EXHIBIT 10.1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,THE MICHIGAN UNIFORM SECURITIES ACT, OR ANY OTHER
STATE SECURITIES LAW, AND NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY
BE TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933,THE MICHIGAN UNIFORM SECURITIES ACT, AND ANY OTHER
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No. CAW-1 April 9, 2007
WARRANT TO PURCHASE CLASS A COMMON STOCK
OF
TECUMSEH PRODUCTS COMPANY,
A MICHIGAN CORPORATION
VOID AFTER APRIL 9, 2012
This certifies that for value received TRICAP PARTNERS II L.P., a Delaware
limited liability company, or its permitted registered assigns ("Holder"), is
entitled, subject to the terms set forth below, at any time before 5:00 p.m.,
Detroit, Michigan time, on April 9, 2012, to purchase from TECUMSEH PRODUCTS
COMPANY, a Michigan corporation (the "Company"), up to 1,390,944 shares of the
Class A common stock of the Company ("Common Stock") at a price per share equal
to the applicable Purchase Price (as defined below), upon surrender of this
Warrant at the principal office of the Company referred to below, with the
attached subscription form (the "Subscription Form") duly executed, and
simultaneous payment therefor in the manner specified in Section 1. The Purchase
Price and the number of shares of Common Stock purchasable hereunder (the
"Warrant Shares") are subject to adjustment as provided in Section 3.
As used in this Warrant:
"Business Day" means any day other than Saturday, Sunday or any other
day which is a legal holiday under the laws of the state of New York or any
day on which commercial banks are not authorized or required by law to
close in the City of New York, New York.
"Closing Price" means, for a Trading Day, the price at which the
Common Stock last traded on that day, as reported by the Trading Market.
"Exercise Date" means the particular date (or dates) on which this
Warrant is exercised.
"Issue Date" means April 9, 2007.
"Purchase Price" means:
(a) with respect to any Exercise Date on or before the first
anniversary of the Issue Date, 65% of the lowest Closing Price of the
Common Stock during the period beginning on March 27, 2007 and ending
on the day before the Exercise Date; and
(b) with respect to any Exercise Date after the first anniversary
of the Issue Date, 65% of the lowest Closing Price of the Common Stock
during the period beginning on March 27, 2007 and ending on the first
anniversary of the Issue Date.
"Trading Day" means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
is not quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day.
"Trading Market" means the markets or exchanges on which the Common
Stock is or may become listed or quoted for trading on the date in
question, including the American Stock Exchange, the New York Stock
Exchange, the Nasdaq Global Market, the Nasdaq Capital Market, OTC Bulletin
Board, or the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices).
"Warrant" means this Warrant and any warrant delivered in substitution
or exchange for this Warrant as provided herein.
"Warrant Shares" means any shares of Common Stock acquired by Holder
upon exercise of this Warrant.
1. Exercise.
(a) This Warrant may be exercised, in whole or in part, at any time or
from time to time, on any Business Day, for all or any part of the number of
shares of Common Stock called for hereby, by surrendering it at the principal
office of the Company, 100 East Patterson Street, Tecumseh, Michigan 49286,
together with: (A) a completed and executed Subscription Form; and (B) a
certified or cashier's check in an amount equal to the number of shares of
Common Stock being purchased multiplied by the applicable Purchase Price unless
such exercise is by means of a cashless exercise pursuant to Section 5.
(b) This Warrant may be exercised for less than the full number of
shares as of the Exercise Date. Upon such partial exercise, this Warrant shall
be surrendered, and a new Warrant of the same tenor and for the purchase of the
Warrant Shares not purchased upon such exercise shall be issued to Holder by the
Company.
(c) A Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of its surrender for exercise as provided
above, and the person entitled to receive the shares of Common Stock issuable
upon such exercise shall be treated for all purposes as the holder of such
shares of record as of the close of business on such date. As soon as
practicable on or after such date, and in any event within five Business Days
thereafter, the Company shall provide its transfer agent with instructions to
issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash, in lieu of any fraction of a
share,
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equal to such fraction of the current fair market value of one full share as
reasonably determined in good faith by the Company's Board of Directors.
