Document:

EX-4.3

 

Exhibit 4.3

FIRST SUPPLEMENTAL INDENTURE

          FIRST SUPPLEMENTAL INDENTURE, dated as of July 15, 2005 (this “First Supplemental
Indenture”), by and between Fisher Scientific International Inc., a Delaware corporation (the
“Company”), having its principal office at Liberty Lane, Hampton, New Hampshire 03842, and
J.P. Morgan Trust Company, National Association, a national banking association organized and
existing under the laws of the United States, as Trustee (the “Trustee”) to the Indenture
(as defined below), having its principal corporate trust office at 4 New York Plaza,
15th Floor, New York, New York 10004.

W I T N E S S E T H:

          WHEREAS, the Company and the Trustee have heretofore executed and delivered an Indenture,
dated as of August 20, 2003 (the “Original Indenture”), pursuant to which the Company has
$300 million aggregate principal amount of 8% Senior Subordinated Notes due 2013 (the
“Notes”) outstanding;

          WHEREAS, Section 9.2 of the Original Indenture provides that the Company and the Trustee may,
with certain exceptions, amend the Indenture and the Notes with the consent of the Holders (as
defined in the Original Indenture) of a majority in principal amount of the Notes then outstanding;

          WHEREAS, the Company has distributed an Offer to Purchase and Consent Solicitation Statement,
dated as of June 28, 2005 (the “Solicitation Statement”), and accompanying Consent and
Letter of Transmittal, dated as of June 28, 2005, to the Holders of the Notes in connection with
certain proposed amendments to the Indenture as described in the Solicitation Statement (the
“Proposed Amendments”);

          WHEREAS, the Holders of at least a majority of the outstanding principal amount of the Notes
have duly consented to the Proposed Amendments;

          WHEREAS, the Board of Directors of the Company has determined that it is in the best interests
of the Company to authorize and approve the Proposed Amendments; and

          WHEREAS, the execution and delivery of this First Supplemental Indenture have been duly
authorized by all necessary corporate action on the part of the Company and all conditions and
requirements necessary to make this instrument a valid and binding agreement have been duly
performed and complied with.

          NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the
Trustee mutually covenant and agree, for the equal and ratable benefit of the Holders of the Notes,
as follows:

 

 

ARTICLE I — AMENDMENTS

          Section 1.1. Amendments to the Definitions in the Original Indenture and the Notes.

               (a) Upon the effective date of this First Supplemental Indenture certain definitions shall be
deemed deleted when references to such definitions would be eliminated as a result of the
amendments described herein.

               (b) Any definitions used exclusively in the provisions of the Notes that are deleted as
described in the Solicitation Statement, and any definitions used exclusively within such
definitions, are hereby deleted in their entirety from the Notes, and all references in the Notes
to paragraphs, Sections, Articles or other terms or provisions of the Original Indenture that have
been otherwise deleted pursuant to this First Supplemental Indenture are hereby deleted in their
entirety or revised to conform herewith.

          Section 1.2. Amendments to Article IV – Covenants. The following Sections of the
Original Indenture, and any corresponding provisions in the Notes, are hereby deleted in their
entirety and replaced with “Intentionally Omitted.”:

	 	 	 
	Existing Section Number	 	Caption
	Section 4.2.

	 	Limitation on Liens
	Section 4.3.

	 	Limitation on Incurrence of Additional Indebtedness
	Section 4.4.

	 	Limitation on Restricted Payments
	Section 4.5.

	 	Limitation on Dividends and Other Payment
	 

	 	Restrictions Affecting Subsidiaries
	Section 4.7.

	 	Limitation on Transactions with Affiliates
	Section 4.9.

	 	Prohibition on Incurrence of Senior Subordinated Debt
	Section 4.10.

	 	Limitation on Preferred Stock of Subsidiaries
	Section 4.11.

	 	Limitation on Guarantees By Restricted Subsidiaries
	Section 4.14.

	 	Corporate Existence
	Section 4.15.

	 	Payment of Taxes and Other Claims
	Section 4.16.

	 	Maintenance of Properties and Insurance
	Section 4.18.

	 	Additional Information

          Section 1.3. Amendments to Article V – Successor Company. Paragraph (a) of Section 5.1
of the Original Indenture is hereby amended by deleting clauses (ii) and (iii) thereof.

2

 

          Section 1.4. Amendments to Article VI – Events of Default. Section 6.1 of the
Original Indenture is hereby amended by deleting paragraphs (3), (4), (5), (6), (7) and (8)
thereof.

ARTICLE II — MISCELLANEOUS

          Section 2.1. Effect of Supplemental Indenture. From and after the effective date of
this First Supplemental Indenture, the Original Indenture and the Notes shall be supplemented in
accordance herewith, and this First Supplemental Indenture shall form a part of the Original
Indenture and the Notes for all purposes, and every Holder of Notes heretofore or hereafter
authenticated and delivered under the Original Indenture shall be bound thereby.

