EXHIBIT 4.1 EXECUTION VERSION
AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT
AMENDMENT NO. 2 (this "Amendment"), dated as of November 3, 2006,
among TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the "Borrower"), the
Lenders party hereto, and CITICORP USA, INC., as administrative agent and
collateral agent for the Lenders and the Issuers (in such capacities, the
"Administrative Agent"), amends certain provisions of the FIRST LIEN CREDIT
AGREEMENT, dated as of February 6, 2006 and amended as of May 5, 2006 (as
further amended hereby and as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the financial institutions from time to time party thereto as lenders
(the "Lenders"), the financial institutions from time to time party thereto as
issuing banks (the "Issuers") and the Administrative Agent.
WITNESSETH:
WHEREAS, the Borrower has requested, and the Administrative Agent
and each Lender signatory to an Acknowledgement and Consent have agreed to
certain amendments of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions hereinafter contained, the parties hereto hereby agree
as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined
herein but defined in the Credit Agreement are used herein as defined in the
Credit Agreement.
2. AMENDMENT TO THE CREDIT AGREEMENT. As of the Second Amendment
Effective Date (as defined in Section 4), the Credit Agreement is hereby amended
as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
deleting the following existing definitions in their entirety and inserting the
following in lieu thereof:
"Availability Reserve" means the sum of (a) the Permanent
Availability Reserve, (b) effective upon receipt of written
notice of any determination thereof to the Borrower by the
Administrative Agent such amounts as the Administrative Agent may
from time to time establish against the Facility, in the
Administrative Agent's sole discretion and in accordance with
customary business practices for comparable asset based
transactions, in order either (i) to preserve the value of the
Collateral or the Collateral Agent's Lien thereon or (ii) to
provide for the payment of unanticipated liabilities of any Loan
Party arising after the Closing Date and (c) Additional Reserve;
provided, however, for purposes of determining the Applicable
Margin, the Permanent Availability Reserve and the Additional
Reserve shall not be in included in the calculation of the
Quarterly Available Credit.
"Available Credit" means, at any time, (a) the Maximum
Credit minus (b) the aggregate Revolving Credit Outstandings at
such time. For the purposes of calculating Available Credit, the
Borrower shall not take into account any increase in cash
balances ("Additional Cash") resulting from the extension of
current payables or other changes to Current Payment Terms (and
"Revolving Credit Outstandings" shall be deemed to be increased
by the amount of any such Additional Cash).
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"EBITDA" means, with respect to any Person for any period,
(a) Consolidated Net Income of such Person for such period plus
(b) the sum of, in each case to the extent deducted in the
calculation of such Consolidated Net Income but without
duplication, (i) any provision for income taxes, (ii) Interest
Expense, (iii) loss from extraordinary items, (iv) any aggregate
loss from the sale, exchange or other disposition of capital
assets by such Person outside the ordinary course of business,
(v) depreciation, depletion and amortization expenses, (vi)
non-cash expenses in respect of Fourth Quarter 2005 Reserves;
provided, however, all such non-cash expenses in Fourth Quarter
2005 Reserves shall not exceed an aggregate amount of $8,500,000,
(vii) certain cash and non-cash restructuring expenses in
connection with the closing or consolidation of certain
facilities; provided, however, the cash portion of such
restructuring expenses shall not exceed an aggregate amount of
$2,500,000 in any consecutive four Fiscal Quarter period, (viii)
all other non-cash charges and non-cash losses for such period
that are not payable in cash in any subsequent period and (ix)
certain fees and costs payable to (x) Rothschild Inc., a
financial advisor to the Loan Parties, in connection with certain
corporate services provided by or to be provided by Rothschild
Inc. to the Loan Parties, (y) BBK, Ltd., a financial advisor to
the Loan Parties, in connection with certain financial services
provided or to be provided by BBK, Inc. to the Loan Parties and
(z) the Second Lien Advisors in connection with certain financial
due diligence and monitoring services provided to or to be
provided by such Second Lien Advisors to the Lenders and the
Second Lien Secured Parties following the Second Amendment
Effective Date for so long as such professional fees and costs
are being borne by the Loan Parties, provided, however, all such
fees and costs payable under clauses (x), (y) and (z) do not
exceed $2,400,000 per Fiscal Quarter minus (c) the sum of, in
each case to the extent added in the calculation of such
Consolidated Net Income but without duplication, (i) any credit
for income tax, (ii) interest income, (iii) gains from
extraordinary items for such period, (iv) any aggregate gain from
the sale, exchange or other disposition of capital assets by such
Person outside the ordinary course of business and (v) any other
non-cash gains or other items which have been added in
determining Consolidated Net Income, including any reversal of a
charge referred to in clause (b)(viii) above by reason of a
decrease in the value of any Stock or Stock Equivalent. For the
avoidance of doubt, the anticipated Brazilian Tax Benefit shall
not constitute a non-cash gain or other item which have been
added in determining Consolidated Net Income for purposes of
clause (c)(v) above.
