Wisconsin
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1-1373
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39-0482000
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State or other jurisdiction of incorporation
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Commission File Number
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I.R.S. Employer Identification Number
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1500 DeKoven Avenue, Racine, Wisconsin
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53403
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Address of principal executive offices
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Zip Code
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Registrant’s telephone number, including area code:
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(262) 636-1200
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Item 1.01
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Entry into a Material Definitive Agreement
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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Item 9.01
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Financial Statements and Exhibits
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Item 1.01
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Entry into a Material Definitive Agreement
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·
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Amended and Restated Credit Agreement (the “Credit Amendment”) dated as of August 12, 2010, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, LC Issuer, Swing Line Lender and as a Lender, and U.S. Bank, N.A. and Wells Fargo Bank, N.A. as Syndication Agents and as Lenders, M&I Marshall & Ilsley Bank, as Documentation Agent and as Lender and Associated Bank, N.A. and Comerica Bank (collectively, the “Lenders”). The Credit Agreement amends and restates Modine’s existing three-year, $142 million multi-currency revolving credit facility dated as of July 18, 2008, as amended (the “Original Credit Agreement”);
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·
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Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) dated as of August 12, 2010, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Note Holders”) pursuant to which the Company issued $125,000,000 of 6.83% Senior Notes, Series A due August 12, 2020 (the “2010 Notes”); and
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Amended and Restated Collateral Agency and Intercreditor Agreement (the “Amended and Restated Intercreditor Agreement”) dated as of August 12, 2010, among the Lenders, the Note Holders and JPMorgan as Collateral Agent.
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The aggregate commitment of $145 million includes (i) up to $25 million that shall be available for the issuance of commercial and standby letters of credit by JPMorgan at the request of the Company; (ii) up to $75 million that shall be available in foreign currencies to be agreed upon; and (iii) up to $25 million that may, in the sole discretion of JPMorgan as swing line lender, be available as swing line loans. The Company has the right to request an increase in the aggregate commitment by up to a maximum additional amount of $50 million (to a total of up to $195 million) subject only to the agreement of JPMorgan and the other Lenders providing the increase in aggregate commitment.
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The interest rate on borrowings under the Credit Agreement ranges from 2.50% to 3.75% over the adjusted London Interbank Offered Rate (“LIBOR”) or, at the option of the Company, may be based on an Alternate Base Rate, which is the greater of the JPMorgan Prime rate or the Federal funds rate plus 0.50% or adjusted LIBOR plus 1%. The exact spread over LIBOR will depend on the Company’s Leverage Ratio (a ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA for the then four preceding Fiscal Quarters, as defined in the Credit Agreement). The Company also pays quarterly commitment fees that range from 0.40% to 0.50% on the unused portion of the committed funds available under the Credit Agreement.
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The Credit Agreement contains customary covenants (including compliance with laws, maintenance of insurance, keeping of books, conduct of business, maintenance of properties, payment of taxes, inspection of records and furnishing of quarterly and annual financial statements, quarterly compliance certificates and other financial information).
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The Credit Agreement also contains various other restrictive covenants, including restrictions on the following:
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o
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dividends, repurchases and retirement of common stock;
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o
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other indebtedness;
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o
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consolidation and mergers;
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o
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sales of assets;
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o
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investments, loans and advances;
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o
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liens and encumbrances; and
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o
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transactions with affiliates.
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The Credit Agreement also contains certain financial covenants, as follows (calculated on a consolidated basis):
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o
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the Company cannot permit the Leverage Ratio (the ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA for a rolling four quarters), determined as of the end of each fiscal quarter, to be greater than 3.25 to 1.0; and
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o
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the Company cannot permit the Interest Expense Coverage Ratio (the ratio of Consolidated Adjusted EBITDA to Consolidated Interest Expense for a rolling four quarters), determined as of the end of each fiscal quarter, to be less than 3.0 to 1.0.
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The Company continues to provide the Lenders a blanket lien on all domestic assets; Modine, Inc., one of the Company’s domestic subsidiaries, continues to guarantee the Company’s outstanding borrowings; and 65 percent of the Company’s and the guarantor’s stock in foreign subsidiaries continues to be pledged as collateral.
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The Credit Agreement sets forth certain events of default including (i) failure to pay when due any principal, interest or other amount payable; (ii) default in the performance of the covenants regarding providing notice of default, limitation on dividends and distributions, loans, advances, investments, acquisitions, liens, maintenance of existence, dissolution, consolidation, merger, sale of assets, limitation on debt, sale of accounts, financial covenants and certain other restrictions; (iii) default in the observance or performance of other covenants for 30 days after written notice; (iv) representation or warranty in the Credit Agreement proves to have been false or incorrect in any material respect on the date as of which it was made; (v) default in the payment on any outstanding debt in an aggregate principal amount of at least $10,000,000; (vi) the occurrence of bankruptcy events; (vii) becoming subject to one or more unpaid judgments in excess of $10,000,000; (viii) becoming subject to liability under ERISA or having certain material events occur under ERISA covered plans; (ix) a change in control; (x) a seizure of a substantial portion of its property by a governmental entity; (xi) subsidiary guarantees ceasing to be valid; and (xii) invalidity of collateral protections. Except as described below, upon the happening of any event of default, Lenders holding not less than 51% in outstanding principal amount (or, if there are two or more Lenders, at least two Lenders) may at any time at its or their option, by notice or notices to Modine, declare all the Loans then outstanding to be immediately due and payable. If a bankruptcy event of default occurs, the Loan shall immediately become due and payable without any election or action on the part of any Lender or Agent.
