EXHIBIT 1.1F
OEM ACQUISITION AGREEMENT
OEM ACQUISITION AGREEMENT, dated as of January 31, 2005 (this "Agreement"),
by and between Modine Manufacturing Company, a Wisconsin corporation ("Modine"),
and Transpro, Inc., a Delaware corporation ("Transpro").
RECITALS
1. Transpro owns all of the issued and outstanding capital stock of G&O
Manufacturing Company, Inc., a Delaware corporation (the "Company");
2. The Company is engaged in the Business; and
3. Modine desires to purchase the Business from Transpro, and Transpro
desires to sell the Business to Modine, for the consideration set forth below,
subject to the terms and conditions of this Agreement.
Accordingly, the parties agree as follows:
I. DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere herein, as used
in this Agreement, the following terms have the meanings specified below when
used in this Agreement with initial capital letters:
"Action" means any controversy, claim, action, litigation, arbitration,
mediation or any other proceeding by or before any Governmental Entity,
arbitrator, mediator or other Person acting in a dispute resolution capacity, or
any investigation, subpoena or demand preliminary to any of the foregoing.
"Affiliate" means, with respect to a Person, another Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.
"Ancillary Agreements" means the agreements included as "Ancillary
Agreements" in the Merger Agreement, but excluding this Agreement and including
the Merger Agreement.
"Authorization" means any legally required consent, authorization,
approval, order, license, certificate or Permit of or from, or declaration or
filing with, any Governmental Entity, including any legally required filing with
any Governmental Entity and the subsequent expiration of any legally required
waiting period under any antitrust Laws.
"Books of Account" means the books and records of account of the Business
wherever located, including any files and records covering transactions with
customers
and suppliers, the data in computer files at the Facility, the Warehouse or
elsewhere, and records kept by outside accounting services utilized by the
Company to prepare its financial statements and Tax Returns.
"Business" means the business conducted by the Company involving the
design, manufacture and sale of Products to original equipment manufacturers as
conducted by the Company on the date hereof.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C.A. ▇▇.▇▇. 9601, et seq., and the
rules, regulations and Orders promulgated thereunder.
"Closing" means the conference to be held at 10:00 a.m., Eastern Time, on
the Closing Date at the offices of ▇▇▇▇▇ Day, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, at which the transactions contemplated by this Agreement are consummated.
"Closing Date" means the date on which the "OEM Closing" occurs under the
Merger Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the issued and outstanding shares of the common stock,
par value $0.01 per share, of the Company.
"Company Material Adverse Effect" means a material adverse effect on (a)
the business, financial condition or results of operations of the Company taken
as a whole or (b) the ability of Transpro to consummate the Transaction
contemplated by Section 2.1 or to perform its obligations under this Agreement
and the Ancillary Agreements on a timely basis or to consummate the other
Transactions on a timely basis.
"Confidentiality Agreement" means the Confidentiality Agreement between
Transpro and Modine dated as of November 11, 2003, as the same may be amended
from time to time in accordance with its terms.
"Contract" means any note, bond, mortgage, indenture, license, franchise,
permit, agreement, contract, commitment, understanding, lease, franchise
agreement or other legally binding instrument or legal obligation of any kind,
whether written or oral.
"Contribution Agreement" means the Contribution Agreement between Newco,
Modine, Modine, Inc. and Transpro, attached as Exhibit 1.1A to the Merger
Agreement, as the same may be amended from time to time in accordance with its
terms.
"Disclosure Schedule" means the disclosure schedule delivered pursuant to
this Agreement by Transpro to Modine on the date hereof.
"Effective Time of Closing" means 11:59 p.m., Eastern Time, on the Closing
Date, or such other time and date to which the parties may mutually agree.
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"Environment" means any land, soil, substrata, groundwater, surface water,
drinking water, sediment, air, or terrestrial or aquatic biota.
"Environmental Laws" means all Laws (including CERCLA) relating to the
protection of the Environment, including Laws relating to Environmental Releases
or threatened Environmental Releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.
"Environmental Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, sewer system, groundwater or
land.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"Facility" means the land, building(s), fixtures, structures and
improvements located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Financial Statements" means (i) the unaudited financial statements for the
Business at and for the twelve month period ended December 31, 2003 and (ii) the
unaudited financial statements for the Business at and for the interim period
ended September 30, 2004.
"GAAP" means generally accepted accounting principles, applied consistently
period to period, as in effect in the United States.
"Governmental Entity" means any arbitrator, court, judicial, legislative,
administrative or regulatory agency, commission, department, board or bureau or
body or other governmental authority or instrumentality or any Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, whether foreign, federal, state, provincial or local.
"Hazardous Materials" means any material, substance, chemical, waste,
hazardous waste, pollutant, contaminant or hazardous or toxic substance as to
which liabilities, restrictions or standards of conduct are imposed pursuant to
any Environmental Laws, including asbestos, formaldehyde, polychlorinated
biphenyls, lead based paint, radioactive materials, waste oil and other
petroleum products.
"Indebtedness" means all liabilities that would be shown as short- or
long-term indebtedness on a balance sheet of the Company prepared in accordance
with GAAP.
"Intercompany Accounts" means any balance owed between Transpro or any
of its Affiliates, on the one hand, and the Company, on the other hand.
"Inventory" means all spare parts, raw materials, finished products,
goods-in-process and supplies of the Company that are of a character that would
be shown as inventory on a balance sheet of the Company prepared applying the
same accounting
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principles and policies used in preparing the Financial Statements, wherever
situated, including all such items located on or in transit to or from the real
property of the Company or at a facility that is owned or leased by the Company.
"IRS" means the Internal Revenue Service.
"Law" means any statute, law, ordinance, rule or regulation of any
Governmental Entity.
"License Agreement" means the OEM License Agreement between Transpro,
Modine and the Company in the form of Exhibit 1.1E to the Merger Agreement.
"Lien" means, with respect to any property or asset, any lien, security
interest, pledge, mortgage, deed of trust, charge, option or other encumbrance
in respect of such property or asset.
"Merger" means the merger under the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated as of the
date hereof among Modine, Newco and Transpro, to which this Agreement is
attached as Exhibit 1.1F.
"Modine Material Adverse Effect" means a material adverse effect on the
ability of Modine to consummate the Transaction contemplated by Section 2.1 or
to perform its obligations under this Agreement and the Ancillary Agreements on
a timely basis or to consummate the other Transactions on a timely basis.
"Newco" means Modine Aftermarket Holdings, Inc.
"Order" means any order, judgment, decree, writ, permit or license or other
requirement of any Governmental Entity.
"OSHA" means the Occupational Safety and Health Act, 29 U.S.C. ss.ss.651,
et seq., and the regulations thereunder.
"Permits" means all permits, approvals, licenses, authorizations,
certificates, rights, exemptions and Orders from Governmental Entities.
"Permitted Liens" means those (a) Liens which are expressly noted with an
asterisk as Permitted Liens in Section 3.4 of the Disclosure Schedule, (b) Liens
consisting of zoning or planning restrictions, easements, permits and other
restrictions or limitations on the use of real property or irregularities in
title thereto which do not materially detract from the value of, or impair the
use of, such property by the Company, and (c) Liens for current Taxes,
assessments or governmental charges or levies on property not yet due or which
are being contested in good faith and for which appropriate reserves in
accordance with GAAP have been created.
"Person" means any individual or legal entity, including any Governmental
Entity.
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"Post-Closing Period" means all taxable periods or portions of periods
beginning after the Closing Date.
"Pre-Closing Period" means all taxable periods or portions of periods
ending on or before the Closing Date.
"Products" means radiators, radiator cores, charge air coolers, charge air
cooler cores, engine cooling systems and related thermal management products.
"Purchase Price" means $17,000,000.
"SEC" means the Securities and Exchange Commission.
"Straddle Period" means any tax period which begins on or before and ends
after the Closing Date.
"Subsidiary" of any Person means any Person whose financial condition and
results of operations are required to be consolidated with those of the first
Person in preparing financial statements in accordance with GAAP.
"Supply Agreement" means the OEM Supply Agreement between Transpro, Modine
and the Company in the form of Exhibit 1.1H to the Merger Agreement.
"Tax" means (i) any federal, state, local or foreign income, excise, gross
receipts, gross income, ad valorem, profits, gains, property, capital, sales,
transfer, use, payroll, employment, severance, withholding, duties, intangibles,
franchise, backup withholding or other tax, charge, levy or like assessment
imposed by a Governmental Entity together with all penalties and additions to
tax and interest thereon, and (ii) any liability for Taxes described in clause
(i) under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign Law).
"Tax Authority" means, with respect to any Tax, the governmental entity or
political subdivision thereof that imposes such Tax and the agency (if any)
charged with the collection of such Tax for such entity or subdivision.
"Tax Benefit" means any decrease in Taxes paid or payable.
"Tax Contest" means an audit, review, examination or any other
administrative or judicial proceeding with the purpose or effect of
redetermining any Taxes (including any administrative or judicial review of any
claim for refund).
"Tax Detriment" means any increase in Taxes paid or payable.
"Tax Return" means a report, return or other information (including any
attached schedules or any amendments to such report, return or other
information) required to be supplied to or filed with a Governmental Entity with
respect to any Tax, including an information return, claim for refund, amended
return or declaration of estimated Tax.
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"Territory" means ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and
Eastern Europe.
"Transactions" means the transactions contemplated by this Agreement and
the Ancillary Agreements.
"Transition Services Agreement" means the OEM Transition Services Agreement
between Transpro, Modine and the Company in the form of Exhibit 1.1J to the
Merger Agreement.
"Transpro Group" means, as the context may require, (i) Transpro and those
members of the affiliated group (as defined in Section 1504 of the Code) of
which Transpro is the parent and which file a consolidated federal income tax
return with Transpro and/or (ii) any corporations which file consolidated or
combined state or local returns with Transpro.
"Transpro SEC Report" means a final registration statement, prospectus,
form, report, schedule, definitive proxy statement or other documents and
related exhibits filed since January 1, 2003 by Transpro with the SEC pursuant
to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended.
"Transpro's Knowledge" (and any variation thereof) means the actual
knowledge after due inquiry of any corporate officer of Transpro or the Company
as of the relevant date.
"Warehouse" means the land, building(s), fixtures, structures and
improvements located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and
leased by the Company.
"Working Capital" means, with respect to the Company, total current assets
of the Company less total current liabilities of the Company, based on a balance
sheet prepared applying the same accounting principles and policies used in
preparing the Financial Statements, and excluding for all purposes of this
definition all Intercompany Accounts.
