Exhibit 10.6
Execution Copy
FOURTH AMENDMENT TO NOTE PURCHASE
AGREEMENT
(2005)
This Fourth Amendment dated as of
September 18, 2009 (this “ Fourth Amendment
”) to the Note Purchase Agreement dated as of
September 29, 2005 as amended by the First Amendment thereto
dated February 1, 2008 and the Second Amendment thereto dated
as of February 17, 2009 and the Third Amendment thereto dated
as of September 15, 2009 (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 Fourth
Amendment (collectively, the “ Noteholders
”).
RECITALS:
A. The Company and the Noteholders
are parties to the Note Purchase Agreement pursuant to which the
Notes (as defined therein) are outstanding.
B. The Company has requested that
the Noteholders agree to certain amendments to the Note Purchase
Agreement as set forth below.
C. Subject to the terms and
conditions set forth herein, the Noteholders are willing to amend
the Note Purchase Agreement in the respects, but only in the
respects, set forth in this Fourth Amendment.
D. Capitalized terms used herein
shall have the respective meanings ascribed thereto in the Note
Purchase Agreement, as amended hereby, unless herein defined or the
context shall otherwise require.
E. All requirements of law have been
fully complied with and all other acts and things necessary to make
this Fourth 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.
AMENDMENTS.
Effective as of the times specified
in Section 3.1 hereof, the Company and the Noteholders agree
that the Note Purchase Agreement is amended as follows:
1.1 Schedule B to the Note Purchase
Agreement is amended by adding, or amending and restating, as
applicable, the following definitions:
“Capitalized Lease
Obligations” of a
Person means the amount of the obligations of such Person under
Capital Leases which would be shown as a liability on the balance
sheet of such Person in accordance with GAAP.
“Consolidated Interest
Expense” means, as
to any Person and with reference to any period, the interest
expense of such Person and its Subsidiaries calculated on a
consolidated basis for such period, including, without limitation,
such interest expense as may be attributable to Capital Leases,
Receivables Transaction Financing Costs, the discount or implied
component of Off–Balance Sheet Liabilities, all commissions,
discounts and other fees and charges owed with respect to Letters
of Credit and Net Mark-to-Market Exposure.
“Debt”
of any Person means, without
duplication, such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase
price of property or services (other than accounts payable arising
in the ordinary course of such Person’s business payable on
terms customary in the trade), (iii) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or
production of property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments (other than with respect to
accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade),
(v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same
or substantially similar securities or property,
(vi) Capitalized Lease Obligations, (vii) obligations in
respect of Letters of Credit, (viii) any Guaranty in respect
of Debt of any other Person, (ix) Off-Balance Sheet
Liabilities, (x) Receivables Transaction Attributed
Indebtedness, and (xi) any other obligation for borrowed money
or other financial accommodation which in accordance with GAAP
would be shown as a liability on the consolidated balance sheet of
such Person.
“Letter of
Credit” of a Person
means a letter of credit or similar instrument which is issued upon
the application of such Person or upon which such Person is an
account party or for which such Person is in any way
liable.
“Net Mark-to-Market
Exposure” of a
Person means, as of any date of determination, the excess (if any)
of all unrealized losses over all unrealized profits of such Person
arising from Swap Contracts. “Unrealized losses” means
the fair market value of the cost to such Person of replacing such
Swap Contracts as of the date of determination (assuming the Swap
Contracts were to be terminated as of that date), and
“unrealized profits” means the fair market value of the
gain to such Person of replacing such Swap Contracts as of the date
of determination (assuming such Swap Contracts were to be
terminated as of that date).
“Off-Balance Sheet
Liability” of a
Person means (i) any repurchase obligation or liability of
such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback
Transaction that is not a Capital Lease or Synthetic Lease, but
excluding from this clause (ii) all such Sale and Leaseback
Transactions existing as of July 18, 2008 where the liability
is less than $10,000,000 in the aggregate and such Sale and
Leaseback Transactions entered
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into after July 18, 2008 where
the liability is less than $20,000,000 in the aggregate (in each
case as determined by aggregating the present value, applying an
appropriate discount rate from the date on which each fixed lease
payment is due under such lease to such date of determination),
(iii) any liability under any Synthetic Leases entered into by
such Person, or (iv) any obligation arising with respect to
any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from
this clause (iv) Operating Leases.
