Credit Facility Agreement among Modine Holding GmbH, Modine Europe GmbH and Deutsche Bank AG dated as of May 15, 2009

---

 

 

Arthur-B.-Modine-Str.1

70794 Filderstadt

 

and

 

Arthur-B.-Modine-Str.1

70794 Filderstadt

 

(each a “Borrower” and together the “Borrowers”)

 

and

 

Filiale Deutschlandgeschäft

Marktgebiet Stuttgart 2

Theodor-Heuss-Straße 3

70174 Stuttgart

(the „Bank“)

 

enter into the following agreement (the „Credit Facility Agreement“) pursuant to which the Bank makes available a revolving credit facility to the Borrower (the “Credit Facility”) on the basis of the Bank’s General Business Conditions (Allgemeine Geschäftsbedingungen); whereas this Credit Facility Agreement supercedes conflicting rules of the Allgemeine Geschäftsbedingungen:

 

Borrowers:	Modine Holding GmbH, Arthur-B.-Modine-Str. 1, 70794 Filderstadt Modine Europe GmbH, Arthur-B.-Modine-Str. 1, 70794 Filderstadt
Bank:	Deutsche Bank AG Filiale Deutschlandgeschäft, Markgebiet Stuttgart 2, Theodor-Heuss-Straße 3, 70174 Stuttgart

 

 

(1)	Aggregate Facility Amount

 

The Bank makes available to the Borrowers a revolving cash credit facility (the “Facility”) in the amount of EUR 20.000.000,-- (in words: Euro twenty million) („Aggregate Facility Amount“).

 

(2)	Term of the Facility

 

The Credit Facility is available until 14th May 2010. (“Term of the Facility”).

 

(3)

Purpose

 

The proceeds of the Facility shall be applied towards general corporate purposes including working capital requirements of the Modine Holding GmbH - Group only. The use of the Facility for acquisitions (Unternehmenskäufe, ganz oder in Teilen) irrespective of form, duration and amount will require the prior consent of the Bank.

 

(4)	Joint and Several Liability

 

The Credit Facility may be used by each Borrower independently, provided that the aggregate principal amount outstanding may not exceed the Aggregate Facility Amount. The obligations of each Borrower under the Credit Facility Agreement are joint and several (gesamtschuldnerische Haftung). Such joint and several liability will not end upon termination of this Credit Facility Agreement (e.g. upon the expiration or cancellation) but only upon final settlement of all claims of the Bank including interest, fees and costs.

 

5)	Definitions

 

In this Credit Facility Agreement the following words and terms are defined as specified below:

 

„Banking Day“ means a day (other than  a Saturday or Sunday) on which banks are open for general business in Stuttgart.

 

„EONIA“ means the Euro OverNight Index Average as determined by the European Central Bank for each TARGET-day. On days which are not a TARGET-day the EONIA as determined on the immediately preceding TARGET-day shall apply. If no EONIA is available on a TARGET-day the Bank will determine the applicable reference interest rate in accordance with section 315 German Civil Code (BGB) on the basis of the quotations for overnight funds in the European interbank market.

„EURIBOR“ means the interest rate per annum for deposits in Euro for the relevant interest period displayed on page 248 of the Telerate screen or a respective succeeding screen replacing page 248 for 11.00 a.m. Brussels time two TARGET-days prior to the disbursement/the commencement of the respective interest period. If the EURIBOR cannot be determined two TARGET-days prior to the first interest period, the Bank and the Borrower will negotiate the interest rate for the relevant interest period. The Bank is not obligated to disburse the loan unless an agreement about the applicable interest rate has been reached. The Bank is released from its obligation to disburse the loan if an agreement about the applicable interest rate is not reached within 15 days. If the EURIBOR for an interest period following the first interest period cannot be determined two TARGET-days prior to the commencement of the relevant interest period the Bank will determine interest for the relevant interest period based on interest rates customary in the European interbank market for the particular interest period plus the agreed margin.