The following terms have the meanings specified in the indicated Sections:
Term Section/Agreement
---- -----------------
401(k) Plan 10.6(c)
Agreement Preamble
Bankruptcy Exception 3.3(a)
Closing Financial Statements 2.6(a)
COBRA 10.6(b)
Company Recitals
Company Assets 5.3
Company Benefit Plans 3.15(b)
Company Employees 10.6(b)
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Term Section/Agreement
---- -----------------
Company ERISA Affiliate 3.15(b)
Company MAE Exception 3.1
Confidentiality Expiration Date Merger Agreement
Damages 8.1
Deliverables 2.6(a)
Election Amount 2.5(b)(ii)
Exempt Restricted Person 2.3(a)(ii)
Final Section 10.5 Amount 10.5(e)
GUST 3.15(d)
Indemnified Party 8.6
Indemnifying Party 8.6
Independent Accountants 10.5(c)
Intellectual Property 3.10
MexPar 2.3(a)(iii)
Modine Preamble
Modine's Benefit Plans 10.6(d)
Offer 2.3(c)
Restricted Business 2.3(b)
RSSC 2.3(a)(iii)
Section 10.5 Amount 10.5(a)
Section 10.5 Notice 10.5(a)
September Balance Sheet 3.5(b)
Stock Sale Amount 2.5(b)(ii)
Transpro Preamble
Transpro Assets 5.3
Transpro Liability 2.5(b)(ii)
Verification Date 10.5(a)
Working Capital Schedule 2.6(a)
1.2 Interpretation. (a) When a reference is made in this Agreement to
Articles, Sections, Exhibits or Schedules, such reference will be to an Article
or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they will be deemed to be followed by
the words "without limitation." Unless the context otherwise requires, (i) "or"
is disjunctive but not necessarily exclusive, (ii) words in the singular include
the plural and vice versa, (iii) the use in this Agreement of a pronoun in
reference to a party hereto includes the masculine, feminine or neuter, as the
context may require, and (iv) terms used herein which are defined in GAAP have
the meanings ascribed to them therein. The Disclosure Schedule, as well as all
other Schedules and all Exhibits hereto, will be deemed part of this Agreement
and included in any reference to this Agreement. This Agreement will not be
interpreted or construed to require any Person to take any action, or fail to
take any action, if to do so would violate any applicable Law. Notwithstanding
anything in this Agreement to the contrary, the mere inclusion of an
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item therein as an exception to a representation or warranty will not be deemed
an admission that such item represents a material exception or material fact,
event or circumstance or that such item has had or would, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
(c) This Agreement may be executed in two or more counterparts, all of
which will be considered one and the same agreement and will become effective
when counterparts have been signed by each of the parties and delivered to the
other party, it being understood that each party need not sign the same
counterpart.
(d) This Agreement (including the documents and the instruments referred to
in this Agreement) and the Ancillary Agreements, together with the
Confidentiality Agreement, constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement, other than the
Confidentiality Agreement.
(e) This Agreement will be governed and construed in accordance with the
internal laws of the state of Delaware applicable to contracts made and wholly
performed within such state, without regard to any applicable conflict of laws
principles.
II. PURCHASE AND SALE; OTHER AGREEMENTS
2.1 Purchase and Sale. At the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, Transpro will sell, assign,
convey and deliver to Modine, and Modine will purchase and accept from Transpro,
all of the Common Stock. The Common Stock will be delivered to Modine free and
clear of all Liens (other than restrictions under applicable federal and state
securities laws) and will be properly endorsed in blank for transfer to Modine.
The transactions described in this Section 2.1 will be deemed to be effective as
of the Effective Time of Closing.
2.2 Payment of Purchase Price. At the Closing, Modine will pay to Transpro,
by wire transfer of immediately available funds, an amount equal to the Purchase
Price.
2.3 Covenant Not to Compete. (a) For a period of five years after the
Closing Date, neither Transpro nor any of its controlled Affiliates will,
without the prior consent of Modine, directly or indirectly, engage in the
Restricted Business anywhere in the Territory; provided, however, that the
foregoing will not restrict Transpro or any of its controlled Affiliates from:
(i) becoming an owner of less than 5% of the outstanding stock of
any publicly traded corporation that engages in the Restricted
Business;
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(ii) acquiring and operating a Person engaged in the Restricted
Business provided that at the time of such acquisition the annual
revenue attributable to such Restricted Business does not exceed (i)
30% of the consolidated revenue of the acquired entity for its last
completed fiscal year or (ii) $15,000,000 for its last completed
fiscal year (such acquired entity, an "Exempt Restricted Person");
(iii) in North America other than Mexico: (A) continuing to
supply the original equipment customers supplied by Transpro's
regional sales and service centers ("RSSC") and Transpro's Emporia,
Kansas and Manufacturera Mexicana de Partes S.A. de C.V. ("MexPar")
operations immediately following the Closing; provided, however, that
Modine's prior approval will be required for any expansion of the
Restricted Business with such original equipment customers; or (B)
engaging in the Restricted Business with RSSC original equipment
customers where the annual sales to each of such RSSC original
equipment customers do not exceed $1,000,000;
(iv) in Mexico, (A) continuing to supply MexPar's current
original equipment customers other than those original equipment
customers identified on Exhibit 2.3A and Affiliates of such identified
customers, or (B) continuing to supply customers identified on Exhibit
2.3A and Affiliates of such customers, provided that MexPar has, as of
the Closing Date, an existing supply relationship with such customers
or their Affiliates and the products so supplied by MexPar are the
same type of products MexPar supplies to such customers or their
Affiliates as of the Closing Date;
(v) in Europe, (A) continuing to supply NRF's current original
equipment customers other than those original equipment customers
identified on Exhibit 2.3B and Affiliates of such identified
customers, (B) continuing to supply customers identified on Exhibit
2.3B and Affiliates of such customers, provided that NRF has, as of
the Closing Date, an existing supply relationship with such customers
or their Affiliates and the products so supplied by NRF are the same
type of products NRF supplies to such customers or their Affiliates as
of the Closing Date or (C) supplying original equipment customers not
currently supplied by NRF, provided that such customers are not listed
on Exhibit 2.3B and provided further that the annual sales to each
such customer do not exceed (euro)1,250,000;
(vi) acquiring and operating a Restricted Business that was the
subject of an Offer with respect to which Modine failed to exercise
its rights, as set forth in Section 2.3(c); or
(vii) supplying Products to original equipment manufacturers for
use as service parts; provided, however, that prior to soliciting any
such customer that is, as of the Closing Date, a heavy duty original
equipment
9
customer of Modine, Transpro or its controlled Affiliate will obtain
the consent of Modine.
(b) For purposes hereof, "Restricted Business" means the design,
manufacture and sale of Products to original equipment manufacturers as
conducted by the Company as of the Closing. The parties agree that the covenants
included in this Section 2.3 are, taken as a whole, reasonable in their
geographic and temporal coverage and no party will raise any issue of geographic
or temporal reasonableness in any proceeding to enforce such covenants. Transpro
acknowledges and agrees that in the event of a breach by Transpro or any of its
controlled Affiliates of the provisions of this Section 2.3, monetary damages
will not constitute a sufficient remedy. Consequently, in the event of any such
breach, Modine may, in addition to any other rights and remedies existing in its
favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief or other relief in order to
enforce or prevent any violation of the provisions hereof.
(c) Without limiting the generality of Section 2.3(a), if, during the
period specified in Section 2.3(a), Transpro directly or indirectly consummates
any acquisition (by merger, consolidation, stock purchase or otherwise) of any
Person, or of all or substantially all of the assets of any such Person, that is
engaged in the Restricted Business and is not an Exempt Restricted Person, then
Transpro will offer in writing (the "Offer") to sell all of its interests in
such Person, or, if applicable, all of the assets of such Person, to Modine on
terms and conditions that are no less favorable to Modine than the terms
pursuant to which Transpro consummated such acquisition. Transpro will deliver
the Offer to Modine promptly after Transpro consummates such acquisition. At any
time within the 90 calendar day period immediately following the receipt of the
Offer, Modine may elect, by written notice to Transpro, to purchase all of the
interests or assets referred to above on the terms and conditions set forth in
the Offer. Should Modine elect not to exercise its rights under this clause (c),
Modine will provide written notice of such decision to Transpro no later than
the 90th calendar day following receipt of the Offer. In the event Modine fails
to provide written notice by the 90th calendar day following receipt of the
Offer, such 90th calendar day following receipt of the Offer will be deemed the
date that Transpro received written notice from Modine that it decided not to
exercise its rights under this clause (c). If Modine elects to exercise its
rights pursuant to this Section 2.3(c), then the closing of the sale and
purchase contemplated by the Offer will be held at the offices of Modine on a
date and at a time chosen by agreement of Modine and Transpro, but in any event
no later than the 90th calendar day after delivery of the Offer.
(d) In the event that Modine reasonably determines in good faith that
there is a substantial probability that Transpro has breached Section
2.3(a)(iii), Modine may request in writing that Transpro indicate whether there
has been such a breach, and Transpro will, within 15 calendar days after its
receipt of such request, deliver to Modine a written certification as to whether
such a breach has occurred, including reasonable substantiating documentation.
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2.4 Disclosure Schedule. Transpro acknowledges and agrees that it has
delivered the Disclosure Schedule to Modine on the date hereof, accompanied by a
certificate signed by an officer of Transpro stating that the Disclosure
Schedule was delivered pursuant to this Agreement and is the Disclosure Schedule
referred to in this Agreement. The Disclosure Schedule may include certain items
and information solely for informational purposes for the convenience of Modine
and the disclosure by Transpro of any matter in the Disclosure Schedule will not
be deemed to constitute an acknowledgment by Transpro that the matter is
required to be disclosed by the terms of this Agreement or that the matter is
material. The Disclosure Schedule is arranged so that the disclosures,
exceptions and/or information provided therein correspond to the lettered and
numbered Sections in this Agreement, and thereby modify those representations,
warranties, covenants or agreements of this Agreement specifically referenced
therein, except that any item or information disclosed in the Disclosure
Schedule with respect to a given Section or subsection of this Agreement in such
a way as to make reasonably apparent its relevance to any other Section or
subsection of this Agreement will be deemed to also have been disclosed with
respect to such other Section or subsection, notwithstanding the omission in the
Disclosure Schedule of an appropriate cross-reference to such other Section or
subsection, provided such other Section or subsection itself is qualified by a
reference to the Disclosure Schedule.
2.5 Election. (a) Modine and Transpro agree that they and the Company will
take all actions necessary to make an election under Section 338(h)(10) of the
Code (and any comparable elections under state or local Law) with respect to the
purchase by Modine of the Common Stock of the Company pursuant to this
Agreement. The parties to this Agreement will (i) cooperate fully with each
other in the making of such elections and (ii) prepare and deliver the
appropriate election forms as soon as practicable after the Closing. In
connection with such elections, the Purchase Price will be allocated among the
assets of the Company as mutually agreed to by the parties. Modine will, as soon
as is reasonably practicable after the Closing Date, submit a proposed
allocation to Transpro and the parties will thereafter discuss, meet and agree
on the allocation. If Modine engages any appraisers in such process, Modine will
be responsible for the fees and expenses of such appraisers.
