Exhibit 10.2
------------------------------
CREDIT AGREEMENT
AMONG
HEICO CORPORATION,
SUNTRUST BANK, SOUTH FLORIDA, N.A., AS AGENT,
AND
THE LENDERS PARTY HERETO
------------------------------
DATED AS OF JULY 30, 1998
$120,000,000.00 REVOLVING CREDIT FACILITY
------------------------------
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.......................................................................................... 1
1.1 Defined Terms............................................................................... 1
1.2 Other Definitional Provisions; Accounting Terms............................................. 13
SECTION 2. THE REVOLVING CREDIT FACILITY;
AMOUNT AND TERMS OF ADVANCES......................................................................... 14
2.1 The Revolving Credit Facility............................................................... 14
2.2 Making of Advances and Funding Mechanics.................................................... 15
2.3 Use of Proceeds............................................................................. 16
2.4 Revolving Credit Notes; Loan Accounts....................................................... 18
2.5 Interest Rates.............................................................................. 18
2.6 Repayment................................................................................... 19
2.7 Revolving Credit Termination Date........................................................... 19
2.8 Fees........................................................................................ 20
2.9 Payments and Computations................................................................... 20
2.10 Prepayments under Revolving Credit Facility................................................. 21
2.11 LIBOR Rate Compensation..................................................................... 23
2.12 Sharing of Payments, Etc.................................................................... 24
2.13 Conversion and Continuation of Advances; Failure to Select Interest Period.................. 25
2.14 Increased Costs, Capital Adequacy, Illegality, Etc.......................................... 25
2.15 Taxes; Gross-Up; Foreign Lenders............................................................ 27
SECTION 3. CONVERSION OF ADVANCES TO TERM LOANS................................................................. 28
3.1 Term Loan Facility.......................................................................... 28
3.2 Conversion of Advances to Term Loans........................................................ 28
3.3 Interest Rates of Term Loans................................................................ 30
3.4 Tenor and Amortization...................................................................... 30
3.5 Term Loan Notes............................................................................. 30
3.6 Repayment................................................................................... 30
3.7 Payment, Computations and Other Terms....................................................... 31
SECTION 4. LETTERS OF CREDIT.................................................................................... 31
4.1 Letter of Credit Facility; Issuance of Letters of Credit.................................... 31
4.2 Letter of Credit Fees....................................................................... 32
4.3 Reimbursement Obligations................................................................... 32
4.4 Lenders' Obligations........................................................................ 33
4.5 Agent's Obligations......................................................................... 34
SECTION 5. COLLATERAL, GUARANTIES AND SUBORDINATION............................................................. 34
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5.1 Lien and Security Interest in All Assets of the Borrower.................................... 34
5.2 Guaranties.................................................................................. 35
5.3 Lien and Security Interest in All Assets of the Guarantors.................................. 36
5.4 Subordination; Permitted Prior Liens and Permitted Liens.................................... 37
5.5 Cross-Collateral; Cross Default............................................................. 37
5.6 Special Provisions With Respect to Lufthansa Technik AG, a Minority
Shareholder of Heico Aerospace Holdings Corp................................................ 37
5.7 Pledge of Stock of Foreign Subsidiaries..................................................... 38
SECTION 6. REPRESENTATIONS AND WARRANTIES....................................................................... 38
6.1 Corporate Existence; Compliance with Law; Name History...................................... 39
6.2 Corporate Power and Authorization to Execute Loan Documents; No
Conflict; No Consent........................................................................ 39
6.3 Enforceable Obligations..................................................................... 40
6.4 Financial Condition......................................................................... 40
6.5 No Litigation............................................................................... 40
6.6 Investment Company Act; Regulation.......................................................... 40
6.7 Disclosure and No Untrue Statements......................................................... 41
6.8 Title to Assets; Leases in Good Standing.................................................... 41
6.9 Payment of Taxes............................................................................ 41
6.10 No Default Under Agreement or Instruments................................................... 41
6.11 Patents, Trademarks, Licenses, Etc.......................................................... 42
6.12 Government Contract......................................................................... 42
6.13 ERISA Requirement........................................................................... 42
6.14 Solvency.................................................................................... 42
6.15 Location of Offices......................................................................... 42
6.16 Subsidiaries................................................................................ 42
SECTION 7. CONDITIONS OF LENDING................................................................................ 43
7.1 Continuing Accuracy of Representations and Warranties....................................... 43
7.2 No Default.................................................................................. 43
7.3 Borrowing Certificate....................................................................... 43
7.4 Opinion of Borrower's Counsel............................................................... 43
7.5 Approval of Agent's Counsel................................................................. 43
7.6 Loan Documents.............................................................................. 44
7.7 Insurance................................................................................... 44
7.8 Supporting Documents........................................................................ 44
SECTION 8. AFFIRMATIVE COVENANTS................................................................................ 44
8.1 Financial Reports and Other Information..................................................... 44
8.2 Payment of Indebtedness to Agent; Performance of Other Covenants;
Payment of Other Obligations................................................................ 46
8.3 Conduct of Business; Maintenance of Existence and Rights.................................... 46
8.4 Maintenance of Property..................................................................... 46
8.5 Right of Inspection; Discussions............................................................ 46
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8.6 Notices..................................................................................... 47
8.7 Payment of Taxes; Liens..................................................................... 48
8.8 Insurance of Properties..................................................................... 48
8.9 True Books.................................................................................. 48
8.10 Observance of Laws.......................................................................... 48
8.11 Further Assurances.......................................................................... 48
8.12 ERISA Benefit Plans......................................................................... 49
8.13 Withholding Taxes........................................................................... 49
8.14 Change of Name, Principal Place of Business, Office, or Registered Agent.................... 49
8.15 Financial Covenants......................................................................... 49
8.16 Hedging Requirements........................................................................ 50
8.17 Affirmative Covenants relating to Subsidiaries.............................................. 50
SECTION 9. NEGATIVE COVENANTS................................................................................... 51
9.1 Other Indebtedness.......................................................................... 51
9.2 Limitations on Mortgages, Liens, Etc........................................................ 51
9.3 Guaranties.................................................................................. 52
9.4 Merger, Acquisition, Sale of Assets, Dissolution, Etc....................................... 52
9.5 Federal Reserve Regulations................................................................. 53
9.6 Changes in Governing Documents, Accounting Methods, Fiscal Year............................. 53
9.7 Capital Expenditures........................................................................ 54
9.8 Dividends, Etc.............................................................................. 54
9.9 Change in Control........................................................................... 54
9.10 HEICO Aerospace Holdings Corp............................................................... 54
9.11 Negative Covenants Relating to Subsidiaries................................................. 55
SECTION 10. EVENTS OF DEFAULT................................................................................... 55
10.1 Payment of Indebtedness Under Loan Documents................................................ 55
10.2 Representation or Warranty.................................................................. 55
10.3 Covenants Under the Loan Documents.......................................................... 56
10.4 Cross-Default............................................................................... 56
10.5 Payment, Performance, or Default of Other Indebtedness...................................... 56
10.6 Liquidation; Dissolution; Bankruptcy; Etc................................................... 56
10.7 Involuntary Bankruptcy, Etc................................................................. 56
10.8 Change in Control........................................................................... 57
10.9 Judgments................................................................................... 57
10.10 Attachment, Garnishment, Liens Imposed by Law............................................... 57
10.11 Corporate Existence, Transfer of Property................................................... 57
10.12 Subsidiaries................................................................................ 57
SECTION 11. RIGHTS AND REMEDIES................................................................................. 57
11.1 Remedies Available Under Loan Documents and Otherwise....................................... 57
11.2 Remedies Upon Event of Default.............................................................. 57
SECTION 12. THE AGENT.......................................................................................... 58
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12.1 Appointment, Authorization, and Action...................................................... 58
12.2 Exculpation; Reliance by the Agent.......................................................... 58
12.3 Agent and Affiliates........................................................................ 59
12.4 Lender Credit Decision...................................................................... 59
12.5 Enforcement by Agent........................................................................ 60
12.6 Indemnification............................................................................. 60
12.7 Failure to Act.............................................................................. 60
12.8 Successor Agent............................................................................. 60
SECTION 13. MISCELLANEOUS...................................................................................... 61
13.1 Lien on Deposits; Set-Off................................................................... 61
13.2 Payment of Expenses, Including Attorneys' Fees and Taxes.................................... 61
13.3 Notices..................................................................................... 61
13.4 Governing Law............................................................................... 62
13.5 Venue; Personal Jurisdiction................................................................ 62
13.6 Severability and Enforceability of Provisions............................................... 62
13.7 Counterparts; Facsimile Signatures; Effective Date.......................................... 62
13.8 No Waiver................................................................................... 62
13.9 Cumulative Remedies......................................................................... 63
13.10 Course of Dealing; Amendments; Waiver....................................................... 63
13.11 Waiver of Default........................................................................... 63
13.12 Table of Contents; Headings................................................................. 63
13.13 Reliance Upon, Survival of and Materiality of Representations and
Warranties, Agreements, and Covenants....................................................... 64
13.14 Complete Agreement; No Other Consideration.................................................. 64
13.15 Legal or Governmental Limitations........................................................... 64
13.16 Binding Obligation on Successors and Assigns................................................ 64
13.17 Assignments and Participations.............................................................. 64
13.18 Confidential Information.................................................................... 66
13.19 Cooperation in Syndication of Credit........................................................ 67
13.20 Waiver of Trial by Jury..................................................................... 67
EXHIBITS
A. Revolving Credit Note
B. Form of Borrowing Certificate
C. Form of Compliance Certificate
SCHEDULES
5.4 Permitted Prior Liens
6.1 Subsidiaries; Reorganizations
6.5 Litigation
6.15 Location of Offices
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") is made and entered into as of
this 30th day of July, 1998, by and between HEICO CORPORATION, a Florida
corporation (together with its successors and permitted assigns, "Borrower"),
the lenders which are or may in the future be listed on the signature pages
hereof (together with their successors and permitted assigns, individually a
"Lender" and collectively the "Lenders,") and SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION, as agent for the Lenders (together with any successor
agent appointed pursuant to the provisions herein, the "Agent").
BACKGROUND
Borrower has applied to Lenders for a revolving line of credit
availability in the maximum aggregate principal amount of One Hundred Twenty
Million and No/100 Dollars ($120,000,000.00). Lenders have agreed to the request
of Borrower upon the terms and conditions described in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants, and conditions herein, Borrower, the Lenders, and Agent
agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. Except as otherwise expressly provided in this
Agreement, the following capitalized terms shall have the respective meanings
ascribed to them for all purposes of this Agreement:
"ACQUISITION" means the acquisition by the Borrower or any of its
Consolidated Subsidiaries of any business; of a controlling interest in the
capital stock or partnership or membership interests in any business; or of all
or substantially all the assets of any business.
"ADVANCE" has the meaning specified in Subsection 2.1(a) hereof.
"AGENT" means SunTrust Bank, South Florida, National Association, in
its capacity as agent hereunder and under the other Loan Documents, together
with any successor agent appointed pursuant to the provisions hereof.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
supplemented, restated, replaced, or otherwise modified from time to time in
accordance with the provisions hereof.
"APPLICABLE REVOLVER MARGIN" means the amount set forth below with
respect to LIBOR Rate Advances or Base Rate Advances for the respective Total
Funded Debt to EBITDA ratio of the Borrower and its Consolidated Subsidiaries
calculated at the end of the most recently ended fiscal quarter, with Total
Funded Debt calculated as of such quarter end and EBITDA calculated for the
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four consecutive fiscal quarters then ended, all in accordance with GAAP
applied on a Consistent Basis:
APPLICABLE REVOLVER MARGIN
Type of Borrowing
================================================================================
TOTAL FUNDED DEBT TO EBITDA BASE RATE ADVANCES LIBOR RATE
--------------------------- ------------------ ADVANCES
--------
less than 1.0 to 1.0 0.0% .75%
greater than or equal to 1.0 to 1.0
but less than 2.0 to 1.0 0.0% 1.00%
greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.0% 1.125%
greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.0% 1.25%
greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 .25% 1.75%
greater than or equal to 3.5 to 1.0 .50% 2.00%
================================================================================
The Applicable Revolver Margin shall be determined based on the financial
statements delivered pursuant to Subsections 8.1(a) and (b), and any change in
the Applicable Revolver Margin shall be effective as of the beginning of and for
the fiscal quarter of Borrower in which such financial statements were required
to be delivered pursuant to Section 8.1(a) and (b), and within a reasonable time
after Agent's receipt of such financial statements any adjustments required
shall be made retroactive to the effective date of any change in the Applicable
Revolver Margin pursuant to this paragraph; provided that, subject to the truth
of the representations and warranties in Section 6.4, the Applicable Revolver
Margin shall be determined based upon the financial statements referenced in
Section 6.4 until any change in the Applicable Revolver Margin becomes effective
pursuant to this Section.
"APPLICABLE TERM LOAN MARGIN" means the amount set forth below with
respect to LIBOR Rate Term Loans or Base Rate Term Loans for the respective
Total Funded Debt to EBITDA ratio of the Borrower and its Consolidated
Subsidiaries calculated at the end of the most recently ended fiscal quarter,
with Total Funded Debt calculated as of such quarter end and EBITDA calculated
for the four consecutive fiscal quarters then ended, all in accordance with GAAP
applied on a Consistent Basis:
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APPLICABLE TERM LOAN MARGIN
Type of Loan
================================================================================
TOTAL FUNDED DEBT TO EBITDA BASE RATE LIBOR RATE
--------------------------- TERM LOANS TERM LOANS
---------- ----------
less than 1.0 to 1.0 0.25% 1.00%
greater than or equal to 1.0 to 1.0
but less than 2.0 to 1.0 0.25% 1.25%
greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.25% 1.375%
greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.25% 1.50%
greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 .50% 2.00%
greater than or equal to 3.5 to 1.0 .75% 2.25%
===============================================================================
The Applicable Term Loan Margin shall be determined based on the financial
statements delivered pursuant to Subsections 8.1(a) and (b), and any change in
the Applicable Term Loan Margin shall be effective as of the beginning of and
for the fiscal quarter of Borrower in which such financial statements were
required to be delivered pursuant to Section 8.1(a) and (b), and within a
reasonable time after Agent's receipt of such financial statements any
adjustments required shall be made retroactive to the effective date of any
change in the Applicable Term Loan Margin pursuant to this paragraph; provided
that, subject to the truth of the representations and warranties in Section 6.4,
the Applicable Term Loan Margin shall be determined based upon the financial
statements referenced in Section 6.4 until any change in the Applicable Term
Loan Margin becomes effective pursuant to this Section.
"APPLICATION" means any application delivered to Agent for or in
connection with issuance of any Letter of Credit pursuant to Section 4 hereof,
in Agent's standard form for such Letters of Credit.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" has the meaning specified in
Subsection 13.17 hereof.
"BASE RATE" shall mean the higher of (i) the rate which Agent announces
from time to time as its prime lending rate, as in effect from time to time, and
(ii) the Federal Funds Rate, as in effect from time to time, plus one-half of
one percent (1/2%) per annum (any changes in such rates to be effective as of
the date of any change in such rate). The Agent's prime lending rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Agent may make commercial loans or other loans
at rates of interest at, above, or below the Agent's prime lending rate.
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"BASE RATE ADVANCE" means an Advance that bears interest at a rate
determined by reference to the Base Rate, as provided in Subsection 2.5(a)(ii)
hereof.
"BASE RATE TERM LOAN" has the meaning set forth in Section 3.3(a).
"BOND DOCUMENTS" has the meaning set forth in Section 5.3.
"BORROWER" means Heico Corporation, a Florida corporation, and its
successors and permitted assigns.
"BORROWER'S COLLATERAL" has the meaning set forth in Section 5.1.
"BORROWER SECURITY AGREEMENTS" has the meaning set forth in Section
5.1.
"BORROWING" denotes the aggregation of Advances of one or more Lenders
to be made to the Borrower pursuant to Section 2 on a single date.