 

"Financial Indebtedness" means any indebtedness for or in respect of (i) moneys borrowed, (ii) any letters of credit issued and acceptances accepted or issued, (iii) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument, (iv) lease contracts which would, in accordance with orders or statements of practice of the Federal Ministry of Finance or GAAP under the applicable law as the case may be, be treated as a finance lease, (v) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis), (vi) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing, (vii) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account), (viii) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by third parties unless both obligations are reported, the primary obligation on and the obligation of the counter-indemnity on or below, the same balance sheet; and (ix) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (i) through (viii) above, (x) a guarantee, surety or other obligation for any of the obligations listed in paragraphs (i) through (ix), and (xi) provisions for pension obligations.]

 

„Group / Group-level / Modine Holding GmbH - Group“ means all companies which are included in the annual consolidated financial statement of Modine Holding GmbH  (Companies included as per 29.02.2008: Modine Holding GmbH, Filderstadt; Modine Europe GmbH, Filderstadt; Modine Pliezhausen GmbH, Pliezhausen, Modine Wackersdorf GmbH, Wackersdorf; Modine Grundstücksverwaltungs GmbH, Filderstadt; Modine Kirchentellinsfurt GmbH, Kirchentellinsfurt; Modine Tübingen GmbH, Tübingen; Modine Neuenkirchen GmbH, Neuenkirchen; Modine Uden B.V., Uden, Niederlande; Modine Pontevico s.r.l., Pontevico, Italien; Modine Hungaria Gép, Kft., Meszökövesd, Ungarn).

 

„TARGET-day“ is any day on which the Trans-European Automated Real Time Gross Settlement Express Transfer System is open for the settlement of payments in Euro.

 

(1)	Cash Credit Facility

 

Facility may be utilized by way of:

 

(a)

Cash Credit

 

Current account cash advances (“Cash Credit”) in Euro.

 

(b)

Fixed Interest Loans

 

Short-term loans with fixed interest rates with interest periods of 1, 2 or 3 months (“Fixed Interest Loans”) in Euro as agreed upon on a case by case basis.

 

(c)

Utilization in foreign currency

 

Cash Credit in foreign currency, namely in US Dollar or with prior consent of the Bank in every other currency which is freely available, convertible and transferable in the European interbank market.

 

(2)	Guarantee Facility

 

Facility may be utilized as follows:

 

(a)

Guarantees

 

Facility may be utilized as agreed upon a case by case basis through sureties (Bürgschaften), sureties upon first demand or guarantees (including bonds and standby letters of credit) issued upon instruction of the Borrower (“Guarantees”) in EUR and if individually agreed upon also in foreign currency. Unless otherwise agreed on a case by case basis, the instructions to issue the Guarantees shall be given using the wording in each case prepared by the Bank.

 

(b)

Special Conditions for Guarantee Business

 

In addition, the Special Conditions for Guarantee Business of the Bank shall apply, which take priority over the Bank’s General Business Conditions.

 

(c)

Conditional Acceptance

 

Before accepting an instruction to issue a Guarantee, the Bank is entitled to consider such instruction with respect to its feasibility under legal, economical and policy aspects and to refuse acceptance, as the case may be.

 

 

(1)	The Borrower will repay all amounts outstanding in full at the latest at the expiration of the Credit Facility Agreement unless otherwise agreed.

 

(2)

If after the termination of the Credit Facility Guarantees are outstanding and the collateral provided to the Bank does not cover the full amount of any risk resulting from such Guarantees, the Borrower will procure that the Bank be released within a reasonable period of time from its obligations under such Guarantees. The Borrower is entitled to provide the Bank instead with security by pledge of an amount in cash in the relevant currency of the Guarantee. Section 10 of the Conditions for Guarantee Business remains unaffected.

 

(1)

General

 

(a)

Authorization for debiting

 

The Bank is entitled to debit due interest, commissions, expenses, charges and fees to the account no. 240/1180108 00 of Borrower Modine Holding GmbH or the account no. 240/ 1180926 00  of Borrower Modine Europe GmbH unless otherwise agreed.

