Document:

EX-10.1

REVOLVING CREDIT

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS AGENT)

WITH

TECUMSEH PRODUCTS COMPANY,

TECUMSEH COMPRESSOR COMPANY,

TECUMSEH PRODUCTS OF CANADA, LIMITED,

AND

EVERGY, INC.

(BORROWERS)

APRIL 21, 2011

TABLE OF CONTENTS

LIST OF EXHIBITS AND SCHEDULES

	 	 	 
	Exhibits

Exhibit 1.2

Exhibit 2.1(a)

Exhibit 5.5(b)

Exhibit 8.1(k)

Exhibit 16.3

Schedules

Schedule 1.2

Schedule 1.2A

Schedule 1.2B

Schedule 4.5

Schedule 4.15(h)

Schedule 4.19

Schedule 5.1

Schedule 5.2(a)

Schedule 5.2(b)

Schedule 5.4

Schedule 5.6

Schedule 5.8(b)

Schedule 5.8(d)

Schedule 5.8(d)(xii)

Schedule 5.9

Schedule 5.10

Schedule 5.14

Schedule 7.3

Schedule 7.4

Schedule 7.5

Schedule 7.8

	 	

Borrowing Base Certificate

Revolving Credit Note

Financial Projections

Financial Condition Certificate

Commitment Transfer Supplement

Permitted Encumbrances

EBITDA Adjustments

Additional Excluded Equipment

Equipment and Inventory Locations

Deposit and Investment Accounts

Real Property

Consents

States of Qualification and Good Standing

Subsidiaries

Federal Tax Identification Number

Prior Names

Litigation

Plans

ERISA

Intellectual Property, Source Code Escrow Agreements

Licenses and Permits

Labor Disputes

Guarantees

Investments

Intercompany Loans

Indebtedness

REVOLVING CREDIT

AND

SECURITY AGREEMENT

Revolving Credit and Security Agreement dated as of April 21, 2011 among TECUMSEH PRODUCTS
COMPANY, a corporation organized under the laws of the State of Michigan (“Tecumseh Products”),
TECUMSEH COMPRESSOR COMPANY, a corporation organized under the laws of the State of Delaware
(“Tecumseh Compressor”), TECUMSEH PRODUCTS OF CANADA, LIMITED, a Canadian corporation (“Tecumseh
Products Canada”), and EVERGY, INC., a corporation organized under the laws of the State of
Delaware (“Evergy”) (Tecumseh Products, Tecumseh Compressor, Tecumseh Products Canada and Evergy,
each a “Borrower”, and collectively “Borrowers”), the financial institutions which are now or which
hereafter become a party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC
BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrowers, Lenders
and Agent hereby agree as follows:

I. DEFINITIONS.

1.1. Accounting Terms. As used in this Agreement, the Other Documents or any certificate,
report or other document made or delivered pursuant to this Agreement, accounting terms not defined
in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to
the extent not defined, shall have the respective meanings given to them under GAAP; provided,
however, whenever such accounting terms are used for the purposes of determining compliance with
financial covenants in this Agreement, such accounting terms shall be defined in accordance with
GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal year
ended December 31, 2010.

1.2. General Terms. For purposes of this Agreement the following terms shall have the
following meanings:

“Accountants” shall have the meaning set forth in Section 9.7.

“Advance Rates” shall mean, collectively, the Receivables Advance Rate, the Inventory Advance
Rates, and the Equipment Advance Rate.

“Advances” shall mean and include the Revolving Advances and Letters of Credit.

“Affiliate” of any Person shall mean (a) any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with such Person, or (b) any Person who is
a director, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary
of such Person or (iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (x) to vote 5% or more of
the Equity Interests having ordinary voting power for the election of directors of such Person or
other Persons performing similar functions for any such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by ownership of Equity Interests,
contract or otherwise.

“After-Acquired Equipment” shall mean Equipment of a Borrower (i) that was acquired after
February 28, 2011, (ii) that was appraised in an appraisal satisfactory to Agent, (iii) that meets
all conditions to be Eligible Equipment, and (iv) that is satisfactory to Agent in its sole
discretion.

“Agent” shall have the meaning set forth in the preamble to this Agreement and shall include
its successors and assigns.

“Agent Advances” shall have the meaning set forth in Section 16.2(b).

“Agreement” shall mean this Revolving Credit and Security Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the higher of (i) the
Base Rate in effect on such day, (ii) the Federal Funds Open Rate in effect on such day plus 1/2 of
1% and (iii) the Daily LIBOR Rate plus 1%. For purposes of this definition, “Daily LIBOR Rate”
shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate
by (y) a number equal to 1.00 minus the Reserve Percentage. For the purposes of this definition,
“Published Rate” shall mean the rate of interest published each Business Day in The Wall Street
Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month
period (or, if no such rate is published therein for any reason, then the Published Rate shall be
the eurodollar rate for a one month period as published in another publication determined by
Agent).

“Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws
comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United
States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable
Laws may from time to time be amended, renewed, extended, or replaced), the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act, S.C. 2000, c.17, the Foreign Extraterritorial
Measures Act, R.S.C. 1985, c. F-29 and the respective regulations promulgated thereunder.

“Applicable Law” shall mean all laws, rules and regulations applicable to the Person, conduct,
transaction, covenant, Other Document or contract in question, including all applicable common law
and equitable principles; all provisions of all applicable state, provincial, federal and foreign
constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental
Body, and all orders, judgments and decrees of all courts and arbitrators.

“Applicable Margin” for Revolving Advances shall mean, as of the Closing Date through
September 30, 2011, the applicable percentage specified below:

	 	 	 	 	 
	APPLICABLE MARGINS FOR DOMESTIC RATE

LOANS

	 	APPLICABLE MARGINS FOR EURODOLLAR

RATE LOANS

	
 
	 	 	 	 
	1.25%

	 	 	2.25	%
	 

	 	 	 	 

Thereafter, effective as of the first Business Day following receipt by Agent of the Average
Undrawn Availability Report for the previous fiscal quarter (each day of such delivery, an
“Adjustment Date”), the Applicable Margin for each type of Advance shall be adjusted, if necessary,
to the applicable percent per annum set forth in the pricing table set forth below corresponding to
the Average Undrawn Availability for the calendar quarter period ending on the last day of the most
recently completed calendar quarter prior to the applicable Adjustment Date (each such period, a
“Calculation Period”):

	 	 	 	 	 	 	 
	TIER
	 	AVERAGE UNDRAWN

AVAILABILITY

	 	APPLICABLE MARGINS

FOR DOMESTIC RATE

LOANS (REVOLVING

ADVANCES)
	 	APPLICABLE MARGINS

FOR EURODOLLAR RATE

LOANS (REVOLVING

ADVANCES)
	 
	 	 

	 	 	 	 
	I
	 	Greater than

$25,000,000

	 	1%

	 	2%

	 
	 	 

	 	 
	 	 
	II
	 	Greater than

$10,000,000 but less

than or equal to

$25,000,000

	 	1.25%

	 	2.25%

	 
	 	 

	 	 
	 	 
	III
	 	Less than or equal to

$10,000,000

	 	1.50%

	 	2.50%

	 
	 	 

	 	 
	 	 

If the Borrowers do not timely deliver the Average Undrawn Availability Report, each
Applicable Margin shall be conclusively presumed to equal the highest Applicable Margin specified
in the pricing table set forth above until the date of delivery of the Average Undrawn Availability
Report, at which time the rate will be adjusted based upon Average Undrawn Availability reflected
in the Average Undrawn Availability Report.

If, as a result of any restatement of, or other adjustment to, the financial statements of
Borrowers on a Consolidated Basis or for any other reason, the Agent determines that (a) the
Average Undrawn Availability as previously calculated as of any applicable date was inaccurate, and
(b) a proper calculation of Average Undrawn Availability would have resulted in different pricing
for any period, then (i) if the proper calculation of the Average Undrawn Availability would have
resulted in higher pricing for such period, the Borrowers shall automatically and retroactively be
obligated to pay to the Agent, promptly upon demand by the Agent, an amount equal to the excess of
the amount of interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period; and (ii) if the proper calculation of the Average
Undrawn Availability would have resulted in lower pricing for such period, Lenders shall
automatically and retroactively be obligated to pay to the Borrowers, promptly upon demand by the
Borrowers, an amount equal to the excess of the amount of interest and fees that was actually paid
for such period over the amount of interest and fees that should have been paid for such period;
provided, that, if as a result of any restatement or other event a proper calculation of the
Average Undrawn Availability would have resulted in higher pricing for one or more periods and
lower pricing for one or more other periods (due to the shifting of income or expenses from one
period to another period or any similar reason), then the amount payable by the Borrowers pursuant
to clause (i) above shall be based upon the excess, if any, of the amount of interest and fees that
should have been paid for all applicable periods over the amounts of interest and fees actually
paid for such periods, and the amount payable by the Lenders pursuant to clause (ii) above shall be
based upon the excess, if any, of the amount of interest and fees that was actually paid for all
applicable periods over the amounts of interest and fees that should have been paid for such
periods.

“Average Undrawn Availability” means, with respect to any period, an amount equal to the sum
of amount of Undrawn Availability on each day in such period divided by the number of days in such
period.

“Average Undrawn Availability Report” means a written report signed by an Authorized Officer
showing the calculation of Average Undrawn Availability for the applicable period that is
satisfactory in form to Agent.

“Authority” shall have the meaning set forth in Section 4.19(d).

“Bankruptcy Code” shall mean: (a) title 11 of the United States Code, (b) the Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B-3, (c) the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.
C-36, (d) the Winding-Up and Restructuring Act, R.S.C. 1985, c. W-11 as applicable, or any similar
legislation in a relevant jurisdiction, in each case as in effect from time to time. Section
references in this Agreement to the Bankruptcy Code refer to title 11 of the United States Code or
in the case of Tecumseh Products Canada to the equivalent provisions of the applicable Canadian
legislation referred to in (b) and (c) above.

“Base Rate” shall mean the base commercial lending rate of PNC as publicly announced to be in
effect from time to time, such rate to be adjusted automatically, without notice, on the effective
date of any change in such rate. This rate of interest is determined from time to time by PNC as a
means of pricing some loans to its customers and is neither tied to any external rate of interest
or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any
particular class or category of customers of PNC.

“Blocked Accounts” shall have the meaning set forth in Section 4.15(h).

“Blocked Account Bank” shall have the meaning set forth in Section 4.15(h).

“Blocked Person” shall have the meaning set forth in Section 5.24(b).

“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to this Agreement
and shall extend to all permitted successors and assigns of such Persons.

“Borrowers on a Consolidated Basis” shall mean the consolidation in accordance with GAAP of
the accounts or other items of the Borrowers and their respective Subsidiaries (including the
Excluded Foreign Subsidiaries).

“Borrowers’ Account” shall have the meaning set forth in Section 2.8.

“Borrowing Agent” shall mean Tecumseh Products.

“Borrowing Base” is defined in Section 2.1(a).

“Borrowing Base Certificate” shall mean a certificate in substantially the form of Exhibit 1.2
duly executed by the President, Chief Financial Officer, or Treasurer of the Borrowing Agent (each
an “Authorized Officer”) and delivered to the Agent, appropriately completed, by which such officer
shall certify to Agent the Formula Amount and calculation thereof as of the date of such
certificate.

“Business Day” shall mean any day other than Saturday or Sunday or a legal holiday on which
commercial banks are authorized or required by law to be closed for business in East Brunswick, New
Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also
be a day on which dealings are carried on in the London interbank market.

"Canadian Dollar” and “C$” means the lawful currency of Canada.

"Canadian Employee Benefit Laws” means the Income Tax Act,, R.S.C. 1985, c. 1 the Pension
Benefits Standards Act, R.S.C. 1985, c. 32, the Employment Insurance Act, S.C. 1996 c. 23, the
Pension Benefits Act, R.S.O. 1990, c. P 8, the Workplace Safety and Insurance Act, 1997, S.O. 1997,
c. 16, the Occupational Health and Safety Act, R.S.O. 1990, c. O. 1 and the Employment Standards
Act, 2000, S.O. 2000, c. 41, and in each case the regulations thereunder, and any federal,
provincial or local counterparts or substantial equivalents relating to employee benefits, in each
case, as amended from time to time.

“Canadian Income Tax Act” shall mean the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th
Supp.), as amended and the regulations thereunder.

“Canadian Pension Plan” shall mean a pension plan or plan that is a “registered pension plan”
as defined in the Canadian Income Tax Act or is subject to the funding requirements of applicable
pension benefits legislation in any Canadian jurisdiction and is applicable to employees or former
employees resident in Canada of Tecumseh Products Canada, including without limitation any Canadian
Union Plan.

“Canadian Union Plan” shall mean any pension plan for the benefit of employees or former
employees resident in Canada of Tecumseh Products Canada which is not maintained, sponsored or
administered by Tecumseh Products Canada, but to which Tecumseh Products Canada is or was required
to contribute pursuant to a collective agreement or participation agreement.

“Canadian Security Documents” means the loan and security documents creating any Lien in
Agent’s favor securing the Obligations for the benefit of the Lenders with respect to that portion
of the Collateral located in Canada or in which a Canadian entity has an interest.

“Canadian Subsidiary” means any Subsidiary of any Borrower organized under the laws of Canada
or any province, territory or other political subdivision thereof.

“Capital Expenditures” shall mean expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto
which have a useful life of more than one year, including the total principal portion of
Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital
expenditures.

“Capitalized Lease Obligation” shall mean any Indebtedness of any Borrower or any Subsidiary
represented by obligations under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

"Cash Dominion Triggering Event” shall mean (a) the occurrence of an Event of Default that is
continuing, or (b) that Undrawn Availability is less than or equal to (i) $7,500,000 for 5
consecutive Business Days, or (ii) $5,000,000 on any Business Day.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. §§9601 et seq.

“Change in Control” means (a) the acquisition on or after the Closing Date of ownership,
directly or indirectly, beneficially or of record, by any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date
hereof, but excluding Tecumseh Products) of Equity Interests representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding Equity Interests of
Tecumseh Products; or (b) occupation of a majority of the seats (other than vacant seats) on the
board of directors of Tecumseh Products by Persons who were neither (i) nominated by the board of
directors of Tecumseh Products nor (ii) appointed by directors so nominated.

“Charges” shall mean all taxes, charges, fees, imposts, levies or other assessments, including
all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties,
fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts, imposed by any taxing or other authority,
domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency
or superfund), upon the Collateral, any Borrower or any Guarantor.

“Closing Date” shall mean the date of this Agreement or such other date as may be agreed to by
the parties hereto.

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and the rules and
regulations thereunder, as from time to time in effect.

“Collateral” shall mean and include:

(a) all Receivables;

(b) all Equipment;

(c) all General Intangibles;

(d) all Inventory;

(e) all Investment Property;

(f) all Real Property;

(g) all Subsidiary Stock;

(h) the Leasehold Interests;

(i) all of each Borrower’s right, title and interest in and to, whether now owned or hereafter
acquired and wherever located, (i) its respective goods and other property including, but not
limited to, all merchandise returned or rejected by Customers, relating to or securing any of the
Receivables; (ii) all of each Borrower’s rights as a consignor, a consignee, an unpaid vendor,
mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to any Borrower from any Customer
relating to the Receivables; (iv) other property, including warranty claims, relating to any goods
securing the Obligations; (v) all of each Borrower’s contract rights, rights of payment which have
been earned under a contract right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit
and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if
and when obtained by any Borrower, all real and personal property of third parties in which such
Borrower has been granted a lien or security interest as security for the payment or enforcement of
Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is
evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal
property or real property now owned or hereafter acquired in which any Borrower has expressly
granted a security interest or may in the future grant a security interest to Agent hereunder, or
in any amendment or supplement hereto or thereto, or under any other agreement between Agent and
any Borrower;

(j) all of each Borrower’s ledger sheets, ledger cards, files, correspondence, records, books
of account, business papers, computers, computer software (owned by any Borrower or in which it has
an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e),
(f), (g), (h) or (i) of this Paragraph;

(k) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) in
whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised
solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and
credit insurance), negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort
claim proceeds; and

(l) all present and future collateral granted under the Canadian Security Documents and each
Guarantor Security Agreement.

Collateral excludes, however, the Excluded Collateral.

“Commitment Percentage” of any Lender shall mean the percentage set forth below such Lender’s
name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant
to Section 16.3(c) or (d).

“Commitment Transfer Supplement” shall mean a document in the form of Exhibit 16.3 hereto,
properly completed and otherwise in form and substance satisfactory to Agent by which the
Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances
under this Agreement.

“Compliance Certificate” shall mean a compliance certificate to be signed by the Chief
Financial Officer, Treasurer, or Controller of Borrowing Agent, which shall state that, based on an
examination sufficient to permit such officer to make an informed statement, (i) no Default or
Event of Default exists, or if such is not the case, specifying such Default or Event of Default,
its nature, when it occurred, whether it is continuing and the steps being taken by Borrowers with
respect to such default and, such certificate shall have appended thereto calculations which set
forth Borrowers’ compliance with the requirements or restrictions imposed by Sections 6.5, 7.4,
7.5, 7.6, 7.7, 7.8, 7.10, and 7.11 and (ii) shall attach evidence reasonably satisfactory to Agent
that Borrowers have timely made all contributions required by ERISA with respect to defined benefit
pension plans.

“Consents” shall mean all filings and all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic
or foreign, necessary to carry on any Borrower’s business or necessary (including to avoid a
conflict or breach under any agreement, instrument, other document, license, permit or other
authorization) for the execution, delivery or performance of this Agreement, the Other Documents,
including any Consents required under all applicable federal, state or other Applicable Law.

“Consigned Inventory” shall mean Inventory of any Borrower that is in the possession of
another Person on a consignment, sale or return, or other basis that does not constitute a final
sale and acceptance of such Inventory.

“Controlled Group” shall mean, at any time, each Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated) under common
control and all other entities which, together with any Borrower, are treated as a single employer
under Section 414 of the Code.

“Customer” shall mean and include the account debtor with respect to any Receivable and/or the
prospective purchaser of goods, services or both with respect to any contract or contract right,
and/or any party who enters into or proposes to enter into any contract or other arrangement with
any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any
services.

“Customs” shall have the meaning set forth in Section 2.11(b).

“Default” shall mean an event, circumstance or condition which, with the giving of notice or
passage of time or both, would constitute an Event of Default.

“Default Rate” shall have the meaning set forth in Section 3.1.

“Defaulting Lender” shall have the meaning set forth in Section 2.23(a).

“Depository Accounts” shall have the meaning set forth in Section 4.15(h).

“Designated Lender” shall have the meaning set forth in Section 16.2(b).

“Documents” shall have the meaning set forth in Section 8.1(c).

“Dollar” and the sign “$” shall mean lawful money of the United States of America.

“Dollar Equivalent” of any amount means, at the time of determination thereof, (a) if such
amount is expressed in Dollars, such amount, or (b) if such amount is expressed in a currency other
than Dollars, the equivalent of such amount in Dollars determined by using the spot exchange rate
determined by the Agent at 11:00 a.m. (New York time) on the date of determination (or, if such
date is not a Business Day, the last Business Day prior thereto) available to it for the spot
purchase in the New York foreign exchange market of such amount of Dollars with such currency or,
if such rate of exchange is not available, such other rate as the Agent, in its reasonable
discretion, deems appropriate.

“Domestic Rate Loan” shall mean any Advance that bears interest based upon the Alternate Base
Rate.

“Domestic Subsidiary” shall mean any Subsidiary of any Borrower organized under the laws of
any jurisdiction within the United States.

“Drawing Date” shall have the meaning set forth in Section 2.12(b).

“Early Termination Date” shall have the meaning set forth in Section 13.1.

“Earnings Before Interest and Taxes” shall mean for any period the sum of (i) net income (or
loss) of Borrowers on a Consolidated Basis for such period as calculated on a first-in-first-out
basis (excluding extraordinary gains), plus (ii) all interest expense of Borrowers on a
Consolidated Basis for such period, plus (iii) all charges against income of Borrowers on a
Consolidated Basis for such period for federal, state and local taxes.

“EBITDA” shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such
period plus (ii) depreciation expenses for such period of Borrowers on a Consolidated Basis, plus
(iii) amortization expenses for such period of Borrowers on a Consolidated Basis. EBITDA will be
adjusted for all non-cash expense items and one-time non-recurring expenses or charges for
discontinued operations, restructuring, impairment and other charges as shown on Schedule 1.2A.

“Eligible Equipment” shall mean and include Equipment of a Borrower that was appraised as of
February 28, 2011 (the “Appraised Equipment”), and that Agent, in its reasonable discretion, deems
eligible, based on such considerations as Agent may from time to time deem appropriate including
whether the Equipment is subject to a perfected, first priority security interest in favor of Agent
and no other Lien (other than a Permitted Encumbrance). In addition, Equipment shall not be
Eligible Equipment if it (i) does not conform to all material standards imposed by any Governmental
Body which has regulatory authority over such goods or the use or sale thereof, (ii) is located
outside the continental United States, Canada, or at a location that is not otherwise in compliance
with this Agreement, (iii) is the subject of an Intellectual Property Claim; (iv) is subject to a
License Agreement or other agreement that limits, conditions or restricts any Borrower’s or Agent’s
right to sell or otherwise dispose of such Equipment, unless Agent is a party to a Licensor/Agent
Agreement with the Licensor under such License Agreement; (v) is situated at a location not owned
by a Borrower unless the owner or occupier of such location has executed in favor of Agent a Lien
Waiver Agreement; (vi) the full purchase price for such Equipment has not been paid by a Borrower;
(vii) is not in good working order and condition (ordinary wear and tear excepted) or is used or
held for use by a Borrower other than in the Ordinary Course of Business of such Borrower; or
(viii) constitutes a “fixture” under the applicable laws of the jurisdiction in which such
Equipment is located. Eligible Equipment may also include, in Agent’s sole discretion,
After-Acquired Equipment.

“Eligible Extended Term Receivables” shall mean and refer to those certain Receivables that
the Agent has deemed Eligible Receivables, in its reasonable discretion and based on such
considerations as the Agent may from time to time deem appropriate, in its reasonable discretion,
that have extended payment terms that the Borrowers have granted to account parties thereon;
provided that in order to be and remain eligible for borrowing purposes hereunder, and without
limitation of the foregoing determination by the Agent as set forth above and as otherwise set
forth in the provisions of the definition of the term Eligible Receivables hereinabove, such
Receivables shall not remain unpaid more than 60 days after their due date and nor shall they
remain unpaid more than 120 days from their invoice date with respect to invoices with 60-day terms
or more than 150 days from their invoice date with respect to invoices with 90-day terms.

“Eligible In-Transit Inventory” means, as of the date of determination thereof, without
duplication of any other Eligible Inventory, Eligible Inventory of each Borrower that meets all
requirements to be Eligible Inventory except that it is in-transit to a Borrower, and that meets
each of the following conditions (a) it has been shipped from outside the United States or Puerto
Rico for receipt within 75 days of the date of determination at a warehouse facility of a Borrower,
(b) it has not yet been so received by such Borrower, (c) title to it has passed to a Borrower, (d)
all negotiable and non-negotiable bills of lading with respect thereto have been properly issued in
a Borrower’s name and are in a Borrower’s possession or the possession of the shipper or
transporter of such Inventory, (e) Agent has control over the documents of title which evidence
ownership of such Inventory (such as, if requested by the Agent, by delivery of a customs broker
agency agreement reasonably satisfactory to the Agent), (f) is insured to Agent’s satisfaction with
Agent named as a lenders loss payee, and (g) the shippers and handlers of which have executed and
delivered to Agent, if so requested by Agent, an additional terms and conditions of service
agreement satisfactory to Agent.

“Eligible Inventory” shall mean and include Inventory, excluding work-in-process with respect
to each Borrower, valued at the lower of cost or market value, determined on a first-in-first-out
basis, which is not, in Agent’s reasonable discretion, slow moving or unmerchantable and which
Agent, in its reasonable discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time deem appropriate including whether the Inventory is
subject to a perfected, first priority security interest in favor of Agent and no other Lien (other
than a Permitted Encumbrance). In addition, Inventory shall not be Eligible Inventory if it (i)
does not conform to all standards imposed by any Governmental Body which has regulatory authority
over such goods or the use or sale thereof, (ii) is in transit (other than Eligible In-Transit
Inventory), (iii) is located outside the continental United States, Canada, or at a location that
is not otherwise in compliance with this Agreement, (iv) constitutes Consigned Inventory, (v) is
the subject of an Intellectual Property Claim; (vi) is subject to a License Agreement or other
agreement that limits, conditions or restricts any Borrower’s or Agent’s right to sell or otherwise
dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor
under such License Agreement; or (vii) or is situated at a location not owned by a Borrower unless
the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement.

In determining whether Inventory is slow moving, Agent will look to the most recently
completed Inventory appraisal that was satisfactory to Agent and will not classify Inventory as
slow moving unless there has been an increase in slow moving Inventory or a change in the Inventory
mix such that slow moving Inventory has increased.

In determining whether or not Inventory is finished goods inventory or work-in-process
Inventory, Agent acknowledges that the following are finished-goods Inventory: finished
compressors that would otherwise be Eligible finished-goods Inventory except that the only
remaining action to be taken with respect to such compressors is to add the required oil. Without
limitation, this means that such Inventory has passed substantially all applicable test and tryout
standards.

“Eligible Receivables” shall mean and include with respect to each Borrower, each Receivable
and each Eligible Extended Term Receivable of such Borrower arising in the Ordinary Course of
Business and which Agent, in its reasonable discretion, shall deem to be an Eligible Receivable,
based on such considerations as Agent may from time to time deem appropriate. A Receivable shall
not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected
security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an
invoice or other documentary evidence satisfactory to Agent. In addition, no Receivable shall be
an Eligible Receivable if:

(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a
Person controlled by an Affiliate of any Borrower;

(b) except with respect to Eligible Extended Term Receivables, it is due or unpaid more than
ninety (90) days after the original invoice date or more than sixty (60) days past the original due
date;

(c) 50% or more of the Receivables from such Customer are not deemed Eligible Receivables
hereunder. Such percentage may, in Agent’s reasonable discretion, be increased or decreased from
time to time;

(d) any covenant, representation or warranty contained in this Agreement with respect to such
Receivable has been breached;

(e) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;

(f) the sale is to a Customer outside the continental United States of America or Canada,
unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to
Agent in its sole discretion;

(g) the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

(h) Agent believes, in its reasonable discretion, that collection of such Receivable is
insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to
pay;

(i) the Customer is the United States of America, any state or any department, agency or
instrumentality of any of them, or any other governmental entity unless the applicable Borrower
assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act
of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or
has otherwise complied with other applicable statutes or ordinances;

(j) the Customer is the government of Canada, any province, territory, or any department,
agency or instrumentality of any of them;

(k) the goods giving rise to such Receivable have not been delivered to and accepted by the
Customer or the services giving rise to such Receivable have not been performed by the applicable
Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale;

(l) the Receivables of the Customer exceed 25% of all Eligible Receivables for all Customers,
but only to the extent that the Receivables of that Customer exceed the 25% limit;

(m) the Receivable is owed in any currency other than U.S. Dollars or Canadian Dollars and any
Receivables denominated in Canadian Dollars must be converted on a daily basis to their US Dollar
Equivalent;

(n) the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the
Customer is also a creditor or supplier of a Borrower or the Receivable is contingent in any
respect or for any reason (provided, however, that the portion of a Receivable not subject to
offset deduction, defense, dispute or counterclaim will be considered an Eligible Receivable if it
meets all other requirements);

(o) the applicable Borrower has made any agreement with any Customer for any deduction
therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt
payment, all of which discounts or allowances are reflected in the calculation of the face value of
each respective invoice related thereto;

(p) any return, rejection or repossession of the merchandise has occurred or the rendition of
services has been disputed;

(q) such Receivable is not payable to a Borrower; or

(r) such Receivable is not otherwise satisfactory to Agent as determined by Agent in the
exercise of its reasonable discretion.

“Environmental Complaint” shall have the meaning set forth in Section 4.19(d).

“Environmental Laws” shall mean all federal, state, provincial, and local environmental, land
use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes
relating to the protection of the environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of Hazardous Substances
and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives
of federal, state and local governmental agencies and authorities with respect thereto.

“Equipment” shall mean and include as to each Borrower all of such Borrower’s goods (other
than Inventory) whether now owned or hereafter acquired and wherever located including all
equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions thereto.

“Equipment Advance Rate” shall have the meaning set forth in Section 2.1(a).

“Equity Interests” of any Person shall mean any and all shares, rights to purchase, options,
warrants, general, limited or limited liability partnership interests, member interests,
participation or other equivalents of or interest in (regardless of how designated) equity of such
Person, whether voting or nonvoting, including common stock, preferred stock, convertible
securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time and the rules and regulations promulgated thereunder.

“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period
relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or
on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered
by leading banks in the London interbank deposit market), or the rate which is quoted by another
source selected by Agent which has been approved by the British Bankers’ Association as an
authorized information vendor for the purpose of displaying rates at which US dollar deposits are
offered by leading banks in the London interbank deposit market (an “Alternative Source”), at
approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest
Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or
any substitute page) or any Alternate Source, a comparable replacement rate determined by the Agent
at such time (which determination shall be conclusive absent manifest error)) for an amount
comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage.

The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of such effective
date. The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as
determined or adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.

“Eurodollar Rate Loan” shall mean an Advance at any time that bears interest based on the
Eurodollar Rate.

“Event of Default” shall have the meaning set forth in Article X.

“Exchange Act” shall have the mean the Securities Exchange Act of 1934, as amended.

“Excluded Collateral” shall mean the Ann Arbor real estate; the Equipment presently located at
the new Ann Arbor facility and other Equipment placed at the new Ann Arbor facility in the ordinary
course of business as listed on Schedule 1.2B so long as in both cases the Equipment is not
included in the Borrowing Base; the real property located in Ohio, Wisconsin, and Tecumseh,
Michigan that is no longer used in any Borrower’s operations and which is currently for sale or
will shortly be placed for sale; all Intellectual Property, License Agreements and Licensor/Agent
Agreements owned, licensed or held for use by any of the Borrowers; any loan or note receivables
owing by Tecumseh Products India, Ltd. to Tecumseh Products and any security therefor; and the
stock of non-US and non-Canadian subsidiaries. In no event, however, does Excluded Collateral
include any of the Appraised Equipment or any Eligible Equipment.

“Excluded Foreign Subsidiaries” shall mean all Subsidiaries of Tecumseh Products other than
the Canadian Subsidiaries and the Domestic Subsidiaries.

“Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended,
amended or replaced.

“Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a year of
360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the
Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of
the rates on overnight federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement;
provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day,
the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced.

“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a year of 360
days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North
America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite
the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as
set forth on such other recognized electronic source used for the purpose of displaying such rate
as selected by PNC (an “Alternate Source”) (or if such rate for such day does not appear on the
Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at
any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any
Alternate Source, a comparable replacement rate determined by the PNC in its reasonable discretion
at such time (which determination shall be conclusive absent manifest error); provided however,
that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the
“open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate
changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate
applies will change automatically without notice to the Borrowers, effective on the date of any
such change.

"Financial Covenant Triggering Event” shall mean that Undrawn Availability is less than or
equal to (a) $10,000,000 for 5 consecutive Business Days, or (b) $7,500,000 on any Business Day.

“Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal period, for
Borrowers on a Consolidated Basis, the ratio of (a) EBITDA, minus Unfinanced Capital Expenditures
made during such period, minus cash taxes paid or required to be paid during such period, to (b)
all Senior Debt Payments during such period, plus all distributions and dividends paid during such
period, plus all advances to and Investments in non-Borrowers made by Borrowers and their
Subsidiaries during such period, plus all cash contributions and payments with respect to pension
obligations by Borrowers and their Subsidiaries during such period.