(b) Transpro and Modine agree that each shall be responsible as
described below for Taxes resulting from the Section 338(h)(10) election. To the
extent the Tax Return filing and payment responsibilities outlined in Section
10.1 give rise to a result different than as is set forth below, the parties
will make appropriate payments to each other to arrive at the result described
below.
(i) All federal income Taxes due as a result of the sale of the
Common Stock and such election, if any, will be the sole
responsibility of Transpro and Transpro will indemnify Modine and the
Company for any nonpayment by Transpro of any such federal income
Taxes.
(ii) With regard to state and local income Taxes relating to such
election, the parties agree to the following. First, a calculation
will be made of the state and local income Taxes that would have been
payable
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by Transpro with respect to the sale of the Common Stock if the
Section 338(h)(10) election had not been made in excess of the amount
payable with the Section 338(h)(10) election, without taking into
account any current year net operating losses, capital losses and tax
credits or any related carryforward amounts from prior tax years (the
"Stock Sale Amount"). Next, a calculation will be made of the amount
of the state and local income Taxes payable by the Company as a result
of the Section 338(h)(10) election in excess of the amount that would
have been payable absent the Section 338(h)(10) election, without
taking into account any current year net operating losses, capital
losses and tax credits or any related carryforward amounts from prior
tax years (the "Election Amount"). Transpro will be responsible and
will indemnify Modine for state and local income Taxes of the Company
in an amount equal to the lesser of the Stock Sale Amount and the
Election Amount (the "Transpro Liability") and Modine will be
responsible and will indemnify Transpro for the Election Amount in
excess of the Transpro Liability. Transpro will be responsible and
will indemnify Modine for all state and local income Taxes imposed
upon Transpro as a result of the sale of the Common Stock.
2.6 Working Capital; Closing Financial Statements. (a) Not later than the
30th calendar day prior to the scheduled Closing Date, Transpro will deliver to
Modine (i) unaudited estimated financial statements (including a balance sheet)
of the Company as of and for the period ending on the close of business on the
date to which Modine and Transpro agree as the estimated Closing Date, prepared
in good faith applying the same accounting principles and policies used in
preparing the Financial Statements (the "Closing Financial Statements"), and
(ii) a schedule, based on the balance sheet included in the Closing Financial
Statements, setting forth the Company's calculation of the estimated Working
Capital of the Company as of immediately prior to the Closing (the "Working
Capital Schedule" and, together with the Closing Financial Statements, the
"Deliverables").
(b) Not later than the 30th calendar day prior to the scheduled
Closing Date, Modine and Transpro will consult with each other in respect of,
and Transpro will use its reasonable best efforts to provide Modine an estimate
of, the Inventory of the Company as of immediately prior to the Closing. Such
reasonable efforts will include conducting a physical count of the Inventory of
the Company in accordance with generally accepted accounting standards in effect
in the United States. Prior to taking any physical inventory contemplated by the
preceding sentence, Transpro will provide Modine with reasonable prior written
notice, and Modine will be permitted, at its option, to have representatives be
present at the taking of any such physical inventory.
(c) From the date of delivery of the Deliverables through the Closing
Date, (i) Transpro will consult with Modine in respect of the Deliverables and
use its reasonable best efforts to update such Deliverables to reflect any
material changes therein and (ii) Transpro will provide to Modine or its
representatives such reasonable access during normal business hours to financial
and other information, personnel and
12
accountants as Modine may reasonably request in good faith in order to assess
the Deliverables.
(d) As promptly as practicable after the Closing, Transpro and Modine
will use their reasonable best efforts to agree on the final Closing Financial
Statements and will provide each other with reasonable access during normal
business hours to each other's books and records, personnel and accountants in
order to agree on such financial statements.
III. REPRESENTATIONS AND WARRANTIES OF TRANSPRO
Except as otherwise disclosed in the Disclosure Schedule, Transpro
represents and warrants to Modine that:
3.1 Organization; Business. The Company is a corporation duly organized and
validly existing in good standing under the Laws of the State of Delaware and is
duly qualified or licensed to do business, and is in good standing or has
equivalent status, in each jurisdiction in which the nature of its business or
the properties owned, operated or leased by it makes such qualification,
licensing or good standing necessary, except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect
(such exception, the "Company MAE Exception"). Section 3.1 of the Disclosure
Schedule lists those jurisdictions in which the Company is qualified to do
business as a foreign corporation as of the date hereof. The Company has the
requisite corporate power and, subject to the Company MAE Exception, all
necessary Permits, Authorizations and registrations necessary to carry on its
business as it is now being conducted and to own, lease, and operate its assets
and properties. The Company has no Subsidiaries and does not own any interest
(equity, voting or otherwise), directly or indirectly, in any other entity or
business enterprise. Neither Transpro nor any Affiliate of Transpro, other than
the Company, is engaged in the Business.
3.2 Capital Stock and Related Matters. (a) The authorized capital stock of
the Company consists entirely of 1,000 shares of Common Stock, of which 1,000
shares are issued and outstanding, all of which are held of record and owned
beneficially by Transpro. There are no shares of Common Stock held in the
Company's treasury. Transpro is the sole legal and beneficial owner of the
Common Stock, free and clear of any Liens (other than restrictions under
applicable federal and state securities laws). Transpro has not granted a
currently effective power of attorney or proxy to any Person with respect to the
Common Stock. Transpro is not a party to any stockholder or similar agreement
relating to the Common Stock.
(b) The Company does not have outstanding any securities convertible
into or exchangeable for any shares of its capital stock, nor does it have
outstanding any rights or options to subscribe for or to purchase its capital
stock or any securities convertible into or exchangeable for its capital stock.
The Company is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock. All
of the shares of Common Stock are validly issued, fully
13
paid and nonassessable, and such shares were not issued in violation of any
preemptive rights.
(c) All prior redemptions, if any, of the capital stock of the Company
were made in compliance with all applicable Laws, including securities Laws, and
any applicable agreements or governance instruments.
(d) Attached to Section 3.2(d) of the Disclosure Schedule are true,
correct and complete copies of the Company's certificate of incorporation and
bylaws, each as amended to date.
(e) Subject to the Company MAE Exception, the Company's minute books
contain records in reasonable detail of the substantive actions taken at all
meetings and other corporate actions of the Company's stockholders and Board of
Directors.
(f) Section 3.2(f) of the Disclosure Schedule lists the current
officers and directors of the Company.
3.3 Authorization; Enforceability; No Violation or Conflict. (a) The
execution, delivery and performance by Transpro of this Agreement and the
Ancillary Agreements are within the corporate power of Transpro and have been
duly authorized by all necessary corporate action. This Agreement is, and the
other documents and instruments required hereby will be, when executed and
delivered by Transpro, the valid and binding obligations of Transpro,
enforceable against Transpro in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
Laws affecting the enforcement of creditors' rights generally and by general
equitable principles (such exception, the "Bankruptcy Exception").
(b) Subject to the Company MAE Exception, the execution, delivery and
performance of this Agreement and the Ancillary Agreements by Transpro:
(i) do not and will not conflict with or violate any Law or
Order, the certificate of incorporation or bylaws of Transpro or the
Company, or any Contract or Permit binding on or issued to Transpro or
the Company, or give rise to a right of termination or acceleration of
any obligation thereunder;
(ii) will not result in the creation of any Lien of any kind or
nature against or with respect to the Company's assets or the Common
Stock; and
(iii) do not require any approvals or consents of third parties,
or any declaration or filing with any Person.
3.4 Assets. (a) The Company is the sole legal and beneficial owner of all
of its material assets (including, as of the Closing, the Company Assets), free
and clear of any and all Liens, other than Permitted Liens, and is in sole
possession of, and has sole
14
control of, such assets (including, as of the Closing, the Company Assets),
except, as of the Closing, for shipments of inventory and other events in the
ordinary course of business that occur between the date of this Agreement and
the Closing Date.
(b) The Company's assets (whether owned or validly leased or
licensed), together with the Company Assets, include all of the assets and
properties used by the Company in the operation of the Business as now
conducted.
3.5 Financial Information. (a) The Financial Statements attached to Section
3.5 of the Disclosure Schedule were prepared in accordance with GAAP (but not on
a stand-alone basis) and present fairly in all material respects the financial
position and results of operations of the Business as of the respective dates
thereof and for the respective periods indicated therein, except as otherwise
noted therein and subject, in the case of interim statements, to normal year-end
adjustments in amounts that are immaterial in nature and amounts consistent with
past experience.
(b) Except for those liabilities that are reflected or reserved
against on the balance sheet of the Business as of September 30, 2004 (the
"September Balance Sheet") that is included in the Financial Statements, and for
liabilities incurred in the ordinary course of business consistent with past
practice since the date of the September Balance Sheet, the Company has not
incurred any liability of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether due or to become due and including any off
balance sheet financings, loans, indebtedness, make whole or similar liabilities
or obligations) that would be required to be reflected in a balance sheet of the
Company or would, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. In connection with preparing its audited
financial statements for the period ending December 31, 2003 and quarterly
unaudited financial statements subsequent thereto but prior to the date hereof,
Transpro did not identify, in accordance with Statement of Accounting Standards
No. 5, any loss contingency that related to the Business and was excluded from
such financial statements because such loss contingency was either not estimable
or not probable.
(c) Except for the deposit and collection of checks in the ordinary
course of business, the Company has not guaranteed or become a surety or is not
otherwise contingently liable for the Indebtedness of any other Person.
3.6 Absence of Certain Changes. Except as required or expressly permitted
by this Agreement or as reflected in the Financial Statements, since September
30, 2004 (a) the Business has been operated in the ordinary course and
consistent with past practice, (b) there has been no event, occurrence or
condition which would, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, and (c) there has not been (i) any
material change in purchase, sale, management, accounting, operations,
collections or other business methods or practices or (ii) any event, occurrence
or condition that would have been a breach of Section 6.1 of the Merger
Agreement if such Section 6.1 had been in effect since September 30, 2004.
15
3.7 Taxes. The Company has duly filed all Tax Returns required to be filed
by it on or prior to the date of this Agreement (all such returns being accurate
and complete in all material respects) and has duly paid or made provision for
the payment of all Taxes that have been incurred or are due or claimed to be due
from it by federal, state, foreign or local taxing authorities other than (i)
Taxes that (a) are not yet delinquent or (b) are being contested in good faith,
have not been finally determined and have been adequately reserved against or
(ii) Tax Returns or Taxes as to which the failure to file, pay or make provision
for would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect. The period (including any extensions) within
which the IRS may assess federal income Taxes against the Company has closed
with respect to all taxable years through and including the fiscal year ended
December 31, 2000 and any liability with respect thereto has been satisfied.