 

 

(a)

Interest rate for current account cash advances

 

The rate of interest for cash advances will be calculated as follows:

 

The rate of interest per annum for current account cash advances in Euro for each day is the sum of the EONIA applicable for such day and the margin.

 

The margin is 2,5 % p.a. until further notice.

 

Interest will be calculated on the basis actual/360. Amounts will be debited monthly in arrears and upon expiration of the Credit Facility Agreement.

 

(b)

Interest for EURIBOR-Fixed Interest Loans

 

The rate of interest for Fixed Interest Loans in Euro is the percentage rate per annum which is the sum of the applicable EURIBOR for the agreed interest period and the margin.

 

The margin is 2,5 % p.a. until further notice

 

Interest will be calculated by calendar days on the basis actual / 360. Interest is due at the end of the respective interest period.

 

For Fixed Loans the agreed margin upon conclusion of such a transaction shall not be affected by any later change of the margin.

 

(c)

Utilization in foreign currency

 

The interest rate for utilizations in foreign currency and its payment will be agreed upon in advance on a case by case basis.

 

(d)

Commission on Guarantees and Guarantee Fees  The commissions and fees on each Guarantee will be determined between the parties in separate agreements.

 

 

The Bank is entitled to further remuneration for services rendered which exceed the standard handling of a Guarantee (from the instruction to issue the Guarantee until its discharge) (e.g. wordings which require special scrutiny or in case of contentious procedures). The remuneration will be calculated by the Bank based on the actual expenditure of time and manpower.

(3)	Additional Fees

 

 

 

In addition to existing security, if applicable, the following collateral, shall be provided by the Borrower:

 

(1)	The Credit Facility has to be fully collateralized by assets of the group. Details, especially regarding the purpose of the collateral, are subject to separate agreements, which have been or will be entered into, respectively.

 

 

The Borrower may utilize this Credit Facility once and as long as the following Conditions Precedent are fulfilled:

 

(1)

Up-to-date certified (beglaubigt) extract from the Commercial Register (Handelsregisterauszug), its articles of association (Satzung), certified by the commercial register as of a recent date, or partnership agreement (Gesellschaftsvertrag), copies of any by-laws as well as a list of shareholders (Gesellschafterliste) (if applicable), and

 

(2)	The agreed collateral is in full force and effect, and

 

(3)	No event of default is outstanding which constitutes or, with the expiry of a grace period and/or the giving of a notice would constitute the right to terminate the Credit Facility Agreement for reasonable cause, and

 

(4)	The Borrower is not in default with any obligation vis-à-vis the Bank, and

 

(5)

Legal opinion covering the legal validity and enforceability of the “Commitment to limit intercompany claims and obligations („Abschottungserklärung“) and to suspend dividend payments in the event of an equity deterioration („Ausschüttungsregelung“) which constitutes Attachment 1 to this Credit Facility Agreement.

 

The Bank may allow utilization without the above conditions being satisfied. The obligation of the Borrower to comply with the conditions of utilization remains unaffected hereby unless the Bank has definitely and expressly waived compliance with certain conditions in writing.

 

Until all liabilities under this Credit Facility Agreement have been fully and finally discharged the Borrower undertakes the following obligations:

 

(1)	Information

 

The Borrower undertakes to keep the Bank always informed of its current economic condition and, as the case may be, the current economic condition of the Modine Holding GmbH - Group.

 

For this purpose the Borrower will, in particular, immediately upon completion and in any event within 6 months after the end of each of its financial years provide the Bank with

 

-

an original of its audited financial statement, at least with the content required by law and including appendix and management report (local GAAP);

 

-

the audited consolidated financial statement together with the group management report of the Borrower’s group of companies including the respective auditor’s reports (local GAAP);

 

-

an annual budget-plan (US GAAP) for the Modine Holding GmbH – Group (plus other entities under the operational control of the Borrower) at latest with the beginning of each fiscal year

 

Should the financial statement not need to be audited, the executed copy to be submitted to the Bank has to be duly signed by the duly authorized managing directors.

