Amendment No. 1 to Senior Subordinated Note Purchase Agreement between NUCO2 Inc. and Investors

 EXHIBIT 10.5 AMENDMENT NO. 1 AMENDMENT NO. 1 dated as of July 9, 2004 to the Note Purchase Agreement referred to below, between: NUCO2 INC., a corporation duly organized and validly existing under the laws of the State of Florida (the "COMPANY"); and each of the Investors appearing under the caption "INVESTORS" on the signature pages hereto (each, an "INVESTOR", and collectively, the "INVESTORS"). WHEREAS, the Company and the Investors are party to a Senior Subordinated Note Purchase Agreement dated as of August 25, 2003 (as heretofore modified and supplemented and in effect on the date hereof, the "NOTE PURCHASE AGREEMENT"), pursuant to which the Company has issued to the Investors its 16.3% Senior Subordinated Notes in an aggregate principal amount of $30,000,000 outstanding on the date hereof; and WHEREAS, the parties to the Note Purchase Agreement wish to amend the Note Purchase Agreement to make certain modifications thereto; Accordingly, the parties hereto hereby agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Amendment No. 1, terms defined in the Note Purchase Agreement are used herein as defined therein. Section 2. AMENDMENTS TO NOTE PURCHASE AGREEMENT. Subject to the satisfaction of the conditions precedent specified in Section 4 below, but effective as of the date hereof, the Note Purchase Agreement shall be amended as follows: A. References in the Note Purchase Agreement to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Note Purchase Agreement as amended hereby. B. Section 3.01 of the Note Purchase Agreement shall be amended in its entirety to read as follows: "SECTION 3.01 PREPAYMENTS. (a) Subject to Article XI, the Company may, at its option, upon notice as provided in this Section 3.01, prepay all or, from time to time, part of the Notes (including any PIK Interest Amounts) at any time prior to February 25, 2005 at a price equal to the sum of (i) 100% of the principal amount of the Notes being prepaid, (ii) all accrued and unpaid interest on such principal amount to but excluding the prepayment date, (iii) an amount equal to the interest that would have accrued on such principal amount for the period from and including the prepayment date to but excluding February 25, 2005 and (iv) a prepayment premium equal to 6% of that portion of the Original Principal Amount being so prepaid (the amounts under clauses (iii) and (iv) collectively, the "Make-Whole Amount"). AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT  -2- (b) The Company may, at its option, upon notice as provided below, prepay all or, from time to time, part of the Notes (including any PIK Interest Amounts) at any time from and after February 25, 2005 at a price equal to the sum of (i) the principal amount of all PIK Interest Amounts being prepaid and (ii) the applicable percentage for the applicable period listed below of that portion of the Original Principal Amount being prepaid, in each case, together with interest accrued and unpaid on the Notes (including any PIK Interest Amounts), or part thereof, as the case may be, to the prepayment date: PERIOD PRICE ------ ----- From February 25, 2005 through August 24, 2006 106% From August 25, 2006 through August 24, 2007 103% Thereafter 100%. (c) Notwithstanding clauses (a) or (b) above, in the event of a Change in Control prior to August 24, 2006 in which the net cash consideration received (or receivable) by the Company or its shareholders shall be at least equal (or equivalent) to $22.00 per share of the Company's authorized common stock, the Company, in connection with the consummation of such Change in Control, may at its option prepay all outstanding Notes at a price equal to 103% of the principal amount of each Note, in each case, together with interest accrued and unpaid on each Note to the prepayment date. (d) The Company will give each holder of the Notes notice of each optional prepayment under paragraph (a) or (b) of this Section 3.01 not less than 20 days prior to the date fixed for such prepayment, specifying such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid the interest to be prepaid to the prepayment date with respect to such principal amount being prepaid and the premium (if any), as applicable, due in connection with such prepayment. (e) In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment; PROVIDED that such prepayment shall be applied, first, to the prepayment of all PIK Interest Amounts, together with the accrued and unpaid interest thereon, and, only after such amounts have been paid in full, to the prepayment of the Original Principal Amount of the Notes. At the request of the Company, any Note which is to be prepaid only in part shall be surrendered to the Company by the holder thereof, and the Company shall issue to such holder a new Note equal in principal amount to the unpaid portion of the surrendered Note (after giving effect to such prepayment) and in the form of Exhibit A. (f) In the case of each prepayment of Notes pursuant to this Section 3.01, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest and premium (if any) on such principal amount accrued to such date. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT  -3- and premium (if any) thereon, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. (g) The Company will not and will not permit any of its Affiliates to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement or otherwise on terms identical to those offered to all the other Investors (whether or not such terms have actually been accepted by all the Investors). The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes." Section 3. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Investors that on the date that this Amendment No. 1 becomes effective, after giving effect to this Amendment No. 1 and the actions contemplated hereby: (a) the representations and warranties set forth in Article VI of the Note Purchase Agreement are true and complete on the date hereof as if made on and as of the date hereof (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specified date) and (b) no Default or Event of Default has occurred and is continuing. Section 4. CONDITIONS PRECEDENT. The amendments to the Note Purchase Agreement set forth in Section 2 above shall become effective, as of the date hereof, upon the satisfaction of the following conditions: (a) AMENDMENT NO. 1. The execution and delivery of one or more counterparts of this Amendment No. 1 by the Company and the Investors, and receipt by the Investors of evidence that the lenders party to the Senior Credit Agreement shall have approved this Amendment No. 1; and (b) AMENDMENT FEE. Receipt by each Investor of an amendment fee equal to 1.0% of the Original Principal Amount of the Notes held by such Investor. Section 5. MISCELLANEOUS. Except as herein provided, the Note Purchase Agreement shall remain unchanged and in full force and effect. This Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the law of the State of New York. AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT  -4- IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered as of the day and year first above written. NUCO2 INC. By: /s/ Robert R. Galvin Title: Chief Financial Officer INVESTORS J.P. MORGAN PARTNERS (BHCA), L.P. BY: JPMP MASTER FUND MANAGER, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters --------------------- Name: Title: J.P. MORGAN PARTNERS GLOBAL INVESTORS, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters --------------------- Name: Title: J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN), L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., IT GENERAL PARTNER By: /s/ Richard D. Waters --------------------- Name: Title: AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT  -5- J.P. MORGAN PARTNERS GLOBAL INVESTORS A, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., IT GENERAL PARTNER By: /s/ Richard D. Waters --------------------- Name: Title: J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN) II, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., IT GENERAL PARTNER By: /s/ Richard D. Waters --------------------- Name: Title: BETTINA LOORAM PRIVATSTIFTUNG By: /s/ Craig Burr -------------- Name: Craig Burr Title: Trustee KBGM LLC By: /s/ Francis F. Kingsley ----------------------- Name: Francis F. Kingsley Title: UPOA THE ROYAL BANK OF SCOTLAND PLC By: /s/ Matthew Headington ------------------------- Name: Matthew Headington Title: Director AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT