Document:

exv10w3

 

Exhibit 10.3

EXECUTION COPY

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

(2005)

     This First Amendment dated as of February 1, 2008 to be effective as of December 26, 2007
(this “First Amendment”) to the Note Purchase Agreement dated as of September 29, 2005 (the “Note
Purchase Agreement”) is between Modine Manufacturing Company, a Wisconsin corporation (the
“Company”), and each of the institutions which is a signatory to this First Amendment
(collectively, the “Noteholders”).

RECITALS:

     A. The Company and the Noteholders are parties the Note Purchase Agreement pursuant to which
the Company issued the $75,000,000 4.91% Senior Notes Due September 29, 2015 (the “Notes”).

     B. The Company has requested that the Noteholders agree to certain amendments to the Note
Purchase Agreement as set forth below and the Company and the Noteholders now desire to amend the
Note Purchase Agreement in the respects, but only in the respects, set forth in this First
Amendment.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the
Note Purchase Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things
necessary to make this First Amendment a valid, legal and binding instrument according to its terms
for the purposes herein expressed have been done or performed.

     NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Noteholders do hereby agree as
follows:

SECTION 1. CONSENTS AND AMENDMENTS.

     Effective as of December 26, 2007 upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this First Amendment as set forth in Section 3.1 hereof, the
Company and the Noteholders agree that the Note Purchase Agreement is amended as follows:

     1.1 The definition of “Consolidated EBIT” is added to the Note Purchase Agreement or amended
in its entirety to read as follows:

 

 

     “Consolidated EBIT” means, for the Company and its Subsidiaries for any period, an
amount equal to the sum of (a) Consolidated Net Earnings for such period plus (b) to the
extent deducted in determining Consolidated Net Earnings for such period, (i) Consolidated
Interest Expense, (ii) federal, state, local and foreign income tax expense and franchise
tax expense paid or accrued during such period, determined on a consolidated basis in
accordance with GAAP, (iii) non-cash stock option expense for such period, determined on a
consolidated basis in accordance with GAAP, (iv) non-cash charges which are unusual,
non-recurring or extraordinary, determined on a consolidated basis, (v) Restructuring
Charges incurred prior to the end of the Company’s fiscal year ending March 31, 2010 not
exceeding, in the aggregate through the end of such fiscal year, $25,000,000, and (vi)
non-cash expense incurred directly as a result of mandatory changes to significant
accounting policies which are mandated by the Financial Accounting Standards Board,
determined on a consolidated basis in accordance with GAAP, minus (c) to the extent included
in determining Consolidated Net Earnings for such period, non-cash gains which are unusual,
non-recurring or extraordinary, determined on a consolidated basis, in each case for such
period; provided, however, that the Consolidated Net Earnings, Consolidated Interest
Expense, income tax expense, franchise tax expense, non-cash stock option expense, unusual,
non-recurring or extraordinary non-cash charges or gains and non-cash expense incurred
directly as a result of mandatory changes to significant accounting policies of any Person
acquired by the Company or any Subsidiary during such period that accrue prior to the date
such Person becomes a Subsidiary or is merged into or consolidated with or otherwise
acquired by the Company or any Subsidiary, shall be included in calculating Consolidated
EBIT, on a pro forma basis as if such acquisition had been consummated on the first day of
such period.

     1.2 The definition of “Consolidated EBITDA” on Schedule B to the Note Purchase Agreement is
amended in its entirety to read as follows:

     “Consolidated EBITDA” means, for the Company and its Subsidiaries for any period, an
amount equal to the sum of (a) Consolidated EBIT for such period plus (b) to the extent
deducted in determining Consolidated Net Earnings for such period, depreciation and
amortization determined on a consolidated basis in accordance with GAAP, provided, however,
that the Consolidated Net Earnings, Consolidated Interest Expense, income tax expense,
franchise tax expense, non-cash stock option expense, unusual, non-recurring or
extraordinary non-cash charges or gains, non-cash expense incurred directly as a result of
mandatory changes to significant accounting policies, depreciation and amortization of any
Person acquired by the Company or any Subsidiary during such period that accrue prior to the
date such Person becomes a Subsidiary or is merged into or consolidated with or otherwise
acquired by the Company or any Subsidiary, shall be included in calculating Consolidated
EBITDA, on a pro forma basis as if such acquisition had been consummated on the first day of
such period.