 

Furthermore, the Borrower will provide the Bank with quarterly business assessments including a forecast until year-end; all such reporting shall be based on US-GAAP accounting methods and Borrower`s usual reporting practices.

 

The Borrower will provide upon the Bank’s demand further information and documents which give insight into its economic condition.

 

The Borrower will inform the Bank immediately in case material adverse changes or divergences in regard to the information given or documents handed over (including plan figures and projections) occur or in case it becomes apparent or there is evidence indicating that information given or documents handed over are incomplete or incorrect.

 

(2)

Purpose

 

As far as the Facility has been assigned to a specified purpose, the Borrower undertakes to provide the Bank upon its demand with proof that the Facility has been used for the agreed purpose by furnishing appropriate documents.

 

The Bank is not obligated to the Borrower to verify that the Credit Facility has been used for the agreed purpose.

(3)	Ownership / Change of control

 

The parties to this agreement agree that the current ownership in the Borrower represents an essential basis for the Bank’s preparedness to grant the Facility and any utilization thereunder.

 

If a change in the current ownership occurs, the parties will negotiate,  prior to the occurrence of such a change, an agreement satisfactory to both sides on the continuation of this Credit Facility Agreement on changed terms and conditions, e.g. in respect of interest rates, collateral, or other agreements.

 

(4)	Other Undertakings

 

During the term of the Credit Facility Agreement Modine Holding GmbH will inform the Bank immediately if it is imminent that the Borrower`s equity (on Group level) declines below an amount of EUR 130.000.000,--. According to a separate Commitment –“Abschottungserklärung” and “Ausschüttungsregelung”- signed by Modine Manufacturing Company Racine, USA), in such an event any direct or indirect distribution of retained earnings or profits to the parent company shall be suspended until the equity has achieved again an amount of EUR 130.000.000,--.

 

All parties agree that an equity amount of EUR 100.000.000,-- of the Borrower is essential for the granting and drawing of the Credit Facility. If it is imminent that the equity will decline below this amount all parties together will find a suitable solution regarding the continuation of the Credit Facility Agreement.

 

(5)	Intercompany Business

 

The Borrowers will only enter into agreements with Modine Companies outside of the Modine Holding GmbH – Group under terms and conditions customary in the market and on arms-lengths basis. They will only act on the basis of and in accordance with such agreements. They will document and file all documents concerning agreements, deliveries, claims, and settlements / set offs as usual in an accurate ordinary business. However, nothing in this paragraph shall preclude the Borrower from entering into an agreement regarding an acquisition of Modine Austria Holding GmbH or a part thereof from Modine Manufacturing Company or regarding a merger of Modine Holding GmbH with Modine Climate Systems GmbH (Verschmelzung der Modine Climate Systems GmbH auf die  Modine Holding GmbH).

 

(6)	Credit agreements with other financial institutions

 

The Borrower will inform the Bank about future credit agreements or about material changes in existing credit agreements between the Borrower and other financial institutions (e.g. increases, terminations or demands for additional collateral) in advance if they are under negotiation and otherwise immediately upon their effectiveness. This shall not apply to any negotiations regarding a substitution of this Facility.

 

(7)	Information and cooperation regarding credit by way of guarantee

 

The Borrower will, upon request, provide the Bank for each Guarantee issued with all information and appropriate documentation on the claim secured by the Guarantee, and will, in case a demand under the Guarantee is imminent, furnish the Bank with all information and documentation the Bank deems necessary in order to verify the validity of such demand, give the Bank all reasonable support in this respect and, for this purpose, nominate and place at the Bank’s disposal qualified and competent employees.

