FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

Exhibit 10.1

Execution Copy

FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of February 17, 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.

RECITAL

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.

TERMS

ARTICLE 1.

WAIVER

1.1           The Borrower has informed the Lenders and the Agent that Defaults have occurred under Section 7.2 of the Credit Agreement due to a breach of Sections 6.18(a) and (b) of the Credit Agreement as of December 31, 2008 (the "Existing Defaults").  The Borrower has requested that the Lenders and the Agent waive the Existing Defaults.

1.2           Pursuant to such request, and subject to (a) the accuracy of the representations of the Borrower hereunder, and (b) the satisfaction of the conditions to the effectiveness of this Agreement specified in Article IV hereof, the Lenders hereby waive the Existing Defaults.  The Borrower acknowledges and agrees that the waiver contained herein is a limited, specific, and one-time waiver as described above.  Such limited waiver shall not modify or waive any other Default or Unmatured Default or any other term, covenant or agreement contained in any of the Loan Documents, and shall not be deemed to have prejudiced any present or future right or rights which the Agent or the Lenders now have or may have under the Credit Agreement or the other Loan Documents and, in addition, shall not entitle the Borrower or the Guarantors (or any of them) to a waiver, amendment, modification or other change to, of or in respect of any provision of any of the Loan Documents in the future in similar or dissimilar circumstances.

ARTICLE 2.

AMENDMENTS

“Additional Covenant” shall mean any affirmative or negative covenant or similar restriction applicable to the Borrower or any Subsidiary (regardless of whether such provision is labeled or otherwise characterized as a covenant) the subject matter of which either (i) is similar to that of any covenant in Article 6 of this Agreement, or related definitions herein, but contains one or more percentages, amounts or formulas that is more restrictive than those set forth herein or more beneficial to the lender under any agreement with respect to any Indebtedness of the Borrower or such Subsidiary or any agreement for the refinancing or extension of all or a portion of the Indebtedness thereunder (and such covenant or similar restriction shall be deemed an Additional Covenant only to the extent that it is more restrictive or more beneficial) or (ii) is different from the subject matter of any covenants in Article 6 of this Agreement, or related definitions herein.

 

 

“Additional Default” shall mean any provision contained in any agreement with respect to any Indebtedness of the Borrower or any Subsidiary or any agreement for the refinancing or extension of all or a portion of the Indebtedness thereunder which permits the holders of such Indebtedness to accelerate (with the passage of time or giving of notice or both) the maturity thereof or otherwise requires the Borrower or any Subsidiary to purchase the Indebtedness thereunder or any agreement for the refinancing or extension of all or a portion of the Indebtedness thereunder prior to the stated maturity thereof and which either (i) is similar to any Default or Event of Default contained in Article 7 of this Agreement, or related definitions herein, but contains one or more percentages, amounts or formulas that is more restrictive or has a shorter grace period than those set forth herein or is more beneficial to the lender under any agreement with respect to any Indebtedness of the Borrower or such Subsidiary or any agreement for the refinancing or extension of all or a portion of the Indebtedness thereunder (and such provision shall be deemed an Additional Default only to the extent that it is more restrictive, has a shorter grace period or is more beneficial) or (ii) is different from the subject matter of any Default or Event of Default contained in Article 7 of this Agreement, or related definitions herein.

“Adjusted Eurocurrency Reference Rate” means, with respect to a Eurocurrency Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency Reference Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) in the case of Loans by a Lender from its Lending Installation in the United Kingdom, the Mandatory Cost Rate.

“Banking Services” shall mean all treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services and international treasury management services), commercial credit cards and stored value cards, provided to any of the Borrower or any of its Subsidiaries by any Lender or any Lender's Affiliates.

“Banking Services Obligations” shall mean any and all obligations of any of the Borrower or any of its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

"Brazil Holdback" means the contingent obligation of the Borrower to the former owners of Modine do Brasil Sistemas Termicos Ltda. in the amount of $2,000,000.