     1.3 The definition of “Consolidated Net Earnings” is added to Schedule B of the Note Purchase
Agreement, to read as follows:

     “Consolidated Net Earnings” means, for the Company and its Subsidiaries for any period,
the net earnings (or loss) of the Company and its Subsidiaries for such period

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(taken as a cumulative whole), as determined in accordance with GAAP, excluding (to the
extent deducted in determining Consolidated Net Earnings): (i) extraordinary gains and
losses; and (ii) any equity interest of the Company on the unremitted earnings of any Person
that is not a Subsidiary.

     1.4 The definition of “SWAP Contract” on Schedule B to the Note Purchase Agreement is amended
by adding the following proviso at the end:

“provided, however, that any transactions that would otherwise be included under clauses
(a) or (b) above shall not be so included if entered into in the ordinary course of business
of the Company or a Subsidiary for the purposes of hedging a risk exposure of the Company or
a Subsidiary and not for speculative purposes.”

     1.5 A definition of “Restructuring Charges” is added to Schedule B to the Note Purchase
Agreement to read as follows:

     “Restructuring Charges” means certain cash charges related to the Company’s
restructuring program announced on or about January 31, 2008 only insofar as such charges
specifically relate to the following categories of expense: severance, retained
restructuring consulting, equipment transfer, employee outplacement, environmental services,
and employee insurance continuation.

     1.6 A definition of “2006 Note Purchase Agreement” is added to Schedule B to the Note Purchase
Agreement to read as follows:

     “2006 Note Purchase Agreement” means the Note Purchase Agreement, dated as of
December 7, 2006, among the Company and the Purchasers listed in Schedule A attached
thereto, as it may be amended, modified, supplemented, restated, refinanced or replaced from
time to time.

     1.7 Section 7.1 of the Note Purchase Agreement is amended by re-lettering clause (f) thereof
as clause (g), and adding new clause (f) thereto, such clause (f) to read as follows:

     “(f) Amendments to Other Agreements - promptly upon the execution and delivery thereof,
notice of any waiver, consent, modification or amendment of or to the Credit Agreement or
the 2006 Note Purchase Agreement, together with a copy of the documentation relating
thereto; and”

     1.8 New Sections 8.7 and 8.8 are added to the Note Purchase Agreement, such Sections 8.7 and
8.8 to read as follows:

     “Section 8.7 Change in Control.

     (a) Conditions to Company Action. The Company will not take any action that
consummates or finalizes a Change in Control unless at least twenty (20) Business Days prior
to such action the Company shall have given to each holder of Notes written notice
containing and constituting an offer to prepay such Notes as described in Section 8.7(b),
accompanied by the certificate described in Section 8.7(f), and subject to the provisions of
clause (c) of this Section 8.7, contemporaneously with such action, it prepays all Notes
required to be prepaid in accordance with this Section 8.7.

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     (b) Offer to Prepay Notes. The offer to prepay the Notes contemplated by paragraph (a)
of this Section 8.7 shall be an offer to prepay by the Company, in accordance with and
subject to this Section 8.7, all, but not less than all, the Notes held by each holder (in
this case only, “holder” in respect of any Note registered in the name of a nominee for a
disclosed beneficial owner shall mean such beneficial owner) on a date specified in such
offer (the “Proposed Prepayment Date”) which shall be the effective date of the Change in
Control.

     (c) Acceptance. A holder of Notes may accept the offer to prepay made pursuant to this
Section 8.7 by causing a notice of such acceptance to be delivered to the Company at least
seven (7) Business Days prior to the Proposed Prepayment Date. A failure by a holder of
Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to
constitute a rejection of such offer by such holder.

     (d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.7
shall be at 100% of the principal amount of the Notes together with accrued and unpaid
interest thereon but without any Make-Whole Amount. The prepayment shall be made on the
Proposed Prepayment Date except as provided in Section 8.7(e). The obligation of the
Company to prepay the Notes pursuant to the offers required by subparagraph (b) and accepted
in accordance with subparagraph (c) of this Section 8.7 is subject to the occurrence of the
Change in Control in respect of which such offers and acceptances shall have been made.