"Net Cash Proceeds" means proceeds received by any Loan
Party after the Closing Date in cash or Cash Equivalents from any
(a) Asset Sale, other than an Asset Sale permitted under clauses
(a), (b), (c)(i), (d), (e) or (h) of Section 8.4 (Sale of
Assets), net of (i) the reasonable cash costs of sale, assignment
or other disposition, (ii) taxes paid or reasonably estimated to
be payable as a result thereof and (iii) any amount required to
be paid or prepaid on Indebtedness (other than the Obligations)
secured by the assets subject to such Asset Sale, provided,
however, that evidence of each of clauses (i), (ii) and (iii)
above is provided to the Administrative Agent in form and
substance satisfactory to it, (b) Property Loss Event or (c) US
Tax Receivable.
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"Scheduled Termination Date" shall mean the third
anniversary of the Second Amendment Effective Date (as defined in
Amendment No. 2 to the Credit Agreement).
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding the following defined terms in alphabetical order:
"Amendment No. 2 to the Credit Agreement" means that certain
Amendment No. 2 to First Lien Credit Agreement, dated as of
November 3, 2006, entered into among the Borrower, the
Administrative Agent and the Lenders party thereto.
"Additional Reserve" shall mean, collectively, each reserve
established by the Administrative Agent pursuant to Section 7.16
hereof; provided, that the amount of each such reserve is equal
to $5,000,000.
"Brazilian Tax Benefit" means the anticipated increase in
the Borrower's net income (not to exceed an aggregate amount of
$7,000,000) resulting from the reversal of non-cash tax charges
associated with the "PIS" and "COFINS" taxes under Brazilian Law
accrued prior to June 30, 2006.
"Disposition Adjustment" means those adjustments, if any, to
Minimum EBITDA as set forth on Annex A hereto.
"Master Global Manufacture and Supply Agreement" means that
certain Master Global Manufacture and Supply Agreement,
substantially in the form attached hereto as Exhibit D, by and
between the Borrower and TMT.
"Minimum EBITDA" means, for each reporting period set forth
in Section 5.2 hereof, that amount of EBITDA set forth opposite
such period in Section 5.2.
"Second Lien Advisors" means and includes each Person
providing or to provide certain financial due diligence and
monitoring services to the Second Lien Secured Parties following
the Second Amendment Effective Date.
"Subject Units" means the business lines and concomitant
entities set forth on Annex A attached hereto.
"TMT" means TMT-Motoco do Brasil Ltda.
"TMT Brazilian Out-of-Court-Restructurings" means any
agreement between TMT and any creditor in Brazil holding 60% or
more of the aggregate outstanding amount of TMT Indebtedness
which share a common element among them, as defined by applicable
Brazilian Legislation (Law 11.101) of February 9, 2005.
"TMT Debt Documents" means those certain debt agreements set
forth on Annex B hereto.
"TMT Debt Document Arbitration Proceedings" means any
arbitration proceedings instituted in Brazil in accordance with
the provisions of the agreements set forth on Annex B hereto.
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"TMT Enforcement Remedies or TMT Enforcement Remedy" means
the filing of an enforcement action or any ordinary collection
law suit or of a bankruptcy request or other formal proceedings,
in each case filed or instituted in Brazil and arising from, or
in connection with, any indebtedness having a principal amount in
excess of $100,000; provided, however, that such action is not
effectively stayed by a TMT Brazilian Out-of-Court Restructuring
or by an order of a court of competent jurisdiction within ten
(10) days of the commencement thereof.
"TMT Indebtedness" means the Indebtedness of TMT outstanding
in an amount equal to $121,373,599.80 on the Second Amendment
Effective Date incurred in connection with certain agreements set
forth on Annex B attached hereto.
"Permanent Availability Reserve" means an amount equal to
$15,000,000 which shall be applied at all times until all the
Obligations have been paid in full and the Revolving Credit
Commitments have been terminated unless (x) the Second Lien
Secured Obligations have been paid in full and (y) the
Administrative Agent has determined in its sole discretion that
there has been no Liquidity Event Period occurring for 8
consecutive weeks, at which time the Administrative Agent shall
terminate the Permanent Availability Reserve.
"US Tax Receivable" means a United States income tax refund
with respect to the 2003 tax year of any Loan Party in the amount
of up to $14,000,000.
(c) Section 2.5 of the Credit Agreement is hereby amended by
inserting at the end of the first sentence the following language:
On the Second Amendment Effective Date, the Revolving Credit
Commitments of all Lenders shall be reduced ratably by an amount
equal to $25,000,000. The Revolving Credit Commitments shall be
$250,000,000.