“Capital Expenditures” means for any period all direct or indirect (by way of acquisition of securities of a Person or the expenditure of cash or the transfer of property or the incurrence of Indebtedness) expenditures in respect of the purchase or other acquisition of fixed or capital assets determined in conformity with Agreement Accounting Principles.

"Capital Stock" means (i) in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities or any other form of equity securities, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

 

“Defaulting Lender” means any Lender, as determined by the Agent, that has (a) failed to fund any portion of its Loans or participations in Facility LC's or Swing Line Loans within three Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Agent, the Issuing Bank, the Swing Line Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by the Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Facility LC's and Swing Line Loans, (d) otherwise failed to pay over to the Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) becomes or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

"Event of Loss" means, with respect to any property of the Borrower and its Subsidiaries, any loss, destruction or damage of such property or any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property, or confiscation of such property or the requisition of the use of such property.

"First Amendment" means the First Amendment to this Agreement dated as of the First Amendment Effective Date.

 

 

"First Amendment Effective Date" shall mean February 17, 2009.

"Mortgages" means each mortgage, deed of trust and similar agreement and any other agreement from any Borrower or Guarantor granting a Lien on any of its real property, each in form and substance acceptable to the Agent and as amended or modified from time to time, entered into by any Borrower or Guarantor at any time for the benefit of the Collateral Agent and the Secured Parties pursuant to this Agreement or the Intercreditor Agreement.

"Net Cash Proceeds" means, without duplication, in connection with any issuance of Capital Stock, sale or other disposition of any asset or any settlement by, or receipt of payment in respect of, any property insurance claim or condemnation award, the cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such sale, settlement or payment, net of (i) direct costs relating solely to such sale, other disposition or settlement, including sales commissions and reasonable and documented attorneys' fees, accountants' fees, investment banking fees, and other customary fees and expenses actually incurred in connection therewith, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such sale, insurance claim or condemnation award (other than any Lien in favor of the Agent for the benefit of the Agent and the Lenders) and (iii) taxes paid or reasonably estimated to be payable as a result thereof.

"Note Purchase Agreements" means the 2005 Note Purchase Agreement and the 2006 Note Purchase Agreement.

"Note Purchase Documents" means the 2005 Note Purchase Documents and the 2006 Note Purchase Documents.

"Secured Obligations" means, collectively, all (i) Obligations, (ii) Rate Management Obligations owing to one or more Lenders or their Affiliates, (iii) 2005 Senior Note Debt, (iv) 2006 Senior Note Debt and (v) Banking Services Obligations.

"Security Agreements" means each security agreement, pledge agreement, pledge and security agreement and similar agreement and any other agreement from any Borrower or Guarantor granting a Lien on any of its personal property (including without limitation any Capital Stock owned by such Borrower or Guarantor), each in form and substance acceptable to the Agent and as amended or modified from time to time, entered into by any Borrower or Guarantor at any time for the benefit of the Collateral Agent and the Secured Parties pursuant to this Agreement or the Intercreditor Agreement.

"Senior Note Holders" means the 2005 Senior Note Holders and the 2006 Senior Note Holders.

 

 

"2005 Note Purchase Documents" means the 2005 Note Purchase Agreement, the 2005 Senior Notes and all agreements and documents executed in connection therewith at any time and as amended or modified from time to time.

"2005 Senior Note Debt" means the indebtedness and other liabilities owing pursuant to any 2005 Note Purchase Documents at any time.

"2005 Senior Notes" means the 4.91% Senior Notes due September 29, 2015 in the aggregate principal amount of $75,000,000 issued by the Borrower pursuant to the 2005 Note Purchase Agreement, as amended or modified from time to time and including any notes issued in exchange or replacement for such notes, and any other securities issued pursuant to the 2005 Note Purchase Agreement at any time.

"2006 Note Purchase Documents" means the 2006 Note Purchase Agreement, the 2006 Senior Notes and all agreements and documents executed in connection therewith at any time and as amended or modified from time to time.

"2006 Senior Note Debt" means the indebtedness and other liabilities owing pursuant to any 2006 Note Purchase Documents at any time.

"2006 Senior Note Holders" means the holders of the 2006 Senior Note Debt.