     (e) Deferral Pending Change in Control. In the event that such Change in Control does
not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be
deferred until and shall be made on the date on which such Change in Control occurs. The
Company shall keep each holder of Notes reasonably and timely informed of (i) any such
deferral of the date of prepayment, (ii) the date on which such Change in Control and the
prepayment are expected to occur, and (iii) any determination by the Company that efforts to
effect such Change in Control have ceased or been abandoned (in which case the offers and
acceptances made pursuant to this Section 8.7 in respect of such Change in Control shall be
deemed rescinded).

     (f) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.7
shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company
and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that
such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note
offered to be prepaid; (iv) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of Section 8.7(a)
have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of
the Change in Control.

     (g) Certain Definitions. “Change in Control” shall be deemed to have occurred if any
Person or group of Persons acting in concert directly or indirectly acquires more than 50%
of the voting rights or shares of the Company. For the purposes hereof, “group of Persons
acting in concert” means, Persons who, pursuant to a formal agreement, actively co-operate,
through the acquisition by any of them, either directly or indirectly, of shares in the
Company, to obtain or consolidate control of the Company.

- 4 -

 

     Section 8.8. Supplemental Interest. In addition to the interest accruing on the Notes
as provided in the Notes, the Company agrees to pay to each holder of a Note supplemental
interest (the “Supplemental Interest”) for the period beginning on April 1, 2008 and ending
on June 30, 2009 at the rate of 0.35% per annum on the outstanding principal balance of the
Notes held by such holder. The Supplemental Interest with respect to each Note shall be
computed on the same basis as interest on such Note is computed (i.e., on a basis of a
360-day year of twelve 30 day months) and shall be paid semi-annually in arrears on the same
dates upon which interest is payable on such Note. The Supplemental Interest shall be
considered to be part of the “interest” accruing and due any payable upon the Notes for the
purposes of Section 11(b) and the other provisions of this Agreement.”

     1.9 Section 10.1(b) of the Note Purchase Agreement is amended in its entirety to read as
follows.

     “(b) The Company will not, and will not permit any Subsidiary to, create or incur any
Debt (other than unsecured debt ranking pari passu in right of payment, including from any
guarantors or sureties, to the Notes) during any fiscal quarter if a Responsible Officer
reasonably believes an Event of Default would exist as of the last day of such fiscal
quarter under any of Section 10.1(a), Section 10.2 and Section 10.3(j).”

     1.10 Section 10.5(a) of the Note Purchase Agreement is amended in its entirety to read as
follows:

     “(a) any Subsidiary may sell substantially all its assets if such sale is permitted
under Section 10.4(c) of this Agreement; and any Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Subsidiary so long as in (i) any merger or
consolidation involving the Company, the Company shall be the surviving or continuing
corporation and (ii) in any merger or consolidation involving a Wholly-owned Subsidiary (and
not the Company), the Wholly-owned Subsidiary shall be the surviving or continuing
corporation or limited liability company;”

     1.11 Section 10.5(b) of the Note Purchase Agreement is amended to add the following to the end
thereof:

“and (v) at the time of such consolidation or merger and immediately after giving effect
thereto, the surviving corporation shall be in compliance with Sections 10.1 and 10.9 hereof
(treating, for purposes of determining compliance with Sections 10.1 and 10.9, such
transaction as having been consummated on the last day of the immediately preceding fiscal
quarter);”

     1.12 Section 10.5(c) of the Note Purchase Agreement is amended to add the following to the end
thereof:

“ and (v) at the time of sale or disposition and immediately after giving effect thereto,
the acquiring corporation shall be in compliance with Sections 10.1 and 10.9 hereof
(treating, for purposes of determining compliance with Sections 10.1 and 10.9, such
transaction as having been consummated on the last day of the immediately preceding fiscal
quarter).”

- 5 -

 

     1.13 The Interest Expense Coverage Ratio is added to the Note Purchase Agreement or amended
its entirety to read as follows:

     “Section 10.9 Interest Expense Coverage Ratio. The Company will not permit, at the end
of any fiscal quarter set forth below, the ratio of (a) Consolidated EBIT for the period of
the four consecutive fiscal quarters ended with such fiscal quarter, to (b) Consolidated
Interest Expense for the period of the four consecutive fiscal quarters ended with such
fiscal quarter, to be less than the amount set forth in the table below for such fiscal
quarter:

