Document:

EX-10.18: PLEDGE, ASSIGNMENT AND SECURITY AGMT.

EXHIBIT 10.18

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

         PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT, dated as of July 26, 2001, made
by Reed Krakoff, a natural person residing in the sate of New York (the
“Pledgor”) to Coach, Inc., a Maryland corporation (the “Pledgee”). Capitalized
terms used herein and not otherwise defined herein shall have the meaning
ascribed to such terms in the Loan Agreement (as defined below).

W I T N E S S E T H:

         WHEREAS, the Pledgor has entered into that certain Secured Loan Agreement
with the Pledgee, dated as of July 26, 2001 (as it may be amended, supplemented
or modified from time to time, the “Loan Agreement”) evidencing a loan (the
“Loan”) of $2,000,000 by the Pledgee to the Pledgor;

         WHEREAS, the Pledgor has been granted certain options to purchase shares
of the Pledgee’s common stock; and

         WHEREAS, It is a condition precedent to the effectiveness of the Loan
Agreement that the Pledgor shall grant the security interest contemplated by
this Agreement.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Pledgee to make the loan contemplated by the Loan Agreement, the Pledgor
hereby agrees with the Pledgee as follows:

         Section 1   Grant of Security. The Pledgor hereby assigns, transfers and
pledges to the Pledgee, and hereby grants to the Pledgee a security interest
in, all of the Pledgor’s right, title and interest in, to and under the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired, wherever located and whether now or hereafter
existing (the “Collateral”):

                  (a) That certain option granted to Pledgor by Pledgee described on
Schedule I hereto (the “Option”) to purchase 150,000 shares of Coach, Inc.
common stock, par value $0.01 per share (“Common Stock”), and all shares of
Common Stock acquired upon exercise of the Option (collectively, “Security
Collateral”), and all dividends, cash, instruments and other property from time
to time received upon the sale of, or receivable or otherwise distributed in
respect of or in exchange for, any or all of such Security Collateral;

                  (b) That certain Stock Option Agreement, to the extent that it evidences
the Option, in substantially the form set forth on Schedule II hereto (the
“Assigned Agreement”), including without limitation all rights of the Pledgor
under or with respect to the Assigned Agreement (all such Collateral being the
“Agreement Collateral”);

                  (c) All proceeds of any and all of the foregoing Collateral (including,
without limitation, any property or cash) and, to the extent not otherwise
included, all payments under insurance (whether or not the Pledgee is the loss
payee

                  

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thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing Collateral;
and

                  (d) Any other property or right constituting any part of the Pledged
Security.

         Section 2   Security for Obligations. This Agreement secures the payment of
all obligations of the Pledgor now or hereafter existing under the Loan
Documents (all such obligations of the Pledgor being the “Obligations”).
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Obligations and would be
owed by the Pledgor to the Pledgee under any of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.

         Section 3   Release of Security

                  (a) As of the date of the repayment of any Loan principal under the Loan
Agreement, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor with respect to that number of
shares of Common Stock subject to the Option (or acquired upon exercise of the
Option) equal to the product of (a) 150,000 and (b) the ratio of (i) the amount
of Loan principal repaid as of such date to (ii) $2,000,000.

                  (b) As of the date of each repayment of Loan principal, the termination of
the security interest as described in Section 3(a) shall apply first with
respect to any shares of Common Stock purchased by Pledgor upon exercise of the
Option prior to such repayment date (or any other property received with
respect to such shares) and then with respect to shares of Common Stock subject
to the Option as of the date of such repayment.

         Section 4   Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Pledgor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Pledgee of any of
the rights hereunder shall not release the Pledgor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) the Pledgee shall have no obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
the Pledgee be obligated to perform any of the obligations or duties of the
Pledgor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

         Section 5   Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and shall be
held by or on behalf of the Pledgee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Pledgee. The Pledgee shall have the right, at any

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time in its discretion and without notice to the Pledgor, to transfer to
or to register in the name of the Pledgee (as pledgee hereunder) or any of its
nominees any or all of the Collateral. In addition, the Pledgee shall have the
right at any time to exchange certificates or instruments representing or
evidencing the Collateral for certificates or instruments of smaller or larger
denominations.

         Section 6   Representations and Warranties. The Pledgor represents and
warrants as follows:

                  (a) A fully executed original counterpart of the Assigned Agreement has
been delivered to the Pledgee.