(d) Section 2.9(a) of the Credit Agreement is hereby amended in
its entirety and inserting the following in lieu thereof:
(a) Upon receipt by the Borrower or any other Loan Party of
Net Cash Proceeds, the Borrower shall immediately prepay the
Loans (or provide cash collateral in respect of Letters of
Credit) in an amount equal to 100% of such Net Cash Proceeds. Any
such mandatory prepayment shall be applied in accordance with
clause (c) below; provided, however, that, subject to the
Intercreditor Agreement (x) no prepayment of the Second Lien
Secured Obligations from Net Cash Proceeds arising from any Asset
Sale shall be permitted if, after giving effect to the
application of such Net Cash Proceeds to the Obligations, the
Available Credit (without giving effect to any Additional
Reserve) is less than $25,000,000, (y) upon receipt by the
Borrower or any other Loan Party of Net Cash Proceeds arising
from any Loan Party's receipt of US Tax Receivable, such Net Cash
Proceeds shall be applied as follows: (i) first, the Borrower
shall immediately prepay the outstanding Loans to the extent that
Available Credit (without giving effect to any Additional
Reserve) is less than $25,000,000, and (ii) second, to the extent
that Available Credit (without giving effect to any Additional
Reserve) is greater than $25,000,000, the Borrower shall apply
such Net Cash Proceeds as a mandatory prepayment of the loans
under the Second Lien Facility and (z) upon receipt by the
Borrower or any other Loan Party of
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Net Cash Proceeds arising from any Asset Sale permitted under
Section 8.4(j), such Net Cash Proceeds shall be applied as
follows: (i) first, the Borrower shall immediately prepay that
portion of the outstanding Loans (and provide cash collateral in
respect of Letters of Credit) in an amount equal to that portion
of the Available Credit created solely by the inclusion of the
assets subject to such Asset Sale in the Borrowing Base
immediately prior to the consummation of such Asset Sale; (ii)
second, the Borrower shall apply the remaining balance of Net
Cash Proceeds after giving effect to the application of such
proceeds made under clause (i) above, as a mandatory prepayment
of the loans under the Second Lien Facility and (iii) then, as
long as no Liquidity Event Period is in effect, the Borrower or
such Loan Party shall be entitled to retain any remaining Net
Cash Proceeds.
(e) Section 4.19 (c) is hereby amended by deleting the word "No"
at the beginning such clause and inserting the following:
(c) Except with respect to the Real Property located at 0000
Xxxxxxxx Xxx., Xxxxxx, Xxxx, 00000 (and set forth on Schedule
4.19), no
(f) Section 5.2 of the Credit Agreement is hereby amended in its
entirety as follows:
Section 5.2 Minimum EBITDA
Subject to any applicable Disposition Adjustment, the
Borrower shall have, on the last day of each period set forth
below, EBITDA for such period of not less than the amount set
forth opposite such period:
PERIOD MINIMUM EBITDA
------ --------------
October 1, 2006 through ($14,900,000)
December 31, 2006
October 1, 2006 through ($8,000,000)
March 31, 2007
October 1, 2006 through $21,800,000
June 30, 2007
October 1, 2006 through $57,000,000
September 30, 2007
January 1, 2007 through $88,900,000
December 31, 2007
(g) Section 6.1 of the Credit Agreement is hereby amended by
inserting the following new clause (i) immediately following the existing
subsection (h) to read as follows:
(i) Cash Flow Forecast. The Borrower shall deliver on or
prior to the Second Amendment Effective Date (as defined in
Section 4), and thereafter as soon as available and in any event
not later than Tuesday at 5:00 pm (New York time) of each week
(A) until the repayment in full of all of the Second Lien Secured
Obligations and thereafter (B) until the earlier of (x) the date
that the Administrative
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Agent determines in its sole discretion that there has been no
Liquidity Event Period occurring for 8 consecutive weeks and (y)
end of the Fiscal Year of 2007, a 13-week rolling cash flow
forecast detailing cash receipts and cash disbursements on a
weekly basis for the next 13 weeks, the information and
calculations contained in which shall be reasonably satisfactory
to the Administrative Agent, certified by a Responsible Officer
of the Borrower that such forecast has been prepared in good
faith.
(h) Section 7.6 of the Credit Agreement is hereby amended by
inserting the following immediately following the last sentence thereof:
In addition, the Borrower shall authorize (and hereby does
so authorize) its and its Subsidiaries' investment bankers and
other financial advisors to discuss with the Administrative Agent
or any Lender, during reasonable business hours, the status of
the sale of the Subject Units and such other matters relating
thereto.
(i) Article VII (Affirmative Covenants) is hereby amended by
inserting the following new Section 7.16 immediately after the existing Section
7.15 and a new Section 7.17 after Section 7.16, each to read as follows:
Section 7.16 Additional Reserve
The Borrower and each of its Subsidiaries hereby agree and
acknowledge that the Administrative Agent shall include in the
Availability Reserve an Additional Reserve upon the written
notification from the administrative agent under the Second Lien
Credit Facility stating that the Borrower has not, by the
applicable Target Date (as defined in the Second Lien Credit
Agreement) reduced the outstanding principal amount of the Second
Lien Term Loans (as defined in the Second Lien Credit Agreement)
to the applicable Target Date Principal Reduction Goal (as
defined in the Second Lien Credit Agreement). Any such Additional
Reserve shall continue to be in effect until such time as the
Administrative Agent receives written notification from the
administrative agent under the Second Lien Credit Facility that
Borrower has reduced the outstanding principal amount of the
Second Lien Term Loans to at or below the Target Date Principal
Reduction Goal set forth opposite the applicable Target Date for
which such Additional Reserve was instituted; provided, however,
the Administrative Agent shall have no obligation to hold any
Additional Reserve in trust for or for the benefit of the lenders
under the Second Lien Credit Facility.
Section 7.17 Current Payment Terms
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, duly pay and discharge in accordance with each Loan
Party's customary business practices in respect thereto, all
current debts, obligations and Accounts payable as they become
due in accordance with such customary business practices
("Current Payment Terms"); provided, however, under no
circumstances shall the Borrower or any Subsidiary of the
Borrower, willfully or otherwise, extend, modify or change the
Current Payment Terms for the purpose of redirecting or
redeploying cash toward repaying Revolving Credit Outstandings in
an effort to temporarily inflate Available Credit.
