First Addendum to Interim Management, Advisory, and Consulting Services Agreement between AP Services, LLC and Tecumseh Products Company (January 19, 2007)
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This addendum updates the agreement between AP Services, LLC and Tecumseh Products Company, expanding AP Services’ role to provide interim executive management, including appointing James Bonsall as President and COO and Bob Busch as VP Finance. AP Services will also supply additional consultants to help with cash management and operational restructuring, focusing on the company’s operations in Brazil and Mexico. The retainer is increased to $800,000, with monthly fees capped at $663,000 (excluding certain roles). The addendum expires June 30, 2007, unless otherwise modified.
EX-10.1 2 k11712exv10w1.txt FIRST ADDENDUM DATED JANUARY 19, 2007 EXHIBIT 10.1 (APSERVICES LLC LOGO) Detroit New York Chicago Dallas January 19, 2007 Board of Directors Tecumseh Products Company 100 E. Patterson Street Tecumseh, MI 49286 Re: Interim Management, Final Advisory and Consulting Services - First Addendum Gentlemen: This letter represents the first addendum (the "First Addendum") to the agreement between AP Services, LLC, a Michigan limited liability company ("APS") and Tecumseh Products Company ("TPC" or the "Company") dated December 7, 2006 (the "Engagement Letter.") Unless otherwise modified herein, the terms and conditions of the Engagement Letter remain in full force and effect. THIS FIRST ADDENDUM ADDS THE FOLLOWING TASKS TO THE ENGAGEMENT LETTER, AMENDS THE RATES FOR MESSRS. BONSALL AND BUSCH AND INCREASES THE AMOUNT OF THE RETAINER. OBJECTIVES AND TASKS The following tasks are incremental to those outlined in the Engagement Letter: APS will provide James Bonsall to serve as the Company's President and Chief Operating Officer ("President"). Reporting relationships of the President and the other Company personnel will be as established by the Board of Directors. APS may provide additional resources including a cash manager and up to two operational consultants. Jim Bonsall as well as all APS personnel regardless of designation or title will be deemed to be temporary staff ("Temporary Staff") of the Company. Working collaboratively with the Board of Directors and other Company professionals, Mr. Bonsall will assist the Company in evaluating and implementing strategic and tactical options for performance improvement. Mr. Bonsall will: - - Perform functions typically assigned to the President and Chief Operating Officer in accordance with the Bylaws of the Company. - - Continue his role as President-Engine & Transmission Group until a replacement is found. In addition, the Temporary Staff will work with the Company and its team to do the following: 2000 Town Center | Suite 2400 | Southfield, MI | 48075 | 248 ###-###-#### | 248 ###-###-#### fax | www.alixpartners.com (APSERVICES LLC LOGO) Tecumseh Products Company January 19, 2007 Page 2 - - Analyze cash sources and identify potential additional sources of cash including opportunities to reduce worldwide inventories. - - Develop and oversee the implementation of an operational restructuring plan that is designed to streamline the Company's cost base and efficiency of operations. Our initial focus will be on the Company's compressor operations in Brazil and electrical operations in Mexico. - - Assist with such other matters as may be requested that fall within APS' expertise and that are mutually agreeable. - - Bob Busch shall continue his role as Vice President Finance, Engine & Transmission Group until a replacement is found. RETAINER AND FEES In addition to the Retainer paid in accordance with the Engagement Letter, the Company shall pay APS an additional $200,000 for a total Retainer of $800,000 to be applied against Fees and Expenses as set forth in the Engagement Letter and its General Terms and Conditions. Professional fees under this First Addendum are limited to $663,000 monthly plus expenses. For the purpose of clarity, fees for Bob Busch acting in his role of VP-Finance Engine and Transmission Group will not be subject to this maximum. Subject to the General Terms and Conditions, this First Addendum shall expire June 30, 2007. We confirm that neither APS nor any affiliate of APS shall participate in any sales transaction as a purchaser of the Company, its assets or any of its operating units. * * * (APSERVICES LLC LOGO) Tecumseh Products Company January 19, 2007 Page 3 If these terms meet with your approval, please sign and return the enclosed copy of the First Addendum and wire transfer the amount to increase the Retainer. We look forward to our continuing relationship with you. Sincerely yours, AP SERVICES, LLC James J. Bonsall Managing Director Acknowledged and Agreed to: TECUMSEH PRODUCTS COMPANY By: --------------------------------- Its: -------------------------------- Dated: ------------------------------ AP SERVICES, LLC EMPLOYMENT BY TECUMSEH PRODUCTS COMPANY FIRST ADDENDUM EXHIBIT A TEMPORARY EMPLOYEES INDIVIDUALS WITH EXECUTIVE OFFICER POSITIONS
WITH THE EXCEPTION OF BOB BUSCH, ADDITIONAL TEMPORARY STAFF
(1) Full time is defined as substantially full time. (2) Part time is defined as approximately 2-3 days per week, with some weeks more or less depending on the needs and issues facing the Company at that time.