                  (b) The Pledgor is the legal and beneficial owner of the Collateral free
and clear of any lien, security interest, option or other charge or
encumbrance, except for the security interests created by this Agreement. No
effective financing statement or other document similar in effect covering all
or any part of the Collateral is on file in any recording office, except such
as may have been filed in favor of the Pledgee relating to this Agreement.

                  (c) This Agreement has been duly executed and delivered by the Pledgor and
is a valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.

                  (d) The execution and delivery by the Pledgor of this Agreement and the
performance of its obligations thereunder are within the Pledgor’s authority
and capacity and do not contravene any law, regulation, order or contractual
restriction binding on or affecting the Pledgor.

                  (e) The Pledge and grant of the Collateral pursuant to this Pledge
Agreement creates a valid and perfected first priority security interest in the
Collateral in favor of the Pledgee, securing the payment of all of the
Obligations.

         Section 7   Further Assurances

                  (a) The Pledgor agrees that from time to time the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Pledgee may reasonably
request, in order to perfect and protect any pledge, assignment or security
interest granted or purported to be granted hereby or to enable the Pledgee to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, the Pledgor
will: (i) deliver and pledge to the Pledgee promptly upon receipt thereof all
instruments or certificates representing or evidencing any of the Collateral
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Pledgee; and (ii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be

                  
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necessary or desirable, or as the Pledgee may request, in order to perfect
and preserve the pledge, assignment and security interest granted or purported
to be granted hereby.

                  (b) The Pledgor hereby authorizes the Pledgee to file one or more
financing or continuation statements, and amendments thereto, relating to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

                  (c) The Pledgor will furnish to the Pledgee from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Pledgee may reasonably
request, all in reasonable detail.

                  (d) The Pledgor agrees to defend the title of the Collateral and the lien
thereon of the Pledgee against the claim of any other person and to maintain
and preserve such lien until payment in full of all of the Obligations.

         Section 8   Assigned Agreement. The Pledgor shall at its expense (a)
perform and observe all the terms and provisions, in all material respects, of
the Assigned Agreement to be performed or observed by it, enforce the Assigned
Agreement in accordance with their respective terms, and take all such action
to such end as may be from time to time reasonably requested by the Pledgee,
(b) furnish to the Pledgee such information and reports regarding the
Collateral as the Pledgee may reasonably request and (c) upon request of the
Pledgee make to any other party to the Assigned Agreement such demands and
requests for information and reports or for action as the Pledgor is entitled
to make thereunder.

         Section 9   Voting Rights; Dividends

                  (a) So long as no Event of Default shall have occurred and be continuing:

                           (i) The Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of the Pledgor or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the other Loan Documents; provided, however, that the Pledgor shall not
exercise or shall refrain from exercising any such right if, in the Pledgee’s
judgment, such action could have a material adverse effect on the Security
Collateral or any part thereof; provided further, that the Pledgor shall give
the Pledgee at least five business days’ written notice of the manner in which
he intends to exercise, or his reasons for refraining from exercising, any such
right.

                           (ii) Any and all (A) dividends and interest paid or payable including cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security
Collateral, (B) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in

                           
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connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus, (C)
cash paid, payable or otherwise distributed in respect of principal of or in
exchange for, any Security Collateral, and (D) cash dividends paid or payable
in violation of the terms of the Loan Documents, shall be, and shall be
forthwith delivered to the Pledgee to hold as, Security Collateral and shall,
if received by the Pledgor, be received in trust for the benefit of the
Pledgee, be segregated from the other property or funds of the Pledgor and be
forthwith delivered to the Pledgee as Security Collateral in the same form as
so received (with any necessary endorsement).

                           (iii) The Pledgee shall (A) execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and (B) release to the Pledgor amounts of the Collateral
as the Pledgor may reasonably request, but solely to the extent necessary to
permit the Pledgor to exercise the rights set forth in the Assigned Agreement;
provided that such exercise shall comply with the terms and provisions of such
agreements and provided further that upon the exercise by the Pledgor of any
such rights, all proceeds resulting from such exercise shall be, and shall be
forthwith delivered to the Pledgee to hold as, Collateral and shall, if
received by the Pledgor, be received in trust for the benefit of the Pledgee,
be segregated from the other property or funds of the Pledgor and be forthwith
delivered to the Pledgee as Collateral in the same form as so received (with
any necessary endorsement).

                           (iv) Upon the receipt by the Pledgee of adequate supporting documents, the
Pledgee shall release to the Pledgor amounts of the Collateral as the Pledgor
may reasonably request, but solely to the extent necessary to pay all taxes due
and payable by the Pledgor upon the exercise of any options under the
respective Assigned Agreement, and any gain recognized upon the sale or
exchange of any collateral, or on any dividends or distributions previously
received by the Pledgor and pledged to the Pledgee pursuant to paragraph (ii)
above.

