Exhibit 4.2.2
FIFTH AMENDMENT TO LOAN AGREEMENT
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THIS FIFTH AMENDMENT TO LOAN AGREEMENT, dated as of March 28, 2001
(this "Amendment"), is among NUMATICS, INCORPORATED, a Michigan corporation (the
"Company"), NUMATICS LTD., a corporation organized and existing under the laws
of Canada ("Numatics Ltd."), and NUMATICS GMBH, a corporation organized and
existing under the laws of the Federal Republic of Germany ("Numatics GmbH")
(the Company, Numatics Ltd. and Numatics GmbH, the "Borrowers") the lenders set
forth on the signature pages hereof (collectively, the "Lenders"), BANK ONE,
MICHIGAN, a Michigan banking corporation, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), and FLEET NATIONAL BANK,
formerly known as BANKBOSTON, N.A., a national banking association, as
documentation agent for the Lenders (in such capacity, the "Documentation
Agent", and together with the Administrative Agent, collectively, the "Agents").
RECITALS
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A. The Borrowers, the Agents and the Lenders are parties to an
Amended and Restated Loan Agreement dated as of March 23, 1998, as amended (the
"Loan Agreement").
B. The Borrowers are in default under the Loan Agreement, have
requested the Agent and the Lenders amend the Loan Agreement and desire to amend
the Loan Agreement set forth herein, and the Agents and the Lenders are willing
to do so strictly in accordance with the terms hereof.
TERMS
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In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in Article
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III hereof, the Loan Agreement shall be amended as follows:
1.1 The following new definitions are added to Section 1.1 in
appropriate alphabetical order:
"Fifth Amendment" shall mean the Fifth Amendment to this Agreement
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dated as of March 28, 2001 among the Borrowers, the Lenders and the Agents.
"Fifth Amendment Effective Date" shall mean the effective date of the
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Fifth Amendment.
1.2 The definitions of "Applicable Margin", "Fixed Charge Coverage
Ratio", "Maturity Date A", "Maturity Date B" and "Termination Date" contained in
Section 1.1 are restated as follows:
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"Applicable Margin" shall mean, as of the Fifth Amendment Effective
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Date and thereafter, (a) 4.00% with respect to each Revolving Credit Loan and
Term Loan A that is a LIBOR Loan and the S/L/C fee, (b) 4.00% with respect to
each Term Loan B that is a LIBOR Loan, (c) 1.50% with respect to each Prime Rate
Loan and (d) 0.50% with respect to commitment fees.
"Fixed Charge Coverage Ratio" shall mean, as of the end of any month,
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the ratio of (a) EBITDA for the three consecutive months then ending minus
Capital Expenditures for such period of three months, to (b) without
duplication, Consolidated Interest Expense, plus cash tax payments, plus all
payments on Funded Debt (excluding prepayments required pursuant to 3.1(d)),
plus all cash dividends paid or required to be paid with respect to any Capital
Stock of the Company and all redemptions of any Capital Stock, in each case as
determined for such three months.
"Maturity Date A" shall mean the earlier to occur of (a) the date on
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which the maturity of Term Loan A is accelerated pursuant to Section 6.2 and (b)
June 30, 2002.
"Maturity Date B" shall mean the earlier to occur of (a) the date on
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which the maturity of Term Loan B is accelerated pursuant to Section 6.2 and (b)
June 30, 2002.
"Termination Date" shall mean the earlier to occur of (a) June 30,
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2002 and (b) the date on which the Revolving Credit Commitments shall be
terminated pursuant to Sections 2.2 or 6.2.
1.3 Section 4.21 is restated as follows:
0.21 Management Group. The Management Group owns 93.88% of the issued
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and outstanding Capital Stock of the Company as described on Schedule 4.21-A,
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and Harvard owns 6.12% of the issued and outstanding Capital Stock of the
Company as described on Schedule 4.21-A. All shareholder agreements and other
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agreements relating to the ownership, transfer, control or otherwise relating to
the Capital Stock of the Company or any of the Guarantors are listed on Schedule
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4.21-B hereto.