	 	 	 	 	 
	 	 	Minimum Interest
	Fiscal Quarter	 	Expense Coverage Ratio
	Any fiscal quarters ending on or before March 31,
2008
	 	 	2.50 to 1.00	 
	Fiscal quarter ending on June 30, 2008
	 	 	2.00 to 1.00	 
	Fiscal quarter ending on September 30, 2008 or
December 31, 2008
	 	 	1.75 to 1.00	 
	Fiscal quarter ending on March 31, 2009 or
June 30, 2009
	 	 	2.25 to 1.00	 
	Any fiscal quarter ending after June 30, 2009
	 	 	2.50 to 1.00	”

     1.14 Section 11(f) of the Note Purchase Agreement is amended in its entirety to read as
follows:

     “(f) (i) the Company or any Significant Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest on any Debt that is outstanding in an aggregate principal amount of at
least $20,000,000 beyond any period of grace provided with respect thereto, or (ii) the
Company or any Significant Subsidiary is in default in the performance of or compliance with
any term of any evidence of any Debt in an aggregate outstanding principal amount of at
least $20,000,000 or of any mortgage, indenture or other agreement relative thereto or any
other condition exists, and as a consequence of such default or condition such Debt has
become, or has been declared (or one or more Persons are entitled to declare such Debt to
be), due and payable before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of Debt to convert such
Debt into equity interests), (x) the Company or any Significant Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at least
$20,000,000, or (y) one or more Persons have the right to require the Company or any
Significant Subsidiary so to purchase or repay such Debt; or”

     1.15 The Company is negotiating the terms of a purchase agreement pursuant to which the
Company’s Wholly-owned Subsidiary Thermacore, Inc. will sell substantially all of its assets,
including the stock of Thermal Corp. (the “Thermacore Sale”). The Noteholders hereby agree to
execute and deliver a release of the Subsidiary Guaranty with respect to Thermal Corp. in the form
attached to this First Amendment as Exhibit A upon consummation of the

- 6 -

 

Thermacore Sale in compliance with Section 10.4 of the Note Purchase Agreement provided that
the Company is entitled to obtain such release under Section 2.2(c) of the Note Purchase Agreement.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     2.1 To induce the Noteholders to execute and deliver this First Amendment (which
representations shall survive the execution and delivery of this First Amendment), the Company
represents and warrants to the Noteholders that:

     (a) this First Amendment has been duly authorized, executed and delivered by it and
this First Amendment constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors’ rights generally;

     (b) the Note Purchase Agreement, as amended by this First Amendment, constitutes the
legal, valid and binding obligations, contracts and agreements of the Company enforceable
against it in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors’ rights generally;

     (c) the execution, delivery and performance by the Company of this First Amendment (i)
has been duly authorized by all requisite corporate action and, if required, shareholder
action, (ii) does not require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A)(1) violate any provision of law, statute, rule or
regulation or its certificate of incorporation or bylaws, (2) any order of any court or any
rule, regulation or order of any other agency or government binding upon it, or (3) any
provision of any material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, including without limitation the
Credit Agreement or 2006 Note Purchase Agreement, or (B) result in a breach or constitute
(alone or with due notice or lapse of time or both) a default under, or require any consent
or approval under, any indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 2.1(c);

     (d) except as set forth on the Disclosure Schedule attached to this First Amendment,
all the representations and warranties contained in Section 5 of the Note Purchase Agreement
are true and correct in all material respects with the same force and effect as if made by
the Company on and as of the date hereof;

     (e) after giving effect to the amendments to the Note Purchase Agreement contained in
this First Amendment, no Default or Event of Default shall be in existence; and

     (f) neither the Company nor any of its Subsidiaries has paid or agreed to pay, and
neither the Company nor any of its Subsidiaries will pay or agree to pay, any fees or

- 7 -

 

other consideration for the amendments described in Section 3.1(c) below except as set
forth in such amendments.

SECTION 3. CONDITIONS TO EFFECTIVENESS.

     3.1 This First Amendment shall not become effective until, and shall become effective when,
each and every one of the following conditions shall have been satisfied:

     (a) executed counterparts of this First Amendment, duly executed by the Company, each
Subsidiary Guarantor and the holders of at least 51% of the outstanding principal of the
Notes, shall have been delivered to the Noteholders;

     (b) each holder shall have received payment of the amendment fee due such holder as
provided in Section 4.1 hereof;

     (c) the Noteholders shall have received evidence satisfactory to them that an amendment
to the Credit Agreement and the 2006 Note Agreement, each in form and substance satisfactory
to the Noteholders, shall have been duly executed and delivered by the Company and the
required other parties and shall be in full force and effect;

     (d) the representations and warranties of the Company set forth in Section 2 hereof
shall be true and correct on the date of the effectiveness of this First Amendment; and

     (e) the Noteholders shall have received a copy of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance by the Company
of this First Amendment, certified by its Secretary or an Assistant Secretary.