                  (b) Upon the occurrence and during the continuance of any Event of Default
all rights of the Pledgor to exercise or refrain from exercising the consensual
rights that it would otherwise be entitled to exercise pursuant to Section
9(a)(i) shall cease, and all such rights shall thereupon become vested in the
Pledgee, which shall thereupon have the sole right to exercise or refrain from
exercising such consensual rights.

         Section 10   Transfers and Other Liens. The Pledgor shall not (a) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (b) create or permit to exist
any lien, security interest, option or other charge or encumbrance upon or with
respect to any of the Collateral, except for the security interest under this
Agreement.

         Section 11   Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Pledgee the Pledgor’s attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to

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 time in the Pledgee’s discretion, to take any action and to execute any
instrument that the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

                  (a) To ask for, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,

                  (b) To receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above, and

                  (c) To file any claims or take any action or institute any proceedings
that the Pledgee may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Pledgee with respect
to any of the Collateral.

         Section 12   Pledgee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Pledgee may itself perform, or cause
performance of, such agreement, and the expenses of the Pledgee incurred in
connection therewith shall be payable by the Pledgor.

         Section 13   Pledgee’s Duties. The powers conferred on the Pledgee
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Pledgee shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Pledgee has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Pledgee shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Pledgee accords its own
property.

         Section 14   Remedies. If any Event of Default shall have occurred and be
continuing:

                  (a) The Pledgee may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York at that time (the “UCC”)
(whether or not the UCC applies to the affected Collateral), and also may (i)
require the Pledgor to, and the Pledgor hereby agrees that it will at its
expense and upon request of the Pledgee forthwith, assemble all or part of the
Collateral as directed by the Pledgee and make it available to the Pledgee at a
place to be designated by the Pledgee which is reasonably convenient to both
parties and (ii) without notice except as specified below, sell or, to the
extent permitted by applicable law, purchase the Collateral or any part thereof
in one or more parcels at public or private sale, at

                  
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any of the Pledgee’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Pledgee may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to the Pledgor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Pledgee shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Pledgee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
The Pledgor hereby waives any claim against the Pledgee arising by reason of
the fact that the price at which any Collateral may have been sold at a private
sale was less than the price that might have been obtained at a public sale,
even if the Pledgee accepts the first offer received and does not offer such
Collateral to more than one offeree.

                  (b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws, the Pledgee may be compelled, with respect to
the sale of all or any part of the Collateral, to limit purchases to those who
will agree, among other things, to acquire such securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. The Pledgor acknowledges and agrees that any such sale may result in
prices and other terms less favorable to the seller than if such a sale were a
public sale without such restrictions, and notwithstanding such circumstances,
agrees that such sale shall be deemed to have been made in a commercially
reasonable manner.

                  (c) Any cash held by the Pledgee as Collateral and all cash proceeds
received by the Pledgee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
the Pledgee, be held by the Pledgee as collateral for, and then or at any time
thereafter be applied (after payment of any amounts payable to the Pledgee
pursuant to Section 15) in whole or in part by the Pledgee against, all or any
part of the Obligations in such order as the Pledgee shall elect. Any surplus
of such cash or cash proceeds held by the Pledgee and remaining after payment
in full of all the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.

                  (d) The Pledgee may exercise any and all rights and remedies of the
Pledgor under or in connection with the Assigned Agreement or otherwise in
respect of the Collateral, including, without limitation, any and all rights of
the Pledgor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreement.

                  (e) Subject to Section 9, all payments received by the Pledgor under or in
connection with the Assigned Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Pledgee, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Pledgee in the same form as so received (with any necessary endorsement).

                  
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In exercising the remedies provided for herein, the Pledgee shall comply with
all provisions of the Assigned Agreement and with applicable law, including
without limitation the securities laws.

         Section 15   Amendments. No amendment or waiver of any provision of this
Agreement, and no consent to any departure by the Pledgor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Pledgee.

         Section 16   Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the payment in full of the Obligations and all other
amounts payable under the Loan Documents (b) be binding upon the Pledgor, its
successors and assigns and (c) inure to the benefit of, and be enforceable by,
the Pledgee and its successors, transferees and assigns.

* * * * * * *

         IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Agreement, and the Pledgee has caused this Agreement to be duly executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.

