Exhibit 4.1
AMENDMENT NO. 6 TO
FIRST LIEN CREDIT AGREEMENT
AMENDMENT NO. 6 (this "Amendment"), dated as of August 27, 2007, 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 has heretofore been amended, as amended hereby,
and as it may be further amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the 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, in connection with the contemplated sale of the Borrower's
Electrical Segment (or portions thereof), the Borrower has informed the
Administrative Agent and the Lenders of its desire to enter into certain
internal restructuring transactions; and
WHEREAS, the Borrower has requested that the Administrative Agent and
the Lenders constituting the Requisite Lenders consent to certain amendments to
the Credit Agreement in connection therewith; and
WHEREAS, the Borrower has requested, and the Administrative Agent and
each Lender signatory to an Acknowledgement and Consent has agreed to consent to
certain amendments of the Credit Agreement on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions hereinafter contained, the parties hereto hereby agree
as follows:
SECTION 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.
SECTION 2. AMENDMENT TO THE CREDIT AGREEMENT. As of the Sixth
Amendment Effective Date (as defined in Section 4), the Credit Agreement is
hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by adding
the following defined terms in alphabetical order:
"A&S Sale" means any potential sale of the automotive and
specialty segment of the Electrical Unit, it being understood that any such
sale shall require the separate consent of the Administrative Agent and
Requisite Lenders.
"Amendment No. 6 to the Credit Agreement" means that certain
Amendment No. 6 to the First Lien Credit Agreement, dated as of August 27,
2007, entered into by the Borrower, the Administrative Agent and the
Lenders party thereto.
"Fasco" means Fasco Industries, Inc., a Delaware corporation and
a Wholly-Owned Subsidiary of the Borrower.
"Fasco Australia" means Fasco Australia Pty. Ltd., a company
formed under the laws of Australia and a Wholly-Owned Subsidiary of the
Borrower.
"Fasco Escrow Agreements" means each of the escrow agreements
executed and delivered by the Borrower pursuant to the provisions of the
Fasco Purchase Agreement.
"Fasco Escrow Funds" means those funds held by the escrow agent
pursuant to the terms of the Fasco Escrow Agreements, not to exceed
$18,000,000 in the aggregate.
"Fasco Purchase Agreement" means that certain purchase agreement
dated as of July 3, 2007 among the Borrower and certain Subsidiaries, as
sellers, and Regal Beloit Corporation, as purchaser.
"Fasco Restructurings" means and includes taking such actions as
may be necessary or advisable in furtherance of any and all of (i) the
conversion of certain intercompany indebtedness, charges and other payables
owed by the Thai Subsidiary to the Borrower, Fasco Australia and Fasco into
equity of the Thai Subsidiary, (ii) the conversion of certain intercompany
indebtedness, charges and other payables owed by Fasco Australia to Fasco
and the Thai Subsidiary into equity of Fasco Australia, (iii) the
conversion of the debt evidenced by the Thai Intercompany Note into equity
of the Thai Subsidiary, (iv) the sale by each of Fasco and Xxx Xxxxx Gear
Company of all of their respective automotive and specialty assets to
Tecumseh Canada Holding Company and the purchase by Tecumseh Canada Holding
Company of such assets, and (v) as among the Borrower and its Subsidiaries,
such other conversion, restructuring or repayment of intercompany
indebtedness, charges or payables, restructuring of share or asset
ownership or other actions including name changes for each Subsidiary with
"Fasco" in its name, as may be necessary or advisable in furtherance of the
closing of the Fasco Sale and in preparation for any permitted A&S Sale.
"Fasco Sale" means the closing of the transactions contemplated
by the Fasco Purchase Agreement.
"Fasco Sale Documents" means the Fasco Purchase Agreement and the
Fasco Escrow Agreements.
"Thai Intercompany Note" means that certain Promissory Note dated
as of February 15, 2006 issued by the Thai Subsidiary in the initial
principal amount of $8,600,000.