          Section 2.2. Indenture Remains in Full Force and Effect. Except as supplemented by
this First Supplemental Indenture, all provisions in the Original Indenture and the Notes shall
remain in full force and effect.

          Section 2.3. References to Supplemental Indenture. Any and all notices, requests,
certificates and other instruments executed and delivered after the execution and delivery of this
First Supplemental Indenture may refer to the Original Indenture without making specific reference
to this First Supplemental Indenture, but nevertheless all such references shall include this First
Supplemental Indenture unless the context requires otherwise.

          Section 2.4. Conflict with Trust Indenture Act. The Company will comply with the
provisions of the TIA. If any provision of this First Supplemental Indenture limits, qualifies or
conflicts with any provision of the TIA that is required under the TIA to be part of and govern any
provision of this First Supplemental Indenture, the provision of the TIA shall control. If any
provision of this First Supplemental Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture
as so modified or to be excluded by this First Supplemental Indenture, as the case may be.

          Section 2.5. Severability. If any court of competent jurisdiction shall determine that
any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

          Section 2.6. Terms Defined in the Original Indenture. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Original Indenture.

          Section 2.7. Headings. The Article and Section headings of this First Supplemental
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this First Supplemental Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.

3

 

          Section 2.8. Benefits of First Supplemental Indenture. Nothing in this First
Supplemental Indenture or the Notes, express or implied, shall give to any Person, other than the
parties hereto and thereto and their successors hereunder and thereunder and the Holders of the
Notes any benefit of any legal or equitable right, remedy or claim under the Original Indenture,
this First Supplemental Indenture or the Notes.

          Section 2.9. Successors. All agreements of the Company in this First Supplemental
Indenture shall bind their respective successors. All agreements of the Trustee in this First
Supplemental Indenture shall bind its successors.

          Section 2.10. Trustee Not Responsible for Recitals. The recitals contained herein
shall be taken as the statements of the Company and the Trustee assumes no responsibility for their
correctness.

          Section 2.11. Certain Duties and Responsibilities of the Trustee. In entering into
this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision
of the Original Indenture and the Notes relating to the conduct or affecting the liability or
affording protection to the Trustee, whether or not elsewhere herein so provided.

          Section 2.12. Governing Law. This First Supplemental Indenture shall be governed by,
and construed in accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.

          Section 2.13. Counterpart Originals. The parties may sign any number of copies of this
First Supplemental Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

          Section 2.14. Effectiveness. This First Supplemental Indenture shall become effective
upon execution and delivery by the Company and the Trustee.

          Section 2.15. Confirmation. Each of the Company and the Trustee hereby confirms and
reaffirms the Original Indenture in every particular except as amended and supplemented by this
First Supplemental Indenture.

4

 

          IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
duly executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	 	 	FISHER SCIENTIFIC INTERNATIONAL INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ KEVIN P. CLARK
	 

	 	 	 	 	 	Name: Kevin P. Clark
	 

	 	 	 	 	 	Title:   Vice President and Chief
            Financial
Officer
	 
	 	 	 	 	 	 
	J.P. MORGAN TRUST COMPANY, NATIONAL
ASSOCIATION,

as Trustee
	 
	 	 	 	 	 	 
	By:
	 	/s/ FRANCINE SPRINGER	 	 	 	 
	 

	 	 	 	 	 	 
	

	 	Name: Francine Springer	 	 	 	 
	

	 	Title:   Vice President	 	 	 	 

5<PAGE>

[ALIXPARTNERS LLC LOGO]                 Chicago Dallas DETROIT Dusseldorf London
                                        Los Angeles Milan Munich New York Tokyo

                                                                    Exhibit 10.1

July 20, 2005

Mr. Todd Herrick
Chairman, President & CEO
Tecumseh Products Company
100 E. Patterson Street
Tecumseh, MI 49286

Re: Agreement for Consulting Services

Dear Todd:

This letter outlines the understanding ("Agreement") between AlixPartners, LLC,
a Delaware limited liability company ("AlixPartners") and Tecumseh Products
Company (the "Company") of the objective, tasks, work product and fees for the
engagement of AlixPartners to provide consulting services to the Company.

All defined terms shall, unless the context otherwise requires, have the
meanings ascribed to them in Schedule 1 ("Definitions and Interpretation").

                                    OBJECTIVE

The overall objective of this engagement is to help Tecumseh Products Company
significantly improve its competitive positioning through decreased operational
costs.

                                      TASKS

Working with the Company's management:

-     Plan and implement a new manufacturing strategy designed to lower
      manufacturing costs.

-     Plan and implement changes to the sourcing process aimed at lowering the
      costs of raw materials and purchased products.