	 	PLEDGOR

 

 

	 	/s/ Reed Krakoff

Reed Krakoff

	 	PLEDGEE

 

 

	 	By: /s/ Keith Monda

Title: Chief Operating Officer

Schedule I

Option

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Class of	 	 	 	 	 	 	 	 
	Pledgor	 	Issuer	 	Stock	 	Number of Shares	 	Exercise Price
	

	Reed Krakoff
	 	Coach, Inc	 	Common	 	 	150,000	 	 	$	16.00	 
	

	 
	

8<PAGE>   1

                                                                     EXHIBIT 4.4

                               FOURTH AMENDMENT TO
                            CLASS A RIGHTS AGREEMENT

       THIS FOURTH AMENDMENT to the Class A Rights Agreement dated April 22,
1992, as amended (as so amended, the "Existing Class A Agreement"), is dated as
of August 22, 2001 and is between TECUMSEH PRODUCTS COMPANY, a Michigan
corporation (the "Company"), and STATE STREET BANK AND TRUST COMPANY, N.A., as
Class A Rights Agent (the "Agent").

       WHEREAS, Section 26 of the Existing Class A Agreement entitles the
Company at any time prior to the Distribution Date (as therein defined) to amend
any provisions of the Existing Class A Agreement and requires the Agent, if
directed by the Company, to execute any such amendment upon the delivery of a
certificate from an appropriate officer of the Company which states that it is
in compliance with Section 26 (a "compliance certificate"); and

       WHEREAS, the Board of Directors of the Company has authorized and
approved the amendments to the Existing Class A Agreement hereafter set forth in
this Fourth Amendment and has directed the execution hereof, and a compliance
certificate concerning this Fourth Amendment has been delivered to the Agent;

       NOW, THEREFORE, in consideration of the foregoing and pursuant to Section
26 of the Existing Class A Agreement, the parties hereby agree as follows:

       1. Amendment of Definition of "Acquiring Person." The definition of
"Acquiring Person" in Section 1 of the Existing Class A Agreement is hereby
amended to read in its entirety as follows:

              "Acquiring Person" shall mean any Person who or which shall be the
       Beneficial Owner of 10% or more of the shares of Class B Stock then
       outstanding, but shall not include:

                  (i) the Company;

                  (ii) any Subsidiary of the Company;

                  (iii) any employee benefit plan of the Company or of any
              Subsidiary of the Company or any trustee or fiduciary with respect
              to any such plan acting in such capacity;

                  (iv) any Grandfathered Person, unless such Grandfathered
              Person after April 22, 1992 becomes the Beneficial Owner of more
              than the Grandfathered Percentage of the Class B Stock then
              outstanding;

<PAGE>   2

                  (v) any Person who or which becomes the Beneficial Owner of
              10% (or, if applicable, the Grandfathered Percentage) or more of
              the shares of Class B Stock then outstanding as a result of a
              reduction in the number of shares of Class B Stock outstanding due
              to the repurchase of shares of Class B Stock by the Company unless
              and until such Person, after becoming aware that such Person has
              become the Beneficial Owner of 10% (or, if applicable, the
              Grandfathered Percentage) or more of the then outstanding shares
              of Class B Stock, acquires beneficial ownership of additional
              shares of Class B Stock representing 1% or more of the shares of
              Class B Stock then outstanding; or

                  (vi) any such Person who or which has reported or is permitted
              to report such ownership (but less than 20%) on Schedule 13G under
              the Exchange Act (or any comparable or successor report), or on
              Schedule 13D under the Exchange Act (or any comparable or
              successor report) which Schedule 13D does not state any intention
              to or reserve the right to control or influence the management or
              policies of the Company or engage in any of the actions specified
              in Item 4 of such Schedule (other than the disposition of the
              Class B Stock). Within ten Business Days after being requested by
              the Company, such Person shall certify to the Company that such
              Person acquired beneficial ownership of shares of Class B Stock
              representing 10% or more of the outstanding Class B Stock
              inadvertently or without knowledge of the terms of the Class A
              Rights. If such Person, having been requested to so certify as
              aforesaid, fails to do so within ten Business Days, then such
              Person shall become an Acquiring Person immediately after such ten
              Business Day period. If such Person, after so certifying, acquires
              beneficial ownership of additional shares of Class B Stock while
              the Beneficial Owner of 10% or more of the shares of Class B Stock
              then outstanding, then such Person shall become an Acquiring
              Person immediately following the date on which the Company's Board
              of Directors shall adopt a resolution to that effect.