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The Company may authorize the issuance of additional senior promissory notes under the Note Purchase Agreement (the “Shelf Notes”) in an aggregate principal amount of $25 million pursuant to a currently uncommitted facility.
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The Note Purchase Agreement contains customary covenants (including compliance with laws, maintenance of insurance, keeping of books, conduct of business, maintenance of properties, payment of taxes, inspection of records, furnishing of quarterly and annual financial statements, quarterly compliance certificates and other financial information).
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·
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The Note Purchase Agreement also contains customary restrictive covenants including certain restrictions on the following:
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o
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dividends, repurchases and retirement of common stock;
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o
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other indebtedness;
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o
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consolidation and mergers;
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o
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sales of assets;
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o
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investments, loans and advances;
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o
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liens and encumbrances; and
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o
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transactions with affiliates.
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·
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The Note Purchase Agreement also contains certain financial covenants, as follows (calculated on a consolidated basis):
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o
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the Company cannot permit the Leverage Ratio (the ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA for a rolling four quarters), determined as of the end of each fiscal quarter (i) on or after June 30, 2010 but on or before August 12, 2014, to be greater than 3.25 to 1.0 and (ii) after August 12, 2014, to be greater than 3.0 to 1.0; and
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o
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the Company cannot permit the Interest Expense Coverage Ratio (the ratio of Consolidated Adjusted EBITDA to Consolidated Interest Expense for a rolling four quarters), determined as of the end of each fiscal quarter, to be less than 3.0 to 1.0.
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·
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The Company provides a blanket lien on all domestic assets; Modine, Inc., one of the Company’s domestic subsidiaries guarantees the 2010 Notes; and 65 percent of the Company’s and the guarantor’s stock in foreign subsidiaries is as collateral.
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The Note Purchase Agreement sets forth certain events of default including (i) failure to pay any principal or “make whole” amount when due; (ii) failure to pay interest on the Notes when due; (iii) default in the performance of the covenants regarding providing notice of default, limitation on dividends and distributions, loans, advances, investments, acquisitions, liens, maintenance of existence, dissolution, consolidation, merger, sale of assets, limitation on debt, sale of accounts, financial covenants and certain other restrictions; (iv) default in the observance or performance of other covenants for 30 days after written notice; (v) representation or warranty in the Note Purchase Agreement or a related agreement proves to have been false or incorrect in any material respect on the date as of which it was made; (vi) default in the payment on any outstanding debt in an aggregate principal amount of at least $10,000,000; (vii) becoming subject to bankruptcy events; (viii) becoming subject to one or more unpaid judgments in excess of $10,000,000; (ix) becoming subject to liability under ERISA or having certain events occur under ERISA covered plans that would have a material adverse affect on Modine; (x) subsidiary guarantees ceasing to be valid; or (xi) invalidity of collateral protections. Except as described below, upon the happening of any event of default, the holder or holders of not less than 51% in principal amount of the 2010 Notes at the time outstanding may at any time at its or their option, by notice or notices to Modine, declare all the notes then outstanding to be immediately due and payable. If an event of default with respect to the payment of principal or interest on the 2010 Notes occurs, any holder or holders of the 2010 Notes at the time outstanding affected by such event of default may at any time at its or their option, by notice or notices to Modine, declare all of the 2010 Notes held by it or them to be immediately due and payable. If an event of default with respect to bankruptcy proceedings occurs, all of the 2010 Notes then outstanding will become immediately due and payable without any declaration or other act on the part of any holders of the 2010 Notes.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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Item 9.01
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Financial Statements and Exhibits
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Exhibit No.
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Description
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4.1
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Amended and Restated Credit Agreement dated as of August 12, 2010
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4.2
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Note Purchase and Private Shelf Agreement dated as of August 12, 2010
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4.3
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Amended and Restated Intercreditor Agreement dated as of August 12, 2010
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99.1
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Press Release dated August 17, 2010
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Modine Manufacturing Company
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By: /s/ Thomas A. Burke
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Thomas A. Burke
President and Chief Executive Officer
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By: /s/ Margaret C. Kelsey
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Margaret C. Kelsey
Vice President, Corporate Development and
General Counsel and Secretary
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Exhibit No.
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Description
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Amended and Restated Credit Agreement dated as of August 12, 2010
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Note Purchase and Private Shelf Agreement dated as of August 12, 2010
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Amended and Restated Intercreditor Agreement dated as of August 12, 2010
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Press Release dated August 17, 2010
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