-     Plan and implement changes to the sales and operations planning process,
      and the related inventory management process, designed to improve supply
      chain visibility and reduce inventory.

2000 Town Center | Suite 2400 | Southfield, MI | 48075 | 248.358.4420 |
248.358.1969 fax | www.alixpartners.com

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[ALIXPARTNERS LLC LOGO]

Mr. Todd Herrick
July 20, 2005
Page 2

-     Plan and implement changes to product development and engineering aimed at
      lowering product costs.

-     Plan and implement other operational changes that help the Company reduce
      costs and improve efficiency.

-     Assist with other matters as may be requested that are within our
      expertise and that are mutually agreeable.

                                  WORK PRODUCT

Our work product will be in the form of:

-     Information to be discussed with you and others, as you may direct.

-     Written reports and analysis worksheets to support our suggestions as we
      deem necessary or as you may request.

                                    STAFFING

John Hoffecker will be responsible for the overall engagement pursuant to this
Agreement.

The engagement team, pursuant to this Agreement, will consist of consultants at
various levels, all of whom have a wide range of skills and abilities required
to perform this assignment. In addition, we have relationships with and
periodically retain independent contractors with specialized skills and
abilities to assist us.

The Company confirms that the AlixPartners' engagement team members will have
operational authority commensurate with their roles and as agreed to by the
Company.

                                 TIMING AND FEES

We will commence this engagement immediately upon receipt of a signed engagement
letter.

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[ALIXPARTNERS LLC LOGO]

Mr. Todd Herrick
July 20, 2005
Page 3

We typically work for a combination of daily fees and contingent success fees.
In this engagement, we will bill daily and commit to a fixed fee plus success
fee. AlixPartners shall be compensated for its Services under this Agreement in
accordance with the terms set forth on Schedule 2.

                                      * * *

The terms and conditions set out in the attached Schedules and the General Terms
and Conditions form part of and are incorporated by reference herein to this
Agreement.

If these terms meet with your approval, please sign and return the enclosed copy
of this letter and wire transfer $850,000 as stipulated on Schedule 2.

We look forward to working with you.

Sincerely yours,

ALIXPARTNERS, LLC

/s/ JOHN HOFFECKER

John Hoffecker
Managing Director

Acknowledged and Agreed to:

TECUMSEH PRODUCTS COMPANY

By: /s/ TODD W. HERRICK

Its: President and Chief Executive Officer

Dated: July 20, 2005

<PAGE>

[ALIXPARTNERS LLC LOGO]

                                   SCHEDULE 1

                         DEFINITIONS AND INTERPRETATION

<TABLE>
<S>                 <C>
Affiliate           Affiliates of AlixPartners include AP Services, LLC, a
                    company that provides temporary employees, AlixPartners
                    Asia, LLC, AlixPartners Ltd., AlixPartners GmbH,
                    AlixPartners S.r.l., and AlixPartners Asia, LLC, which are
                    financial advisory and consulting firms, The System Advisory
                    Group, providing information technology services,
                    Partnership Services, LLC, a company that provides temporary
                    employees, and the Questor funds, which are private equity
                    funds that invest in special situations and under-performing
                    companies;

Agreement           the terms and conditions set out, or referenced in, or
                    incorporated intothis letter;

Break Fee           the Break Fee (if any) payable by the Company in accordance
                    with Schedule 2;

Contingent Success  the success fees payable by the Company to AlixPartners, as
Fees                more particularly described in Schedule 2;

Expenses            costs and expenses which are incurred by AlixPartners, its
                    affiliates and their respective personnel in the performance
                    of the Services, as more particularly described in Schedule
                    2;

Fees                the professional fees payable by the Company to AlixPartners
                    in accordance with Schedule 2 which, where the context
                    requires, shall include the Fixed Fee, Break Fee and/or the
                    Success Fees, as the case may be;

General Terms and   the terms and conditions attached to and forming part of
Conditions          this Agreement;

Party or Parties    a party or the parties to this Agreement (as the case may
                    be);

Personnel           directors, officers, employees, agents, contractors and
                    sub-contractors;
</TABLE>

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[ALIXPARTNERS LLC LOGO]

<TABLE>
<S>                 <C>
Schedules           the schedules attached to, or referenced in, this Agreement,
                    and which form part of this Agreement, as such schedules may
                    be amended from time to time in accordance with this
                    Agreement;

Services            the services to be provided by AlixPartners under this
                    Agreement; and

Termination Date    the date on which this Agreement shall terminate.
</TABLE>

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[ALIXPARTNERS LLC LOGO]

                                   SCHEDULE 2

                                FEES AND EXPENSES

1.    FIXED FEE: The Company shall pay AlixPartners a fixed fee of $850,000 for
      work on this engagement, and for the work performed during the prior
      QuickStrike engagement as specified in the agreement dated April 28, 2005.
      Payment of the Fixed Fee is due on the start date of the engagement.