There are no disputes pending, or claims asserted, for Taxes or assessments upon
the Company for which the Company does not have adequate reserves that would,
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect. The Company is not a party to or bound by any Tax
sharing, allocation or indemnification agreement or arrangement (other than as
described in the Ancillary Agreements). No disallowance of a deduction under
Section 162(m) of the Code for employee remuneration of any amount paid or
payable by the Company under any contract, plan, program or arrangement or
understanding would, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
3.8 Material Contracts. The Company is not (and as of the Closing, will not
be) a party to or bound by (a) any "material contract" as defined in Item
601(b)(10) of Regulation S-K promulgated by the SEC that relates to the Business
or any agreement, contract or commitment that would be such a "material
contract" but for the exception for contracts entered into in the ordinary
course of business (the term "material contract" to be applied as if the Company
were a separate company for the purpose of this Section 3.8) or (b) any
non-competition agreement or any other agreement or obligation that materially
limits or will materially limit the Company from engaging in the Business. Each
of the "material contracts" (as defined above) of the Company is, or at the
Closing will be, valid and in full force and effect and the Company has not
violated any provisions of, or committed or failed to perform any act that, with
or without notice, lapse of time, or both, would constitute a default under the
provisions of any such "material contract." To Transpro's Knowledge, the other
party to any material contract described above is not in breach or default under
such "material contract."
3.9 Customers. (a) Between January 1, 2004 and the date hereof, no material
customer or group of customers (whether or not related) of the Business has
canceled or otherwise terminated its contract or relationship with the Company
or has at any time decreased significantly its purchases of the products of the
Business and, to the Knowledge of Transpro, there has been no material adverse
change in its business relationship or the business relationship of the Company
with any material customer or group of customers (whether or not related) of the
Business. To the Knowledge of Transpro and subject to the Company MAE Exception,
no such customer or group of customers intends to cancel or otherwise terminate
its relationship with the Company or to decrease significantly its purchases of
the products of the Company.
16
(b) To the Knowledge of Transpro and subject to the Company MAE
Exception, there is no dispute with any material customer or group of customers
(whether or not related) or delays or other problem in connection with any
products sold or services rendered by the Company or any of its Subsidiaries to
any material customer of the Business that have given rise or could reasonably
be expected to give rise to a liability or the need to provide additional
products or services for the customer or group of customers involved.
(c) Section 3.9 of the Disclosure Schedule sets forth a list of the 10
largest customers of the Business and the 10 largest suppliers to the Business
during each of the Company's three most recent fiscal years determined on the
basis of the total dollar amount of net sales to such customers and purchases
from such suppliers.
3.10 Intellectual Property. Subject to the Company MAE Exception, the
Company owns, or has the right to use without infringing or violating the rights
of any third parties: (i) each trademark, trade name, brand name, service ▇▇▇▇
or other trade designation used, owned or licensed by or to the Company and each
patent, copyright and similar intellectual property owned or licensed to or by
the Company, that relates to or is used in the Business and each license,
royalty, assignment or other similar agreement and each registration and
application relating to the foregoing that is material to the conduct of the
Business; and (ii) each agreement relating to technology, know-how or processes
that the Company is licensed or authorized to use, or which it licenses or
authorizes others to use, that is material to the conduct of the Business
(collectively, the "Intellectual Property"). Other than pursuant to the License
Agreement, no consent of any third party will be required for the use by the
Company of the Intellectual Property after the Closing Date. Subject to the
Company MAE Exception, no claim has been asserted by any Person against Transpro
or the Company regarding the ownership of or the right to use any Intellectual
Property or challenging the rights of Transpro, the Company or any of Transpro's
Subsidiaries other than the Company with respect to any of the Intellectual
Property.
3.11 Compliance with Law. Subject to the Company MAE Exception, (i) the
Company is in compliance with all applicable Laws and Orders and (ii) the
Company holds, to the extent legally required, all Permits that are required for
the lawful operation of the Business as now conducted and there has not occurred
any default under any such Permit.
3.12 Books of Account. The Books of Account are complete and correct in all
material respects and reflect in reasonable detail all material transactions to
which the Company is a party or which relate to the Business.
3.13 Facility and Warehouse. Transpro has, and as of the Closing the
Company will have, good and valid title to the Facility, free and clear of all
Liens, except for Permitted Liens and for municipal and zoning ordinances,
recorded easements for roadways, recorded easements for utilities, recorded
building and use restrictions and covenants (provided none of the foregoing are
being violated or prohibit the use, occupancy or operation of the Facility as
currently used, occupied and operated) and
17
liens for real estate taxes not delinquent. The Company has a valid leasehold
interest in the Warehouse and has not violated any provisions of, or committed
or failed to perform any act that, with or without notice, lapse of time, or
both, would constitute a material default under, the provisions of the lease
relating to the Warehouse. The Company does not own, lease or occupy any real
property other than the Facility and the Warehouse.
3.14 Environmental Liability. Subject to the Company MAE Exception, (i)
there are no legal, administrative, arbitral or other Actions of any nature
seeking to impose, or that are reasonably likely to result in the imposition, on
the Company of any liability or obligation arising under common law relating to
the Environment or under any Environmental Law pending or, to the Knowledge of
Transpro, threatened against the Company, (ii) to the Knowledge of Transpro,
there is no reasonable basis for any such proceeding, claim, action or
governmental investigation that would impose any such liability or obligation
and (iii) except as set forth in the Transpro SEC Reports, the Company is not
subject to any Order by or with any Governmental Entity or third party imposing
any such liability or obligation with respect to the foregoing.
3.15 Employee Benefit Matters. (a) Section 3.15(a) of the Disclosure
Schedule lists all individuals who will be employees of the Company as of the
Closing, their rates of compensation and most recent pay increases, dates of
hire and benefits. All such employees are employees at-will. No employees of
Transpro or any of its Affiliates other than the Company are engaged in the
operation of the Business. The Company has no employees resident outside of the
United States. There are no employment agreements with any employees. As of the
Closing, the Company will have sufficient employees (both in number and
capability) to conduct the Business as conducted on the date of this Agreement.
(b) Section 3.15(b) of the Disclosure Schedule sets forth a true and
complete list of each material benefit or compensation plan, arrangement or
agreement, and any material bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control or fringe
benefit plan, program or agreement that is maintained, or contributed to, for
the benefit of current or former directors or employees of the Company, with
respect to which the Company may, directly or indirectly, have any liability, as
of the date of this Agreement or as of the Closing Date, including all plans of
any Company ERISA Affiliate that are subject to Title IV of ERISA (the "Company
Benefit Plans"). For purposes of this Agreement, a "Company ERISA Affiliate" is
any trade or business, whether or not incorporated, all of which together with
the Company would be deemed a "single employer" within the meaning of Section
4001(a) or (b) of ERISA or Section 414 of the Code.
(c) Transpro has heretofore made available to Modine true and complete
copies of each of the Company Benefit Plans and certain related documents,
including (i) the actuarial report for such Company Benefit Plan (if applicable)
for each of the last two years and (ii) the most recent determination letter
from the IRS (if applicable) for such Company Benefit Plan.
18
(d) Subject to the Company MAE Exception, (i) each of the Company
Benefit Plans has been operated and administered in compliance in all material
respects with its terms and applicable Laws, including ERISA and the Code, (ii)
each of the Company Benefit Plans intended to be "qualified" within the meaning
of Section 401(a) of the Code has received a favorable determination letter from
the IRS with respect to all changes in applicable Law for which certain
qualified plans were required to be amended pursuant to Revenue Procedure 99-23
("GUST") within the remedial amendment period prescribed by GUST, and there are
no existing circumstances or any events that have occurred that will adversely
affect the qualified status of any such Company Benefit Plan, (iii) with respect
to each Company Benefit Plan that is subject to Title IV of ERISA, the present
value (as defined under Section 3(26) of ERISA) of accumulated benefit
obligations under such Company Benefit Plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such Company Benefit Plan's actuary with respect to such Company
Benefit Plan, did not, as of its latest valuation date, exceed the then current
value (as defined under Section 3(26) of ERISA) of the assets of such Company
Benefit Plan allocable to such accrued benefits, (iv) no Company Benefit Plan
provides benefits coverage, including death or medical benefits coverage
(whether or not insured), with respect to current or former employees or
directors of the Company beyond their retirement or other termination of
service, other than (A) coverage mandated by applicable Law, (B) death benefits
or retirement benefits under any "employee pension plan" (as such term is
defined in Section 3(2) of ERISA), (C) deferred compensation benefits accrued as
liabilities on the books of the Company, (D) benefits the full cost of which are
borne by the current or former employee or director (or his beneficiary), (E)
coverage through the last day of the calendar month in which retirement or other
termination of service occurs, or (F) medical expense reimbursement accounts,
(v) no liability or potential liability (contingent or otherwise) under Title IV
of ERISA has been incurred by the Company or any Company ERISA Affiliate, that
has not been satisfied in full, and no condition exists that presents a material
risk to the Company or any Company ERISA Affiliate of incurring a liability
thereunder, (vi) no Company Benefit Plan is a "multiemployer pension plan" (as
such term is defined in Section 3(37) of ERISA) or a "multiple employer plan"
(as such term is defined Section 210(a) of ERISA or Section 413(c) of the Code),
(vii) no Company Benefit Plan has or has incurred an "accumulated funding
deficiency" within the meaning of Section 302 of ERISA or Section 412 of the
Code, whether or not waived, nor has any waiver of the minimum funding standards
of Section 302 of ERISA and Section 412 of the Code been requested of or granted
by the IRS with respect to any Company Benefit Plan, nor has any lien in favor
of any Company Benefit Plan arisen under Section 412(n) of the Code or Sections
302(f) or 4068 of ERISA, (viii) neither the Company nor, to the Knowledge of
Transpro, any other Person, including any fiduciary, has engaged in a
transaction in connection with which the Company or any Company Benefit Plan
would reasonably be expected to be subject to either a material civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a material Tax imposed
pursuant to Section 4975 or 4976 of the Code, (ix) to the Knowledge of Transpro
there are no pending, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the Company Benefit
Plans or any trusts related thereto and (x) all contributions or
19
other amounts payable by the Company as of the Closing Date with respect to each
Company Benefit Plan in respect of current or former plan years have been paid
or accrued in accordance with GAAP and Section 412 of the Code.
(e) Neither the execution and delivery of this Agreement nor the
consummation of the Transactions will (either alone or in conjunction with any
other event) (i) result in any payment (including severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of the Company from the Company under any Company
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under
any Company Benefit Plan or (iii) result in any acceleration of the time of
funding, payment or vesting of any such benefits.