"2006 Senior Notes" means the 5.68% Senior Notes, Series A, due December 7, 2017 in the aggregate principal amount of $50,000,000 issued by the Borrower pursuant to the 2006 Note Purchase Agreement and the 5.68% Senior Notes, Series B, due December 7, 2018 in the aggregate principal amount of $25,000,000 issued by the Borrower pursuant to the 2006 Note Purchase Agreement, in each case as amended or modified from time to time and including any notes issued in exchange or replacement for such notes, and any other securities issued pursuant to the 2006 Note Purchase Agreement at any time.

"Alternate Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on  such day plus ½ of 1% per annum and (c) the Adjusted Eurocurrency Reference Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to a change  in the Prime Rate, the Federal Funds Effective Rate or the Adjusted Eurocurrency Reference Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted Eurocurrency Reference Rate, respectively.

“Applicable Fee Rate” means, at any time and as the context may require, (i) 0.50% per annum with respect to commitment fees accruing on the Available Aggregate Commitment, (ii) 4.75% per annum with respect to letter of credit fees accruing on the undrawn stated amount of standby Facility LCs or (iii) 2.375% per annum with respect to letter of credit fees accruing on the undrawn stated amount of commercial Facility LCs.

“Applicable Margin” means with respect to (i) any Eurocurrency Advances, 4.75% and (ii) Floating Rate Advance, 3.75%.

 

 

“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 (iv) 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.

“Consolidated Total Debt” means as to any Person and at any time Indebtedness and, without duplication, Debt (as such term is defined in the Note Purchase Agreements as of the First Amendment Effective Date) of such Person and its Subsidiaries calculated on a consolidated basis.

“Guarantor” means (a) with respect to the Obligations and Rate Management Obligations owing by the Borrower, each Subsidiary required under this Agreement to execute and deliver a Guaranty and its successors and assigns with respect to such Obligations and Rate Management Obligations, and (b) with respect to the Obligations and Rate Management Obligations owing by a Foreign Subsidiary Borrower, the Borrower and its successors and assigns and each Subsidiary required under this Agreement to execute and deliver a Guaranty and its successors and assigns with respect to such Obligations and Rate Management Obligations.

"Intercreditor Agreement" shall mean the Collateral Agency and Intercreditor Agreement among the Secured Parties of the Borrower and JPMorgan, as Collateral Agent, dated as of the date hereof, as amended or modified from time to time, provided that such Intercreditor Agreement, and any amendments or modifications thereto, shall be in form and substance acceptable to the Required Lenders and the Agent.

“Interest Expense Coverage Ratio” means, as of any date of calculation, the ratio of (i) the Borrower’s Consolidated Adjusted EBITDA for the then most recently ended four fiscal quarters to (ii) the Borrower’s Consolidated Interest Expense for the then most recently ended four fiscal quarters.

“Leverage Ratio” means, as of any date of calculation, the ratio of (i) the Borrower’s Consolidated Total Debt outstanding on such date, minus the amount of any cash collateral provided for any of the Obligations, the Rate Management Obligations owing to one or more Lenders or their Affiliates or the Banking Services Obligations, to (ii) the Borrower’s Consolidated Adjusted EBITDA for the then most recently ended four fiscal quarters.

"Material Indebtedness" means (a) 2005 Senior Note Debt, (b) 2006 Senior Note Debt, and (c) any other Indebtedness (other than the Loans and Facility LC's) of the Borrower in an aggregate principal amount exceeding $5,000,000.

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary pursuant to which the Borrower or any Subsidiary may sell, convey or otherwise transfer to a newly-formed Subsidiary or other special-purpose entity, or any other Person, any accounts or notes receivable and rights related thereto on a limited recourse basis, provided that (i) such sale, conveyance or transfer qualifies as a sale under Agreement Accounting Principles and (ii) the aggregate outstanding Receivables Transaction Attributed Indebtedness for all Qualified Receivables Transactions (including those listed on Schedule 6.16 and any other Qualified Receivables Transaction at any time, but excluding sales or assignments of trade notes receivable or accounts receivable of the Borrower's Foreign Subsidiaries permitted under Section 6.17(b)) shall not exceed $15,000,000.