Upon receipt of all of the foregoing, this First Amendment shall become effective as of December
26, 2007.

SECTION 4. AMENDMENT FEE; PAYMENT OF NOTEHOLDERS’ COUNSEL FEES AND EXPENSES.

     4.1 In consideration of the execution and delivery by the Noteholders of this First Amendment,
the Company agrees to pay to each holder of a Note an amendment fee in an amount equal to .075% of
the outstanding principal amount of the Notes held by such holder.

     4.2 The Company agrees to pay upon demand, the reasonable fees and expenses of Schiff Hardin
LLP, counsel to the Noteholders, in connection with the negotiation, preparation, approval,
execution and delivery of this First Amendment.

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SECTION 5. REAFFIRMATION.

     Each Subsidiary Guarantor, by its consent hereto, ratifies and reaffirms all of its payment
and performance obligations, contingent or otherwise, under the Subsidiary Guaranty. Each
Subsidiary Guarantor, by its consent hereto, consents to the terms and conditions of this First
Amendment and reaffirms its obligations and liabilities under or with respect to the Note Purchase
Agreement as amended by this First Amendment. Each Subsidiary Guarantor, by its consent hereto,
acknowledges that the Subsidiary Guaranty remains in full force and effect and is hereby ratified
and confirmed. Without limiting the generality of the foregoing, each Subsidiary Guarantor, by its
consent hereto, agrees and confirms that the Subsidiary Guaranty continues to guaranty the
obligations arising under or in connection with the Note Purchase Agreement as amended by this
First Amendment.

SECTION 6. MISCELLANEOUS.

     6.1 This First Amendment shall be construed in connection with and as part of each of the Note
Purchase Agreement, and except as modified and expressly amended by this First Amendment, all
terms, conditions and covenants contained in the Note Purchase Agreement and the Notes are hereby
ratified and shall be and remain in full force and effect. Notwithstanding anything contained in
the Amendment Memorandum, dated January, 2008, relating to this First Amendment (the “Memorandum”),
no provisions contained in the Memorandum that purport to create agreements by any holder shall be
binding upon, or create any obligation by, any holder. The Company and the Subsidiary Guarantors
acknowledge and agree that no holder is under any duty or obligation of any kind or nature
whatsoever to grant the Company any additional amendments or waivers of any type, whether or not
under similar circumstances, and no course of dealing or course of performance shall be deemed to
have occurred as a result of the amendments herein.

     6.2 Any and all notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this First Amendment may refer to the Note Purchase Agreement
without making specific reference to this First Amendment but nevertheless all such references
shall include this First Amendment unless the context otherwise requires.

     6.3 The descriptive headings of the various Sections or parts of this First Amendment are for
convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     6.4 This First Amendment shall be governed by and construed in accordance with Illinois law.

     6.5 The execution hereof by you shall constitute a contract between us for the uses and
purposes hereinabove set forth, and this First Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all together only one
agreement.

* * * * *

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	 	 	MODINE MANUFACTURING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David B. Rayburn	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David B. Rayburn	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THERMACORE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bradley C. Richardson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bradley C. Richardson	 	 
	 

	 	Title:
	 	Vice President and Assistant Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	THERMAL CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dean R. Zakos	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Dean R. Zakos	 	 
	 

	 	Title:
	 	Vice President and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	MODINE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William K. Langan	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	William K. Langan	 	 
	 

	 	Title:
	 	President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	MODINE JACKSON, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bradley C. Richardson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bradley C. Richardson	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 

5.4 - 1

 

	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 	 
	 
	 	 	 	 
	AMERICAN FAMILY LIFE INSURANCE COMPANY	 	 
	 
	 	 	 	 
	By:

	 	/s/ Phillip Hannifan	 	 
	 

	 	 	 	 
	Name:

	 	Phillip Hannifan	 	 
	Title:

	 	Investment Director	 	 

5.4 - 2

 

MODERN WOODMEN OF AMERICA

	 	 	 	 	 
	By:

	 	/s/ Douglas A. Pannier
	 	 
	 

	 	 	 	 
	Name:

	 	Douglas A. Pannier	 	 
	Title:

	 	Supervisor - Private Placements	 	 

5.4 - 3

 

	 	 	 	 	 
	THE PRUDENTIAL LIFE INSURANCE COMPANY LTD.	 	 
	 
