Exhibit 4.1
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SECOND AMENDMENT
TO
NOTE PURCHASE AGREEMENT
by and among
NUMATICS, INCORPORATED,
NUMATICS, GMBH,
NUMATICS LTD.,
THE OTHER LOAN PARTIES SIGNATORY HERETO,
and
AMERICAN CAPITAL FINANCIAL SERVICES, INC.,
AS AGENT
and
THE PURCHASERS IDENTIFIED ON
ANNEX A
Date of Second Amendment: August 13, 2002
Original Date: November 28, 2001
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SECOND AMENDMENT
TO
NOTE PURCHASE AGREEMENT
$14,354,000 Aggregate Principal Amount of
Senior Notes Due November 27, 2006
of Numatics, Incorporated, Numatics, GMBH
and Numatics Ltd.
$17,000,000 Aggregate Principal Amount of
Senior Secured Term A Notes Due
November 27, 2006
of Numatics, Incorporated
THIS SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment") is
entered into as of August 13, 2002 by and NUMATICS, INCORPORATED, a Michigan
corporation (the "Company"), NUMATICS, GMBH, a corporation organized under the
laws of the Federal Republic of Germany ("Numatics Germany"), NUMATICS LTD., a
Canadian corporation ("Numatics Canada", and together with the Company and
Numatics Germany, the "Borrowers"), the U.S. Subsidiaries of the Company
signatory hereto (the "Subsidiary Guarantors" and together with the Borrowers,
the "Loan Parties"), the securities purchasers that are now and hereafter at any
time parties hereto and are listed in Annex A (or any amendment or supplement
thereto) (each a "Purchaser" and collectively, "Purchasers"), and AMERICAN
CAPITAL FINANCIAL SERVICES, INC., a Delaware corporation ("ACFS"), as
administrative agent for Purchasers (in such capacity "Agent").
RECITALS
A. As of November 28, 2001, the Loan Parties, the Purchasers and Agent
entered into a Note Purchase Agreement as amended by that First
Amendment thereto dated as of March 29, 2002 (the "Agreement"),
pursuant to which the Purchasers purchased from the Borrowers certain
notes (the "Notes"). Capitalized terms used and not defined elsewhere
in this Amendment that are defined in the Agreement shall have the
same meaning as in the Agreement.
B. The Loan Parties are in default of the financial covenants set forth
in Section 7.3 of the Agreement for the period ended June 30, 2002
(the "Existing Defaults").
C. The Loan Parties have requested that Purchaser waive the Existing
Defaults and amend certain provisions of the Agreement, and Purchaser
is willing to do so on the terms and conditions set forth herein.
Second Amendment to Note Purchase Agreement
1
NOW, THEREFORE, the parties hereto, in consideration of the premises and
their mutual covenants and agreements herein set forth and intending to be
legally bound hereby, covenant and agree as follows:
ARTICLE 1
THE AMENDMENT
Upon the satisfaction of the conditions set forth in Section 3.1
herein, the Agreement shall be deemed to be amended, retroactive to November 28,
2001, as set forth in this Article 1.
1.1 Amendment to Section 7.3. Section 7.3 of the Agreement is amended and
restated in its entirety to read as follows:
7.3 Financial Covenants. The Loan Parties, jointly and severally,
covenant that, so long as all or any part of the principal amount of the
Notes or any interest thereon shall remain outstanding, they shall maintain
the following financial covenants on a consolidated basis at the end of
each calendar quarter (except that for the first calendar quarter of 2003
financial covenants shall be measured at the end of each calendar month and
such compliance shall be evidenced by a compliance certificate in the form
of Exhibit F to be delivered within twenty (20) days following such
calendar month) (each such date being a "Measurement Date").
(a) Minimum Tangible Net Worth. A minimum Tangible Net Worth of
(i) $15,700,000 at all times from and including November 28, 2001
through December 31, 2002, (ii) $19,500,000 at all times from and
including January 1, 2003 through December 30, 2003, and (iii)
$22,000,000 at all times from and including December 31, 2003 and
thereafter.
(b) Minimum Debt Service Coverage Ratio. A minimum Debt Service
Coverage ratio for any twelve (12) consecutive months ending as of the
Measurement Date as follows:
Second Amendment to Note Purchase Agreement
2
Measurement Date Ratio
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From Closing Date through 1.00 to 1.0
December 31, 2001
From January 1, 2002 through 1.05 to 1.0
March 31, 2002
From April 1, 2002 through 1.00 to 1.0
September 30, 2002
From October 1, 2002 through 1.05 to 1.0
December 31, 2002
From January 1, 2003 and
thereafter 1.10 to 1.0
(c) Interest Coverage Ratio. A maximum ratio (i) Adjusted Net
Income to (ii) scheduled payments of interest and fees, to the extent
carried as interest expense on the Company's and its Subsidiaries'
consolidated financial statements, with respect to indebtedness for
borrowed money (including the interest component payments with respect
to Capitalized Leases) for any period of twelve (12) consecutive
months ending as of the Measurement Date as follows:
Measurement Date Ratio
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From Closing Date through 1.20 to 1.0
March 31, 2002
From April 1, 2002 through 1.15 to 1.0
June 30, 2002
From July 1, 2002 through 1.10 to 1.0
September 30, 2002
From October 1, 2002 through 1.20 to 1.0
December 31, 2002
From January 1, 2003 and
thereafter 1.35 to 1.0
ARTICLE 2
LIMITED WAIVER
2.1 Waiver. Upon the Loan Parties' compliance with the terms and conditions
in Article III hereof, Purchaser hereby waives the Existing Defaults for the
quarter ended June 30, 2002.