(f) Subject to the Company MAE Exception, no Company Benefit Plan or
trust has been terminated, nor has there been any "reportable event" as defined
in Section 4043 of ERISA with respect to any Company Benefit Plan that has not
been waived. Neither the Company nor any Company ERISA Affiliate has ever
incurred a "complete withdrawal" or a "partial withdrawal" (as such terms are
defined in Sections 4203 and 4205, respectively, of ERISA) with respect to any
multiemployer plan. No termination proceedings have been threatened or initiated
with respect to any Company Benefit Plan.
3.16 Labor Matters. As of the date of this Agreement, (i) the Company is
not a party to any collective bargaining agreement, (ii) subject to the Company
MAE Exception, no labor organization or group of employees of the Company has
made a pending demand for recognition or certification, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to Transpro's Knowledge,
threatened to be brought or filed with the National Labor Relations Board or any
other domestic or foreign labor relations tribunal or authority and (iii)
subject to the Company MAE Exception, there are no organizing activities,
strikes, work stoppages, slowdowns, lockouts, arbitrations or grievances, or
other labor disputes pending or, to Transpro's Knowledge, threatened against or
involving the Company.
3.17 Litigation. Subject to the Company MAE Exception, there is not any
Action or Order pending or, to Transpro's Knowledge, threatened against or
affecting the Business at law or in equity, or before or by any Governmental
Entity. Subject to the Company MAE Exception, there are no Orders of any
Governmental Entity outstanding against the Company or relating to any aspect of
the Business. Subject to the Company MAE Exception, for all litigation and/or
claims listed in Section 3.17 of the Disclosure Schedule not settled or
compromised, the Company has insurance, or is named as an insured party under
insurance policies maintained by Transpro, which will cover such litigation
and/or claims in full, subject to any applicable deductibles, including any
damages or attorneys' fees and all such insurance is described in Section 3.18
of the Disclosure Schedule.
20
3.18 Insurance. Transpro and its Subsidiaries maintain insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in a business
similar to the Business. Section 3.18 of the Disclosure Schedule lists and
describes all of the insurance policies providing coverage for the Business in
effect on the date hereof (including the insurer, type of policy, policy limits,
whether the policy is claims made or occurrence, and deductibles).
3.19 Transactions with Related Parties. The Company is not a party to any
transaction or proposed transaction, including the leasing of property, the
purchase or sale of raw materials or finished goods, the furnishing of services
or the borrowing or lending of money, with the Company's directors, officers or
employees, or any other Person who is an Affiliate of the Company. Neither
Transpro nor any of its controlled Affiliates owns or has any ownership interest
in any Person which is in competition with the Company or which is engaged in a
related or similar business to that of the Business and none of such Persons has
entered into any agreement, commitment or understanding contemplating such
ownership or ownership interest.
3.20 No Brokers. Except as set forth in Section 5.14 of the Merger
Agreement, no Person acting on behalf of Transpro or the Company is, or will be,
entitled to any investment banking, broker's, finder's or similar fee for which
the Company, Modine or any of their respective Affiliates could have any
liabilities in connection with this Agreement or any of the Transactions.
3.21 Regulatory Matters. (a) Subject to the Company MAE Exception, there
are no facts:
(i) which would furnish a substantial basis for the recall,
withdrawal or suspension of any products of the Business by any
competent Governmental Entity; or
(ii) which would otherwise reasonably be expected to cause the
Company to withdraw, recall or suspend any products of the Business
from the market or to change the marketing classification of any
products of the Business or to terminate or suspend testing of any
products of the Business.
(b) There are no:
(i) products of the Business which have been recalled (whether
voluntary or otherwise) at any time since January 1, 2003; or
(ii) proceedings (whether completed or pending) at any time since
January 1, 2003 seeking the recall, suspension or seizure of any
products of the Business.
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IV. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to Transpro that:
4.1 Organization. Modine is a corporation duly organized and validly
existing in active status under the Laws of the State of Wisconsin and is duly
qualified or licensed to do business, and is in good standing or has equivalent
status, in all jurisdictions in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing,
good standing or equivalent status necessary, except as would not individually
or in the aggregate reasonably be expected to result in a Modine Material
Adverse Effect.
4.2 Authorization; Enforceability. The execution, delivery, and performance
by Modine of this Agreement and the Ancillary Agreements are within the
corporate power of Modine and have been duly authorized by all necessary
corporate action. This Agreement is, and the other documents and instruments
required hereby will be, when executed and delivered by Modine, the valid and
binding obligations of Modine, enforceable against Modine in accordance with
their respective terms, subject to the Bankruptcy Exception.
4.3 No Violation or Conflict. Except for such matters that would not,
individually or in the aggregate, reasonably be expected to have a Modine
Material Adverse Effect, and assuming the truth of the representations and
warranties of Transpro in Section 5.21 of the Merger Agreement, the execution,
delivery, and performance of this Agreement and the Ancillary Agreements by
Modine:
(a) do not and will not conflict with or violate any Law or the
articles of incorporation or bylaws of Modine or any Contract or Permit binding
on or issued to Modine, or give rise to a right of termination or acceleration
of any obligation thereunder; and
(b) do not require any approvals or consents of third parties, or any
declaration or filing with any Person.
4.4 No Brokers. Except as set forth in Section 4.14 of the Merger
Agreement, no Person acting on behalf of Modine is, or will be, entitled to any
investment banking, broker's, finder's or similar fee for which Transpro or any
of its Affiliates could have any liabilities in connection with this Agreement
or any of the Transactions.
4.5 Financial Wherewithal. Modine has, and as of the Closing Date will
have, sufficient cash, borrowing capacity under existing credit facilities which
Modine may draw upon without limitation (other than the delivery of customary
certificates and receipt of appropriate consents, as detailed in the Merger
Agreement) and/or other committed financing to fund the Purchase Price and to
make all other necessary payments of fees and expenses of Modine in connection
with the Transactions.
22
V. CERTAIN MATTERS PENDING THE CLOSING
From and after the date of this Agreement and until the Closing Date
(unless otherwise noted):
5.1 Cooperation. (a) Each of Modine and Transpro will use its reasonable
best efforts to cause all of the conditions, as specified in Articles VI and
VII, as applicable, to their respective obligations to consummate the
Transactions to be met as soon as practicable after the date of this Agreement.
(b) Each of Modine and Transpro will comply fully with all applicable
notification, reporting and other requirements under any Law or Order.
(c) Each of Modine and Transpro will use its reasonable best efforts
to obtain, as soon as practicable, the Authorizations and Contract consents that
may be or become necessary for the performance of its obligations under this
Agreement, the Ancillary Agreements and the consummation of the Transactions and
will cooperate fully with each other in promptly seeking to obtain such
Authorizations and Contract consents, except that no such party hereto will be
required to make any material expenditure in connection with its obligations
under this subsection (c).
(d) Where the cooperation of third parties such as insurers or
trustees would be necessary in order for a party hereto to completely fulfill
its obligations under this Agreement and the Ancillary Agreements, such party
hereto will use its reasonable best efforts to cause such third parties to
provide such cooperation, except that no such party hereto will be required to
make any material expenditure in connection with its obligations under this
subsection (d).
5.2 Contribution/Transfer of Assets and Contracts. Notwithstanding any of
Transpro's representations contained herein, if it is discovered following the
Closing that any assets or Contracts of the Business are not included in the
Company at the Closing, Transpro will, and will cause its Affiliates to,
promptly transfer to the Company such assets and Contracts and execute and
deliver, without consideration, such documents as the Company may reasonably
request and take any additional action as may be reasonably necessary to effect
such transfer and to put the Company in actual possession and control of such
assets and Contracts.
5.3 Divestiture of Assets. Prior to Closing, (a) Transpro will cause the
Company to transfer and/or distribute to Transpro or any Affiliate of Transpro
(other than the Company) the assets identified in Section 5.3 of the Disclosure
Schedule as "Transpro Assets," which are owned by the Company but not used in
the Business, and (b) Transpro will transfer to the Company the assets
identified in Section 5.3 of the Disclosure Schedule as "Company Assets," which
are owned by Transpro but used in the Business. Transpro will bear all costs,
fees or other expenses incurred in connection with the transfer and/or
distribution of such assets to Transpro or Transpro's Affiliates.
23
5.4 Control of Business. Nothing contained in this Agreement will give
Modine, directly or indirectly, the right to control or direct the Company's
operations prior to the Closing. Prior to the Closing, Transpro will, and will
cause the Company to, exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over the Business.
5.5 Intercompany Accounts. As of the Closing Date, all Intercompany
Accounts (other than pursuant to this Agreement or any Ancillary Agreement) will
be canceled without any payment of funds. In addition, except as otherwise
contemplated by this Agreement and the Ancillary Agreements, all agreements and
commitments, whether written or otherwise, that are solely between the Company,
on the one hand, and Transpro or any of its controlled Affiliates, on the other
hand, will be terminated and of no further effect simultaneously with the
Closing and without any further action or liability on the part of the parties
hereto or their Affiliates.
VI. CLOSING CONDITIONS TO OBLIGATIONS OF MODINE
Each and every obligation of Modine to be performed on the Closing Date is
subject to the satisfaction prior to or at the Closing of the following express
conditions precedent (any or all of which Modine may expressly waive):
6.1 Compliance with Agreement. Transpro shall have performed and complied
with all of its obligations under Section 2.1 and Transpro shall have performed
and complied in all material respects with all other of its obligations under
this Agreement which are to be performed or complied with by it prior to or on
the Closing Date.
6.2 Litigation. No preliminary or permanent injunction or other order shall
have been issued that would make unlawful the consummation of any of the
Transactions, and consummation of the Transactions shall not be prohibited or
made illegal by any Law.
6.3 Representations and Warranties. (a) The representations and warranties
of Transpro in this Agreement (which for purposes of this paragraph shall be
read as though none of them contained any materiality or Company Material
Adverse Effect qualifications or was subject to the Company MAE Exception) shall
have been true and correct as of the date of this Agreement and (b) the
representations and warranties of Transpro set forth on Exhibit 6.3 (which for
purposes of this paragraph shall be read as though none of them contained any
materiality or Company Material Adverse Effect qualifications or was subject to
the Company MAE Exception) shall be true and correct as of the Closing Date with
the same effect as though made as of the Closing Date, except (i) that, in the
case of clause (b), any such representation and warranty made as of a date other
than the date of this Agreement shall continue on the Closing Date to be true
and correct in all respects as of the specified date and (ii) where, in the
event of clauses (a) and (b), the failure of such representations and warranties
to be true and correct in all respects as of the applicable time would not in
the aggregate have a Company Material Adverse Effect.