2. Payment of Taxes. All shares of Common Stock issued upon the exercise of
a Warrant shall be validly issued, fully paid, and nonassessable, and the
Company shall pay all taxes and other governmental charges that may be imposed
in respect of the issue or delivery thereof, other than any tax or other charge
imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock in any name other than that of the registered Holder
of the Warrant surrendered in connection with the purchase of such shares, and
in such case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the Company's satisfaction that no tax or other charge is due.
3. Certain Adjustments.
(a) Adjustment for Dividends in Securities or Property;
Reclassifications. In case at any time or from time to time after the Issue Date
the holders of Common Stock (or any shares of stock or other securities at the
time receivable upon the exercise of this Warrant) shall have received, or, on
or after the record date fixed for the determination of eligible shareholders (a
"Record Date"), shall have become entitled to receive, without payment therefor,
(1) other or additional stock or other securities or property
(including cash) by way of dividend,
(2) other or additional stock or other securities or property by
way of stock-split, spin-off, reclassification, combination of shares, or
similar corporate rearrangement,
(other than additional shares of Common Stock of the Company issued as a stock
dividend or stock-split, which events shall be covered by the terms of Section
3(b) or 3(c)), then and in each such case Holder, upon the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property which such Holder would have received if, upon the
Record Date such Holder had been the holder of the number of shares of Common
Stock called for on the face hereof and had thereafter, during the period from
the Issue Date through the date of such exercise, retained such shares and/or
all other or additional stock and other securities and property receivable by it
as aforesaid during such period, giving effect to all adjustments called for
during such period by Sections 3(a) and 3(b).
(b) Adjustment for Reclassification, Merger, or Share Exchange. In
case of any reclassification, merger, share exchange, or other similar corporate
reorganization on or after the Issue Date in which holders of outstanding Common
Stock receive stock or other securities or property in exchange for their Common
Stock, then and in each such case Holder, upon the exercise hereof at any time
after the consummation of such reclassification, merger, share exchange, or
other reorganization, shall be entitled to receive, in lieu of the stock or
other securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which the Holder
would have been entitled upon such consummation if the Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as provided
in paragraph (a), and in each such case, the terms of this Section 3 shall be
applicable to the Company securities properly receivable upon the exercise of
this Warrant after such consummation.
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(c) Adjustments for Dividends in Common Stock. In case at any time
after the Issue Date the Company shall declare any dividend on the Common Stock
which is payable in Common Stock, the number of Warrant Shares evidenced hereby
shall be proportionately increased and the Purchase Price shall be
proportionately decreased.
(d) Stock Split and Reverse Stock Split. If the Company at any time or
from time to time after the Issue Date effects a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased, and the number of shares of
Common Stock theretofore receivable upon the exercise of this Warrant shall be
proportionately increased. If the Company at any time or from time to time after
the Issue Date combines the outstanding shares of Common Stock into a smaller
number of shares, the Purchase Price then in effect immediately before that
combination shall be proportionately increased, and the number of shares of
Common Stock theretofore receivable upon the exercise of this Warrant shall be
proportionately decreased. Each adjustment under this Section 3(d) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) Accountants' Certificate as to Adjustment. In each case of an
adjustment in the shares of Common Stock receivable on the exercise of the
Warrant, the Company at its expense shall cause independent public accountants
of recognized standing selected by the Company (who may be the independent
public accountants then auditing the books of the Company) to compute such
adjustment in accordance with the terms of the Warrant and prepare a certificate
setting forth such adjustment and showing the facts upon which such adjustment
is based. The Company will forthwith mail a copy of each such certificate to
each holder of a Warrant at the time outstanding.
(f) No Dilution or Impairment. Subject to the provisions of Section 7,
the Company will not, by amendment of its restated articles of incorporation or
through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect Holder's rights under this Warrant against dilution or other impairment.
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Purchase Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.