2.    CONTINGENT SUCCESS FEES:

      A.    Beginning on January 2, 2006, the Company shall pay AlixPartners a
            monthly Contingent Success Fee based on a portion of improvements in
            on-going cash flow from mutually agreed projects as set forth in a
            schedule developed and agreed to by AlixPartners and the Company
            within 30 days of the date of this Agreement (the "Cash Flow
            Improvement Schedule"):

            i.    Definition: Improvements in on-going cash flow may include,
                  but are not necessarily limited to, inventory-related cost
                  reductions (measured as 25% of inventory level reductions),
                  right-sizing direct, indirect and salaried staffing levels,
                  manufacturing efficiencies, quality improvements,
                  transportation cost reductions, and reducing or eliminating
                  capital expenditures that have been planned or are underway.

            ii.   Measurement: The Cash Flow Improvement Schedule shall list
                  specific projects that are designated for on-going cash flow
                  improvement, baselines for measuring improvements, targets for
                  improvements, and anticipated timing for improvements. Example
                  guidelines for measurement include:

                  -     Procurement cost reductions will be indexed for changes
                        in raw commodity (eg aluminum, iron, linerboard, plastic
                        resin) prices

                  -     The value of inventory reductions will be based on a
                        fixed unit cost and adjusted for forecasted sales

                  -     All benefits will be measured using a fixed exchange
                        rate

                  AlixPartners will use its commercially reasonable best efforts
                  to cause the Company to achieve the on-going cash flow
                  improvements targeted in the Cash Flow Improvement Schedule.

                  On-going cash flow improvement shall be measured monthly. The
                  January 2006 improvement shall be measured as the annualized
                  run-rate of the incremental on-going cash flow improvement
                  achieved on the approved projects since the start date of the
                  engagement. Subsequent monthly payments shall be measured as
                  the annualized run-

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[ALIXPARTNERS LLC LOGO]

                  rate of the incremental on-going cash flow improvement
                  achieved on the approved projects over the prior month in
                  which there was an improvement in on-going cash flow for such
                  projects. The measurement of improvements shall exclude all
                  one-time costs (e.g., severance, equipment move costs,
                  AlixPartners fees and expenses, etc.).

                  Calculation of the cash flow improvement Success Fee shall be
                  in accordance with the following schedule:

<TABLE>
<CAPTION>
                                    % of Incremental Cash Flow
            Measurement                Improvement Paid to
              Period                       AlixPartners
-------------------------------     --------------------------
<S>                                 <C>
Monthly,
January 2, 2006 - July 31, 2006                25%

Monthly,
August 1, 2006 - July 31, 2007                  5%
</TABLE>

            iii.  Payment: Payment of the cash flow improvement Success Fees
                  shall be due immediately upon Company's receipt of invoice.

            iv.   If no on-going cash flow improvement is achieved by the
                  Company for each of three consecutive months, during the
                  period beginning January 1, 2006 and ending when two or less
                  of the AlixPartners "Consulting Services" personnel are
                  working on the project on a full time basis, the Company may
                  terminate this Agreement without any obligation to pay a Break
                  Fee. However, this provision shall not effect the obligation
                  of the Company to pay the EBIT improvement Success Fee.

            v.    The Company shall be entitled to terminate this Agreement with
                  payment of the Fixed Fee of $850,000 but without payment of a
                  Break Fee if the cash flow improvement Schedule is not agreed
                  to as aforesaid within 30 days of the date of this Agreement,
                  unless the Parties agree in writing to an extension.

      B.    Contingent Success Fee Based on Improvements in EBIT for the Engine
            and Power Train Group:

            i.    Definition: EBIT is defined as a) earnings before interest and
                  taxes, b) before restructuring charges; and c) excluding any
                  asset impairments, allocations from the Company (e.g., charges
                  from the parent corporation) or allocation schemes to other
                  divisions, changes in personnel costs due to strategic hires
                  or pay raises, environmental charges, and extraordinary items.

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[ALIXPARTNERS LLC LOGO]

            ii.   Measurement: The baseline for measuring EBIT improvement shall
                  be the Engine and Power Train Group's cumulative EBIT from
                  August 1, 2004 through July 31, 2005.

                  There will be two measurement periods: 1) August 1, 2005
                  through July 31, 2006; and 2) August 1, 2006 through July 31,
                  2007. The difference between the cumulative EBIT in each
                  period and the baseline period represents the EBIT
                  improvement.