"BORROWING CERTIFICATE" has the meaning defined in Section 7.3.
"BUSINESS DAY" means a day that is not a Saturday, a Sunday, or a day
on which Agent is closed pursuant to authorization or requirement of law.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, the sum, without duplication, of the aggregate amount of all
expenditures of such Person during such period which, in accordance with GAAP,
is required to be included in, or is properly included by such Person as
additions to, property, plant or equipment (including leasehold improvements) or
other similar fixed asset accounts of such Person.
"CAPITAL LEASE" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
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"CHANGE IN CONTROL" shall mean, as applied to the Borrower and each
Subsidiary, that, (a) the Xxxxxxxxx Reporting Group (as identified in the
reports filed with the U.S. Securities and Exchange Commission) shall cease
beneficially to own and control at least fifteen (15%) of the combined voting
power of all classes of capital stock of the Borrower, or (b) Laurans X.
Xxxxxxxxx shall cease to be employed as President and Chief Executive Officer of
the Borrower or shall cease actively to manage the Borrower and its Subsidiaries
(however, should Laurans X. Xxxxxxxxx die or become disabled, such death or
disability alone shall not constitute a Change in Control if and only if both
Xxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxxx continue to be employed as executive
officers of the Borrower and continue actively to manage the Borrower and its
Subsidiaries), or (c) during any period of twelve (12) consecutive calendar
months (i) more than fifty percent (50%) of the members of the Board of
Directors of the Borrower who were members on the first day of such period shall
have resigned or been removed or replaced, other than as a result of death,
disability, or change in personal circumstances, or (ii) any Person or "Group"
(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, but excluding (A) any employee benefit or stock ownership plans of the
Borrower, and (B) members of the Board of Directors and executive officers of
the Borrower as of the date of this Agreement, members of the immediate families
of such members and executive officers, and family trusts and partnerships
established by or for the benefit of any of the foregoing individuals) shall
have acquired more than fifty percent (50%) of the combined voting power of all
classes of common stock of the Borrower or of any Subsidiary, except that the
Borrower's purchase of its common stock outstanding on the date hereof which
results in one or more of the Borrower's shareholders of record as of the date
of this Agreement controlling more than fifty percent (50%) of the combined
voting power of all classes of the common stock of the Borrower shall not
constitute a Change in Control.
"CLOSING DATE" means the last date on which this Agreement is executed
and delivered by Borrower and by Agent and Agent as Lender.
"COMMITMENT FEE" has the meaning defined in Section 2.8(a).
"COMMITMENT FEE PERCENTAGE" shall mean the per annum rate set forth
below for the respective Total Funded Debt to EBITDA ratio of the Borrower and
its Consolidated Subsidiaries calculated at the end of the most recently ended
fiscal quarter of the Borrower, with Total Funded Debt calculated as of such
quarter end and EBITDA calculated for the four consecutive fiscal quarters then
ended, all in accordance with GAAP applied on a Consistent Basis:
TOTAL FUNDED DEBT TO EBITDA COMMITMENT FEE PERCENTAGE
--------------------------- -------------------------
less than 1.0 to 1.0 .20%
greater than or equal to 1.0 to 1.0
but less than 2.0 to 1.0 .25%
greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 .275%
greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 .30%
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greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 .375%
greater than or equal to 3.5 to 1.0 .40%
The Commitment Fee Percentage, like the Applicable Revolver Margin and the
Applicable Term Loan Margin, shall be determined based on the financial
statements delivered pursuant to Subsections 8.1(a) and (b), and any change in
the Commitment Fee Percentage shall be effective as of the beginning of and for
the fiscal quarter of Borrower in which such financial statements were required
to be delivered pursuant to Section 8.1(a) and (b), and within a reasonable time
after Agent's receipt of such financial statements any adjustments required
shall be made retroactive to the effective date of any change in the Commitment
Fee Percentage pursuant to this paragraph; provided that, subject to the truth
of the representations and warranties in Section 6.4, the Applicable Commitment
Fee Percentage shall be determined based upon the financial statements
referenced in Section 6.4 until any change in the Applicable Commitment Fee
Percentage becomes effective pursuant to this Section.
"COMPLIANCE CERTIFICATE" has the meaning defined in Section 8.1(g).
"CONSISTENT BASIS" means, in reference to the application of Generally
Accepted Accounting Principles, that the accounting principles observed in the
current period are comparable in all material respects to those applied in the
preceding period.
"CONSOLIDATED NET INCOME" for any period means the net income (or loss)
of Borrower and its Subsidiaries on a consolidated basis for such period (taken
as a single accounting period) determined in conformity with GAAP applied on a
Consistent Basis.
"CONSOLIDATED NET WORTH" means the consolidated net worth of the
Borrower and its Consolidated Subsidiaries determined in accordance with GAAP
applied on a Consistent Basis.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements as of such date.
"CONTINUE," "CONTINUATION," and "CONTINUED" refer to a continuation of
an Advance from one Interest Period to the next Interest Period.
"CONVERT," "CONVERSION," and "CONVERTED" refer to a conversion of an
Advance of one Type into an Advance of the other Type, whether optional or
obligatory, or the conversion of an Advance into a Term Loan, whether optional
or obligatory.
"CURRENT ASSETS" means current assets as defined by GAAP.
"CURRENT LIABILITIES" means current liabilities as defined by GAAP.
"DEFAULT RATE" has the meaning specified in Subsection 2.5(a)(iii)
hereof.
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"EASTERN TIME" means the time of day in effect in the Eastern Time Zone
of the Continental United States.
"EBITDA" means with respect to the Borrower and its Consolidated
Subsidiaries, measured on a consolidated basis, the sum of (i) Consolidated Net
Income before minority interest, plus (ii) taxes, plus (iii) interest expense
plus (iv) depreciation and amortization expense (including with respect to all
of the foregoing, the historical pro forma results of acquired businesses), all
as defined and determined in accordance with GAAP applied on a Consistent Basis.
"ENCUMBRANCE" means any lien, claim, security interest, pledge,
hypothecation, charge, or encumbrance of any nature of kind.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EVENT OF DEFAULT" means any of the events specified in Section 10
hereof.
"FEDERAL FUNDS RATE" means a fluctuating interest rate per annum equal
to the weighted average of the rates per annum, rounded upward to the nearest
one-hundredth of one percent (1/100%), on overnight federal funds transactions
with members of the Federal Reserve System, arranged by federal funds brokers,
as published for such day (or if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate
is not published for any day which is a Business Day, the average of the
quotations for such day for such transactions received by Agent from three (3)
federal funds brokers of recognized standing selected by Agent.
"FIXED CHARGE COVERAGE RATIO" means the ratio of (i) EBITDA, plus
operating lease payments, less cash Capital Expenditures to (ii) cash dividends,
plus interest expense, plus current maturities of Total Funded Debt, plus
operating lease payments, plus payments into cash collateral accounts, for the
Borrower and its Consolidated Subsidiaries, all calculated at the end of each
fiscal quarter of the Borrower for the four consecutive quarters then ended, on
a consolidated basis and in accordance with GAAP applied on a Consistent Basis.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means those
principles of accounting set forth in Opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants which
are applicable in the circumstances as of the date of any report required herein
or as of the date of an application of such principles as required herein.
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"GUARANTOR(S)" means individually and collectively, all present and all
hereafter acquired or formed direct or indirect Subsidiaries of the Borrower,
including without limitation, HEICO Aerospace Holdings Corp., a Florida
corporation (hereinafter, "HEICO Aerospace Holdings Corp."), HEICO Aerospace
Corporation, a Florida corporation, Jet Avion Corporation, a Florida
corporation, LPI Industries Corporation, a Florida corporation, Aircraft
Technology, Inc., a Florida corporation, ATI Heat Treat Corporation, a Florida
corporation, Jet Avion Heat Treat Corporation, a Florida corporation, N.A.C.
Acquisition Corporation, a Florida corporation, Northwings Accessories Corp., a
Florida corporation, HEICO Aviation Products Corp., a Florida corporation,
Trilectron Industries, Inc., a New York corporation, HEICO International
Corporation, a U.S. Virgin Islands corporation, HEICO East Corporation, a
Florida corporation, HEICO-NEWCO, Inc., a Florida corporation, HEICO Engineering
Corporation, a Florida corporation, HEICO--Jet Corporation, a Florida
corporation, HEICO Bearings Corp., a Florida corporation, XxXxxxx Property
Corp., a Florida corporation, and PTM Acquisition Corporation, a Florida
corporation, as to all of the Obligations (as herein defined). All of the above
Guarantors shall jointly and severally guarantee payment, collection and
performance of all of the Obligations.
"GUARANTIES" means collectively, the absolute unconditional and
continuing guaranties executed by each Guarantor in favor of Agent for the
benefit of Lenders, as modified and/or reaffirmed from time to time,
guaranteeing repayment of the Obligations, as specified in Section 5.2.
"INDEBTEDNESS" of any Person means (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property or services
(other than current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) all
obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person, (c) all other
indebtedness of such Person evidenced by notes, bonds, debentures, or similar
instruments, (d) all obligations of such Person under Capital Leases, (e) all
obligations of such Person in respect of letters of credit or acceptances issued
or created for the account of such Person, and (f) all net obligations of such
Person under interest rate and currency hedging agreements.
"INTEREST PERIOD" means, for each LIBOR Rate Advance, the period
commencing on the date such Advance is made, Converted from an Advance of
another Type, or Continued as an Advance of the same Type, and ending on the
numerically corresponding day one, two, three, or six months thereafter as
Borrower may select; provided however that:
8
(a) If an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED that if any Interest Period would otherwise
expire on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(b) Any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(c) No Interest Period shall extend beyond the Termination
Date; and
(d) The aggregate number of different Interest Periods shall
not be greater than six (6) (for purposes of this provision, Interest Periods of
the same duration, but commencing on different dates, shall be treated as
different Interest Periods).
"INTEREST RATE HEDGE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, or other similar
agreement or arrangement designed to protect Borrower against fluctuations in
interest rates.
"LENDERS" means, collectively, the Persons identified as "Lenders"
which are, or from time to time may become, listed on the signature pages of
this Agreement, together with their successors and permitted assigns pursuant to
Subsection 13.17 hereof, and "Lender" means any one of the Lenders.
"LENDING OFFICE" means, with respect to Agent or a Lender, the office
of Agent or such Lender specified as its "Lending Office" on the signature pages
hereto or in the Assignment and Acceptance Agreement pursuant to which a Lender
becomes a Lender, or such other office of such Lender as such Lender may from
time to time specify in writing to Agent or such other office of Agent as Agent
may from time to time specify in writing to Borrower and the Lenders.
"LETTER OF CREDIT" means any letter of credit (whether a standby letter
of credit or commercial documentary letter of credit) issued by the Agent
pursuant to the provisions of Section 4 of this Agreement.
"LETTER OF CREDIT OBLIGATIONS" means, at any particular time, the sum
of (i) the aggregate maximum amount then available to be drawn under the Letters
of Credit and (ii) (without duplication) all obligations of the Borrower
pursuant to the Letters of Credit and all reimbursement obligations with respect
to the Letters of Credit pursuant to this Agreement and pursuant to any Letter
of Credit Reimbursement Agreements.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" has the meaning set forth
in Section 4.3(a).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to Fifteen Million
U.S. Dollars (U.S. $15,000,000.00).
9
"LIBOR" means, for any Interest Period, with respect to LIBOR Rate
Advances, the offered rate for deposits in U.S. Dollars, for a period comparable
to the Interest Period and in an amount comparable to the Agent's portion of
such Advances, appearing on the Telerate Screen Page 3750, as of 11:00 A.M.
(London, England time) on the day that is two Business Days prior to the first
day of the Interest Period. If two or more of such rates appear on the Telerate
Screen Page 3750, the rate for that Interest Period shall be the arithmetic mean
of such rates. If the foregoing rate is unavailable from the Telerate Page 3750
for any reason, then such rate shall be determined by the Agent on any other
interest rate reporting service of recognized standing designated in writing by
the Agent to Borrower and the other Lenders; in any such case rounded, if
necessary, to the next higher 1/100 of 1.0%, if the rate is not such a multiple.
"LIBOR ADJUSTED RATE" means, for any Interest Period, the interest rate
per annum (rounded upwards, if necessary, to the next highest 1/100 of 1%)
obtained by dividing (i) LIBOR BY (ii) an amount equal to 1 MINUS the LIBOR
Reserve Requirement.
"LIBOR RATE ADVANCE" means an Advance that bears interest at a rate
determined by reference to the LIBOR Adjusted Rate as provided in Subsection
2.5(a)(i) hereof.
"LIBOR RATE TERM LOAN" has the meaning set forth in Section 3.3(b)
hereof.
"LIBOR RESERVE REQUIREMENT" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100 of 1%) in effect for such day as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any basic, supplemental, or
emergency reserves) for Agent in respect of Eurocurrency liabilities or any
similar category of liabilities.
"LOAN" means any Advance or any Term Loan hereunder, and "Loans" means
collectively, the Advances and the Term Loans made hereunder.
"LOAN DOCUMENTS" means this Agreement, the Revolving Credit Notes, the
Term Loan Notes, any Tax Indemnification Agreements, the Guaranties, the
Borrower Security Agreements, each of the Subsidiary Security Agreements, the
Foreign Subsidiary Stock Pledge Agreement, all Security Documents, all fee
letters or other written agreements between the Borrower and the Agent with
respect to fees, and any and all financing statements, other security
agreements, instruments or documents delivered or to be delivered by the
Borrower or any of the Subsidiaries pursuant to this Agreement (as the same may
be amended, renewed, restated, reaffirmed, increased, replaced, or otherwise
modified from time to time).
10
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, operations, properties, assets, prospects, or financial condition of
Borrower and its Consolidated Subsidiaries taken as a whole, or (b) the validity
or enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of Agent or the Lenders hereunder or thereunder, or (c) the
ability of the Borrower to perform its obligations under this Agreement, or (d)
the ability of the Borrower or any of the Subsidiaries or Guarantors to perform
their respective obligations under any of the Loan Documents.
"NET PROCEEDS" shall mean 100% of all cash or cash equivalent proceeds
received by the Borrower or any Subsidiary (other than from the Borrower or any
Subsidiary) from (i) the issuance of any common or preferred stock or any other
debt or equity securities, or any other additions to the equity, or
contributions to the capital, of the Borrower or any Subsidiary (provided that
cash proceeds received by the Borrower or any Subsidiary from the issuance of
stock upon the exercise of stock options shall be excluded from Net Proceeds up
to an aggregate amount not exceeding U.S. $2,000,000.00 per fiscal year of the
Borrower, and provided further that in the event the Borrower or any Subsidiary
makes a permitted Acquisition in which the Acquisition consideration consists of
an issuance of capital stock of the Borrower or a Subsidiary and cash is
acquired as part of the assets of such acquired company, such cash shall not be
included in "Net Proceeds"), or (ii) any sale, lease, sale and leaseback,
assignment, or other disposition of any asset or property of the Borrower or any
Subsidiary in any such transaction in which proceeds of U.S. $1,000,000.00 or
greater were realized by the Borrower or any Subsidiary (other than the sale of
inventory or equipment in the ordinary course of business), or (iii) any
insurance or condemnation awards relating to any asset or property owned or
leased by the Borrower or any Subsidiary (except to the extent the proceeds of
such insurance or condemnation award are used to repair or replace the asset or
property to which they relate and for which they were received, and except as
otherwise required by the Bond Documents); in each case net of all reasonable
out-of-pocket costs incurred and paid by the Borrower or such Subsidiary in
connection with such transaction; provided that any capital injected into any
Subsidiary by HEICO Aerospace Holdings Corp.'s current shareholder, Lufthansa
Technik AG, shall not be included in Net Proceeds unless such capital injection
has the effect of increasing Lufthansa Technik AG's voting control of such
Subsidiary to, or occurs at any time when Lufthansa Technik AG holds voting
control in such Subsidiary of, thirty percent (30%) or more of the outstanding
capital stock of such Subsidiary.