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(j) Section 8.1(f) of the Credit Agreement is herby amended in
its entirety as follows:
(f) Indebtedness arising from intercompany loans (i) from
the Borrower to any Guarantor, (ii) from any Guarantor to the
Borrower or any other Guarantor, (iii) from any Non-Guarantor
Subsidiary to the Borrower or any Guarantor, (iv) from a
Brazilian Subsidiary to any other Brazilian Subsidiary; provided,
however, the aggregate outstanding principal amount of all such
Indebtedness permitted under this clause (iv) and under Section
8.1(k)(iii)(y)(B) shall not exceed $10,000,000 or (v) from the
Borrower or any Guarantor to any Non-Guarantor Subsidiary;
provided, however, that, in the case of this clause (v), the
Investment in such intercompany loan to such Non-Guarantor
Subsidiary is permitted under Section 8.3(e)(iv) (Investments);
(k) Section 8.1(k) of the Credit Agreement is hereby amended in
its entirety as follows:
(k) Indebtedness (not otherwise permitted under this Section
8.1) (i) incurred in connection with the Brazilian Receivables
Transactions; provided, however, that the Dollar Equivalent of
the aggregate outstanding principal amount (or equivalent
repurchase obligation) of all such Indebtedness incurred pursuant
to this clause (i) shall not exceed $150,000,000 at any time,
(ii) incurred by any Material Foreign Subsidiary; provided,
however, that the Dollar Equivalent of the aggregate outstanding
principal amount of all Indebtedness permitted under this clause
(ii) shall not exceed $25,000,000 at any time and (iii) incurred
by Tecumseh do Brasil Ltda solely for the purpose of (x) paying a
dividend to the Borrower or (y) making a capital contribution in
or a loan to TMT; provided, that, the Dollar Equivalent of the
aggregate outstanding principal amount of all Indebtedness
permitted under this clause (iii) shall not exceed (A)
$25,000,000, in the case of clause (x) above and (B) $10,000,000,
in the case of clause (y) above; provided, further, the
outstanding principal amount of all Indebtedness permitted under
this clause (iii) shall not exceed $25,000,000 at any time.
(l) Section 8.3 (e)(iv) of the Credit Agreement is hereby amended
by adding the following immediately preceding the semi colon at the end of such
clause (e)(iv):
(other than Investments permitted under Section 8.1(f) and
8.1(k))
(m) Section 8.4(h) of the Credit Agreement is hereby amended in
its entirety to read as follows:
(h) the sale of certain Investment Property set forth on
Schedule 8.4(a) in an aggregate Net Cash Proceeds of which shall
not exceed $500,000 so long as such sale is consummated on or
prior to January 1, 2007; and
(n) Section 8.4 of the Credit Agreement is hereby amended by
deleting the word "and" appearing at the end of clause (h) and inserting "and"
at the end of clause (i) and inserting a new clause (j) immediately following
the existing clause (i) to read as follows:
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(j) as long as no Default or Event of Default is continuing
or would result therefrom, an Asset Sale for Fair Market Value
(i) payable in cash or (ii) payable in a combination of cash and
other consideration; provided, however, (A) at least 85% of all
the consideration received from such Asset Sale shall be in cash
(except for Asset Sales of certain Subject Units set forth under
clause III on Annex A hereto for which the greater of (x) 25% of
the total purchase price and (y) an amount equal to that portion
of the Available Credit created solely by the inclusion of the
assets comprising the Subject Units set forth under clause III on
Annex A hereof included in the Borrowing Base immediately prior
to the consummation of such Asset Sale, shall be in cash and the
balance of the purchase price shall be permitted to be in the
form of the assumption of Indebtedness by the purchaser of such
assets) and (B) the Net Cash Proceeds received from such Asset
Sale is in an amount sufficient to satisfy the Second Lien
Obligations, in respect of the Stock or assets of all or any part
of any entity or combination of parts or entities comprising the
Subject Units; provided, further, that such Net Cash Proceeds
from such sale are applied to the Obligations as set forth in,
and to the extent required by, Section 2.9(a).
(o) Section 8.7 of the Credit Agreement is hereby amended by
adding the following at the end of clause (a)(i):
(other than with any other Loan Party),
(p) Section 8.9 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (e)(i) and inserting "and" at the
end of clause (e)(ii) and inserting a new clause (e)(iii) immediately following
the existing clause (e)(ii) to read as follows:
(iii) that certain Master Global Manufacture and Supply
Agreement between Tecumseh Power Company and TMT, in connection
with the restructuring of the TMT Indebtedness, with terms and
conditions that are as favorable to the Borrower as those that
could be obtained in a comparable arm's length transaction with a
Person not an Affiliate of the Borrower.
(q) Schedule 4.19 to the Credit Agreement is hereby amended by
adding that certain property set forth on Annex C hereto.
(r) Schedule 8.4(b) to the Credit Agreement is hereby amended by
adding that certain property set forth on Annex D hereto.