	 	 	 	 
	By:

	 	Prudential Investment Management (Japan), Inc.,	 	 
	 

	 	as Investment Manager	 	 
	 
	 	 	 	 
	By:

	 	Prudential Investment Management, Inc.,	 	 
	 

	 	as Sub-Adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Anthony Coletta	 	 
	 

	 	 	 	 
	Name:

	 	Anthony Coletta	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	PRUDENTIAL RETIREMENT INSURANCE

    AND ANNUITY COMPANY	 	 
	 
	 	 	 	 
	By:

	 	Prudential Investment Management, Inc.,	 	 
	 

	 	as investment manager	 	 
	 
	 	 	 	 
	By:

	 	/s/ Anthony Coletta	 	 
	 

	 	 	 	 
	Name:

	 	Anthony Coletta	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	MTL INSURANCE COMPANY	 	 
	 
	 	 	 	 
	By:

	 	Prudential Private Placement Investors, L.P.	 	 
	 

	 	(as Investment Advisor)	 	 
	 
	 	 	 	 
	By:

	 	Prudential Private Placement Investors, Inc.	 	 
	 

	 	(as its General Partner)	 	 
	 
	 	 	 	 
	By:

	 	/s/ Anthony Coletta	 	 
	 

	 	 	 	 
	Name:

	 	Anthony Coletta	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	THE PRUDENTIAL INSURANCE COMPANY

    OF AMERICA	 	 
	 
	 	 	 	 
	By:

	 	/s/ Anthony Coletta	 	 
	 

	 	 	 	 
	Name:

	 	Anthony Coletta	 	 
	Title:

	 	Vice President	 	 

5.4 - 4

 

STANDARD INSURANCE COMPANY

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

5.4 - 5

 

	 	 	 	 	 
	STATE FARM LIFE AND ACCIDENT 

    ASSURANCE COMPANY	 	 
	 
	 	 	 	 
	By:

	 	/s/ Julie Pierce	 	 
	 

	 	 	 	 
	Name:

	 	Julie Pierce	 	 
	Title:

	 	Senior Investment Officer	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jeffrey T. Attwood	 	 
	 

	 	 	 	 
	Name:

	 	Jeffrey T. Attwood	 	 
	Title:

	 	Investment Officer	 	 
	 
	 	 	 	 
	STATE FARM LIFE INSURANCE COMPANY	 	 
	 
	 	 	 	 
	By:

	 	/s/ Julie Pierce	 	 
	 

	 	 	 	 
	Name:

	 	Julie Pierce	 	 
	Title:

	 	Senior Investment Officer	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jeffrey T. Attwood	 	 
	 

	 	 	 	 
	Name:

	 	Jeffrey T. Attwood	 	 
	Title:

	 	Investment Officer	 	 

5.4 - 6

 

STATE OF WISCONSIN INVESTMENT BOARD

	 	 	 	 	 
	By:

	 	/s/ Christopher P. Prestigiacomo
	 	 
	 

	 	 	 	 
	Name:

	 	Christopher P. Prestigiacomo	 	 
	Title:

	 	Portfolio Manager	 	 

5.4 - 7

 

WOODMEN OF THE WORLD LIFE

    INSURANCE SOCIETY

	 	 	 	 	 
	By:

	 	/s/ James J. Stolze
	 	 
	 

	 	 	 	 
	Name:

	 	James J. Stolze	 	 
	Title:

	 	Assistant Vice President	 	 

5.4 - 8exv10w1

 

Exhibit 10.1

HEALTH FITNESS CORPORATION

AGREEMENT FOR SEPARATION FROM EMPLOYMENT

     This Agreement for Separation from Employment (“Agreement”) is entered into this 31st day of
January, 2008, between Jerry V. Noyce (“Noyce”) and Health Fitness Corporation (“HFC” or
“Company”).