“Foreign Subsidiary” of any Person, shall mean any Subsidiary that is not a Domestic
Subsidiary or a Canadian Subsidiary.

“Formula Amount” shall mean an amount as calculated at any time and from time to time
equal to the Borrowing Base, minus such reserves as the Agent may in its reasonable discretion deem
proper and necessary from time to time, including with respect to Priority Payables. But no
reserves may be implemented at any time with respect to Permitted Hedging Contracts related to
commodity metals and non-PNC and non-Lender provided Hedging Contracts.

“GAAP” shall mean generally accepted accounting principles in the United States of America in
effect from time to time.

“General Intangibles” shall mean and include as to each Borrower all of such Borrower’s
general intangibles, whether now owned or hereafter acquired, including all payment intangibles,
all choses in action, causes of action, corporate or other business records, equipment
formulations, manufacturing procedures, quality control procedures, trade secrets, computer
information, updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, all claims under guaranties, security interests or other security held by or granted to
such Borrower to secure payment of any of the Receivables by a Customer (other than to the extent
covered by Receivables) all rights of indemnification and all other intangible property of every
kind and nature (other than Receivables and the Excluded Collateral).

“Governmental Body” shall mean any nation or government, any state or other political
subdivision thereof or any entity, authority, agency, division or department exercising the
legislative, judicial, regulatory or administrative functions of or pertaining to a government.

“Guarantor” shall mean each Borrower and each other Person who may guarantee payment or
performance of the whole or any part of the Obligations and “Guarantors” means collectively all
such Persons.

“Guarantor Security Agreement” shall mean any Security Agreement executed by any Guarantor in
favor of Agent securing the Guaranty of such Guarantor, in form and substance satisfactory to the
Agent.

“Guaranty” shall mean any guaranty of the obligations of Borrowers executed by a Guarantor in
favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance
satisfactory to the Agent.

“Hazardous Discharge” shall have the meaning set forth in Section 4.19(d).

“Hazardous Substance” shall mean, without limitation, any flammable explosives, radon,
radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or
Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State
Environmental Conservation Law or any other applicable Environmental Law and in the regulations
adopted pursuant thereto.

“Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA or
applicable state law, and any other applicable Federal and state laws now in force or hereafter
enacted relating to hazardous waste disposal.

"Hedging Contracts” means any foreign exchange contract, currency swap agreement, futures
contract, commodities hedge agreement, interest rate protection agreement, interest rate future
agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, option agreement, hedging agreement for commodity metal pricing (including copper and
aluminum) or any other similar hedging agreement or arrangement entered into by a Person in the
ordinary course of business and not for speculative purposes.

“Hedge Liabilities” shall have the meaning provided in the definition of “Lender-Provided
Interest Rate Hedge”.

“Indebtedness” of a Person at a particular date shall mean all obligations of such Person
which in accordance with GAAP would be classified upon a balance sheet as liabilities (except
capital stock and surplus earned or otherwise) and in any event, without limitation by reason of
enumeration, shall include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates
of such indebtedness, and all indebtedness secured by a Lien on assets owned by such Person,
whether or not such indebtedness actually shall have been created, assumed or incurred by such
Person. Any indebtedness of such Person resulting from the acquisition by such Person of any
assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the
creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so
created, assumed or incurred.

“Ineligible Security” shall mean any security which may not be underwritten or dealt in by
member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C.
Section 24, Seventh), as amended.

“Intellectual Property” shall mean any patents, patent applications, continuations,
continuations in part, reissues, re-examinations, divisionals, or disclosures relating thereto,
industrial design applications and registrations, and copyrights and applications and registrations
therefor, trademarks, service marks, trademark or service mark, tradenames, trade dress and
applications and registrations therefor, mask works, and software.

“Intellectual Property Claim” shall mean the assertion by any Person of a claim (whether
asserted in writing, by action, suit or proceeding or otherwise) that any Borrower’s ownership,
use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other
property or asset is violative of any ownership of or right to use any Intellectual Property of
such Person.

“Interest Period” shall mean the period provided for any Eurodollar Rate Loan pursuant to
Section 2.2(b).

“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap, adjustable
strike cap, adjustable strike corridor or similar agreements entered into by any Borrower or its
Subsidiaries in order to provide protection to, or minimize the impact upon, such Borrower, any
Guarantor and/or their respective Subsidiaries of increasing floating rates of interest applicable
to Indebtedness.

“Inventory” shall mean and include as to each Borrower all of such Borrower’s now owned or
hereafter acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for sale or lease, all raw
materials, work in process, finished goods and materials and supplies of any kind, nature or
description which are or might be used or consumed in such Borrower’s business or used in selling
or furnishing such goods, merchandise and other personal property, and all documents of title or
other documents representing them.

“Inventory Advance Rates” shall have the meaning set forth in Section 2.1(a).

“Investment Property” shall mean and include as to each Borrower, all of such Borrower’s now
owned or hereafter acquired securities (whether certificated or uncertificated), securities
entitlements, securities accounts, commodities contracts and commodities accounts.

“Issuer” shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant
to the terms hereof.

“Leasehold Interests” shall mean all of each Borrower’s right, title and interest in and to
the premises listed on Schedule 4.19.

“Lender” and “Lenders” shall have the meaning ascribed to such term in the preamble to this
Agreement and shall include each Person which becomes a transferee, successor or assign of any
Lender.

“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is provided by
any Lender and with respect to which the Agent confirms meets the following requirements: such
Interest Rate Hedge (i) is documented in a standard International Swap Dealer Association
Agreement, (ii) provides for the method of calculating the reimbursable amount of the provider’s
credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather
than speculative) purposes. The liabilities of any Borrower to the provider of any Lender-Provided
Interest Rate Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder, guaranteed
obligations under the Guaranty and secured obligations under the Guarantor Security Agreement and
otherwise treated as Obligations for purposes of each of the Other Documents. The Liens securing
the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this
Agreement and the Other Documents.

“Letter of Credit Fees” shall have the meaning set forth in Section 3.2.

“Letter of Credit Borrowing” shall have the meaning set forth in Section 2.12(d).

“Letter of Credit Sublimit” shall mean $10,000,000.

“Letters of Credit” shall have the meaning set forth in Section 2.9.

“License Agreement” shall mean any agreement between any Borrower and a Licensor pursuant to
which such Borrower is authorized to use any Intellectual Property in connection with the
manufacturing, marketing, sale or other distribution of any Inventory of such Borrower or otherwise
in connection with such Borrower’s business operations.

“Licensor” shall mean any Person from whom any Borrower obtains the right to use (whether on
an exclusive or non-exclusive basis) any Intellectual Property in connection with such Borrower’s
manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with
such Borrower’s business operations.

“Licensor/Agent Agreement” shall mean an agreement between Agent and a Licensor, in form and
content satisfactory to Agent, and subject to the terms hereof, by which Agent is given the
unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose
of any Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto,
irrespective of such Borrower’s default under any License Agreement with such Licensor.

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security
interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference,
priority or other security agreement or preferential arrangement held or asserted in respect of any
asset of any kind or nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the foregoing, and the
filing of, or agreement to give, any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction.

“Lien Waiver Agreement” shall mean an agreement which is executed in favor of Agent by a
Person who owns or occupies premises at which any Collateral may be located from time to time and
by which such Person shall waive any Lien that such Person may ever have with respect to any of the
Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or
remove the Collateral from such premises or to use such premises to store or dispose of such
Inventory.

“Material Adverse Effect” shall mean a material adverse effect on (a) the condition (financial
or otherwise), results of operations, assets, business, properties or prospects of any Borrower or
any Guarantor, (b) any Borrower’s ability to duly and punctually pay or perform the Obligations in
accordance with the terms thereof, (c) the value of the Collateral, or Agent’s Liens on the
Collateral or the priority of any such Lien or (d) impair in any material respect the ability of
the Agent or the Lenders to enforce their rights and remedies under this Agreement and the Other
Documents.

“Maximum Face Amount” shall mean, with respect to any outstanding Letter of Credit, the face
amount of such Letter of Credit including all automatic increases provided for in such Letter of
Credit, whether or not any such automatic increase has become effective.

“Maximum Revolving Advance Amount” shall mean $45,000,000

“Maximum Undrawn Amount” shall mean with respect to any outstanding Letter of Credit, the
amount of such Letter of Credit that is or may become available to be drawn, including all
automatic increases provided for in such Letter of Credit, whether or not any such automatic
increase has become effective.

“Modified Commitment Transfer Supplement” shall have the meaning set forth in Section 16.3(d).

“Mortgages” shall mean any present or future mortgages on any Real Property securing the
Obligations, together with all extensions, renewals, amendments, supplements, modifications,
substitutions and replacements thereto and thereof.

“Mortgaged Real Property” means the Real Property commonly known as 2700 West Wood Street,
Paris, Tennessee, 5424 Highway 145 South, Verona, Mississippi, and 200 Elm Street, Aylmer, Ontario,
Canada, and any other Real Property subject to a Mortgage.

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections 3(37) and
4001(a)(3) of ERISA.

“Multiple Employer Plan” shall mean a Plan which has two or more contributing sponsors
(including any Borrower or any member of the Controlled Group) at least two of whom are not under
common control, as such a plan is described in Section 4064 of ERISA.

“Net Orderly Liquidation Value” means, with respect to Inventory or Equipment of any Person,
the orderly liquidation value thereof as determined in a manner acceptable to the Agent from time
to time by an appraiser acceptable to the Agent, net of all costs of liquidation.

“Obligations” shall mean and include any and all loans, advances, debts, liabilities,
obligations, covenants and duties owing by any Borrower to Lenders or Agent or to any other direct
or indirect subsidiary or affiliate of Agent or any Lender of any kind or nature, present or future
(including any interest or other amounts accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition
interest or other amounts is allowed in such proceeding), whether or not evidenced by any note,
guaranty or other instrument, whether arising under any agreement, instrument or document,
(including this Agreement and the Other Documents) whether or not for the payment of money, whether
arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease
or guarantee, under any interest or currency swap, future, option or other similar agreement, or in
any other manner, whether arising out of overdrafts or deposit or other accounts or electronic
funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or
any Lender’s non-receipt of or inability to collect funds or otherwise not being made whole in
connection with depository transfer check or other similar arrangements, whether direct or indirect
(including those acquired by assignment or participation), absolute or contingent, joint or
several, due or to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what
agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument,
including, but not limited to, any and all of any Borrower’s Indebtedness and/or liabilities under
this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any
Borrower and any amendments, extensions, renewals or increases and all costs and expenses of Agent
and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not limited to reasonable
attorneys’ fees and expenses and all obligations of any Borrower to Agent or Lenders to perform
acts or refrain from taking any action.

“Ordinary Course of Business” shall mean with respect to any Borrower, the ordinary course of
such Borrower’s business as conducted on the Closing Date.

“Other Documents” shall mean the Mortgages, the Canadian Security Documents, the Revolving
Credit Note, the Questionnaire, any Guaranty, any Guarantor Security Agreement, any Lender-Provided
Interest Rate Hedge and any and all other agreements, instruments and documents, including
guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other
similar agreements and all other writings heretofore, now or hereafter executed by any Borrower or
any Guarantor and/or delivered to Agent or any Lender in respect of the transactions contemplated
by this Agreement.

“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(b).

“Parent” of any Person shall mean a corporation or other entity owning, directly or indirectly
at least 50% of the shares of stock or other ownership interests having ordinary voting power to
elect a majority of the directors of the Person, or other Persons performing similar functions for
any such Person.

“Participant” shall mean each Person who shall be granted the right by any Lender to
participate in any of the Advances and who shall have entered into a participation agreement in
form and substance satisfactory to such Lender.

“Participation Advance” shall have the meaning set forth in Section 2.12(d).

“Participation Commitment” shall mean each Lender’s obligation to buy a participation of the
Letters of Credit issued hereunder.

“Payee” shall have the meaning set forth in Section 3.10.

“Payment Office” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey
08816; thereafter, such other office of Agent, if any, which it may designate by notice to
Borrowing Agent and to each Lender to be the Payment Office.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA or any successor.

“Pension Benefit Plan” shall mean at any time any employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained
by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii)
has at any time within the preceding five years been maintained by any entity which was at such
time a member of the Controlled Group for employees of any entity which was at such time a member
of the Controlled Group.

“Permitted Encumbrances” shall mean:

(a) Liens in favor of Agent for the benefit of Agent and Lenders;

(b) Liens for taxes, assessments or other governmental charges not delinquent or being
Properly Contested;

(c) Liens disclosed in the financial statements referred to in Section 5.5, the existence of
which Agent has consented to in writing;

(d) deposits or pledges to secure obligations under worker’s compensation, social security or
similar laws, or under unemployment insurance;

(e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the Ordinary Course of Business;

(f) Liens arising by virtue of the rendition, entry or issuance against any Borrower or any
Guarantor, or any property of any Borrower or any Guarantor, of any judgment, writ, order, or
decree for so long as each such Lien (x) is in existence for less than 20 consecutive days after it
first arises or is being Properly Contested and (y) is at all times junior in priority to any Liens
in favor of Agent;

(g) mechanics’, workers’, materialmen’s, warehouse, statutory landlord or other like Liens
arising in the Ordinary Course of Business with respect to obligations which are not due or which
are being Properly Contested;

(h) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such lien shall not encumber any other property of any
Borrower and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of
such purchases during any fiscal year shall not exceed the amount provided for in Section 7.8;

(i) Canadian statutory Liens in respect of deemed statutory trusts under pensions benefits and
employment standards legislation that are subordinate and junior to Agent’s Liens;

(j) consensual Liens on the new Ann Arbor real property and its contents (other than Appraised
Equipment and Eligible Equipment); and

(k) Liens disclosed on Schedule 1.2; provided that such Liens shall secure only those
obligations which they secure on the Closing Date and shall not subsequently apply to any other
property or assets of any Borrower.

“Permitted Hedging Contracts” means (i) a Lender-Provided Interest Rate Hedge and (ii) an
Interest Rate Hedge or foreign currency Hedging Contract that (A) is documented in a standard
International Swap Dealer Association Agreement, (B) provides for the method of calculating the
reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, (C) is
entered into for hedging (rather than speculative) purposes, (D) is unsecured, and (E) is with a
counterparty satisfactory to Agent.

“Person” shall mean any individual, sole proprietorship, partnership, corporation, business
trust, joint stock company, trust, unincorporated organization, association, limited liability
company, limited liability partnership, institution, public benefit corporation, joint venture,
entity or Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).

“Plan” shall mean any employee pension benefit plan within the meaning of Section 3(2)(A) of
ERISA (including a Pension Benefit Plan), maintained for employees of any Borrower or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the Controlled Group
is required to contribute on behalf of any of its employees.

“PNC” shall have the meaning set forth in the preamble to this Agreement and shall extend to
all of its successors and assigns.

“PPSA” shall mean the Personal Property Security Act of the applicable Canadian province or
provinces in respect of Tecumseh Products Canada and in the Province of Quebec, shall mean the
applicable provisions of the Civil Code of Quebec, each as amended from time to time.

“Priority Payables” shall mean the full amount of the liabilities of any Borrower which (i)
have a trust imposed to provide for payment or a security interest, pledge, lien, hypothec or
charge ranking or capable of ranking senior to or pari passu with security interests, liens,
hypothecs or charges securing the Obligations on any Collateral under any federal, provincial,
state, county, district, municipal, or local law of Canada or (ii) have a right imposed to provide
for payment ranking or capable of ranking senior to or pari passu with the Obligations under
federal, provincial, state, county, district, municipal, local law, regulation or directive of
Canada, including, but not limited to, claims for unremitted and/or accelerated rents, taxes,
wages, withholdings taxes, value added taxes, amounts payable to an insolvency administrator,
employee withholdings or deductions, vacation pay, severance and termination pay, workers’
compensation obligations, government royalties or pension obligations in each case to the extent
such trust, or security interest, lien hypothec or charge has been or may be imposed.

“Pro Forma Financial Statements” shall have the meaning set forth in Section 5.5(b).

“Properly Contested” shall mean, in the case of any Indebtedness or Lien, as applicable, of
any Person (including any taxes) that is not paid as and when due or payable by reason of such
Person’s bona fide dispute concerning its liability to pay same or concerning the amount thereof,
(i) such Indebtedness or Lien, as applicable, is being properly contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and enforcement of such Lien
is stayed during the period prior to the final resolution or disposition of such dispute; (ii) such
Person has established appropriate reserves as shall be required in conformity with GAAP; (iii) the
non-payment of such Indebtedness will not have a Material Adverse Effect and will not result in the
forfeiture of any assets of such Person; (iv) no Lien is imposed upon any of such Person’s assets
with respect to such Indebtedness unless such Lien is at all times junior and subordinate in
priority to the Liens in favor of the Agent (except only with respect to property taxes that have
priority as a matter of applicable state law); (v) if such Indebtedness or Lien, as applicable,
results from, or is determined by the entry, rendition or issuance against a Person or any of its
assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is
stayed pending a timely appeal or other judicial review; (vi) if such contest is abandoned, settled
or determined adversely (in whole or in part) to such Person, such Person forthwith pays such
Indebtedness and all penalties, interest and other amounts due in connection therewith; and (vii)
Borrowers shall have given Agent written notice thereof.

“Projections” shall have the meaning set forth in Section 5.5(b).

“Purchasing CLO” shall have the meaning set forth in Section 16.3(d).

“Purchasing Lender” shall have the meaning set forth in Section 16.3(c).

“Questionnaire” shall mean the Documentation Information Questionnaire and the responses
thereto provided by Borrowers and delivered to Agent.

“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as
same may be amended from time to time.

“Real Property” shall mean all of each Borrower’s right, title and interest in and to the
owned and leased premises identified on Schedule 4.19 hereto or which is hereafter owned or leased
by any Borrower.

“Receivables” shall mean and include, as to each Borrower, all of such Borrower’s accounts,
contract rights, instruments (including those evidencing indebtedness owed to such Borrower by its
Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles
relating to accounts, drafts and acceptances, credit card receivables and all other forms of
obligations owing to such Borrower arising out of or in connection with the sale or lease of
Inventory or the rendition of services, all supporting obligations, guarantees and other security
therefor, whether secured or unsecured, now existing or hereafter created, and whether or not
specifically sold or assigned to Agent hereunder.

“Receivables Advance Rate” shall have the meaning set forth in Section 2.1(a).

“Register” shall have the meaning set forth in Section 16.3(e).

“Reimbursement Obligation” shall have the meaning set forth in Section 2.12(b).

“Release” shall have the meaning set forth in Section 5.7(c)(i).

“Reportable Event” shall mean a reportable event described in Section 4043(c) of ERISA or the
regulations promulgated thereunder.

“Required Lenders” shall mean Lenders holding at least 51% of the Advances and, if no Advances
are outstanding, shall mean Lenders holding 51% of the Commitment Percentages; provided, however,
if there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.

“Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).

“Revolving Advances” shall mean Advances made other than Letters of Credit.

“Revolving Credit Note” shall mean, collectively, the promissory notes referred to in Section
2.1(a).

“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the
Alternate Base Rate plus the Applicable Margin with respect to Domestic Rate Loans and (b) the sum
of the Eurodollar Rate plus the Applicable Margin with respect to Eurodollar Rate Loans.

“SEC” shall mean the Securities and Exchange Commission or any successor thereto.

“Section 20 Subsidiary” shall mean the Subsidiary of the bank holding company controlling PNC,
which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in
certain Ineligible Securities.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Senior Debt Payments” shall mean and include all cash actually expended by Borrowers on a
Consolidated Basis to make (a) interest payments on any Advances hereunder, plus (b) payments for
all fees, commissions and charges set forth herein and with respect to any Advances, plus (c)
capitalized lease payments, plus (d) payments with respect to any other Indebtedness for borrowed
money.

“Settlement Date” shall mean the Closing Date and thereafter Wednesday or Thursday of each
week or more frequently if Agent deems appropriate unless such day is not a Business Day in which
case it shall be the next succeeding Business Day.

“Subsidiary” of any Person shall mean a corporation or other entity of whose Equity Interests
having ordinary voting power (other than Equity Interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such corporation, or other
Persons performing similar functions for such entity, are owned, directly or indirectly, by such
Person.

“Subsidiary Stock” shall mean (i) 100% of the issued and outstanding Equity Interests of each
of each Borrower’s Domestic Subsidiaries and (ii) 100% of any Canadian Subsidiary (other than
Tecumseh Products Canada) directly or indirectly owned by any Borrower, unless a material adverse
tax consequence would result therefrom (in which case, 65% of the Subsidiary Stock shall be
pledged).

“Term” shall have the meaning set forth in Section 13.1.

“Termination Event” shall mean (i) a Reportable Event with respect to any Plan or
Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the Controlled Group from
a Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a
Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which
might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, of any Borrower or any member of the
Controlled Group from a Multiemployer Plan; or (vii) any event, action, condition, proceeding or
otherwise that constitutes (a) the institution by any Governmental Body of proceedings to terminate
a Canadian Pension Plan under pension benefit laws of Canada or (b) an event or condition that
provides a basis under pension benefit laws of Canada for the termination by any Governmental Body
of, or the appointment of a Governmental Body of an administrator of, any Canadian Pension Plan..

“Toxic Substance” shall mean and include any material present on the Real Property or the
Leasehold Interests which has been shown to have significant adverse effect on human health or
which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et
seq., applicable state law, or any other applicable Federal or state laws now in force or hereafter
enacted relating to toxic substances. “Toxic Substance” includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.

“Trading with the Enemy Act” shall mean the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation
or executive order relating thereto.

“Transferee” shall have the meaning set forth in Section 16.3(d).

“Undrawn Availability” at a particular date shall mean an amount equal to (a) the lesser of
(i) the Formula Amount or (ii) the Maximum Revolving Advance Amount, minus (b) the sum of (i) the
outstanding amount of Advances, plus (ii) the Maximum Undrawn Amount, plus (iii) all amounts due
and owing to any Borrower’s trade creditors that are 60 days or more past due, plus (iv) fees and
expenses for which Borrowers are liable but which have not been paid or charged to Borrowers’
account, the calculation of which shall be acceptable to Agent in its reasonable discretion.

“Unfinanced Capital Expenditures” shall mean all Capital Expenditures of Borrowers on a
Consolidated Basis other than those made utilizing financing provided by the applicable seller or
third party lenders. For the avoidance of doubt, Capital Expenditures made by a Borrower utilizing
Revolving Advances shall be deemed Unfinanced Capital Expenditures.

“Uniform Commercial Code” shall have the meaning set forth in Section 1.3.

“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.

“Week” shall mean the time period commencing with the opening of business on a Wednesday and
ending on the end of business the following Tuesday.

1.3. Uniform Commercial Code Terms. All terms used herein and defined in the Uniform
Commercial Code as adopted in the State of Michigan from time to time (the “Uniform Commercial
Code”) shall have the meaning given therein unless otherwise defined herein. Without limiting the
foregoing, the terms “accounts”, “chattel paper”, “commercial tort claims”, “instruments”, “general
intangibles”, “goods”, “payment intangibles”, “proceeds”, “supporting obligations”, “securities”,
“investment property”, “documents”, “deposit accounts”, “software”, “letter of credit rights”,
“inventory”, “equipment” and “fixtures”, as and when used in the description of Collateral shall
have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code. To the
extent the definition of any category or type of collateral is expanded by any amendment,
modification or revision to the Uniform Commercial Code, such expanded definition will apply
automatically as of the date of such amendment, modification or revision. All terms used herein
and defined in the PPSA (but only in respect of Collateral located or treated as located in Canada)
shall have the meaning given therein unless otherwise defined herein. Without limiting the
foregoing, the terms “accounts”, “chattel paper”, “goods”, “instruments”, “intangibles”,
“proceeds”, “securities”, “investment property”, “document of title”, “inventory”, “equipment” and
“fixtures”, as and when used in the description of Collateral located or treated as located in
Canada shall have the meanings given to such terms in the PPSA.  To the extent the definition of
any category or type of collateral is expanded by any amendment, modification or revision to the
PPSA, such expanded definition will apply automatically as of the date of such amendment,
modification or revision.

1.4. Certain Matters of Construction. The terms “herein”, “hereof” and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. All references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the
context, terms used herein in the singular also include the plural and vice versa. All references
to statutes and related regulations shall include any amendments of same and any successor statutes
and regulations. Unless otherwise provided, all references to any instruments or agreements to
which Agent is a party, including references to any of the Other Documents, shall include any and
all modifications or amendments thereto and any and all extensions or renewals thereof. All
references herein to the time of day shall mean the time in New York, New York. All references
herein to “province” or like terms shall include territory and like terms. Unless otherwise
provided, all financial calculations and collateral reporting for borrowing base purposes shall be
performed with Inventory valued on a first-in, first-out basis at the lower of cost or market
value. Whenever the words “including” or “include” shall be used, such words shall be understood
to mean “including, without limitation” or “include, without limitation”. A Default or Event of
Default shall be deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of Default is waived
in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of
cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be
“continuing” until such Event of Default has been waived in writing by the Required Lenders or
cured in accordance with the terms of this Agreement. Any Lien referred to in this Agreement or
any of the Other Documents as having been created in favor of Agent, any agreement entered into by
Agent pursuant to this Agreement or any of the Other Documents, any payment made by or to or funds
received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents,
or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be
created, entered into, made or received, or taken or omitted, for the benefit or account of Agent
and Lenders. Wherever the phrase “to the best of Borrowers’ knowledge” or words of similar import
relating to the knowledge or the awareness of any Borrower are used in this Agreement or Other
Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any
Borrower or (ii) the knowledge that a senior officer would have obtained if he had engaged in good
faith and diligent performance of his duties, including the making of such reasonably specific
inquiries as may be necessary of the employees or agents of such Borrower and a good faith attempt
to ascertain the existence or accuracy of the matter to which such phrase relates. All covenants
hereunder shall be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an exception to, or
otherwise within the limitations of, another covenant shall not avoid the occurrence of a default
if such action is taken or condition exists. In addition, all representations and warranties
hereunder shall be given independent effect so that if a particular representation or warranty
proves to be incorrect or is breached, the fact that another representation or warranty concerning
the same or similar subject matter is correct or is not breached will not affect the incorrectness
of a breach of a representation or warranty hereunder. To the extent it is necessary to determine
Undrawn Availability, the occurrence of any Event of Default, or compliance with any provision
hereof for which measurement is based on Dollars, any amount of Canadian Dollars shall be deemed to
be the Dollar Equivalent.

II. ADVANCES, PAYMENTS.

2.1. Revolving Advances.

(a) Amount of Revolving Advances. Subject to the terms and conditions set forth in this
Agreement including Section 2.1(b), each Lender, severally and not jointly, will make Revolving
Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s
Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the aggregate
Maximum Undrawn Amount or (y) the Formula Amount, minus the aggregate Maximum Undrawn Amount, where
“Borrowing Base” means:

(i) up to 85%, subject to the provisions of Section 2.1(b) (“Receivables Advance Rate”), of
Eligible Receivables, plus

(ii) up to the lesser of (A) 65%, subject to the provisions of Section 2.1(b), of the value of
Eligible Inventory consisting of raw materials, work-in-process, finished goods, and in-transit
Inventory (determined on a category by category basis), or (B) 85% of the Net Orderly Liquidation
Value of Eligible Inventory consisting of raw materials, work-in-process, finished goods, and
in-transit Inventory (determined on a category by category basis) (the lesser of (A) and (B) is
called the “Inventory Advance Rate, plus

(iii) up to the lesser of (A) 80%, subject to the provisions of Section 2.1(b), of the Net
Orderly Liquidation Value of Eligible Equipment (the “Equipment Advance Rate”), or (B) $4,927,200
in the aggregate on the date of this Agreement (as such amount may be increased by Agent in its
sole discretion in connection with the inclusion of the value of any After-Acquired Equipment),
reducing to $4,681,200 on June 30, 2011, and reducing by $246,000 on the last day of each
calendar-quarter end thereafter (as such monthly payment may be proportionately increased in
connection with any increase related to the inclusion of the value of any After-Acquired
Equipment). If the amount in subsection (B) above is increased by Agent in its sole discretion due
to including after-Acquired Equipment, then the quarterly reduction amount is changed to 80% of the
Net Orderly Liquidation Value of Eligible Equipment and After-Acquired Equipment (to the extent it
constitutes Eligible Equipment), divided by 20.

In addition to the above limitations, after giving effect to all sublimits, (x) Revolving Advances
with respect to Eligible In-Transit Inventory may not exceed $12,000,000 at any one time, and (y)
Revolving Advances with respect to all Eligible Inventory, including Eligible In-Transit Inventory
may not exceed $27,500,000 in the aggregate at any one time.

The Revolving Advances shall be evidenced by one or more secured promissory notes
(collectively, the “Revolving Credit Note”) substantially in the form attached hereto as Exhibit
2.1(a).

(b) Discretionary Rights. The Advance Rates and sublimits may be increased or decreased by
Agent at any time and from time to time in the exercise of its reasonable discretion, including in
connection with new Inventory and Equipment appraisals (provided, however, that prior to the
occurrence of an Event of Default or Default which is continuing, Borrower is only obligated to
reimburse Agent for one new Inventory appraisal and one new Equipment appraisal during any 12-month
period). Each Borrower consents to any such increases or decreases and acknowledges that
decreasing the Advance Rates or sublimits, or increasing or imposing reserves may limit or restrict
Advances requested by Borrowing Agent. The rights of Agent under this subsection are subject to
the provisions of Section 16.2(b). Unless a Default or Event of Default exists, Agent will provide
notice of any adjustment under this Section 2.1(b) two Business Days before its implementation.

2.2. Procedure for Revolving Advances Borrowing.

(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 1:00 p.m. on a
Business Day of a Borrower’s request to incur, on that day, a Revolving Advance hereunder. Should
any amount required to be paid as interest hereunder, or as fees or other charges under this
Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation,
become due, same shall be deemed a request for a Revolving Advance maintained as a Domestic Rate
Loan as of the date such payment is due, in the amount required to pay in full such interest, fee,
charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and such
request shall be irrevocable.

(b) Notwithstanding the provisions of subsection (a) above, in the event any Borrower desires
to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written notice by no later than
10:00 a.m. on the day which is three (3) Business Days prior to the date such Eurodollar Rate Loan
is to be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business
Day), (ii) the type of borrowing and the amount on the date of such Advance to be borrowed, which
amount shall be in an aggregate principal amount that is not less than $1,000,000 and integral
multiples of $100,000 in excess thereof, and (iii) the duration of the first Interest Period
therefor. Interest Periods for Eurodollar Rate Loans shall be for one, two, or three months;
provided, if an Interest Period would end on a day that is not a Business Day, it shall end
on the next succeeding Business Day unless such day falls in the next succeeding calendar month in
which case the Interest Period shall end on the next preceding Business Day. No Eurodollar Rate
Loan shall be made available to any Borrower during the continuance of a Default or an Event of
Default. After giving effect to each requested Eurodollar Rate Loan, including those which are
converted from a Domestic Rate Loan under Section 2.2(d), there shall not be outstanding more than
five Eurodollar Rate Loans, in the aggregate.

(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar
Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in
subsection (b)(iii) above provided that the exact length of each Interest Period shall be
determined in accordance with the practice of the interbank market for offshore Dollar deposits and
no Interest Period shall end after the last day of the Term.

Borrowing Agent shall elect the initial Interest Period applicable to a Eurodollar Rate Loan
by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice of conversion
given to Agent pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect the
duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not later than 10:00 a.m. on the day which is three (3) Business Days prior to the last
day of the then current Interest Period applicable to such Eurodollar Rate Loan. If Agent does not
receive timely notice of the Interest Period elected by Borrowing Agent, Borrowing Agent shall be
deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d) hereinbelow.

