Exhibit 10.4
Execution Copy
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD AMENDMENT TO CREDIT
AGREEMENT, dated as of September 18, 2009 (this
“Amendment”), is among Modine Manufacturing Company, a
Wisconsin corporation, any Foreign Subsidiary Borrowers, the
Lenders party hereto and JPMorgan Chase Bank, N.A., a national
banking association, as Swing Line Lender, as LC Issuer and as
Agent.
R E C I T A L
The Borrower, the Lenders party
thereto and the Agent are parties to an Amended and Restated Credit
Agreement dated as of July 18, 2008 (as amended or modified
from time to time, the “Credit Agreement”). The
Borrower desires to amend the Credit Agreement and the Agent and
the Lenders are willing to do so in accordance with the terms
hereof.
T E R M S
In consideration of the premises and
of the mutual agreements herein contained, the parties agree as
follows:
ARTICLE 1.
AMENDMENTS
The Credit Agreement shall be
amended as follows:
1.1 The following definitions are
added to Article I of the Credit Agreement in appropriate
alphabetical order:
“Additional Restructuring
Charges” means certain cash charges of the Borrower and its
Subsidiaries related to plant closures under consideration by the
Borrower as of September 15, 2009 as described to the Lenders
subject to the following limitations:
(a) such charges specifically relate
to the following categories of expense incurred in connection with
any such restructuring: severance and related benefits; contractual
salary continuation with respect to terminated employees; retained
restructuring consulting; equipment transfer; employee
outplacement; environmental services; and employee insurance and
benefits continuation.
(b) the aggregate amount of all
Additional Restructuring Charges shall not exceed
$20,000,000.
“Additional Sale Leaseback
Transactions” means all Sale and Leaseback Transactions
occurring after September 18, 2009.
“Make-Whole Amount”
means the Make-Whole Amount as defined in, and payable under, the
2005 Note Purchase Documents and the 2006 Note Purchase
Documents.
“Third Amendment” means
the Third Amendment to this Agreement dated as of
September 18, 2009.
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“2008 Credit Agreement
Superpriority Amount” is defined in the Intercreditor
Agreement.
“2008 Credit Agreement Base
Amount” is defined in the Intercreditor Agreement.
“2009 Equity Offering”
means the equity offering as described by the Borrower to the
Lenders prior to September 18, 2009 and proposed to be closed
on or before September 30, 2009.
1.2 The following definitions in
Article I of the Credit Agreement are restated as
follows:
“Consolidated Interest
Expense” means, as to any Person and with reference to any
period, the interest expense of such Person and its Subsidiaries
calculated on a consolidated basis for such period including,
without limitation, such interest expense as may be attributable to
Capitalized Leases, Receivables Transaction Financing Costs, the
discount or implied interest component of Off-Balance Sheet
Liabilities, all commissions, discounts and other fees and charges
owed with respect to Letters of Credit and Net Mark-to-Market
Exposure, but excluding any Make-Whole Amounts.
“Consolidated Net
Income” means, as to any Person and with reference to any
period, the net income (or loss) of such Person and its
Subsidiaries calculated on a consolidated basis for such period,
(a) excluding (i) any non-cash charges or gains which are
unusual, non-recurring or extraordinary, (ii) any non-cash
charges or gains related to exchange gains or losses on
intercompany loans or to the Brazil Holdback, (iii) for
purposes of Section 6.18 only, Restructuring Charges subject
to the limits set forth in the definition of Restructuring Charges
and Additional Restructuring Charges subject to the limits set
forth in the definition of Additional Restructuring Charges,
(iv) Make-Whole Amounts, and (v) fees and expenses
incurred by or for the account of the Borrower with respect to any
Financial Advisor engaged pursuant to Sections 9.6(d) and
(e) hereof or Sections 15.2 and 15.3 of the Note Purchase
Agreements as in effect on the First Amendment Effective Date; and
(b) including, to the extent not otherwise included in the
determination of Consolidated Net Income, all cash dividends and
cash distributions received by the Borrower or any Subsidiary from
any Person in which the Borrower or such Subsidiary has made an
investment; provided , however , that for any
calculation of Consolidated Net Income for any period commencing on
or after April 1, 2009, Modine Korea shall not be included as
a Subsidiary of the Borrower.