 

 

“Restructuring Charges” means certain cash charges related any restructuring program of the Borrower and its Subsidiaries subject to the following limitations:

"Significant Subsidiary" means any Subsidiary that, together with its subsidiaries, owns consolidated total assets with a value of greater than $1,000,000 at any time.

 

(i) each Credit Extension as of the date three Business Days prior to (x) in the case of an Advance, the Borrowing Date or, if applicable, date of conversion/continuation of such Advance, and (y) in the case of a Facility LC, the date for which a Borrower has requested issuance of such Facility LC, and

(ii)  all outstanding Credit Extensions on and as of the last Business Day of each month and on any other Business Day elected by the Agent in its discretion or upon instruction by the Required Lenders.

Each day upon or as of which the Agent determines Dollar Amounts as described in the preceding clauses (i) and (ii) is herein described as a “Computation Date” with respect to each Credit Extension for which a Dollar Amount is determined on or as of such day.  If at any time the Dollar Amount of the Aggregate Outstanding Credit Exposure (calculated, with respect to those Credit Extensions denominated in Agreed Currencies other than Dollars, as of the most recent Computation Date with respect to each such Credit Extension) exceeds the Aggregate Commitment, the Borrowers shall immediately repay Advances in an aggregate principal amount sufficient to eliminate any such excess.

(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 paid 100% of the Asset Sale Net Proceeds as a prepayment of the principal amount of the Advances in excess of $94,000,000 (up to the amount of such excess) and, if any Asset Sale Net Proceeds remain thereafter, shall pay such remaining amounts to the Collateral Agent, to be held by the Collateral Agent in accordance with Section 4.2(b) of the Intercreditor Agreement as in effect on the date hereof (and giving effect to any amendment thereof only if agreed to by the Borrower) and applied to the Secured Obligations (as defined in the Intercreditor Agreement as in effect on the date hereof, and giving effect to any amendment thereof only if agreed to by the Borrower) in accordance with the Intercreditor Agreement as in effect on the date hereof, and giving effect to any amendment thereof only if agreed to by the Borrower.  The amount paid to the Collateral Agent and held by the Collateral Agent shall not reduce the Obligations until, and only to the extent, such amounts are applied by the Collateral Agent to the Obligations in accordance with the Intercreditor Agreement as in effect on the date hereof (and giving effect to any amendment thereof only if agreed to by the Borrower).

 

 

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, 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, or (v) 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, and the Aggregate Commitment will be automatically reduced by (x) 100% of the Asset Sale Net Proceeds used as a prepayment of the principal amount of the Advances in excess of $94,000,000, simultaneously with such payment, and (y) 38.524590163% of all Asset Sale Net Proceeds paid to the Collateral Agent and to be held by the Collateral Agent (provided that, if a greater percentage thereof is applied by the Collateral Agent to the principal amount of the Advances, then such amount in excess of the amount that previously reduced the Aggregate Commitment shall further reduce the Aggregate Commitments as and when such amount is so applied to the principal amount of the Advances).

(c)           In addition to all other payments of the Obligations required hereunder and unless waived by the Required Lenders, if at any time (i) the aggregate principal amount of the Aggregate Outstanding Credit Exposure exceeds $94,000,000 and (ii) the aggregate amount of cash and Cash Equivalent Investments (excluding the aggregate amount of any cash collateral for any Obligations or Rate Management Obligations) of the Borrower and its Domestic Subsidiaries on hand exceeds $10,000,000 (the "Excess Domestic Cash"), then the Borrowers shall prepay the Obligations or cause the Obligations to be prepaid by the amount of the Excess Domestic Cash on or within 14 days after such excess occurs, unless any such other payment is required to be made at such time under this Agreement or the Intercreditor Agreement.