3. CONSENT AND WAIVER. (a) As of the Second Amendment Effective
Date (as defined in Section 4) and until the earlier of (i) ninety (90) days
from the date that TMT has failed to make a payment that is due and payable
under any TMT Debt Document (as in effect on the date hereof) or has otherwise
failed to comply with the terms of any TMT Debt Document (as in effect on the
date hereof), and (ii) the date that any TMT Enforcement Remedy has occurred,
the Administrative Agent and each Lender signatory to an Acknowledgement and
Consent hereby waive any Default or Event of Default under (A) Section 9.1(e)
(Events of Default) arising from TMT's failure to make any payment on any TMT
Indebtedness when the same becomes due and payable and (B) Section 9.1(f)
(Events of Default) with respect to TMT solely in connection with any Brazilian
Out-of-Court Restructuring or any TMT Debt Document Arbitration Proceeding that
may occur or be instituted.
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(b) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the Borrower's request of a one time extension of the
delivery date of the (x) monthly report solely for the fiscal month of September
2006, due within 30 days after the end of such fiscal month pursuant to Section
6.1(a) (the "September Reporting"), and (y) Borrowing Base Certificate solely
for the fiscal month of September 2006 due no later than 10 Business Days after
the end of such fiscal month pursuant to Section 6.10(a), in each case in clause
(x) and (y) above, to November 14, 2006.
(c) Each Lender signatory to an Acknowledgement and Consent
hereby waives any Default or Event of Default (i) under Section 5.2 of the
Credit Agreement that may have arisen from the Borrower's expected failure to
meet the minimum EBITDA requirement for the Fiscal Quarter ending September 30,
2006 and which will be reflected in the September Reporting to be delivered to
the Administrative Agent by November 14, 2006, (ii)(A) Section 4.1(b) of the
Credit Agreement that may have arisen due to the Borrower's failure to disclose
the property set forth on Annex C in Schedule 4.19 and (B) Section 4.19(c) and
(iii) Section 6.1(a) of the Credit Agreement that may have arisen due to the
Borrower's failure to deliver the monthly report for the fiscal month of August
2006 at the appropriate delivery date.
(d) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the terms contained in Amendment No. 2 to the Second Lien
Credit Agreement.
(e) Each Lender signatory to an Acknowledgement and Consent
hereby consents to the terms contained in Amendment No.1 to the Intercreditor
Agreement, in form set forth hereto as Exhibit A.
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall become effective on the date (the "Second Amendment
Effective Date") when the Administrative Agent shall have received all of the
following, each of which shall be in form and substance satisfactory to the
Administrative Agent:
(a) Certain Documents. The Administrative Agent shall have
received each of the following, in form and substance satisfactory to the
Administrative Agent:
(i) this Amendment, executed by the Borrower and the
Administrative Agent;
(ii) an Acknowledgment and Consent, in the form set
forth hereto as Exhibit B, duly executed by each of the Requisite Lenders;
(iii) the Consent of Guarantors, in the form set forth
hereto as Exhibit C, executed by each Guarantor;
(iv) an amendment to the Intercreditor Agreement
substantially in the form of Exhibit A hereto, duly executed and delivered to
the Administrative Agent; and
(v) such additional documentation as the Administrative
Agent or the Requisite Lenders may reasonably require.
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(b) Second Amendment Effective Date - Second Lien. The
Second Amendment Effective Date (as defined in Amendment No. 2 to the Second
Lien Credit Agreement) shall have occurred.
(c) Payment of Fees, Costs and Expenses. The Administrative
Agent shall have received payment of all fees, costs and expenses, including,
without limitation, all fees, costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Administrative Agent) in connection with this Amendment, the
Credit Agreement and each other Loan Document, as required by Sections 8 and 9
hereof.
(d) Representations and Warranties. Each of the
representations and warranties contained in Section 5 below shall be true and
correct.
(e) No Default or Event of Default. After giving effect to
this Amendment and Amendment No. 2 to the Second Lien Credit Agreement, no
Default or Event of Default shall have occurred and be continuing.
5. REPRESENTATIONS AND WARRANTIES. On and as of the date hereof,
and as of the Second Amendment Effective Date, after giving effect to this
Amendment and Amendment 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.
6. CONTINUING EFFECT; NO OTHER AMENDMENTS. Except as expressly
amended hereby, all of the terms and provisions of the Credit Agreement and the
other Loan Documents are and shall remain in full force and effect. The
amendments and consents contained herein shall not constitute an amendment or a
waiver of any other provision of the Credit Agreement or the other Loan
Documents or for any other purpose except as expressly set forth herein.
7. LOAN DOCUMENTS. This Amendment is deemed to be a "Loan
Document" for the purposes of the Credit Agreement.
8. FEES. As consideration for the execution of this Amendment,
the Borrower agrees to pay to the Administrative Agent, for the account of each
Lender from which the Administrative Agent shall have received (by facsimile or
otherwise) an executed Acknowledgment and Consent with respect to this Amendment
by 5:00 p.m. (New York time) on November 3, 2006, a fee equal to 0.25% of such
Lenders' Revolving Credit Commitment then in effect.
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9. COSTS AND EXPENSES. The Borrower agrees to pay on demand all
reasonable and documented out-of-pocket costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment and other instruments and documents to be delivered pursuant hereto,
including the reasonable and documented fees and out-of-pocket expenses of
counsel for the Administrative Agent with respect thereto.
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 Second Amendment Effective Date, all
references in the Credit Agreement to the "Agreement" shall be deemed to be
references to such Agreement as modified hereby and this Amendment and the
Credit Agreement shall be read together and construed as a single instrument.
[signature pages follow]
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IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment No. 2 to the Credit Agreement to be effective for all purposes as of
the Second Amendment Effective Date.