“Off-Balance Sheet
Liability” of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability under
any Sale and Leaseback Transaction that is not a Capitalized Lease
or so-called “synthetic lease” transaction, but
excluding from this clause (ii) all such Sale and Leaseback
Transactions existing as of the Effective Date where the liability
is less than $10,000,000 in the aggregate and such Sale and
Leaseback Transactions entered into after the Effective Date where
the liability is less than $30,000,000 in the aggregate (in each
case as determined by aggregating the present value, applying an
appropriate discount rate from the date on which each fixed lease
payment is due under such lease to such date of determination),
(iii) any liability under any so-called “synthetic
lease” transaction entered into by such Person, or
(iv) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the
balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
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1.3 Section 2.3(b) of the
Credit Agreement is restated as follows:
(b) In addition to all other
payments of the Obligations or relating to the Obligations required
hereunder and unless waived by the Required Lenders, the Borrower
shall pay or cause to be paid (i) 100% of the Asset Sale Net
Proceeds as a prepayment of the principal amount of the 2008 Credit
Agreement Superpriority Amount and (ii) if any Asset Sale Net
Proceeds remain thereafter, shall pay 38.524590163% of such
remaining Asset Sale Net Proceeds as a prepayment of the principal
amount of the remaining Advances, with the other 61.475409836% of
such remaining Asset Sale Net Proceeds being used as a prepayment
of the 2005 Senior Note Debt and the 2006 Senior Note Debt, subject
to the Intercreditor Agreement.
As used herein, “Asset Sale
Net Proceeds” means 100% of all of the Net Cash Proceeds from
any sale, Event of Loss, license, lease or other disposition or
transfer of any assets (including without limitation any Sale and
Leaseback Transaction and any sale permitted under
Section 6.17(b) or (c), but excluding the Excluded Sales
described below) in excess of $25,000,000 in aggregate amount after
the First Amendment Effective Date (the “Retained Proceeds
Amount”), provided that no more than $10,000,000 of the Net
Cash Proceeds from the Additional Sale Leaseback Transactions may
count toward the Retained Proceeds Amount and be excluded from the
100% mandatory prepayment required under this Section 2.3(b),
each payable and effective upon receipt of such Net Cash Proceeds.
As used herein, “Excluded Sales” means (i) the
sale of inventory in the ordinary course of business, (ii) the
sale of obsolete or worn-out property in the ordinary course of
business not to exceed $1,000,000 in the aggregate after the First
Amendment Effective Date, (iii) sales of notes receivable or
accounts receivable to the extent permitted under
Section 6.17; (iv) revenues from licenses in existence on
the First Amendment Effective Date, including all renewals,
extensions and modifications thereof and substitutions therefor,
(v) the sale or other transfer of any assets solely among the
Borrower and the Subsidiaries which is permitted by the terms of
this Agreement, and (vi) if the Borrower shall deliver to the
Agent a certificate of a Authorized Officer to the effect that the
Borrower or its applicable Subsidiary receiving the Net Cash
Proceeds from an Event of Loss intends to apply the Net Proceeds
from such event (or a portion thereof specified in such
certificate), within 180 days after receipt of such Net Proceeds,
to acquire (or replace or rebuild) real property or equipment to be
used in the business of the Borrower or its Subsidiaries, and
certifying that no Default has occurred and is continuing, then
such Net Cash Proceeds specified in such certificate shall be
excluded from the prepayment determination required under the first
sentence of this Section 2.3(b), provided that to the extent
of any such Net Cash Proceeds therefrom that have not been so
applied by the end of such 180 day period, such Net Cash Proceeds
will not be so excluded, and will be included in the calculation
contained in the first sentence of this Section 2.3(b) in
determining whether a prepayment shall then be required.
Notwithstanding anything herein to
the contrary, the Aggregate Commitment will be automatically
reduced by (x) 100% of the Asset Sale Net Proceeds as a
prepayment (and including amounts deposited in the Facility LC
Collateral Account as provided in Section 2.3(h)) of the
principal amount of the 2008 Credit Agreement Superpriority Amount
and (y) if any Asset Sale Net Proceeds remain thereafter, an
additional amount equal to 38.524590163% of such remaining Asset
Sale Net Proceeds.
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1.4 Each reference in Sections
2.3(c) and (d) of the Credit Agreement to
“$94,000,000” shall be replaced with “the 2008
Credit Agreement Base Amount”.
1.5 Section 2.3(e) of the
Credit Agreement is restated as follows:
(e) In addition to all other
payments of the Obligations or relating to the Obligations required
hereunder and unless waived by the Required Lenders, the Borrower
shall pay (i) 100% of the Equity Issuance Net Proceeds as a
prepayment of the principal amount of the 2008 Credit Agreement
Superpriority Amount and (ii) if any Equity Issuance Net
Proceeds remain thereafter, shall pay 38.524590163% of such
remaining Equity Issuance Net Proceeds as a prepayment of the
principal amount of the remaining Advances, with