                  AlixPartners will earn EBIT Improvement Success Fees based on
                  the following schedule:

<TABLE>
<CAPTION>
                         % of Realized EBIT
      Measurement          Improvement Paid to
        Period                AlixPartners
----------------------   ---------------------
<S>                      <C>
August 1, 2005 through
July 31, 2006                    10%

August 1, 2006 through
July31, 2007                     10%
</TABLE>

            iii.  Payment of EBIT improvement Success Fees will be due
                  immediately upon Company's receipt of invoice.

                  During the period of time from the Termination Date until the
                  final payment of the Success Fee, a representative of
                  AlixPartners will talk monthly with a representative of the
                  Company to monitor actual achieved savings.

3.    OUT-OF-POCKET EXPENSES: In addition to the fees set forth above, the
      Company shall pay directly or reimburse AlixPartners upon receipt of
      periodic billings for all reasonable out-of-pocket expenses incurred in
      connection with this assignment as set forth in Section 2 of the attached
      General Terms and Conditions. Initial billings shall include expenses
      incurred during the prior QuickStrike engagement as specified in the
      agreement dated April 28, 2005.

4.    BREAK FEE: If this Agreement is terminated by the Company prior to July
      31, 2006, other than pursuant to 2.A.iv. and v. above, and other than as a
      result of a material breach by AlixPartners, the Company shall pay
      AlixPartners a Break Fee equal to the greater of (i) any daily fees
      recorded by AlixPartners, calculated at 100% of standard daily rates or
      (ii) the Cash Flow Improvement Success Fee; plus the EBIT Improvement
      Success Fee for the first of the two measurement periods (August 1, 2005
      through July 31, 2006).

      If the Company terminates this Agreement after July 31, 2006, other than
      pursuant to 2.A.iv.and v. above, and other than as a result of a material
      breach by AlixPartners, the Company shall pay AlixPartners a Break Fee
      equal to the greater of (i) any daily fees recorded

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[ALIXPARTNERS LLC LOGO]

      by AlixPartners, calculated at 100% of standard daily rates, or (ii) the
      cash flow improvement Success Fee; plus the EBIT improvement Success Fee
      for the two measurement periods (August 1, 2005 through July 31, 2007).

      If this Agreement is terminated by AlixPartners as a result of a) a
      material breach by the Company, b) a change in control of the
      Company/Division, c) promotion or hiring of a new CEO, or d) failure of
      the Company to grant AlixPartners engagement team members operational
      authority commensurate with their roles, then the Company shall pay
      AlixPartners a Break Fee equal the greater of (i) any daily fees recorded
      by AlixPartners, calculated at 100% of standard daily rates, or (ii) the
      cash flow improvement Success Fee, plus any earned EBIT improvement
      Success Fees. The earned EBIT improvement Success Fees is defined as the
      pro-rata share calculated on the agreed-upon baseline.

      AlixPartners engagement team members will record the days they perform
      work related to the engagement; this will enable the calculation of a
      Break Fee, if required, as described above. Our standard daily rates are
      as follows:

<TABLE>
<S>                       <C>
Managing Directors        $6,270 - $7,590
Directors                 $4,730 - $5,830
Vice Presidents           $3,520 - $4,510
Associates                $2,750 - $3,080
Analysts                  $1,980 - $2,420
Paraprofessionals                  $1,650
</TABLE>

      AlixPartners will review and revise its daily rates effective each January
      1, but increases will be limited to a maximum of 4%.

5.    DETERMINATION OF CONTINGENT SUCCESS FEES: AlixPartners will meet (in
      person or by telephone) with Jim Nicholson to review and validate
      improvements and fees as described above. If AlixPartners and Jim
      Nicholson do not agree on the measurement of the improvements and fees
      within 15 days, then a Steering Committee comprised of Todd Herrick, Kent
      Herrick, Jim Nicholson, John Hoffecker and the interim President of the
      Engine and Power Train Group will meet (in person or by telephone) to
      review and validate improvements and fees as described above. Agreement is
      defined as 4 of 5 members agreeing.

6.    RETAINER: In light of the Fixed Fee described above, AlixPartners does not
      require a retainer for this engagement.

<PAGE>

[ALIXPARTNERS LLC LOGO]

                                   SCHEDULE 3

                                   DISCLOSURES

We know of no fact or situation that would represent a conflict of interest for
us with regard to the Company. However, we wish to disclose the following:

-     Questor Partners Fund, L.P. ("QPF") and an affiliated side-by-side fund
      and Questor Partners Fund II, L.P. ("QPF II") and affiliated side-by-side
      funds, $300 million and $865 million funds, respectively, are private
      equity funds that invest in special situations and under-performing
      companies. Neither QPF nor QPF II will make an investment in the Debtors
      for at least three years after the date that AlixPartners' engagement
      terminates.

-     Mr. Jay Alix, a managing director in AlixPartners, is also the President
      and CEO of Questor Management Company, LLC ("Questor"), the entity that
      manages QPF and QPF II.