24
6.4 No Adverse Change. There shall not have occurred at any time after the
date of this Agreement any change, effect, event, occurrence or state of facts
that has had or could reasonably be expected to have a Company Material Adverse
Effect arising from or relating to a breach by Transpro of any of its
representations, warranties or covenants in this Agreement or any Ancillary
Agreement that results from an act or omission of Transpro. For purposes of this
Section 6.4, (i) a criminal indictment or criminal information or similar
proceeding or action against Transpro or any of its Subsidiaries or any of their
respective officers or directors, (ii) an SEC enforcement action or commencement
of a formal SEC investigation of Transpro, any of its Subsidiaries or any of
their respective officers or directors relating to actions within the scope of
the business of Transpro and its Subsidiaries, or (iii) a public announcement by
Transpro of any restatement of its earnings, accounting fraud or internal
investigation of possible accounting fraud involving Transpro or any of its
Subsidiaries, will in each case be deemed to constitute a Company Material
Adverse Effect under this Section 6.4 arising from a breach by Transpro of this
Agreement that results from an act or omission of Transpro, whether or not such
event would be deemed "material" under applicable Law.
6.5 Approvals and Consents. The consents, approvals and Authorizations
listed in Section 6.5 of the Disclosure Schedule shall have been obtained.
6.6 Transpro's Closing Deliveries. Transpro shall have delivered, or caused
to be delivered, to Modine at or prior to the Closing the following documents,
each properly executed and dated as of the Closing Date unless otherwise noted:
(a) stock certificates representing all of the Common Stock, duly
endorsed and in proper form for transfer to Modine;
(b) a certificate of Transpro addressed to Modine and signed by
an executive officer of Transpro (on Transpro's behalf and without
personal liability) confirming the matters set forth in Sections 6.1
and 6.3;
(c) copies of those Authorizations and Contract consents obtained
as described in Section 5.1(c);
(d) resignations of those officers and directors of the Company
designated by Modine;
(e) the Company's minute books;
(f) the Supply Agreement, duly executed by Transpro and the
Company;
(g) the Transition Services Agreement, duly executed by Transpro
and the Company; and
(h) the License Agreement, duly executed by Transpro and the
Company.
25
6.7 HSR Act. The condition set forth in Section 7.1(e) of the Merger
Agreement shall have been satisfied.
VII. CLOSING CONDITIONS TO OBLIGATIONS OF TRANSPRO
Each and every obligation of Transpro to be performed on the Closing Date
is subject to the satisfaction prior to or at the Closing of the following
express conditions precedent (any or all of which Transpro may expressly waive):
7.1 Compliance with Agreement. Modine shall have performed and complied
with all of its obligations under Section 2.2 and shall have performed and
complied in all material respects with all other of its obligations under this
Agreement which are to be performed or complied with by it prior to or on the
Closing Date.
7.2 Litigation. No preliminary or permanent injunction or other order shall
have been issued that would make unlawful the consummation of any of the
Transactions, and consummation of the Transactions shall not be prohibited or
made illegal by any Law.
7.3 Representations and Warranties. (a) The representations and warranties
of Modine in this Agreement (which for purposes of this paragraph shall be read
as though none of them contained any materiality or Modine Material Adverse
Effect qualifications) shall have been true and correct as of the date of this
Agreement and (b) the representations and warranties of Modine set forth on
Exhibit 7.3 (which for purposes of this paragraph shall be read as though none
of them contained any materiality or Modine Material Adverse Effect
qualifications) shall be true and correct as of the Closing Date with the same
effect as though made as of the Closing Date, except (i) that, in the case of
clause (b), any such representation and warranty made as of a date other than
the date of this Agreement shall continue on the Closing Date to be true and
correct in all respects as of the specified date and (ii) where, in the case of
clauses (a) and (b), the failure of such representations and warranties to be
true and correct in all respects as of the applicable time would not in the
aggregate have a Modine Material Adverse Effect.
7.4 Modine's Closing Certificate. Transpro shall have received a
certificate of Modine addressed to Transpro, dated as of the Closing Date and
signed by an executive officer of Modine (on Modine's behalf and without
personal liability), confirming the matters set forth in Sections 7.1 and 7.3;
7.5 HSR Act. The condition set forth in Section 7.1(e) of the Merger
Agreement shall have been satisfied.
VIII. INDEMNIFICATION
8.1 Indemnity by Transpro. Following the Closing, Transpro will indemnify
and hold Modine harmless from and against and will promptly defend Modine from
and reimburse Modine for any and all losses, damages, costs, expenses,
liabilities, obligations, and claims of any kind (including reasonable
attorneys' fees and other costs
26
and expenses) ("Damages") which Modine or the Company may suffer or incur or
become subject to, as a result of or in connection with any claim by a third
party that relates to any of the following:
(a) the conduct by Transpro or its Affiliates of any business other
than the Business;
(b) the failure by Transpro to perform any covenant to be performed by
it under this Agreement in whole or in part after the Closing; and
(c) any income Tax arising in respect of the conduct of the Business
on or prior to the Closing Date, any Tax for which Transpro is responsible
under Section 2.5, any Taxes of Transpro or any member of the Transpro
Group (other than the Company) imposed upon the Company or Modine by reason
of the Company being severally liable for such Taxes pursuant to Treasury
Regulations Section 1.1502-6 or any analogous provisions of state or local
Law, or any Tax arising in respect of the conduct of any other business of
Transpro; provided, however, that Taxes arising in respect of the conduct
of the Business on or prior to the Closing Date do not include any Taxes
arising as a result of the election provided for in Section 2.5.
8.2 Modine's Indemnity. Following the Closing, Modine will indemnify and
hold Transpro harmless from and against, and will promptly defend Transpro from
and reimburse Transpro for, any and all Damages which Transpro may directly or
indirectly at any time suffer or incur or become subject to, as a result of or
in connection with any claim by a third party that relates to any of the
following:
(a) the conduct of the Business whether prior to or after the Closing
(except that Modine will only indemnify for income Taxes arising in respect
of the conduct of the Business to the extent required pursuant to an
obligation set forth in Section 10.1);
(b) the failure by Modine or the Company to perform any covenant to be
performed by it under this Agreement in whole or in part after the Closing;
and
(c) any Tax arising in respect of the conduct of the Business not
described in Section 8.1(c) or any Tax arising in respect of the conduct of
any other business of Modine.
8.3 Straddle Periods. For purposes of Sections 8.1(c) and 8.2(c), any Taxes
of the Company imposed with respect to any Straddle Period will be paid by the
respective parties as set forth in such sections and if more than one party is
responsible for Taxes of any Straddle Period, such Taxes will be allocated
between the Pre-Closing Period and the Post-Closing Period, based upon the
permanent books and records of the Company, as if the portion of the Straddle
Period ending on the Closing Date was included in the Pre-Closing Period and the
portion of the Straddle Period beginning on the date immediately following the
Closing Date was included in the Post-Closing Period.
27
8.4 Insurance Coverage. The indemnification to which any party is entitled
hereunder will be exclusive of all insurance proceeds actually received or to be
received, if any, by the indemnified party with respect to the losses for which
indemnification is provided in Sections 8.1 or 8.2 and no party will be entitled
to be indemnified for any matter for which insurance proceeds are available.
8.5 Right of Party to Indemnification. Each party hereto will be entitled
to indemnification for losses sustained in accordance with the provisions of
this Article VIII regardless of any Law or public policy that would limit or
impair the right of the party to recover indemnification under the
circumstances.
8.6 Indemnification Procedures. Any party seeking indemnification hereunder
(the "Indemnified Party") must notify the party from whom such indemnity is
sought (the "Indemnifying Party") in writing of any claim, demand, action or
proceeding for which indemnification will be sought under this Article VIII and
the Indemnifying Party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the Indemnified Party. The
Indemnified Party will have the right (i) to participate, at its own expense,
with respect to any claim, demand, action or proceeding that is being diligently
defended by the Indemnifying Party and (ii) to assume the defense of any claim,
demand, action or proceeding at the cost and expense of the Indemnifying Party
if the Indemnifying Party fails or ceases to defend the same. In connection with
any such claim, demand, action or proceeding the parties will cooperate with
each other and provide each other with access to relevant books and records in
their possession. If a firm written offer is made to the Indemnifying Party to
settle any such claim, demand, action or proceeding solely in exchange for
monetary sums to be paid by the Indemnifying Party (and such settlement contains
a complete release of the Indemnified Party and its Affiliates and their
respective directors, officers and employees) and the Indemnifying Party
proposes to accept such settlement and the Indemnified Party refuses to consent
to such settlement, then (i) the Indemnifying Party will be excused from, and
the Indemnified Party will be solely responsible for, all further defense of
such claim, demand, action or proceeding, (ii) the maximum liability of the
Indemnifying Party relating to such claim, demand, action or proceeding will be
the amount of the proposed settlement if the amount thereafter recovered from
the Indemnified Party on such claim, demand, action or proceeding is greater
than the amount of the proposed settlement, and (iii) the Indemnified Party will
pay all attorneys' fees and legal costs and expenses incurred after rejection of
such settlement by the Indemnified Party; provided, however, that if the amount
thereafter recovered by the third party from the Indemnified Party is less than
the amount of the proposed settlement, the Indemnified Party will be reimbursed
by the Indemnifying Party for such attorneys' fees and legal costs and expenses
up to a maximum amount equal to the difference between the amount recovered by
the third party and the amount of the proposed settlement.
IX. TERMINATION
9.1 Termination. This Agreement will automatically terminate without action
by any party upon the termination of the Merger Agreement.
28
9.2 Effect of Termination. If this Agreement is terminated as provided in
Section 9.1, then this Agreement will forthwith become void and there will be no
liability on the part of any party to any other party or any other Person in
respect hereof regardless of the circumstances unless such termination results
from the willful and material breach by a party of any of its covenants,
agreements, representations or warranties set forth in this Agreement.
X. CERTAIN OTHER AGREEMENTS
10.1 Tax Matters. (a) Effective as of immediately prior to the Closing,
Transpro will terminate each tax sharing agreement, if any, with the Company and
each such tax sharing agreement will have no further effect and, after the
Closing Date, the Company will have no liability thereunder.
(b) The Company will join, for any Pre-Closing Period for which the
Company is required to do so (and at Transpro's request for any such period or
return for which the Company is eligible but not required to do so), in all
federal, state or local income Tax Returns of the Transpro Group. Transpro will
prepare and timely file all such federal, state or local income Tax Returns and
will timely pay all taxes with respect to such Tax Returns. Transpro will
prepare and timely file all other state and local income Tax Returns relating to
the Company for any Pre-Closing Period and will timely pay all Taxes with
respect to any such Tax Returns for which Transpro is liable under Section
8.1(c), and Modine will not be responsible for paying any Taxes with respect to
any such Tax Return.
(c) Modine will prepare and file (or cause to be prepared and filed)
any Tax Return relating to the Company for any Pre-Closing Period that is
required to be filed after the Closing Date other than those required to be
filed by Transpro pursuant to Section 10.1(b). Modine will timely pay the amount
due on such Tax Return, and Transpro will not be responsible for paying any
Taxes with respect to any such Tax Return.