(d) Provided that no Event of Default shall have occurred and be continuing, Borrowing Agent
may, on the last Business Day of the then current Interest Period applicable to any outstanding
Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such
loan into a loan of another type in the same aggregate principal amount provided that any
conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Borrowing Agent desires to
convert a loan, Borrowing Agent shall give Agent written notice by no later than 10:00 a.m. (i) on
the day which is three (3) Business Days’ prior to the date on which such conversion is to occur
with respect to a conversion from a Domestic Rate Loan to a Eurodollar Rate Loan, or (ii) on the
day which is one (1) Business Day prior to the date on which such conversion is to occur with
respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying, in each
case, the date of such conversion, the loans to be converted and if the conversion is from a
Domestic Rate Loan to any other type of loan, the duration of the first Interest Period therefor.

(e) At its option and upon written notice given prior to 10:00 a.m. (New York time) at least
three (3) Business Days’ prior to the date of such prepayment, any Borrower may prepay the
Eurodollar Rate Loans in whole at any time or in part from time to time with accrued interest on
the principal being prepaid to the date of such repayment. Such Borrower shall specify in such
notice the date of prepayment of Advances which are Eurodollar Rate Loans and the amount of such
prepayment. In the event that any prepayment of a Eurodollar Rate Loan is required or permitted on
a date other than the last Business Day of the then current Interest Period with respect thereto,
such Borrower shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f) .

(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from
and against any and all losses or expenses that Agent and Lenders may actually sustain or incur as
a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the
principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a
borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or Lenders to lenders
of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by
Agent or any Lender to Borrowing Agent shall be conclusive absent manifest error.

(g) Notwithstanding any other provision hereof, if any Applicable Law, or any change therein
or in the interpretation or application thereof, shall make it unlawful for any Lender (for
purposes of this subsection (g), the term “Lender” shall include any Lender and the office or
branch where any Lender or any corporation or bank controlling such Lender makes or maintains any
Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of Lenders to
make Eurodollar Rate Loans hereunder shall forthwith be suspended and Borrowers shall, if any
affected Eurodollar Rate Loans are then outstanding, promptly upon request from Agent, either pay
all such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans into loans
of another type. If any such payment or conversion of any Eurodollar Rate Loan is made on a day
that is not the last day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers
shall pay Agent, upon Agent’s request, such amount or amounts as may be necessary to compensate
Lenders for any loss or expense actually sustained or incurred by Lenders in respect of such
Eurodollar Rate Loan as a result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in order to
make or maintain such Eurodollar Rate Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive
absent manifest error.

2.3. Disbursement of Advance Proceeds. All Advances shall be disbursed from whichever
office or other place Agent may designate from time to time and, together with any and all other
Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s
books. During the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions hereof. The proceeds of each
Revolving Advance requested by Borrowing Agent on behalf of any Borrower or deemed to have been
requested by any Borrower under Section 2.2(a) shall, with respect to requested Revolving Advances
to the extent Lenders make such Revolving Advances, be made available to the applicable Borrower on
the day so requested by way of credit to such Borrower’s operating account at PNC, or such other
bank as Borrowing Agent may designate following notification to Agent, in immediately available
federal funds or other immediately available funds or, with respect to Revolving Advances deemed to
have been requested by any Borrower, be disbursed to Agent to be applied to the outstanding
Obligations giving rise to such deemed request.

2.4. [Reserved.]

2.5. Maximum Advances. The aggregate balance of Revolving Advances outstanding at any time
shall not exceed the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula Amount
less, in each case, the aggregate Maximum Undrawn Amount.

2.6. Repayment of Advances.

(a) The Revolving Advances shall be due and payable in full on the last day of the Term
subject to earlier prepayment as herein provided.

(b) Each Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other
items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the
date received. In consideration of Agent’s agreement to conditionally credit Borrowers’ Account as
of the next Business Day following the Agent’s receipt of those items of payment, each Borrower
agrees that, in computing the charges under this Agreement, all items of payment shall be deemed
applied by Agent on account of the Obligations one Business Day after (i) the Business Day
following the Agent’s receipt of such payments via wire transfer or electronic depository check or
(ii) in the case of payments received by Agent in any other form, the Business Day such payment
constitutes good funds in Agent’s account. Agent is not, however, required to credit Borrowers’
Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge
Borrowers’ Account for the amount of any item of payment which is returned to Agent unpaid.

(c) All payments of principal, interest and other amounts payable hereunder, or under any of
the Other Documents shall be made to Agent at the Payment Office not later than 1:00 P.M. (New York
time) on the due date therefor in lawful money of the United States of America in federal funds or
other funds immediately available to Agent. Agent shall have the right to effectuate payment on
any and all Obligations due and owing hereunder by charging Borrowers’ Account or by making
Advances as provided in Section 2.2 .

(d) Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under
any related agreement, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.

2.7. Repayment of Excess Advances. The aggregate balance of Advances outstanding at any
time in excess of the maximum amount of Advances permitted hereunder shall be immediately due and
payable without the necessity of any demand, at the Payment Office, whether or not a Default or
Event of Default has occurred.

2.8. Statement of Account. Agent shall maintain, in accordance with its customary
procedures, a loan account (“Borrowers’ Account”) in the name of Borrowers in which shall be
recorded the date and amount of each Advance made by Agent and the date and amount of each payment
in respect thereof; provided, however, the failure by Agent to record the date and amount of any
Advance shall not adversely affect Agent or any Lender. Each month, Agent shall send to Borrowing
Agent a statement showing the accounting for the Advances made, payments made or credited in
respect thereof, and other transactions between Agent and Borrowers during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and
shall constitute an account stated between Lenders and Borrowers unless Agent receives a written
statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is
received by Borrowing Agent. The records of Agent with respect to the loan account shall be
conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and
of payments applicable thereto.

2.9. Letters of Credit. Subject to the terms and conditions hereof, Agent shall issue or
cause the issuance of standby and/or trade letters of credit (“Letters of Credit”) for the account
of any Borrower; provided, however, that Agent will not be required to issue or cause to be issued
any Letters of Credit to the extent that the issuance thereof would then cause the sum of (i) the
outstanding Revolving Advances plus (ii) the aggregate Maximum Undrawn Amount to exceed the lesser
of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount. The aggregate Maximum
Undrawn Amount shall not exceed in the aggregate at any time the Letter of Credit Sublimit. All
disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans
consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for
Domestic Rate Loans.

2.10. Issuance of Letters of Credit.

(a) Borrowing Agent, on behalf of Borrowers, may request Agent to issue or cause the issuance
of a Letter of Credit by delivering to Agent at the Payment Office, prior to 1:00 p.m. (New York
time), at least five (5) Business Days’ prior to the proposed date of issuance, Agent’s form of
Letter of Credit Application (the “Letter of Credit Application”) completed to the satisfaction of
Agent; and, such other certificates, documents and other papers and information as Agent may
reasonably request. Borrowing Agent, on behalf of Borrowers, also has the right to give
instructions and make agreements with respect to any application, any applicable letter of credit
and security agreement, any applicable letter of credit reimbursement agreement and/or any other
applicable agreement, any letter of credit and the disposition of documents, disposition of any
unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of
Credit.

(b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight
drafts, other written demands for payment, or acceptances of usance drafts when presented for honor
thereunder in accordance with the terms thereof and when accompanied by the documents described
therein and (ii) have an expiry date not later than twenty-four (24) months after such Letter of
Credit’s date of issuance and in no event later than the last day of the Term. Each standby Letter
of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as
most recently published by the International Chamber of Commerce at the time a Letter of Credit is
issued (the “UCP”) or the International Standby Practices (ISP98-International Chamber of Commerce
Publication Number 590) (the “ISP98 Rules”)), and any subsequent revision thereof at the time a
standby Letter of Credit is issued, as determined by Agent, and each trade Letter of Credit shall
be subject to the UCP.

(c) Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent
for a Letter of Credit hereunder.

2.11. Requirements For Issuance of Letters of Credit.

(a) Borrowing Agent shall authorize and direct any Issuer to name the applicable Borrower as
the “Applicant” or “Account Party” of each Letter of Credit. If Agent is not the Issuer of any
Letter of Credit, Borrowing Agent shall authorize and direct the Issuer to deliver to Agent all
instruments, documents, and other writings and property received by the Issuer pursuant to the
Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to
all matters arising in connection with the Letter of Credit, the application therefor or any
acceptance therefor.

(b) In connection with all Letters of Credit issued or caused to be issued by Agent under this
Agreement, each Borrower hereby appoints Agent, or its designee, as its attorney, with full power
and authority if an Event of Default shall have occurred, (i) to sign and/or endorse such
Borrower’s name upon any warehouse or other receipts, letter of credit applications and
acceptances, (ii) to sign such Borrower’s name on bills of lading; (iii) to clear Inventory through
the United States of America Customs Department or the equivalent in Canada (“Customs”) in the name
of such Borrower or Agent or Agent’s designee, and to sign and deliver to Customs officials powers
of attorney in the name of such Borrower for such purpose; and (iv) to complete in such Borrower’s
name or Agent’s, or in the name of Agent’s designee, any order, sale or transaction, obtain the
necessary documents in connection therewith, and collect the proceeds thereof. Neither Agent nor
its attorneys will be liable for any acts or omissions nor for any error of judgment or mistakes of
fact or law, except for Agent’s or its attorney’s willful misconduct. This power, being coupled
with an interest, is irrevocable as long as any Letters of Credit remain outstanding.

2.12. Disbursements, Reimbursement.

(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Commitment
Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing,
respectively.

(b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or
transferee thereof, Agent will promptly notify Borrowing Agent. Provided that Borrowing Agent
shall have received such notice, the Borrowers shall reimburse (such obligation to reimburse Agent
shall sometimes be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 Noon, New York
time on each date that an amount is paid by Agent under any Letter of Credit (each such date, a
“Drawing Date”) in an amount equal to the amount so paid by Agent. In the event Borrowers fail to
reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 Noon, New
York time, on the Drawing Date, Agent will promptly notify each Lender thereof, and Borrowers shall
be deemed to have requested that a Revolving Advance maintained as a Domestic Rate Loan be made by
the Lenders to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount
of the unutilized portion of the lesser of (i) Maximum Revolving Advance Amount less the aggregate
Maximum Undrawn Amount or (ii) the Formula Amount less the aggregate Maximum Undrawn Amount, and
subject to Section 8.2. Any notice given by Agent pursuant to this Section 2.12(b) may be oral if
immediately confirmed in writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.

(c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available to Agent an
amount in immediately available funds equal to its Commitment Percentage of the amount of the
drawing, whereupon the participating Lenders shall (subject to Section 2.12(d)) each be deemed to
have made a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in that amount. If
any Lender so notified fails to make available to Agent the amount of such Lender’s Commitment
Percentage of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then
interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to
the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds
Effective Rate during the first three days following the Drawing Date and (ii) at a rate per annum
equal to the rate applicable to Revolving Advances maintained as a Domestic Rate Loan on and after
the fourth day following the Drawing Date. Agent will promptly give notice of the occurrence of
the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient
time to enable any Lender to effect such payment on such date shall not relieve such Lender from
its obligation under this Section 2.12(c), provided that such Lender shall not be obligated to pay
interest as provided in Section 2.12(c) (i) and (ii) until and commencing from the date of receipt
of notice from Agent of a drawing.

(d) With respect to any unreimbursed drawing that is not converted into a Revolving Advance
maintained as a Domestic Rate Loan to Borrowers in whole or in part as contemplated by Section
2.12(b), because of Borrowers’ failure to satisfy the conditions set forth in Section 8.2 (other
than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred
from Agent a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing. Such
Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to a Revolving Advance maintained as a Domestic Rate
Loan. Each Lender’s payment to Agent pursuant to Section 2.12(c) shall be deemed to be a payment
in respect of its participation in such Letter of Credit Borrowing and shall constitute a
“Participation Advance” from such Lender in satisfaction of its Participation Commitment under this
Section 2.12.

(e) Each Lender’s Participation Commitment shall continue until the last to occur of any of
the following events: (x) Agent ceases to be obligated to issue or cause to be issued Letters of
Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and
uncancelled and (z) all Persons (other than the Borrowers) have been fully reimbursed for all
payments made under or relating to Letters of Credit.

2.13. Repayment of Participation Advances.

(a) Upon (and only upon) receipt by Agent for its account of immediately available funds from
Borrowers (i) in reimbursement of any payment made by the Agent under the Letter of Credit with
respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of
interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each
Lender, in the same funds as those received by Agent, the amount of such Lender’s Commitment
Percentage of such funds, except Agent shall retain the amount of the Commitment Percentage of such
funds of any Lender that did not make a Participation Advance in respect of such payment by Agent.

(b) If Agent is required at any time to return to any Borrower, or to a trustee, receiver,
liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments
made by Borrowers to Agent pursuant to Section 2.13(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith
return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus
interest at the Federal Funds Effective Rate.

2.14. Documentation. Each Borrower agrees to be bound by the terms of the Letter of Credit
Application and by Agent’s interpretations of any Letter of Credit issued on behalf of such
Borrower and by Agent’s written regulations and customary practices relating to letters of credit,
though Agent’s interpretations may be different from such Borrower’s own. In the event of a
conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.
It is understood and agreed that, except in the case of gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final non-appealable judgment), Agent shall
not be liable for any error, negligence and/or mistakes, whether of omission or commission, in
following the Borrowing Agent’s or any Borrower’s instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.

2.15. Determination to Honor Drawing Request. In determining whether to honor any request
for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be responsible only
to determine that the documents and certificates required to be delivered under such Letter of
Credit have been delivered and that they comply on their face with the requirements of such Letter
of Credit and that any other drawing condition appearing on the face of such Letter of Credit has
been satisfied in the manner so set forth.

2.16. Nature of Participation and Reimbursement Obligations. Each Lender’s obligation in
accordance with this Agreement to make the Revolving Advances or Participation Advances as a result
of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Agent upon a
draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.16 under all circumstances,
including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have
against Agent, any Borrower or any other Person for any reason whatsoever;

(ii) the failure of any Borrower or any other Person to comply, in connection with a Letter of
Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving
Advance, it being acknowledged that such conditions are not required for the making of a Letter of
Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section
2.12;

(iii) any lack of validity or enforceability of any Letter of Credit;

(iv) any claim of breach of warranty that might be made by any Borrower or any Lender against
the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment,
counterclaim, cross-claim, defense or other right which any Borrower or any Lender may have at any
time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or
the proceeds thereof (or any Persons for whom any such transferee may be acting), Agent or any
Lender or any other Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying transaction between any
Borrower or any Subsidiaries of such Borrower and the beneficiary for which any Letter of Credit
was procured);

(v) the lack of power or authority of any signer of (or any defect in or forgery of any
signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy,
enforceability or genuineness of any draft, demand, instrument, certificate or other document
presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit, in each case even if Agent or any of Agent’s Affiliates has been
notified thereof;

(vi) payment by Agent under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such Letter of Credit;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit,
or any other Person having a role in any transaction or obligation relating to a Letter of Credit,
or the existence, nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;

(viii) any failure by the Agent or any of Agent’s Affiliates to issue any Letter of Credit in
the form requested by Borrowing Agent, unless the Agent has received written notice from Borrowing
Agent of such failure within three (3) Business Days after the Agent shall have furnished Borrowing
Agent a copy of such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;

(ix) any Material Adverse Effect on any Borrower or any Guarantor;

(x) any breach of this Agreement or any Other Document by any party thereto;

(xi) the occurrence or continuance of an insolvency proceeding with respect to any Borrower or
any Guarantor;

(xii) the fact that a Default or Event of Default shall have occurred and be continuing;

(xiii) the fact that the Term shall have expired or this Agreement or the Obligations
hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.

2.17. Indemnity. In addition to amounts payable as provided in Section 16.5, each Borrower
hereby agrees to protect, indemnify, pay and save harmless Agent and any of Agent’s Affiliates that
have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages,
taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal counsel) which the
Agent or any of Agent’s Affiliates may incur or be subject to as a consequence, direct or indirect,
of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or
willful misconduct of the Agent as determined by a final and non-appealable judgment of a court of
competent jurisdiction or (b) the wrongful dishonor or payment, as applicable by the Agent or any
of Agent’s Affiliates of a proper or improper, as applicable, demand for payment made under any
Letter of Credit.

2.18. Liability for Acts and Omissions. As between Borrowers and Agent and Lenders, each
Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the
respective foregoing, Agent shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent shall
have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other
party to which such Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of any Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any
Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable,
facsimile, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Agent,
including any governmental acts, and none of the above shall affect or impair, or prevent the
vesting of, any of Agent’s rights or powers hereunder. Nothing in the preceding sentence shall
relieve Agent from liability for Agent’s gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final non-appealable judgment) in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence. In no event shall Agent
or Agent’s Affiliates be liable to any Borrower for any indirect, consequential, incidental,
punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees),
or for any damages resulting from any change in the value of any property relating to a Letter of
Credit.

Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may
rely on any oral or other communication believed in good faith by Agent or such Affiliate to have
been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor
any presentation if the documents presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored
presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to
settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to
reimbursement to the same extent as if such presentation had initially been honored, together with
any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon
presentation of a statement advising negotiation or payment, upon receipt of such statement (even
if such statement indicates that a draft or other document is being delivered separately), and
shall not be liable for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming
that it rightfully honored under the laws or practices of the place where such bank is located; and
(vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to
any order issued at the applicant’s request to an air carrier, a letter of guarantee or of
indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in
connection with any Letter of Credit that is the subject of such Order, notwithstanding that any
drafts or other documents presented in connection with such Letter of Credit fail to conform in any
way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set forth above,
any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it
or any documents and certificates delivered thereunder, if taken or omitted in good faith and
without gross negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment), shall not put Agent under any resulting liability to any Borrower or any
Lender.

2.19. Additional Payments. Any sums expended by Agent or any Lender due to any Borrower’s
failure to perform or comply with its obligations under this Agreement or any Other Document
including any Borrower’s obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may
be charged to Borrowers’ Account as a Revolving Advance and added to the Obligations.

2.20. Manner of Borrowing and Payment.

(a) Each borrowing of Revolving Advances shall be advanced according to the applicable
Commitment Percentages of Lenders.

(b) Each payment (including each prepayment) by any Borrower on account of the principal of
and interest on the Revolving Advances, shall be applied to the Revolving Advances pro rata
according to the applicable Commitment Percentages of Lenders. Except as expressly provided
herein, all payments (including prepayments) to be made by any Borrower on account of principal,
interest and fees shall be made without set off or counterclaim and shall be made to Agent on
behalf of the Lenders to the Payment Office, in each case on or prior to 1:00 P.M., New York time,
in Dollars and in immediately available funds.

(c) (i) Notwithstanding anything to the contrary contained in Sections 2.20(a) and (b) ,
commencing with the first Business Day following the Closing Date, each borrowing of Revolving
Advances shall be advanced by Agent and each payment by any Borrower on account of Revolving
Advances shall be applied first to those Revolving Advances advanced by Agent. On or before 1:00
P.M., New York time, on each Settlement Date commencing with the first Settlement Date following
the Closing Date, Agent and Lenders shall make certain payments as follows: (I) if the aggregate
amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the
aggregate amount of repayments applied to outstanding Revolving Advances during such preceding
Week, then each Lender shall provide Agent with funds in an amount equal to its applicable
Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments
and (II) if the aggregate amount of repayments applied to outstanding Revolving Advances during
such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then Agent
shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of
the difference between (y) such repayments and (z) such Revolving Advances.

(ii) Each Lender shall be entitled to earn interest at the applicable Revolving Interest Rate
on outstanding Advances which it has funded.

(iii) Promptly following each Settlement Date, Agent shall submit to each Lender a certificate
with respect to payments received and Advances made during the Week immediately preceding such
Settlement Date. Such certificate of Agent shall be conclusive in the absence of manifest error.

(d) If any Lender or Participant (a “benefited Lender”) shall at any time receive any payment
of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof
(whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment
to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances,
or interest thereon, and such greater proportionate payment or receipt of Collateral is not
expressly permitted hereunder, such benefited Lender shall purchase for cash from the other Lenders
a participation in such portion of each such other Lender’s Advances, or shall provide such other
Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to
cause such benefited Lender to share the excess payment or benefits of such Collateral or proceeds
ratably with each of the other Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but
without interest. Each Lender so purchasing a portion of another Lender’s Advances may exercise
all rights of payment (including rights of set-off) with respect to such portion as fully as if
such Lender were the direct holder of such portion.

(e) Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender
that such Lender will not make the amount which would constitute its applicable Commitment
Percentage of the Advances available to Agent, Agent may (but shall not be obligated to) assume
that such Lender shall make such amount available to Agent on the next Settlement Date and, in
reliance upon such assumption, make available to Borrowers a corresponding amount. Agent will
promptly notify Borrowing Agent of its receipt of any such notice from a Lender. If such amount is
made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent
on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on
the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount,
times (iii) the number of days from and including such Settlement Date to the date on which such
amount becomes immediately available to Agent. A certificate of Agent submitted to any Lender with
respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of
manifest error. If such amount is not in fact made available to Agent by such Lender within three
(3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount,
with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder,
on demand from Borrowers; provided, however, that Agent’s right to such recovery shall not
prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.

2.21. Mandatory Prepayments. Subject to Section 4.3, when any Borrower sells or otherwise
disposes of any Collateral other than Inventory in the Ordinary Course of Business, Borrowers shall
repay the Advances in an amount equal to the net proceeds of such sale (i.e., gross proceeds less
the reasonable costs of such sales or other dispositions), such repayments to be made promptly but
in no event more than one (1) Business Day following receipt of such net proceeds, and until the
date of payment, such proceeds shall be held in trust for Agent. The foregoing shall not be deemed
to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof.
Such repayments shall be applied to the Revolving Advances in such order as Agent may determine,
subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof.

2.22. Use of Proceeds.

(a) Borrowers shall apply the proceeds of Advances to (i) repay existing indebtedness owed by
Tecumseh Products India, Ltd. to its primary lender, (ii) pay fees and expenses relating to this
transaction, and (iii) provide for its working capital needs and reimburse drawings under Letters
of Credit.

(b) Without limiting the generality of Section 2.22(a) above, neither the Borrowers, the
Guarantors nor any other Person which may in the future become party to this Agreement or the Other
Documents as a Borrower or Guarantor, intends to use nor shall they use any portion of the proceeds
of the Advances, directly or indirectly, for any purpose in violation of the Trading with the Enemy
Act.

2.23. Defaulting Lender.

(a) Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has
refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement)
to make available its portion of any Advance or (y) notifies either Agent or Borrowing Agent that
it does not intend to make available its portion of any Advance (if the actual refusal would
constitute a breach by such Lender of its obligations under this Agreement) (each, a “Lender
Default”), all rights and obligations hereunder of such Lender (a “Defaulting Lender”) as to which
a Lender Default is in effect and of the other parties hereto shall be modified to the extent of
the express provisions of this Section 2.23 while such Lender Default remains in effect.

(b) Advances shall be incurred pro rata from Lenders (the “Non-Defaulting Lenders”) which are
not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment
Percentage of any Lender or any pro rata share of any Advances required to be advanced by any
Lender shall be increased as a result of such Lender Default. Amounts received in respect of
principal of any type of Advances shall be applied to reduce the applicable Advances of each Lender
(other than any Defaulting Lender) pro rata based on the aggregate of the outstanding Advances of
that type of all Lenders at the time of such application; provided, that, Agent shall not
be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting
Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments
hereunder (including any principal, interest or fees). Amounts payable to a Defaulting Lender
shall instead be paid to or retained by Agent. Agent may hold and, in its discretion, re-lend to a
Borrower the amount of such payments received or retained by it for the account of such Defaulting
Lender.

(c) A Defaulting Lender shall not be entitled to give instructions to Agent or to approve,
disapprove, consent to or vote on any matters relating to this Agreement and the Other Documents.
All amendments, waivers and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, for purposes of the definition of “Required
Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have either Advances
outstanding or a Commitment Percentage.

(d) Other than as expressly set forth in this Section 2.23, the rights and obligations of a
Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall
remain unchanged. Nothing in this Section 2.23 shall be deemed to release any Defaulting Lender
from its obligations under this Agreement and the Other Documents, shall alter such obligations,
shall operate as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice
any rights which any Borrower, Agent or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.

(e) In the event a Defaulting Lender retroactively cures to the satisfaction of Agent the
breach which caused a Lender to become a Defaulting Lender, such Defaulting Lender shall no longer
be a Defaulting Lender and shall be treated as a Lender under this Agreement.

III. INTEREST AND FEES.

3.1. Interest. Interest on Advances shall be payable in arrears on the first day of each
month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans, at the end of
each Interest Period. Interest charges shall be computed on the actual principal amount of
Advances outstanding during the month or Interest Period, as applicable, at a rate per annum equal
to the applicable Revolving Interest Rate. Whenever, subsequent to the date of this Agreement, the
Alternate Base Rate is increased or decreased, the Revolving Interest Rate for Domestic Rate Loans
shall be similarly changed without notice or demand of any kind by an amount equal to the amount of
such change in the Alternate Base Rate during the time such change or changes remain in effect.
The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without notice or
demand of any kind on the effective date of any change in the Reserve Percentage as of such
effective date. Upon and after the occurrence of an Event of Default, and during the continuation
thereof, at the option of Agent or at the direction of Required Lenders, the Obligations shall bear
interest at the Revolving Interest Rate for Domestic Rate Loans listed in Tier III of the
definition of Applicable Margin plus two (2%) percent per annum (the “Default Rate”).

3.2. Letter of Credit Fees.

(a) Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter
of Credit for the period from and excluding the date of issuance of such Letter of Credit to and
including the date of expiration or termination, equal to the per annum rate of the average daily
face amount of each outstanding Letter of Credit multiplied by the Applicable Margin for Revolving
Advances for Eurodollar Rate Loans, such fees to be calculated on the basis of a 360-day year for
the actual number of days elapsed and to be payable quarterly in arrears on the first day of each
quarter and on the last day of the Term, and (y) to the Issuer, a fronting fee of one quarter of
one percent (0.25%) per annum, together with any and all administrative, issuance, amendment,
payment and negotiation charges with respect to Letters of Credit and all fees and expenses as
agreed upon by the Issuer and the Borrowing Agent in connection with any Letter of Credit,
including in connection with the opening, amendment or renewal of any such Letter of Credit and any
acceptances created thereunder and shall reimburse Agent for any and all fees and expenses, if any,
paid by Agent to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”). All such
charges shall be deemed earned in full on the date when the same are due and payable hereunder and
shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.
Any such charge in effect at the time of a particular transaction shall be the charge for that
transaction, notwithstanding any subsequent change in the Issuer’s prevailing charges for that type
of transaction. All Letter of Credit Fees payable hereunder shall be deemed earned in full on the
date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration
upon the termination of this Agreement for any reason. Upon and after the occurrence of an Event
of Default, and during the continuation thereof, at the option of Agent or at the direction of
Required Lenders, the Letter of Credit Fees described in clause (x) of this Section 3.2(a) shall be
increased to an amount equal to the Applicable Margin for Eurodollar Rate Loans in Tier III of the
definition of Applicable Margin plus two percent (2%) per annum.

On demand after the occurrence and during the continuance of an Event of Default, Borrowers
will cause cash to be deposited and maintained in an account with Agent, as cash collateral, in an
amount equal to one hundred and five percent (105%) of the Maximum Undrawn Amount of all
outstanding Letters of Credit, and each Borrower hereby irrevocably authorizes Agent, in its
discretion, on such Borrower’s behalf and in such Borrower’s name, to open such an account and to
make and maintain deposits therein, or in an account opened by such Borrower, in the amounts
required to be made by such Borrower, out of the proceeds of Receivables or other Collateral or out
of any other funds of such Borrower coming into any Lender’s possession at any time. Agent will
invest such cash collateral in such short-term money-market items as to which Agent and such
Borrower mutually agree and the net return on such investments shall be credited to such account
and constitute additional cash collateral. No Borrower may withdraw amounts credited to any such
account except upon the occurrence of all of the following: (x) payment and performance in full of
all Obligations, (y) expiration of all Letters of Credit and (z) termination of this Agreement.

3.3. Closing Fee and Facility Fee.

(a) Closing Fee. Upon the execution of this Agreement, Borrowers shall pay to Agent for
the ratable benefit of Lenders a closing fee of $100,000 less that portion of the commitment fee of
$50,000 heretofore paid by Borrowers to Agent remaining after application of such fee to out of
pocket expenses. The closing fee shall be deemed earned in full on the Closing Date and shall not
be subject to rebate (or pro-ration upon termination of this Agreement) for any reason.

(b) Facility Fee. If, for any calendar quarter during the Term, the average daily unpaid
balance of the Revolving Advances and undrawn amount of any outstanding Letters of Credit for each
day of such calendar quarter does not equal the Maximum Revolving Advance Amount, then Borrowers
shall pay to Agent for the ratable benefit of Lenders a fee at a rate equal to .375% per annum on
the amount by which the Maximum Revolving Advance Amount exceeds such average daily unpaid balance.
Such fee shall be payable to Agent in arrears on the first day of each calendar quarter with
respect to the previous calendar quarter.

3.4. Collateral Evaluation Fee, and Collateral Monitoring Fee.

(a) Collateral Evaluation Fee. Borrowers shall pay Agent a collateral evaluation fee equal
to $2,000 per month commencing on the first day of the month following the Closing Date and on the
first day of each month thereafter during the Term. The collateral evaluation fee shall be deemed
earned in full on each date when same is due and payable hereunder and shall not be subject to
rebate or proration upon termination of this Agreement for any reason prior to the end of any
month.

(b) Collateral Monitoring Fee. Borrowers shall pay to Agent on the first day of each month
following any month in which Agent performs any collateral monitoring — namely any field
examination, collateral analysis or other business analysis, the need for which is to be determined
by Agent and which monitoring is undertaken by Agent or for Agent’s benefit — a per-day collateral
monitoring fee in an amount equal to the amount established by Agent from time to time (which is
currently $1,000 per day) for each person employed to perform such monitoring, plus all costs and
disbursements incurred by Agent in the performance of such examination or analysis.
Notwithstanding the foregoing, absent the occurrence of an Event of Default which is continuing,
and absent Agent’s reasonable belief that a Default or Event of Default has occurred, Borrowers
will only be obligated to reimburse Agent for two field examinations during any fiscal year.

3.5. Computation of Interest and Fees.

(a) Interest and fees hereunder shall be computed on the basis of a year of 360 days and for
the actual number of days elapsed. If any payment to be made hereunder becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the Revolving Interest Rate for Domestic Rate
Loans or Eurodollar Rate Loans, as applicable, during such extension.

(b) Notwithstanding anything to the contrary contained in this Agreement or in any Other
Document:

(i) whenever interest payable by Tecumseh Products Canada is calculated on the basis of a
period which is less than the actual number of days in a calendar year, each rate of interest
determined pursuant to such calculation is, for the purposes of the Interest Act, R.S.C. 1985, c.
I-15, equivalent to such rate multiplied by the actual number of days in the calendar year in which
such rate is to be ascertained and divided by the number of days used as the basis of such
calculation;

(ii) in no event shall the aggregate “interest” (as defined in Section 347 of the Criminal
Code, R.S.C. 1985, c. C-46, as the same shall be amended, replaced or re-enacted from time to time)
payable by Tecumseh Products Canada to the Agent or any Lender under this Agreement or any Other
Document exceed the effective annual rate of interest on the “credit advanced” (as defined in that
section) under this Agreement or such Other Document lawfully permitted under that section and, if
any payment, collection or demand pursuant to this Agreement or any Other Document in respect of
“interest” (as defined in that section) is determined to be contrary to the provisions of that
section, such payment, collection or demand shall be deemed to have been made by mutual mistake of
the Agent or the Lender and Tecumseh Products Canada and the amount of such payment or collection
shall be refunded by the Agent or such Lender to Tecumseh Products Canada. For the purposes of
this Agreement and each Other Document to which Tecumseh Products Canada is a party, the effective
annual rate of interest payable by Tecumseh Products Canada shall be determined in accordance with
generally accepted actuarial practices and principles over the term of the loans on the basis of
annual compounding for the lawfully permitted rate of interest and, in the event of dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Agent for the
account of Tecumseh Products Canada will be conclusive for the purpose of such determination in the
absence of evidence to the contrary; and

(iii) all calculations of interest payable by Tecumseh Products Canada under this Agreement or
any Other Document are to be made on the basis of the nominal interest rate described herein and
therein and not on the basis of effective yearly rates or on any other basis which gives effect to
the principle of deemed reinvestment of interest. The parties acknowledge that there is a material
difference between the stated nominal interest rates and the effective yearly rates of interest and
that they are capable of making the calculations required to determine such effective yearly rates
of interest.

