Warrant To Purchase Class A Common Stock

EXHIBIT 10.1


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,THE MICHIGAN UNIFORM SECURITIES ACT, OR ANY OTHER STATE SECURITIES LAW, AND NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933,THE MICHIGAN UNIFORM SECURITIES ACT, AND ANY OTHER
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.


No. CAW-1 April 9, 2007


WARRANT TO PURCHASE CLASS A COMMON STOCK
OF
TECUMSEH PRODUCTS COMPANY,
A MICHIGAN CORPORATION


VOID AFTER APRIL 9, 2012


This certifies that for value received TRICAP PARTNERS II L.P., a Delaware limited liability company, or its permitted registered assigns ("Holder"), is entitled, subject to the terms set forth below, at any time before 5:00 p.m., Detroit, Michigan time, on April 9, 2012, to purchase from TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the "Company"), up to 1,390,944 shares of the Class A common stock of the Company ("Common Stock") at a price per share equal to the applicable Purchase Price (as defined below), upon surrender of this Warrant at the principal office of the Company referred to below, with the attached subscription form (the "Subscription Form") duly executed, and simultaneous payment therefor in the manner specified in Section 1. The Purchase Price and the number of shares of Common Stock purchasable hereunder (the "Warrant Shares") are subject to adjustment as provided in Section 3.


As used in this Warrant:


"Business Day" means any day other than Saturday, Sunday or any other
day which is a legal holiday under the laws of the state of New York or any
day on which commercial banks are not authorized or required by law to
close in the City of New York, New York.


"Closing Price" means, for a Trading Day, the price at which the
Common Stock last traded on that day, as reported by the Trading Market.


"Exercise Date" means the particular date (or dates) on which this
Warrant is exercised.


"Issue Date" means April 9, 2007.


"Purchase Price" means:


(a) with respect to any Exercise Date on or before the first
anniversary of the Issue Date, 65% of the lowest Closing Price of the
Common Stock during the period beginning on March 27, 2007 and ending
on the day before the Exercise Date; and


(b) with respect to any Exercise Date after the first anniversary
of the Issue Date, 65% of the lowest Closing Price of the Common Stock
during the period beginning on March 27, 2007 and ending on the first
anniversary of the Issue Date.


"Trading Day" means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
is not quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day.


"Trading Market" means the markets or exchanges on which the Common
Stock is or may become listed or quoted for trading on the date in
question, including the American Stock Exchange, the New York Stock
Exchange, the Nasdaq Global Market, the Nasdaq Capital Market, OTC Bulletin
Board, or the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices).


"Warrant" means this Warrant and any warrant delivered in substitution
or exchange for this Warrant as provided herein.


"Warrant Shares" means any shares of Common Stock acquired by Holder
upon exercise of this Warrant.


1. Exercise.


(a) This Warrant may be exercised, in whole or in part, at any time or from time to time, on any Business Day, for all or any part of the number of shares of Common Stock called for hereby, by surrendering it at the principal office of the Company, 100 East Patterson Street, Tecumseh, Michigan 49286, together with: (A) a completed and executed Subscription Form; and (B) a certified or cashier's check in an amount equal to the number of shares of Common Stock being purchased multiplied by the applicable Purchase Price unless such exercise is by means of a cashless exercise pursuant to Section 5.


(b) This Warrant may be exercised for less than the full number of shares as of the Exercise Date. Upon such partial exercise, this Warrant shall be surrendered, and a new Warrant of the same tenor and for the purchase of the Warrant Shares not purchased upon such exercise shall be issued to Holder by the Company.


(c) A Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. As soon as practicable on or after such date, and in any event within five Business Days thereafter, the Company shall provide its transfer agent with instructions to issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Common Stock issuable upon such exercise, together with cash, in lieu of any fraction of a share,


2


equal to such fraction of the current fair market value of one full share as reasonably determined in good faith by the Company's Board of Directors.


2. Payment of Taxes. All shares of Common Stock issued upon the exercise of a Warrant shall be validly issued, fully paid, and nonassessable, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issue or delivery thereof, other than any tax or other charge imposed in connection with any transfer involved in the issue of any certificate for shares of Common Stock in any name other than that of the registered Holder of the Warrant surrendered in connection with the purchase of such shares, and in such case the Company shall not be required to issue or deliver any stock certificate until such tax or other charge has been paid or it has been established to the Company's satisfaction that no tax or other charge is due.


3. Certain Adjustments.


(a) Adjustment for Dividends in Securities or Property; Reclassifications. In case at any time or from time to time after the Issue Date the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible shareholders (a "Record Date"), shall have become entitled to receive, without payment therefor,


(1) other or additional stock or other securities or property
(including cash) by way of dividend,


(2) other or additional stock or other securities or property by
way of stock-split, spin-off, reclassification, combination of shares, or
similar corporate rearrangement,


(other than additional shares of Common Stock of the Company issued as a stock dividend or stock-split, which events shall be covered by the terms of Section 3(b) or 3(c)), then and in each such case Holder, upon the exercise hereof as provided in Section 1, shall be entitled to receive the amount of stock and other securities and property which such Holder would have received if, upon the Record Date such Holder had been the holder of the number of shares of Common Stock called for on the face hereof and had thereafter, during the period from the Issue Date through the date of such exercise, retained such shares and/or all other or additional stock and other securities and property receivable by it as aforesaid during such period, giving effect to all adjustments called for during such period by Sections 3(a) and 3(b).


(b) Adjustment for Reclassification, Merger, or Share Exchange. In case of any reclassification, merger, share exchange, or other similar corporate reorganization on or after the Issue Date in which holders of outstanding Common Stock receive stock or other securities or property in exchange for their Common Stock, then and in each such case Holder, upon the exercise hereof at any time after the consummation of such reclassification, merger, share exchange, or other reorganization, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which the Holder would have been entitled upon such consummation if the Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in paragraph (a), and in each such case, the terms of this Section 3 shall be applicable to the Company securities properly receivable upon the exercise of this Warrant after such consummation.


3


(c) Adjustments for Dividends in Common Stock. In case at any time after the Issue Date the Company shall declare any dividend on the Common Stock which is payable in Common Stock, the number of Warrant Shares evidenced hereby shall be proportionately increased and the Purchase Price shall be proportionately decreased.


(d) Stock Split and Reverse Stock Split. If the Company at any time or from time to time after the Issue Date effects a subdivision of the outstanding Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and ...