(d) Modine will prepare and file any Tax Return relating to the
Company for any Straddle Period and any Post-Closing Period. Modine will provide
a copy of each income Tax Return for any Straddle Period and any supporting
schedules to Transpro at least 30 days before the date such income Tax Return is
to be filed by Modine for Transpro's review and approval. Modine will pay all
Taxes with respect to Tax Returns that it files under this Section 10.1(d),
except that Transpro will pay to Modine two days prior to the filing of an
income Tax Return with respect to a Straddle Period the amount due on such
income Tax Return that is the responsibility of Transpro pursuant to Section
8.3.
(e) All returns and schedules prepared pursuant to this Section 10.1
will be prepared on a basis consistent with those prepared for prior Tax years
unless a different treatment of any item is required by an intervening change in
law. Modine may make any necessary changes in the filing of Tax Returns with
respect to Post-Closing
29
Periods provided that, unless a change is required by law, such a change does
not result in any Tax Detriment to Transpro or its Affiliates.
(f) Modine will not file any amended income Tax Returns with respect
to the Company for any Pre-Closing Period of the Company without Transpro's
prior written consent.
(g) Each of the parties will provide the other parties with such
cooperation and information as reasonably requested in (i) filing any Tax
Return, amended Tax Return or claim for refund, (ii) determining a liability for
Taxes or a right to a refund of Taxes, or (iii) participating in or conducting
any audit or other proceeding in respect of Taxes. Such cooperation and
information will include providing copies of relevant Tax Returns or portions
thereof, together with accompanying schedules and related work papers and
documents relating to rulings or other determinations by Tax Authorities. Each
party will make its employees available on a mutually convenient basis to
provide explanations of any documents or information provided hereunder. Any
information obtained under this Section 10.1(g) will be kept confidential,
except as may be otherwise necessary in connection with the filing of returns or
claims for refund or in conducting an audit or other proceeding.
(h) Tax Contests. (i) Each Indemnified Party will provide prompt
notice to the other parties of any pending or threatened Tax audit, assessment
or proceeding or other Tax Contest of which the Indemnified Party becomes aware
related to Taxes for Tax periods for which the Indemnified Party is indemnified
pursuant to Sections 8.1 and 8.2. Such notice will contain factual information
(to the extent known) describing any asserted Tax liability in reasonable detail
and will be accompanied by copies of any notice and other documents received
from any Tax Authority in respect of any such matters. If an Indemnified Party
has knowledge of an asserted Tax liability with respect to a matter for which
such party is to be indemnified under Sections 8.1 and 8.2 and such Indemnified
Party fails to give the Indemnifying Party prompt notice of such asserted Tax
liability, then (A) if the Indemnifying Party is precluded from contesting the
asserted Tax liability in any forum as a result of the failure to give prompt
notice, the Indemnifying Party will have no obligation to indemnify the
Indemnified Party for any Taxes arising out of such asserted Tax liability and
(B) if the Indemnifying Party is not precluded from contesting the asserted Tax
liability in any forum, but if such failure to give prompt notice results in a
monetary detriment to the Indemnifying Party, then any amount which the
Indemnifying Party is otherwise required to pay the Indemnified Party pursuant
to this Agreement will be reduced by the amount of such detriment.
(ii) Each party will have full responsibility and discretion in
handling, settling or contesting any Tax Contest involving a Tax for
which it is liable pursuant to Sections 8.1 and 8.2 of this Agreement.
(i) Refunds and Tax Benefits. (i) Any refunds of Taxes with respect to
periods and Taxes for which Transpro is responsible pursuant to Section 8.1 will
be for the account of Transpro and if received by (or credited for the benefit
of) the Company, Modine or any Affiliate of Modine, such refunds will be
promptly paid to Transpro
30
(together with any interest paid or credited with respect thereto), net of any
Tax cost to the Company or Modine of the receipt of such refund.
(ii) If any adjustments will be made to any income Tax Returns
relating to the Company or the Transpro Group for the Pre-Closing
Period as a result of or in settlement of any Tax Contest or as the
result of the filing of an amended income Tax Return to reflect the
consequences of any determination made in connection with any such Tax
Contest or as required by an intervening change of law, and if such
adjustment results in any Tax Detriment to Transpro or any Affiliate
of Transpro (including the Company) with respect to such period and
any Tax Benefit to Modine, the Company or any Affiliate of Modine for
any Post-Closing Period, Transpro will be entitled to such Tax
Benefit, and Modine will pay to Transpro the amount of such Tax
Benefit at such time or times as and to the extent that Modine, the
Company or any Affiliate of Modine realizes such Tax Benefit through a
refund of income Tax or reduction in the amount of income Taxes which
Modine, the Company or any Affiliate of Modine would otherwise have
had to pay if such adjustment had not been made; provided, however,
that no payment by Modine to Transpro will exceed the amount of Tax
Detriment suffered by Transpro or the Affiliate, as the case may be.
(iii) If any adjustments will be made to any income Tax Returns
relating to Modine, the Company or any Affiliate of Modine for the
Post-Closing Period as a result of or in settlement of any Tax Contest
or as the result of the filing of an amended income Tax Return to
reflect the consequences of any determination made in connection with
any such Tax Contest or as required by an intervening change of law,
and if such adjustment results in any Tax Detriment to Modine, the
Company or any Affiliate of Modine with respect to such period and any
Tax Benefit to Transpro or any Affiliate of Transpro (including the
Company) for the Pre-Closing Period, Modine will be entitled to such
Tax Benefit, and Transpro will pay to Modine the amount of such Tax
Benefit at such time or times as and to the extent that Transpro or
any Affiliate of Transpro realizes such Tax Benefit through a refund
of income Tax or reduction in the amount of income Taxes which
Transpro or any Affiliate of Transpro would otherwise have had to pay
if such adjustment had not been made; provided, however, that no
payment by Transpro to Modine will exceed the amount of Tax Detriment
suffered by Modine or the Affiliate, as the case may be.
(iv) Transpro will not be considered to have suffered a Tax
Detriment to the extent that it is indemnified by Modine for such Tax
Detriment pursuant to Section 8.2 of this Agreement. Modine will not
be considered to have suffered a Tax Detriment to the extent that it
is indemnified by Transpro for such Tax Detriment pursuant to Section
8.1 of this Agreement.
31
(j) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement will be paid when due by the party primarily
responsible therefor under applicable Law. The liability with respect to all
such Taxes (other than in connection with Transpro's actions described in
Sections 5.2, 5.3 and 10.6) will be subject to Section 6.25 of the Merger
Agreement.
(k) Royalty Payment Taxes. Transpro and Modine agree that if the IRS
determines that any Tax is due or payable by Transpro or any member of the
Transpro Group in connection with the license of trademarks and patents pursuant
to the License Agreement, Modine will reimburse Transpro for the amount of any
such Tax grossed up to take into account any income Tax payable as a result of
the receipt of such reimbursement.
10.2 Cooperation in Litigation. For a period of five years after the
Closing, Transpro will, in the defense of any third-party Action relating to the
Business, make available during normal business hours, but without unreasonably
disrupting its business, all personnel and records of the Business reasonably
necessary to permit the effective defense or investigation of such Action. If
information other than that pertaining to the Business is contained in such
records, Modine will either agree that such information may be omitted or
redacted by Transpro or will enter into appropriate secrecy commitments to
protect such information.
10.3 Additional Documents. From time to time after the Closing, each of the
parties will, and will cause its officers, attorneys, accountants and other
respective representatives and Affiliates over which they exercise control to,
execute and deliver, without further consideration, such documents as may be
reasonably necessary or advisable in connection with the consummation of the
transactions set forth in this Agreement.
10.4 Confidentiality Obligations. The parties acknowledge that they are
subject to, and any confidential information of any nature whatsoever of a party
to this Agreement that is provided or disclosed to the other party in connection
with this Agreement will be subject to, the confidentiality provisions contained
in Section 6.6 of the Merger Agreement. The confidentiality obligations
thereunder will automatically terminate in their entirety on the Confidentiality
Expiration Date.
10.5 Working Capital. (a) Prior to the 45th calendar day after the Closing
(the "Verification Date"), Modine and its representatives will have the right to
verify the Deliverables. In the event Modine determines that Transpro breached
Section 6.1(a) of the Merger Agreement in respect of the Company, Modine will
notify (the "Section 10.5 Notice") Transpro of the aggregate amount (the
"Section 10.5 Amount") of Damages related to such breach.
(b) If Transpro disagrees with any item in the Section 10.5 Notice,
Transpro may, within 15 calendar days after delivery of the Section 10.5 Notice,
deliver a notice to Modine disagreeing with such item. Any such notice of
disagreement will, to
32
the extent reasonably practicable, specify in reasonable detail those items or
amounts as to which Transpro disagrees, and will set forth in detail Transpro's
calculation of those items or amounts, together with an explanation of the
disagreement. Upon delivery of such notice, Transpro will be deemed to have
agreed with (and the Independent Accountants described in Section 10.5(c), if
any, will be deemed to be bound by) all other items and amounts contained in the
Section 10.5 Notice that are not specifically the subject of disagreement in any
notice of disagreement delivered by Transpro as provided above.
(c) If a notice of disagreement is delivered pursuant to Section
10.5(b), Modine and Transpro will, during the 10 calendar days following such
delivery, use reasonable efforts to reach agreement on the disputed items or
amounts. If Modine and Transpro are unable to reach such agreement during such
period, they will promptly thereafter cause independent accountants of
nationally recognized standing reasonably satisfactory to Modine and Transpro
(who do not have any material relationship with Modine, Transpro or any of their
respective Affiliates) (the "Independent Accountants"), promptly to review this
Agreement and the disputed items or amounts in the Section 10.5 Notice for the
purpose of calculating the Section 10.5 Amount. In making such calculation, such
Independent Accountants will consider only those items or amounts in the Section
10.5 Notice as to which Transpro has disagreed. Such Independent Accountants
will deliver to Modine and Transpro, as promptly as practicable, a report that
sets forth the Independent Accountants' calculation of the Section 10.5 Amount.
Such report and the calculations set forth therein will be final and binding
upon Modine and Transpro and their respective Affiliates and will not be subject
to challenge by any of the foregoing in a court of law or otherwise. The cost of
such review and report will be borne by Modine if the difference between the
Final Section 10.5 Amount and Modine's calculation of the Section 10.5 Amount
delivered pursuant to Section 10.5(a) is greater than the difference between the
Final Section 10.5 Amount and Transpro's calculation of the Section 10.5 Amount
delivered pursuant to Section 10.5(b), by Transpro if the first such difference
is less than the second such difference and otherwise equally by Modine and
Transpro.
(d) Modine and Transpro will, and will cause their respective
independent accountants to, cooperate and assist in the reviews referred to in
this Section, including, without limitation, making available all necessary
books, records, work papers and personnel.