-     Questor and AlixPartners are separate companies. AlixPartners, pursuant to
      contract, performs certain accounting and other administrative services
      for Questor. From time to time, Questor hires AlixPartners as a contractor
      to advise it regarding a potential acquisition, and occasionally investee
      companies of QPF and QPF II hire AlixPartners. From time to time,
      employees of AlixPartners are elected to the boards of directors of
      investee companies of QPF and QPF II, but no such board members are
      involved in this engagement.

-     Mr. Alix and Mr. Robert Shields own interests in Questor General Partner,
      LP ("QGP") and Questor General Partner II, LP ("QGP II"), the general
      partners of QPF and QPF II. Substantially all of the AlixPartners managing
      directors are limited partners in QGP II and, as such, are passive
      participants in the general partner with no voice in authorizing QPF II's
      investments. Mr. Alix, Mr. Albert A. Koch, and Mr. Michael Grindfors are
      also managing directors of Questor and, along with Mr. Shields, members of
      its Investment Committee. The Investment Committee makes investment
      decisions for Questor.

-     Substantially all of the managing directors of AlixPartners own limited
      partnership interests in one or more of the following entities: Questor
      Side-by-Side Partners, L.P. ("SBS"), Questor Side-by-Side Partners II,
      L.P. ("SBS II") and Questor Side-by-Side Partners II 3(c)(1), L.P. ("SBS
      II 3c1"). Limited partners, except for Mr. Alix, Mr. Koch and Mr.
      Grindfors are passive investors and have no voice in approving the
      entities' investments.

-     Some of the limited partners of QPF and/or QPF II are affiliates of
      financial institutions that are also lenders to companies that may have
      retained AlixPartners. The affiliates of such financial institutions are
      passive investors in QPF and QPF II and have no voice in approving
      Questor's investments. Where such situations occur, the lending
      relationship and investment in QPF and/or QPF II is detailed in
      AlixPartners' disclosures.

<PAGE>

[ALIXPARTNERS LLC LOGO]

-     QPF, QPF II, SBS, SBS II, SBS II 3c1 and Questor are all related entities.
      The Side-by-Side funds contain, in the aggregate, 6.3% of the total
      Questor funds, which are in excess of $1.17 billion.

-     Albert A. Koch, a director of Tecumseh Products Company, is a managing
      director of AlixPartners, LLC; and

            Mr. Koch has advised, or will advise, the other directors that:

                  (a) he is an employee of AlixPartners, LLC;

                  (b) he does not perform policy making functions for
            AlixPartners, LLC similar to those performed for a corporation by
            its president, a vice president in charge of a principal business
            unit, division, or function (such as sales, administration, or
            finance), or other officer who performs policy making functions;

                  (c) he is not a director of AlixPartners, LLC or a person who
            performs functions for AlixPartners, LLC similar to those performed
            by a director of a corporation;

                  (d) he does not own any portion of the equity interest in
            AlixPartners, LLC;

                  (e) his compensation from AlixPartners, LLC is determined by
            its compensation committee (of which he is not a member) based on a
            variety of factors, including revenues and profits received by
            AlixPartners, LLC from all sources and not specifically from this
            certain letter agreement between Tecumseh Products Company and
            AlixPartners, LLC (the "Agreement"); and

                  (f) he anticipates that the fees to be paid to AlixPartners,
            LLC for the consulting services under the Agreement will constitute
            less than 5% of the total consolidated revenues of AlixPartners, LLC
            and its subsidiaries, if any, for its current fiscal year.

This Schedule 2 may be updated by AlixPartners from time to time to disclose
additional connections or relationships between AlixPartners and the interested
parties.

<PAGE>

                                ALIXPARTNERS, LLC
                          GENERAL TERMS AND CONDITIONS

These General Terms and Conditions ("Terms") shall govern the services provided
by AlixPartners, LLC ("AlixPartners") as set forth in the Agreement executed by
the Company and AlixPartners to which these Terms are attached.

SECTION 1. COMPANY RESPONSIBILITIES.

COMPANY WILL UNDERTAKE RESPONSIBILITIES AS SET FORTH BELOW:

1.    Provide reliable and accurate detailed information, materials,
      documentation, and

2.    Make decisions and take future actions, as the Company determines in its
      sole discretion, on any recommendations made by AlixPartners in connection
      with the tasks or deliverables under this Agreement.

AlixPartners' delivery of the services and the fees charged are dependent on (i)
Company's timely and effective completion of its responsibilities; and (ii)
timely decisions and approvals made by the Company's management. Company shall
be responsible for any delays, additional costs, or other deficiencies caused by
not completing its responsibilities.

SECTION 2. TIMING, FEES, AND EXPENSES.

The engagement will commence immediately upon receipt of a signed engagement
letter and a retainer as described in Schedule 2.