I. RECITALS

     A. Noyce has been employed by HFC as its Vice Chairman.

     B. In connection with his employment by HFC, Noyce executed an Employment Agreement dated
November 30, 2000,as amended from time to time (the “Employment Agreement”).

     C. Also in connection with his employment by HFC, Noyce executed (i) a Restricted Stock
Agreement dated June 1, 2007 (the “Restricted Stock Agreement”) granted to Noyce pursuant to the
Company’s 2007 Equity Incentive Plan (the “Plan”) and (ii) numerous stock option agreements under
which a total of 484,000 options to acquire common stock of HFC remain outstanding and unexercised
as of the date hereof (the “Option Agreements”).

     D. Noyce and the Company have agreed that Noyce shall retire from his position as Vice
Chairman of the Company and the parties have agreed that Noyce’s employment as Vice Chairman shall
be deemed to have been terminated effective January 31, 2008 (the “Termination Date”).

II. AGREEMENTS

     For the consideration described below, the adequacy of which the parties acknowledge, the
parties agree as follows:

     1. Retirement and Termination of Employment. Noyce’s retirement from the Company and
his termination of employment as Vice-Chairman shall be deemed to have been effective as of the
close of business on the Termination Date.

     2. Severance Payment. HFC will pay Noyce $275,000 within three (3) business days
following satisfaction of the conditions in Section 8, which sum is equal to Noyce’s base salary
for 2007. The parties acknowledge that such payment represents mutually negotiated consideration
for Noyce’s contributions to the Company and for his continued support and consulting activities
and that Noyce would not have been entitled to such severance under the Employment Agreement in the
case of voluntary, as opposed to mutually negotiated, retirement.

     3. Vacation Pay. Within ten (10) days after the effective date of the Release (as
defined in Section 5 herein), HFC shall pay to Noyce a lump sum in the amount of $2,985.34 to
compensate him for his 22.58 days of accrued but unused paid PTO time through January 11, 2008,
together with the sum of $132.21 per hour for each additional hour of PTO time that accrues after
January 11, 2008, through the Effective Date.

 

 

     4. Benefits After Termination Date. Except as provided in this Paragraph 4 and in
Paragraph 7 below, Noyce’s rights and benefits under any and all of the Company’s employee benefits
plans and policies shall be deemed to terminate in their entirety after the Termination Date,
including without limitation any automobile expense allowances, club memberships and similar
perquisites.

          (a) Noyce’s rights pursuant to the Restricted Stock Agreement and Plan shall be revised as set
forth in Exhibit A hereto effective upon satisfaction of the conditions in Section 8, with the
intent that (i) Noyce shall receive a fully vested allocation of the appropriate number of shares
of Restricted Stock for achievement of the 2007 Performance Objectives (as defined in such
Agreement) as if he were still employed through December 31, 2009 (to the extent that such fully
vested allocations are made to other Plan participants for achievement of such 2007 Performance
Objectives), which shares shall be distributed to Noyce upon determination of the number of shares
to which he is entitled after completion of the 2007 audit and provided that the conditions in
Section 8 herein have been satisfied.

          (b) The Company shall pay Noyce $15,000 under the 2007 Bonus Program applicable to Noyce three
(3) business days following satisfaction of the conditions in Section 8.

     5. Consulting Agreement. Effective immediately following the Effective Date of the
Release, Noyce and HFC shall enter into a Consulting Agreement in the form attached as Exhibit B
hereto.

     6. Release by Noyce. At the same time that he executes this Separation Agreement,
Noyce shall execute the release that is attached as Exhibit C (the “Release”).

     7. Health Coverage. Subject to the conditions stated in Paragraph 11 below, if after
the Termination Date, Noyce elects to continue his group health coverage (including dental)
pursuant to COBRA, HFC shall pay the full cost (i.e., both the employer’s and employee’s portion of
the applicable premiums) for coverage for the applicable COBRA period at the premium levels paid
for such coverage in the case of employees electing similar coverage, until 18 months following the
Termination Date, or the date on which Noyce reaches age 65, whichever first occurs.

     8. Conditions. HFC need not make the payments or provide the benefits described in
Paragraphs 2, 4, or 7 above unless and until both of the following conditions have been satisfied:

          (a) Noyce executes the Release and delivers it to HFC within the time specified in the
Release.

          (b) The applicable rescission period for the Release expires without Noyce’s rescission
thereof.

