FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (2006)
Exhibit 10.2
EXECUTION COPY
EXECUTION COPY
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
(2006)
(2006)
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 December 7, 2006 (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 $50,000,000 5.68% Senior Notes, Series A, due December 7, 2017 and the
$25,000,000 5.68% Senior Notes, Series B, due December 7, 2018 (collectively, 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” in Schedule B to the Note Purchase Agreement is
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 proviso in the definition of “Consolidated EBITDA” on Schedule B to the Note Purchase
Agreement is amended in its entirety to read as follows:
“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 “SWAP Contract” on Schedule B to the Note Purchase Agreement is amended
by amending the proviso at the end thereof to read as follows:
“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.”
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1.4 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.
1.5 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 2005 Note Purchase Agreement, together with a copy of the documentation relating
thereto; and”
1.6 New Section 8.8 is added to the Note Purchase Agreement, such Section 8.8 to read as
follows:
“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 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.”
1.7 Section 10.1 of the Note Purchase Agreement is amended in its entirety to read as follows:
“Section 10.1. Limitations on Consolidated Total Debt” The Company will not permit as
of the last day of each fiscal quarter the ratio of (a) Consolidated Total Debt to (b)
Consolidated EBITDA for the four consecutive fiscal quarters then most recently ended, to
exceed 3.00 to 1.0.”
1.8 Section 10.3 of the Note Purchase Agreement is amended its entirety to read as follows:
“Section 10.3 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:
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| 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” |
1.9 Section 10.6(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 10.5(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;”
1.10 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”
1.11 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.
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in the form attached to this First Amendment as Exhibit A upon consummation of the Thermacore
Sale in compliance with Section 10.5 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 2005 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
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(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 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 2005 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 Xxxxxx Xxxxxx
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 New York 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/ Xxxxx X. Xxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
| THERMACORE, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxxxxxx | |||||
| Title: | Vice President and Assistant Treasurer | |||||
| THERMAL CORP. | ||||||
| By: | /s/ Xxxx X. Xxxxx
|
|||||
| Name: | Xxxx X. Xxxxx | |||||
| Title: | Vice President and Secretary | |||||
| MODINE, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx
|
|||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | President and Treasurer | |||||
| XXXXXX XXXXXXX, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx
|
|||||
| Name: | Xxxxxxx X. Xxxxxxxxxx | |||||
| Title: | Vice President and Treasurer | |||||
| ACCEPTED AND AGREED TO: | ||||
| THE PRUDENTIAL INSURANCE COMPANY OF AMERICA |
||||
By:
|
/s/ Xxxxxxx Xxxxxxx | |||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Vice President | ||||
| GIBRALTAR LIFE INSURANCE CO., LTD. | ||||
By:
|
Prudential Investment Management (Japan), Inc. as Investment Manager | |||
By:
|
Prudential Investment Management, Inc.,
as Sub-Adviser |
|||
By:
|
/s/ Xxxxxxx Xxxxxxx | |||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Vice President | ||||
| PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY |
||||
By:
|
Prudential Investment Management, Inc.,
as investment manager |
|||
By:
|
/s/ Xxxxxxx Xxxxxxx | |||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Vice President | ||||
| THE PRUDENTIAL INSURANCE COMPANY, LTD. | ||||
By:
|
Prudential Investment Management (Japan), Inc.
as Investment Manager |
|||
By:
|
Prudential Investment Management, Inc.,
as Sub-Adviser |
|||
By:
|
/s/ Xxxxxxx Xxxxxxx | |||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Vice President | ||||
AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, INC.
AMERICAN MEMORIAL LIFE INSURANCE COMPANY
AMERICAN SECURITY INSURANCE COMPANY
TIME INSURANCE COMPANY
UNION SECURITY INSURANCE COMPANY
SECURITY BENEFIT LIFE INSURANCE COMPANY, INC.
ZURICH AMERICAN INSURANCE COMPANY
AMERICAN MEMORIAL LIFE INSURANCE COMPANY
AMERICAN SECURITY INSURANCE COMPANY
TIME INSURANCE COMPANY
UNION SECURITY INSURANCE COMPANY
SECURITY BENEFIT LIFE INSURANCE COMPANY, INC.
ZURICH AMERICAN INSURANCE COMPANY
By:
|
Prudential Private Placement Investors, L.P.
(as Investment Advisor) |
|||
By:
|
Prudential Private Placement Investors, Inc.
(as its General Partner) |
|||
By:
|
/s/ Xxxxxxx Xxxxxxx | |||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Vice President | ||||
| TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA |
||||
By:
|
/s/ Xxxxx Xxxxxx | |||
| Name: Xxxxx Xxxxxx | ||||
| Title: Director | ||||
| COUNTRY LIFE INSURANCE COMPANY | ||||
By:
|
/s/ Xxxxx Xxxxx | |||
| Name: Xxxxx Xxxxx | ||||
| Title: VP - Investments | ||||
| STANDARD INSURANCE COMPANY | ||||
By: |
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Name:
|
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Title:
|
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