(d)           In addition to all other payments of the Obligations required hereunder and unless waived by the Required Lenders, if at any time (i) the aggregate principal amount of the Aggregate Outstanding Credit Exposure exceeds $94,000,000 and (ii) the aggregate amount of cash and Cash Equivalent Investments (excluding the aggregate amount of any cash collateral for any Obligations or Rate Management Obligations) of the Foreign Subsidiaries on hand exceeds $20,000,000 (the "Excess Foreign Cash"), then the Borrowers shall cause the Obligations to be prepaid by the amount of the Excess Foreign Cash (and the Borrower shall cause the Excess Foreign Cash to be repatriated to the United States to effect such prepayment, and it is acknowledged that such repatriation may be in the form of dividends from the applicable Foreign Subsidiary or by loan from the applicable Foreign Subsidiary to the Borrower evidenced by documents satisfactory to the Agent and subordinated to all Secured Obligations on terms and by agreements satisfactory to the Agent) on or within 45 days after such excess occurs, unless any such other payment is required to be made at such time under this Agreement or the Intercreditor Agreement; provided , that  no such prepayment or repatriation shall be required if the amount of Excess Foreign Cash is reduced to zero through ordinary uses of cash by such Foreign Subsidiary in compliance with this Agreement.  Notwithstanding anything in this Section 2.3(d) to the contrary, to the extent that the Borrower has determined in good faith and has documented in reasonable detail to the reasonable satisfaction of the Agent, that any repatriation of Excess Foreign Cash would (i) result in material adverse tax consequences, (ii) result in a material breach of any agreement governing Indebtedness of such Foreign Subsidiary permitted to exist or to be incurred by such Foreign Subsidiary under the terms of this Agreement and/or (iii) be limited or prohibited under applicable local law, the prepayment required by this Section 2.3(d) shall be deferred on terms to be agreed between the Borrower and the Agent; provided that in each case the Borrower and such Foreign Subsidiary shall take commercially reasonable steps (except to the extent that any such steps result in material cost or tax to the Borrower or any of its Subsidiaries) to minimize any such adverse tax consequences and/or to obtain any exchange control clearance or other consents, permits, authorizations or licenses which are required to enable such Excess Foreign Cash to be repatriated or advanced to, and applied by, the Borrower in order to effect such a prepayment.

 

 

(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 100% of the Equity Issuance Net Proceeds as a prepayment of the principal amount of the Advances in excess of $94,000,000 (up to the amount of such excess) and, if any Equity Issuance Net Proceeds remain thereafter, shall pay such remaining amounts to the Collateral Agent, to be held by the Collateral Agent in accordance with Section 4.2(b) of the Intercreditor Agreement as in effect on the date hereof (and giving effect to any amendment thereof only if agreed to by the Borrower) and applied to the Secured Obligations (as defined in the Intercreditor Agreement as in effect on the date hereof, and giving effect to any amendment thereof only if agreed to by the Borrower) in accordance with the Intercreditor Agreement as in effect on the date hereof, and giving effect to any amendment thereof only if agreed to by the Borrower.  The amount paid to the Collateral Agent and held by the Collateral Agent shall not reduce the Obligations until, and only to the extent, such amounts are applied by the Collateral Agent to the Obligations in accordance with the Intercreditor Agreement as in effect on the date hereof (and giving effect to any amendment thereof only if agreed to by the Borrower).

As used herein, "Equity Issuance Net Proceeds" means 50% of all of the Net Cash Proceeds from issuance of any Capital Stock by the Borrower.

Notwithstanding anything herein to the contrary, and the Aggregate Commitment will be automatically reduced by (x) 100% of the Equity Issuance Net Proceeds used as a prepayment of the principal amount of the Advances in excess of $94,000,000, simultaneously with such payment, and (y) 38.524590163% of all Equity Issuance Net Proceeds paid to the Collateral Agent and to be held by the Collateral Agent (provided that, if a greater percentage thereof is applied by the Collateral Agent to the principal amount of the Advances, then such amount in excess of the amount that previously reduced the Aggregate Commitment shall further reduce the Aggregate Commitments as and when such amount is so applied to the principal amount of the Advances).

(f)            If the principal amount of the Aggregate Outstanding Credit Exposure exceeds the Aggregate Commitment at any time, the Borrower shall promptly pay, or cause to be paid, the amount of such excess.