     9. Exclusive Payments. Noyce shall not be entitled to any compensation or other
payments from HFC except as provided in this Agreement.

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     10. Protection of Trade Secrets and Confidential Business Data. Noyce agrees that his
obligations set forth in Article IV of the Employment Agreement shall continue in full force and
effect as to all Confidential Information (as defined therein) known to Noyce as of the
Termination Date or learned by Noyce at any time thereafter.

     11. Restrictive Covenants. Noyce agrees that provisions of Sections 5.01 and 5.02 of
the Employment Agreement shall continue in effect for a period of one year following the
later of the Termination Date of this Agreement, or the date on which Noyce ceases to serve
on the Board of Directors of the Company, or the date on which the Consulting Agreement terminates;
provided that Section 5.01 of the Employment Agreement shall be modified to replace the words
“25-mile radius of any HFC site as of the date of termination’ with the words “United States”. The
provisions of Sections 5.04, 5.05, 5.06, 5.08, and all the provisions of Article VI, of the
Employment Agreement, shall continue in full force and effect indefinitely.

     12. Acknowledgement and Remedies. Noyce hereby acknowledges that the provisions of
Paragraphs 10 and 11 above are reasonable and necessary to protect the legitimate interests of HFC
and that any violation of Paragraphs 10 or 11 by Noyce would cause substantial and irreparable harm
to HFC to such an extent that monetary damages alone would be an inadequate remedy. In the event
that Noyce violates any provision of Paragraphs 10 or 11 above, HFC shall be entitled to an
injunction, in addition to all other remedies it may have, including without limitation (i) in the
case of violations that are or reasonably may be expected to be material to the Company,
prospective termination of any and all payments and benefits provided by this Agreement, and (ii)
restraining Noyce from violating or continuing to violate such provision.

     13. Right to Consult with an Attorney. Noyce understands and acknowledges that he is
hereby being advised by HFC to consult with an attorney prior to signing this Agreement and the
Release.

     14. Consideration and Rescission. The periods described in the Release during which
Noyce may consider whether to sign or may rescind the Release and the procedures stated in the
Release for accepting or rescinding the Release also apply to this Agreement. The Release and this
Agreement must be accepted or rescinded together. Rescission of one of these documents will be
deemed a rescission of both of them.

     15. Entire Agreement. This Separation Agreement and the Release supersede all prior
oral and written agreements, representations, and promises between the parties except that the
Restricted Stock Agreement and Option Agreements shall continue in full force and effect according
to its terms. This Agreement, the Release, the Restricted Stock Agreement, and such other benefit
plans as continue in force hereunder constitute the entire agreement between the parties with
respect to Noyce’s employment with HFC and the termination of that employment. Noyce acknowledges
that there were no inducements or representations leading to the execution of this Agreement or the
Release, except as stated in this Agreement.

     16. Voluntary and Knowing Action. The parties acknowledge that they understand the
terms of this Agreement and that they are voluntarily entering into this Agreement. The

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parties intend to be legally bound. Noyce represents that he is legally able and entitled to enter
into this Agreement and the Release and to receive the payments described in above.

     17. Governing Law. All matters relating to the interpretation, construction,
application, validity and enforcement of this Agreement shall be governed by the laws of the State
of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of
the State of Minnesota or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.

     18. Jurisdiction and Venue. Noyce and HFC consent to the jurisdiction of the courts
of the State of Minnesota and the United States District Court for the District of Minnesota for
the purpose of resolving all issues of law, equity, or fact, arising out of or in connection with
this Agreement. Any action involving claims of a breach of this Agreement shall be brought in such
courts. Each party consents to personal jurisdiction over such party and venue in the state and
federal courts identified above.

     19. Tax Matters.

          (a) HFC may withhold from any payments due to Noyce pursuant to this Agreement required taxes
and other deductions.

          (b) Noyce acknowledges and agrees that neither HFC nor anyone acting on its behalf has
made any representations to him concerning the tax consequences of entering into this Agreement and
receiving the consideration specified in it and that he has not relied on any tax advice from HFC
or anyone acting on its behalf.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	HEALTH FITNESS CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Jerry V. Noyce
 

Jerry V. Noyce

	 	 
	 	By
	 	/s/ Gregg O. Lehman
 

	 	 
	 

	 	 	 	Its
	 	President and CEO	 	 
	 

	 	 	 	 	 	 	 	 

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