“Operating
Leases” of a Person
means any lease of property (other than a Capital Lease) by such
Person as lessee which has an original term (including any required
renewals and any renewals effective at the option of the lessor) of
one year or more.
“Receivables Transaction
Financing Cost” means such portion of the fees, service charges,
and other costs, as well as all collections or other amounts
retained by purchasers of the accounts or notes receivable and
rights related thereto pursuant to a Qualified Receivables
Transaction, which are in excess of the amounts paid to the Company
and its Subsidiaries under any Qualified Receivables Transaction
for the purchase of accounts or notes receivable and rights related
thereto pursuant to such Qualified Receivables Transaction and are
the equivalent of the interest component of the financing if the
transaction were characterized as a secured lending transaction
rather than a purchase.
1.2 Section 9.12 of the Note
Purchase Agreement is amended and restated in its entirety as
follows:
“9.12 Proceeds of certain
Asset Sales; Casualties; and Issuance of Equity Interests. The
Company shall pay or cause to be paid (1) 100% of the Asset
Sale Net Proceeds and (2) 100% of the Equity Issuance Net
Proceeds as a prepayment of the principal amount of the Advances
(as defined in the Credit Agreement as in effect on the Second
Amendment Effective Date) constituting the 2008 Credit Agreement
Superpriority Amount (as defined in the Intercreditor Agreement)
and, if any Asset Sale Net Proceeds or Equity Issuance Net Proceeds
remain thereafter, shall, subject to the Intercreditor Agreement,
pay 38.524590163% of such remaining Asset Sale Net Proceeds or
Equity Issuance Net Proceeds, as applicable, as a prepayment of the
principal amount of the remaining Advances (as defined in the
Credit Agreement as in effect on the Second Amendment Effective
Date), and shall apply the other 61.475409836% of such remaining
Asset Sale Net Proceeds or Equity Issuance Net Proceeds, as
applicable, to the prepayment of a principal amount of Notes in
accordance with Section 8.1(b) hereof and a principal amount
of notes outstanding under the 2006 Note Purchase Agreement in
accordance with Section 8.1(c) of the 2006 Note Purchase
Agreement, pro rata in proportion to the aggregate outstanding
principal amount of the Notes and the notes outstanding under the
2006 Note Purchase Agreement. With respect to Equity Issuance Net
Proceeds from the proceeds of the 2009 Equity Offering, the
Make-Whole Amount due together with the principal prepayment of the
Notes to be made with such Equity Issuance Net Proceeds in
accordance with this Section 9.12 shall be computed based on
the interest rates for the Notes set forth in clause (b)(ii) of the
definition of “Remaining Scheduled Payments”. With
respect to any prepayment of the Notes from
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Asset Sale Net Proceeds or Equity
Issuance Net Proceeds, the Make-Whole Amount due together with such
prepayment in accordance with this Section 9.12 with respect
to any Note shall be payable in cash on the date of such prepayment
to the extent computed based on the interest rate for such Note set
forth in clause (b)(ii) of the definition of “Remaining
Scheduled Payments”, and the balance, if any, of such
Make-Whole Amount shall (1) bear interest from the date of
such prepayment at the same rate (computed and compounded quarterly
on the same basis) as the Note for which such Make-Whole Amount was
computed, and (2) be due and payable in cash, together with
all interest thereon, upon the occurrence of a Special Event of
Default (as defined in the Intercreditor Agreement).