4. Notices of Record Date. In case (a) the Company shall take a record of
the holders of its Common Stock (or other stock or securities at the time
receivable upon the exercise of the Warrants) for the purpose of entitling them
to receive any dividend or other distribution, or any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right, or (b) of any Extraordinary Transaction (as defined below) or
reorganization, reclassification, consolidation, merger, share exchange,
conveyance, voluntary dissolution, liquidation, or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to
Holder a notice specifying, as the case may be, (1) the date on which a record
is to be taken for the purpose of such dividend, distribution, or right, and
stating the amount and character of such dividend, distribution or right, or
(2) the date on which such Extraordinary Transaction, reorganization,
reclassification, consolidation, merger,
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share exchange, conveyance, dissolution, liquidation, or winding-up is to take
place, and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or such stock or securities at the time receivable upon the
exercise of the Warrants) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
share exchange, conveyance, dissolution, liquidation, or winding-up. Such notice
shall be mailed at least 30 days prior to the date therein specified.
5. Cashless Exercise. Holder may, at its option, in lieu of paying the
Purchase Price upon exercise of this Warrant pursuant to Section 1, elect to
instead receive a number of Warrant Shares computed using the following formula:
X = Y(A-B)/A
where:
X = the number of Warrant Shares issuable to Holder upon exercise
under this Section 5;
Y = the number of Warrant Shares issuable to Holder upon exercise
under the terms of this Warrant if Holder had elected to
exercise otherwise than under this Section 5;
A = the Closing Price on the Trading Day before the Exercise
Date; and
B = the Purchase Price.
6. Registration Rights. The Warrant Shares are entitled to the benefits of
the Registration Rights Agreement dated as of the Issue Date between the Company
and the original Holder.
7. Reorganization, Merger, Consolidation, or Disposition of Assets. In case
the Company shall (i) reorganize its capital, (ii) consolidate or merge with or
into another corporation (where the Company is not the surviving corporation or
where there is a change in or distribution with respect to the Common Stock of
the Company), or (iii) sell, transfer or otherwise dispose of all or
substantially all its property, assets, or business to another corporation (each
of (i) through (iii), an "Extraordinary Transaction") and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then the Holder shall have the right thereafter to
receive, at the option of the Holder, upon exercise of this Warrant, the number
of shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event.
Notwithstanding anything contained herein to the contrary, in the event of any
Extraordinary Transaction, the Company shall provide the Holder with notice of
the Extraordinary Transaction in accordance with Section 4, and the Holder must
exercise its Warrant at least three calendar days prior to the effective date of
the Extraordinary Transaction ("Extraordinary Transaction Election Date") in
accordance with the exercise
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procedures set forth herein in exchange for the consideration set forth in the
first sentence of this Section 7, and if Holder does not exercise the Warrant
prior to the Extraordinary Transaction Election Date, Holder shall forfeit all
of its rights under this Warrant and this Warrant shall terminate as of the
Extraordinary Transaction Election Date. For purposes of this Section 7, "common
stock of the successor or acquiring corporation" shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 7 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations, or disposition of assets.
8. Transfer, Division, and Combination.
(a) Subject to compliance with any applicable securities laws and the
conditions set forth herein, this Warrant and all rights hereunder are
transferable, in whole or, subject to Section 8(f), in part, upon surrender of
this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be canceled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
(b) This Warrant may be divided, subject to Section 8(f), or combined
with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by Holder or its agent or
attorney. Subject to compliance with Section 8(a), as to any transfer which may
be involved in such division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
(c) The Company shall prepare, issue, and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 8.
(d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), the Michigan Uniform Securities
Act (the "Michigan Act") if applicable, and any other applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such transfer (i) that the Holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel reasonably acceptable to
the Company (which opinion shall be in form, substance, and scope customary for
opinions of counsel in comparable
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transactions) to the effect that such transfer may be made without registration
under the Securities Act, the Michigan Act, and any applicable state securities
or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company,
and (iii) that the transferee be an "accredited investor" as defined in Rule
501(a) promulgated under the Securities Act.
(f) No Warrant shall be issued in a denomination of less than 25,000
Warrant Shares. Accordingly, (i) any partial assignment of this Warrant must be
in a denomination of at least 25,000 Warrant Shares and the portion retained by
the assignor must cover at least 25,000 Warrant Shares, and (ii) this Warrant
may not be divided so as to result in the issuance of any new Warrant in a
denomination of less than 25,000 Warrant Shares.