3.6. Maximum Charges. In no event whatsoever shall interest and other charges charged
hereunder exceed the highest rate permissible under law. In the event interest and other charges as
computed hereunder would otherwise exceed the highest rate permitted under law, such excess amount
shall be first applied to any unpaid principal balance owed by Borrowers, and if the then remaining
excess amount is greater than the previously unpaid principal balance, Lenders shall promptly
refund such excess amount to Borrowers and the provisions hereof shall be deemed amended to provide
for such permissible rate.

3.7. Increased Costs. In the event that any Applicable Law, or any change therein or in
the interpretation or application thereof, or compliance by any Lender (for purposes of this
Section 3.7, the term “Lender” shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined)
makes or maintains any Eurodollar Rate Loans with any request or directive (whether or not having
the force of law) from any central bank or other financial, monetary or other authority, shall:

(a) subject Agent or any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Other Document or change the basis of taxation of payments to Agent or any Lender
of principal, fees, interest or any other amount payable hereunder or under any Other Documents
(except for changes in the rate of tax on the overall net income of Agent or any Lender by the
jurisdiction in which it maintains its principal office);

(b) impose, modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of, advances or loans by, or
other credit extended by, any office of Agent or any Lender, including pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or

(c) impose on Agent or any Lender or the London interbank Eurodollar market any other
condition with respect to this Agreement or any Other Document;

and the result of any of the foregoing is to increase the cost to Agent or any Lender of
making, renewing or maintaining its Advances hereunder by an amount that Agent or such Lender
reasonably deems to be material or to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of the Advances by an amount that Agent or such Lender
deems to be material, then, in any case Borrowers shall promptly pay Agent or such Lender, upon its
demand, such additional amount as will compensate Agent or such Lender for such additional cost or
such reduction, as the case may be. Agent or such Lender shall certify the amount of such
additional cost or reduced amount to Borrowing Agent, and such certification shall be conclusive
absent manifest error.

3.8. Basis For Determining Interest Rate Inadequate or Unfair. In the event that Agent or
any Lender shall have determined that:

(a) reasonable means do not exist for ascertaining the Eurodollar Rate applicable pursuant to
Section 2.2 for any Interest Period; or

(b) Dollar deposits in the relevant amount and for the relevant maturity are not available in
the London interbank Eurodollar market, with respect to an outstanding Eurodollar Rate Loan, a
proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a Eurodollar
Rate Loan,

then Agent shall give Borrowing Agent prompt written or telephonic notice of such
determination. If such notice is given, (i) any such requested Eurodollar Rate Loan shall be made
as a Domestic Rate Loan, unless Borrowing Agent shall notify Agent no later than 10:00 a.m. (New
York City time) two (2) Business Days prior to the date of such proposed borrowing, that its
request for such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate
Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to an
affected type of Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate Loan,
or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the proposed conversion, shall be maintained as an unaffected type of
Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be converted
into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New
York City time) two (2) Business Days prior to the last Business Day of the then current Interest
Period applicable to such affected Eurodollar Rate Loan, shall be converted into an unaffected type
of Eurodollar Rate Loan, on the last Business Day of the then current Interest Period for such
affected Eurodollar Rate Loans. Until such notice has been withdrawn, Lenders shall have no
obligation to make an affected type of Eurodollar Rate Loan or maintain outstanding affected
Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.

3.9. Capital Adequacy.

(a) In the event that Agent or any Lender shall have determined that any Applicable Law or
guideline regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender (for purposes of
this Section 3.9, the term “Lender” shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined)
makes or maintains any Eurodollar Rate Loans with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on Agent or any Lender’s
capital as a consequence of its obligations hereunder to a level below that which Agent or such
Lender could have achieved but for such adoption, change or compliance (taking into consideration
Agent’s and each Lender’s policies with respect to capital adequacy) by an amount reasonably deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall pay upon demand to
Agent or such Lender such additional amount or amounts as will compensate Agent or such Lender for
such reduction. In determining such amount or amounts, Agent or such Lender may use any reasonable
averaging or attribution methods. The protection of this Section 3.9 shall be available to Agent
and each Lender regardless of any possible contention of invalidity or inapplicability with respect
to the Applicable Law or condition.

(b) A certificate of Agent or such Lender setting forth such amount or amounts as shall be
necessary to compensate Agent or such Lender with respect to Section 3.9(a) when delivered to
Borrowing Agent shall be conclusive absent manifest error.

3.10. Gross Up for Taxes. If any Borrower shall be required by Applicable Law to withhold
or deduct any taxes (other than taxes determined based on net income) from or in respect of any sum
payable under this Agreement or any of the Other Documents to Agent, or any Lender, assignee of any
Lender, or Participant (each, individually, a “Payee” and collectively, the “Payees”), (a) the sum
payable to such Payee or Payees, as the case may be, shall be increased as may be necessary so
that, after making all required withholding or deductions, the applicable Payee or Payees receives
an amount equal to the sum it would have received had no such withholding or deductions been made
(the “Gross-Up Payment”), (b) such Borrower shall make such withholding or deductions, and (c) such
Borrower shall pay the full amount withheld or deducted to the relevant taxation authority or other
authority in accordance with Applicable Law. Notwithstanding the foregoing, no Borrower shall be
obligated to make any portion of the Gross-Up Payment that is attributable to any withholding or
deductions that would not have been paid or claimed had the applicable Payee or Payees properly
claimed a complete exemption with respect thereto pursuant to Section 3.11.

3.11. Withholding Tax Exemption.

(a) Each Payee that is not incorporated under the Laws of the United States of America or a
state thereof (and, upon the written request of Agent, each other Payee) agrees that it will
deliver to Borrowing Agent and Agent two (2) duly completed appropriate valid Withholding
Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”))
certifying its status (i.e., U.S. or foreign person) and, if appropriate, making a claim of
reduced, or exemption from, U.S. withholding tax on the basis of an income tax treaty or an
exemption provided by the Code. The term “Withholding Certificate” means a Form W-9; a Form
W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required
under §1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of
the Regulations; or any other certificates under the Code or Regulations that certify or establish
the status of a payee or beneficial owner as a U.S. or foreign person.

(b) Each Payee required to deliver to Borrowing Agent and Agent a valid Withholding
Certificate pursuant to Section 3.11(a) shall deliver such valid Withholding Certificate as
follows: (A) each Payee which is a party hereto on the Closing Date shall deliver such valid
Withholding Certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by any Borrower hereunder for the account of such Payee; or, in the
case of assignment or participation, (B) each Payee shall deliver such valid Withholding
Certificate at least five (5) Business Days before the effective date of such assignment or
participation (unless Agent in its sole discretion shall permit such Payee to deliver such
Withholding Certificate less than five (5) Business Days before such date in which case it shall be
due on the date specified by Agent). Each Payee which so delivers a valid Withholding Certificate
further undertakes to deliver to Borrowing Agent and Agent two (2) additional copies of such
Withholding Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event requiring a change in
the most recent Withholding Certificate so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by Borrowing Agent or Agent.

(c) Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of or
exemption from U.S. withholding tax required under Section 3.11(b), Agent shall be entitled to
withhold United States federal income taxes at the full 30% withholding rate if in its reasonable
judgment it is required to do so under the due diligence requirements imposed upon a withholding
agent under §1.1441-7(b) of the Regulations. Further, Agent is indemnified under §1.1461-1(e) of
the Regulations against any claims and demands of any Payee for the amount of any tax it deducts
and withholds in accordance with regulations under §1441 of the Code.

IV. COLLATERAL: GENERAL TERMS

4.1. Security Interest in the Collateral. To secure the prompt payment and performance to
Agent and each Lender of the Obligations, each Borrower hereby assigns, pledges and grants to Agent
for its benefit and for the ratable benefit of each Lender (and each other holder of any of the
Obligations) a continuing security interest in and to and Lien on all of its Collateral, whether
now owned or existing or hereafter acquired or arising and wheresoever located. Each Borrower
shall mark its books and records as may be necessary or appropriate to evidence, protect and
perfect Agent’s security interest. Each Borrower shall promptly provide Agent with written notice
of all commercial tort claims, such notice to contain the case title together with the applicable
court and a brief description of the claim(s). Upon delivery of each such notice, such Borrower
shall be deemed to hereby grant to Agent a security interest and lien in and to such commercial
tort claims and all proceeds thereof.

4.2. Perfection of Security Interest. Each Borrower shall take all action that may be
necessary or desirable, or that Agent may reasonably request, so as at all times to maintain the
validity, perfection, enforceability and priority of Agent’s security interest in and Lien on the
Collateral or to enable Agent to protect, exercise or enforce its rights hereunder and in the
Collateral, including, but not limited to, (i) immediately discharging all Liens other than
Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements, (iii) delivering to Agent, endorsed
or accompanied by such instruments of assignment as Agent may specify, and stamping or marking, in
such manner as Agent may specify, any and all chattel paper, instruments, letters of credits and
advices thereof and documents evidencing or forming a part of the Collateral, (iv) entering into
warehousing, lockbox and other custodial arrangements satisfactory to Agent, and (v) executing and
delivering financing statements, control agreements, instruments of pledge, mortgages, notices and
assignments, in each case in form and substance satisfactory to Agent, relating to the creation,
validity, perfection, maintenance or continuation of Agent’s security interest and Lien under the
Uniform Commercial Code or other Applicable Law. By its signature hereto, each Borrower hereby
authorizes Agent to file against such Borrower, one or more financing, registration, continuation
or amendment statements pursuant to the Uniform Commercial Code and applicable Canadian law in form
and substance satisfactory to Agent (which statements may have a description of collateral which is
broader than that set forth herein). All charges, expenses and fees Agent may incur in doing any
of the foregoing, and any local taxes relating thereto, shall be charged to Borrowers’ Account as a
Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at Agent’s option,
shall be paid to Agent for its benefit and for the ratable benefit of Lenders immediately upon
demand.

4.3. Disposition of Collateral. Each Borrower will safeguard and protect all Collateral
for Agent’s general account and make no disposition thereof whether by sale, lease or otherwise
except (a) the sale of Inventory in the Ordinary Course of Business and (b) the disposition or
transfer of obsolete and worn-out Equipment in the Ordinary Course of Business during any fiscal
year, to the extent that (i) the proceeds of any such disposition are used to acquire replacement
Equipment which is subject to Agent’s first priority security interest or (ii) the proceeds of
which are remitted to Agent to be applied pursuant to Section 2.21 (to the extent that Obligations
are outstanding at the time of such sale).

4.4. Preservation of Collateral. Following the occurrence of a Default or Event of
Default, in addition to the rights and remedies set forth in Section 11.1, Agent: (a) may at any
time take such steps as Agent deems necessary to protect Agent’s interest in and to preserve the
Collateral, including the hiring of such security guards or the placing of other security
protection measures as Agent may deem appropriate; (b) may employ and maintain at any of any
Borrower’s premises a custodian who shall have full authority to do all acts necessary to protect
Agent’s interests in the Collateral; (c) may lease warehouse facilities to which Agent may move all
or part of the Collateral; (d) may use any Borrower’s owned or leased lifts, hoists, trucks and
other facilities or equipment for handling or removing the Collateral; and (e) shall have, and is
hereby granted, a right of ingress and egress to the places where the Collateral is located, and
may proceed over and through any of Borrower’s owned or leased property. Each Borrower shall
cooperate fully with all of Agent’s efforts to preserve the Collateral and will take such actions
to preserve the Collateral as Agent may direct. All of Agent’s reasonable expenses of preserving
the Collateral, including any expenses relating to the bonding of a custodian, shall be charged to
Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations.

4.5. Ownership of Collateral.

(a) With respect to the Collateral, at the time the Collateral becomes subject to Agent’s
security interest: (i) each Borrower shall be the sole owner of and fully authorized and able to
sell, transfer, pledge and/or grant a first priority security interest to Agent in each and every
item of its respective Collateral; and, except for Permitted Encumbrances the Collateral shall be
free and clear of all Liens and encumbrances whatsoever; (ii) each document and agreement executed
by each Borrower or delivered to Agent or any Lender in connection with this Agreement shall be
true and correct in all respects; (iii) all signatures and endorsements of each Borrower that
appear on such documents and agreements shall be genuine and each Borrower shall have full capacity
to execute same; and (iv) each Borrower’s Equipment and Inventory shall be located as set forth on
Schedule 4.5 and shall not be removed from such location(s) without the prior written consent of
Agent except with respect to the sale of Inventory in the Ordinary Course of Business and Equipment
to the extent permitted in Section 4.3.

(b) (i) There is no location at which any Borrower has any Inventory (except for Inventory in
transit) other than those locations listed on Schedule 4.5; (ii) Schedule 4.5 hereto contains a
correct and complete list, as of the Closing Date, of the legal names and addresses of each
warehouse at which Inventory of any Borrower is stored; none of the receipts received by any
Borrower from any warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person’s assigns; (iii)
Schedule 4.5 hereto sets forth a correct and complete list as of the Closing Date of (A) each place
of business of each Borrower and (B) the chief executive office of each Borrower; and (iv) Schedule
4.5 hereto sets forth a correct and complete list as of the Closing Date of the location, by state
and street address, of all Real Property owned or leased by each Borrower, together with the names
and addresses of any landlords.

4.6. Defense of Agent’s and Lenders’ Interests. Until (a) payment and performance in full
of all of the Obligations (other than contingent indemnity obligations to the extent no claim
giving rise thereto has been asserted) and (b) termination of this Agreement, Agent’s interests in
the Collateral shall continue in full force and effect. During such period no Borrower or any
Guarantor shall, without Agent’s prior written consent, pledge, sell (except Inventory in the
Ordinary Course of Business and Equipment to the extent permitted in Section 4.3), assign,
transfer, create or suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in
any way except for Permitted Encumbrances, any part of the Collateral. Each Borrower shall defend
Agent’s interests in the Collateral against any and all Persons whatsoever. At any time following
demand by Agent for payment of all Obligations, Agent shall have the right to take possession of
the indicia of the Collateral and the Collateral in whatever physical form contained, including:
labels, stationery, documents, instruments and advertising materials. If Agent exercises this
right to take possession of the Collateral, Borrowers shall, upon demand, assemble it in the best
manner possible and make it available to Agent at a place reasonably convenient to Agent. In
addition, with respect to all Collateral, Agent and Lenders shall be entitled to all of the rights
and remedies set forth herein and further provided by the Uniform Commercial Code or other
Applicable Law. Following the occurrence of a Cash Dominion Triggering Event that has not been
suspended in accordance with Section 6.11 each Borrower shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding cash,
checks, Inventory, documents or instruments in which Agent holds a security interest to deliver
same to Agent and/or subject to Agent’s order and if they shall come into any Borrower’s
possession, they, and each of them, shall be held by such Borrower in trust as Agent’s trustee, and
such Borrower will immediately deliver them to Agent in their original form together with any
necessary endorsement.

4.7. Books and Records. Each Borrower and each Subsidiary shall (a) keep proper books of
record and account in which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs; (b) set up on its books accruals with
respect to all taxes, assessments, charges, levies and claims; and (c) on a reasonably current
basis set up on its books, from its earnings, allowances against doubtful Receivables, advances and
investments and all other proper accruals (including by reason of enumeration, accruals for
premiums, if any, due on required payments and accruals for depreciation, obsolescence, or
amortization of properties), which should be set aside from such earnings in connection with its
business. All determinations pursuant to this subsection shall be made in accordance with, or as
required by, GAAP consistently applied in the opinion of such independent public accountant as
shall then be regularly engaged by Borrowers.

4.8. Financial Disclosure. Each Borrower hereby irrevocably authorizes and directs all
accountants and auditors employed by such Borrower at any time during the Term to exhibit and
deliver to Agent and each Lender copies of any of such Borrower’s financial statements, trial
balances or other accounting records of any sort in the accountant’s or auditor’s possession, and
to disclose to Agent and each Lender any information such accountants may have concerning such
Borrower’s financial status and business operations. Each Borrower hereby authorizes all
Governmental Bodies to furnish to Agent and each Lender copies of reports or examinations relating
to such Borrower, whether made by such Borrower or otherwise; however, Agent and each Lender will
attempt to obtain such information or materials directly from such Borrower prior to obtaining such
information or materials from such accountants or Governmental Bodies.

4.9. Compliance with Laws. Each Borrower and each Guarantor shall comply with all
Applicable Laws with respect to the Collateral or any part thereof or to the operation of such
Borrower’s business the non-compliance with which could reasonably be expected to have a Material
Adverse Effect. The assets of Borrowers at all times shall be maintained in accordance with the
requirements of all insurance carriers which provide insurance with respect to the assets of
Borrowers so that such insurance shall remain in full force and effect.

4.10. Inspection of Premises. At all reasonable times Agent and each Lender shall have
full access to and the right to audit, check, inspect and make abstracts and copies from each
Borrower’s books, records, audits, correspondence and all other papers relating to the Collateral
and the operation of each Borrower’s business. Agent, any Lender and their agents may enter upon
any premises of any Borrower at any time during business hours and at any other reasonable time,
and from time to time, for the purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of such Borrower’s business. The Agent and Lenders shall have
the right to conduct at Borrowers’ expense such audits, appraisals and field examinations at such
times as the Agent and Lenders deem necessary, but not less than one inventory appraisal per
calendar year.

4.11. Insurance. The assets and properties of each Borrower and each Guarantor at all
times shall be maintained in accordance with the requirements of all insurance carriers which
provide insurance with respect to the assets and properties of such Borrower so that such insurance
shall remain in full force and effect. Each Borrower shall bear the full risk of any loss of any
nature whatsoever with respect to the Collateral. At each Borrower’s own cost and expense in
amounts and with carriers acceptable to Agent, each Borrower shall (a) keep all its insurable
properties and properties in which such Borrower has an interest insured against the hazards of
fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other
hazards, and for such amounts, as is customary in the case of companies engaged in businesses
similar to such Borrower’s including business interruption insurance; (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar to such Borrower
insuring against larceny, embezzlement or other criminal misappropriation of insured’s officers and
employees who may either singly or jointly with others at any time have access to the assets or
funds of such Borrower either directly or through authority to draw upon such funds or to direct
generally the disposition of such assets; (c) maintain public and product liability insurance
against claims for personal injury, death or property damage suffered by others; (d) maintain all
such worker’s compensation or similar insurance as may be required under the laws of any state or
jurisdiction in which such Borrower is engaged in business; (e) furnish Agent with (i) copies of
all policies and evidence of the maintenance of such policies by the renewal thereof at least
thirty (30) days before any expiration date, and (ii) appropriate loss payable endorsements in form
and substance satisfactory to Agent, naming Agent as a co-insured and loss payee as its interests
may appear with respect to all insurance coverage referred to in clauses (a) and (c) above, and
providing (A) that all proceeds thereunder shall be payable to Agent, (B) no such insurance shall
be affected by any act or neglect of the insured or owner of the property described in such policy,
and (C) that such policy and loss payable clauses may not be cancelled, amended or terminated
unless at least thirty (30) days’ prior written notice is given to Agent. In the event of any loss
thereunder, the carriers named therein hereby are directed by Agent and the applicable Borrower to
make payment for such loss to Agent and not to such Borrower and Agent jointly. If any insurance
losses are paid by check, draft or other instrument payable to any Borrower and Agent jointly,
Agent may endorse such Borrower’s name thereon and do such other things as Agent may deem advisable
to reduce the same to cash. Agent is hereby authorized to adjust and compromise claims under
insurance coverage referred to in clauses (a) and (b) above. All loss recoveries received by Agent
upon any such insurance may be applied to the Obligations, in such order as Agent in its sole
discretion shall determine. Any surplus shall be paid by Agent to Borrowers or applied as may be
otherwise required by law. Any deficiency thereon shall be paid by Borrowers to Agent, on demand.
Each Borrower has taken and shall take all actions required under the Flood Laws and/or requested
by the Agent to assist in ensuring that each Lender is in compliance with the Flood Laws applicable
to the Collateral, including, but not limited to, providing the Agent with the address and/or GPS
coordinates of each structure located upon any real property that will be subject to a mortgage in
favor of the Agent, for the benefit of the Lenders, and, to the extent required, obtaining flood
insurance for such property, structures and contents prior to such property, structures and
contents becoming Collateral, and thereafter maintaining such flood insurance in full force and
effect for so long as required by the Flood Laws. Notwithstanding the foregoing, if no Default or
Event of Default shall then exist or arise therefrom, insurance proceeds shall not be required to
be so applied if they do not exceed $2,500,000 in any calendar year, and the Borrower Agent shall
have delivered a certificate of a Authorized Officer of the Borrower Agent to the Agent on or prior
to such date stating that such proceeds are expected to be used to repair, replace or restore any
property in respect of which such insurance proceeds were paid, no later than three months
following the date of receipt of such proceeds; provided, that the Borrowers shall, on the first
Business Day immediately following receipt of such insurance proceeds, immediately deposit or cause
to be deposited such proceeds into a deposit account that is subject to a control agreement and
such funds shall remain in such deposit account until the earliest of (x) the date the Borrowers
make written request for such proceeds in connection with such repairs, replacement or restoration
of the property and in accordance with this subsection, at which time such proceeds shall be used
for such purpose; provided, that no Default or Event of Default shall then exist or arise
therefrom, (y) the expiration of the three-month period, at which time any such remaining insurance
proceeds shall be applied to the Obligations as a mandatory prepayment, and (z) the expiration of
the Term, at which time such proceeds shall be applied to all Obligations then due; provided,
further, that if the property subject to the event of loss giving rise to the insurance proceeds
constituted Collateral, then all property purchased with the insurance proceeds thereof pursuant to
this subsection shall be made subject to the Lien in favor of Agent on behalf of itself and the
Lenders.

4.12. Failure to Pay Insurance. If any Borrower fails to obtain insurance as hereinabove
provided, or to keep the same in force, Agent, if Agent so elects, may obtain such insurance and
pay the premium therefor on behalf of such Borrower, and charge Borrowers’ Account therefor as a
Revolving Advance of a Domestic Rate Loan and such expenses so paid shall be part of the
Obligations.

4.13. Payment of Taxes. Each Borrower and each Guarantor will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Borrower or any of the
Collateral including real and personal property taxes, assessments and charges and all franchise,
income, employment, social security benefits, withholding, and sales taxes. If any tax by any
Governmental Body is or may be imposed on or as a result of any transaction between any Borrower
and Agent or any Lender which Agent or any Lender may be required to withhold or pay or if any
taxes, assessments, or other Charges remain unpaid after the date fixed for their payment, or if
any claim shall be made which, in Agent’s or any Lender’s opinion, may possibly create a valid Lien
on the Collateral, Agent may without notice to Borrowers pay the taxes, assessments or other
Charges and each Borrower hereby indemnifies and holds Agent and each Lender harmless in respect
thereof. Notwithstanding the foregoing, if any taxing jurisdiction asserts a Charge against Agent
or any Lender which, if successful, would require the Borrowers to indemnify Agent or any Lender
therefor, Agent or the Lender, as applicable, agrees to contest the claim reasonably and in good
faith on the request of the Borrowers by either paying the tax claimed (which must be immediately
reimbursed by Borrowers) and suing for a refund or contesting the claim in the appropriate court
and, if necessary, bringing appropriate appeals so long as (i) no Event of Default has occurred and
is continuing and (ii) Borrowers request Agent or such Lender to contest the Charge within thirty
(30) days of receipt of notice of the Charge from Agent or such Lender. Borrowers agree to
indemnify the Agent or any Lender, as applicable, for all reasonable costs and expenses it may
incur in connection with contesting a Charge at the request of Borrowers. Furthermore, if
requested by Agent, Borrowers must post cash collateral with Agent in an amount reasonably
determined by Agent to ensure that Agent’s costs and expenses, and potential liability, will be
covered by such cash collateral. The amount of any payment by Agent under this Section 4.13 shall
be charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and
added to the Obligations and, until Borrowers shall furnish Agent with an indemnity therefor (or
supply Agent with evidence satisfactory to Agent that due provision for the payment thereof has
been made), Agent may hold without interest any balance standing to Borrowers’ credit and Agent
shall retain its security interest in and Lien on any and all Collateral held by Agent.

4.14. Payment of Leasehold Obligations. Each Borrower and each Guarantor shall at all
times pay, when and as due, its rental obligations under all leases under which it is a tenant, and
shall otherwise comply, in all material respects, with all other terms of such leases and keep them
in full force and effect and, at Agent’s request will provide evidence of having done so.

4.15. Receivables.

(a) Nature of Receivables. Each of the Receivables shall be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named, for a fixed sum as
set forth in the invoice relating thereto (provided immaterial or unintentional invoice errors
shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and delivery
of goods upon stated terms of a Borrower, or work, labor or services theretofore rendered by a
Borrower as of the date each Receivable is created. Same shall be due and owing in accordance with
the applicable Borrower’s standard terms of sale without dispute, setoff or counterclaim except as
may be stated on the accounts receivable schedules delivered by Borrowers to Agent.

(b) Solvency of Customers. Each Customer, to the best of each Borrower’s knowledge, as of
the date each Receivable is created, is and will be solvent and able to pay all Receivables on
which the Customer is obligated in full when due or with respect to such Customers of any Borrower
who are not solvent such Borrower has set up on its books and in its financial records bad debt
reserves adequate to cover such Receivables.

(c) Location of Borrowers. Each Borrower’s chief executive office is located at 1136 Oak
Valley Drive, Ann Arbor, Michigan 48108. Until written notice is given to Agent by Borrowing
Agent of any other office at which any Borrower keeps its records pertaining to Receivables, all
such records shall be kept at such executive office.

(d) Collection of Receivables. Upon the occurrence of a Cash Dominion Triggering Event
that has not been suspended in accordance with Section 6.11, (i) each Borrower will, at such
Borrower’s sole cost and expense, but on Agent’s behalf and for Agent’s account, collect as Agent’s
property and in trust for Agent all amounts received on Receivables, and shall not commingle such
collections with any Borrower’s funds or use the same except to pay Obligations, and (ii) each
Borrower shall deposit in the Blocked Account or, upon request by Agent, deliver to Agent, in
original form and on the date of receipt thereof, all checks, drafts, notes, money orders,
acceptances, cash and other evidences of Indebtedness. Each Borrower shall deposit in the Blocked
Account or the Depository Accounts as applicable all checks, drafts, notes, money orders,
acceptances, cash and other evidences of Indebtedness.

(e) Notification of Assignment of Receivables. At any time Agent shall have the right to
send notice of the assignment of, and Agent’s security interest in and Lien on, the Receivables to
any and all Customers or any third party holding or otherwise concerned with any of the Collateral.
After an Event of Default has occurred and so long as it is continuing, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both. Agent’s actual
collection expenses, including, but not limited to, stationery and postage, telephone and
telegraph, secretarial and clerical expenses and the salaries of any collection personnel used for
collection, may be charged to Borrowers’ Account and added to the Obligations.

(f) Power of Agent to Act on Borrowers’ Behalf. Agent shall have the right to receive,
endorse, assign and/or deliver in the name of Agent or any Borrower any and all checks, drafts and
other instruments for the payment of money relating to the Receivables, and each Borrower hereby
waives notice of presentment, protest and non-payment of any instrument so endorsed. Each Borrower
hereby constitutes Agent or Agent’s designee as such Borrower’s attorney with power (which power
will not increase Agent’s rights with respect to dominion over Borrowers’ cash prior to the
occurrence of Cash Dominion Triggering Event that has not been suspended in accordance with Section
6.11) (i) at any time (A) to endorse such Borrower’s name upon any notes, acceptances, checks,
drafts, money orders or other evidences of payment or Collateral and to do all other acts and
things necessary to carry out this Agreement; (B) to sign such Borrower’s name on any invoice or
bill of lading relating to any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (C) to send verifications of Receivables to any Customer; and (D) to
sign such Borrower’s name on all financing statements or any other documents or instruments deemed
necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the
Collateral and to file same; and (ii) at any time after the occurrence of an Event of Default, (A)
to demand payment of the Receivables; (B) to enforce payment of the Receivables by legal
proceedings or otherwise; (C) to exercise all of such Borrower’s rights and remedies with respect
to the collection of the Receivables and any other Collateral; (D) to settle, adjust, compromise,
extend or renew the Receivables; (E) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (F) to prepare, file and sign such Borrower’s name on a proof of claim in
bankruptcy or similar document against any Customer; and (G) to prepare, file and sign such
Borrower’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Receivables. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of omission or commission
nor for any error of judgment or mistake of fact or of law, unless done maliciously or with gross
(not mere) negligence (as determined by a court of competent jurisdiction in a final non-appealable
judgment); this power being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right, at any time after the occurrence of an Event of
Default, to change the address for delivery of mail addressed to any Borrower to such address as
Agent may designate and to receive, open and dispose of all mail addressed to any Borrower.

(g) No Liability. Neither Agent nor any Lender shall, under any circumstances or in any
event whatsoever, have any liability for any error or omission or delay of any kind occurring in
the settlement, collection or payment of any of the Receivables or any instrument received in
payment thereof, or for any damage resulting therefrom, except to the extent resulting from Agent’s
gross negligence or willful misconduct. Agent may, without notice or consent from any Borrower,
sue upon or otherwise collect, extend the time of payment of, compromise or settle for cash, credit
or upon any terms any of the Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof. Agent is authorized and empowered to accept
the return of the goods represented by any of the Receivables, without notice to or consent by any
Borrower, all without discharging or in any way affecting any Borrower’s liability hereunder.

(h) Establishment of a Lockbox Account, Dominion Account. All proceeds of Collateral shall
be deposited by Borrowers into either a lockbox account, dominion account or such other “blocked
account” (“Blocked Accounts"), pursuant to an arrangement with such bank as may be selected by
Borrowers and be acceptable to the Agent in its reasonable discretion. Borrowers shall issue to
any such bank on or before the Closing Date, an irrevocable letter of instruction directing said
bank to transfer such funds so deposited to the Agent upon the occurrence of a Cash Dominion
Triggering Event that has not been suspended in accordance with Section 6.11, either to any account
maintained by the Agent at said bank or by wire transfer to appropriate account(s) of the Agent.
Upon the occurrence of a Cash Dominion Triggering Event that has not been suspended in accordance
with Section 6.11, all funds deposited in the Blocked Accounts shall immediately become the
property of the Agent, and Borrowers shall obtain the agreement by such bank to waive any offset
rights against the funds so deposited. Neither the Agent nor any Lender assumes any responsibility
for such blocked account arrangement, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank thereunder. Alternatively,
the Agent may establish depository accounts (“Depository Accounts") in the name of the Agent at a
bank or banks for the deposit of such funds and Borrowers shall deposit all proceeds of Collateral
or cause same to be deposited, in kind, in such Depository Accounts of the Agent in lieu of
depositing same to the Blocked Accounts. All deposit accounts of each Borrower and its Subsidiaries
(except Excluded Foreign Subsidiaries) are set forth on Schedule 4.15(h). Agent agrees not to
deliver a notice exercising exclusive control with respect to any Blocked Accounts, Depository
Accounts, securities accounts or lockboxes unless a Cash Dominion Triggering Event has occurred
that has not been suspended in accordance with Section 6.11; provided that Agent agrees not to
deliver a notice exercising exclusive control with respect to Black Rock account #32941 and
JPMorgan Chase account #5016101 unless an Event of Default has occurred and is continuing; provided
further that Agent shall promptly inform Black Rock and JPMorgan Chase (with respect to account
#5016101) that an Event of Default no longer exists once an Event of Default ceases to exist, at
which time, Borrowers shall be entitled to give, and Black Rock and JPMorgan Chase (with respect to
account #5016101), shall comply with, the Grantor’s instructions with respect to the specified
accounts. Agent shall promptly inform any depository, securities intermediary or issuer party to
any control agreement to whom it has given a notice exercising exclusive control if the Cash
Dominion Triggering Event has been suspended in accordance with Section 6.11, at which time
Borrowers shall be entitled to give, and the depository, securities intermediary or issuer, as
applicable, shall comply with, the Borrowing Agent’s instructions with respect to the Account.