"OBLIGATIONS" shall have the meaning defined in Section 5.1 hereof.
"PERMITTED ACQUISITIONS" shall have the meaning defined in Section 2.3.
"PERMITTED PRIOR LIENS" shall have the meaning defined in Section 5.4.
"PERMITTED LIENS" shall have the meaning defined in Section 5.4.
"PERSON" means any corporation, limited liability company, business
entity, natural person, firm, joint venture, partnership, trust, unincorporated
organization, association, government, or any department or agency of any
government.
11
"PRO RATA PORTION" means, with respect to a Lender, the quotient
obtained by dividing the Revolving Credit Commitment of the Lender by the
aggregate Revolving Credit Commitments of all the Lenders.
"PURCHASE MONEY INDEBTEDNESS" shall mean, as applied to any Person,
debt (excluding trade payables incurred in the ordinary course of business)
incurred or assumed for the purpose of financing all or any part of the
acquisition cost of any equipment or real property for use in the ordinary
course of business of such Person, but not including inventory or any other
property, in each case entered into in compliance with this Agreement.
"REAL ESTATE DEBT" shall mean, as applied to any Person, debt incurred
or assumed which was incurred for the purpose of financing all or any part of
the cost of acquisition or improvement of any real property for use in the
ordinary course of business of such Person, entered into in compliance with this
Agreement.
"REQUIRED LENDERS" means at any time the Lenders owning or holding in
the aggregate at least sixty-six and two-thirds percent (66 2/3%) of the
aggregate amount of the Revolving Credit Commitments, or if the Revolving Credit
Commitments have been terminated, the Lenders holding at least sixty-six and
two-thirds percent (66 2/3%) of the aggregate unpaid principal amount of the
Loans outstanding hereunder.
"REVOLVING CREDIT COMMITMENT" means the amount set forth and designated
as the Revolving Credit Commitment on the signature pages hereto with respect to
a Lender, as the same may be increased or decreased from time to time as a
result of any reduction thereof pursuant to Section 2.10(b), or any amendment
thereof pursuant to Section 13.10, or, if there has been a full or partial
assignment of a Revolving Credit Commitment pursuant to the provisions of
Subsection 13.17 hereof, as may be reflected on the records of Agent with
respect to such assignment based on the respective Assignment and Acceptance
Agreement.
"REVOLVING CREDIT FACILITY" means the commitments of the Lenders to
make Advances to Borrower pursuant to Subsection 2.1 hereof.
"REVOLVING CREDIT NOTES" has the meaning specified in Subsection 2.4
hereof, and "Revolving Credit Note" means any one of the Revolving Credit Notes.
"REVOLVING CREDIT TERMINATION DATE" means the date three (3) years
after the Closing Date hereunder (or such later date as may be agreed to by
Lender pursuant to Section 2.7), or, if such day is not a Business Day, the next
succeeding Business Day, or such earlier date on which all amounts outstanding
hereunder and under the Revolving Credit Notes shall be due and payable pursuant
to the terms hereof.
"SENIOR FUNDED DEBT" shall mean Total Funded Debt of the Borrower and
its Subsidiaries less Subordinated Debt, all calculated on a consolidated basis
and in accordance with GAAP applied on a Consistent Basis.
12
"SOLVENT" means, with respect to any Person, that as of the date of
determination, both (a)(i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
obligations to the extent required to be reflected as liabilities in the
financial statements of such Person pursuant to GAAP) of such Person and (z)
greater than the amount that will be required to pay the probable liabilities of
such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (ii) such Person's capital is not unreasonably small
in relation to its business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe or reasonably should
believe that it will incur, debts beyond its ability to pay such debts as they
become due and (b) such Person is solvent within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers.
"SUBORDINATED DEBT" means subordinated debt of the Borrower and any of
its Subsidiaries calculated on a consolidated basis and in accordance with GAAP
applied on a Consistent Basis.
"SUBSIDIARY" means, for any Person, any corporation, partnership, or
other entity of which fifty percent (50%) or more of the securities or other
ownership interests having ordinary voting power to elect the board of directors
or having direct power to perform functions similar to that of a board of
directors is at the time directly or indirectly owned or controlled by such
Person. Unless the context clearly indicates otherwise, the term "Subsidiary"
refers to a Subsidiary of Borrower existing on the date of execution hereof or
becoming a Subsidiary at any time thereafter.
"SUBSIDIARY SECURITY AGREEMENTS" has the meaning set forth in Section
5.3.
"TAX INDEMNIFICATION AGREEMENTS" means any documentary stamp tax and
intangible tax agreements executed by Borrower in favor of a Lender from time to
time.
"TERM LOAN" shall have the meaning set forth in Section 3.1.
"TERM LOAN NOTES" shall have the meaning set forth in Section 3.5.
"TERM LOAN AVAILABILITY" means, at any particular time, the aggregate
of all of the Lenders' Revolving Credit Commitments minus the sum of: (i) all
outstanding Advances net of the aggregate Advance(s) to be converted to Term
Loan(s) at the time of determination, plus (ii) the aggregate amount of the
original principal balances of all Term Loans previously made under this
Agreement plus (iii) the aggregate amount of all outstanding Letter of Credit
Obligations.
"TOTAL CAPITALIZATION" means, as measured on a consolidated basis,
Total Funded Debt plus Consolidated Net Worth, determined in accordance with
GAAP, of the Borrower and its Consolidated Subsidiaries.
"TOTAL CREDIT AVAILABILITY" means, at any particular time, the
aggregate of all of the Lenders' Revolving Credit Commitments minus the sum of:
(i) all outstanding Advances plus (ii) the aggregate amount of the original
principal balances of all Term Loans made under this Agreement plus (iii) the
aggregate amount of all outstanding Letter of Credit Obligations.
13
"TOTAL FUNDED DEBT" shall mean and include, without duplication, the
following obligations of the Borrower and any of its Subsidiaries: (i) any
liability or obligation for borrowed money that under GAAP is required to be
shown on the balance sheet as a liability; (ii) Indebtedness that is secured by
any security interest on property owned by the Borrower or any Subsidiary (such
as capitalized leases, asset securitization vehicles, conditional sales
contracts and similar title retention arrangements), irrespective of whether or
not the Indebtedness secured thereby shall have been assumed by the Borrower or
such Subsidiary; (iii) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of business), and
other contingent liabilities, whether direct or indirect (such as by way of a
letter of credit issued for the account of the Borrower or a Subsidiary) in
connection with the obligations for borrowed money, stock, or dividends of any
person; (iv) obligations under any contract providing for the making of loans,
advances, or capital contributions to any person in order to enable such person
primarily to maintain working capital, net worth, or any other balance sheet
condition or to pay debts, dividends, or expenses; and (v) obligations under any
contract which, in economic effect, is substantially equivalent to a guarantee
of loans, advances or capital contributions of another person, all as determined
for the Borrower and its Subsidiaries on a consolidated basis, in accordance
with GAAP applied on a Consistent Basis.
"TYPE" refers to the distinction among Advances bearing interest based
on the LIBOR Adjusted Rate and the Base Rate and to the distinction among Base
Rate Term Loans and LIBOR Rate Term Loans.
14
1.2 OTHER DEFINITIONAL PROVISIONS; ACCOUNTING TERMS.
(a) OTHER DEFINITIONAL PROVISIONS. The terms "material" and
"materially" shall have the meanings ascribed to such terms under Generally
Accepted Accounting Principles as such would be applied to the business of
Borrower or others, except as the context shall clearly otherwise require; (b)
all of the terms defined in this Agreement shall have such defined meanings when
used in other documents issued under, or delivered pursuant to, this Agreement
unless the context shall otherwise require; (c) words in singular shall include
the plural and words in plural shall include the singular, unless the context
clearly requires otherwise; (d) accounting terms to the extent not otherwise
defined shall have the respective meanings given them under, and shall be
construed in accordance with, Generally Accepted Accounting Principles; (e) the
words "hereby," "hereto," "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; (f) words of any gender shall
include all other genders; and (g) whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such parties unless the context shall expressly provide
otherwise.
(b) ACCOUNTING TERMS. Any accounting terms used in this
Agreement which are not specifically defined shall have the meanings customarily
given them in accordance with GAAP; PROVIDED, HOWEVER, that, (i) unless
otherwise provided or unless the context indicates otherwise, all accounting
terms shall refer to the Borrower and the Subsidiaries on a consolidated basis,
and (ii) in the event that changes in GAAP shall be mandated by the Financial
Accounting Standards Board, or any similar accounting body of comparable
standing, or shall be recommended by the Borrower's certified public
accountants, then Borrower shall obtain the prior written consent of the
Required Lenders, which consent shall not be unreasonably withheld, before
implementing such changes, and to the extent that such changes would modify such
accounting terms or the interpretation or computation thereof, such changes
shall be followed in defining such accounting terms only from and after such
date as the Borrower and the Agent and Lenders shall have amended this Agreement
to the extent necessary to reflect any such changes in the financial covenants
and other terms and conditions of this Agreement.
15
SECTION 2. THE REVOLVING CREDIT FACILITY;
AMOUNT AND TERMS OF ADVANCES.
2.1 THE REVOLVING CREDIT FACILITY.
(a) Each Lender severally agrees, on the terms and
conditions set forth herein, that prior to the Revolving Credit Termination
Date, and so long as there exists no Event of Default or circumstance of which
the Borrower has knowledge which with the giving of notice or passage of time
would become an Event of Default, it will, upon the request of Borrower, make
advances to Borrower ("Advances") in an aggregate amount not to exceed at any
time outstanding the lesser of (A) such Lender's Revolving Credit Commitment or
(B) such Lender's Pro Rata Portion of Total Credit Availability; it being
understood and agreed that at no time shall the sum of (i) all outstanding
Advances plus (ii) the aggregate original principal amounts of all Term Loans
made hereunder plus (iii) the aggregate amount of all outstanding Letter of
Credit Obligations, ever exceed the aggregate of the Revolving Credit
Commitments of the Lenders. During such period, subject to the limits set forth
herein, Borrower may borrow, repay, and reborrow in accordance with the terms
hereof.
(b) If at any time the aggregate principal amounts
outstanding under the Advances of any Lender plus (i) the aggregate original
principal balances of Term Loans made by such Lender hereunder and plus (ii)
such Lender's Pro Rata Portion of the aggregate outstanding Letter of Credit
Obligations, exceeds the Revolving Credit Commitment of such Lender, Borrower
shall prepay, without premium or penalty (other than as expressly set forth in
Subsection 2.10), the Advances so as to cause the aggregate outstanding amounts
thereunder plus (i) the aggregate original principal balances of Term Loans made
by such Lender hereunder plus (ii) such Lender's Pro Rata Portion of the
aggregate outstanding Letter of Credit Obligations to be equal to or less than
such Lender's Revolving Credit Commitment.
(c) Subject to the further terms and conditions of this
Agreement, Borrower may request an Advance under the Revolving Credit Facility
by means of a LIBOR Rate Advance or a Base Rate Advance, and Borrower may
Convert an Advance of one Type into an Advance of another Type (as provided in
Subsection 2.13 hereof), or Continue an Advance of one Type as an Advance of the
same Type (as provided in Subsection 2.13 hereof); provided, however, that there
shall be no more than six (6) LIBOR Rate Advances outstanding at any one time
hereunder. All Advances shall be made, Converted, or Continued by the Lenders
simultaneously and proportionately to their Pro Rata Portion of the aggregate
Revolving Credit Commitments.
2.2 MAKING OF ADVANCES AND FUNDING MECHANICS.
16
(a) The Advances shall be made upon irrevocable notice from
Borrower to Agent (effective upon receipt) no later than 12:00 p.m. (Eastern
Time) three (3) Business Days prior to the date of any proposed LIBOR Rate
Advances and no later than 12:00 p.m. (Eastern Time) one (1) Business Day prior
to the date of any proposed Base Rate Advances (with any notice given after the
specified time being deemed to have been given on the following Business Day).
Each such notice shall be given in writing or by telephone, telex, facsimile
transmission, or cable, confirmed immediately in writing, specifying the
proposed (i) date of Borrowing, which shall be a Business Day, (ii) aggregate
amount of Borrowing, (iii) Type of Advances, (iv) in the case of LIBOR Rate
Advances, the initial Interest Period for such Advances, and (v) manner of
receipt of the funds, and shall be accompanied by a Borrowing Certificate
executed by the chief financial officer of Borrower as required by Subsection
7.3 hereof. Each request for a LIBOR Rate Advance shall be in the aggregate
minimum amount of $5,000,000.00 or an integral multiple of $1,000,000.00 in
excess thereof, provided that no more than six LIBOR Rate Advances may be
outstanding at any time hereunder. Each request for a Base Rate Advance shall be
in the aggregate minimum amount of $1,000,000.00 or an integral multiple of
$1,000,000.00 in excess thereof.
(b) Notwithstanding the foregoing, Borrower may not select
any LIBOR Rate Advances if the obligation of any of the Lenders to make LIBOR
Rate Advances is suspended pursuant to Subsections 2.13(b)(iii) or 2.14(c) or
(d) hereof.
(c) Neither Agent nor any Lender shall incur any liability
to Borrower in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by the President, Chief Executive
Officer, Chief Financial Officer, Secretary, Assistant Secretary, Treasurer, or
Assistant Treasurer of Borrower, or other Person designated by Borrower to Agent
as authorized to borrow on behalf of Borrower or for otherwise acting in good
faith under this Subsection, and, upon funding of Advances by Agent or any
Lender in accordance with this Agreement pursuant to any telephonic notice,
Borrower shall be deemed to have received Advances hereunder.
(d) Each notice of a proposed Borrowing shall be irrevocable
and binding on Borrower. Borrower shall indemnify each Lender against any loss,
costs, or expense incurred by such Lender as a result of any failure of Borrower
to fulfill on or before the date specified for an Advance all conditions for
such Borrowing set forth in Section 7 hereof, or as a result of any purported
revocation of such Borrowing request or any other reason for nonfunding of such
Advance, including, without limitation, any loss (including loss of anticipated
profits), cost, or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance, when
such Advance is not made on such date, as more fully described in Subsection
2.10 hereof.
(e) Agent shall give each Lender notice of each request for
Advances in writing or by telephone, telex, facsimile transmission, or cable,
not later than 2:00 p.m. (Eastern Time) on the date of receipt of such request,
provided that if the request was not received prior to 12:00 p.m. (Eastern
Time), Agent shall give such notice no later than 9:00 a.m. (Eastern Time) on
the following Business Day. Not later than 12:00 p.m. (Eastern Time) on the date
specified in such notice, each Lender shall make available to Agent, at its
Lending Office, in immediately available funds, the
17
Lender's Pro Rata Portion of such Borrowing. After Agent's receipt of such
funds, Agent will make such funds available to Borrower no later than 2:00 p.m.
(Eastern Time) on the date specified in the notice, or if such date is not a
Business Day then on the next Business Day after such date. Each Advance shall
be made to the Borrower by crediting the amount of the Advance to the general
deposit account of Borrower maintained with Agent, except as otherwise specified
in writing by Borrower.
(f) Unless Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to Agent such Lender's Pro Rata Portion of the Borrowing, Agent may
assume that the Lender has made such portion available to Agent on the date of
such Borrowing in accordance with the provisions hereof. Agent may, in reliance
upon such assumption (but shall not be required to), make available to Borrower
a corresponding amount. If and to the extent that the Lender shall not have so
made such Pro Rata Portion available to Agent, the Lender and Borrower severally
agree to repay to Agent forthwith upon demand, to the extent not collected from
the other, such corresponding amount together with interest thereon, for each
day from the date such amount is made available to Borrower until the date such
amount is repaid to Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Advances comprising the Borrowing, and (ii) in the
case of the Lender, the Federal Funds Rate. If the delinquent Lender shall repay
to Agent such amount (with interest), the amount so repaid shall constitute the
Lender's Advance as part of such Borrowing for purposes of this Agreement. If
Borrower shall repay to Agent such corresponding amount, such payment shall not
relieve the delinquent Lender of its obligations hereunder.