9. No Rights as Shareholder. Prior to the exercise of this Warrant, Holder
shall not be entitled to any rights of a shareholder with respect to the Warrant
Shares, including without limitation the right to vote such Warrant Shares,
receive dividends or other distributions thereon, exercise preemptive rights, or
be notified of shareholder meetings, and Holder shall not be entitled to any
notice or other communication concerning the business or affairs of the Company.
However, nothing in this Section 9 shall limit the right of Holder to be
provided the notices required under this Warrant.
10. Compliance with Securities Laws. Holder, by acceptance hereof, agrees
that this Warrant and the Warrant Shares to be issued upon exercise hereof are
being acquired for investment and not with a view towards resale and that it
will not offer, sell, or otherwise dispose of this Warrant or any Warrant Shares
to be issued upon exercise hereof except under circumstances that will not
result in a violation of the Securities Act, the Michigan Uniform Securities
Act, or any other applicable state securities act. Upon exercise of this
Warrant, Holder hereof shall confirm in writing, in the form of Exhibit A, that
the Warrant Shares so purchased are being acquired for investment and not with a
view toward distribution or resale. This Warrant and all Warrant Shares issued
upon exercise of this Warrant (unless registered under the Securities Act, the
Michigan Act if applicable, and any other applicable state securities act) shall
be stamped or imprinted with the legend indicated on the first page of this
Warrant.
11. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of reasonable discretion) of the ownership
of and the loss, theft, destruction, or mutilation of any Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it (in the
exercise of reasonable discretion but shall not include the posting of any
bond), and (in the case of mutilation) upon surrender and cancellation thereof,
the Company will execute and deliver in lieu thereof a new Warrant of like
tenor.
12. Reservation of Common Stock. The Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of this Warrant. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable, and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
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13. Notices. All notices and other communications from the Company to
Holder shall be mailed by first-class registered or certified mail, postage
prepaid, to the address furnished to the Company by Holder.
14. Change; Waiver. Neither this Warrant nor any term hereof may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge, or termination is sought. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers, or
remedies.
15. Headings. The headings in this Warrant are for purposes of convenience
in reference only, and shall not be deemed to constitute a part hereof.
16. Saturdays, Sundays, Holidays, Etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday, or a legal holiday, then such action may be taken
or such right may be exercised on the next succeeding day not a Saturday,
Sunday, or legal holiday.
17. Law Governing. This Warrant is delivered in Michigan and shall be
construed and enforced in accordance with and governed by the internal laws, and
not the law of conflicts, of such State.
18. Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
20. Remedies. Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
21. Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Warrant as of the
date set forth above.
TECUMSEH PRODUCT COMPANY
By: /s/ James S. Nicholson
------------------------------------
Name: James S. Nicholson
Title: Vice President, Treasurer and
Chief Financial Officer
Accepted and agreed to:
(Holder)
TRICAP PARTNERS II L.P.
By: Tricap Partners II GP L.P.,
its general partner
By: Tricap Partners Ltd., its
general partner
By: /s/ Gary Franko
---------------------------------
Name: Gary Franko
Title: Vice President
[Warrant - Signature Page]
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant and purchases ____________ of the number of shares of Class A Common
Stock of Tecumseh Products Company, a Michigan corporation, purchasable with
this Warrant, and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant. The undersigned hereby
represents and warrants that the undersigned is acquiring such shares for its
own account for investment purposes only, and not for resale or with a view to
distribution of such shares or any part thereof.
(Holder)
Dated: _______________, 20___ ----------------------------------------
By:
------------------------------------
[name]
---------------------------------
[title]
--------------------------------
----------------------------------------
[Street address]
----------------------------------------
[City, state, and ZIP code]
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns, and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
Name of Assignee:
------------------------------------
Address:
---------------------------------------------
No. of Shares:
---------------------------------------
and does hereby irrevocably constitute and appoint ___________________________
Attorney to make such transfer on the books of Tecumseh Products Company, a
Michigan corporation, maintained for the purpose, with full power of
substitution in the premises.
(Holder)
Dated: _______________, 20___ ----------------------------------------
Witnessed by:
By:
- ------------------------------ ------------------------------------
[name]
---------------------------------
[title]
--------------------------------