       2. Amendment of Section 11(a)(ii)(B). Section 11(a)(2)(B) of the Existing
Class A Agreement is hereby amended to read in its entirety as follows:

           (B) any Acquiring Person shall become the Beneficial Owner of 15%
       (or, if such Person is a Grandfathered Person, the greater of the
       Grandfathered Percentage or 15%) or more of the shares of Class B Stock
       then outstanding, other than pursuant to any transaction set forth in
       Section 13(a) hereof; or

       3. Amendment of Section 11(d). The first sentence of Section 11(d) of the
Existing Class A Agreement is hereby amended to read as follows:

           (d) For the purpose of any computation hereunder, the "current market
       price" per share of Class A Stock on any date shall be deemed to be the

                                      -2-

<PAGE>   3

       arithmetic mean of the average of the daily closing prices per share of
       the Class A Stock and the average of the daily closing prices per share
       of the Class B Stock for the ten consecutive Trading Days (as such term
       is hereinafter defined) immediately prior to such date; provided,
       however, if prior to the expiration of such requisite ten Trading Day
       period the issuer announces either (A) a dividend or distribution on such
       shares payable in such shares or securities convertible into such shares
       (other than the Class A Rights or rights issued under the Company's
       Amended and Restated Class B Rights Agreement dated as of April 22, 1992,
       as amended from time to time), or (B) any subdivision, combination or
       reclassification of such shares, then, following the ex-dividend date for
       such dividend or the record date for such subdivision, as the case may
       be, the "current market price" shall be properly adjusted to take into
       account such event.

       4. Amendment of Summary of Rights. Exhibit B to the Existing Class A
Agreement (Summary of Rights to Purchase Class A Stock) is hereby amended to
read in its entirety as set forth in Annex A to this Fourth Amendment.

       5. Affirmation. Except as specifically amended herein, the Existing Class
A Agreement shall remain in full force and effect as existing prior to the date
hereof.

       IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to be duly executed, all as of the date first above written.

TECUMSEH PRODUCTS COMPANY              STATE STREET BANK AND TRUST COMPANY, N.A.

By:  /s/ John H. Foss                  By:  /s/ Tyler Haynes
     ---------------------------            -------------------------------
     John H. Foss                           Tyler Haynes
Its: Vice President, Treasurer and     Its: Managing Director
     Chief Financial Officer

                                      -3-

<PAGE>   4

                                     ANNEX A

                                                                       EXHIBIT B

                   SUMMARY OF RIGHTS TO PURCHASE CLASS A STOCK

       Pursuant to a Class A Rights Agreement entered into in 1992, Tecumseh
Products Company (the "Company") distributed one Class A Right for each share of
Class A Stock issued by the Company. Each Class A Right entitles the registered
holder, subject to the terms of the Class A Rights Agreement, to purchase from
the Company one share of Class A Stock at a specified purchase price.

       The Class A Rights are issued pursuant to a Class A Rights Agreement
dated as of April 22, 1992, as amended, between the Company and State Street
Bank and Trust Company, N.A., as successor Class A Rights Agent. This summary
does not purport to be complete and is qualified in its entirety by reference to
all the provisions of the Class A Rights Agreement, including its definition of
certain terms. The Class A Rights Agreement is incorporated in this summary by
reference. Copies of the Class A Rights Agreement and all amendments to that
Agreement have been filed with the Securities and Exchange Commission and are
available free of charge from the Company.

       Each Class A Right entitles the registered holder, subject to the terms
of the Class A Rights Agreement, to purchase from the Company one share of Class
A Stock at a purchase price of $180.00 per share, subject to adjustment (the
"Purchase Price"). The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company.

       The Class A Rights currently are attached to all certificates
representing shares of outstanding Class A Stock. Class A Rights will also be
attached to all certificates representing shares of Class A Stock issued in the
future until the Distribution Date. Initially, no separate Class A Rights
Certificates will be distributed. Until the Distribution Date, the Class A
Rights will be evidenced by the certificates representing Class A Stock and will
be transferred with and only with those certificates. The Class A Rights are not
exercisable until the Distribution Date and will expire at the close of business
on August 25, 2009, unless earlier redeemed by the Company as described below.