(g)           The Aggregate Outstanding Credit Exposure and all other unpaid Obligations owing by each Borrower shall be paid in full by each such Borrower on the Facility Termination Date.

 

 

2.4           The following is added to the end of Section 2.6:  "Notwithstanding anything herein to the contrary, the Aggregate Commitment shall automatically be reduced by the Dollar Amount by which the sum of (i) the aggregate principal amount of Indebtedness incurred under Section 6.16(e) (and not including any Indebtedness described on Schedule 6.16) by the members of the Modine Holding Consolidated Group plus (ii) the aggregate unfunded committed amount of all credit facilities for such Indebtedness, is in excess of €5,000,000, effective as of the date such Indebtedness is incurred or such credit facility or facilities are effective and as of the date any subsequent increase therein occurs, provided that the aggregate reductions in the Aggregate Commitment pursuant to this sentence shall not exceed $15,000,000.

2.27.         Collateral Security; Further Assurances .     (i)  To secure the payment when due of the Secured Obligations (subject to the Intercreditor Agreement), the Borrower shall execute and deliver, or cause to be executed and delivered, to the Collateral  Agent, Collateral Documents granting or providing for the following:

(a)           Security Agreements granting a first priority, enforceable Lien and security interest, subject to the Liens permitted by this Agreement and subject to the sharing provisions to be contained in the Intercreditor Agreement, on all present and future accounts, chattel paper, commercial tort claims, deposit accounts, documents, farm products, fixtures, chattel paper, equipment, general intangibles, goods, instruments, inventory, investment property, letter-of-credit rights (as those terms are defined in the Illinois Uniform Commercial Code) and all other personal property of the Borrower and of each Guarantor, subject to any exclusions described in the Intercreditor Agreement or approved by the Required Lenders.  Notwithstanding the foregoing, with respect to Liens granted by the Borrower or any Guarantor on the Capital Stock of any Foreign Subsidiary such Lien shall not exceed 65% (or such greater percentage that, due to a change in an applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Borrower or any Guarantor.  Notwithstanding the foregoing, at any time after a Default has occurred or if the Agent determines that the Borrower will not incur a material tax liability as result of such greater pledge, the Borrower shall, upon the request of the Agent, have the balance of its Capital Stock pledged to the Collateral Agent to secure, subject to the Intercreditor Agreement, the Secured Obligations.

 

 

(ii)           Each Foreign Subsidiary Borrower shall execute and deliver, or cause to be executed and delivered, Collateral Documents requested by the Agent from each such Foreign Subsidiary Borrower and each of its Subsidiaries, granting a first priority, enforceable Lien and security interest, subject to the Liens permitted by this Agreement and securing the Obligations owing by such Foreign Subsidiary Borrower, on all present and future assets of such Foreign Subsidiary Borrower and each of its Subsidiaries.  Additionally, to the extent required by the Agent or the Required Lenders at any time after a Default has occurred or if the Agent determines that the Borrower will not incur a material tax liability as result of the following, the Borrower shall cause, to the extent legally permitted and to the extent not prohibited by a restriction permitted under Section 6.25 hereof, each other Foreign Subsidiary required by the Agent or the Required Lenders to execute and deliver such Collateral Documents requested by the Agent to grant a first priority (subject to the Liens permitted by this Agreement), enforceable Lien and security interest on all present and future assets of such Foreign Subsidiary securing the Obligations and Rate Management Obligations owing by each Foreign Subsidiary Borrower.

(iii)           On or before the First Amendment Effective Date (or April 30, 2009 in the case of Collateral Documents relating to the Collateral described in Section 2.27(i)(b) or such later date agreed to by the Agent, provided that the Borrower shall use commercially reasonable efforts to complete such Collateral Documents as soon as practical), the Borrower shall cause all Collateral Documents as reasonably requested by the Agent, in each case duly executed on behalf of the Borrower and the Guarantors, as the case may be, granting to the Lenders and the Agent the Collateral and support specified in Section 2.27 hereof, together with: (v) such resolutions, certificates and opinions of counsel as reasonably requested by the Agen