(b) Section 1.1 of the Credit Agreement is hereby amended by deleting
the grid appearing in the definition of "Applicable Margin" in its entirety and
inserting the following in lieu thereof:
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FISCAL QUARTER ENDING FISCAL QUARTER ENDING
ON OR BEFORE 12/31/07 AFTER 12/31/07
---------------------- ----------------------
BASE RATE EURODOLLAR BASE RATE EURODOLLAR
QUARTERLY AVAILABLE CREDIT LOANS RATE LOANS LOANS RATE LOANS
-------------------------- --------- ---------- --------- ----------
Greater than or equal to $150,000,000 1.00% 2.00% 1.25% 2.25%
Less than $150,000,000 and greater than or
equal to $50,000,000 1.25% 2.25% 1.50% 2.50%
Less than $50,000,000 1.50% 2.50% 1.75% 2.75%
(c) Section 2.5 of the Credit Agreement is hereby amended by inserting
at the end of the paragraph the following language:
On the Sixth Amendment Effective Date, the Revolving Credit
Commitment of all Lenders shall be reduced ratably by an amount equal to
$75,000,000. After giving effect to such reduction, the Revolving Credit
Commitments shall be $175,000,000.
(d) 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:
Minimum Fixed
Fiscal Quarter Charge Ratio
-------------- ------------
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
(e) Section 5.2 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.2 Intentionally Reserved
(f) Article VII (Affirmative Covenants) of the Credit Agreement is
hereby amended by inserting the following new Section 7.21 immediately after the
existing Section 7.20 and a new Section 7.22 after Section 7.21, each to read as
follows:
Section 7.21 Minimum Available Credit
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Beginning on the day immediately following the effective date of
the Fasco Sale, the Borrower shall maintain a minimum Available Credit of not
less than $50,000,000; provided, however, that if at any time, the Agents and
the Lenders consent to an A&S Sale, beginning on the day immediately following
the effective date of such A&S Sale, the Borrower shall maintain a minimum
Available Credit of not less than $50,000,000 minus the amount, if any, by which
(x) that portion of the Available Credit created solely by the inclusion of the
assets subject to such A&S Sale in the Borrowing Base immediately prior to the
consummation of such A&S Sale exceeds (y) the Net Cash Proceeds of such A&S
Sale.
Section 7.22 Fasco Sale
The Borrower shall close the transactions contemplated by the
Fasco Sale Documents by September 30, 2007.
(g) Article VIII (Negative Covenants) of the Credit Agreement is
hereby amended by deleting Section 8.4(i) in its entirety and inserting the
following in lieu thereof:
So long as no Default or Event of Default is continuing or would
result from any such Asset Sale hereunder, and so long as such Asset Sale
is made for Fair Market Value, payable in cash, the sale of certain Real
Property and other assets set forth on Schedule 8.4(b).
(h) Schedule 8.4(b) is hereby amended by adding that certain property
set forth on Annex I hereto.
SECTION 3. WAIVER AND CONSENT. As of the Sixth Amendment Effective
Date,
(a) the Collateral Agent, the Administrative Agent, and each Lender
signatory to an Acknowledgement and Consent hereby consents to the Borrower and
the applicable Subsidiaries entry into, and the consummation of the transactions
contemplated by, the Fasco Restructurings and the Fasco Sale Documents and
waives any Defaults or Events of Default arising solely from the consummation of
such transactions, on any date on or prior to the effective date of such
transactions, it being understood that no consent is granted hereby with respect
to any A&S Sale.
(b) the Administrative Agent and each Lender signatory to an
Acknowledgement and Consent hereby consents to granting of a first priority
security interest to the purchaser under the Fasco Sale Documents (the "Fasco
Purchaser") with respect to, and only with respect to, the Fasco Escrow Funds,
and only for such time as the Fasco Escrow Funds are held pursuant to the Fasco
Escrow Agreements (each a "Purchaser Lien" and collectively the "Purchaser
Liens"), it being understood that (i) by such consent neither the Administrative
Agent nor any Lender waives any rights or interest such parties may have with
respect to the Fasco Escrow Funds, if any, except as specifically provided in
this Section 3 and (ii) with respect to any such Fasco Escrow Funds owing to the
Borrower upon completion of the Fasco Sale and expiration of the terms of the
Fasco Escrow Agreements, such funds shall be returned to the Borrower and any
security interest and lien over such funds in favor of the Collateral Agent on
behalf of the Secured Parties pursuant to the Loan Documents shall, unless such
security interest
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and lien has been released or otherwise terminated prior thereto, automatically
continue with the same priority as was in effect prior to the Sixth Amendment
Effective Date.