       The Class A Rights will separate from the Class A Stock on the
Distribution Date. The Distribution Date will occur upon the earlier of (i) ten
business days following a public announcement (the "Stock Acquisition Date")
that a person or group of persons (an "Acquiring Person") has acquired 10% (or,
if such person or group is a "Grandfathered Person," the "Grandfathered
Percentage") or more of the then outstanding shares of Class B Stock other than
as a result of repurchases of Class B Stock by the Company or certain
inadvertent actions by institutional or certain other shareholders, or (ii) ten
business days (or a later date determined by the Board of Directors) following
the commencement, without Board approval, of a tender or exchange offer that
would result in a person or group owning 10% or more of the then

<PAGE>   5

outstanding shares of Class B Stock. Any person or group that owned 5% or more
of the Class B Stock outstanding on April 22, 1992 (a "Grandfathered Person")
will not be an Acquiring Person unless the percentage of outstanding shares of
Class B Stock owned by that Grandfathered Person subsequently exceeds twice the
percentage owned on April 22, 1992, plus an additional 1% (the "Grandfathered
Percentage"). An announcement by the Company will only give rise to the Stock
Acquisition Date if the Company expressly states in the announcement that it
will do so.

       After the Distribution Date, Class A Rights Certificates will be mailed
to holders of record of Class A Stock on the Distribution Date. From that point
on, the separate Class A Rights Certificates alone will represent the Class A
Rights.

       If (i) the Company survives a merger with an Acquiring Person and shares
of Class A Stock remain outstanding, or (ii) any Acquiring Person becomes the
owner of 15% (or, if such person is a Grandfathered Person, the greater of 15%
or the Grandfathered Percentage) or more of the outstanding shares of Class B
Stock (other than pursuant to a transaction described in the next paragraph), or
(iii) an Acquiring Person engages in one or more "self-dealing" transactions as
set forth in the Class A Rights Agreement, or (iv) the Company is a party to any
transaction which results in an Acquiring Person's ownership interest being
increased by more than 1% (other than a transaction described in the next
paragraph), then, in each such case, each Class A Right will thereafter
represent the right to receive, upon exercise, shares of Class A Stock (or, in
certain circumstances, shares of Class A Stock and cash, property, or other
securities of the Company) having a value (based on the current market price)
equal to two times the Purchase Price of the Class A Right. However, all Class A
Rights that are owned by any Acquiring Person will be null and void.

       If, at any time following the Stock Acquisition Date, (i) the Company
merges into any other person, (ii) any person merges into the Company and in
connection with the merger all or part of the Class A Stock is converted or
exchanged for cash or property, or securities of any other person, or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Class A Right (except Class A Rights which previously have been
voided as described above) will have the right to receive, upon exercise, common
stock of the Acquiring Person having a value (based on the current market price)
equal to two times the Purchase Price of the Class A Right.

       For purposes of the calculations described above, the current market
price of the Class A Stock will be considered to be the average of the daily
closing prices of the Class A Stock and the Class B Stock over a period of ten
consecutive trading days.

       The Purchase Price payable, and the number of shares of Class A Stock
issuable, upon exercise of the Class A Rights are subject to adjustment from
time to time to prevent dilution. Those circumstances are set forth in detail in
the Class A Rights Agreement. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. The Company is not required to issue fractional

                                      -2-
<PAGE>   6

shares. Instead, it may make a cash adjustment based on the market price of the
Class A Stock prior to the date of exercise.

       For ten business days following the Stock Acquisition Date, the Company's
Board of Directors may redeem all the Class A Rights at a price of one-fourth of
one cent ($.0025) per Class A Right, subject to adjustment (the "Redemption
Price"). The Redemption Price is payable, at the election of the Board, in cash
or shares of Class A Stock. Immediately upon action of the Board of Directors
ordering the redemption of the Class A Rights, the Class A Rights will terminate
and the holders of Class A Rights will only have a right to receive the
Redemption Price.

       Until a Class A Right is exercised, the holder of the Right will have no
rights as a shareholder of the Company with respect to that Right (but the
holder will have rights as a shareholder with respect to the Class A Stock that
the Class A Right is attached to). The distribution of the Class A Rights was
not taxable to shareholders or to the Company. However, Class A shareholders
may, depending on the circumstances, recognize taxable income if the Class A
Rights become exercisable.

       Any of the provisions of the Class A Rights Agreement may be amended at
any time prior to the Distribution Date. After the Distribution Date, the Class
A Rights Agreement may be amended to cure an ambiguity, defect, or
inconsistency, to make changes that do not adversely affect the interests of
holders of Class A Rights Certificates (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period. However, no amendment may be
made to lengthen the time period governing redemption when the Class A Rights
are not redeemable or to lengthen any other time period unless it is for the
purpose of protecting, enhancing, or clarifying the rights of and/or the
benefits to the holders of Class A Rights.

                                      -3-

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