FEES. For purposes of monthly billings, AlixPartners will be compensated in
accordance with the terms reflected in Schedule 2.

We review and revise our billing rates effective January l of each year.

OUT-OF-POCKET EXPENSES. In addition to Fees as defined in the Agreement, the
Company shall pay directly or reimburse AlixPartners upon receipt of periodic
billings for all reasonable out-of-pocket expenses incurred in connection with
this assignment such as travel, lodging, postage, telephone and facsimile
charges, capped at 15% of Fees, including Contingent Success Fees and/or the
Break Fee.

PAYMENT. All payments to be made by the Company to AlixPartners under this
Agreement (including but not limited to, the Fees, Expenses and Contingent
Success Fee) shall be payable upon receipt of invoice via wire transfer to
AlixPartners' bank account, the details of which are as follows:

      Receiving Bank: Comerica Bank
                      ABA #072000096

      Receiving Account: AlixPartners, LLC
                         A/C #1851-765386

SECTION 3. RELATIONSHIP OF THE PARTIES.

The parties intend that an independent contractor relationship will be created
by this Agreement. AlixPartners employees are not to be considered employees or
agents of the Company and the employees of AlixPartners are not entitled to any
of the benefits that the Company provides for the Company's employees.

The Company also agrees not to solicit, recruit, or hire any employees or agents
of AlixPartners for a period of two years subsequent to the completion and/or
termination of the Agreement.

SECTION 4. CONFIDENTIALITY.

AlixPartners agrees to keep confidential all information obtained from the
Company. AlixPartners agrees that neither it nor its directors, officers,
employees, agents or attorneys will disclose to any other person or entity, or
use for any purpose other than specified herein, any information pertaining to
the Company or any affiliate thereof, which is either non-public, confidential
or proprietary in nature ("Information") that it obtains or is given access to
during the performance of the services provided hereunder. AlixPartners may make
reasonable disclosures of Information to third parties in connection with the
performance of its obligations and assignments hereunder. In addition,
AlixPartners will have the right to disclose to others in the normal course of
business its involvement with the Company.

Information includes data, plans, reports, schedules, drawings, accounts,
records, calculations, specifications, flow sheets, computer programs, source or
object codes, results, models, or any work product relating to the business of
the Company, its subsidiaries, distributors, affiliates, vendors, customers,
employees, contractors, and consultants.

The Company acknowledges that all advice (written or oral), including Work
Product, given by AlixPartners to the Company in connection with AlixPartners'
engagement is intended solely for the benefit and use of the Company (limited to
its management and its Board of Directors) in connection with the services to
which it relates. The Company agrees that no such advice shall be used for any
other purpose or reproduced, disseminated, quoted, or referred to with
attribution to AlixPartners at any time, in any manner, or for any purpose
without AlixPartners' prior approval (which shall not be unreasonably withheld)
except as required by law.

SECTION 5. INTELLECTUAL PROPERTY.

All methodologies, processes, techniques, ideas, concepts, know-how, procedures,
software, tools, writings and other intellectual property that AlixPartners has
created, acquired or developed prior to the date of this Agreement are, and
shall remain, the sole and exclusive property of AlixPartners, and the Company
shall not acquire any interest therein. AlixPartners shall be free to use all
methodologies, processes, techniques, ideas, concepts, know-how, procedures,
software, tools, writings and other intellectual property that AlixPartners may
create or develop in connection with this engagement except to the extent that
the same contain information or materials furnished to AlixPartners by the
Company that constitute Information referred to in Section 4 above. Except as
provided above, all information, reports, materials, software and other work
product that AlixPartners creates or develops specifically for the Company as
part of this engagement (collectively known as "Work Product") shall be owned by
the Company and shall constitute Information referred to in Section 4 above.
AlixPartners may retain copies of the Work Product, subject to its obligations
under Section 4 above.

SECTION 6. FRAMEWORK OF THE ENGAGEMENT.

The Company acknowledges that it is hiring AlixPartners purely to assist and
advise the Company as described in the Agreement. AlixPartners' engagement shall
not constitute an audit, review, or

<PAGE>

                                ALIXPARTNERS, LLC
                          GENERAL TERMS AND CONDITIONS

compilation, or any other type of financial statement reporting or consulting
engagement that is subject to the rules of the AICPA, the SSCS, or other such
state and national professional bodies.

SECTION 7. INDEMNIFICATION AND OTHER MATTERS.

In engagements of this nature, it is our practice to receive indemnification.
Accordingly, in consideration of our agreement to act on your behalf in
connection with this engagement, you agree to indemnify, hold harmless, and
defend us (including our directors, officers, employees, and agents) from and
against all claims, liabilities, losses, expenses and damages arising from
services performed by AlixPartners personnel in accordance with this Agreement.
With respect to any matter for which indemnification is provided herein, the
Company shall pay costs as incurred, including reasonable legal fees and
disbursements of counsel in any legal proceeding in which we may be required or
agree to participate but in which we are not a party. We, our directors,
officers, employees, and agents will engage a single firm of separate counsel
acceptable to the Company, which approval shall not be unreasonably withheld, in
connection with any of the matters to which this indemnification agreement
relates.