 

A reasonable cause which entitles the Bank to terminate this Credit Facility Agreement without notice according to no. 19 section 3 of the General Business Conditions is also and especially given if:

 

(1)	the Borrower does not comply with the General Undertakings or other material obligations under this Credit Facility Agreement or under any collateral agreement entered into in connection with this Credit Facility Agreement, or

 

(2)	a change of ownership occurs and the parties do not reach an agreement on the continuation of the Credit Facility Agreement on changed terms and conditions, e.g. in respect of interest rate, collateral, or other agreements, in due time, or

 

(3)

any other Financial Indebtedness of the Borrower is not paid when due or is declared, or capable of being declared, due and payable by any creditor(s) thereof prior to its agreed maturity by reasons of the occurrence of an event of default (howsoever described) and the aggregate of all such Financial Indebtedness exceeds an amount of EURO 1.000.000,-- or the equivalent thereof in any other currency or currencies (“Cross Default”).

 

 

(1)

Hedges

 

If the Bank and the Borrower have entered or will enter into hedging transactions covering interest or currency risk which may also arise from this Credit Facility Agreement, a termination of this Credit Facility Agreement will have no effect on the validity and continuation of such hedging transactions. Nothing in this clause shall oblige the Bank to enter into hedging transactions with the Borrower.

 

(2)	Foreign exchange risk

 

Any utilization in foreign currency must be repaid in the same currency, irrespective of changes in the exchange rate which may have taken place in the meantime. Amounts outstanding in foreign currency will be counted against the Aggregate Facility Amount at any time on the basis of the respective current exchange rate to the Euro, as determined and published by the Bank on the Internet around 13:00 Frankfurt time of every trading day.

 

If fluctuations in the exchange rate result in the total amounts outstanding exceeding the Aggregate Facility Amount the Borrower will reduce this overdraft immediately – by the expiry date of the agreed interest period at the latest or procure that the Bank be released without delay from its obligations under the relevant Guarantees. In the meantime, the Bank may demand security by pledge of an amount in cash and in Euro, namely in the amount the amounts outstanding exceed the Aggregate Facility Amount.

(3)	Transfer of the Credit Risk to third parties with disclosure of information

 

The Bank is entitled to transfer the economic risk of this credit facility, in whole or in part, to third parties or to use its claims resulting from this credit facility for refinancing purposes (inter alia by sub-participation, transfer or pledge of the claims including the respective collateral) and to provide the relevant information to the respective third parties. Albeit, the Bank will remain the Borrower´s contractual counterparty in accordance with the terms and provisions of this Credit Facility Agreement.

 

The Bank is also entitled to provide the relevant information to persons who have to be involved in the execution of the transfer due to technical or legal reasons and who are obligated, contractually or by law or by professional obligation to confidentiality, to keep all information received confidential, e.g. auditors, and to credit rating agencies.

 

Third party within the above meaning can be any member of the European system of central banks, any financial institution, any finance company, any insurance company, any pension fund, any investment company or any special purpose vehicle for securitization purposes.

 

(4)	Choice of Law and Jurisdiction

 

This agreement and all rights or obligations arising hereunder shall in all respects be governed by, and construed in accordance with, the laws of the Federal Republic of Germany.

 

The Borrower hereby submits to the jurisdiction of the competent courts of Stuttgart, Germany, and, at the option of the Bank, of the competent courts of its domicile.

 

(5)	Amendments

 

Any amendment to this Credit Facility Agreement is required to be made in writing.

 

(6)	Expiration Date/ Effectiveness

 

(a)

The offer of the Bank to enter into this Credit Facility Agreement expires on 15.06.2009 (“Expiration Date”).

 

(b)

This Credit Facility Agreement becomes effective upon receipt by the Bank of this Credit Facility Agreement on or prior to the Expiration Date duly signed by all parties.

 

(7)	Non-conflict with other obligations

 

The borrower confirms, that the entry into this Credit Facility Agreement and performance by it, and the transactions contemplated by it, do not and will not conflict with (i) any law or regulation applicable to it, (ii) its or any of its subsidiaries´constitutional documents or (iii) any agreement or instrument binding upon it or any of its subsidiaries or any of its subsidiaries´ assets.

 

(8)	Severability Clause

 

Should any provision of this Agreement be unenforceable or invalid, the other provisions hereof shall remain in full force and effect.