(c) the Collateral Agent and each Lender signatory to an
Acknowledgement and Consent hereby acknowledges and agrees, with respect to the
Purchaser Liens and the Senior Lien (as defined in the Intercreditor Agreement)
on such Fasco Escrow Funds, whether under the Credit Agreements or any extension
of credit during the term of one or more of the Fasco Escrow Agreements, that
notwithstanding the date, manner or order of grant, attachment or perfection of
any Senior Lien or Purchaser Lien and notwithstanding any provisions of the UCC
or any other applicable Requirement of Law or any other circumstance whatsoever:
(i) any Purchaser Lien on all or any portion of such Fasco Escrow
Funds shall be senior and prior in all respects to any Senior Lien on such Fasco
Escrow Funds and shall remain so, whether or not such Purchaser Lien is junior
or subordinate to any other obligation or any Lien securing any other
obligation, in each case, for so long as such Fasco Escrow Funds are held under
the Fasco Escrow Agreements; and
(ii) any Senior Lien on all or any portion of such Fasco Escrow
Funds shall be junior and subordinate in all respects to the Purchaser Liens on
such Fasco Escrow Funds, in each case, for so long as such Fasco Escrow Funds
are held under the Fasco Escrow Agreements.
(d) Subject to the immediately following sentence, and with respect to
each and every disbursement of all or a portion of the Fasco Escrow Funds to a
party other than the Borrower or a Subsidiary, the Collateral Agent hereby
releases, effective immediately upon any such disbursement, any Lien upon that
portion of the Fasco Escrow Funds so disbursed. The foregoing notwithstanding,
the Senior Lien upon the Fasco Escrow Funds, if any, shall, unless such lien has
been released or otherwise terminated prior thereto, (x) remain a valid and
perfected Lien upon the Fasco Escrow Funds at all times while held in escrow
pursuant to the Fasco Escrow Agreements or disbursed to the Borrower or a
Subsidiary and (y) not be released unless and until such funds are actually
disbursed to a party other than the Borrower or a Subsidiary in accordance with
the Fasco Escrow Agreements.
SECTION 4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AMENDMENT. This Amendment shall become effective as of the date first written
above on the date (the "Sixth Amendment Effective Date") when the Administrative
Agent shall have received all of the following:
(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 Acknowledgement and Consent, in the form attached
hereto as Exhibit A, duly executed by each of the Requisite Lenders;
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(iii) the Consent of Guarantors, in the form attached hereto
as Exhibit B, executed by each Guarantor;
(iv) Waiver No. 2 to the Second Lien Credit Agreement,
executed by the Borrower, the Second Lien Agent and the Lenders party thereto;
(v) The Fee Letter, dated as of the date hereof, executed by
the Borrower; and
(vi) 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 as required by
Sections 8 and 9 hereof, including, without limitation, all fees, costs and
expenses of the Administrative Agent (including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent) in connection with this Amendment, the Credit Agreement and each other
Loan Document.
(c) 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 Waiver No. 2 to the Second Lien Credit Agreement, no Default or
Event of Default shall have occurred and be continuing.
SECTION 5. REPRESENTATIONS AND WARRANTIES. On and as of the date
hereof, and as of the Sixth Amendment Effective Date, after giving effect to
this Amendment and Waiver No. 2 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.
SECTION 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, waivers and consents contained herein shall not constitute an
amendment or a waiver of any other provision of the Credit Agreement or the
other Loan Documents or for any other purpose except as expressly set forth
herein.
6
SECTION 7. LOAN DOCUMENTS. This Amendment is deemed to be a "Loan
Document" for the purposes of the Credit Agreement.
SECTION 8. FEES. As consideration for the execution of this Amendment,
the Borrower agrees to pay on the Sixth Amendment Effective Date to the
Administrative Agent, for the account of each Lender from which the
Administrative Agent shall have received (by facsimile or otherwise) an executed
Acknowledgement and Consent with respect to this Amendment by 5:00 p.m. (New
York time) on August 24, a fee equal to 0.10% of such Lender's Revolving
Commitment then in effect.