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1.4 Section 5.1(d)(xi) is re-designated as 5.1(d)(xiv) and the
following three new subsections are added immediately prior thereof:
(xi) As soon as available and in any event within three Business
Days after the end of each month, a rolling ninety day cash flow forecast with
projected borrowing base information in form and detail satisfactory to the
Agents;
(xii) Within 10 Business Days after the end of each month, a report
(subject to any confidentiality requirements of the prospective new lenders or
investors) on the progress of the Company in finding a source of financing or
equity to refinance the Indebtedness and other obligations hereunder in full,
which report shall be in form and detail satisfactory to the Agents;
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(xiii) As soon as available and in any event on or before May 31,
2001, appraisal reports, performed by independent third party appraisers
acceptable to the Required Lenders and at the expense of the Company, covering
substantially all of the machinery and equipment and real estate of the Company
and each of its Subsidiaries; and
1.5 Section 5.1(e) is restated as follows:
(e) Accounting, Access to Records, Books, Etc. Maintain a
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system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, (i) permit any Lender or the Administrative Agent, or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Company and
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with their respective directors and officers, and,
after notice to the Company, employees and independent auditors, and by this
provision the Company does hereby authorize such persons to discuss such
affairs, finances and accounts with any Lender or the Administrative Agent, and
(ii) permit the Administrative Agent or any of its agents or representatives to
conduct a comprehensive field audit of its books, records, properties and
assets, including without limitation all collateral subject to the Security
Documents, real estate appraisals and site access, at the Company's expense,
provided that (x) Company shall not be liable for the charges, costs and
expenses of more than three such comprehensive field audits per fiscal year
prior to the occurrence and continuance of an Event of Default and (y) at the
request of the Required Lenders, the Administrative Agent or any of its agents
or representatives shall conduct up to three such comprehensive field audits per
fiscal year.
1.6 Section 5.1(g) is amended by adding the following to the end
thereof: "In addition, at any time after the difference of (a) the lesser of the
Aggregate Tranche A Revolving Credit Commitments (which is $32,000,000 as of the
Fifth Amendment Effective Date) or the Borrowing Base minus (b) the aggregate
Revolving Credit Advances is less than $4,000,000, if requested by the Agents,
the Borrowers and the Guarantors shall direct all customers and other account
debtors to make all payments in connection with any obligations of any Borrower
or Guarantor directly to a lock-box account, which account shall be a non-
interest bearing account over which the Administrative Agent shall have the
power of application and withdrawal, and all amounts received in such lock-box
account shall be promptly applied to the Advances on such terms reasonably
required by the Agents (with such amounts applied to the Revolving Credit Loans
if payments on the other Advances and obligations under the Loan Agreement are
not then due, and applied in a manner to minimize any obligations of the
Borrowers under Section 3.9), and the Borrowers and the Guarantors shall
promptly execute such lock-box agreements, dominion of funds agreements and
related agreements in connection therewith, each in form and substance
satisfactory to the Agents."
1.7 A new Section 5.1(h) is hereby added as follows:
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(h) Refinancing. Use its best efforts to find an alternative
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source of financing or equity to refinance the indebtedness and other
obligations hereunder and terminate the Commitments as soon as possible.
1.8 Sections 5.2(a), (b) and (c) are restated as follows:
(a) Fixed Charge Coverage Ratio. Permit or suffer the Fixed
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Charge Coverage Ratio to be less than 1.0 to 1.0 as of the end of any month.
(b) Minimum Availability. Permit or suffer the difference of
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(a) the lesser of the Aggregate Tranche A Revolving Credit Commitments (which is
$32,000,000 as of the Fifth Amendment Effective Date) or the Borrowing Base
minus (b) the aggregate Revolving Credit Advances, to be less than $8,000,000 as
of July 30, 2001, $8,000,000 as of August 31, 2001, $10,000,000 as of January
31, 2002 or $10,000,000 as of February 28, 2002.
(c) [intentionally omitted]
1.9 Section 5.2(e)(vii) is restated as follows:
(vii) [intentionally omitted].
1.10 Section 5.2(g) is restated as follows:
(g) Merger; Acquisitions; Etc. Purchase or otherwise acquire, or
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permit or suffer any Subsidiary to purchase or otherwise acquire, whether in one
or a series of transactions, all or a substantial portion of the business
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, of any person, or all or a substantial portion of the capital stock
of or other ownership interest in any other person; nor merge or consolidate or
amalgamate with any other person or take any other action having a similar
effect, nor enter into any joint venture or similar arrangement with any other
person.