Borrower
TECUMSEH PRODUCTS COMPANY
as Borrower
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President, Treasurer and
Chief Financial Officer
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT]
Administrative Agent
CITICORP USA, INC.,
as Administrative Agent, Collateral
Agent, Dollar Swing Loan Lender,
Issuer and as a Lender
By: /s/ Sebastien Delasnerie
------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT]
*indicates information omitted pursuant to a request
for confidential treatment and filed separately with
the Securities and Exchange Commission.
ANNEX A
SUBJECT UNITS
I. *
II. * and
III. *
CERTAIN DEFINITIONS RELATING TO DISPOSITION ADJUSTED SET FORTH IN SECTION 5.2
"Reporting Period" has the meaning specified on Annex A.
"Electrical Segment" has the meaning specified on Annex A.
"Engines Segment" has the meaning specified on Annex A.
"Segment" means, individually, each of *, * and * as shown on Annex A.
"Cumulative EBITDA Covenant Adjustment" means, with respect to each Reporting
Period, that number set forth opposite such Reporting Period under the heading
"Cumulative EBITDA Covenant Adjustment" in the chart on Annex A.
"Cumulative Sales Projection" means, with respect to each Reporting Period, that
number set forth opposite such Reporting Period under the heading "Cumulative
Sales Projection" in the chart on Annex A.
"Quarterly Projected EBITDA Covenant" means, with respect to each quarter
specified in the applicable chart on Annex A, that number set forth opposite
such quarter under the heading "Quarterly Projected EBITDA Covenant" in the
chart on Annex A.
"Sales Projection" means, with respect to each quarter specified in the
applicable chart on Annex A, that number set forth opposite such quarter under
the heading "Sales Projection" in the chart on Annex A.
In the event of an Asset Sale of a Subject Unit permitted under Section 8.4(j),
Minimum EBITDA shall be adjusted downward, for each reporting period specified
in Section 5.2 (each a "Reporting Period") (other than Reporting Periods ended
prior to the date of the Asset Sale being examined), by the Cumulative EBITDA
Covenant Adjustment amount set forth opposite each of (x) the Reporting Period
in which the Asset Sale takes place for the applicable Segment below and (y)
each Reporting Period subsequent to the Reporting Period in which the Asset Sale
takes place for the applicable Segment below; provided, however, that
(A) in the event the subject Asset Sale is of less than the entire
Segment, then the Cumulative EBITDA Covenant Adjustment specified below for each
Reporting Period shall be an amount equal to the product obtained by multiplying
(x) the Cumulative EBITDA Covenant Adjustment specified for such Reporting
Period by (y) a fraction (i) the numerator of which is that portion of the
Segment's Sales Projection attributable to the assets being sold and (ii) the
denominator of which is Sales Projection for the subject Segment set forth
opposite such Reporting Period; and
(B) shall be further adjusted in accordance with GAAP accounting standards
to reflect the timing of the Asset Sale to reflect the EBITDA contribution to
such Segment's Cumulative EBITDA Covenant Adjustment that was projected for the
Segment (or portion thereof) that was the subject of the Asset Sale as set forth
in the Quarterly Projected EBITDA Covenant table below:
*
CUMULATIVE CUMULATIVE SALES
CUMULATIVE REPORTING EBITDA COVENANT ADJUSTMENT PROJECTION
PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
*
CUMULATIVE EBITDA COVENANT CUMULATIVE SALES
ADJUSTMENT PROJECTION
REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
*:
CUMULATIVE CUMULATIVE SALES
EBITDA COVENANT ADJUSTMENT PROJECTION
REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
1/1/07-12/31/07 * *
QUARTERLY PROJECTED EBITDA
COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2
TO
FIRST LIEN CREDIT AGREEMENT]
ANNEX B
LIST OF BRAZILIAN DEBT DOCUMENTS
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Banco Nacional De BNDES Facility Agreement No. 05.2.0306.1 dated August 12, 2005 36,803,000
Brasil Ltda Desenvolvimento
Economico E Social -
BNDES ("BNDES"),
Unibanco - Banco Nacional De Guaratee Letter dated August 22, 2005 (re BNDES Financing Contract NIHIL
Uniao De Bancos Desenvolvimento No. 05.2.0306.1)
Brasileiros Economico E Social -
S.A. BNDES ("BNDES"),
TMT Motoco do Unibanco - Uniao De Guarantee Agreement dated August 22, 2005 (re BNDES Financing Contract NIHIL
Brasil Ltda Bancos Brasileiros No. 05.2.0306.1)
S.A.