(g) The failure of any Lender to make an Advance to be made
by it as part of any Borrowing, when required to do so by the provisions hereof,
shall not relieve any other Lender of its obligation hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Advance to be made by such other
Lender. Nothing herein shall prejudice any rights or remedies that Borrower may
have against any Lender as a result of any failure by such Lender to make an
Advance hereunder.
2.3 USE OF PROCEEDS. Advances shall be used by Borrower for working
capital and general corporate purposes, including asset and stock Acquisitions
only to the extent permitted by this Section 2.3 and Subsections (a) and (b)
hereunder and not in violation of or causing an Event of Default to occur under
any other provision of this Agreement ("Permitted Acquisitions").
(a) PERMITTED ACQUISITIONS. The nature of any business
acquired with the proceeds of Advances shall be substantially similar to that of
Borrower or any of its Consolidated Subsidiaries existing as of the date of this
Agreement. Borrower must obtain the prior written consent of the Required
Lenders to use the proceeds of Advances for an Acquisition if (a) the cash
portion of the Acquisition consideration exceeds U.S. $25,000,000.00 (provided
that the Required Lenders have consented to the XxXxxxx Acquisition and the PTM
International Acquisition as defined below subject to the provisions of Section
2.3(b)); or (b) the aggregate cash portion of the gross purchase prices of all
Acquisitions (excluding the XxXxxxx Acquisition and the PTM International
Acquisition as defined below) made or to be made with the proceeds of Advances
during any four consecutive fiscal quarters of the Borrower exceeds, or
including any proposed Acquisition will exceed, U.S. $25,000,000.00.
18
Without such prior written consent of the Required Lenders, no such Acquisitions
referred to in the immediately preceding sentence are permitted to be made by
the Borrower or any Subsidiary. In an Acquisition by the Borrower or any
Subsidiary of 100% of the stock of a company or all or substantially all of the
assets of a company, which Acquisition is otherwise permitted hereunder, the
Borrower or such Subsidiary shall be entitled to assume the following kinds of
Indebtedness of the target company: (i) Real Estate Debt, (ii) equipment related
debt, (iii) Capital Leases, and (iv) Purchase Money Indebtedness; but shall not
assume additional long-term Indebtedness without the prior written consent of
the Required Lenders. In an Acquisition by the Borrower or any Subsidiary of
less than 100% of the stock of a company, which Acquisition is otherwise
permitted hereunder, the Borrower or such Subsidiary shall be entitled to assume
the kinds of Indebtedness of the target company listed in (i) through (iv) in
the previous sentence, as well as other short-term revolving debt; provided that
all debt so assumed shall be on a non-recourse basis to the Borrower and its
Subsidiaries. Any Acquisition not specifically permitted by the terms of this
Section shall not be a Permitted Acquisition. No proceeds of any Advance shall
be used for any Acquisition which is not a Permitted Acquisition.
(b) THE XXXXXXX ACQUISITION AND THE PTM INTERNATIONAL
ACQUISITION. Without limiting the foregoing, it is specifically agreed that the
Lenders have consented to the following Acquisitions, which shall constitute
Permitted Acquisitions hereunder: (A) the acquisition by HEICO Aerospace
Holdings Corp. of all of the stock of XxXxxxx International, Inc., a Georgia
corporation, to be paid in cash, substantially on the terms provided in the
executed Stock Purchase Agreement, dated June 9, 1998, and the acquisition by
XxXxxxx Property Corp., a wholly owned subsidiary of HEICO Aerospace Holdings
Corp., from Xxxxxxx XxXxxxx of certain real property used in the business of
XxXxxxx International, Inc. upon the terms set forth in the Agreement for the
Sale and Purchase of Real Property dated June 9, 1998, copies of which
agreements have been provided to Agent, provided that the combined total
acquisition price of these transactions shall not exceed U.S. $45,000,000.00,
and provided further that such transactions close within ninety (90) days after
the Closing Date (the "XxXxxxx Acquisition"), and (B) the Acquisition by PTM
Acquisition Corporation, a wholly owned subsidiary of HEICO Aerospace Holdings
Corp., of substantially all of the assets of PTM International, Inc., a Florida
corporation for a total acquisition price not to exceed $20,000,000.00, to be
paid in cash, substantially on the terms set forth in the executed Asset
Purchase Agreement, dated June 2, 1998, a copy of which was provided to Agent,
provided that such Acquisition closes within ninety (90) days after the Closing
Date (the "PTM International Acquisition"); in each case provided that within
two Business Days after the closing date of such Acquisition, Borrower shall
execute and deliver and cause all of its Subsidiaries including any such newly
acquired Subsidiary to execute and deliver to Agent for the benefit of the
Lenders such documents, agreements and instruments as Agent shall require to
comply with the provisions of this Agreement, including without limitation
Section 5.
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2.4 REVOLVING CREDIT NOTES; LOAN ACCOUNTS.
(a) The aggregate indebtedness of Borrower to the Lenders
resulting from the Advances shall be evidenced by a promissory note of Borrower
to each of the Lenders in a principal amount equal to such Lender's Revolving
Credit Commitment payable to the order of such Lender, in substantially the form
of Exhibit "A" hereto (as may be amended, renewed, increased, restated,
replaced, or otherwise modified from time to time, the "Revolving Credit
Notes"). Each such Lender is irrevocably authorized by each Borrower to endorse
on the schedule attached to its Note(s) (or on a continuation of such schedule
attached to such schedule and made a part thereof), or otherwise record in such
Lender's internal records, an appropriate notation evidencing the date and
amount of each Advance from such Lender, the interest rate and Interest Period
of such Advance, each payment and prepayment of principal of any such Advance,
each payment of interest on any such Advance and the other information provided
for on such schedule and each Lender's record shall be prima facie evidence;
provided, however, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to any Loan shall not limit, expand or otherwise
affect the obligations of the Borrower hereunder or under any such Note to such
Lender; provided further that in the event of any Loans evidenced both by Loan
Accounts, as provided in Section 2.4(b) hereof, and by Note(s), the Loan
Accounts shall govern as prima facie evidence of the amount of the Loans made by
the Lenders and the Agent to the Borrower and the interest and payments thereon.
(b) The Advances made by each Lender shall be evidenced by
one or more loan accounts or records (the "Loan Accounts") maintained by such
Lender in the ordinary course of business. The Loan Accounts maintained by the
Agent, as Lender, and each Lender shall be prima facie evidence of the amount of
the Advances, as the case may be, made by the Lenders to the Borrower and the
interest and payments thereon. Any failure to record or any error in doing so
shall not, however, limit, expand or otherwise affect the obligations of the
Borrower hereunder.
2.5 INTEREST RATES.
(a) Borrower shall pay interest on the unpaid principal
amounts of Advances from the date of such Advances until such principal amounts
shall be paid in full, at the following rates per annum:
(i) with respect to LIBOR Rate Advances, a rate
equivalent to the LIBOR Adjusted Rate for the Interest
Period for such Advances plus a per annum percentage
equivalent to the Applicable Revolver Margin then in effect
for LIBOR Rate Advances, as adjusted from time to time;
(ii) with respect to Base Rate Advances, a rate
equivalent to the Base Rate in effect from time to time,
which rate shall be adjusted daily to reflect changes in the
Base Rate, with each adjustment to be effective on the day
the change occurs, plus a per annum percentage equivalent to
the Applicable Revolver Margin then in effect for Base Rate
Advances, as adjusted from time to time;
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(iii) after the maturity or due date of the Advances
(whether by acceleration or otherwise), a rate equivalent to
two percent (2%) per annum above the rate per annum required
to be paid on such Advances pursuant to paragraphs (i) or
(ii) above (the "Default Rate").
(b) Borrower shall pay interest in respect of any other
obligations (other than Advances and interest thereon) of Borrower under the
Loan Documents after the date when due at a rate per annum equal to two percent
(2%) per annum above the higher of the two rates per annum described in
paragraphs (i) or (ii) above, and all such interest accrued shall be due and
payable on the earlier of the applicable interest payment date or demand.
2.6 REPAYMENT. Interest and principal of the Advances shall be paid to
Agent for the ratable account of the Lenders as follows:
(a) Interest on the LIBOR Rate Advances shall be paid in
arrears on the dates the LIBOR Rate Advances are Converted, Continued, or paid,
and on the Revolving Credit Termination Date, and for LIBOR Rate Advances for
Interest Periods longer than three months, also on the last day of each three
month period commencing from the first day of the Interest Period and ending
prior to the date such LIBOR Rate Advance is Converted, Continued, or paid, and
shall be paid to and including each of such dates.
(b) Interest on the Base Rate Advances shall be paid
quarterly in arrears on the last day of each January, April, July and October of
each year, and on the Revolving Credit Termination Date, and shall be paid to
and including each of such dates; provided that all interest accrued at the
Default Rate shall be payable on the earlier of the applicable interest payment
dates or demand.
(c) Advances shall be Converted or Continued as provided
herein, and all outstanding principal, if not sooner paid, shall be paid on the
Revolving Credit Termination Date.
2.7 REVOLVING CREDIT TERMINATION DATE. All Borrowings outstanding under
the Revolving Credit Facility shall be due and payable in full on the Revolving
Credit Termination Date. The Borrower shall not request and the Lenders will not
be required to make or consider requests for Revolving Credit Advances after the
Revolving Credit Termination Date. The Borrower may, by written notice to the
Agent (which shall promptly deliver a copy to each of the Lenders), given not
more than one hundred twenty (120) days nor less than ninety (90) days prior to
the first anniversary date of the Closing Date, and again not more than one
hundred twenty (120) days nor less than ninety (90) days prior to the second
anniversary date of the Closing Date, request that the Lenders extend the then
scheduled Revolving Credit Termination Date. Upon delivery of such notice by the
Borrower, the Required Lenders shall determine, in their sole and absolute
discretion, whether to extend the Revolving Credit Termination Date for one (1)
additional year on the same terms and conditions as set forth in this Agreement,
and Agent shall give written notice to Borrower on or before the anniversary
date of the Closing Date prior to which such notice from the Borrower was
delivered, as to whether
21
the Required Lenders have elected so to extend the Revolving Credit Termination
Date for one (1) additional year. If the Required Lenders elect to make any such
extension of the Revolving Credit Termination Date, and assuming Borrower elects
to accept such extension, Borrower, at its expense, shall and shall cause its
Subsidiaries to, execute such amendments to this Agreement and other documents
as shall be reasonably required by Agent on behalf of the Lenders in connection
with any such extension. Nothing contained herein shall obligate the Lenders to
make any such extension of the Revolving Credit Termination Date, or obligate
Borrower to accept any such extension.
2.8 FEES.
(a) As further consideration for making the Revolving Credit
Facility available, Borrower shall pay to Agent, for the ratable account of the
Lenders, a fee (the "Commitment Fee") from the date of this Agreement to the
Revolving Credit Termination Date equal to a percentage per annum equal to the
Commitment Fee Percentage of Total Credit Availability. Such Commitment Fee
shall be computed on the basis of the average daily Total Credit Availability,
and the Commitment Fee Percentage applicable thereto shall be adjusted to
reflect changes in the Commitment Fee Percentage from time to time, with each
adjustment to be effective on the day the change occurs. The Commitment Fee
shall be payable quarterly in arrears three (3) Business Days after the last day
of each January, April, July, and October of each year, and on the Revolving
Credit Termination Date, and shall be payable to and including the last days of
such months and on the Revolving Credit Termination Date.
(b) Borrower shall also pay to Agent such underwriting and
syndication, agency, termination, and other fees as Agent and Borrower shall
separately agree from time to time.
2.9 PAYMENTS AND COMPUTATIONS.
(a) Borrower shall make each payment hereunder not later
than 11:00 a.m. (Eastern Time) on the day when due to Agent at its Lending
Office in immediately available funds, free and clear of any defenses, set-offs,
counterclaims, or withholdings or deductions for taxes. Agent will promptly
thereafter cause to be distributed like funds ratably to the Lenders, in each
case to be applied in accordance with the terms of this Agreement.
(b) Unless Agent shall have received notice from Borrower
prior to the date on which any payment is due to the Lenders hereunder that
Borrower will not make such payment in full, Agent may assume that Borrower has
made such payment in full to Agent on such date. Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on the Business Day
following the date when due an amount equal to the amount then due to such
Lender. If and to the extent Borrower shall not have made such payment in full
to Agent, each such Lender shall repay to Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to Agent, at the Federal Funds Rate.
(c) Unless otherwise specified herein, or unless otherwise
determined by the
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Required Lenders in their sole discretion, all payments shall be applied by the
Lenders first to interest and other charges then accrued under this Agreement
(to be allocated pro rata among the Advances according to amount accrued), and
then to principal of the Advances. If Agent receives funds for application to
the Advances under circumstances for which the Loan Documents or Borrower (to
the extent permitted by the Loan Documents) do not specify the Advances to which
such funds are to be applied, Agent may elect to distribute such funds for
application to the Advances to each Lender ratably in accordance with such
Lender's Pro Rata Portion of all outstanding Advances, in repayment or
prepayment of such of the outstanding Advances of such Lender, as Agent shall
determine in its discretion.
(d) Borrower hereby authorizes Agent, if and to the extent
that any payments owed hereunder are not made when due, to charge such payments
from time to time against any or all of Borrower's accounts with the Agent, in
which event the Agent will give prompt notice to Borrower of such charge;
provided, however, that the failure to give such notice shall not affect the
validity of such charge.
(e) Interest and any fees hereunder shall be computed on the
basis of a year of 360 days, but charged for the actual number of days elapsed.
Each determination by Agent of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(f) Notwithstanding anything contained herein to the
contrary, in no event shall any interest rate provided for herein exceed the
maximum rate of interest allowed by applicable law, as amended from time to
time. Neither the Lenders nor Agent intend to charge any amount of interest or
other fees or charges in the nature of interest that exceeds the maximum amount
allowed by applicable law. If any payment of interest or in the nature of
interest, together with all other payments of interest or in the nature of
interest, would cause the foregoing interest rate limitation to be exceeded,
then such excess payment shall be credited as a payment of principal, unless
Borrower notifies Agent in writing that the excess payment must be returned to
Borrower, together with interest at the rate specified in Section 687.04(2),
Florida Statutes, or any successor statute.
(g) Each payment and prepayment by Borrower of principal or
interest shall be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts. If any installment of principal or interest becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (except as otherwise provided with respect to LIBOR
Rate Advances in the definition of "Interest Period"), and, in the case of
principal, interest shall be payable on such principal during the extension at
the annual rate then in effect for such principal before maturity or default.
2.10 PREPAYMENTS UNDER REVOLVING CREDIT FACILITY; REDUCTION OF
REVOLVING CREDIT COMMITMENTS.
(a) PREPAYMENTS UNDER REVOLVING CREDIT FACILITY.
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(i) Borrower shall be entitled to pay LIBOR Rate
Advances only on the last day of the Interest Period applicable thereto, without
premium or penalty, upon at least three (3) Business Days prior notice to Agent,
each notice stating the proposed date, Advances to be paid, and aggregate
principal amount of the payment.
(ii) Borrower shall be entitled to prepay Base Rate
Advances in whole or in part,
at any time, without premium or penalty, upon at least two (2) Business Days
prior notice to Agent, each notice stating the proposed date, Advances to be
prepaid, and aggregate principal amount of the prepayment.
(iii) Any payment or prepayment of LIBOR Rate
Advances shall be in the minimum principal amount of $5,000,000.00 or an
integral multiple of $1,000,000.00 in excess thereof. Any payment or prepayment
of Base Rate Advances shall be in the minimum principal amount of $1,000,000.00
or an integral multiple of $1,000,000.00 in excess thereof.