2.2 Limitation of Waiver. Except as specifically provided in this Article
II, nothing contained in this Amendment shall be construed as a waiver by
Purchaser of any
Second Amendment to Note Purchase Agreement
3
covenant or provision of the Agreement, the other Purchase Documents, this
Amendment, or of any other contract or instrument between the Loan Parties
and/or Purchaser, and the failure of Purchaser at any time or times hereafter to
require strict performance by the Loan Parties of any provision thereof shall
not waive, affect or diminish any right of Purchaser to thereafter demand strict
compliance therewith. Purchaser hereby reserves all rights granted under the
Agreement, the other Purchase Documents, this Amendment and any other contract
or instrument between the Loan Parties and/or Purchaser.
ARTICLE 3
CONDITIONS PRECEDENT
The obligation of Purchaser to deliver this Amendment is subject to the
satisfaction of the following conditions precedent:
3.1 Accommodation Fee. The Loan Parties shall have paid to the Purchaser or
its designee an accommodation fee in the amount of $75,000.
3.2 Field Audit Fee. The Loan Parties shall have paid to the Purchaser or
its designee a field audit fee in the amount of $25,000 in order for Purchaser
to conduct an audit of the Loan Parties Collateral.
3.3 Revolving Credit Amendment. The Loan Parties shall have delivered an
amendment to the Revolving Credit Agreement, duly executed by the Loan Parties
and the Revolving Financing Lender, all to the satisfaction of Purchaser.
3.4 Continuation of Representations and Warranties. All representations,
warranties, covenants and agreements of the Loan Parties contained in the
Agreement shall be true and correct in all material respects at and as of the
date hereof as though then made, except (i) to the extent of the changes caused
by the transactions expressly contemplated therein or herein, and (ii) for such
representations and warranties as by their terms expressly speak as of an
earlier date, and an officer of the Loan Parties shall have delivered a
certificate to Purchaser to such effect.
3.5 Costs and Expenses. The Loan Parties shall have paid to the Purchaser
and Purchaser's counsel all outstanding costs and expenses related to
preparation, negotiation and delivery of this Amendment, any previous amendment
and the Agreement.
ARTICLE 4
REFERENCE TO AND EFFECT ON THE AGREEMENT
4.1 Representations. In order to induce the Purchaser to enter into this
Amendment and to consummate the transactions contemplated hereby, the Loan
Parties hereby (x) represent and warrant that no Default or Event of Default
exists on the date hereof after giving effect to this Amendment and (y) make
each of the representations, warranties and agreements contained in the
Agreement and the other Purchase Documents on and as of the date hereof, after
giving effect to this Amendment (it being
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understood that any representation or warranty that by its terms is made as of a
specified date shall be required to be true and correct in all material respects
as of such date).
4.2 References. On and after the date hereof, (i) each reference in the
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import shall mean and be a reference to the Agreement as amended hereby, and
(ii) each reference to the Agreement in all other Purchase Documents shall mean
and be a reference to the Agreement, as amended hereby.
4.3 Effects. Except as specifically amended hereby, the Agreement and all
other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
4.4 No Waiver or Novation. The execution, delivery and effectiveness of
this Amendment shall not (i) operate as a waiver of any right, power or remedy
of Purchaser, whether created by contract, at law or in equity, (ii) constitute
a waiver of, or consent to and departure from, any provision of the Agreement,
or any other documents, instruments and agreements executed and/or delivered in
connection therewith (the "Note Documents"), or (iii) be construed or deemed to
be a satisfaction, novation, cure, modification, amendment or release of the
Notes.
ARTICLE 5
MISCELLANEOUS
5.1 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.
5.2 Severability. Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Amendment is held to be prohibited by or invalid
under applicable law in any jurisdiction, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating any
other provision of this Amendment.
5.3 Headings. Article, section and subsection headings in this Amendment
are included for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose.
5.4 Counterparts. This Amendment may be executed in any number of
counterparts and by either party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.
5.5 Integration. This Amendment, the Agreement and the other Purchase
Documents set forth the entire understanding of the parties hereto with respect
to all matters contemplated hereby and supersede all previous agreements and
understandings
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among them concerning such matters. No statements or agreements, oral or
written, made prior to or at the signing hereof, shall vary, waive or modify the
written terms hereof.
* * * * *
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SIGNATURE PAGE TO
SECOND AMENDMENT TO
NOTE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE BORROWERS:
NUMATICS, INCORPORATED
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chief Executive Officer
NUMATICS, GMBH, a corporation organized
under the laws of the Federal Republic of Germany
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: General Manager
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NUMATICS LTD., a Canadian corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Secretary
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AGENT:
AMERICAN CAPITAL FINANCIAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Vice President
Second Amendment to Note Purchase Agreement
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PURCHASERS:
ACAS BUSINESS LOAN TRUST 2000-1
By: AMERICAN CAPITAL STRATEGIES, LTD., as Servicer
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx Xxxxxxxx, Vice President
ACAS FUNDING TRUST I
By: AMERICAN CAPITAL STRATEGIES, LTD., as Servicer
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx Xxxxxxxx, Vice President
AMERICAN CAPITAL STRATEGIES, LTD.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx Xxxxxxxx, Vice President
Second Amendment to Note Purchase Agreement
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