TMT Motoco do Banco Alfa De Advance on Export Contract ACC 06/001123 dated 9.5.2006 1.114.495
Brasil Ltda Investimento S.A. Advance on Export Contract ACC 06/001132 dated 10.5.2006 1.216.821
Advance on Export Contract ACC 06/001292 dated 23.5.2006 1.777.961
Advance on Export Contract ACC 06/001332 dated 29.5.2006 3.581.056
Advance on Export Contract ACC 06/001387 dated 7.6.2006 1.487.333
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
FIRST LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
Advance on Export Contract ACC 06/001388 dated 7.6.2006 1.775.920
Advance on Export Contract ACC 06/001408 dated 14.6.2006 150.791
Advance on Export Contract ACC 06/001773 dated 28.8.2006 2.853.609
==========
13,957,986
TMT Motoco do Banco Bradesco S.A. Advance on Export Contract ACC 06/005075 dated 30.6.2006 1.107.708
Brasil Ltda Advance on Export Contract ACC 06/005170 dated 30.6.2006 1.107.214
Advance on Export Contract ACC 06/005231 dated 3.7.2006 805.555
Advance on Export Contract ACC 06/005452 dated 10.7.2006 1.591.311
Advance on Export Contract ACC 06/005453 dated 10.7.2006 651.995
Advance on Export Contract ACC 06/005607 dated 13.7.2006 1.479.922
Advance on Export Contract ACC 06/006530 dated 9.8.2006 1.179.705
Advance on Export Contract ACC 06/006531 dated 9.8.2006 878.737
Advance on Export Contract ACC 06/006532 dated 9.8.2006 219.684
Advance on Export Contract ACC 06/006649 dated 11.8.2006 988.201
Advance on Export Contract ACC 06/006650 dated 11.8.2006 994.789
Advance on Export Contract ACC 06/006778 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006779 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006780 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006781 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006782 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006784 dated 16.8.2006 219.385
Advance on Export Contract ACC 06/006785 dated 16.8.2006 329.077
Advance on Export Contract ACC 06/006786 dated 16.8.2006 219.385
Advance on Export Contract ACC 06/006979 dated 23.8.2006 328.619
Advance on Export Contract ACC 06/006980 dated 23.8.2006 1.095.396
Advance on Export Contract ACC 06/006981 dated 23.8.2006 974.903
Advance on Export Contract ACC 06/007140 dated 28.8.2006 1.094.305
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
FIRST LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
Advance on Export Contract ACC 06/007141 dated 28.8.2006 656.583
Advance on Export Contract ACC 06/007559 dated 11.9.2006 436.499
Advance on Export Contract ACC 06/007561 dated 11.9.2006 436.499
Advance on Export Contract ACC 06/007562 dated 11.9.2006 218.250
Advance on Export Contract ACC 06/007563 dated 11.9.2006 2.149.759
Advance on Export Contract ACC 06/007764 dated 13.9.2006 4.403.264
Advance on Export Contract ACC 06/074200 dated 14.9.2006 1.714.276
Advance on Export Contract ACC 06/077936 dated 27.9.2006 2.819.470
==========
29,745,876
TMT Motoco do HSBC Bank Brasil Advance on Export Contract ACC 05/070072 dated 1.11.2005 7.330.707
Brasil Ltda S.A. - Banco Multiplo Advance on Export Contract ACC 05/073442 dated 16.11.2005 4.125.818
Advance on Export Contract ACC 06/031332 dated 25.4.2006 2.308.042
Advance on Export Contract ACC 06/035254 dated 10.5.2006 2.328.943
Advance on Export Contract ACC 06/038119 dated 17.5.2006 445.846
Advance on Export Contract ACC 06/039810 dated 22.5.2006 1.336.562
Advance on Export Contract ACC 06/049962 dated 22.6.2006 1.161.796
Advance on Export Contract ACC 06/051829 dated 29.6.2006 1.225.224
Advance on Export Contract ACC 06/055126 dated 11.7.2006 773.469
Advance on Export Contract ACC 06/056736 dated 17.7.2006 145.724
Advance on Export Contract ACC 06/057958 dated 20.7.2006 1.102.863
Advance on Export Contract ACC 06/057962 dated 20.7.2006 1.094.040
Advance on Export Contract ACC 06/059007 dated 25.7.2006 1.295.680
Advance on Export Contract ACC 06/060457 dated 28.7.2006 1.634.136
Advance on Export Contract ACC 06/062166 dated 3.8.2006 250.734
Advance on Export Contract ACC 06/063032 dated 7.8.2006 1.120.984
==========
27,680,568
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
FIRST LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Banco Itau BBA S.A. Advance on Export Contract ACC 05/018001 dated 6.10.2005 2.447.495
Brasil Ltda Advance on Export Contract ACC 05/018536 dated 17.10.2005 2.410.372
Advance on Export Contract ACC 05/019934 dated 4.11.2005 918.237
Advance on Export Contract ACC 05/020684 dated 17.11.2005 2.522.189
Advance on Export Contract ACC 05/020968 dated 21.11.2005 687.399
Advance on Export Contract ACC 05/021502 dated 25.11.2005 916.092
==========
9,901,784
TMT Motoco do Banco Itau BBA S.A. Bank Credit Bills representing Dual Index Loans Contract 106306091100100
Brasil Ltda dated 11.9.2006 8.999.761
Bank Credit Bills representing Dual Index Loans Contract 106306091301500
dated 13.9.2006 5.364.066
Bank Credit Bills representing Dual Index Loans Contract MC6.63/12
dated 15.9.2006 1.581.902
Bank Credit Bills representing Dual Index Loans Contract 106306092000100
dated 20.9.2006 4.678.354
Bank Credit Bills representing Dual Index Loans Contract 106306092200100
dated 22.9.2006 6.617.995
Bank Credit Bills representing Dual Index Loans Contract EC5.63/01 B
dated 25.9.2006 1.135.968
==========
28,378,046
TMT Motoco do Banco Safra S.A. BNDES Facility Agreement 32106591-3 dated 412.106
Brasil Ltda BNDES Facility Agreement 32108874-3 dated 07.12.2005 460.138
BNDES Facility Agreement 32108523-0 dated 30.12.2004 491.226
==========
1,363,470
TMT Motoco do Banco Bradesco S.A. BNDES Facility Agreement (proposal no 2004018) dated 19.04.2005 49,493,000
Brasil Ltda
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO
FIRST LIEN CREDIT AGREEMENT]
OUTSTANDING
PRINCIPAL
IN REAIS
DEBTOR CREDITOR DOCUMENT (9/30/06)
--------------- ---------------------- --------------------------------------------------------------------------- -----------
TMT Motoco do Fleet National Bank Brazilian Pre-Export Financing Agreement 03/023970 dated 18.6.2003 2.174.207
Brasil Ltda d.b.a BankBoston, N.A Brazilian Pre-Export Financing Agreement 03/027035 dated 10.7.2003 2.610.858
Brazilian Pre-Export Financing Agreement 03/031835 dated 8.8.2003 2.590.933
Brazilian Pre-Export Financing Agreement 03/033941 dated 22.8.2003 2.575.366
Brazilian Pre-Export Financing Agreement 04/018926 dated 31.3.2004 3.261.303
Brazilian Pre-Export Financing Agreement 04/026608 dated 6.5.2004 3.660.592
==========
16,873,259
TMT Motoco do Tecumseh do Brasil Loan Agreement dated June 22, 2004 48,798,000
Brasil Ltda Ltda.