1.11 Section 5.2(h) is restated as follows:
(h) Disposition of Assets; Etc. Sell, lease, license, transfer,
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assign or otherwise dispose of all or a material portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment, and shall not permit or suffer any
Subsidiary to do any of the foregoing; provided, however, that this Section
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5.2(h) shall not prohibit sales as to which proceeds are used to make optional
prepayments on the Term Loans pursuant to Section 3.1.
1.12 Section 5.2(j) is restated as follows:
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(j) Dividends and Other Restricted Payments. Make, pay, declare
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or authorize any dividend, payment or other distribution in respect of any class
of is capital stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, or any shares of its Capital Stock other than such dividends,
payments or other distributions to the extent payable solely in shares of
Capital Stock of the Borrower.
1.13 Section 5.2(m) is restated as follows:
(m) Contingent Liabilities. Create, incur, assume or in any
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manner become liable in respect of, or suffer to exist, any Contingent
Liabilities other than Contingent Liabilities incurred prior to the Fifth
Amendment Effective Date in an aggregate amount not to exceed $500,000.
1.14 Clause (v) of Section 5.2(k) is restated as follows:
[intentionally omitted].
1.15 Section 5.2(s) is restated as follows:
(s) Capital Expenditures. Make any Capital Expenditures if the
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aggregate amount thereof made by the Company or any of its Subsidiaries for any
consecutive three month period would exceed, on a consolidated basis, $900,000.
1.16 Section 5.2(t) is restated as follows:
(t) EBITDA Permit or suffer EBITDA, as of the last day of each
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month and as calculated for the three consecutive months then ending, to be less
than the amounts set forth below for the month end indicated:
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Month End Date EBITDA
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March 31, 2001 $5,500,000
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April 30, 2001 $5,500,000
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May 31, 2001 $5,900,000
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June 30, 2001 $5,900,000
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July 31, 2001 $6,400,000
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August 31, 2001 $6,400,000
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September 30, 2001 $6,700,000
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October 31, 2001 $6,700,000
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November 30, 2001 $6,700,000
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December 31, 2001 $6,700,000
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January 31, 2002 $7,000,000
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February 28, 2002 $7,000,000
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March 31, 2002 $7,000,000
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April 30, 2002 $7,000,000
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May 31, 2002 $7,000,000
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June 30, 2002 $7,000,000
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1.17 A new Section 5.2(u) is added as follows:
(u) Annual EBITDA Permit or suffer EBITDA, as of December 31,
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2001 and as calculated for the twelve consecutive months then ending, to be less
than $35,000,000.
1.18 Schedules 4.4, 4.21-A and 4.21-B to the Loan Agreement are
replaced with Schedules 4.4, 4.21-A and 4.21-B attached hereto.
ARTICLE II. REPRESENTATIONS. Each Borrower represents and warrants to the
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Agents and the Lenders that:
2.1 The execution, delivery and performance of this Amendment is
within its powers, has been duly authorized and is not in contravention with any
law, of the terms of its Articles of Incorporation or By-laws, or any
undertaking to which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation of
the Borrowers enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments and waivers herein
contained, the representations and warranties contained in Article IV of the
Loan Agreement are true on and as of the date hereof with the same force and
effect as if made on and as of the date hereof.
2.4 After giving effect to the amendments and waivers herein
contained, no Event of Default or Unmatured Event exists or has occurred and is
continuing on the date hereof.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become
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effective until each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrowers and the
Required Lenders.
3.2 Each of the Guarantors shall have executed the Consent and
Agreement at the end of this Amendment.
3.3 Each of the Borrowers and the Guarantors shall have delivered
a board resolution approving this Amendment and all the transactions
contemplated hereby.
3.4 The Borrowers and the Guarantors shall have delivered such
other agreements and documents requested by either Agent.
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ARTICLE IV. EVENTS OF DEFAULT AND WAIVER.