As used herein, “Asset Sale
Net Proceeds” means 100% of all of the Net Cash Proceeds from
any sale, Event of Loss, license, lease or other disposition or
transfer of any assets (including without limitation any Sale and
Leaseback Transaction and any sale permitted under
Section 10.5(b) , but excluding the Excluded Sales
described below) in excess of $25,000,000 in aggregate amount after
the Second Amendment Effective Date (the “ Retained
Proceeds Amount ”), provided that no more than
$10,000,000 of the Net Cash Proceeds from the Additional Sale
Leaseback Transactions may count toward the Retained Proceeds
Amount and be excluded from the 100% mandatory prepayment required
under this Section 9.12 , each payable and effective
upon receipt of such Net Cash Proceeds. As used herein,
“Excluded Sales” means (i) the sale of inventory
in the ordinary course of business, (ii) the sale of obsolete
or worn-out property in the ordinary course of business not to
exceed $1,000,000 in the aggregate after the Second Amendment
Effective Date, (iii) sales of notes receivable or accounts
receivable to the extent permitted under Section 10.23
; (iv) revenues from licenses in existence on the Second
Amendment Effective Date, including all renewals, extensions and
modifications thereof and substitutions therefor, (v) the sale
or other transfer of any assets solely among the Company and the
Subsidiaries which is permitted by the terms of this Agreement, or
(vi) if the Company shall deliver to the holders a certificate
of a Responsible Officer to the effect that the Company or its
applicable Subsidiary receiving the Net Cash Proceeds from an Event
of Loss intends to apply the Net Cash Proceeds from such event (or
a portion thereof specified in such certificate), within
180 days after receipt of such Net Cash Proceeds, to acquire
(or replace or rebuild) real property or equipment to be used in
the business of the Company or its Subsidiaries, and certifying
that no Default or Event of Default has occurred and is continuing,
then such Net Cash Proceeds specified in such certificate shall be
excluded from the determination required under the first sentence
of this Section 9.12 , provided that to the
extent of any such Net Cash Proceeds therefrom that have not been
so applied by the end of such 180 day period, such Net Cash
Proceeds will not be so excluded, and will be included in the
calculation contained in the first sentence of this
Section 9.12 in determining whether a prepayment shall
then be required.
As used herein, “Equity
Issuance Net Proceeds” means 50% of all of the Net Cash
Proceeds from issuance of any Equity Interests by the
Company.”
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1.3 Section 10.12 of the Note
Purchase Agreement is amended and restated in its entirety as
follows:
“Section 10.12. Capital
Expenditures. The Company
will not permit or suffer Consolidated Capital Expenditures in
excess of:
(i) for the fiscal quarter ending
March 31, 2009, $30,000,000,
(ii) for the fiscal year ending
March 31, 2010, $70,000,000,
(iii) for the fiscal year ending
March 31, 2011, the sum of $70,000,000 plus the lesser of
(x) the amount by which Consolidated Capital Expenditures were
less than $70,000,000 for the fiscal year ending March 31,
2010 or (y) $5,000,000, or
(iv) for any fiscal year ending
thereafter, $70,000,000;
in each case in addition to any
replacement or rebuilding of any real property or equipment from
the Net Cash Proceeds from any Event of Loss of real property or
equipment as provided in Section 9.12
.”
1.4 Schedule B to the Note Purchase
Agreement is amended by adding, or amending and restating, as
applicable, the following definitions:
“Additional Restructuring
Charges” means
certain cash charges of the Company and its Subsidiaries related to
plant closures under consideration by the Company as of
September 15, 2009 as described to the holders of the Notes
subject to the following limitations:
(a) such charges specifically relate
to the following categories of expense incurred in connection with
any such restructuring: severance and related benefits; contractual
salary continuation with respect to terminated employees; retained
restructuring consulting; equipment transfer; employee
outplacement; environmental services; and employee insurance and
benefits continuation; and
(b) the aggregate amount of all
Additional Restructuring Charges shall not exceed
$20,000,000.
“Additional Sale Leaseback
Transactions” means
all Sale and Leaseback Transactions occurring after
September 18, 2009.
“Consolidated Interest
Expense” means, as
to any Person and with reference to any period, the interest
expense of such Person and its Subsidiaries calculated on a
consolidated basis for such period, including, without limitation,
such interest expense as may be attributable to Capital Leases,
Receivables Transaction Financing Costs, the discount or implied
component of Off–Balance Sheet Liabilities, all commissions,
discounts and other fees and charges owed with respect to Letters
of Credit and Net Mark-to-Market Exposure, but excluding any
Make-Whole Amounts under this Agreement and the 2006 Note Purchase
Agreement.
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“Consolidated Net
Income” means, as
to any Person and with reference to any period, the net income (or
loss) of such Person and its Subsidiaries calculated on a
consolidated basis for such period, (a) excluding (i) any
non-cash charges or gains which are unusual, non-recurring or
extraordinary, (ii) any non-cash charges or gains related to
exchange gains or losses on intercompany loans or to the Brazil
Holdback, (iii) for purposes of Sections 10.1, 10.3, 10.11
and 10.12 only, Restructuring Charges subject to the limits set
forth in the