(i) Adjustments. No Borrower will, without Agent’s consent, compromise or adjust any
Receivables (or extend the time for payment thereof) or accept any returns of merchandise or grant
any additional discounts, allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in the business of
such Borrower.

4.16. Inventory. To the extent Inventory held for sale or lease has been produced by any
Borrower in the United States, it has been and will be produced by such Borrower in accordance with
the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders
thereunder.

4.17. Maintenance of Equipment. The Equipment shall be maintained in good operating
condition and repair (reasonable wear and tear excepted) and all necessary replacements of and
repairs thereto shall be made so that the value and operating efficiency of the Equipment shall be
maintained and preserved. No Borrower shall use or operate the Equipment in material violation of
any law, statute, ordinance, code, rule or regulation. Each Borrower shall have the right to sell
Equipment to the extent set forth in Section 4.3.

4.18. Exculpation of Liability. Nothing herein contained shall be construed to constitute
Agent or any Lender as any Borrower’s agent for any purpose whatsoever, nor shall Agent or any
Lender be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any
part of the Collateral wherever the same may be located and regardless of the cause thereof, except
to the extent caused by the gross negligence or willful misconduct of the Agent or any Lender.
Neither Agent nor any Lender, whether by anything herein or in any assignment or otherwise, assume
any of any Borrower’s obligations under any contract or agreement assigned to Agent or such Lender,
and neither Agent nor any Lender shall be responsible in any way for the performance by any
Borrower of any of the terms and conditions thereof.

4.19. Environmental Matters.

(a) Borrowers shall ensure that the Real Property and all operations and businesses conducted
thereon remains in compliance with all Environmental Laws and they shall not place or permit to be
placed any Hazardous Substances on any Real Property except as permitted by Applicable Law or
appropriate governmental authorities.

(b) Borrowers shall establish and maintain a system to assure and monitor continued compliance
with all applicable Environmental Laws which system shall include periodic reviews of such
compliance.

(c) Borrowers shall (i) employ in connection with the use of the Real Property appropriate
technology necessary to maintain compliance with any applicable Environmental Laws and (ii) dispose
of any and all Hazardous Waste generated at the Real Property only at facilities and with carriers
that maintain valid permits under RCRA and any other applicable Environmental Laws. Borrowers
shall use their best efforts to obtain certificates of disposal, such as hazardous waste manifest
receipts, from all treatment, transport, storage or disposal facilities or operators employed by
Borrowers in connection with the transport or disposal of any Hazardous Waste generated at the Real
Property.

(d) In the event any Borrower obtains, gives or receives notice of any Release or threat of
Release of a reportable quantity of any Hazardous Substances at the Real Property in violation of
Environmental Laws (any such event being hereinafter referred to as a “Hazardous Discharge”) or
receives any notice of violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at the Real Property, demand
letter or complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting the Real Property or any Borrower’s interest
therein (any of the foregoing is referred to herein as an “Environmental Complaint”) from any
Person with respect to a liability that could reasonably be expected to exceed $1,000,000,
including any state agency responsible in whole or in part for environmental matters in the state
in which the Real Property is located or the United States Environmental Protection Agency (any
such person or entity hereinafter the “Authority”), then Borrowing Agent shall, within five (5)
Business Days, give written notice of same to Agent detailing facts and circumstances of which any
Borrower is aware giving rise to the Hazardous Discharge or Environmental Complaint. Such
information is to be provided to allow Agent to protect its security interest in and Lien on the
Real Property and the Collateral and is not intended to create nor shall it create any obligation
upon Agent or any Lender with respect thereto.

(e) Borrowing Agent shall promptly forward to Agent copies of any request for information,
notification of potential liability or demand letter relating to potential responsibility with
respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated
or used by any Borrower to dispose of Hazardous Substances and shall continue to forward copies of
correspondence between any Borrower and the Authority regarding such claims to Agent until the
claim is settled; provided, however, such obligation to notify Agent shall only apply to the extent
that the aggregate share of potential liability for all Borrowers in connection with such
notification, request or demand is estimated by the Borrowers to be equal to or greater than
$250,000. Borrowing Agent shall promptly forward to Agent copies of all documents and reports
concerning a Hazardous Discharge at the Real Property that any Borrower is required to file under
any Environmental Laws. Such information is to be provided solely to allow Agent to protect
Agent’s security interest in and Lien on the Real Property and the Collateral.

(f) Borrowers shall respond promptly to any Hazardous Discharge or Environmental Complaint and
take all necessary action in order to safeguard the health of any Person and to avoid subjecting
the Collateral or Real Property to any Lien. If any Borrower shall fail to respond promptly to any
Hazardous Discharge or Environmental Complaint or any Borrower shall fail to comply with any of the
material requirements of any Environmental Laws, Agent on behalf of Lenders may, but without the
obligation to do so, for the sole purpose of protecting Agent’s interest in the Collateral: (A)
give such notices or (B) enter onto the Real Property (or authorize third parties to enter onto the
Real Property) and take such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise deal with any such
Hazardous Discharge or Environmental Complaint. All reasonable costs and expenses incurred by
Agent and Lenders (or such third parties) in the exercise of any such rights, including any sums
paid in connection with any judicial or administrative investigation or proceedings, fines and
penalties, together with interest thereon from the date expended at the Default Rate for Domestic
Rate Loans constituting Revolving Advances shall be paid upon demand by Borrowers, and until paid
shall be added to and become a part of the Obligations secured by the Liens created by the terms of
this Agreement or any other agreement between Agent, any Lender and any Borrower.

(g) Promptly upon the written request of Agent from time to time, but no more frequently than
once per fiscal year absent the occurrence and continuance of an Event of Default or a suspected
Hazardous Discharge, Borrowers shall provide Agent, at Borrowers’ expense, with an environmental
site assessment or environmental audit report prepared by an environmental engineering firm
acceptable in the reasonable opinion of Agent, to assess with a reasonable degree of certainty the
existence of a Hazardous Discharge and the potential costs in connection with abatement, cleanup
and removal of any Hazardous Substances found on, under, at or within the Real Property. Any
report or investigation of such Hazardous Discharge proposed and acceptable to an appropriate
Authority that is charged to oversee the clean-up of such Hazardous Discharge shall be acceptable
to Agent. If such estimates, individually or in the aggregate, exceed $250,000, Agent shall have
the right to require Borrowers to post a bond, letter of credit or other security reasonably
satisfactory to Agent to secure payment of these costs and expenses.

(h) Borrowers shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their
respective employees, agents, directors and officers harmless from and against all loss, liability,
damage and expense, claims, costs, fines and penalties, including attorney’s fees, suffered or
incurred by Agent or Lenders under or on account of any Environmental Laws, including the assertion
of any Lien thereunder, with respect to any Hazardous Discharge, the presence of any Hazardous
Substances affecting the Real Property in violation of Environmental Laws, whether or not the same
originates or emerges from the Real Property or any contiguous real estate, including any loss of
value of the Real Property as a result of the foregoing except to the extent such loss, liability,
damage and expense is attributable to any Hazardous Discharge act or omission on the part of Agent
or any Lender. Borrowers’ obligations under this Section 4.19 shall arise upon the discovery of
the presence of any Hazardous Substances at the Real Property in violation of Environmental Laws,
whether or not any federal, state, or local environmental agency has taken or threatened any action
in connection with the presence of any Hazardous Substances. Borrowers’ obligation and the
indemnifications hereunder shall survive the termination of this Agreement.

4.20. Financing Statements. Except as respects the financing statements filed by Agent and
the financing statements described on Schedule 1.2, no financing statement covering any of the
Collateral or any proceeds thereof is on file in any public office.

V. REPRESENTATIONS AND WARRANTIES.

Each Borrower represents and warrants as follows:

5.1. Authority. Each Borrower has full power, authority and legal right to enter into this
Agreement and the Other Documents and to perform all its respective Obligations hereunder and
thereunder. This Agreement and the Other Documents have been duly executed and delivered by each
Borrower, and this Agreement and the Other Documents constitute the legal, valid and binding
obligation of such Borrower enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors’ rights generally. The execution, delivery and performance of this Agreement
and of the Other Documents (a) are within such Borrower’s organizational powers, have been duly
authorized by all necessary organizational action, are not in contravention of law or the terms of
such Borrower’s organizational documents or other applicable documents relating to such Borrower’s
formation or to the conduct of such Borrower’s business or of any material agreement or undertaking
to which such Borrower is a party or by which such Borrower is bound, (b) will not conflict with or
violate any law or regulation, or any judgment, order or decree of any Governmental Body, (c) will
not require the Consent of any Governmental Body or any other Person, except those Consents set
forth on Schedule 5.1 hereto, all of which will have been duly obtained, made or compiled prior to
the Closing Date and which are in full force and effect and (d) will not conflict with, nor result
in any breach in any of the provisions of or constitute a default under or result in the creation
of any Lien except Permitted Encumbrances upon any asset of such Borrower under the provisions of
any agreement, charter document, instrument, by-law, operating agreement or other instrument to
which such Borrower is a party or by which it or its property is a party or by which it may be
bound.

5.2. Formation and Qualification.

(a) Each Borrower is duly incorporated and in good standing under the laws of the state or
country listed on Schedule 5.2(a) and is qualified to do business and is in good standing in the
states and countries listed on Schedule 5.2(a) which constitute all states and countries in which
qualification and good standing are necessary for such Borrower to conduct its business and own its
property and where the failure to so qualify could reasonably be expected to have a Material
Adverse Effect on such Borrower. Each Borrower has delivered to Agent true and complete copies of
its certificate of incorporation and by-laws and will promptly notify Agent of any amendment or
changes thereto.

(b) The only Subsidiaries of each Borrower are listed on Schedule 5.2(b).

5.3. Survival of Representations and Warranties. All representations and warranties of
such Borrower contained in this Agreement and the Other Documents shall be true in all material
respects at the time of such Borrower’s execution of this Agreement and the Other Documents, and
shall survive the execution, delivery and acceptance thereof by the parties thereto and the closing
of the transactions described therein or related thereto.

5.4. Tax Returns. Each Borrower’s federal tax identification number or federal business
number, as applicable, is set forth on Schedule 5.4. Each Borrower has filed all federal
(including the federal government of Canada), state, provincial, and local tax returns and other
material reports each is required by law to file and has paid all taxes, assessments, fees and
other governmental charges that are due and payable that exceed $250,000 in the aggregate.
Federal, state, provincial and local income tax returns of each Borrower have been examined and
reported upon by the appropriate taxing authority or closed by applicable statute and satisfied for
all fiscal years prior to and including the fiscal year ending December 31, 2009. The provision
for taxes on the books of each Borrower is adequate for all years not closed by applicable
statutes, and for its current fiscal year, and no Borrower has any knowledge of any deficiency or
additional assessment in connection therewith not provided for on its books.

5.5. Financial Statements.

(a) [Reserved.]

(b) The twelve-month cash flow projections of Borrowers on a Consolidated Basis and their
projected balance sheets as of the Closing Date, copies of which are annexed hereto as Exhibit
5.5(b) (the “Projections”) were prepared by the Chief Financial Officer of Borrowing Agent, are
based on underlying assumptions which provide a reasonable basis for the projections contained
therein and reflect Borrowers’ judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period. The cash flow Projections together with
the projected balance sheets, are referred to as the “Pro Forma Financial Statements”.

(c) The consolidated and consolidating balance sheets of Borrowers, their Subsidiaries and
such other Persons described therein (including the accounts of all Subsidiaries for the respective
periods during which a subsidiary relationship existed) as of December 31, 2010, and the related
statements of income, changes in stockholder’s equity, and changes in cash flow for the period
ended on such date, all accompanied by reports thereon containing opinions without qualification by
independent certified public accountants, copies of which have been delivered to Agent, have been
prepared in accordance with GAAP, consistently applied (except for changes in application in which
such accountants concur) and present fairly the financial position of Borrowers and their
Subsidiaries at such date and the results of their operations for such period. Since December 31,
2010 there has been no change in the condition, financial or otherwise, of Borrowers or their
Subsidiaries as shown on the consolidated balance sheet as of such date and no material change in
the aggregate value of machinery, equipment and Real Property owned by Borrowers and their
respective Subsidiaries, except changes in the Ordinary Course of Business, none of which
individually or in the aggregate has been materially adverse.

5.6. Entity Names. No Borrower has been known by any other corporate name in the past five
years and does not sell Inventory under any other name except as set forth on Schedule 5.6, nor has
any Borrower been the surviving entity of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five (5) years, except as set
forth on Schedule 5.6.

5.7. O.S.H.A. and Environmental Compliance.

(a) Each Borrower has duly complied with, and its facilities, business, assets, property,
leaseholds, Real Property and Equipment are in compliance in all material respects with, the
provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act,
RCRA and all other Environmental Laws; there have been no outstanding citations, notices or orders
of non-compliance issued to any Borrower or relating to its business, assets, property, leaseholds
or Equipment under any such laws, rules or regulations.

(b) Each Borrower has been issued all required federal, state and local licenses, certificates
or permits relating to all applicable Environmental Laws.

(c) (i) There are no visible signs of releases, spills, discharges, leaks or disposal
(collectively referred to as “Releases”) of Hazardous Substances at, upon, under or within any Real
Property or any premises leased by any Borrower; (ii) there are no underground storage tanks or
polychlorinated biphenyls on the Real Property or any premises leased by any Borrower; (iii)
neither the Real Property nor any premises leased by any Borrower has ever been used as a
treatment, storage or disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are
present on the Real Property or any premises leased by any Borrower, excepting such quantities as
are handled in accordance with all applicable manufacturer’s instructions and governmental
regulations and in proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.

5.8. Solvency; No Litigation, Violation, Indebtedness or Default.

(a) After giving effect to Revolving Advances on the Closing Date, each Borrower is solvent,
able to pay its debts as they mature, has capital sufficient to carry on its business and all
businesses in which it is about to engage, and (i) as of the Closing Date, the fair present
saleable value of its assets, calculated on a going concern basis, is in excess of the amount of
its liabilities and (ii) subsequent to the Closing Date, the fair saleable value of its assets
(calculated on a going concern basis) will be in excess of the amount of its liabilities.

(b) Except as disclosed in Schedule 5.8(b), no Borrower has (i) any pending or threatened
litigation, arbitration, actions or proceedings which could be expected to have a Material Adverse
Effect, and (ii) any liabilities or indebtedness for borrowed money other than the Obligations.

(c) No Borrower is in violation of any applicable statute, law, rule, regulation or ordinance
in any respect which could reasonably be expected to have a Material Adverse Effect, nor is any
Borrower in violation of any order of any court, Governmental Body or arbitration board or
tribunal.

(d) No Borrower nor any member of the Controlled Group maintains or contributes to any Plan
other than (i) as of the Closing Date, those listed on Schedule 5.8(d) hereto and (ii) thereafter,
as permitted under this Agreement. (i) No Plan has incurred any “accumulated funding deficiency,”
as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and
each Borrower and each member of the Controlled Group has met all applicable minimum funding
requirements under Section 302 of ERISA in respect of each Plan; (ii) each Plan which is intended
to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined
by the Internal Revenue Service to be qualified under Section 401(a) of the Code and the trust
related thereto is exempt from federal income tax under Section 501(a) of the Code; (iii) neither
any Borrower nor any member of the Controlled Group has incurred any liability to the PBGC other
than for the payment of premiums, and there are no premium payments which have become due which are
unpaid; (iv) no Plan has been terminated by the plan administrator thereof nor by the PBGC, and
there is no occurrence which would cause the PBGC to institute proceedings under Title IV of ERISA
to terminate any Plan; (v) [intentionally omitted]; (vi) neither any Borrower nor any member of the
Controlled Group has breached any of the responsibilities, obligations or duties imposed on it by
ERISA with respect to any Plan; (vii) neither any Borrower nor any member of a Controlled Group has
incurred any liability for any excise tax arising under Section 4972 or 4980B of the Code, and no
fact exists which could give rise to any such liability; (viii) neither any Borrower nor any member
of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a
“prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code nor
taken any action which would constitute or result in a Termination Event with respect to any such
Plan which is subject to ERISA; (ix) each Borrower and each member of the Controlled Group has made
all contributions due and payable with respect to each Plan; (x) there exists no event described in
Section 4043(b) of ERISA, for which the thirty (30) day notice period has not been waived; (xi)
neither any Borrower nor any member of the Controlled Group has any fiduciary responsibility for
investments with respect to any plan existing for the benefit of persons other than employees or
former employees of any Borrower and any member of the Controlled Group; (xii) except as set forth
on Schedule 5.8(d)(xii), neither any Borrower nor any member of the Controlled Group maintains or
contributes to any Plan which provides health, accident or life insurance benefits to former
employees, their spouses or dependents, other than in accordance with Section 4980B of the Code;
(xiii) neither any Borrower nor any member of the Controlled Group has withdrawn, completely or
partially, from any Multiemployer Plan so as to incur liability under the Multiemployer Pension
Plan Amendments Act of 1980 and there exists no fact which would reasonably be expected to result
in any such liability; and (xiv) to Borrowers’ knowledge, no Plan fiduciary (as defined in Section
3(21) of ERISA) has any liability for breach of fiduciary duty or for any failure in connection
with the administration or investment of the assets of a Plan.

5.9. Patents, Trademarks, Copyrights and Licenses. All registered or applied for patents,
trademarks, service marks, copyrights,, or design rights, owned or utilized by any Borrower in the
U.S. or Canada are set forth on Schedule 5.9, have been duly registered or filed with all
appropriate Governmental Bodies in the U.S. and Canada and constitute all of the intellectual
property rights which are materially necessary for the operation of its business as currently
conducted in the U.S. and Canada; there is no known objection to or pending challenge to the
validity of any such registered or applied for patent, trademark, copyright, or design rights in
the U.S. or Canada, and no Borrower is aware of any grounds for any challenge, except as set forth
in Schedule 5.9 hereto. To the knowledge of Borrowers, each registered or applied for patent,
trademark, service mark, copyright or design right, owned or held by any Borrower in the U.S. and
Canada developed by such Borrower or was lawfully acquired by such Borrower from the proper and
lawful owner or licensor thereof. Each of such items has been maintained in the ordinary course of
business so as to preserve the validity or value thereof from the date of creation, adoption or
acquisition thereof. With respect to all software used by any Borrower that is material (and in
particular, excluding any mass market, off the shelf software) to conducting the business of any
Borrower as it is currently conducted in the U.S., such Borrower is either in possession of any
necessary source or object code related to such software or is the beneficiary of an applicable
source code or object code escrow agreement.

5.10. Licenses and Permits. Except as set forth in Schedule 5.10, each Borrower (a) is in
compliance with and (b) has procured and is now in possession of, all material licenses or permits
required by any applicable federal, state, provincial, or local law, rule or regulation for the
operation of its business in each jurisdiction wherein it is now conducting or proposes to conduct
business and where the failure to procure such licenses or permits could have a Material Adverse
Effect.

5.11. Default of Indebtedness. No Borrower is in default in the payment of the principal
of or interest on any Indebtedness in excess of $500,000 or under any instrument or agreement under
or subject to which such Indebtedness has been issued and no event has occurred under the
provisions of any such instrument or agreement which with or without the lapse of time or the
giving of notice, or both, constitutes or would constitute an event of default thereunder.

5.12. No Default. No Borrower is in default in the payment or performance of any of its
contractual obligations that could result in aggregate liability of $500,000 or more to Borrowers
or cause a Material Adverse Effect, and no Default has occurred.

5.13. No Burdensome Restrictions. No Borrower is party to any contract or agreement the
performance of which could have a Material Adverse Effect. Each Borrower has heretofore delivered
to Agent true and complete copies of all material contracts to which it is a party or to which it
or any of its properties is subject. No Borrower has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its property, whether now owned or
hereafter acquired, to be subject to a Lien which is not a Permitted Encumbrance.

5.14. No Labor Disputes. No Borrower is involved in any labor dispute; there are no
strikes or walkouts or union organization of any Borrower’s employees to any Borrower’s knowledge
threatened or in existence and no labor contract is scheduled to expire during the Term other than
as set forth on Schedule 5.14 hereto.

5.15. Margin Regulations. No Borrower is engaged, nor will it engage, principally or as
one of its important activities, in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted
terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect. No part of the proceeds of any Advance will be used for
“purchasing” or “carrying” “margin stock” as defined in Regulation U of such Board of Governors.

5.16. Investment Company Act. No Borrower is an “investment company” registered or
required to be registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.

5.17. Disclosure. No representation or warranty made by any Borrower in this Agreement or
in any financial statement, report, certificate or any other document furnished in connection
herewith or therewith contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein not misleading. There is no fact
known to any Borrower or which reasonably should be known to such Borrower which such Borrower has
not disclosed to Agent in writing with respect to the transactions contemplated by this Agreement
which could reasonably be expected to have a Material Adverse Effect.

5.18. Swaps. No Borrower is a party to, nor will it be a party to, any swap agreement
whereby such Borrower has agreed or will agree to swap interest rates or currencies unless same
provides that damages upon termination following an event of default thereunder are payable on an
unlimited “two-way basis” without regard to fault on the part of either party.

5.19. Conflicting Agreements. No provision of any mortgage, indenture, contract,
agreement, judgment, decree or order binding on any Borrower, any Subsidiary or affecting the
Collateral conflicts with, or requires any Consent which has not already been obtained to, or would
in any way prevent the execution, delivery or performance of, the terms of this Agreement or the
Other Documents.

5.20. Application of Certain Laws and Regulations. Neither any Borrower nor any Affiliate
of any Borrower is subject to any law, statute, rule or regulation which regulates the incurrence
of any Indebtedness, including laws, statutes, rules or regulations relative to common or
interstate carriers or to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.

5.21. Business and Property of Borrowers. Upon and after the Closing Date, Borrowers do
not propose to engage in any business other than the manufacture and sale of residential and
commercial refrigeration and air conditioning products and activities necessary to conduct the
foregoing. On the Closing Date, each Borrower will own all the property and possess all of the
rights and Consents necessary for the conduct of the business of such Borrower.

5.22. Section 20 Subsidiaries. Borrowers do not intend to use and shall not use any
portion of the proceeds of the Advances, directly or indirectly, to purchase during the
underwriting period, or for 30 days thereafter, Ineligible Securities being underwritten by a
Section 20 Subsidiary.

5.23. Anti-Terrorism Laws.

(a) General. Neither any Borrower nor any Affiliate of any Borrower is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in any Anti-Terrorism Law.

(b) Executive Order No. 13224. Neither any Borrower nor any Affiliate of any Borrower or
their respective agents acting or benefiting in any capacity in connection with the Advances or
other transactions hereunder, is any of the following (each a “Blocked Person”):

(i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No.
13224;

(iii) a Person or entity with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;

(v) a Person or entity that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication of such list, or

(vi) a Person or entity who is affiliated or associated with a Person or entity listed above.

Neither any Borrower nor to the knowledge of any Borrower, any of its agents acting in any
capacity in connection with the Advances or other transactions hereunder (i) conducts any business
or engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive Order No. 13224.

5.24. Trading with the Enemy. No Borrower or any Subsidiary has engaged, nor does it
intend to engage, in any business or activity prohibited by the Trading with the Enemy Act.

5.25. Federal Securities Laws. Neither any Borrower nor any of its Subsidiaries has filed
a registration statement that has not yet become effective under the Securities Act.

VI. AFFIRMATIVE COVENANTS.

Each Borrower shall, until payment in full of the Obligations and termination of this
Agreement:

6.1. Payment of Fees. Pay to Agent on demand all usual and customary fees and expenses
which Agent incurs in connection with (a) the forwarding of Advance proceeds and (b) the
establishment and maintenance of any Blocked Accounts or Depository Accounts as provided for in
Section 4.15(h). Agent may, without making demand, charge Borrowers’ Account for all such fees and
expenses.

6.2. Conduct of Business and Maintenance of Existence and Assets. (a) Conduct continuously
and operate actively its business according to good business practices and maintain all of its
properties useful or necessary in its business in good working order and condition (reasonable wear
and tear excepted and except as may be disposed of in accordance with the terms of this Agreement),
including all licenses, patents, copyrights, design rights, tradenames, trade secrets and
trademarks and take all actions necessary to enforce and protect the validity of any intellectual
property right or other right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations governing the conduct
of its business where the failure to do so could reasonably be expected to have a Material Adverse
Effect; and (c) make all such reports and pay all such franchise and other taxes and license fees
and do all such other acts and things as may be lawfully required to maintain its rights, licenses,
leases, powers and franchises under the laws of the United States, or Canada, or any political
subdivision thereof.

6.3. Violations. Promptly notify Agent in writing of any material violation of any law,
statute, regulation or ordinance of any Governmental Body, or of any agency thereof, applicable to
any Borrower.

6.4. Government Receivables. Take all steps reasonably necessary to protect Agent’s
interest in the Collateral under the Federal Assignment of Claims Act, the Uniform Commercial Code
and all other applicable state or local statutes or ordinances and deliver to Agent, appropriately
endorsed, any instrument or chattel paper connected with any Receivable arising out of contracts
between any Borrower and the United States, any state or any department, agency or instrumentality
of any of them.

6.5. Fixed Charge Coverage Ratio. Upon the occurrence of a Financial Covenant Triggering
Event that has not been suspended in accordance with Section 6.10, for Borrowers on a Consolidated
Basis, maintain as of (i) the First Test Date, for the period equal to the twelve (12) consecutive
months ended on the First Test Date, a Fixed Charge Coverage Ratio of at least 1 to 1 and (ii) the
last day of each month occurring after such Financial Covenant Triggering Event and continuing
until such Financial Covenant Triggering Event is suspended in accordance with Section 6.10, for
the period equal to the twelve (12) consecutive months then ended, a Fixed Charge Coverage Ratio of
at least 1 to 1. “First Test Date” means last day of the month for which Agent has received the
financial statements required under Section 9.9. For example, if a Financial Covenant Triggering
Event occurred on June 30, 2012 and the last month for which Agent has received the financial
statements required under Section 9.9 is May, 2012, then the First Test Date is May 31, 2012 for
the twelve (12) consecutive months ended on the First Test Date.

6.6. Execution of Supplemental Instruments. Execute and deliver to Agent from time to
time, upon demand, such supplemental agreements, statements, assignments and transfers, or
instructions or documents relating to the Collateral, and such other instruments as Agent may
reasonably request, in order that the full intent of this Agreement may be carried into effect.

6.7. Payment of Indebtedness. Pay, discharge or otherwise satisfy at or before maturity
(subject, where applicable, to specified grace periods and, in the case of the trade payables, to
normal payment practices) all its obligations and liabilities of whatever nature, except when the
failure to do so could not reasonably be expected to have a Material Adverse Effect or when the
amount or validity thereof is currently being contested in good faith by appropriate proceedings
and each Borrower shall have provided for such reserves as Agent may reasonably deem proper and
necessary, subject at all times to any applicable subordination arrangement in favor of Lenders.

6.8. Standards of Financial Statements. Cause all financial statements referred to in
Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12 and 9.13 as to which GAAP is applicable to be complete and
correct in all material respects (subject, in the case of interim financial statements, to the
absence of footnotes and normal year-end audit adjustments) and to be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the periods reflected therein (except
as concurred in by such reporting accountants or officer, as the case may be, and disclosed
therein).

6.9. Federal Securities Laws. Promptly notify Agent in writing if Tecumseh Products, or
any of its Subsidiaries (i) is required to file any reports under the Exchange Act other than in
the ordinary course of business, (ii) registers any securities under the Exchange Act or (iii)
files a registration statement under the Securities Act.

6.10. Suspension of Financial Covenant Triggering Event. After the occurrence of a
Financial Covenant Triggering Event, so long as Undrawn Availability for the most recent 45
consecutive days has been greater than or equal to $12,500,000, upon a written request received by
the Agent from an Authorized Officer of the Borrowing Agent certifying that Undrawn Availability
for the most recent 45 consecutive days has been greater than or equal to $12,500,000 and
requesting that the required compliance with and calculation of the Fixed Charge Coverage Ratio set
forth in Section 6.5 be suspended until the next Financial Covenant Triggering Event occurs, the
compliance with and calculation of the Fixed Charge Coverage Ratio contained in Section 6.5 shall
be suspended until the occurrence of the next Financial Covenant Triggering Event. Nothing
contained in this Section 6.10 shall suspend compliance with or calculation of the Fixed Charge
Coverage Ratio to the extent required under any Section of this Agreement other than Section 6.5 or
required under any other Loan Document.

6.11. Suspension of Cash Dominion Triggering Event. After the occurrence of a Cash
Dominion Triggering Event, so long as (a) no Default or Event of Default has occurred and is
continuing, and (b) Undrawn Availability for the most recent 45 consecutive days has been greater
than or equal to $10,000,000, upon a written request received by the Agent from an Authorized
Officer of the Borrowing Agent certifying that the above items (a) and (b) are true and correct and
requesting that the required compliance with the cash dominion requirements set forth in Section
4.15 (d) and (h) on account of a Cash Dominion Triggering Event occurring be suspended until the
next Cash Dominion Triggering Event occurs, the compliance with the cash dominion requirements set
forth in Section 4.15 (d) and (h) on account of a Cash Dominion Triggering Event occurring shall be
suspended until the occurrence of the next Cash Dominion Triggering Event. Nothing contained in
this Section 6.11 shall suspend compliance with the cash dominion requirements set forth in Section
4.15 (d) and (h) to the extent required under any Section of this Agreement other than Section 4.15
(d) and (h) or required under any other Loan Document.

6.12. Bank Accounts. Within 120 days of the Closing Date, Borrowers must have closed all
of their banking and other accounts at JPMorgan Chase Bank, N.A. Except as provided in the
immediately preceding sentence, and on Schedule 4.15(h) each Borrower shall maintain all of its
depository, disbursement, and other bank accounts at Agent.

VII. NEGATIVE COVENANTS.

No Borrower shall, until satisfaction in full of the Obligations and termination of this
Agreement:

7.1. Merger, Consolidation, Acquisition and Sale of Assets.

(a) Enter into any merger, consolidation or other reorganization with or into any other Person
or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit
any other Person to consolidate with or merge with it.

(b) Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i)
dispositions of Inventory and Equipment to the extent expressly permitted by Section 4.3 and (ii)
any other sales or dispositions expressly permitted by this Agreement.

7.2. Creation of Liens. Create or suffer to exist any Lien or transfer upon or against any
of its property or assets now owned or hereafter acquired, including the Excluded Collateral,
except Permitted Encumbrances.

7.3. Guarantees. Become liable upon the obligations or liabilities of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders) except (a) as
disclosed on Schedule 7.3, and (b) the endorsement of checks in the Ordinary Course of Business.