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4.1 The Borrowers acknowledge that Event of Defaults have occurred
because the Borrowers have failed to comply with Sections 5.2(a), (b) and (c) of
the Credit Agreement (the "Previously Existing Defaults"). The Borrowers
acknowledge that the Required Lenders have the ability to accelerate all
indebtedness and exercise all of their rights and remedies under the Credit
Agreement and that the Lenders do not have any obligation to make any Advances
under the Credit Agreement. In consideration of the execution of this Amendment
and subject to the satisfaction of all conditions required by Article III
hereof, the Agents and the Required Lenders agree to waive the Previously
Existing Defaults, provided that such waiver shall waive only the Previously
Existing Defaults on or prior to the date hereof, and does not waive any other
Default, including without limitation any Default caused by any violation of
Section 5.2(a), (b) and (c) at any time on or after the date hereof, and this
waiver shall not be deemed to be a waiver, or a consent to any modification or
amendment, of any other term or condition of the Credit Agreement or any term or
condition of any other Loan Document, or to prejudice any present or future
right or rights which the Agents or any of the Lenders now have or may have
thereunder.
ARTICLE V. MISCELLANEOUS.
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5.1 References in the Loan Agreement or in any note, certificate,
instrument or other document to the Loan Agreement shall be deemed to be
references to the Loan Agreement as amended hereby and as further amended from
time to time.
5.2 The Borrowers agree to pay and to save the Agent harmless for
the payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Agent in connection with
preparing this Amendment and the related documents.
5.3 Each Borrower and Guarantor acknowledges and agrees that the
Agent and the Lenders have fully performed all of their obligations under all
documents executed in connection with the Loan Agreement, the Notes, the
Security Documents and all other documents and agreements executed by a Borrower
in connection with the Loan Agreement and all actions taken by the Agent and the
Lenders are reasonable and appropriate under the circumstances and within their
rights under the Loan Agreement and all other documents executed in connection
therewith and otherwise available. Each Borrower and Guarantor represents and
warrants that it is not aware of any claims or causes of action against either
Agent or any Lender or any of their successors or assigns. Notwithstanding this
representation and a further consideration for the agreements and understandings
herein, each Borrower and each Guarantor and their respective successors and
assigns hereby release each Agent, each Lender and their respective successors
and assigns from any liability, claim, right or cause of action which now exists
or hereafter arises, whether known or unknown, arising from or in any way
related to facts in existence as of the date hereof to any agreements or
transactions among the Agents, the Lenders, the Borrowers, the Guarantors or any
of them, or to any acts or omissions of the Agents or the Lenders in connection
therewith or otherwise related thereto in any way.
5.4 Except as expressly amended hereby, each Borrower agrees that
the Loan Agreement, the Notes, the Security Documents and all other documents
and agreements executed by a
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Borrower in connection with the Loan Agreement in favor of the Agent or any
Lender are ratified and confirmed and shall remain in full force and effect and
that it has no set off, counterclaim, defense or other claim or dispute with
respect to any of the foregoing. Terms used but not defined herein shall have
the respective meanings ascribed thereto in the Loan Agreement.
5.5 On the date of this Amendment, the Company agrees to pay to
each Lender signing this Amendment on or before 12:00 noon, Detroit time, on the
date hereof a fee equal to 0.25% of such Lender's Commitments.
5.6 This Amendment may be signed upon any number of counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument, and telecopied signatures shall be enforceable as originals.
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IN WITNESS WHEREOF, the parties signing this Amendment have caused
this Amendment to be executed and delivered as of the day and year first above
written.
NUMATICS, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Vice President
NUMATICS LTD.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Its: Secretary
NUMATICS GMBH
By: /s/ Xxxx X. Xxxxxx
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Its: General Manager
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XXXX XXX, XXXXXXXX, as Administrative Agent
and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
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Its: First Vice President
BANK ONE, NA
By: /s/ Xxxxxx X. Xxxxxx
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Its: First Vice President
BANK ONE, CANADA
By: /s/ Xxxxxx X. Xxxxxx
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Its: First Vice President
FLEET NATIONAL BANK, as Documentation Agent
and as a Lender
By: /s/ Xxxxx Perkham
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Its: Senior Vice President
COMERICA BANK
By: /s/ Xxxxx Xxxxxx
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Its: Account Officer
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MAPLEWOOD (CAYMAN) LIMITED
By: _______________________________
Its: ____________________________
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: _______________________________
Its: ____________________________
BLACK DIAMOND CLO 2000-LTD.