(iv) Mandatory Prepayments: If the Borrower or any
Subsidiary receives any Net Proceeds, the Borrower shall prepay outstanding Term
Loans and Advances in an amount equal to 100% of such Net Proceeds
simultaneously with the Borrower's receipt of such Net Proceeds. Such mandatory
prepayment shall be applied first to the prepayment of all Term Loans
outstanding, with such prepayments applied first to Base Rate Term Loans in the
order in which such Base Rate Term Loans were made and then to LIBOR Rate Term
Loans (subject to the provisions of Sections 2.11 and 3.7 and pursuant to all of
the terms of this Agreement). After prepayment of all outstanding Term Loans,
such mandatory prepayment shall be applied to Base Rate Advances in the order in
which such Advances were made, and then to the prepayment of LIBOR Rate Advances
(subject to the provisions of Section 2.11 and pursuant to all of the terms of
this Agreement). Prepayments with respect to Loans with the same Interest Period
shall apply pro rata to the Lenders extending such Loans. The Borrower shall
give the Agent not less than five Business Days' prior written notice of the
date on which any prepayment will be made pursuant to this Section 2.10(a)(iv)
(which date shall be no later than the date five Business Days before payment is
due and payable pursuant hereto.)
(b) REDUCTION OF REVOLVING CREDIT COMMITMENTS.
(c) At any time after the date one year
after the Closing Date, upon at least five (5) Business Days' prior written
notice to the Agent, Borrower shall have the right, without premium or penalty
(subject to the provisions of Sections 3.7 and 2.11 with respect to any LIBOR
Rate Term Loans or LIBOR Rate Advances required to be prepaid as provided
below), to terminate the Revolving Credit Commitments, in part or in whole,
provided that any partial termination of the Revolving Credit Commitments
pursuant to this Section 2.10(b) shall be in an amount of at least U.S.
$10,000,000.00 or an integral multiple of U.S. $10,000,000.00.
(i) Any reduction of Revolving Credit Commitments
pursuant to this Section 2.10(b) shall apply to proportionately, automatically
and permanently reduce the Revolving Credit Commitments of each of the Lenders
based upon each Lender's Pro Rata Portion.
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(ii) If at any time the aggregate outstanding
Advances, Term Loans and Letter of Credit Obligations exceed the total aggregate
amount of the Revolving Credit Commitments, the Borrower shall immediately cause
an amount equal to such excess to be applied as follows in the order of priority
indicated: (A) first, to the prepayment of outstanding Base Rate Term Loans in
the order in which such Base Rate Term Loans were made, (B) second, to the
prepayment of LIBOR Rate Term Loans (subject to the provisions of Sections 2.11
and 3.7) in the order in which such LIBOR Rate Term Loans were made, (C) third,
to the prepayment of outstanding Base Rate Advances in the order in which such
Base Rate Advances were made, and (D) fourth, to the prepayment of LIBOR Rate
Advances (subject to the provisions of Sections 2.11) in the order in which such
LIBOR Rate Advances were made. Prepayments with respect to Loans with the same
Interest Period shall apply pro rata to the Lenders extending such Loans.
2.11 LIBOR RATE COMPENSATION AND INDEMNITY.
(a) COMPENSATION: In the event that all or any portion of
any LIBOR Rate Advance is repaid, prepaid, Converted, or Continued prior to the
end of the Interest Period applicable to such Advance, regardless of whether
such payment is optional or obligatory, or in the event that any LIBOR Rate
Advance is not borrowed, Converted, or Continued as specified in a notice given
pursuant to Subsection 2.2 or 2.13 hereof for any reason, including the failure
of any conditions precedent, Borrower shall be required to pay to Agent, for the
ratable account of the Lenders, compensation as follows. Borrower shall be
required to pay an amount equal to the excess, if any, of (i) the amount of
interest which otherwise would have accrued on the portion of the LIBOR Rate
Advance repaid, prepaid, Converted, Continued, or not borrowed, Converted, or
Continued from and after the date of such payment, prepayment, Conversion,
Continuation, or failure to borrow, Convert, or Continue, to the last day of the
applicable Interest Period (or, in the case of a failure to borrow, Convert, or
Continue to the last day of the Interest Period which would have commenced) at
the applicable rate of interest for such Advance specified herein, over (ii) the
amount of interest which would have accrued on such LIBOR Rate Advance or
portion thereof from and after the date of such payment, prepayment, Conversion,
Continuation, or failure to borrow, Convert, or Continue, to the last day of the
applicable Interest Period at the applicable rate of interest for such Advance
specified herein, but calculated with respect to a LIBOR Adjusted Rate based on
an amount substantially equal to the amount paid, prepaid, Converted, Continued,
or not borrowed, Converted, or Continued, and an Interest Period substantially
equal to the number of days remaining in the applicable Interest Period. Whether
or not the foregoing calculation results in a charge to be paid by Borrower,
Borrower shall also pay all actual out-of-pocket expenses other than those taken
into account in the foregoing calculation incurred by Agent and the Lenders
(excluding any internal expenses) and reasonably attributable to such payment,
prepayment, Conversion, Continuation, or failure to borrow, Convert, or
Continue. Borrower acknowledges that Lenders are relying on the LIBOR Rate
Advance remaining outstanding or being borrowed, Converted, or Continued for the
entire Interest Period selected, and that the foregoing compensation represents
reasonable liquidated damages and is not a penalty. The foregoing compensation
shall apply with respect to all payments, prepayments, Conversions, and
Continuations of LIBOR Rate Advances and all failures to borrow, Convert, or
Continue into LIBOR Rate Advances, whether optional or obligatory (including any
required principal payments and any required Conversions pursuant to the
provisions of Subsection 2.14 hereof), and shall include any prepayment,
repayment, Conversion, or Continuation after default or acceleration of
25
the Revolving Credit Notes.
(b) INDEMNITY: The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (i) failure by the Borrower to borrow,
Convert into or Continue LIBOR Rate Advances after the Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(ii) failure by the Borrower to make any prepayment after the Borrower has given
a notice thereof (or is required to make prepayment) in accordance with the
provisions of this Agreement or (iii) the making of a prepayment of LIBOR Rate
Advances on a day which is not the last day of an Interest period with respect
thereto. Such indemnification may include, without limitation, any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds obtained to fund or maintain a LIBOR Rate Advance during any
Interest Period, which any Lender may incur as a consequence of such failure to
borrow, Convert or Continue, as the case may be. A certificate by Agent as to
the amount of such loss, expense or increased cost shall, when submitted to the
Borrower, be conclusive, in the absence of manifest error, unless the Borrower
shall have provided the Agent with written notice of the Borrower's objection to
all or any portion of such certificate not later than ten (10) days after the
date on which such certificate is submitted to the Borrower. Any such LIBOR Rate
Advance shall not be deemed paid or satisfied until all such additional amounts
are paid. Agent agrees to provide the Borrower with such information as the
Borrower may reasonably request with respect to the calculation of any losses or
expenses. The covenants contained in this Subsection 2.11(b) shall survive the
termination of this Agreement and the payment of the Revolving Credit Notes, the
Term Loan Notes, any Letter of Credit Reimbursement Agreement, and all other
amounts payable hereunder.
2.12 SHARING OF PAYMENTS, ETC.
(a) If any Lender shall obtain from Borrower payment of any
principal of or interest on any Advance owing to it or payment of any other
amount under this Agreement or any other Loan Document through the exercise of
any right of set-off, banker's lien, counterclaim, similar right, or otherwise
(other than from Agent as provided herein), and, as a result of such payment,
such Lender shall have received a greater percentage of the principal of or
interest on the Advances or other amounts then due hereunder by Borrower to such
Lender than its ratable percentage of such amounts pursuant to its Revolving
Credit Commitment, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Advances or such other amounts, respectively, owing to such
other Lenders (or in interest due thereon, as the case may be) in such amounts,
and make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such excess payment (net of
any expenses which may be incurred by such Lender in obtaining or preserving
such excess payment) pro rata in accordance with the unpaid principal of and
interest on the Advances or such other amounts, respectively, owing to each of
the Lenders. To such end all the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(b) Nothing contained herein shall require any Lender to
exercise any set-off, banker's lien, or other right or shall affect the right of
any Lender to exercise, and retain the benefits
26
of exercising, any such right with respect to any other indebtedness or
obligation of Borrower. If, under any applicable bankruptcy, insolvency, or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Subsection applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a matter consistent with
the rights of the Lenders entitled under this Subsection to share in the
benefits of any recovery on such secured claim.
2.13 CONVERSION AND CONTINUATION OF ADVANCES; FAILURE TO SELECT
INTEREST PERIOD.
(a) Borrower may, upon notice given to Agent (effective upon
receipt) no later than 12:00 p.m. (Eastern Time) at least three (3) Business
Days prior to the date of a proposed Conversion into or Continuation of LIBOR
Rate Advances and not later than 12:00 p.m. (Eastern Time) one (1) Business Day
prior to a proposed Conversion into Base Rate Advances, and subject to the
provisions hereof, Convert Advances of one Type into Advances of the other Type
or Continue an Advance of one Type as Advances of the same Type at any time and
from time to time on any Business Day; PROVIDED, HOWEVER, that (1) any
Conversion or Continuation of LIBOR Rate Advances shall be made on, and only on,
the last day of the Interest Period for the LIBOR Rate Advances being Converted
or Continued, (ii) any Conversion or Continuation of any Advances into a LIBOR
Rate Advances shall be in an aggregate amount not less than the minimum amount
specified in Subsection 2.2(a), and (iii) no Conversion or Continuation of
Advances shall result in a greater number of different Interest Periods for
LIBOR Rate Advances than is permitted in the definition of "Interest Period."
Each such notice of Conversion or Continuation shall be given in writing or by
telephone, telex, facsimile transmission, or cable, confirmed immediately in
writing, specifying, within the restrictions specified above, the date of such
Conversion or Continuation, the Advances to be Converted or Continued, the
portion thereof to be Converted or Continued, and the Type of Advances into
which they will be Converted or Continued, and if such Conversion or
Continuation is into LIBOR Rate Advances, the duration of the Interest Period
for such Advances. Each notice of Conversion or Continuation shall be
irrevocable and binding on Borrower.
(b) (i) If Borrower shall fail to give a notice of
Conversion or Continuation in respect of LIBOR Rate Advances prior to the end of
the Interest Period applicable thereto as provided in paragraph (a) hereof, or
to select the duration of any Interest Period for any LIBOR Adjusted Rate, such
LIBOR Rate Advances will automatically, on the last day of the then existing
Interest Period therefor, convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance
of any Event of Default, (i) all LIBOR Rate Advances will automatically, on the
last days of the then existing Interest Periods therefor, Convert into Base Rate
Advances and (ii) the obligation of Lenders to make, Continue, or Convert
Advances into LIBOR Rate Advances shall be suspended.
(iii) LIBOR Rate Advances may be subject to automatic
Conversion into Base Rate Advances, as provided in Subsection 2.14(c) and (d).
2.14 INCREASED COSTS, CAPITAL ADEQUACY, ILLEGALITY, ETC.
(a) If either (i) the introduction, after the date hereof,
of or any change, after the
27
date hereof, in any law or regulation or in the interpretation or administration
of any law or regulation by any court or administrative or governmental
authority charged with the interpretation of administration thereof or (ii) the
compliance with any guideline issued from or request made by any such
governmental authority, after the date hereof, including, without limitation,
any central bank (whether or not having the force of law), (x) subjects any
Lender or any corporation controlling a Lender to any tax of any kind whatsoever
with respect to this Agreement or any Advance, or changes the basis of taxation
of payments to such Lender or corporation of principal, commissions, fees,
interest, or any other amount payable hereunder (except for (A) taxes on or
measured by the overall net income of such Lender or branch, office, or agency
through which such Lender is acting for purposes of this Agreement, (B) changes
in the rate of such taxes, or (C) taxes for which such Lender is indemnified
under Subsection 13.2; (y) imposes, modifies, or holds applicable any reserve,
special deposit, compulsory loan, or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by,
or other credit or commitment therefor extended by, or any other acquisition of
funds by, any office of any Lender which are not otherwise included in any
determination of the Base Rate or LIBOR Adjusted Rate or interest payable
hereunder; or (z) imposes on any Lender or any corporation controlling a Lender
any other condition, and as a result there shall be any increase in the cost to
such Lender or corporation of agreeing to make or making, funding, or
maintaining Advances by an amount deemed by such Lender to be material, then
Borrower shall from time to time, upon notice from such Lender, pay to such
Lender additional amounts sufficient to compensate such Lender for such
increased cost.
(b) If any Lender determines that compliance with any law or
regulation or with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) concerning
capital adequacy or otherwise has or would have the effect of reducing the rate
of return on the capital of such Lender or the corporation controlling the
Lender as a consequence of, or with reference to, such Lender's commitment
hereunder or its making or funding or maintaining Advances below the rate which
such Lender or corporation could have achieved but for such compliance (taking
into account the policies of such Lender or such corporation with regard to
capital) by an amount deemed by such Lender material, Borrower shall from time
to time, upon notice from such Lender, pay to such Lender additional amounts
sufficient to compensate such Lender or corporation for such reduction,
PROVIDED, however, that such additional amounts shall be determined on a
reasonable basis and be similarly charged to corporations or other entities
similar to Borrower who are then borrowers from such Lender pursuant to
agreements having provisions similar to this Subsection 2.14(b), to the extent
permitted by such provisions. Each Lender agrees promptly to notify Borrower and
Agent of any circumstances that would cause Borrower to pay additional amounts
pursuant to this paragraph, provided that the failure to give such notice shall
not affect Borrower's obligation to pay such additional amounts hereunder.
(c) If, with respect to any LIBOR Rate Advances, the
Required Lenders notify Agent that the LIBOR Adjusted Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Lenders of
making, funding, or maintaining the LIBOR Rate Advances for such Interest
Period, Agent shall forthwith so notify Borrower whereupon (i) each LIBOR Rate
Advance will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, Continue, or Convert Advances into LIBOR Rate Advances shall be
suspended until Agent notifies Borrower that the Required
28
Lenders have determined that the circumstances causing such suspension no
longer exist.
(d) Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender to perform its
obligations hereunder to make LIBOR Rate Advances or to continue to fund or
maintain LIBOR Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender through the Agent, (i) each LIBOR Rate Advance of such
Lender will automatically, upon such demand, Convert into a Base Rate Advance
and (ii) the obligation of such Lender to make, Continue, or Convert Advances
into LIBOR Rate Advances shall be suspended until Agent shall notify Borrower
that the Lender has determined that the circumstances causing such suspension no
longer exist.
2.15 TAXES; GROSS-UP; FOREIGN LENDERS.
(a) All payments made by the Borrower under this Agreement,
the Revolving Credit Notes, the Term Loan Notes or under or in connection with
any Letter of Credit Reimbursement Agreement shall be made free and clear of,
and without deduction or withholding for or on account of any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Agent or any Lender
as a result of a present or former connection between the Agent or such Lender
and the jurisdiction of said governmental authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement, the Revolving Credit Notes, the Term Loan Notes or any Letter of
Credit Reimbursement Agreement). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the Agent or any
Lender hereunder or under the Revolving Credit Notes, Term Loan Notes or any
Letter of Credit Reimbursement Agreement, the amounts so payable to the Agent or
such Lender shall be increased to the extent necessary to yield to the Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Revolving Credit Notes, Term Loan Notes or Letter of Credit
Reimbursement Agreement; PROVIDED, HOWEVER, that the Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such failure.
The agreements in this Subsection 2.15(a) shall survive the termination of this
Agreement and the payment of the Revolving Credit Notes, Term Loan Notes, Letter
of Credit Reimbursement Agreements, and all other amounts payable
29
hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two (2)
duly completed copies of United States Internal Revenue
Service form 1001 or 4224, or successor applicable form, as
the case may be, and (B) an Internal Revenue Service Form
W-8 or W-9, or successor applicable form, as the case may
be;
(ii) deliver to the Borrower and the Agent two (2)
further copies of any such form or certification on or
before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent,
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a participant
pursuant to Section 13.17 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms and statements required pursuant to this
Subsection 2.15(b), provided that in the case of a participant such participant
shall furnish all such required forms and statements to the Lender from which
the related participation shall have been purchased.
SECTION 3. CONVERSION OF ADVANCES TO TERM LOANS.