7.4. Investments. Purchase or acquire obligations or Equity Interests of, or any other
interest in, any Person, except (a) obligations issued or guaranteed by the United States of
America or any agency thereof, (b) commercial paper with maturities of not more than 180 days and a
published rating of not less than A-1 or P-1 (or the equivalent rating), (c) certificates of time
deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if (i) such bank has
a combined capital and surplus of at least $500,000,000, or (ii) its debt obligations, or those of
a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency, (d) U.S. money market funds that invest solely
in obligations issued or guaranteed by the United States of America or an agency thereof, (e)
investments in Borrowers; (f) investments in Excluded Foreign Subsidiaries and other non-Borrower
Subsidiaries as long as (A) no Default or Event of Default is in existence prior to the making
thereof or would otherwise arise as a result thereof and (B) Borrowers demonstrate to the Agent’s
reasonable satisfaction that after giving effect to each such Investment, Average Undrawn
Availability was greater than $7,500,000 for the immediately preceding 60 days and that on a pro
forma basis Average Undrawn Availability for the immediately succeeding 60 day period will not be
less than $7,500,000, and (g) those Investments listed on Schedule 7.4.

7.5. Loans and Payments on Affiliate Loans. Make advances, loans or extensions of credit
to any Person, including any Parent, Subsidiary or Affiliate except with respect to (a) the
extension of commercial trade credit in connection with the sale of Inventory in the Ordinary
Course of Business, (b) loans to its employees in the Ordinary Course of Business not to exceed the
aggregate amount of $25,000 at any time outstanding, (c) existing intercompany loans listed on
Schedule 7.5, and (d) loans to Excluded Foreign Subsidiaries and other non-Borrower Subsidiaries as
long as (A) no Default or Event of Default is in existence prior to the making thereof or would
otherwise arise as a result thereof and (B) Borrowers demonstrate to Agent’s reasonable
satisfaction that after giving effect to each such loans, Average Undrawn Availability was greater
than $7,500,000 for the immediately preceding 60 days and that on a pro forma basis Average Undrawn
Availability for the immediately succeeding 60 day period will not be less than $7,500,000. In
determining whether the Average Undrawn Availability test set forth in this Section 7.5(d) and in
Section 7.4(f) has been met, the test will be applied giving consideration to both loans made
pursuant to this Section 7.5(d) and investments made pursuant to Section 7.4(f). Furthermore, no
Borrower may make any payment to any Affiliate on any loan or other extension of credit from any
Affiliate, except to another Borrower, unless Borrowers would be permitted at that time under this
Section to make a loan to an Excluded Foreign Subsidiary or other non-Borrower Subsidiary.

7.6. [Intentionally Omitted].

7.7. Dividends. Declare, pay or make any dividend or distribution on any shares of the
common stock or preferred stock of any Borrower (other than dividends or distributions payable in
its stock, or split-ups or reclassifications of its stock) or apply any of its funds, property or
assets to the purchase, redemption or other retirement of any common or preferred stock, or of any
options to purchase or acquire any such shares of common or preferred stock of any Borrower, except
that unless a Financial Covenant Trigger Event has occurred, Borrowers will be permitted to make
dividends and distributions in accordance with applicable law.

7.8. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness (exclusive of
trade debt) except in respect of (i) Indebtedness to Lenders; (ii) Indebtedness incurred for
Capital Expenditures in an aggregate amount not to exceed $10,000,000 at any time outstanding;
(iii) the Indebtedness identified on Schedule 7.8, and (iv) other unsecured Indebtedness in
an aggregate amount not to exceed $5,000,000 at any time outstanding.

7.9. Nature of Business. Substantially change the nature of the business in which it is
presently engaged, nor except as specifically permitted hereby purchase or invest, directly or
indirectly, in any assets or property other than in the Ordinary Course of Business for assets or
property which are useful in, necessary for and are to be used in its business as presently
conducted.

7.10. Transactions with Affiliates. Directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, or otherwise enter into any transaction
or deal with, any Affiliate, except transactions disclosed to the Agent, which are in the Ordinary
Course of Business, on an arm’s-length basis on terms and conditions no less favorable than terms
and conditions which would have been obtainable from a Person other than an Affiliate.
Notwithstanding anything to the contrary contained in this Section 7.10, if under Section 7.5
Borrowers are allowed to make loans to Excluded Foreign Subsidiaries and other non-Borrower
Subsidiaries, then Borrowers may make, or allow to remain outstanding, trade terms and loan terms
between any Borrower and its Affiliate that are not on an arms-length basis.

7.11. Leases. Enter as lessee into any lease arrangement for real or personal property
(unless capitalized and permitted under Section 7.8) if after giving effect thereto, aggregate
annual rental payments for all leased property would exceed $4,500,000 in any one fiscal year in
the aggregate for all Borrowers.

7.12. Subsidiaries.

(a) Form any Domestic Subsidiary or Canadian Subsidiary unless (i) such Domestic Subsidiary or
Canadian Subsidiary immediately expressly joins in this Agreement as a Borrower or a Guarantor and
becomes jointly and severally liable for the obligations of Borrowers hereunder and under any other
agreement between any Borrower and Lenders and grants to Agent for the benefit of the Lender a
first-priority Lien in all of its present and future assets to secure the Obligations, and (ii)
Agent shall have received all documents, including legal opinions, it may reasonably require to
establish compliance with each of the foregoing conditions.

(b) Enter into any partnership, joint venture or similar arrangement.

7.13. Fiscal Year and Accounting Changes. Change its fiscal year from December 31 or make
any change (i) in accounting treatment and reporting practices except as required by GAAP or
(ii) in tax reporting treatment except as required by law.

7.14. Pledge of Credit. Now or hereafter pledge Agent’s or any Lender’s credit on any
purchases or for any purpose whatsoever or use any portion of any Advance in or for any business
other than such Borrower’s business as conducted on the date of this Agreement.

7.15. Amendment of Organizational Documents. Amend, modify or waive any term or material
provision of its organizational documents unless required by law.

7.16. Compliance with ERISA. (i) (x) Maintain, or permit any member of the Controlled
Group to maintain, or (y) become obligated to contribute, or permit any member of the Controlled
Group to become obligated to contribute, to any Plan, other than those Plans disclosed on Schedule
5.8(d) or any other Plan for which Agent has provided its prior written consent, (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt “prohibited transaction”, as
that term is defined in section 406 of ERISA and Section 4975 of the Code, (iii) incur, or permit
any member of the Controlled Group to incur, any “accumulated funding deficiency”, as that term is
defined in Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit any member of
the Controlled Group to terminate, any Plan where such event could result in any liability of any
Borrower or any member of the Controlled Group or the imposition of a lien on the property of any
Borrower or any member of the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or
permit any member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on Schedule 5.8(d), (vi) incur, or permit any member of the
Controlled Group to incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly
to notify Agent of the occurrence of any Termination Event, (viii) fail to comply, or permit a
member of the Controlled Group to fail to comply, with the requirements of ERISA or the Code or
other Applicable Laws in respect of any Plan, (ix) fail to meet, or permit any member of the
Controlled Group to fail to meet, all minimum funding requirements under ERISA or the Code or
postpone or delay or allow any member of the Controlled Group to postpone or delay any funding
requirement with respect of any Plan.

7.17. Prepayment of Indebtedness. At any time, directly or indirectly, prepay any
Indebtedness (other than to Lenders), or repurchase, redeem, retire or otherwise acquire any
Indebtedness of any Borrower.

7.18. Anti-Terrorism Laws. No Borrower shall, until satisfaction in full of the
Obligations and termination of this Agreement, nor shall it permit any Affiliate or agent to:

(a) Conduct any business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person.

(b) Deal in, or otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224.

(c) Engage in or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law. Borrower shall
deliver to Lenders any certification or other evidence requested from time to time by any Lender in
its sole discretion, confirming Borrower’s compliance with this Section.

7.19. Membership/Partnership Interests. Elect to treat or permit any of its Subsidiaries
to (x) treat its limited liability company membership interests or partnership interests, as the
case may be, as securities as contemplated by the definition of “security” in Section 8-102(15) and
by Section 8-103 of Article 8 of Uniform Commercial Code or by the Securities Transfer Act of any
Canadian jurisdiction, (y) certificate its limited liability company membership interests or
partnership interests, as the case may be.

7.20. Trading with the Enemy Act. Engage in any business or activity in violation of the
Trading with the Enemy Act.

7.21. Hedging Contracts. Become a party to any Hedging Contract other than Permitted
Hedging Contracts.

VIII. CONDITIONS PRECEDENT.

8.1. Conditions to Initial Advances. The agreement of Lenders to make the initial Advances
requested to be made on the Closing Date is subject to the satisfaction, or waiver by Agent,
immediately prior to or concurrently with the making of such Advances, of the following conditions
precedent:

(a) Revolving Credit Note. Agent shall have received the Revolving Credit Note, this
Agreement, and the Other Documents duly executed and delivered by an authorized officer of each
Borrower;

(b) Filings, Registrations and Recordings. Each document (including any Uniform Commercial
Code financing statement) required by this Agreement, any related agreement or under law or
reasonably requested by the Agent to be filed, registered or recorded in order to create, in favor
of Agent, a perfected security interest in or lien upon the Collateral shall have been properly
filed, registered or recorded in each jurisdiction in which the filing, registration or recordation
thereof is so required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or recordation and
satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto;

(c) Authorization Proceedings of Borrowers and Guarantors. The Agent shall have
received a copy of the resolutions in form and substance reasonably satisfactory to the Agent, of
the members or Board of Directors of each Borrower and each Guarantor, as applicable, authorizing
(i) the execution, delivery and performance of this Agreement, the Revolving Credit Note, the Other
Documents, and any related agreements (collectively, the “Documents") and (ii) the granting by each
Borrower and each Guarantor of the security interests in and liens upon the Collateral in each case
certified by the Secretary or an Assistant Secretary or Manager, as the case may be, of each
Borrower and each Guarantor, as of the Closing Date; and, such certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date
of such certificate;

(d) Incumbency Certificates of Borrowers and each Guarantor. Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Borrower and each Guarantor, dated
the Closing Date, as to the incumbency and signature of the officers of each Borrower and each
Guarantor executing this Agreement, the Other Documents, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of such Secretary or
Assistant Secretary;

(e) Certificates. Agent shall have received a copy of the Articles or Certificate of
Incorporation or Formation for each Borrower and each Guarantor, and all amendments thereto,
certified by the Secretary of State or other appropriate official of its jurisdiction of
incorporation or formation together with copies of the By-Laws or Operating Agreement of each
Borrower and each Guarantor and all agreements of each Borrower’s and each Guarantor’s shareholders
or members certified as accurate and complete by the Secretary of each Borrower and such Guarantor;

(f) Good Standing Certificates. Agent shall have received good standing certificates for
each Borrower and each Guarantor dated not more than 75 days prior to the Closing Date, issued by
the Secretary of State or other appropriate official of each Borrower’s and each Guarantor’s
jurisdiction of incorporation or formation and each jurisdiction where the conduct of each
Borrower’s and each Guarantor’s business activities or the ownership of its properties necessitates
qualification;

(g) Legal Opinion. Agent shall have received the executed legal opinion of Borrowers’
counsel in form and substance satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Revolving Credit Note the Other Documents, the
Guaranty, and related agreements as Agent may reasonably require and each Borrower hereby
authorizes and directs such counsel to deliver such opinions to Agent and Lenders;

(h) No Litigation. (i) No litigation, investigation or proceeding before or by any
arbitrator or Governmental Body shall be continuing or threatened against any Borrower or against
the officers or directors of any Borrower (A) in connection with this Agreement, the Other
Documents or any of the transactions contemplated thereby and which, in the reasonable opinion of
Agent, is deemed material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order of any nature
materially adverse to any Borrower or the conduct of its business shall have been issued by any
Governmental Body;

(i) Financial Condition Certificates. Agent shall have received an executed Financial
Condition Certificate in the form of Exhibit 8.1(k).

(j) Collateral Examination. Agent shall have completed Collateral examinations and
received appraisals, the results of which shall be satisfactory in form and substance to Lenders,
of the Receivables, Inventory, General Intangibles, and Equipment of each Borrower and all books
and records in connection therewith;

(k) Fees. Agent shall have received all fees payable to Agent and Lenders on or prior to
the Closing Date hereunder, including pursuant to Article III;

(l) Pro Forma Financial Statements. Agent shall have received a copy of the Pro Forma
Financial Statements which shall be satisfactory in all respects to Lenders;

(m) Insurance. Agent shall have received in form and substance satisfactory to Agent,
evidence that adequate insurance, including flood insurance, if applicable, required to be
maintained under this Agreement is in full force and effect, with additional insured, mortgagee and
lender loss payable endorsements attached thereto in form and substance satisfactory to the Agent
and its counsel naming the Agent as additional insured, mortgagee and lender loss payee, and
evidence that the Borrowers have taken all actions required under the Flood Laws and/or requested
by the Agent to assist in ensuring that each Lender is in compliance with the Flood Laws applicable
to the Collateral, including, but not limited to, providing the Agent with the address and/or GPS
coordinates of each structure on any real property that will be subject to a mortgage in favor of
the Agent, for the benefit of the Lenders, and, to the extent required, obtaining flood insurance
for such property, structures and contents prior to such property, structures and contents becoming
Collateral;

(n) Title Commitments. Agent shall have received fully paid mortgagee title insurance
commitments to issue title insurance policies that are reasonably satisfactory to Agent;

(o) Environmental Reports. Agent shall have received all environmental studies and reports
in the possession of each Borrower with respect to all Real Property owned or leased by any
Borrower;

(p) Payment Instructions. Agent shall have received written instructions from Borrowing
Agent directing the application of proceeds of the initial Advances made pursuant to this
Agreement;

(q) Blocked Accounts. Agent shall have received duly executed agreements establishing the
Blocked Accounts or Depository Accounts with financial institutions acceptable to Agent for the
collection or servicing of the Receivables and proceeds of the Collateral;

(r) Consents. Agent shall have received any and all Consents necessary to permit the
effectuation of the transactions contemplated by this Agreement and the Other Documents; and, Agent
shall have received such Consents and waivers of such third parties as might assert claims with
respect to the Collateral, as Agent and its counsel shall deem necessary, together with all other
landlord waiver agreements and bailee agreements as the Agent shall determine to be necessary or
advisable;

(s) No Adverse Material Change. (i) since December 31, 2010, there shall not have occurred
any event, condition or state of facts which could reasonably be expected to have a Material
Adverse Effect and (ii) no representations made or information supplied to Agent or Lenders shall
have been proven to be inaccurate or misleading in any material respect;

(t) Leasehold Agreements. Agent shall have received landlord, mortgagee or warehouseman
agreements satisfactory to Agent with respect to all premises leased by Borrowers at which
Inventory and books and records are located;

(u) Mortgage. Agent shall have received in form and substance satisfactory to Lenders (i)
executed Mortgages and (ii) a title commitment for each parcel of Mortgaged Real Property;

(v) Guarantees and Other Documents. Agent shall have received (i) the executed Guarantees,
(ii) the executed Guarantor Security Agreement, and (iii) the executed Other Documents, all in form
and substance satisfactory to Agent;

(w) Contract Review. Agent shall have reviewed all material contracts of Borrowers
including leases, union contracts, labor contracts, vendor supply contracts, license agreements and
distributorship agreements and such contracts and agreements shall be reasonably satisfactory in
all material respects to Agent;

(x) Closing Certificate. Agent shall have received a closing certificate signed by
the Chief Financial Officer of each Borrower dated as of the date hereof, stating that (i) all
representations and warranties set forth in this Agreement and the Other Documents are true and
correct on and as of such date, (ii) Borrowers are on such date in compliance with all the terms
and provisions set forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;

(y) Borrowing Base. Agent shall have received evidence from Borrowers that the aggregate
amount of Eligible Receivables, Eligible Inventory, and Eligible Equipment is sufficient in value
and amount to support Advances in the amount requested by Borrowers on the Closing Date;

(z) Undrawn Availability. After giving effect to the initial Advances hereunder, Borrowers
shall have Undrawn Availability of at least $15,000,000;

(aa) Compliance with Laws. Agent shall be reasonably satisfied that each Borrower is in
compliance with all pertinent federal, state, local or territorial regulations, including those
with respect to the Federal Occupational Safety and Health Act, the Environmental Protection Act,
ERISA and the Trading with the Enemy Act;

(bb) Unrestricted Cash. Borrowers shall have at least $20,000,000 in unrestricted
cash in the United States and Canada without regard to cash at Subsidiaries; and

(cc) Other. All corporate and other proceedings, and all documents, instruments and other
legal matters shall be satisfactory in form and substance to Agent and its counsel.

8.2. Conditions to Each Advance. The agreement of Lenders to make any Advance requested to
be made on any date (including the initial Advance), is subject to the satisfaction of the
following conditions precedent as of the date such Advance is made:

(a) Representations and Warranties. Each of the representations and warranties made by any
Borrower (including with respect to any Subsidiary) in or pursuant to this Agreement, the Other
Documents and any related agreements to which it is a party, and each of the representations and
warranties contained in any certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement, the Other Documents or any related agreement shall
be true and correct in all material respects on and as of such date as if made on and as of such
date;

(b) No Default. No Event of Default or Default shall have occurred and be continuing on
such date, or would exist after giving effect to the Advances requested to be made, on such date;
provided, however that Agent, in its sole discretion, may continue to make Advances notwithstanding
the existence of an Event of Default or Default and that any Advances so made shall not be deemed a
waiver of any such Event of Default or Default; and shall not obligate the Agent or Lenders to make
any future advances; and

(c) Maximum Advances. In the case of any type of Advance requested to be made, after
giving effect thereto, the aggregate amount of such type of Advance shall not exceed the maximum
amount of such type of Advance permitted under this Agreement.

(d) Background Check. Within 45 days of being hired, Agent must have conducted a
background check on the new chief executive officer that Borrowers hire and the background check
must be satisfactory to Agent in its reasonable discretion.

Each request for an Advance by any Borrower hereunder shall constitute a representation and
warranty by each Borrower as of the date of such Advance that the conditions contained in this
subsection shall have been satisfied.

IX. INFORMATION AS TO BORROWERS.

Each Borrower shall, or (except with respect to Section 9.11) shall cause Borrowing Agent on
its behalf to, until satisfaction in full of the Obligations and the termination of this Agreement:

9.1. Disclosure of Material Matters. Immediately upon learning thereof, report to Agent
all matters materially affecting the value, enforceability or collectibility of any portion of the
Collateral, including any Borrower’s reclamation or repossession of, or the return to any Borrower
of, a material amount of goods or claims or disputes asserted by any Customer or other obligor.

9.2. Schedules. Deliver to Agent on or before the fifteenth (15th) day of each month as
and for the prior month (a) accounts receivable ageings inclusive of reconciliations to the general
ledger, (b) accounts payable schedules inclusive of reconciliations to the general ledger, (c)
Inventory reports listing separately Eligible In-Transit Inventory, raw materials, finished goods,
and work-in-process, (d) a hedging activities report and data and other information regarding
unhedged positions as the Agent shall deem advisable or appropriate under the then existing
circumstances; (e) an Average Undrawn Availability Report setting forth as and for each day of such
prior month (i) Undrawn Availability and (ii) Average Undrawn Availability for the month then
ended, and (f) a consolidated monthly Borrowing Base Certificate, including ineligible calculations
(which shall be calculated as of the last day of such prior month and which, in any event, remains
subject to review and approval by the Agent), in each of the foregoing cases in form acceptable to
the Agent. Borrowers shall also deliver, or cause the Borrowing Agent to deliver, to Agent on
Thursday of each week an interim Borrowing Base Certificate (which shall not be binding upon Agent
or restrictive of the Agent’s rights under this Agreement) as of the closing of business on the
preceding Sunday and reflecting all activity (sales, collections, credits, etc.) impacting the
Receivables of the Borrowers for all Business Days since the preparation of the immediately prior
interim Borrowing Base Certificate. In addition, each Borrower will deliver to Agent at such
intervals as Agent may require: (i) confirmatory assignment schedules, (ii) copies of Customer’s
invoices, (iii) evidence of shipment or delivery, and (iv) such further schedules, documents and/or
information regarding the Collateral as Agent may require including trial balances and test
verifications, Average Undrawn Availability Reports, and amounts of Priority Payables. Agent shall
have the right to confirm and verify all Receivables by any manner and through any medium it
considers advisable and do whatever it may deem reasonably necessary to protect its interests
hereunder. The items to be provided under this Section are to be in form satisfactory to Agent and
executed by each Borrower and delivered to Agent from time to time solely for Agent’s convenience
in maintaining records of the Collateral, and any Borrower’s failure to deliver any of such items
to Agent shall not affect, terminate, modify or otherwise limit Agent’s Lien with respect to the
Collateral.

9.3. Environmental Reports. Furnish Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.7 and 9.8, with a Compliance Certificate signed by an
Authorized Officer stating, to the best of his knowledge, that each Borrower is in compliance in
all material respects with all federal, state and local Environmental Laws. To the extent any
Borrower is not in compliance with the foregoing laws, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action such Borrower will implement in
order to achieve full compliance.

9.4. Litigation. Promptly notify Agent in writing of any claim, litigation, suit or
administrative proceeding affecting any Borrower, any Subsidiary, or any Guarantor, whether or not
the claim is covered by insurance, and of any litigation, suit or administrative proceeding, which
in any such case affects the Collateral or which could reasonably be expected to have a Material
Adverse Effect.

9.5. Material Occurrences. Promptly notify Agent in writing upon the occurrence of (a) any
Event of Default or Default; (b) any event, development or circumstance whereby any financial
statements or other reports furnished to Agent fail in any material respect to present fairly, in
accordance with GAAP consistently applied, the financial condition or operating results of any
Borrower as of the date of such statements; (c) any accumulated retirement plan funding deficiency
which, if such deficiency continued for two plan years and was not corrected as provided in Section
4971 of the Code, could subject any Borrower to a tax imposed by Section 4971 of the Code; (f) each
and every default by any Borrower which could result in the acceleration of the maturity of any
Indebtedness, including the names and addresses of the holders of such Indebtedness with respect to
which there is a default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; (d) any other development in the business or
affairs of any Borrower, any Subsidiary, or any Guarantor, which could reasonably be expected to
have a Material Adverse Effect; in each case describing the nature thereof and the action Borrowers
propose to take with respect thereto; and (e) any and all default notices received under or with
respect to any leased location or public warehouse where Collateral is located (which shall be
delivered within two Business Days after receipt thereof).

9.6. Government Receivables. Notify Agent immediately if any of its Receivables arise out
of contracts between any Borrower and the United States, any state, or any department, agency or
instrumentality of any of them.

9.7. Annual Financial Statements. Furnish Agent and Lenders within ninety (90) days after
the end of each fiscal year of Borrowers, financial statements of Borrowers and their Subsidiaries
on a consolidating and consolidated basis including, but not limited to, statements of income and
stockholders’ equity and cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all prepared in accordance
with GAAP applied on a basis consistent with prior practices, and in reasonable detail and reported
upon without qualification by an independent certified public accounting firm selected by Borrowers
and satisfactory to Agent (the “Accountants”). The report of the Accountants shall be accompanied
by a statement of the Accountants certifying that (i) they have caused this Agreement to be
reviewed, (ii) in making the examination upon which such report was based either no information
came to their attention which to their knowledge constituted an Event of Default or a Default under
this Agreement or any related agreement or, if such information came to their attention, specifying
any such Default or Event of Default, its nature, when it occurred and whether it is continuing,
and such report shall contain or have appended thereto calculations which set forth Borrowers’
compliance with the requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8
and 7.11. In addition, the reports shall be accompanied by a Compliance Certificate and by any
management letters or other reports of such accountants addressed to any Borrower or any officer or
employee of any Borrower by its accountants in connection with any financial statements.

9.8. Quarterly Financial Statements. Furnish Agent and Lenders within 45 days after the
end of each fiscal quarter, an unaudited balance sheet of Borrowers and their Subsidiaries on a
consolidated and consolidating basis and unaudited statements of income and stockholders’ equity
and cash flow of Borrowers on a consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of such quarter and for such quarter,
prepared on a basis consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that individually and in the
aggregate are not material to Borrowers’ business. These financial statements shall be accompanied
by a Compliance Certificate.

9.9. Monthly Financial Statements. Furnish Agent and Lenders within thirty (30) days after
the end of each month, an unaudited balance sheet of Borrowers and their Subsidiaries on a
consolidated and consolidating basis and unaudited statements of income and stockholders’ equity
and cash flow of Borrowers on a consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of such month and for such month,
prepared on a basis consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that individually and in the
aggregate are not material to Borrowers’ business. These financial statements shall be accompanied
by a Compliance Certificate.

9.10. Other Reports. Furnish Agent as soon as available, but in any event within 3-days
after the issuance thereof, with copies of such financial statements, reports and returns as each
Borrower shall send to its stockholders.

9.11. Additional Information. Furnish Agent with such additional information as Agent
shall reasonably request in order to enable Agent to determine whether the terms, covenants,
provisions and conditions of this Agreement and the Revolving Credit Note have been complied with
by Borrowers including, without the necessity of any request by Agent, (a) copies of all
environmental audits and reviews, (b) at least thirty (30) days prior thereto, notice of any
Borrower’s opening of any new office or place of business or any Borrower’s closing of any existing
office or place of business, and (c) promptly upon any Borrower’s learning thereof, notice of any
labor dispute to which any Borrower may become a party, any strikes or walkouts relating to any of
its plants or other facilities, and the expiration of any labor contract to which any Borrower is a
party or by which any Borrower is bound.

9.12. Projected Operating Budget. Furnish Agent and Lenders, no later than thirty (30)
days prior to the beginning of each Borrower’s fiscal years commencing with fiscal year 2012, a
month by month projected operating budget and cash flow of Borrowers on a consolidated and
consolidating basis for such fiscal year (including an income statement for each month and a
balance sheet as at the end of the last month in each fiscal quarter), such projections to be
accompanied by a certificate signed by the President or Chief Financial Officer of each Borrower to
the effect that such projections have been prepared on the basis of sound financial planning
practice consistent with past budgets and financial statements and that such officer has no reason
to question the reasonableness of any material assumptions on which such projections were prepared.

9.13. Variances From Operating Budget. Furnish Agent, concurrently with the delivery of
the financial statements referred to in Section 9.7 and each monthly report, a written report
summarizing all material variances from budgets submitted by Borrowers pursuant to Section 9.12 and
a discussion and analysis by management with respect to such variances.

9.14. Notice of Suits, Adverse Events. Furnish Agent with prompt written notice of (i) any
lapse or other termination of any Consent issued to any Borrower or any Guarantor by any
Governmental Body or any other Person that is material to the operation of any Borrower’s or any
Subsidiary’s business, (ii) any refusal by any Governmental Body or any other Person to renew or
extend any such Consent; and (iii) copies of any periodic or special reports filed by any Borrower
or any Guarantor with any Governmental Body or Person, if such reports indicate any material change
in the business, operations, affairs or condition of any Borrower or any Guarantor, or if copies
thereof are requested by Lender, and (iv) copies of any material notices and other communications
from any Governmental Body or Person which specifically relate to any Borrower or any Guarantor.

9.15. ERISA Notices and Requests. Furnish Agent with immediate written notice in the event
that (i) any Borrower or any member of the Controlled Group knows or has reason to know that a
Termination Event has occurred, together with a written statement describing such Termination Event
and the action, if any, which such Borrower or any member of the Controlled Group has taken, is
taking, or proposes to take with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii) any Borrower
or any member of the Controlled Group knows or has reason to know that a prohibited transaction (as
defined in Sections 406 of ERISA and 4975 of the Code) has occurred together with a written
statement describing such transaction and the action which such Borrower or any member of the
Controlled Group has taken, is taking or proposes to take with respect thereto, (iii) a funding
waiver request has been filed with respect to any Plan together with all communications received by
any Borrower or any member of the Controlled Group with respect to such request, (iv) any increase
in the benefits of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the Controlled Group was not
previously contributing shall occur, (v) any Borrower or any member of the Controlled Group shall
receive from the PBGC a notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall receive any favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of a Plan under Section 401(a) of the Code, together
with copies of each such letter; (vii) any Borrower or any member of the Controlled Group shall
receive a notice regarding the imposition of withdrawal liability, together with copies of each
such notice; (viii) any Borrower or any member of the Controlled Group shall fail to make a
required installment or any other required payment under Section 412 of the Code on or before the
due date for such installment or payment; or (ix) any Borrower or any member of the Controlled
Group knows that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer
Plan.

9.16. Additional Documents. Execute and deliver to Agent, upon request, such documents and
agreements as Agent may, from time to time, reasonably request to carry out the purposes, terms or
conditions of this Agreement.

X. EVENTS OF DEFAULT.

The occurrence of any one or more of the following events shall constitute an “Event of
Default”:

10.1. Nonpayment. Failure by any Borrower to pay any principal, interest, or reimbursement
obligation with respect to the Obligations when due, whether at maturity or by reason of
acceleration pursuant to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other payment, fee or
charge provided for herein when due or in any Other Document;

10.2. Breach of Representation. Any representation or warranty made or deemed made by any
Borrower, any Subsidiary, or any Guarantor in this Agreement, any Other Document or any related
agreement or in any certificate, document or financial or other statement furnished at any time in
connection herewith or therewith shall prove to have been misleading in any material respect on the
date when made or deemed to have been made;

10.3. Financial Information. Failure by any Borrower to (i)(x) furnish financial
information when due, or (y) when requested in accordance with the terms of this Agreement or the
Other Documents, or (ii) permit the inspection of its books or records in accordance with this
Agreement;

10.4. Judicial Actions. Issuance of a notice of Lien, levy, assessment, injunction or
attachment against any Borrower’s or any Guarantor’s Inventory or Receivables or against any
Borrower’s or any Subsidiary’s other property;

10.5. Noncompliance. Except as otherwise provided for in Sections 10.1, 10.3 and 10.5(ii),
(i) failure or neglect of any Borrower or any Guarantor to perform, keep or observe any term,
provision, condition, covenant herein contained, or contained in any Other Document or any other
agreement or arrangement, now or hereafter entered into between any Borrower or any Guarantor, and
Agent or any Lender, or (ii) failure or neglect of any Borrower or any Guarantor to perform, keep
or observe any term, provision, condition or covenant, contained in Sections 4.6, 4.7, 4.9, 6.1,
6.3, 6.4, 9.4, 9.6 or 9.7 which is not cured within 20 days from the occurrence of such failure or
neglect;

10.6. Judgments. Any judgment or judgments are rendered against any Borrower or any
Guarantor for an aggregate amount in excess of $1,000,000 against all Borrowers or Guarantors and
(i) enforcement proceedings shall have been commenced by a creditor upon such judgment, (ii) there
shall be any period of thirty (30) consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, shall not be in effect, or (iii) any such
judgment results in the creation of a Lien upon any of the Collateral (other than a Permitted
Encumbrance);

10.7. Bankruptcy. Any Borrower or any Guarantor shall (i) apply for, consent to or suffer
the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v)
file a petition seeking to take advantage of any other law providing for the relief of debtors,
(vi) acquiesce to, or fail to have dismissed, within 60 days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting
any of the foregoing;

10.8. Inability to Pay. Any Borrower or any Guarantor shall admit in writing its
inability, or be generally unable, to pay its debts as they become due or cease operations of its
present business;

10.9. [Intentionally Omitted];

10.10. Material Adverse Effect. Any change in any Borrower’s or any Guarantor’s results of
operations or condition (financial or otherwise) which in Agent’s reasonable judgment has a
Material Adverse Effect;

10.11. Lien Priority. Any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected Lien having a first
priority interest other than with respect to Permitted Liens allowed under (h) of the definition of
Permitted Encumbrances and Permitted Liens allowed under subsection (b) of the definition of
Permitted Encumbrances with respect to taxes for real and personal property which by operation of
the law are senior to Agent’s Liens but which otherwise meet the definition of subsection (b) and
Permitted Liens that Agent has acknowledged in writing may be senior to Agent’s Liens;

10.12. Cross Default. A default of the obligations of any Borrower or any Guarantor under
any other agreement to which it is a party shall occur which adversely affects its condition,
affairs or prospects (financial or otherwise) which default is not cured within any applicable
grace period;

10.13. Breach of Guaranty. Termination or breach of any Guaranty or Guarantor Security
Agreement or similar agreement executed and delivered to Agent in connection with the Obligations
of any Borrower, or if any Guarantor attempts to terminate, challenges the validity of, or its
liability under, any such Guaranty or Guarantor Security Agreement or similar agreement;

10.14. Change of Control. Any Change of Control shall occur;

10.15. Invalidity. Any material provision of this Agreement or any Other Document shall,
for any reason, cease to be valid and binding on Borrower or any Guarantor, or any Borrower or any
Guarantor shall so claim in writing to Agent or any Lender;

10.16. Licenses. (i) Any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any material license, permit, patent trademark or tradename of any Borrower or any
Guarantor, or (B) commence proceedings to suspend, revoke, terminate or adversely modify any such
license, permit, trademark, tradename or patent and such proceedings shall not be dismissed or
discharged within sixty (60) days, or (C) schedule or conduct a hearing on the renewal of any
license, permit, trademark, tradename or patent necessary for the continuation of any Borrower’s or
any Guarantor’s business and the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such license, permit,
trademark, tradename or patent; (ii) any agreement which is necessary or material to the operation
of any Borrower’s or any Guarantor’s business shall be revoked or terminated and not replaced by a
substitute reasonably acceptable to Agent within thirty (30) days after the date of such revocation
or termination, and such revocation or termination and non-replacement would reasonably be expected
to have a Material Adverse Effect;

10.17. Seizures. Any portion of the Collateral shall be seized or taken by a Governmental
Body, or any Borrower or any Guarantor or the title and rights of any Borrower, any Guarantor, that
is the owner of any material portion of the Collateral shall have become the subject matter of
claim, litigation, suit or other proceeding which might, in the opinion of Agent, upon final
determination, result in impairment or loss of the security provided by this Agreement or the Other
Documents;

10.18. Operations. The operations of any Borrower’s or any Guarantor’s manufacturing
facility are interrupted at any time for more than five consecutive days, unless such Borrower or
Guarantor shall (i) be entitled to receive for such period of interruption, proceeds of business
interruption insurance sufficient to assure that its per diem cash needs during such period is at
least equal to its average per diem cash needs for the consecutive three month period immediately
preceding the initial date of interruption and (ii) receive such proceeds in the amount described
in clause (i) preceding not later than thirty (30) days following the initial date of any such
interruption; provided, however, that notwithstanding the provisions of clauses (i) and (ii) of
this section, an Event of Default shall be deemed to have occurred if such Borrower or Guarantor
shall be receiving the proceeds of business interruption insurance for a period of thirty (30)
consecutive days; or

10.19. Pension Plans. An event or condition specified in Sections 7.16 or 9.15 shall occur
or exist with respect to any Plan and, as a result of such event or condition, together with all
other such events or conditions, any Borrower or any member of the Controlled Group shall incur, or
in the opinion of Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Agent, would have a Material Adverse Effect.

