding.
ARTICLE II.
MISCELLANEOUS
SECTION 2.01 NOTICES. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by PDF e-mail or telecopy, as
follows:
(a) if to the Guarantor, at:
[TO BE COMPLETED AT THE TIME THE GUARANTY IS EXECUTED AND
DELIVERED.]
(b) if to any Guarantied Party, to it at its address and facsimile
number set forth below its name on the signature pages hereof.
All notices and other communications given to any party hereto in accordance
with the provisions of this Guaranty shall be deemed to have been given on the
date of receipt if delivered by hand or overnight
2
courier service or sent by telecopy or by certified or registered mail, in each
case delivered, sent or mailed (properly addressed) to such party as provided in
this Section 2.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 2.01, and failure to deliver
courtesy copies of notices and other communications shall in no event affect the
validity or effectiveness of such notices and other communications. As may be
agreed to among the Guarantor and the applicable Guarantied Parties from time to
time, notices and other communications may also be delivered by e-mail to the
e-mail address of a representative of the applicable person from time to time by
such person. Communications delivered by e-mail shall be deemed to have been
given upon receipt.
SECTION 2.02 WAIVERS; AMENDMENT. No failure or delay by any Guarantied
Party in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each Guarantied Party are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver or amendment of any provision of this Guaranty shall be effective
unless the same shall be approved by the Guarantor and Guarantied Parties
holding more than 50% of the amount of the Outstanding Balance.
SECTION 2.03 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Guaranty may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Guaranty shall become
effective when it shall have been executed by the Guarantor and each of the
Guarantied Parties, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Guaranty by
telecopy, Adobe PDF file or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Guaranty.
SECTION 2.04 GOVERNING LAW. This Guaranty shall be construed in accordance
with and governed by the law of the State of New York, without regard to
conflicts of law principles that would require the application of the laws of
another jurisdiction.
SECTION 2.05 ARBITRATION. Any controversy or claim arising out of or
relating to this Guaranty, or the breach thereof, shall be settled before the by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rule, including the Optional Rules for Emergency
Measures Of Protection, and judgment on the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof. The written decision of
the arbitrator or arbitrators shall state the reasons on which it is based and
shall be without appeal. The arbitral award shall be final and binding upon all
parties hereto. The place of arbitration shall be at a location in New York,
N.Y., or otherwise as agreed to by the Guarantor and the Guarantied Parties.
(Signature Pages Follow)
3
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly
executed by their respective authorized officers or other authorized signatories
as of the day and year first above written.
TECUMSEH PRODUCTS COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[NAMES OF GUARANTIED PARTIES]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[ADDRESSES OF GUARANTIED PARTIES.]
1