3.1 TERM LOAN FACILITY. Each Lender severally agrees, on the terms and
conditions set forth herein, that on or prior to the Revolving Credit
Termination Date, and so long as there exists no Event of Default or
circumstance which with the giving of notice or passage of time would become an
Event of Default, it will, upon request of the Borrower or when required
hereunder, make term loans to the Borrower as may be necessary to permit the
Conversion of Advances to term loans as permitted or required hereunder (each
such loan, a "Term Loan"), in an aggregate amount not to exceed at any time
outstanding such Lender's Pro Rata Portion of Term Loan Availability; PROVIDED,
that at no time shall the sum of (i) all outstanding Advances plus (ii) the
aggregate original principal amounts of all Term Loans made hereunder plus (iii)
the aggregate amount of outstanding Letter of Credit Obligations, ever exceed
the aggregate of the Revolving Credit Commitments of the Lenders. All Term Loans
under this Agreement shall be made by the Lenders simultaneously and
proportionately
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to their respective Pro Rata Portions.
3.2 CONVERSION OF ADVANCES TO TERM LOANS. In the event the aggregate
principal balance of all outstanding Advances as of the date 365 days after the
Closing Date equals or exceeds U.S. $75,000,000.00, then Borrower shall be
required to convert 50% of the then outstanding Advances to Term Loans pursuant
to the provisions of this Section 3 ("Mandatory Term-Out"). Subject to the
limitations and terms and conditions of this Agreement, Borrower shall have the
option to convert outstanding Advances to Term Loans at any time or from time to
time hereunder and shall have the option as of the Revolving Credit Termination
Date to convert all or any part of then outstanding Advances to Term Loans
("Voluntary Term-Outs"). Upon any Mandatory Term-Out or any Voluntary Term-Out,
subject to the provisions and restrictions contained in this Agreement, Borrower
may choose to Convert Advances of one Type into Term Loans of the same or the
other Type. Outstanding Base Rate Advances or LIBOR Rate Advances subject to
Mandatory Term-Out or Voluntary Term-Out shall be converted to Base Rate Term
Loans or LIBOR Rate Term Loans, as elected by the Borrower in its irrevocable
notices given pursuant to Subsections 3.2(a) or 3.2(b) below, subject in each
case to the provisions and restrictions contained in this Agreement (including
without limitation the provisions of Section 2.11).
(a) MANDATORY TERM-OUT. In the event a Mandatory Term-Out is
required pursuant to Section 3.2, then outstanding Advances in a total aggregate
principal amount equal to Fifty Percent (50%) of all then outstanding Advances
shall be converted to five-year fully amortizing Term Loans as of the date ten
(10) Business Days after the date 365 days after the Closing Date (the
"Conversion Date") pursuant to the terms hereof. Such Mandatory Term-Out shall
apply first to all outstanding Base Rate Advances in the order in which such
Advances were made, and to the extent required, to LIBOR Rate Advances (subject
to the provisions of Section 2.11 and all of the provisions of this Agreement).
Borrower may, upon irrevocable written notice given to Agent (effective upon
receipt) no later than 12:00 p.m. (Eastern Time) at least three (3) Business
Days prior to the Conversion Date, subject to the provisions and restrictions
contained in this Agreement, specify the amounts(s) and Type(s) of Term Loan(s)
into which the Advances subject to a Mandatory Term-Out shall be converted, and
in the case of LIBOR Rate Term Loans, the Interest Period for such Loans, and
such specifications shall be honored subject to the provisions and restrictions
of this Agreement. If Borrower does not timely give the irrevocable written
notice provided in this Subsection 3.2(a), then all Advances subject to
Mandatory Term-Out shall be Converted to a Base Rate Term Loan.
(b) VOLUNTARY TERM-OUTS. Borrower may exercise its option to
make Voluntary Term Outs at any time, provided that there exists no Event of
Default or circumstance which with the giving of notice or passage of time would
become an Event of Default, by giving irrevocable written notice to the Agent
that it so elects no later than 12:00 p.m. (Eastern Time) at least three (3)
Business Days prior to the date of any proposed Term Loan (with any notice given
after the specified time being deemed to have been given on the following
Business Day). Such notice shall comply with the procedural requirements for a
notice of Borrowing under the Revolving Credit Facility set forth in Section
2.2, and shall specifically set forth (i) the date of proposed Conversion to a
Term Loan (such date or the date of conversion permitted hereunder, if
different, being referred to as the "Conversion Date"), (ii) the amount(s),
date(s) and Type of the Advance(s) to be Converted to Term Loans, (iii) the
amount(s) and Type(s) of Term Loan(s) into which such Advance(s) shall be
Converted, and (iv)
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in the case of LIBOR Rate Term Loans, the Interest Period for such Loans, which
specifications shall be honored subject to the provisions and restrictions
contained in this Agreement. Borrower shall be entitled to Convert LIBOR Rate
Advances to Term Loans only on the last day of the Interest Period applicable to
such LIBOR Rate Advances, without premium or penalty. Each request for a
Voluntary Term-Out of Base Rate Advances shall be in the aggregate minimum
amount of $5,000,000.00. or an integral multiple of $1,000,000.00 in excess
thereof. Each request for Voluntary Term-Out of LIBOR Rate Advances shall be in
the aggregate minimum amount of $5,000,000.00. or an integral multiple of
$1,000,000.00 in excess thereof.
3.3 INTEREST RATES OF TERM LOANS. Base Rate Term Loans and LIBOR Rate
Term Loans shall have the meanings and shall bear interest and be made upon the
terms and conditions as set forth below:
(a) "BASE RATE TERM LOAN" as used herein shall mean a fully
amortizing Term Loan accruing interest at a rate equivalent to the Base Rate in
effect from time to time, which rate shall be adjusted daily to reflect changes
in the Base Rate, with each adjustment to be effective on the day the change
occurs, plus a per annum percentage equivalent to the Applicable Term Loan
Margin then in effect for Base Rate Term Loans, as adjusted from time to time.
(b) "LIBOR RATE TERM LOAN" as used herein shall mean a fully
amortizing Term Loan, the Interest Period for which shall be as elected by the
Borrower in its irrevocable notice given pursuant to Subsections 3.2(a) or
3.2(b), and which shall accrue interest at a per annum rate equal to the LIBOR
Adjusted Rate for such Interest Period plus a per annum percentage equivalent to
the Applicable Term Loan Margin then in effect for LIBOR Rate Term Loans, as
adjusted from time to time.
(c) TERM LOAN DEFAULT RATE. After the maturity or due date
of any payment due under any Base Rate Term Loan or any LIBOR Rate Term Loan
(whether by acceleration or otherwise), interest shall accrue at a rate
equivalent to two percent (2%) per annum above the rate per annum required to be
paid on such Term Loans pursuant to paragraphs (a) or (b) above (the "Default
Rate").
3.4 TENOR AND AMORTIZATION. All Term Loans shall be fully amortizing
term loans, commencing on the Conversion Date and maturing on the date earliest
to occur of (i) the date five years after the Conversion Date, (ii) the date
seven (7) years after the Closing Date, or (iii) such earlier date as may be
requested by the Borrower in its notice of Conversion (each such maturity date,
a "Term Loan Maturity Date").
3.5 TERM LOAN NOTES. The Term Loans shall be evidenced by promissory
notes of the Borrower to each of the Lenders in a principal amount equal to such
Lender's Pro Rata Share of the aggregate principal amount of such Term Loan,
which promissory notes shall be in form and substance satisfactory to the
Required Lenders (as may be amended, renewed, increased, restated, replaced, or
otherwise modified from time to time, the "Term Loan Notes").
3.6 REPAYMENT. Interest and principal of the Term Loans shall be paid
to the Agent for
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the ratable account of the Lenders as follows:
(a) All outstanding principal of each Term Loan shall be due
and payable in equal quarterly installments, each in the amount determined by
dividing the initial principal amount of such Term Loan by a number equal to the
total number of ninety (90) day periods occurring and ended during the time
period commencing with the Conversion Date and ending with the Term Loan
Maturity Date of such Term Loan, such installments being due and payable
quarterly on the date ninety (90) days after the Conversion Date and each ninety
(90) days thereafter (each such date a "Payment Date"), with the entire unpaid
principal balance due and payable on or before the Term Loan Maturity Date of
such Loan.
(b) Interest on the LIBOR Rate Term Loans shall be paid in
arrears on the expiration date of each Interest Period, and on the Term Loan
Maturity Date, and shall be paid to and including each of such dates, and for
LIBOR Rate Term Loans for Interest Periods longer than three months, also on the
last day of each three month period commencing from the first day of the
Interest Period and ending prior to the Term Loan Maturity Date, and shall be
paid to and including each of such dates.
(c) Interest on the Base Rate Term Loans shall be paid
quarterly in arrears on each Payment Date for such Loan, and on the Term Loan
Maturity Date, and shall be paid to and including each of such dates.
(d) All interest accrued at the Default Rate shall be
payable on the earlier to occur of the applicable interest payment date or on
demand.
3.7 PAYMENT, COMPUTATIONS AND OTHER TERMS. The terms and provisions of
Sections 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, and the definition of
"Interest Period" in Section 1.1, shall apply to Term Loans as modified by this
Section 3. In applying the provisions of such Sections to Term Loans, such
provisions shall be modified such that the word "Advances" throughout those
Sections shall be read as "Term Loans", and the words "LIBOR Rate Advances" and
"Base Rate Advances" throughout such Sections shall be read as "LIBOR Rate Term
Loans" and "Base Rate Term Loans", respectively. Section 2.10(a)(i) as applied
to LIBOR Rate Term Loans shall be read to mean that Borrower shall be entitled
to prepay LIBOR Rate Term Loans only on the last day of the applicable Interest
Period pursuant to the provisions thereof.
SECTION 4. LETTERS OF CREDIT.
4.1 LETTER OF CREDIT FACILITY; ISSUANCE OF LETTERS OF CREDIT. The
Borrower shall give the Agent not less than five (5) Business Days prior written
notice of a request for the issuance of a Letter of Credit, and the Agent shall
promptly notify each Lender of such request. Upon receipt of the Borrower's
properly completed and duly executed Applications, and subject to the terms of
such Applications and to the terms of this Agreement, the Agent agrees to issue
Letters of Credit on behalf of the Borrower in an aggregate face amount not in
excess of the lesser of (a) the Letter of Credit Sublimit or (b) Total Credit
Availability. No Letter of Credit shall have a maturity extending beyond
33
the earliest of (i) the Revolving Credit Termination Date or (ii) one year from
the date of its issuance. Subject to such maturity limitations and so long as no
Event of Default has occurred and is continuing or would result from the renewal
of a Letter of Credit, upon written request of the Borrower, the Letters of
Credit shall be renewed by the Agent. The Lenders shall participate ratably in
any liability under the Letters of Credit and in any unpaid reimbursement
obligations of the Borrower with respect to any Letter of Credit in their Pro
Rata Portions. The amount of the Letter of Credit Obligations at any time
outstanding shall reduce the amount of the aggregate Revolving Credit
Commitments available, so that at no time shall the sum of (i) all outstanding
Advances in the aggregate, plus (ii) the aggregate original principal balances
of all Term Loans, plus (iii) the aggregate outstanding Letter of Credit
Obligations, exceed the aggregate Revolving Credit Commitments, and at no time
shall the sum of (a) all outstanding Advances made by any Lender plus (b) the
aggregate original principal balances of all Term Loans made by such Lender,
plus (c) such Lender's Pro Rata Portion of outstanding Letter of Credit
Obligations exceed its Revolving Credit Commitment.
4.2 LETTER OF CREDIT FEES. In consideration for the issuance of each
Letter of Credit, the Borrower shall pay:
(a) to the Agent for its own account, an application,
processing and facing fee with respect to each Letter of Credit issued, in the
amount of the greater of (i) 0.10% of the face amount of such Letter of Credit
or (ii) $250.00, which fee shall be due and payable on the date of issuance of
each Letter of Credit; and
(b) to the Agent for the account of the Agent and the
Lenders in accordance with their Pro Rata Portions, with respect to each Letter
of Credit, a letter of credit fee, payable quarterly in advance, on the first
day of each fiscal quarter of the Borrower, in an amount equal to the Applicable
Revolver Margin for LIBOR Rate Advances multiplied by (on the basis of actual
days elapsed in a 360-day year) the amount available to be drawn under such
Letter of Credit from day to day during the previous quarter.
4.3 REIMBURSEMENT OBLIGATIONS.
(a) The Borrower hereby agrees to reimburse Agent
immediately upon demand by Agent, and in immediately available funds, for any
payment or disbursement made by Agent under any Letter of Credit, in accordance
with the terms of this Agreement and any such reimbursement agreement as the
Agent may employ in the ordinary course of business for its own account, which
the Borrower hereby agrees to sign and deliver to Agent, upon Agent's request,
as a pre-condition to availability of any Letter of Credit hereunder (each such
agreement, a "Letter of Credit Reimbursement Agreement"). In the event of any
direct conflict between the terms of any Letter of Credit Reimbursement
Agreement and the terms of this Agreement, the terms of this Agreement shall
prevail. Payment shall be made by the Borrower with interest on the amount so
paid or disbursed by Agent from and including the date payment is made under any
Letter of Credit to and including the date of payment, at the lesser of (i) the
highest lawful rate, and (ii) the Base Rate in effect from time to time;
PROVIDED, HOWEVER, that if the Borrower would be permitted under the terms of
Section 2, to borrow Advances in amounts at least equal to the reimbursement
obligation for a drawing under any Letter of Credit, an Advance by each Lender,
in an amount equal to such Lender's Pro Rata Portion,
34
shall automatically be deemed made on the date of any such payment or
disbursement made by Agent in the amount of such obligation and subject to the
terms of this Agreement.
(b) Upon an Event of Default hereunder, the Borrower hereby
also agrees to pay to Agent immediately upon demand by Agent and in immediate
available funds, as security for its reimbursement obligations in respect of the
Letters of Credit under Section 4.3(a) hereof and any Letter of Credit
Reimbursement Agreements and for any other amounts payable hereunder and under
the Revolving Credit Notes and the Term Loan Notes, an amount equal to the
aggregate amount available to be drawn under Letters of Credit then outstanding,
irrespective of whether the Letters of Credit have been drawn upon. Any such
payments shall be deposited in a separate account designated "Heico Letter of
Credit Account" or such other designation as Agent shall elect. All such amounts
deposited with Agent shall be and shall remain funds of the Borrower on deposit
with Agent and may be invested by Agent as Agent shall determine. Such amounts
may not be used by Agent to pay the drawings under the Letters of Credit;
however, such amounts may be used by Agent as reimbursement of Letter of Credit
drawings which Agent has paid. If any amounts in the Heico Letter of Credit
Account shall have been deposited upon the occurrence of an Event of Default,
and such Event of Default shall have been subsequently cured or waived and no
other Event of Default exists, such amounts shall be returned to the Borrower
upon Borrower's written request and the Borrower shall be relieved of its
obligations under this Section 4.3(b) until an Event of Default once again
occurs. During the existence of an Event of Default but after the expiration of
any Letter of Credit that was not drawn upon, the Borrower may direct the Agent
to use any cash collateral for any such expired Letter of Credit, if any, to
reduce the amount of the Obligations. Any amounts remaining in the Heico Letter
of Credit Account, after the Revolving Credit Termination Date and after the
expiration of all Letters of Credit and after all Obligations have been paid in
full, shall be repaid to the Borrower promptly after such expiration and such
payment in full.
(c) The obligations of the Borrower under this Section 4.3
will continue until all Letters of Credit have expired and all reimbursement
obligations with respect thereto have been paid in full by the Borrower and
until all other Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Agent upon
demand for all amounts paid under the Letters of Credit as set forth in Section
4.3(a) hereof; provided, however, if the Borrower for any reason fails to
reimburse Agent in full upon demand, whether by borrowing Advances to pay such
reimbursement obligations or otherwise, the Lenders shall reimburse Agent in
accordance with each Lender's Pro Rata Portions for amounts due and unpaid from
the Borrower as set forth in Section 4.4 hereof; provided, however, that no such
reimbursement made by the Lenders shall discharge the Borrower's obligations to
reimburse Agent.