By: /s/ Xxxxx Xxxx
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Its: Director
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CONSENT AND AGREEMENT
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As of the date and year first above written, each of the undersigned
hereby:
(a) fully consents to the terms and provisions of the above Amendment and
the consummation of the transactions contemplated hereby and agrees to all terms
and provisions of the above Amendment applicable to it;
(b) agrees that each Guaranty and all other agreements executed by any of
the undersigned in connection with the Loan Agreement or otherwise in favor of
the Agents or the Lenders, or any of them (collectively, the "Guarantor
Documents") are hereby ratified and confirmed and shall remain in full force and
effect, and each of the undersigned acknowledges that it has no setoff,
counterclaim, defense or other claim or dispute with respect to any Guarantor
Document; and
(c) acknowledges that its consent and agreement hereto is a condition to
the Lenders' obligation under this Amendment and it is in its interest and to
its financial benefit to execute this consent and agreement.
MICRO-FILTRATION, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
NUMATION, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
NUMATECH, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
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ULTRA AIR PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
MICROSMITH, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
EMPIRE AIR SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Secretary
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SCHEDULE 4.4
Subsidiaries
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Jurisdiction
of
Name of Subsidiary Incorporation Percentage Owned
------------------ ------------- ----------------
I.A.E. Incorporated Michigan 100%
Micro-Filtration, Inc. Michigan 100%
Numation Inc. Michigan 90%
Numatech, Inc. Michigan 88%
Ultra Air Products, Inc. Michigan 100%
Microsmith, Inc. Arizona 100%
Empire Air Systems, Inc. New York 100%
Numatics B.V. Netherlands 100%
Numatics S.A. de C.V. United States 99%*
of Mexico
Numatics S.A.R.L. France 99%*
Numatics Ltd. Canada 100%
Numatics, Limited United Kingdom 99%*
NAC Beteilingungs Gmbh Federal Republic 100%
of Germany
Numatics Gmbh Germany 100%
Numatics K.F.T. Hungary 100%
Numatics Ltd. Taiwan 91%*
Numatics S.R.L. Italy 99%*
Univer Gmbh Germany 100%
Numatics Spain S.L. Spain 100%
* 1% share held by Xxxx X. Xxxxxx
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SCHEDULE 4.21-A
Management Group Stock Ownership
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NUMATICS, INCORPORATED
OWNERSHIP OF SECURITIES
Stockholder Shares Percent
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Xxxx X. Xxxxxx 1,971,196.25 75.60%
Xxxxx X. Xxxxx 112,881.25 4.33%
Xxxxxx X. XxXxxxxx 112,881.25 4.33%
Xxxxx Xxxxxxxxx 97,201.25 3.73%
Xxxxxx X. Xxxxxxx 78,391.25 3.01%
Xxxx Xxxxx 56,441.25 2.16%
Xxxxx Xxxx 18,750.00 0.72%
Harvard Private Capital Holdings, Inc. 159,575.00 6.12%
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2,607,317.50 100.00%
============ ======
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SCHEDULE 4.21-B
Shareholder Agreements
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1. Voting Agreement dated November 29, 1990, as supplemented, among Numatics
Acquisition Corporation (the "Company") and the Shareholders.
2. Amended and Restated Stock Transfer Agreement dated December 28, 1995.
3. NUMATION, INC., a Michigan corporation
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Stock Transfer Agreement by and among Xxxxxxx X. Xxxxxxx and Numatics,
Incorporated, and Numation, Inc. dated September 1, 1994
4. NUMATECH, INC., a Michigan corporation
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Stock Transfer Agreement by and among Xxxxxxx X. Xxxxxx, Xx. and Numatics,
Incorporated, and Numatech, Inc. dated September 1, 1994
5. As a condition to exercising any option granted under the Numatics,
Incorporated Incentive Plan adopted June 29, 2000, each option holder will be
required to enter into a Stock Transfer Agreement in substantially the form
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30
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