10.20. Default Under Hedging Contract. The occurrence or existence of any default, event
of default, termination event or other similar condition or event (however described) with respect
to any Hedging Contract of any Borrower or any Guarantor.

XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

11.1. Rights and Remedies.

(a) Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all Obligations
shall be immediately due and payable and this Agreement and the obligation of Lenders to make
Advances shall be deemed terminated; (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured), at the option of Required Lenders all
Obligations shall be immediately due and payable and Lenders shall have the right to terminate this
Agreement and to terminate the obligation of Lenders to make Advances and (iii) a filing of a
petition against any Borrower or any Guarantor in any involuntary case under any state or federal
bankruptcy laws, all Obligations shall be immediately due and payable and the obligation of Lenders
to make Advances hereunder shall be terminated. Upon the occurrence of any Event of Default, Agent
shall have the right to exercise any and all rights and remedies provided for herein, under the
Other Documents, under the Uniform Commercial Code and at law or equity generally, including the
right to foreclose the security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of the Collateral
with or without judicial process. Agent may enter any of any Borrower’s premises or other premises
without legal process and without incurring liability to any Borrower therefor, and Agent may
thereupon, or at any time thereafter, in its discretion without notice or demand, take the
Collateral and remove the same to such place as Agent may deem advisable and Agent may require
Borrowers to make the Collateral available to Agent at a convenient place. With or without having
the Collateral at the time or place of sale, Agent may sell the Collateral, or any part thereof, at
public or private sale, at any time or place, in one or more sales, at such price or prices, and
upon such terms, either for cash, credit or future delivery, as Agent may elect. Except as to that
part of the Collateral which is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Agent shall give Borrowers reasonable notification of
such sale or sales, it being agreed that in all events written notice mailed to Borrowing Agent at
least ten (10) days prior to such sale or sales is reasonable notification. At any public sale
Agent or any Lender may bid for and become the purchaser, and Agent, any Lender or any other
purchaser at any such sale thereafter shall hold the Collateral sold absolutely free from any claim
or right of whatsoever kind, including any equity of redemption and all such claims, rights and
equities are hereby expressly waived and released by each Borrower. In connection with the
exercise of the foregoing remedies, including the sale of Inventory, Agent is granted a royalty
free, nonexclusive license and Agent is granted permission to use all of each Borrower’s
Intellectual Property and other intellectual property which are used or useful in connection with
Inventory and Equipment for the purpose of marketing, advertising for sale and selling or otherwise
disposing of such Inventory and Equipment and (b) Equipment for the purpose of completing the
manufacture of unfinished goods. This license shall remain in effect and be irrevocable until the
subject unfinished goods and Inventory are finished, and the subject Inventory, goods, and
Equipment are sold off or otherwise disposed of to Agent’s satisfaction. The cash proceeds
realized from the sale of any Collateral shall be applied to the Obligations in the order set forth
in Section 11.5. Noncash proceeds will only be applied to the Obligations as they are converted
into cash. If any deficiency shall arise, Borrowers shall remain liable to Agent and Lenders
therefor.

(b) To the extent that Applicable Law imposes duties on the Agent to exercise remedies in a
commercially reasonable manner, each Borrower acknowledges and agrees that it is not commercially
unreasonable for the Agent (i) to fail to incur expenses reasonably deemed significant by the Agent
to prepare Collateral for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
Customers or other Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (iv) to exercise collection remedies against Customers and other Persons
obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as any Borrower, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)
to purchase insurance or credit enhancements to insure the Agent against risks of loss, collection
or disposition of Collateral or to provide to the Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Agent, to obtain the
services of other brokers, investment bankers, consultants and other professionals to assist the
Agent in the collection or disposition of any of the Collateral. Each Borrower acknowledges that
the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or
omissions by the Agent would not be commercially unreasonable in the Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 11.1(b).
Without limitation upon the foregoing, nothing contained in this Section 11.1(b) shall be construed
to grant any rights to any Borrower or to impose any duties on Agent that would not have been
granted or imposed by this Agreement or by Applicable Law in the absence of this Section 11.1(b).

11.2. Agent’s Discretion. Agent shall have the right in its sole discretion to determine
which rights, Liens, security interests or remedies Agent may at any time pursue, relinquish,
subordinate, or modify or to take any other action with respect thereto and such determination will
not in any way modify or affect any of Agent’s or Lenders’ rights hereunder.

11.3. Setoff. Subject to Section 14.12, in addition to any other rights which Agent or any
Lender may have under Applicable Law, upon the occurrence of an Event of Default hereunder, Agent
and such Lender shall have a right, immediately and without notice of any kind, to apply any
Borrower’s or any Guarantor’s property held by Agent and such Lender to reduce the Obligations.

11.4. Rights and Remedies not Exclusive. The enumeration of the foregoing rights and
remedies is not intended to be exhaustive and the exercise of any rights or remedy shall not
preclude the exercise of any other right or remedies provided for herein or otherwise provided by
law, all of which shall be cumulative and not alternative.

11.5. Allocation of Payments After Event of Default. Notwithstanding any other provisions
of this Agreement to the contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Agent on account of the Obligations or any other
amounts outstanding under any of the Other Documents or in respect of the Collateral may, at
Agent’s discretion, be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of the Agent in connection with enforcing its rights and the rights of the Lenders
under this Agreement and the Other Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of this Agreement;

SECOND, to payment of any fees owed to the Agent;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of each of the Lenders to the extent owing to such Lender pursuant to the terms of
this Agreement;

FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest;

FIFTH, to the payment of the outstanding principal amount of the Obligations (including the
payment or cash collateralization of any outstanding Letters of Credit);

SIXTH, to all other Obligations and other obligations which shall have become due and payable
under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive
such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category; (ii) each of the
Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro rata
share (based on the proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant to clauses
“FOURTH”, “FIFTH” and “SIXTH” above and Agent may convert any amounts to Dollars or Canadian
Dollars as necessary to make such application; and (iii) to the extent that any amounts available
for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount
of outstanding Letters of Credit, such amounts shall be held by the Agent in a cash collateral
account and applied (A) first, to reimburse the Issuer from time to time for any drawings under
such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner
provided in this Section 11.5.

XII. WAIVERS AND JUDICIAL PROCEEDINGS.

12.1. Waiver of Notice. Each Borrower hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any and all
instruments, notice of acceptance hereof, notice of loans or advances made, credit extended,
Collateral received or delivered, or any other action taken in reliance hereon, and all other
demands and notices of any description, except such as are expressly provided for herein.

12.2. Delay. No delay or omission on Agent’s or any Lender’s part in exercising any right,
remedy or option shall operate as a waiver of such or any other right, remedy or option or of any
Default or Event of Default.

12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY
HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

XIII. EFFECTIVE DATE AND TERMINATION.

13.1. Term. This Agreement, which shall inure to the benefit of and shall be binding upon
the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall
become effective on the date hereof and shall continue in full force and effect until April 21,
2015 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this
Agreement at any time upon ninety (90) days’ prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full prior to the last day of the Term
(the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers
shall pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (x)
$900,000 if the Early Termination Date occurs on or after the Closing Date to and including the
date immediately preceding the first anniversary of the Closing Date, (y) $450,000 if the Early
Termination Date occurs on or after the first anniversary of the Closing Date to and including the
date immediately preceding the second anniversary of the Closing Date, and (z) $0 if the Early
Termination Date occurs on or after the second anniversary of the Closing Date. No early
termination fee, however, will be due and payable if the Borrowers refinance the Obligations with
PNC or any of its Affiliates.

13.2. Termination. The termination of the Agreement shall not affect any Borrower’s,
Agent’s or any Lender’s rights, or any of the Obligations having their inception prior to the
effective date of such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations have been fully and
indefeasibly paid, disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed hereunder shall continue
in full force and effect, notwithstanding the termination of this Agreement or the fact that
Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of
the Obligations of each Borrower (other than contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted) have been indefeasibly paid and performed in full
after the termination of this Agreement or each Borrower has furnished Agent and Lenders with an
indemnification satisfactory to Agent and Lenders with respect thereto. Accordingly, each Borrower
waives any rights which it may have under the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be required to send such
termination statements to each Borrower, or to file them with any filing office, unless and until
this Agreement shall have been terminated in accordance with its terms and all Obligations (other
than contingent indemnification obligations to the extent no claim giving rise thereto has been
asserted) have been indefeasibly paid in full in immediately available funds. All representations,
warranties, covenants, waivers and agreements contained herein shall survive termination hereof
until all Obligations are indefeasibly paid and performed in full.

XIV. REGARDING AGENT.

14.1. Appointment. Each Lender hereby designates PNC to act as Agent for such Lender under
this Agreement and the Other Documents. Each Lender hereby irrevocably authorizes Agent to take
such action on its behalf under the provisions of this Agreement and the Other Documents and to
exercise such powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto and Agent shall hold all Collateral, payments of principal and
interest, fees (except the fees set forth in Sections 3.3(a) and 3.4), charges and collections
(without giving effect to any collection days) received pursuant to this Agreement, for the ratable
benefit of Lenders. Agent may perform any of its duties hereunder by or through its agents or
employees. As to any matters not expressly provided for by this Agreement (including collection of
the Revolving Credit Note) Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; provided, however, that Agent shall not be required to take any
action which exposes Agent to liability or which is contrary to this Agreement or the Other
Documents or Applicable Law unless Agent is furnished with an indemnification reasonably
satisfactory to Agent with respect thereto.

14.2. Nature of Duties. Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Other Documents. Neither Agent nor any of its
officers, directors, employees or agents shall be (i) liable for any action taken or omitted by
them as such hereunder or in connection herewith, unless caused by their gross (not mere)
negligence or willful misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment), or (ii) responsible in any manner for any recitals, statements,
representations or warranties made by any Borrower or any officer thereof contained in this
Agreement, or in any of the Other Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in connection with, this
Agreement or any of the Other Documents or for the value, validity, effectiveness, genuineness, due
execution, enforceability or sufficiency of this Agreement, or any of the Other Documents or for
any failure of any Borrower to perform its obligations hereunder. Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any of the Other Documents, or to
inspect the properties, books or records of any Borrower. The duties of Agent as respects the
Advances to Borrowers shall be mechanical and administrative in nature; Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent
any obligations in respect of this Agreement except as expressly set forth herein.

14.3. Lack of Reliance on Agent and Resignation. Independently and without reliance upon
Agent or any other Lender, each Lender has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Borrower and each Guarantor in
connection with the making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of
each Borrower and each Guarantor. Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before making of the Advances or at any time or times
thereafter except as shall be provided by any Borrower pursuant to the terms hereof. Agent shall
not be responsible to any Lender for any recitals, statements, information, representations or
warranties herein or in any agreement, document, certificate or a statement delivered in connection
with or for the execution, effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Other Document, or of the financial condition of any Borrower
or any Guarantor, or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the Revolving Credit
Note, the Other Documents or the financial condition of any Borrower, or the existence of any Event
of Default or any Default.

Agent may resign on sixty (60) days’ written notice to each of Lenders and Borrowing Agent and
upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably
satisfactory to Borrowers.

Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term
“Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s
rights, powers and duties as Agent shall be terminated, without any other or further act or deed on
the part of such former Agent. After any Agent’s resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.

14.4. Certain Rights of Agent. If Agent shall request instructions from Lenders with
respect to any act or action (including failure to act) in connection with this Agreement or any
Other Document, Agent shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the foregoing, Lenders shall
not have any right of action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.

14.5. Reliance. Agent shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, order or other document or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity, and, with respect to
all legal matters pertaining to this Agreement and the Other Documents and its duties hereunder,
upon advice of counsel selected by it. Agent may employ agents and attorneys-in-fact and shall not
be liable for the default or misconduct of any such agents or attorneys-in-fact selected by Agent
with reasonable care.

14.6. Notice of Default. Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder or under the Other Documents, unless Agent
has received notice from a Lender or Borrowing Agent referring to this Agreement or the Other
Documents, describing such Default or Event of Default and stating that such notice is a “notice of
default”. In the event that Agent receives such a notice, Agent shall give notice thereof to
Lenders. Agent shall take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of Lenders.

14.7. Indemnification. To the extent Agent is not reimbursed and indemnified by Borrowers,
each Lender will reimburse and indemnify Agent in proportion to its respective portion of the
Advances (or, if no Advances are outstanding, according to its Commitment Percentage), from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to
or arising out of this Agreement or any Other Document; provided that, Lenders shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable
judgment).

14.8. Agent in its Individual Capacity. With respect to the obligation of Agent to lend
under this Agreement, the Advances made by it shall have the same rights and powers hereunder as
any other Lender and as if it were not performing the duties as Agent specified herein; and the
term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender. Agent may engage in business with any Borrower as if
it were not performing the duties specified herein, and may accept fees and other consideration
from any Borrower for services in connection with this Agreement or otherwise without having to
account for the same to Lenders.

14.9. Delivery of Documents. To the extent Agent receives financial statements required
under this Agreement or Borrowing Base Certificates from any Borrower pursuant to the terms of this
Agreement which any Borrower is not obligated to deliver to each Lender, Agent will promptly
furnish such documents and information to Lenders.

14.10. Borrowers’ Undertaking to Agent. Without prejudice to their respective obligations
to Lenders under the other provisions of this Agreement, each Borrower hereby undertakes with Agent
to pay to Agent from time to time on demand all amounts from time to time due and payable by it for
the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not already
paid. Any payment made pursuant to any such demand shall pro tanto satisfy the relevant Borrower’s
obligations to make payments for the account of Lenders or the relevant one or more of them
pursuant to this Agreement.

14.11. No Reliance on Agent’s Customer Identification Program. Each Lender acknowledges
and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely
on the Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or pursuant to the USA
PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121
(as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law,
including any programs involving any of the following items relating to or in connection with any
Borrower, its Affiliates or its agents, this Agreement, the Other Documents or the transactions
hereunder or contemplated hereby: (1) any identity verification procedures, (2) any record-keeping,
(3) comparisons with government lists, (4) customer notices or (5) other procedures required under
the CIP Regulations or such other laws.

14.12. Other Agreements. Each of the Lenders agrees that it shall not, without the express
consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the
request of Agent, set off against the Obligations, any amounts owing by such Lender to any Borrower
or any deposit accounts of any Borrower now or hereafter maintained with such Lender. Anything in
this Agreement to the contrary notwithstanding, each of the Lenders further agrees that it shall
not, unless specifically requested to do so by Agent, take any action to protect or enforce its
rights arising out of this Agreement or the Other Documents, it being the intent of Lenders that
any such action to protect or enforce rights under this Agreement and the Other Documents shall be
taken in concert and at the direction or with the consent of Agent or Required Lenders.

XV. BORROWING AGENCY.

15.1. Borrowing Agency Provisions.

(a) Each Borrower hereby irrevocably designates the Borrowing Agent to be its attorney and
agent and in such capacity to (i) collect and remit, on behalf of such Borrower or Borrowers, all
funds from the collection of Receivables in accordance with the provisions of Sections 4.15(d) and
(h), (ii) borrow, sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf of such Borrower or
Borrowers, and hereby authorizes the Agent to credit all funds from the collection of Receivables
and pay over or credit all loan proceeds hereunder in accordance with the request of the Borrowing
Agent, and (iii) to receive all loan proceeds hereunder, at which time the Borrowing Agent shall
promptly disburse such proceeds to such Borrower(s) as Borrowing Agent and Borrowers may agree in
their reasonable discretion. The Borrowing Agent hereby agrees to act as such attorney and agent
upon the express conditions set forth in this Article.

(b) The handling of this credit facility as a co-borrowing facility with a borrowing agent in
the manner set forth in this Agreement is solely as an accommodation to Borrowers and at their
request. Neither Agent nor any Lender shall incur liability to Borrowers as a result thereof. To
induce Agent and Lenders to do so and in consideration thereof, each Borrower hereby indemnifies
Agent and each Lender and holds Agent and each Lender harmless from and against any and all
liabilities, expenses, losses, damages and claims of damage or injury asserted against Agent or any
Lender by any Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Agent or any Lender on any request or
instruction from Borrowing Agent or any other action taken by Agent or any Lender with respect to
this Section 15.1 except due to willful misconduct or gross (not mere) negligence by the
indemnified party (as determined by a court of competent jurisdiction in a final and non-appealable
judgment).

(c) All Advances, upon funding, shall be deemed to be jointly funded to and received by the
Borrowers. Except as may otherwise be expressly limited by the terms of such Borrower’s Guaranty:
(a) each Borrower jointly and severally agrees to pay, and shall be jointly and severally liable
under this Agreement for, all Obligations, regardless of the manner or amount in which proceeds of
Advances are used, allocated, shared, or disbursed by or among the Borrowers themselves, or the
manner in which the Agent accounts for such Advances or other extensions of credit on its books and
records; (b) each Borrower shall be liable for all amounts due to the Agent under this Agreement,
regardless of which Borrower actually receives Advances or other extensions of credit hereunder or
the amount of such Advances and extensions of credit received or the manner in which the Agent
accounts for such Advances or other extensions of credit on its books and records; and (c) each
Borrower’s Obligations with respect to Advances and other extensions of credit made to it, and such
Borrower’s Obligations arising as a result of the joint and several liability of such Borrower
hereunder, with respect to Advances made to the other Borrowers hereunder, shall be separate and
distinct obligations, but all such Obligations shall be primary obligations of such Borrower. The
Borrowers acknowledge and expressly agree with the Agent that the joint and several liability of
each Borrower is required solely as a condition to, and is given solely as inducement for and in
consideration of, credit or accommodations extended or to be extended under the Other Documents to
any or all of the other Borrowers and is not required or given as a condition of extensions of
credit to such Borrower. Each Borrower’s obligations under this Agreement and as an obligor under
a Guaranty shall be separate and distinct obligations. Each Borrower’s obligations under this
Agreement shall, to the fullest extent permitted by law, be unconditional irrespective of: (i) the
validity or enforceability, avoidance, or subordination of the Obligations of any other Borrower or
of any promissory note or other document evidencing all or any part of the Obligations of any other
Borrower; (ii) the absence of any attempt to collect the Obligations from any other Borrower, any
Guarantor, or any other security therefor, or the absence of any other action to enforce the same;
(iii) the waiver, consent, extension, forbearance, or granting of any indulgence by the Agent with
respect to any provision of any instrument evidencing the Obligations of any other Borrower or
Guarantor, or any part thereof, or any other agreement now or hereafter executed by any other
Borrower or Guarantor and delivered to the Agent; (iv) the failure by the Agent to take any steps
to perfect and maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Borrower or Guarantor; (v) the Agent’s election, in any
proceeding instituted under the Bankruptcy Code, or the application of Section 1111(b)(2) of the
Bankruptcy Code; (vi) any borrowing or grant of a security interest by any other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code; (vii) the disallowance of all or any
portion of the Agent’s claim(s) for the repayment of the Obligations of any other Borrower under
Section 502 of the Bankruptcy Code; or (viii) any other circumstances that might constitute a legal
or equitable discharge or defense of a Guarantor or of any other Borrower. With respect to any
Borrower’s Obligations arising as a result of the joint and several liability of the Borrowers
hereunder with respect to Advances or other extensions of credit made to any of the other Borrowers
hereunder, such Borrower waives, until the Obligations shall have been paid in full and this
Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy
which the Agent now has or may hereafter have against any other Borrower, any endorser or any
Guarantor of all or any part of the Obligations, and any benefit of, and any right to participate
in, any security or collateral given to the Agent to secure payment of the Obligations or any other
liability of any Borrower to the Agent. Upon any Event of Default, the Agent may proceed directly
and at once, without notice, against any Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against any other Borrower or any other
Person, or against any security or collateral for the Obligations. Each Borrower consents and
agrees that the Agent shall be under no obligation to marshal any assets in favor of any Borrower
or against or in payment of any or all of the Obligations.

15.2. Contribution and Indemnification among the Borrowers. Each Borrower is obligated to
repay the Obligations as joint and several obligors under this Agreement as provided in Section
15.1(c) above. To the extent that any Borrower shall, under this Agreement as a joint and several
obligor, repay any of the Obligations constituting Advances made to another Borrower hereunder or
other Obligations incurred directly and primarily by any other Borrower and to the extent any other
Borrower makes any transfer (including any payment, grant, guaranty, or granting of a Lien)
pursuant to this Agreement (any such payment or transfer being referred to herein as an
"Accommodation Payment”), then the Borrower making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other Borrowers in an
amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the
numerator of which fraction is such other Borrower’s Allocable Amount and the denominator of which
is the sum of the Allocable Amounts of all of the Borrowers. As of any date of determination, the
"Allocable Amount” of each Borrower shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Borrower hereunder without (a)
rendering such Borrower “insolvent” within the meaning of Section 101 (32) of the Bankruptcy Code,
Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small capital or assets,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of
the UFCA, or (c) leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.
All rights and claims of contribution, indemnification, and reimbursement under this Section shall
be subordinate in right of payment to the prior indefeasible payment in full of the Obligations
(other than contingent indemnification obligations to the extent no claim giving rise thereto has
been asserted) in immediately available funds. The provisions of this Section shall, to the extent
expressly inconsistent with any provision in any Other Document, supersede such inconsistent
provision.

XVI. MISCELLANEOUS.

16.1. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Michigan applied to contracts to be performed wholly within the State of
Michigan. Any judicial proceeding brought by any Borrower or any Guarantor with respect to or
relating directly or indirectly to any of the Obligations, Agent, any Lender, this Agreement, the
Other Documents or any related agreement may only be brought in any state court of competent
jurisdiction in the State of Michigan, County of Oakland or in a federal court located in Detroit,
Michigan and applicable courts of appeal. Any judicial proceeding brought by Agent or any Lender
against any Borrower or any Guarantor with respect to any of the Obligations, this Agreement, the
Other Documents or any related agreement may be brought in any court of competent jurisdiction. By
execution and delivery of this Agreement, each Borrower accepts for itself and in connection with
its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this
Agreement. Each Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by registered mail (return receipt requested)
directed to Borrowing Agent at its address set forth in Section 16.6 and service so made shall be
deemed completed five (5) days after the same shall have been so deposited in the mails of the
United States of America, or, at the Agent’s option, by service upon Borrowing Agent which each
Borrower irrevocably appoints as such Borrower’s Agent for the purpose of accepting service within
the State of Michigan. Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Agent or any Lender to bring proceedings against any
Borrower in the courts of any other jurisdiction. Each Borrower waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on
lack of jurisdiction or venue or based upon forum non conveniens. Each Borrower waives the right
to remove any judicial proceeding brought against such Borrower in any state court to any federal
court.

16.2. Entire Understanding.

(a) This Agreement and the documents executed concurrently herewith contain the entire
understanding between each Borrower, Agent and each Lender and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no force and effect
unless in writing, signed by each Borrower’s, Agent’s and each Lender’s respective officers.
Neither this Agreement nor any portion or provisions hereof may be changed, modified, amended,
waived, supplemented, discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be charged. Each Borrower
acknowledges that it has been advised by counsel in connection with the execution of this Agreement
and Other Documents and is not relying upon oral representations or statements inconsistent with
the terms and provisions of this Agreement.

(b) The Required Lenders, Agent with the consent in writing of the Required Lenders, and
Borrowers may, subject to the provisions of this Section 16.2 (b), from time to time enter into
written amendments or supplemental agreements to this Agreement or the Other Documents executed by
Borrowers, for the purpose of adding or deleting any provisions or otherwise changing, varying or
waiving in any manner the rights of Lenders, Agent or Borrowers thereunder or the conditions,
provisions or terms thereof or waiving any Event of Default thereunder, but only to the extent
specified in such written agreements; provided, however, that no such supplemental agreement shall,
without the consent of all Lenders:

(i) increase the Commitment Percentage, the maximum dollar commitment of any Lender or the
Maximum Revolving Advance Amount.

(ii) extend the maturity of any Revolving Credit Note or the due date for any amount payable
hereunder, or decrease the rate of interest or reduce any fee payable by Borrowers to Lenders
pursuant to this Agreement.

(iii) alter the definition of the term Required Lenders or alter, amend or modify this Section
16.2(b).

(iv) release any Collateral during any calendar year (other than in accordance with the
provisions of this Agreement) having an aggregate value in excess of $2,500,000.

(v) change the rights and duties of Agent.

(vi) permit any Revolving Advance to be made if after giving effect thereto the total of
Revolving Advances plus the aggregate Maximum Undrawn Amount outstanding hereunder would exceed the
Formula Amount for more than sixty (60) consecutive Business Days or exceed one hundred and ten
percent (110%) of the Formula Amount.

(vii) increase the Advance Rates above the Advance Rates in effect on the Closing Date.

(viii) release any Guarantor.

Any such supplemental agreement shall apply equally to each Lender and shall be binding upon
Borrowers, Lenders and Agent and all future holders of the Obligations. In the case of any waiver,
Borrowers, Agent and Lenders shall be restored to their former positions and rights, and any Event
of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event
of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of
Default is the same as the Event of Default which was waived), or impair any right consequent
thereon.

In the event that Agent requests the consent of a Lender pursuant to this Section 16.2 and
such consent is denied, then PNC may, at its option, require such Lender to assign its interest in
the Advances to PNC or to another Lender or to any other Person designated by the Agent (the
“Designated Lender”), for a price equal to (i) the then outstanding principal amount thereof plus
(ii) accrued and unpaid interest and fees due such Lender, which interest and fees shall be paid
when collected from Borrowers. In the event PNC elects to require any Lender to assign its
interest to PNC or to the Designated Lender, PNC will so notify such Lender in writing within forty
five (45) days following such Lender’s denial, and such Lender will assign its interest to PNC or
the Designated Lender no later than five (5) days following receipt of such notice pursuant to a
Commitment Transfer Supplement executed by such Lender, PNC or the Designated Lender, as
appropriate, and Agent.

In the event that the Agent requests the consent of a Lender pursuant to this Section 16.2 and
such consent is denied by that Lender but has been approved by the Required Lenders, or in the
event that a Lender (other than PNC) requests additional compensation under Sections 3.7, 3.8, 3.9
or 3.10, then the Borrowing Agent may, at its option and at its sole cost and expense, require such
Lender (other than PNC) to assign, without recourse, its interest in the Advances to one or more
banks or financial institutions selected by Borrowing Agent and reasonably acceptable to Agent who
wish to become a Lender under this Agreement (each, a “Borrowing Agent Designated Lender"), for a
price equal to (i) the then outstanding principal amount of the Advances plus (ii) accrued and
unpaid interest and fees due such Lender. In the event the Borrowing Agent elects to require any
Lender to assign its interest to a Borrowing Agent Designated Lender, the Borrowing Agent will so
notify such Lender and Agent in writing within forty-five (45) days following such Lender’s denial
or request for additional compensation, and such Lender will assign its interest to a Borrowing
Agent Designated Lender no later than five (5) days following receipt of such notice pursuant to a
Commitment Transfer Supplement executed by such Lender, the Borrowing Agent Designated Lender, and
the Agent provided that the Borrowers have reimbursed such Lender for its increased costs for which
it is entitled to reimbursement under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, a Lender will not be required to make any such assignment if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrowing Agent to require such assignment cease to apply.

Notwithstanding (a) the existence of a Default or an Event of Default, (b) that any of the
other applicable conditions precedent set forth in Section 8.2 have not been satisfied or (c) any
other provision of this Agreement, Agent may at its discretion and without the consent of the
Required Lenders, voluntarily permit the sum of the outstanding Revolving Advances and the Maximum
Undrawn Amount at any time to exceed an amount equal to the sum of (i) the Formula Amount at such
time by up to 10% of the Formula Amount for up to sixty (60) consecutive Business Days (the
“Out-of-Formula Loans”); provided, that, such outstanding Advances do not exceed the Maximum
Revolving Advance Amount. If Agent is willing in its sole and absolute discretion to make such
Out-of-Formula Loans, such Out-of-Formula Loans shall be payable on demand and shall bear interest
at the Default Rate for Revolving Advances consisting of Domestic Rate Loans; provided that, if
Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall be deemed thereby to have
changed the limits of Section 2.1(a). For purposes of this paragraph, the discretion granted to
Agent hereunder shall not preclude involuntary overadvances that may result from time to time due
to the fact that the Formula Amount was unintentionally exceeded for any reason, including, but not
limited to, Collateral previously deemed to be either “Eligible Receivables” or “Eligible
Inventory”, as applicable, becomes ineligible, collections of Receivables applied to reduce
outstanding Revolving Advances are thereafter returned for insufficient funds or overadvances are
made to protect or preserve the Collateral. In the event Agent involuntarily permits the
outstanding Revolving Advances plus the aggregate Maximum Undrawn Amount to exceed the Formula
Amount by more than 10%, Agent shall use its efforts to have Borrowers decrease such excess in as
expeditious a manner as is practicable under the circumstances and not inconsistent with the reason
for such excess. Revolving Advances made after Agent has determined the existence of involuntary
overadvances shall be deemed to be involuntary overadvances and shall be decreased in accordance
with the preceding sentence.