 

Declaration according to Section 8 German Money Laundering Law (Geldwäschegesetz)   The Borrower acts for its own account.   The Borrower is obligated to inform the Bank without delay in writing of any change of the beneficial owner indication its name and address.

 

This Credit Facility Agreement will be cited under the date first above written.

 

Deutsche Bank AG

Filiale Deutschlandgeschäft

 

Stuttgart, 5.15.09	/s/ Groß
Place, Date
Stuttgart, 5.15.09	/s/ Forster
Modine Holding GmbH
Filderstadt, 5.15.09	/s/ Feldmann
Place, Date
Modine Europe GmbH
Filderstadt, 5.15.09	/s/ F. Michel and /s/ T. Jadgt
Place, Date

 

 

 

Modine Manufacturing Company (Racine, USA) is sole shareholder with:

 

·

100% of shares by Modine Holding GmbH.

 

I.

We will only enter into agreements with the Borrower or other companies of the Modine Holding GmbH – Group under terms and conditions customary in the market and on arms-lengths basis. We will only act on the basis of and in accordance with such agreements. We will prepare and maintain all documents concerning agreements, deliveries, claims, and settlements / set offs as usual in an accurate ordinary business.

 

II.

In the name of Modine Manufacturing Company and all Associated Companies we will ensure that Modine Holding GmbH will not assume liabilities, surrender securities or warrant funds or medium- or long term loans to a direct or indirect parent company or any Associated company with the exception of the following transactions: (1) current loan of € 14.500.000,-- to Modine UK Dollar Limited, Great Britain; (2) existing loan of Modine Climate Systems GmbH to Modine Holding GmbH of ca. € 25.000.000,--; (3) payments regarding royalties up to 2 % p.a. based on the group turnover by Modine Holding GmbH; (4) cash-pool debt of Modine Holding Austria GmbH to Modine Holding GmbH; (5) or any other fulfilment of an agreement or arrangement which was concluded in line with number I.

 

III.

According to the balance sheet report (local GAAP) Modine Holding GmbH as of 29th February 2008 (Konzernabschluss zum 29. Februar 2008) the equity amounts to T€ 159.141 [thereof capital stock (gezeichnetes Kapital): T€ 2.045; capital surplus (Kapitalrücklage): T€ 23.785; retained earnings (Gewinnvortrag; Jahresüberschuss): T€  135.211; currency value adjustments (Ausgleichsposten aus Währungsumrechnung): T€ - 1.899]. In the event and for the time the equity of Borrower (on Modine Holding GmbH – Group level) falls below € 130.000.000,-- any direct or indirect distribution of retained earnings or profits to the parent company shall be suspended.

 

IV.

We have taken notice of and approved the Credit Facility Agreement of Modine Holding GmbH and Modine Europe GmbH dated 15.05.2009 and commit ourselves, not to make  resolutions and not to give any instructions to the borrower, which might cause a breach of this agreement.

 

V.

We confirm, that the entry into this Commitment and performance by it, and the transactions contemplated by it, do not and will not conflict with (i) any law or regulation applicable to it, (ii) our or any of our subsidiaries´constitutional documents or (iii) any of our agreements or instruments binding upon it or any Modine company of the Modine Holding GmbH – Group or any of the Modine Holding GmbH – Group`s assets.

In the event of any conflict between the English text and the text in any other language, the English text shall prevail, except that where a German translation of a legal term appears in such text, the German translation shall prevail.

 

This Agreement shall be governed by and construed in accordance with the laws of the Federal Republic of Germany.

 

Modine Manufacturing Company hereby irrevocably appoints Modine Holding GmbH, Filderstadt, Germany,as its agent for service of process or other legal summons in connection with any action or proceedings in Germany arising under this Commitment. Modine Manufacturing Company irrevocably waives any objection which it may now or hereafter have that such proceedings have been brought in an inconvenient forum. The place of jurisdiction for all Parties shall be Stuttgart.

 

Modine Manufacturing Company

 

May 15, 2009	/s/ Thomas A. Burke
	Thomas A. Burke, President and CEO