(e) The Borrower shall indemnify and hold Agent and each
Lender, its officers, directors, representatives and employees harmless from
loss of any claim, demand or liability which may be asserted against Agent or
such indemnified party in connection with actions taken under the Letters of
Credit or in connection therewith, and shall pay Agent for reasonable fees of
attorneys (who may be employees of Agent) and legal costs paid or incurred by
Agent in connection with any matter related to the Letters of Credit, except
only for losses and liabilities incurred as a direct result of the gross
negligence of wilful misconduct of Agent or such indemnified party. If the
Borrower for any
35
reason fails to indemnify or pay Agent or such indemnified party as set forth
herein in full, the Lenders shall indemnify and pay Agent upon demand, in
accordance with each Lender's Pro Rata Portion of such amounts due and unpaid
from Borrower. The provisions of this Section 4.3(e) shall survive the
termination of this Agreement.
4.4 LENDERS' OBLIGATIONS. Each Lender agrees, unconditionally and
irrevocable to reimburse Agent (to the extent Agent is not otherwise reimbursed
by the Borrower in accordance with Section 4.3(a) hereof) on demand for such
Lender's Pro Rata Portion of each draw paid by Agent under any Letter of Credit.
All amounts payable by any Lender under this subsection shall include interest
thereon at the Federal Funds Rate, from the date of the applicable draw to the
date of reimbursement by such Lender. No Lender shall be liable for the
performance or nonperformance of the obligations of any other Lender under this
Section. The obligations of the Lenders under this Section shall continue after
the Revolving Credit Termination Date and shall survive termination of any Loan
Documents.
4.5 AGENT'S OBLIGATIONS.
(a) Agent makes no representation or warranty, and assumes
no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Agent assumes no responsibility for the financial
condition of the Borrower and its Subsidiaries or for the performance of any
obligation of the Borrower. Agent may use its discretion with respect to
exercising or refraining from exercising any rights, or taking or refraining
from taking any action which may be vested in it or which it may be entitled to
take or assert with respect to any Letter of Credit or any Application.
(b) Except as set forth in subsection (c) below, Agent shall
be under no liability to any Lender, with respect to anything the Agent may do
or refrain from doing in the exercise of its judgment, the sole liability and
responsibility of Agent being to handle each Lender's share on as favorable a
basis as Agent handles its own share and to promptly remit to each Lender its
share of any sums received by Agent under any Application. Agent shall have no
duties or responsibilities except those expressly set forth herein and those
duties and liabilities shall be subject to the limitations and qualifications
set forth herein.
(c) Neither Agent nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender waives its right to
institute legal action against Agent for wrongful payment of any Letter of
Credit due to Agent's gross negligence or willful misconduct. Agent shall incur
no liability to any Lender, the Borrower or any Affiliate of the Borrower or
Lender in acting upon any notice, document, order, consent, certificate, warrant
or other instrument reasonably believed by Agent to be genuine or authentic and
to be signed or sent by the proper party.
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SECTION 5. COLLATERAL, GUARANTIES AND SUBORDINATION.
Payment of all Obligations shall be secured, guaranteed, and
subordinated as provided in this Section 5 (all documents, instruments and
agreements referred to herein or to be delivered pursuant to this Section 5
being referred to collectively as the "Security Documents"). All Security
Documents shall be delivered on the Closing Date and as required pursuant to
this Agreement thereafter.)
37
5.1 LIEN AND SECURITY INTEREST IN ALL ASSETS OF THE BORROWER. Payment
of the Loans, any and all other obligations under the Loan Documents, and any
other obligations of Borrower to Lenders presently existing or hereafter arising
in connection with the Loan Documents (collectively, the "Obligations"), shall
be secured by a first priority perfected lien and security interest (subject
only to Permitted Prior Liens and such other Permitted Liens as receive mandated
priority purely and solely by operation of law) in all assets (other then real
property) of Borrower, now owned or hereafter acquired, including but not
limited to all personal property, furniture, fixtures, equipment, machinery,
motor vehicles, inventory, Parts Manufacturing Approvals (PMA's) issued by the
Federal Aviation Administration, accounts, documents, contract rights, leases,
chattel paper, instruments, trademarks, copyrights, licenses, royalties, other
intellectual property, and general intangibles now owned or hereafter acquired
or arising, and all proceeds thereof; together with an assignment of rents and
leases as to any real property leases held by Borrower (all of the foregoing,
collectively, the "Borrower's Collateral"). Notwithstanding anything to the
contrary set forth herein, (i) "Borrower's Collateral" shall not include
Borrower's interest in any leases of equipment in effect as of the date hereof,
or the equipment covered by such leases, if (but only to the extent that) an
encumbrance thereof would constitute an event of default under the terms of such
leases, and (ii) the security interests granted by Borrower and the Subsidiaries
with respect to financial assets (as such term is defined in the Florida UCC
effective as of October 1, 1998) are not perfected, and until the occurrence of
an Event of Default, Borrower and Subsidiaries shall not have any obligation to
perfect a security interest in such financial assets. Borrower shall execute and
deliver to Agent for the benefit of the Lenders such security agreements,
assignments of rents and leases, and other security documents as Agent shall
request, covering said Borrower's Collateral, all in form and substance
satisfactory to Agent (collectively, the "Borrower Security Agreements"). The
Borrower Security Agreements shall be sufficient, when notice thereof is
properly filed or recorded in the appropriate jurisdictions, to grant to Agent
for the benefit of the Lenders a first priority perfected lien and security
interest in the property described therein, to the extent perfection may be
achieved by recording, subject to no prior liens or encumbrances except in favor
of Agent for the benefit of the Lenders, Permitted Prior Liens, and such other
Permitted Liens as shall take mandated priority purely and solely by operation
of law. Notwithstanding the previous sentence, Borrower and its Consolidated
Subsidiaries shall be entitled from time to time to place inventory on
consignment or deliver items of inventory to their customers for demonstration
purposes, provided that the total aggregate fair market value of all such
inventory on consignment or demonstration by Borrower and all of its
Subsidiaries combined shall not at any time exceed U.S. $5,000,000.00, and only
in the event that an Event of Default has occurred hereunder, shall Borrower and
its Subsidiaries be required to take such steps as may be necessary effectively
to grant and perfect a security interest in such inventory on consignment or
demonstration. The Borrower Security Agreement shall constitute the legal,
valid, and binding agreement and obligations of the Borrower, enforceable
against the Borrower and the Borrower's Collateral in accordance with its terms,
except (i) as enforceability may be limited by applicable bankruptcy,
insolvency, or reorganization laws affecting the enforcement of creditors'
rights generally and (ii) as enforceability may be limited or qualified by
general principles of equity. Borrower agrees to execute or otherwise provide to
Agent for the benefit of the Lenders any and all modifications, financing
statements, and other agreements, consents, and documents required by Agent now
or in the future in connection therewith.
5.2 GUARANTIES. Payment of all of the Obligations presently existing or
hereafter arising
38
shall be guaranteed, jointly and severally by each of the Guarantors, which
guarantees shall be evidenced by the execution and delivery by Guarantors to the
Agent for the benefit of the Lenders of absolute, continuing and unconditional
guaranties in form and substance satisfactory to Agent (individually, a
"Guaranty" and collectively, the "Guaranties"). In connection with the
Guaranties set forth in this Agreement, Borrower represents and warrants that
each of the Guaranties constitutes the valid and binding obligation of the
respective Guarantor giving the same, enforceable against such Guarantor in
accordance with its terms, and that good and sufficient consideration for each
Guaranty has been received by the Guarantor due to the fact that each of the
Guarantors shall materially benefit from the effectuation of this Agreement and
the Loans and Letters of Credit hereunder, inasmuch as all of the Guarantors and
the Borrower are wholly interrelated and dependent upon each other, and each
Guarantor may receive proceeds from any Loan or Letter of Credit.
5.3 LIEN AND SECURITY INTEREST IN ALL ASSETS OF THE GUARANTORS. Payment
of all obligations of each Guarantor under its Guaranty, and all Obligations
hereunder shall be secured by a first priority perfected lien and security
interest (subject only to Permitted Prior Liens and such other Permitted Liens
as receive mandated priority purely and solely by operation of law) in all
assets (other than real property) of such Guarantor, now owned or hereafter
acquired, including but not limited to all personal property, furniture,
fixtures, equipment, machinery, motor vehicles, inventory, Parts Manufacturing
Approvals (PMA's) issued by the Federal Aviation Administration, accounts,
documents, contract rights, leases, chattel paper, instruments, trademarks,
copyrights, licenses, royalties, other intellectual property, and general
intangibles now owned or hereafter acquired or arising, and all proceeds
thereof; together with an assignment of rents and leases as to any real property
leases held by such Guarantor (collectively, the "Subsidiary's Collateral").
Notwithstanding anything to the contrary set forth herein : (i) "Subsidiary's
Collateral" shall not include any Subsidiary's interest in any leases of
equipment in effect as of the date hereof, or the equipment covered by such
leases, if (but only to the extent that) an encumbrance thereof would constitute
an event of default under the terms of such leases; and (ii) any property of
HEICO Aerospace Corp. which is encumbered by a security interest granted to the
trustee to secure repayment or credit enhancement of the HEICO Aerospace
Corporation Industrial Development Revenue Bonds - Series 1996 - Broward County,
Florida (October 19, 1996), any property of HEICO Aerospace Corporation which is
encumbered by a security interest granted to the trustee to secure repayment or
credit enhancement of the HEICO Aerospace Corporation Industrial Development
Refunding Bonds - Series 1988 - Broward County, Florida (March 28, 1988), any
property of Trilectron Industries, Inc. which is encumbered by a security
interest granted to the trustee to secure repayment or credit enhancement of the
Trilectron Industries, Inc. Industrial Development Revenue Bonds - Series 1997A
- Manatee County, Florida (March 27, 1997), and/or any property of Trilectron
Industries, Inc. which is encumbered by a security interest granted to the
trustee to secure repayment or credit enhancement of the Trilectron Industries,
Inc. Industrial Development Revenue Bonds - Series 1997C - Manatee County,
Florida (November 3, 1997) (all of the documents executed with the foregoing
industrial development bonds, collectively, the "Bond Documents"), shall not be
deemed "Subsidiary's Collateral" if (but only to the extent that) an encumbrance
on such property would constitute an event of default under the terms of the
Bond Documents.
Borrower shall cause each Guarantor to execute and deliver
to Agent for the benefit of the Lenders such security agreements, assignments of
rents and leases, and other security
39
documents as Agent shall request, covering said Subsidiary's Collateral, all in
form and substance satisfactory to Agent (collectively, "Subsidiary Security
Agreements"). The Subsidiary Security Agreements shall be sufficient, when
notice thereof is properly filed or recorded in the appropriate jurisdictions,
to grant to Agent for the benefit of the Lenders a first perfected lien and
security interest in the property described therein, subject to no prior liens
or encumbrances except in favor of Agent for the benefit of the Lenders,
Permitted Prior Liens, and such other Permitted Liens as shall take mandated
priority purely and solely by operation of law. Each Subsidiary shall be
permitted to place inventory on consignment or deliver inventory to its
customers on demonstration to the extent permitted and subject to the
limitations and requirements set forth in Section 5.1. Each of the Subsidiary
Security Agreements shall constitute the legal, valid, and binding agreement and
obligations of the respective Subsidiary party thereto, enforceable against such
Subsidiary and the Subsidiary's Collateral in accordance with its terms, except
(i) as enforceability may be limited by applicable bankruptcy, insolvency, or
reorganization laws affecting the enforcement of creditors' rights generally and
(ii) as enforceability may be limited or qualified by general principles of
equity. Borrower shall cause each Guarantor to execute or otherwise provide to
Agent for the benefit of the Lenders any and all modifications, financing
statements, and other agreements, consents, and documents required by Agent now
or in the future in connection therewith.
5.4 SUBORDINATION; PERMITTED PRIOR LIENS AND PERMITTED LIENS. The liens
and security interests granted to Agent for the benefit of the Lenders pursuant
to the Borrower Security Agreements and the Subsidiary Security Agreements shall
be subordinate only to (a) those liens listed in Schedule 5.4 attached to this
Agreement, to which Permitted Prior Liens the Agent hereby consents in writing,
(b) any liens in the nature of purchase money security interests securing
Purchase Money Indebtedness in equipment acquired in the ordinary course of
business of the Borrower and its Subsidiaries that are Guarantors, (c) Capital
Leases of equipment, (d) Indebtedness assumed in a Permitted Acquisition to the
extent and only to the extent permitted pursuant to Section 2.3, (e) such other
prior long-term debt as may be assumed with the specific prior written consent
of the Required Lenders ((a) through (e) collectively, the "Permitted Prior
Liens"), and (f) such other Permitted Liens as may have mandated priority
arising purely and solely by operation of law. All of the Borrower's Collateral
and all of the Subsidiary's Collateral of each Guarantor shall be free and clear
of all liens, claims, or Encumbrances of any kind, except only for (i) the
Permitted Prior Liens and (ii) any other liens permitted pursuant to Section 9.2
("Permitted Liens"), which Permitted Liens shall be subordinate in priority to
all liens and security interests granted to Agent for the benefit of the Lenders
pursuant to the Borrower Security Agreements and the Subsidiary Security
Agreements except as otherwise mandated purely and solely by operation of law.
5.5 CROSS-COLLATERAL; CROSS DEFAULT. The Obligations and any other
obligations under the Loan Documents or the Guaranties shall be and constitute
secured "Liabilities" or "Obligations" as defined in, and secured pursuant to,
any other security agreement now existing or hereafter entered into between
Borrower and the Agent for the benefit of the Lenders.
5.6 SPECIAL PROVISIONS WITH RESPECT TO LUFTHANSA TECHNIK AG, A MINORITY
SHAREHOLDER OF HEICO AEROSPACE HOLDINGS CORP. The Subsidiary Security Agreement
given by Heico Aerospace Holdings Corp. shall provide that the net proceeds
realized by Agent upon a sale or other disposition of the Collateral (as defined
therein), or any part thereof, after deduction of the
40
expenses of retaking, holding, preparing for sale, selling or the like, and
reasonable attorneys' fees and other expenses incurred by Agent shall be applied
to payment of (or held as a reserve against) the Liabilities (as defined
therein), whether or not then due, and in such order of application as Agent may
from time to time elect, notwithstanding the existence of any other security
interests in the Collateral, subject to the provisions of Article 18 of that
certain Shareholders Agreement dated as of October 30, 1997 by and among HEICO
Aerospace Holdings Corp., Borrower and Lufthansa Technik AG, as in effect as of
October 30, 1997, if applicable and to the extent legally enforceable, and shall
further provide that Agent shall account to Debtor for any surplus realized upon
such sale or other disposition, after satisfaction of all creditors of Debtor,
and Debtor shall remain liable for any deficiency.