SECTION 9. COSTS AND EXPENSES. The Borrower agrees to pay on demand on
the Sixth Amendment Effective Date 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.
SECTION 10. GOVERNING LAW; COUNTERPARTS; MISCELLANEOUS.
(a) This Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
(b) This Amendment may be executed in any number of counterparts
and by the different parties on separate counterparts, each of which
counterparts 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 Sixth Amendment Effective Date, all
references in the Credit Agreement to the "Agreement" shall be deemed to be
references to such Agreement as modified hereby and this Amendment and the
Credit Agreement shall be read together and construed as a single instrument.
(e) Delivery of an executed signature page of this Amendment by
facsimile or by email in portable document format (.pdf) shall be effective as
delivery of an original manually executed counterpart hereof.
[signature pages follow]
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IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment No. 6 to the Credit Agreement to be effective for all purposes as of
the Sixth 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. 6 TO FIRST LIEN CREDIT AGREEMENT]
Administrative Agent
CITICORP USA, INC.
as Administrative Agent, Collateral
Agent, Swing Loan Lender,
Issuer and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director and Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 6 TO FIRST LIEN CREDIT AGREEMENT]
ANNEX I
ANNEX I
REAL PROPERTY
0000 Xxxxxxxx Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx
0000 Xxxxxxxx Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx
0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxx
Xxxxxxx Xxxxxx Wisconsin (Xxxxxx)
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx
000 XXX Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
OTHER ASSETS
That certain 2001 Raytheon Aircraft Company B300 aircraft bearing Manufacturer's
Serial Number FL-281 and U.S. Registration No. N552TP with two (2) Xxxxx and
Xxxxxxx PT6A-60A engines bearing Manufacturer's Serial Numbers PCE-PK0302 and
PCE-PK0301
All of the assets of Manufacturing Data Systems, Inc., a Michigan corporation
All of the assets of Evergy, Inc., a Delaware corporation, utilized in the
Vitrus line of business as shown on the schedules to the asset purchase
agreement pursuant to which such assets are sold.
[ANNEX I TO AMENDMENT NO. 6 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 Acknowledgment and Consent shall have the meanings ascribed
to such terms in the Credit Agreement.
The Borrower has requested that the Lenders consent to the terms and
provisions of Amendment No. 6 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 and provisions of
the Amendment and authorizes the Administrative Agent to execute and deliver
such Amendment on its behalf.
Very truly yours,
----------------------------------------
[Name of Lender]
By:
------------------------------------
Name
Title:
Dated as of August ____, 2007
[EXHIBIT A TO AMENDMENT NO. 6 TO FIRST LIEN CREDIT AGREEMENT]
EXHIBIT B
CONSENT OF GUARANTORS
Dated as of August 27, 2007
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]
[EXHIBIT B - CONSENT OF GUARANTORS TO AMENDMENT NO. 6 TO FIRST LIEN
CREDIT AGREEMENT]
EXHIBIT B
IN WITNESS WHEREOF, the parties hereto have consented to this
Amendment No. 6, as of the date first written above.
CONVERGENT TECHNOLOGIES INTERNATIONAL,
INC.
TECUMSEH TRADING COMPANY
EVERGY, INC.
FASCO INDUSTRIES, INC.
MANUFACTURING DATA SYSTEMS, INC.
M. P. PUMPS, INC.
TECUMSEH CANADA HOLDING COMPANY
TECUMSEH COMPRESSOR COMPANY
TECUMSEH POWER COMPANY
XXX XXXXX GEAR COMPANY
as U.S. Guarantors
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
EUROMOTOR, INC.
as U.S. Guarantor
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX PROPERTY COMPANY, LLC
TECUMSEH DO BRASIL USA, LLC
As U.S. Guarantors
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
[EXHIBIT B - CONSENT OF GUARANTORS TO AMENDMENT NO. 6 TO FIRST LIEN
CREDIT AGREEMENT]
TECUMSEH PRODUCTS OF CANADA LIMITED,
as Canadian Guarantor
By: Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FASCO MOTORS COMPANY,
As Canadian Guarantor
By: Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
[EXHIBIT B - CONSENT OF GUARANTORS TO AMENDMENT NO. 6 TO FIRST LIEN
CREDIT AGREEMENT]