(e) "Final Section 10.5 Amount" means the Section 10.5 Amount as shown
in the Section 10.5 Notice delivered pursuant to Section 10.5(a), if no notice
of disagreement with respect thereto is duly delivered pursuant to Section
10.5(b), or if a notice of disagreement is duly delivered, as agreed by Modine
and Transpro pursuant to Section 10.5(c) or in the absence of such agreement, as
shown in the Independent Accountants' calculation delivered pursuant to Section
10.5(c).
(f) Payment of the Final Section 10.5 Amount, if any, will be made at
a mutually convenient time and place within 10 calendar days after the Final
Section 10.5 Amount has been determined by delivery by Transpro by wire transfer
of such payment
33
in immediately available funds to be credited to such account of Modine as may
be designated by Modine. The amount of any payment to be made pursuant to this
Section will bear interest from and including the Closing Date to but excluding
the date of payment at a rate per annum equal to the rate of interest publicly
announced by Citibank, N.A., from time to time, in The City of New York, as such
bank's base rate. Such interest will be payable at the same time as the payment
to which it relates and will be calculated daily on the basis of a year of 365
days and the actual number of days elapsed.
10.6 Employee Matters. (a) Immediately prior to the Closing Date, Transpro
will take, or will cause one of its Affiliates to take, such action as is
necessary to terminate employment of the individuals listed on Section 3.15(a)
of the Disclosure Schedule and identified thereon as "Transferred Employees" and
to cause the Company to offer employment to such individuals on substantially
the same terms as applied to them as employees of an Affiliate of Transpro other
than the Company immediately prior to their termination.
(b) Effective as of the Closing Date, the Company will, and Transpro
will cause the Company to, withdraw from and cease its participation in each
Company Benefit Plan in which the Company then participates. To the extent
required by Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), as codified under Section 4980B of the Code and
Title I part 6 of ERISA, Transpro will retain responsibility for making COBRA
continuation coverage available to the employees of the Company as of the
Closing Date (the "Company Employees") for a loss of coverage occurring prior to
the Closing Date. Transpro will retain responsibility for, and on and after the
Closing Date will indemnify and hold the Company and its Affiliates harmless
from, any and all obligations of Transpro or any of its Subsidiaries to Company
Employees and any participants (including those relating to expenses incurred by
Company Employees, participants or their eligible dependents prior to the
Closing Date) arising under the Company Benefit Plans and based on any
participation by Company Employees, participants and their eligible dependents
in the Company Benefit Plans prior to the Closing Date or based on the
employment of Company Employees or former employees of the Business prior to the
Closing Date.
(c) Effective as of the Closing Date, the Company Employees will cease
participation in the Transpro, Inc. 401(k) Savings Plan maintained by Transpro
(the "401(k) Plan"). Effective as of the Closing Date, Transpro will cause the
401(k) Plan to be amended to fully vest the Company Employees in any account
balances and will make any contributions to the 401(k) Plan of all accrued but
unpaid employer and employee contributions.
(d) Modine will cause the Company Employees who remain employed by the
Company on or after the Closing Date to be (i) provided with benefits under
Modine's employee benefit plans, programs, policies or arrangements
(collectively, "Modine's Benefit Plans") on substantially similar terms and
conditions in the aggregate to those provided by Modine to its similarly
situated employees and (ii) credited under Modine's Benefit Plans for their
service prior to the Closing Date with Transpro or any of
34
its Subsidiaries for purposes of eligibility, pre-existing condition
limitations, level of employer contributions and matching contributions,
severance allowance and service-related level of benefits under Modine's Benefit
Plans, except for purposes of accrued benefits under any defined benefit pension
plan. Notwithstanding the foregoing, Modine will cause the Company to pay
severance benefits in accordance with the Company's or Transpro's severance
plans or agreements in place as of the Closing Date and described in Section
10.6(d) of the Disclosure Schedule with respect to each Company Employee whose
employment is terminated by the Company on or prior to the first anniversary of
the Closing Date.
(e) As of the Closing Date, Transpro will amend any Company Benefit
Plan subject to Title IV of ERISA to cease further accrual of all benefits for
all participating Company Employees thereunder. Transpro will retain all
liability and responsibility for any obligations arising under any such Title IV
Company Benefit Plan and will indemnify and hold the Company and each of its
Affiliates harmless from any and all obligations of Transpro or any of its
Subsidiaries under such Company Benefit Plan.
(f) Nothing contained in this Agreement will confer upon any Company
Employee, or any legal representative thereof, any rights or remedies,
including, without limitation, any right to employment for any specified period,
of any nature or kind whatsoever, under or by reason of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, neither
Modine nor any Affiliate of Modine will be required to continue any particular
Modine Benefit Plan after the Closing Date for the Company Employees (except for
severance benefits as provided in Section 10.6(d)), and any such Modine Benefit
Plan may be amended or terminated in accordance with its terms and any
applicable Law.
(g) Prior to the Closing, Modine will consult with Transpro in respect
of, and Modine will provide written notice to all Company Employees of, the
benefits under the Modine Benefit Plans to which the Company Employees are
entitled and Modine's legal obligations under this Section 10.6 in respect
thereto. In the event of any breach by Modine of its obligations under this
Section 10.6, Transpro will have the right, in addition to any other rights and
remedies existing in its favor, to apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief or
other relief in order to enforce or prevent any violation of this Section 10.6.
10.7 Certain Insurance Matters. With respect to any Damages suffered by the
Company after the Closing Date relating to, resulting from or arising out of the
conduct of the Business prior to the Closing Date for which Transpro or any of
its Affiliates would be entitled to assert, or cause any other Person to assert,
a claim for recovery under any policy of insurance maintained by Transpro or for
the benefit of Transpro or the Company or any of Transpro's Subsidiaries in
respect of the Business, Transpro, the Company or any of Transpro's
Subsidiaries, any product of the Business or any Company Employee, at the
request of the Company, Transpro will use its reasonable efforts to assert, or
to assist the Company to assert, one or more claims under such policy of
insurance covering such Damage if the Company is not itself entitled to assert
35
such claim, and any recovery in respect thereof will be paid to the party
suffering such Damages; provided, however, that all of Transpro's out-of-pocket
costs and expenses incurred in connection with the foregoing are promptly
reimbursed by the Company. Nothing in this Section 10.7 will affect or modify or
be deemed to affect or modify in any way Transpro's obligations under Article
VIII of this Agreement.
XI. MISCELLANEOUS
11.1 Waiver of Compliance. Except as otherwise provided in this Agreement
or any of the Ancillary Agreements, the failure by any Person to comply with any
obligation, covenant, agreement or condition under such agreements may be waived
by the Person entitled to the benefit thereof only by a written instrument
signed by the Person granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
will not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. The failure of any Person to enforce at any time any of the
provisions of such agreements will in no way be construed to be a waiver of any
such provision, nor in any way to affect the validity of such agreements or any
part thereof or the right of any Person thereafter to enforce each and every
such provision. No waiver of any breach of such provisions will be held to be a
waiver of any other or subsequent breach.
11.2 Amendment. No amendment, supplement or modification of this Agreement
will be binding unless executed in writing by Modine and Transpro.
11.3 Expenses. Whether or not the Transactions are consummated, all costs,
fees and expenses incurred in connection with this Agreement, the Ancillary
Agreements and the Transactions will be borne as provided in the Merger
Agreement, unless otherwise provided herein.
11.4 Successors and Assigns. This Agreement and the Ancillary Agreements
will be binding upon and will inure to the benefit of the signatories hereto and
their respective successors and permitted assigns. Unless specifically permitted
by an Ancillary Agreement, neither Transpro nor Modine may assign this Agreement
or any of the Ancillary Agreements, or any of their rights or liabilities
thereunder, without the prior written consent of the other parties thereto, and
any attempt to make any such assignment without such consent will be null and
void. Any such assignment will not relieve the party making the assignment from
any liability under such agreements.
11.5 Notices. All notices required or permitted pursuant to this Agreement
will be in writing and will be deemed to be properly given when actually
received by the Person entitled to receive the notice at the address stated
below, or at such other address as a party may provide by notice to the other:
36
If to Modine:
Modine Manufacturing Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Transpro:
Transpro, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ Day
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11.6 Severability. The illegality or partial illegality of any or all of
this Agreement or any of the Ancillary Agreements, or any provision thereof,
will not affect the validity of the remainder of such agreements, or any
provision thereof, and the illegality or partial illegality of any such
agreements will not affect the validity of any such agreements in any
jurisdiction in which such determination of illegality or partial illegality has
not been made, except in either case to the extent such illegality or partial
illegality causes such agreements to no longer contain all of the material
provisions reasonably expected by the parties to be contained therein.
11.7 No Reliance. Except as provided otherwise in this Agreement (including
as to the Company, which will be entitled to enforce the provisions of this
Agreement running in its favor), nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or
their respective successors and assigns (and other than Modine's and its
Affiliates' lending group) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
37
11.8 Specific Performance. The parties hereby acknowledge and agree that
the failure of any party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to the
consummation of the Transactions, will cause irreparable injury to the other
parties for which damages, even if available, will not be an adequate remedy.
Accordingly, each party hereby consents to the issuance of injunctive relief by
any court of competent jurisdiction to compel performance of such party's
obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
11.9 Survival. All representations and warranties of the parties contained
in this Agreement or made pursuant to this Agreement will expire as of the
Closing without further action by the parties, with the result that if the
Closing occurs, no party will have any liability or obligation in respect
thereof, whether asserted before or after the Closing, other than for actual
fraud. The agreements contained herein that by their terms apply or are to be
performed in whole or in part after the Closing will survive.
11.10 Submission to Jurisdiction; Waivers. Each of Transpro and Modine
irrevocably agrees that any legal action or proceeding with respect to this
Agreement, the transactions contemplated hereby, any provision hereof, the
breach, performance, validity or invalidity hereof or for recognition and
enforcement of any judgment in respect hereof brought by another party hereto or
its successors or permitted assigns may be brought and determined in any federal
or state court located in the State of Delaware, and each of Transpro and Modine
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect to its property, generally and unconditionally, to the
exclusive jurisdiction of the aforesaid courts. Each of Transpro and Modine
hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any action or proceeding with respect to
this Agreement, the transactions contemplated hereby, any provision hereof or
the breach, performance, enforcement, validity or invalidity hereof, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to lawfully serve process, (b) that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable Laws, that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper, and (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts.
[SIGNATURES ON FOLLOWING PAGE]
38
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
MODINE MANUFACTURING COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: VP Finance and CFO
TRANSPRO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and CEO
EXHIBITS
Exhibit Description
------- -----------
2.3A Prohibited Customers (Mexico)
2.3B Prohibited Customers (Europe)
6.3 Transpro Bring-Down Representations and Warranties
7.3 Modine Bring-Down Representations and Warranties