AlixPartners is not responsible for any third-party products or services. The
Company's sole and exclusive rights and remedies with respect to any third party
products or services are against the third party vendor and not against
AlixPartners. AlixPartners shall not be liable to the Company, except for claims
resulting from bad faith, self-dealing, or gross negligence.

The obligations of the parties as reflected herein shall survive the termination
of the engagement.

SECTION 8. GOVERNING LAW.

This Agreement is governed by and construed in accordance with the laws of the
State of Michigan with respect to contracts made and to be performed entirely
therein and without regard to choice of law or principles thereof.

Any controversy or claim arising out of or relating to this contract, or the
breach thereof, shall be settled by arbitration. Each party shall appoint one
non-neutral arbitrator. The two party arbitrators shall select a third
arbitrator. However, if within thirty days after their appointment the two party
arbitrators do not select a third arbitrator, the third arbitrator shall be
selected by the American Arbitration Association (AAA). The arbitration shall be
conducted under the AAA's Commercial Arbitration Rules, and the arbitrators
shall issue a reasoned award. The arbitrators may award costs and attorneys'
fees to the prevailing party. Judgment on the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The arbitration shall
be heard in Southfield, Michigan.

SECTION 9. TERMINATION AND SURVIVAL.

This Agreement may be terminated at any time by written notice by one party to
the other; provided, however, that notwithstanding such termination,
AlixPartners will be entitled to any fees and expenses due under the provisions
of the Agreement, including Contingent Success Fee and Break Fee in accordance
with Schedule 2. The Break Fee is due and payable at the Termination Date. Such
payment obligation shall inure to the benefit of any successor or assignee of
AlixPartners.

Additionally, unless AlixPartners is terminated by the Company for cause (as
defined below) or due to circumstances described in the Contingent Success Fee
provision in the Agreement, AlixPartners shall remain entitled to the Contingent
Success Fee(s) that otherwise would be payable for the greater of 12 months from
the date of termination or the period of time that that has elapsed from the
date of this Agreement to the date of termination. Cause shall mean:

(a) an AlixPartners representative acting on behalf of the Company is convicted
of a felony, or

(b) it is determined in good faith by the Board of Directors of the Company, and
after thirty (30) days notice and opportunity to cure, either (i) an
AlixPartners representative engages in misconduct injurious to the Company, or
(ii) an AlixPartners representative breaches any of his or her material
obligations under this Agreement, or (iii) an AlixPartners representative
willfully disobeys a lawful direction of the Board of Directors or senior
management of the Company.

Sections 2, 4, 5, 7, 8, 9, and 10 shall survive the expiration or termination of
the Agreement.

SECTION 10. GENERAL.

SEVERABILITY. If any portion of the Agreement shall be determined to be invalid
or unenforceable, we each agree that the remainder shall be valid and
enforceable to the maximum extent possible.

ENTIRE AGREEMENT. The Terms and the attached Agreement contain the entire
understanding of the parties relating to the services to be rendered by
AlixPartners and may not be amended or modified in any respect except in writing
signed by the parties. AlixPartners will not be responsible for performing any
services not specifically described in this Agreement or in a subsequent writing
signed by the parties. If there is a conflict between these Terms and the
Agreement, these Terms shall govern.

NOTICES. All notices required or permitted to be delivered under this Agreement
shall be sent, if to AlixPartners, to the address set forth in the Agreement, to
the attention of Mr. Melvin R. Christiansen, and if to Company, to the address
set forth in the Agreement, to the attention of your General Counsel, or to such
other name or address as may be given in writing to the other party. All notices
under the Agreement shall be sufficient if delivered by facsimile or overnight
mail. Any notice shall be deemed to be given only upon actual receipt.

SECTION 11. DISCLOSURES.

AlixPartners knows of no fact or situation, other than those disclosed in
Schedule 3, which would represent a conflict of interest for AlixPartners with
regard to the Company. As a large, multi-national firm, AlixPartners has many
present and former clients, and will have future clients, some of which may be
competitors of the Company. While AlixPartners is not aware of any
relationships, other than those disclosed in Schedule 3, that connect
AlixPartners to any party in interest, because AlixPartners is a consulting firm
that serves clients on a national basis in numerous cases, it is possible that
AlixPartners may have rendered services to or have business associations with
other entities which had or have relationships with the Company. AlixPartners
has not and will not represent the interests of any of the entities disclosed on
Schedule 3 in this case.

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