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT]
ANNEX C
PROPERTY TO BE ADDED TO SCHEDULE 4.19
FACILITY OWNER/LESSEE (LESSOR) STREET ADDRESS
-------- --------------------- --------------
Toledo, Ohio Owner:
Tecumseh Products Company 0000 Xxxxxxxx Xxx., Xxxxxx,
Xxxxxx: Ice Investments, Inc. Ohio 43607
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT]
ANNEX D
PROPERTY TO BE ADDED TO SCHEDULE 8.4 (b)
00000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxx, XX 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT AGREEMENT]
EXHIBIT A
AMENDMENT NO. 1 TO THE INTECREDITOR AGREEMENT
EXHIBIT B
ACKNOWLEDGEMENT AND CONSENT
To: CITICORP USA, INC., as Administrative Agent
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE:
TECUMSEH PRODUCTS COMPANY
Reference is made to the CREDIT AGREEMENT, dated as of February
6, 2006, as amended (as the same may be further amended, supplemented, restated
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
TECUMSEH
PRODUCTS COMPANY, a Michigan corporation (the "BORROWER"), the Lenders and
Issuers party thereto and CITICORP USA, INC. ("CITICORP"), as administrative
agent and collateral agent for the Lenders and the Issuers (in such capacity,
the "ADMINISTRATIVE AGENT"). Unless otherwise specified herein, all capitalized
terms used in this Waiver shall have the meanings ascribed to such terms in the
Credit Agreement.
The Borrower has requested that the Lenders consent to amend the
Credit Agreement on the terms described in Amendment No. 2 to First Lien Credit
Agreement (the "AMENDMENT"), the form of which is attached hereto.
Pursuant to Section 11.1(a) (Amendments, Waivers, Etc.) of the
Credit Agreement, the undersigned Lender hereby consents to the terms of the
Amendment and authorizes the Administrative Agent to execute and deliver the
Waiver on its behalf.
Very truly yours,
----------------------------------------
[Name of Lender]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated as of November 3, 2006
EXHIBIT C
CONSENT OF GUARANTORS
Dated as of November 3, 2006
Each of the undersigned companies, as a Guarantor under the
Guaranty dated February 6, 2006 (the "Guaranty") in favor of the Secured Parties
under the Credit Agreement referred to in the foregoing Amendment, hereby
consents to such Amendment and hereby confirms and agrees that notwithstanding
the effectiveness of such Amendment, the Guaranty is, and shall continue to be,
in full force and effect and is hereby ratified and confirmed in all respects,
except that, on and after the effectiveness of such Amendment, each reference in
the Guaranty to the "Credit Agreement", "thereunder", "thereof" or words of like
import shall mean and be a reference to the Credit Agreement, as amended by such
Amendment.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have consented to this
Amendment No. 2, as of the date first written above.
CONVERGENT TECHNOLOGIES INTERNATIONAL,
INC.
TECUMSEH TRADING COMPANY
EVERGY, INC.
FASCO INDUSTRIES, INC.
MANUFACTURING DATA SYSTEMS, INC.
M. P. PUMPS, INC.
TECUMSEH CANADA HOLDING COMPANY
TECUMSEH COMPRESSOR COMPANY
TECUMSEH POWER COMPANY
XXX XXXXX GEAR COMPANY
as U.S. Guarantors
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
EUROMOTOR, INC.
as U.S. Guarantor
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX PROPERTY COMPANY, LLC
TECUMSEH DO BRASIL USA, LLC
as U.S. Guarantors
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT
AGREEMENT]
TECUMSEH PRODUCTS OF CANADA LIMITED,
as Canadian Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FASCO MOTORS COMPANY,
as Canadian Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
[SIGNATURE PAGE TO GUARANTOR CONSENT TO AMENDMENT NO. 2 TO FIRST LIEN CREDIT
AGREEMENT]
EXHIBIT D
MASTER GLOBAL MANUFACTURE AND SUPPLY AGREEMENT