In addition to (and not in substitution of) the discretionary Revolving Advances permitted
above in this Section 16.2, the Agent is hereby authorized by Borrowers and the Lenders, from time
to time in the Agent’s sole discretion, (A) after the occurrence and during the continuation of a
Default or an Event of Default, or (B) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 have not been satisfied, to make Revolving Advances to Borrowers
on behalf of the Lenders which the Agent, in its reasonable business judgment, deems necessary or
desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the
likelihood of, or maximize the amount of, repayment of the Advances and other Obligations, or (c)
to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement; provided,
that at any time after giving effect to any such Revolving Advances the outstanding Revolving
Advances plus the aggregate Maximum Undrawn Amount do not exceed 110% of the Formula Amount.

16.3. Successors and Assigns; Participations; New Lenders.

(a) This Agreement shall be binding upon and inure to the benefit of Borrowers, the Agent,
each Lender, all future holders of the Obligations and their respective successors and assigns,
except that (i) no Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and (ii) no Lender may assign or transfer
any of its rights or obligations under this Agreement to a Borrower or a Guarantor or any of their
respective Affiliates without the prior written consent of the Agent and the Required Lenders.

(b) Each Borrower acknowledges that in the regular course of commercial banking business one
or more Lenders may at any time and from time to time sell participating interests in the Advances
to other financial institutions (each such transferee or purchaser of a participating interest, a
“Participant”). Each Participant may exercise all rights of payment (including rights of set-off)
with respect to the portion of such Advances held by it or other Obligations payable hereunder as
fully as if such Participant were the direct holder thereof provided that Borrowers shall not be
required to pay to any Participant more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations payable hereunder to such
Participant had such Lender retained such interest in the Advances hereunder or other Obligations
payable hereunder and in no event shall Borrowers be required to pay any such amount arising from
the same circumstances and with respect to the same Advances or other Obligations payable hereunder
to both such Lender and such Participant. Each Borrower hereby grants to any Participant a
continuing security interest in any deposits, moneys or other property actually or constructively
held by such Participant as security for the Participant’s interest in the Advances.

(c) Any Lender, with the consent of Agent (which may not be unreasonably withheld or delayed)
and, prior to the occurrence and absent the continuance of an Event of Default, the consent of
Borrowing Agent (which consent by Borrowing Agent may not be unreasonably withheld or delayed;
provided that Borrowing Agent’s consent is not need if the assignment or transfer is to an
Affiliate of any Lender or Agent), may sell, assign or transfer all or any part of its rights and
obligations under or relating to Revolving Advances under this Agreement and the Other Documents to
one or more additional banks or financial institutions and one or more additional banks or
financial institutions may commit to make Advances hereunder (each a “Purchasing Lender”), in
minimum amounts of not less than $3,000,000, pursuant to a Commitment Transfer Supplement, executed
by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording.
Upon such execution, delivery, acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall
be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the
rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein,
and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement, the Commitment Transfer
Supplement creating a novation for that purpose. Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other Documents. Subject to
Borrowing Agent’s right, under certain circumstances, to consent above, each Borrower hereby
consents to the addition of such Purchasing Lender and the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the Other Documents. Borrowers
shall execute and deliver such further documents and do such further acts and things in order to
effectuate the foregoing.

(d) Any Lender, with the consent of Agent and, if applicable, Borrowing Agent as provided
above, which shall not be unreasonably withheld or delayed, may directly or indirectly sell, assign
or transfer all or any portion of its rights and obligations under or relating to Revolving
Advances under this Agreement and the Other Documents to an entity, whether a corporation,
partnership, trust, limited liability company or other entity that (i) is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each Participant and
Purchasing Lender, each a “Transferee” and collectively the “Transferees”), pursuant to a
Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned
(“Modified Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for recording. Upon
such execution and delivery, from and after the transfer effective date determined pursuant to such
Modified Commitment Transfer Supplement, (i) Purchasing CLO thereunder shall be a party hereto and,
to the extent provided in such Modified Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder and (ii) the transferor Lender thereunder shall, to the extent
provided in such Modified Commitment Transfer Supplement, be released from its obligations under
this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose.
Such Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing CLO. Each Borrower
hereby consents to the addition of such Purchasing CLO. Borrowers shall execute and deliver such
further documents and do such further acts and things in order to effectuate the foregoing.

(e) Agent shall maintain at its address a copy of each Commitment Transfer Supplement and
Modified Commitment Transfer Supplement delivered to it and a register (the “Register”) for the
recordation of the names and addresses of each Lender and the outstanding principal, accrued and
unpaid interest and other fees due hereunder. The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein for the purposes of
this Agreement. The Register shall be available for inspection by Borrowing Agent or any Lender at
any reasonable time and from time to time upon reasonable prior notice. Agent shall receive a fee
in the amount of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon the
effective date of each transfer or assignment (other than to an intermediate purchaser) to such
Purchasing Lender and/or Purchasing CLO.

(f) Each Borrower authorizes each Lender to disclose to any Transferee and any prospective
Transferee any and all financial information in such Lender’s possession concerning such Borrower
which has been delivered to such Lender by or on behalf of such Borrower pursuant to this Agreement
or in connection with such Lender’s credit evaluation of such Borrower.

(g) Notwithstanding the sale of any participation to a Participant, (i) the selling Lender’s
obligations under this Agreement shall remain unchanged, (ii) the selling Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations, and (iii)
the Borrowers will continue to deal solely and directly with such selling Lender with respect to
such selling Lender’s rights and obligations under this Agreement.

16.4. Application of Payments. Agent shall have the continuing and exclusive right to
apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations. To the extent that any Borrower makes a payment or Agent or any Lender receives
any payment or proceeds of the Collateral for any Borrower’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part thereof intended to be
satisfied shall be revived and continue as if such payment or proceeds had not been received by
Agent or such Lender.

16.5. Indemnity. Each Borrower shall indemnify Agent, each Lender and each of their
respective officers, directors, Affiliates, attorneys, employees and agents from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses and disbursements of any kind or nature whatsoever (including reasonable fees
and disbursements of counsel) which may be imposed on, incurred by, or asserted against Agent or
any Lender in any claim, litigation, proceeding or investigation instituted or conducted by any
Governmental Body or instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this Agreement or the
Other Documents, whether or not Agent or any Lender is a party thereto, except to the extent that
any of the foregoing arises out of the willful misconduct or gross negligence (as opposed to mere)
negligence of the party being indemnified (as determined by a court of competent jurisdiction in a
final and non-appealable judgment). Without limiting the generality of the foregoing, this
indemnity shall extend to any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses and disbursements of any kind or nature whatsoever
(including reasonable fees and disbursements of counsel) asserted against or incurred by any of the
indemnitees described above in this Section 16.5 by any Person under any Environmental Laws or
similar laws by reason of any Borrower’s or any other Person’s failure to comply with laws
applicable to solid or hazardous waste materials, including Hazardous Substances and Hazardous
Waste, or other Toxic Substances. Additionally, if any taxes (excluding taxes imposed upon or
measured solely by the net income of Agent and Lenders, but including any intangibles taxes, stamp
tax, recording tax or franchise tax) shall be payable by Agent, Lenders or Borrowers on account of
the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of
any of the Other Documents, or the creation or repayment of any of the Obligations hereunder, by
reason of any Applicable Law now or hereafter in effect, Borrowers will pay (or will promptly
reimburse Agent and Lenders for payment of) all such taxes, including interest and penalties
thereon, and will indemnify and hold the indemnitees described above in this Section 16.5 harmless
from and against all liability in connection therewith.

16.6. Notice. Any notice or request hereunder may be given to Borrowing Agent or any
Borrower or to Agent or any Lender at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of change of address under
this Section. Any notice, request, demand, direction or other communication (for purposes of this
Section 16.6 only, a “Notice”) to be given to or made upon any party hereto under any provision of
this Agreement shall be given or made by telephone or in writing (which includes by means of
electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting forth such Notice
on a site on the World Wide Web (a “Website Posting”) if Notice of such Website Posting (including
the information necessary to access such site) has previously been delivered to the applicable
parties hereto by another means set forth in this Section 16.6) in accordance with this Section
16.6. Any such Notice must be delivered to the applicable parties hereto at the addresses and
numbers set forth under their respective names on Section 16.6 or in accordance with any subsequent
unrevoked Notice from any such party that is given in accordance with this Section 16.6. Any
Notice shall be effective:

(a) In the case of hand-delivery, when delivered;

(b) If given by mail, four days after such Notice is deposited with the United States Postal
Service, with first-class postage prepaid, return receipt requested;

(c) In the case of a telephonic Notice, when a party is contacted by telephone, if delivery of
such telephonic Notice is confirmed no later than the next Business Day by hand delivery, a
facsimile or electronic transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);

(d) In the case of a facsimile transmission, when sent to the applicable party’s facsimile
machine’s telephone number, if the party sending such Notice receives confirmation of the delivery
thereof from its own facsimile machine;

(e) In the case of electronic transmission, when actually received;

(f) In the case of a Website Posting, upon delivery of a Notice of such posting (including the
information necessary to access such site) by another means set forth in this Section 16.6; and

(g) If given by any other means (including by overnight courier), when actually received.

Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lenders of its receipt of such
Notice.

	 	(A)	 	If to Agent or PNC at:

	 
	PNC Business Credit

1900 East 9th Street, 9th Floor

Mail Code: B7-YB13-09-5

Cleveland, Ohio 44114

Attention:Todd Milenius

Telephone:(216) 222-9761

Facsimile:(216) 222-8155

with a copy to:

	 	 	 
	PNC Bank, National Association

	PNC Agency Services

	PNC Firstside Center

	500 First Avenue, 4th Floor

	Pittsburgh, Pennsylvania 15219

	Attention:

Telephone:

Facsimile:

	 	Lisa Pierce

(412) 762-6442

(412) 762-8672

with a copy to:

	 
	PNC Business Credit

1900 East 9th Street, 9th Floor

Cleveland, Ohio 44114

Attention:Todd Milenius

Telephone:(216) 222-9761

with an additional copy to:

	 	 	 
	Dickinson Wright PLLC

	500 Woodward Avenue

	Suite 4000

	 	

	Detroit, Michigan 48226

	Attention:

Telephone:

Facsimile:

	 	Theodore B. Sylwestrzak

(313) 223-3036

(313) 223-3598

	 	(B)	 	If to a Lender other than Agent, as specified on the signature
pages hereof.

	 	(C)	 	If to Borrowing Agent or any Borrower:

	 	 	 
	Tecumseh Products Company

	1136 Oak Valley Drive

	Ann Arbor, Michigan 48108

	Attention:

Telephone:

Facsimile:

	 	James J. Connor

(734) 585-9487

(734) 352-3787

with a copy to:

	 	 	 
	Tecumseh Products Company

	1136 Oak Valley Drive

	Ann Arbor, Michigan 48108

	Attention:

Telephone:

Facsimile:

	 	Marcus D. Hudson

(734) 585-9544

(734) 352-3809

with a copy to:

	 	 	 
	Honigman Miller Schwartz and Cohn LLP

	660 Woodward Avenue

	 	

	Detroit, Michigan 48226

	Attention:

Telephone:

Facsimile:

	 	Patrick Duerr

(313) 465-7362

(313) 465-7363

16.7. Survival. The obligations of Borrowers under Sections 2.2(f), 3.7, 3.8, 3.9,
4.19(h), and 16.5 and the obligations of Lenders under Section 14.7, shall survive termination of
this Agreement and the Other Documents and payment in full of the Obligations.

16.8. Severability. If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated
thereby and shall be given effect so far as possible.

16.9. Expenses. All reasonable costs and expenses including reasonable attorneys’ fees
(including the allocated costs of in house counsel) and disbursements incurred by Agent on its
behalf or on behalf of Lenders (a) in all efforts made to enforce payment of any Obligation or
effect collection of any Collateral, or (b) in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any Other Document, or any consents
or waivers hereunder or thereunder and all related agreements, documents and instruments, or (c) in
instituting, maintaining, preserving, enforcing and foreclosing on Agent’s security interest in or
Lien on any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or any
Lender’s rights hereunder and under all related agreements, documents and instruments, whether
through judicial proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent’s or any Lender’s transactions with any Borrower or
any Guarantor or (e) in connection with any advice given to Agent or any Lender with respect to its
rights and obligations under this Agreement and all related agreements, documents and instruments,
may be charged to Borrowers’ Account and shall be part of the Obligations.

16.10. Injunctive Relief. Each Borrower recognizes that, in the event any Borrower fails
to perform, observe or discharge any of its obligations or liabilities under this Agreement, or
threatens to fail to perform, observe or discharge such obligations or liabilities, any remedy at
law may prove to be inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without the necessity of
proving that actual damages are not an adequate remedy.

16.11. Consequential Damages. Neither Agent nor any Lender, nor any agent or attorney for
any of them, shall be liable to any Borrower or any Guarantor (or any Affiliate of any such Person)
for indirect, punitive, exemplary or consequential damages arising from any breach of contract,
tort or other wrong relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other Document.

16.12. Captions. The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of this Agreement.

16.13. Counterparts; Facsimile Signatures. This Agreement may be executed in any number of
and by different parties hereto on separate counterparts, all of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission or electronic mail transmission in PDF
format shall be deemed to be an original signature hereto.

16.14. Construction. The parties acknowledge that each party and its counsel have reviewed
this Agreement and that the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.

16.15. Confidentiality; Sharing Information. Agent, each Lender and each Transferee shall
hold all non-public information obtained by Agent, such Lender or such Transferee pursuant to the
requirements of this Agreement in accordance with Agent’s, such Lender’s and such Transferee’s
customary procedures for handling confidential information of this nature; provided, however,
Agent, each Lender and each Transferee may disclose such confidential information (a) to its
examiners, Affiliates, outside auditors, counsel and other professional advisors, (b) to Agent, any
Lender or to any prospective Transferees (provided such prospective Transferee agrees to these
confidentiality provisions), and (c) as required or requested by any Governmental Body or
representative thereof or pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, Agent, each Lender and each Transferee shall use its reasonable best
efforts prior to disclosure thereof, to notify the applicable Borrower of the applicable request
for disclosure of such non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the financial condition of a
Lender or a Transferee by such Governmental Body) or (B) pursuant to legal process and (ii) in no
event shall Agent, any Lender or any Transferee be obligated to return any materials furnished by
any Borrower other than those documents and instruments in possession of Agent or any Lender in
order to perfect its Lien on the Collateral once the Obligations have been paid in full and this
Agreement has been terminated. Each Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to such Borrower or one
or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one
or more Subsidiaries or Affiliates of such Lender and each Borrower hereby authorizes each Lender
to share any information delivered to such Lender by such Borrower and its Subsidiaries pursuant to
this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to
any such Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or
Affiliate of any Lender receiving such information shall be bound by the provisions of this Section
16.15 as if it were a Lender hereunder. Such authorization shall survive the repayment of the
other Obligations and the termination of this Agreement.

16.16. Publicity. Each Borrower and each Lender hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among Borrowers, Agent and
Lenders, including announcements which are commonly known as tombstones, in such publications and
to such selected parties as Agent shall in its sole and absolute discretion deem appropriate.

16.17. Certifications From Banks and Participants; US PATRIOT Act. Each Lender or assignee
or participant of a Lender that is not incorporated under the Laws of the United States of America
or a state thereof (and is not excepted from the certification requirement contained in Section 313
of the USA PATRIOT Act and the applicable regulations because it is both (i) an affiliate of a
depository institution or foreign bank that maintains a physical presence in the United States or
foreign country, and (ii) subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to the Agent the certification, or, if
applicable, recertification, certifying that such Lender is not a “shell” and certifying to other
matters as required by Section 313 of the USA PATRIOT Act and the applicable regulations: (1)
within 10 days after the Closing Date, and (2) as such other times as are required under the USA
PATRIOT Act.

16.18. Language. The parties have requested that this Agreement and the Other
Documents be drawn up in the English language. Les parties ont requis que cette convention ainsi
que tous les documents qui y sont envisagés ou qui s’y rapportent soient rédigés en langue
anglaise.

16.19. Judgment Currency. If for the purpose of obtaining judgment in any court it is
necessary to convert an amount due hereunder in the currency in which it is due (the “Original
Currency”) into another currency (the “Second Currency”), the rate of exchange applied shall be
that at which, in accordance with normal banking procedures, Agent could purchase in the foreign
exchange market, the Original Currency with the Second Currency on the date two (2) Business Days
preceding that on which judgment is given. Each Borrower agrees that its obligation in respect of
any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such
other currency, be discharged only to the extent that, on the Business Day following the date Agent
receives payment of any sum so adjudged to be due hereunder in the Second Currency, Agent may, in
accordance with normal banking procedures, purchase, in the foreign exchange market, the Original
Currency with the amount of the Second Currency so paid; and if the amount of the Original Currency
so purchased or could have been so purchased is less than the amount originally due in the Original
Currency, each Borrower agrees as a separate obligation and notwithstanding any such payment or
judgment to indemnify Agent and the Lenders against such loss.

XVII. GUARANTY.

17.1. Guaranty. Each Guarantor is jointly and severally liable as a primary
obligor and not merely as surety, and absolutely and unconditionally guarantees to Agent and
Lenders, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, the Obligations and all costs and expenses including all court costs
and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals)
and expenses paid or incurred by the Agent or Lenders in collecting all or any part of the
Obligations from, or in prosecuting any action against, any Borrower or any Guarantor (these costs
and expenses, together with the Obligations, are collectively called the “Guaranteed Obligations”).
The Guaranteed Obligations may be extended or renewed in whole or in part without notice to or
further assent from any Guarantor, and each Guarantor remains bound upon its guarantee
notwithstanding any extension or renewal.

17.2. Guaranty of Payment. This Guaranty is a guaranty of payment and not of
collection. Each Guarantor waives any right to require Agent or any Lender to sue any Borrower, any
Guarantor or any other Person obligated for all or any part of the Guaranteed Obligations, or
otherwise to enforce its payment against any collateral (including the Collateral) securing all or
any part of the Guaranteed Obligations.

17.3. No Discharge or Diminishment of Guaranty.

(a) The obligations of each Guarantor are unconditional and absolute and not subject to any
reduction, limitation, impairment, or termination for any reason (other than the indefeasible
payment in full in cash of the Guaranteed Obligations), including:

	 	(i)	 	any claim of waiver, release, extension,
renewal, settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise;

	 	(ii)	 	any change in the corporate existence,
structure, or ownership of any Borrower, any Guarantor, or any other
Person liable for any of the Guaranteed Obligations;

	 	(iii)	 	any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Borrower, any Guarantor, or any other Person
liable for any of the Guaranteed Obligations, or their assets or any
resulting release or discharge of any obligation of any Borrower, any
Guarantor, or any other Person liable for any of the Guaranteed
Obligations; or

	 	(iv)	 	the existence of any claim, set-off or other
rights that any Guarantor may have at any time against any Borrower,
any Guarantor, the Agent, any Lender, or any other Person, whether in
connection herewith or in any unrelated transactions.

(b) Each Guarantor’s obligations are not subject to any defense or set-off, counterclaim,
recoupment, or termination whatsoever because of the invalidity, illegality, or unenforceability of
any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Borrower, any Guarantor or any other Person liable for any of
the Guaranteed Obligations, of the Guaranteed Obligations or any part thereof.

(c) No Guarantor’s obligations are discharged, impaired, or otherwise affected by:

(i) Agent’s or any Lender’s failure to assert any claim or demand or to enforce any remedy
with respect to all or any part of the Guaranteed Obligations;

(ii) any waiver or modification of or supplement to any provision of any agreement relating to
the Guaranteed Obligations;

(iii) any release, non-perfection, or invalidity of any indirect or direct security for any
Borrower’s obligations or all or any part of the Guaranteed Obligations or of any obligations of
any other Person liable for any of the Guaranteed Obligations;

(iv) any action or failure to act by the Agent or any Lender with respect to any collateral
(including the Collateral) securing any part of the Guaranteed Obligations;

(v) any default, failure or delay, willful or otherwise, in the payment or performance of any
of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any
manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a
discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of the Guaranteed Obligations).

17.4. Defenses Waived. To the fullest extent permitted by applicable law, each
Guarantor waives any defense based on or arising out of any defense of any Borrower or any
Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause,
or the cessation from any cause of the liability of any Borrower or any Guarantor (other than the
indefeasible payment in full in cash of the Guaranteed Obligations). Without limiting the
generality of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest and, to the fullest extent permitted by law, any notice not provided for in this
Agreement, as well as any requirement that at any time any action be taken by any Person against
any Borrower, any Guarantor, or any other Person. The Agent may, at its election, foreclose on any
collateral by one or more judicial or nonjudicial sales, accept an assignment of any such
Collateral in lieu of foreclosure or otherwise act or not act with respect to any collateral
securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the
Guaranteed Obligations, make any other accommodation with any Borrower, any Guarantor, or any other
Person liable on any part of the Guaranteed Obligations or exercise any other right or remedy
available to them against any Borrower, any Guarantor, or any other Person liable on any of the
Guaranteed Obligations, without affecting or impairing in any way the liability of such Guarantor
under this Guaranty except to the extent the Guaranteed Obligations have been fully and
indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election even though that election may operate, pursuant
to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of any Guarantor against any Borrower, any other guarantor or any other Person liable on
any of the Guaranteed Obligations, as the case may be, or any security.

17.5. Rights of Subrogation. No Guarantor may assert any right, claim or cause of action,
including, a claim of subrogation, contribution, or indemnification that it has against any
Borrower, any Guarantor, any Person liable for any of the Guaranteed Obligations, or any
collateral, until the Borrowers and the Guarantors have fully performed all their obligations to
the Agent and Lenders.

17.6. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of
the Guaranteed Obligations is rescinded or must otherwise be restored or returned in connection
with the insolvency, bankruptcy, or reorganization of any Borrower or Guarantor or otherwise, each
Guarantor’s obligations under this Guaranty with respect to that payment will be reinstated at that
time as though the payment had not been made, whether or not the Agent or Lenders are in possession
of this Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts
otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed
Obligations are nonetheless payable by the Guarantors forthwith on demand by the Lenders.

17.7. Information. Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that each Guarantor assumes and incurs under this Guaranty, and agrees that neither the Agent
nor Lenders has any duty to advise any Guarantor of information known to it regarding those
circumstances or risks.

17.8. Taxes. All payments of the Guaranteed Obligations must be made by each
Guarantor free and clear of, and without deduction for, or on account of, any and all present or
future taxes, levies, imposts, duties, charges, deductions or withholdings of whatever nature
imposed by any governmental authority with respect to such payments, and any and all liabilities
with respect to the foregoing, but excluding franchise taxes and taxes imposed on Lenders’ overall
net income by the U.S. or the jurisdiction in which a Lender’s applicable lending office is
located. If any Guarantor is required by law to deduct any Taxes from or in respect of any sum
payable to the Lenders under this Guaranty, (a) the sum payable must be increased as necessary so
that after making all required deductions (including deductions applicable to additional sums
payable under this provision) Lenders receive an amount equal to the sum they would have received
had no such deductions been made, (b) the Guarantors must then make such deductions, and must pay
the full amount deducted to the relevant authority in accordance with applicable law, and (c) the
Guarantors must furnish to Lenders within 45-days after their due date certified copies of all
official receipts evidencing payment thereof.

17.9. Severability. The provisions of this Guaranty are severable, and in any action or
proceeding involving any state corporate law, or any state, federal or foreign bankruptcy,
insolvency, reorganization or other law affecting the rights of creditors generally, if the
obligations of any Guarantor under this Guaranty, or the joint and several nature of the
Obligations, would otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of such Guarantor’s liability under this Guaranty or the joint and several
nature of the Obligations, then, notwithstanding any other provision of this Guaranty or this
Agreement to the contrary, the amount of such liability is, without any further action by the
Guarantors or the Lenders, automatically limited and reduced to the highest amount that is valid
and enforceable as determined in such action or proceeding (such highest amount determined
hereunder being the relevant Guarantor’s “Maximum Liability”). This Section with respect to the
Maximum Liability of each Guarantor is intended solely to preserve the rights of Agent and Lenders
to the maximum extent not subject to avoidance under applicable law, and no Guarantor or any other
Person or entity has any right or claim under this Section with respect to such Maximum Liability,
except to the extent necessary so that the obligations of any Guarantor are not rendered voidable
under applicable law. Each Guarantor agrees that the Guaranteed Obligations and the Obligations may
at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing
this Guaranty, this Agreement, or affecting the rights and remedies of Agent and Lenders, provided
that, nothing in this sentence increases any Guarantor’s obligations beyond its Maximum Liability.

17.10. Contribution. If any Guarantor (a “Paying Guarantor”) makes any payment or payments
under this Guaranty, on account of the joint and several nature of the Obligations or suffers any
loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Guaranty or the Obligations, each other Guarantor (each a “Non-Paying Guarantor”) must
contribute to the Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Pro Rata Share”
of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of
this Section each Non-Paying Guarantor’s “Pro Rata Share” with respect to any such payment or loss
by a Paying Guarantor is determined as of the date on which such payment or loss was made by
reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any contribution hereunder)
or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount
of all monies received by such Non-Paying Guarantor from the Borrowers on or after the date of this
Agreement (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum
Liability of all Guarantors (including such Paying Guarantor) as of such date (without giving
effect to any right to receive, or obligation to make, any contribution hereunder), or to the
extent that a Maximum Liability has not been determined for any Guarantor, the aggregate amount of
all monies received by such Guarantors from the Borrowers on or after the date of this Agreement
(whether by loan, capital infusion or by other means). Nothing in this provision affects any
Guarantor’s several liability for the entire amount of the Guaranteed Obligations and the
Obligations (up to such Guarantor’s Maximum Liability). Each of the Guarantors covenants and
agrees that its right to receive any contribution under this Guaranty from a Non-Paying Guarantor
is subordinate and junior in right of payment to the payment in full in cash of the Guaranteed
Obligations. This provision is for the benefit of the Agent, Lenders, and the Guarantors and may
be enforced by any one, or more, or all of them.

17.11. Lending Offices. The Guaranteed Obligations may be booked at any lending office.
All terms of this Guaranty apply to and may be enforced by or on behalf of any lending office.

17.12. Liability Cumulative. The liability of each Borrower as a Guarantor under this
Article is in addition to and cumulative with all liabilities of each Borrower to the Agent and
Lenders under this Agreement and the Other Documents.

[Remainder of Page Intentionally Left Blank]

Each of the parties has signed this Agreement as of the day and year first above
written.

TECUMSEH PRODUCTS COMPANY

TECUMSEH COMPRESSOR COMPANY

TECUMSEH PRODUCTS OF CANADA, LIMITED

EVERGY, INC.

By:      

James J. Connor, Vice President,

Chief Financial Officer and Secretary

PNC BANK, NATIONAL ASSOCIATION,

as Lender and as Agent

By:      

Todd Milenius, Vice President

1900 East 9th Street, 9th Floor

Cleveland, Ohio 44114

Commitment Percentage: 100%EX-10.2

April 21, 2011

Tecumseh Products Company

Tecumseh Products of Canada, Limited

Tecumseh Compressor Company

Evergy, Inc.

	 	 	 	Re: Advances made by PNC Bank, National Association (“PNC”) and the other financial
institutions (together with PNC, the “Lenders") now or hereafter party to the Revolving
Credit and Security Agreement dated as of the date hereof (the “Credit Agreement")
among Lenders, PNC as agent for the Lenders (PNC in such capacity, “Agent"), Tecumseh
Products Company (“Tecumseh Products"), Tecumseh Products of Canada, Limited (“Tecumseh
Products Canada”), Tecumseh Compressor Company (“Tecumseh Compressor”) and Evergy, Inc.
(“Evergy”; and together with Tecumseh Products, Tecumseh Products Canada, and Tecumseh
Compressor, the “Borrowers"). Capitalized terms used but not defined in this letter
have the meanings given in the Credit Agreement.

Ladies and Gentlemen:

As an accommodation to Borrowers, the Agent and the Lenders have, on this day, permitted
Borrowers to execute certain documents, agreements and instruments relating to the above-referenced
transaction. Borrowers acknowledge that certain conditions precedent are to be satisfied before
the Agent and the Lenders fund the initial Advances under to the Credit Agreement. As of the above
date, the following conditions have not been satisfied (the “Conditions"):

	 	1.	 	Delivery by Borrowers to Agent of the following with respect to 5424 Highway
145 South, Verona, Mississippi (“Mississippi Property”):

	 	a.	 	A Leasehold Deed of Trust, Security Agreement, Assignment of
Rents and Leases and Fixture Filing executed by Tecumseh Products in favor of a
trustee for the benefit of Agent and Lenders to secure the Obligations (the
“Leasehold Deed of Trust”).

	 	b.	 	The consent of Lee County, Mississippi to the Leasehold Deed of
Trust under the Lease dated August 22, 1975 (the “Leasehold Deed of Trust
Consent”).

	 	c.	 	A landlord waiver executed by Lee County in favor of Agent.

	 	d.	 	An Environmental Indemnity Agreement executed by Tecumseh
Products (the “Mississippi EIA”), which will be substantially in the same form
as the Environmental Indemnity Agreement executed by Evergy.

	 	e.	 	The lease between Tecumseh Products and Tecumseh Compressor
(the “Tecumseh Compressor Sublease”).

	 	f.	 	A Subordination of Real Estate Lease agreement executed by
Tecumseh Compressor with respect to the Tecumseh Compressor Sublease (the
“Tenant Subordination Agreement”).

	 	2.	 	Delivery by Borrowers to Agent of a satisfactory lenders loss payable
endorsement with respect to Borrowers’ marine cargo insurance policy in the form
previously received by Agent.

	 	3.	 	A filed copy of a termination statement with respect to Financing Statement No.
2010115914-8 filed on August 27, 2010 against Tecumseh Products by Citibank, N.A.

	 	4.	 	Make the Perfection Certificates for each Borrower and the Schedules to the
Credit Agreement that were delivered to Agent accurate and consistent with each other.

	 	5.	 	Schedules to the Pledge Agreement satisfactory to Agent and Lenders.

	 	6.	 	Original stock certificates and assignments separate from certificates for
stock subject to the Pledge Agreement if appropriate based on the disclosures in the
Pledge Agreement Schedules.

	 	7.	 	Fully-executed control agreements satisfactory to Agent and Lenders with
respect to the following accounts:

	 	a.	 	Lockbox account at JPMorgan Chase, Account No. 93068.

	 	b.	 	Lockbox account at JPMorgan Chase, Account No. 5491401.

	 	c.	 	Investment account at JPMorgan Chase, Account No. 5016101.

Borrowers acknowledge and agree that Agent and Lenders have no obligation to fund any Advances
under the Credit Agreement until the conditions in Sections 8.1 and 8.2 of the Credit Agreement and
the Conditions are satisfied to Agent’s satisfaction.

Borrowers informed Agent and Lenders that Lee County, Mississippi has indicated that it will
not make a decision on whether to consent to the Leasehold Deed of Trust until early May 2011, and
Borrowers requested that Agent and Lenders waive the following Conditions if Lee County’s consent
is not obtained: delivery of the Leasehold Deed of Trust, and (the following being referred to as
the “Leasehold Deed of Trust Related Items”) the Leasehold Deed of Trust Consent, the Mississippi
EIA, and the Tenant Subordination Agreement. PNC, as Agent and as a Lender, will promptly request
of its credit approval committee that it modify the credit approval for Borrowers to provide that
Agent will not have the Leasehold Deed of Trust and will not receive the Leasehold Deed of Trust
Related Items, if, despite Borrowers’ good faith efforts, Borrowers cannot obtain the Leasehold
Deed of Trust Consent. There can be no assurance that the committee will agree to the
modification.

Please acknowledge your consent to the foregoing by signing below.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION,

as the Agent and a Lender

By:

Todd Milenius, Vice President

Consented to this        day of April, 2011

TECUMSEH PRODUCTS COMPANY,

TECUMSEH PRODUCTS OF CANADA, LIMITED,

TECUMSEH COMPRESSOR COMPANY,

EVERGY, INC.

By:      

James J. Connor, Vice President,

Chief Financial Officer and Secretary

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