5.7 PLEDGE OF STOCK OF FOREIGN SUBSIDIARIES. The Borrower and each
Subsidiary of Borrower which owns or hereafter acquires any Subsidiary organized
under the laws of any jurisdiction outside of the 50 states of the United States
of America ("Foreign Subsidiary") shall pledge and grant a first priority
security interest in all stock of such Foreign Subsidiary owned or acquired by
Borrower or any Subsidiary (provided that in the event that such pledge and
security interest will result in an inclusion in income in the nature of a
deemed dividend to the Borrower pursuant to Sections 951 and 956 of the United
States Internal Revenue Code of 1986, as amended, then the Borrower or such
Subsidiary acquiring the Foreign Subsidiary shall pledge and grant a first
priority security interest in 65% of the stock of such Foreign Subsidiary owned
or acquired by Borrower or such Subsidiary) to Agent for the Benefit of Lenders
as collateral security for, (i) in the case of a Foreign Subsidiary directly
owned by the Borrower, the Obligations of the Borrower, or (ii) in the case of a
Foreign Subsidiary of a Subsidiary, the obligations of such Subsidiary under its
Guaranty. Such pledge of stock shall be pursuant to a stock pledge and security
agreement in form and substance satisfactory to Agent and the Required Lenders
(a "Foreign Subsidiary Stock Pledge Agreement"), and Borrower and any such
Subsidiary owning or acquiring a Foreign Subsidiary shall execute and deliver
all such other documents, and take all such further actions, including without
limitation delivering physical possession to Agent for the benefit of Lenders of
all stock certificates representing stock of such Foreign Subsidiary owned by
Borrower or any Subsidiary, duly endorsed in blank, so as effectively to grant
and perfect a first priority lien and security interest in such stock. The
provisions of this Section 5.7 shall apply to Borrower's Subsidiary HEICO
International corporation, a U.S. Virgin Islands corporation ("HIC"), and
Borrower shall pledge and grant to Agent for the benefit of the Lenders pursuant
to the Foreign Subsidiary Stock Pledge Agreement a first priority security
interest in 65% of the stock of HIC owned by Borrower. Borrower hereby further
covenants and agrees that Borrower will not at any time, and will not permit any
Subsidiary of Borrower to, convey, transfer or assign any cash, cash equivalents
or other property or assets of any kind to HIC (other than commissions earned in
the ordinary course of business of HIC; provided that Pledgor will cause HIC to
dividend or distribute to Borrower all such commissions within twenty-four (24)
hours after the time received by HIC).
41
SECTION 6. REPRESENTATIONS AND WARRANTIES.
To induce Agent and the Lenders to enter into this Agreement and to
make the Advances hereunder, Borrower represents and warrants to Agent and the
Lenders (which representations and warranties shall survive the delivery of the
documents mentioned herein and the making of the Loan or Loans contemplated
hereby) as follows:
6.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW; NAME HISTORY. Each of
Borrower and its Subsidiaries is a corporation duly incorporated and organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Borrower and its Subsidiaries has all requisite power
(corporate and otherwise) to own and operate its properties and to carry on its
business as now being conducted, is duly qualified as a foreign corporation to
do business in every jurisdiction in which the nature of its business or the
ownership of its properties makes such qualification necessary and is in good
standing in such jurisdictions, and has all licenses and permits necessary to
carry on and conduct its business in all states and localities wherein it now
operates. Each of Borrower and its Subsidiaries is, and for so long as this
Agreement remains in effect will remain, in compliance with all other
requirements of law, rule, or regulation applicable to it or to its business,
including without limitation any and all city, county, state, or federal legal
or regulatory requirements, requirements of any governmental protective
agencies, Federal Aviation Administration, Office of Safety and Health
Administration, Federal and State land sales statutes, regulations governing
Developments of Regional Impact (DRI's), any and all equal opportunity laws or
regulations, and any and all court or regulatory orders, or other legal,
judicial, or regulatory requirements applicable to it or its business, except in
each case where the lack of such circumstance would not have a Material Adverse
Effect. Borrower does not have any direct or indirect Subsidiaries, except for
those described on Schedule 6.1 hereto. Except as set forth in Schedule 6.1
hereto, neither Borrower nor any of its Subsidiaries has merged, changed its
name, or done business under a fictitious name during the past five years.
6.2 CORPORATE POWER AND AUTHORIZATION TO EXECUTE LOAN DOCUMENTS; NO
CONFLICT; NO CONSENT. Each of Borrower and the Guarantors has the corporate
power and authority to execute and deliver the Loan Documents to be executed by
it and to perform its obligations thereunder and has taken all corporate action
necessary to authorize the execution, delivery, and performance of such Loan
Documents and to authorize the transactions contemplated thereby. The execution,
delivery, and performance by each of Borrower and each Guarantor of the Loan
Documents to be executed by it does not: (a) contravene, conflict with, result
in the breach of, or constitute a violation of or default under (i) the
certificate of incorporation or bylaws of Borrower or such Guarantor, (ii) any
applicable law, rule, regulation, judgment, order, writ, injunction, or decree
of any court or governmental authority, except where the lack of such
circumstance would not have a Material Adverse Effect, or (iii) any agreement or
instrument to which Borrower or any Guarantor is a party or by which Borrower or
any Guarantor or any of its property may be bound or affected, except where the
lack of such circumstance would not have a Material Adverse Effect; or (b)
result in the creation of any lien, charge, or encumbrance upon any property or
assets of Borrower or any Guarantor pursuant to any of the foregoing. No
consent, license, or authorization of, or filing with, or notice to, any Person
or
42
entity (including, without limitation, any governmental authority), is
necessary or required in connection with the execution, delivery, performance,
validity, or enforceability of the Loan Documents and the transactions as
contemplated thereunder, except for consents, licenses, authorizations, filings,
and notices which have already been obtained or performed and of which Agent has
been provided written notice, which are referred to or disclosed in the Loan
Documents, or except which the failure to have would not have a Material Adverse
Effect. Any consents, licenses, authorizations, filings, or notices which have
been obtained remain in full force and effect.
6.3 ENFORCEABLE OBLIGATIONS. The Loan Documents constitute legal,
valid, and binding agreements and obligations of Borrower and each Guarantor,
enforceable against Borrower and each Guarantor in accordance with their
respective terms.
6.4 FINANCIAL CONDITION.
(a) The consolidated financial statements (including the
notes thereto) as of April 30, 1998, of Borrower and its Subsidiaries, copies of
which have been furnished to Agent and Lenders, are correct, complete in all
material respects, and fairly present the financial condition of Borrower and
its Consolidated Subsidiaries as of the date of the financial statements and
fairly present the results of the operations of Borrower and its Consolidated
Subsidiaries, taken as a whole, for the period covered thereby, subject to
non-material changes resulting from normal, recurring year-end adjustments.
(b) The financial statements described above have been
prepared in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis maintained throughout the period involved. There has been no
material adverse change in the business, operations, properties, or financial
condition of Borrower and its Consolidated Subsidiaries, taken as a whole, since
the date of such financial statements.
(c) Borrower and its Consolidated Subsidiaries, when taken
as a whole, do not have any material direct or contingent liabilities,
liabilities for taxes, long-term leases, or unusual forward or long-term
commitments as of the date of this Agreement which are not disclosed by,
provided for, or reserved against in the foregoing financial statements or
referred to in notes thereto, and at the date of this Agreement there are no
material unrealized or anticipated losses of Borrower and its Subsidiaries, when
taken as a whole.
6.5 NO LITIGATION. Except as set forth in Schedule 6.5 hereto, there is
no suit or proceeding at law or in equity or other proceeding or investigation
(including proceedings by or before any court, arbitrator, governmental or
administrative commission, board, bureau, or other administrative agency)
pending, or to the knowledge of Borrower threatened, against Borrower, against
any of its Subsidiaries, or against any of its or their properties, existence,
or revenues which, individually or in the aggregate, if adversely determined, is
reasonably likely to have a Material Adverse Effect, or, regardless of outcome,
which would be required to be disclosed in notes to any consolidated balance
sheets as of the date hereof of Borrower and its Consolidated Subsidiaries
prepared in reasonable detail in accordance with Generally Accepted Accounting
Principles.
43
6.6 INVESTMENT COMPANY ACT; REGULATION.
(a) Neither Borrower nor any of its Subsidiaries is an
"investment company," an "affiliated person" of, or "promoter" or "principal
underwriter" for, any "investment company," or a company "controlled" by an
"investment company," and Borrower is not an "investment advisor" or an
"affiliated person" of an "investment advisor" (as each of the quoted terms is
defined or used in the Investment Company Act of 1940, as amended). Neither the
making of the Advances or Loans, nor the establishment of the credits hereunder,
nor the application of the proceeds or repayment thereof by Borrower, nor the
consummation of the other transactions contemplated hereby, will violate the
provisions of the foregoing Act or any rule, regulation, or order promulgated
thereunder.
(b) Neither Borrower nor any of its Subsidiaries is subject
to regulation under any state or local public utilities code or federal, state,
or local statute or regulation limiting the ability of Borrower or any
Subsidiary to incur indebtedness for money borrowed.
6.7 DISCLOSURE AND NO UNTRUE STATEMENTS. No representation or warranty
or statement made by Borrower or by any Guarantor in the Loan Documents or in
any schedule or exhibit thereto, or in any certificate, report, statement, or
other document or information furnished to the Agent in connection with or prior
to the Loan Documents, or which will be made or furnished by Borrower or any
Guarantor from time to time in connection with the Loan Documents, contains or
will contain any misrepresentation or untrue statement of any material fact or
omits to state a material fact or any fact necessary to make the statements
contained herein or therein not misleading. There is no fact known to Borrower
which would have a Material Adverse Effect, which has not been set forth or
referred to in the Loan Documents or otherwise disclosed in writing to Agent.
6.8 TITLE TO ASSETS; LEASES IN GOOD STANDING. Borrower has good and
marketable title in fee to such of its fixed assets as are real property and
good and marketable title to its other properties and assets, including the
properties and assets reflected in the financial statements and notes thereto
described in Subsection 6.4 hereof, except where the failure to have such title
would not have a Material Adverse Effect, and except for such assets as have
been disposed of in the ordinary course of business. All such properties and
assets are free and clear of all liens, mortgages, pledges, security interests,
charges, title retention agreements, or other Encumbrances of any kind, except
those permitted under Subsection 9.2, if any. Each of Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession under all leases under
which it is now operating, the termination of which could be reasonably expected
to have a Material Adverse Effect, and all such leases are valid, subsisting,
and in full force and effect and neither Borrower nor any Subsidiary is in
violation of any material term of any such lease. Borrower's Subsidiary HEICO
Aerospace Holdings Corp. has no assets, and at all times hereunder will have no
assets, other than capital stock of its direct subsidiaries, except as permitted
pursuant to Section 9.10.
6.9 PAYMENT OF TAXES. Each of Borrower and, to the extent required, its
Subsidiaries, has filed or caused to be filed all federal, state, and local tax
returns which are required to be filed by it and has paid or caused to be paid
all taxes as shown on said returns or on any assessment received by it, to the
extent that such taxes have become due, other than taxes being contested in good
faith by
44
appropriate proceedings diligently conducted and for which adequate reserves
have been established in accordance with Generally Accepted Accounting
Principles, and no controversy in respect of additional taxes of Borrower which
will have or is likely to have a Material Adverse Effect, is pending, or, to the
knowledge of Borrower, threatened.
6.10 NO DEFAULT UNDER AGREEMENT OR INSTRUMENTS. Each of Borrower and
its Subsidiaries is in full compliance with and is not in default in the
performance, observance, or fulfillment of any obligations, covenants, or
conditions contained in any agreement or instrument to which it is a party,
except where such failure would not have a Material Adverse Effect.
6.11 PATENTS, TRADEMARKS, LICENSES, ETC. Each of Borrower and each of
its Subsidiaries owns, possesses, or has the right to use, and holds free from
burdensome restrictions or known conflicts with the rights of others, all
patents, patent rights, licenses, Parts Manufacturing Approvals (PMA's) issued
by the Federal Aviation Administration, trademarks and service marks, trademark
and service xxxx rights, trade names, trade name rights, and copyrights, and all
rights with respect to the foregoing, necessary to conduct its business as now
conducted, and is in full compliance with the terms and conditions, if any, of
all such patents, patent rights, licenses, trademarks and service marks,
trademark and service xxxx rights, trade names, trade name rights, or copyrights
and the terms and conditions of any agreements relating thereto, except where
such failure would not have a Material Adverse Effect.
6.12 GOVERNMENT CONTRACT. Neither Borrower nor any Subsidiary of
Borrower is subject to the renegotiation of any government contract in any
material amount.
6.13 ERISA REQUIREMENT. Except as previously disclosed to Agent in
writing, neither Borrower nor any Subsidiary has in force any pension plan
subject to Title IV of ERISA. Neither Borrower nor any Subsidiary has ever
terminated a pension plan subject to Title IV of ERISA. In addition, neither
Borrower nor any predecessor of Borrower, nor any Subsidiary or any predecessor
of such Subsidiary, is now or was formerly during the five year period
immediately preceding the effective date of this Agreement a participating
employer in any multi-employer plan within the meaning of 001(1)(a)(3) of ERISA.
Each employee benefit plan maintained by Borrower or any Subsidiary which is
subject to the requirements of ERISA substantially complies with all of the
requirements of ERISA and those plans which are subject to being "qualified"
under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended from time to time, have since their adoption been "qualified" and have
received favorable determination letters from the Internal Revenue Service so
holding. To the best knowledge of Borrower, there is no matter which would
adversely affect the qualified tax exempt status of any such trust or plan, and
except as previously disclosed to Agent, there are no deficiencies for any such
plan or trust. To the best knowledge of Borrower, no employee benefit plan
sponsored by Borrower or any Subsidiary has engaged in a non-exempt "prohibited
transaction" as defined in ERISA.
6.14 SOLVENCY. Borrower is, and on and after the consummation of the
transactions contemplated herein will be, Solvent. Each Subsidiary of Borrower
is, and on and after the consummation of the transactions contemplated herein
will be, Solvent.
45
6.15 LOCATION OF OFFICES. Schedule 6.15 contains a true and correct
statement with respect to the Borrower and each Subsidiary of its chief
executive office and principal place of business. The chief executive office,
the principal place of business, and the office where all books and records of
Borrower and each Subsidiary of Borrower are kept is at the location described
with respect to the Borrower or such Subsidiary on Schedule 6.15.
6.16 SUBSIDIARIES. The matters described above at Subsections 6.1, 6.2,
6.3, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, and 6.15 with
respect to Borrower, its business, and its assets, are true with respect to each
Subsidiary, its business, and its assets, to the extent applicable.
SECTION 7. CONDITIONS OF LENDING.
The obligation of Agent and the Lenders to establish the credit and to
permit any Borrowings hereunder is conditioned upon the performance of all
agreements by Borrower contained herein that are required to be performed at or
prior to the time of such Borrowings, as well as satisfaction or waiver by the
Required Lenders of the following conditions precedent:
7.1 CONTINUING ACCURACY OF REPRESENTATIONS AND WARRANTIES. At the time
of each Borrowing hereunder, the representations and warranties set forth in
Section 6 hereof, as supplemented by written disclosures given by Borrower to
Agent and the Lenders (including subsequent financial statements provided to
Agent and the Lenders) of changes affecting such representations and warranties
(but which changes would not create an Event of Default under this Agreement
except as may have been waived by the Required Lenders in writing or for which
consent has been given by the Required Lenders in writing in their sole
discretion) shall be true, correct, and complete in all material respects on and
as of the date of the Borrowing with the same effect as though the
representations and warranties had been made on and as of the date of the
Borrowing, except to the extent that such representations and warranties may
expressly relate to an earlier date, in which case they shall continue to be
true as of such date.
7.2 NO DEFAULT. At the time of each Borrowing hereunder, all payments
of fees due to the Agent pursuant to that certain fee letter between Borrower
and Agent, dated July 7, 1998, shall have been paid to Agent in full; all
payments of principal, interest, fees, and any other amounts due to Agent or
Lenders under this Agreement or under any of the Loan Documents shall have been
paid in full when due (without application of any grace period otherwise
applicable thereto); and no Event of Default, nor any event which upon notice or
lapse of time or both would constitute an Event of Default, shall have occurred
and be continuing at the time of such Borrowing.
7.3 BORROWING CERTIFICATE. At the time of each Borrowing hereunder,
Borrower will deliver to Agent a certificate substantially in the form of
Exhibit B attached to this Agreement ("Borrowing Certificate"), executed by
Borrower's chief executive officer or chief financial officer certifying the
matters contained in Subsections 7.1 and 7.2 hereof, and including without
limitation a specific certification of compliance with all covenants including
all financial covenants of the Borrower, as of such date (or specifying all
exceptions thereto and what actions Borrower is taking or proposes to take with
respect thereto), which Borrowing Certificate shall be in form and substance
satisfactory to Agent.
46
7.4 OPINION OF BORROWER'S COUNSEL. On or prior to the date of this
Agreement, Agent and the Lenders shall have received the favorable opinion of
counsel for Borrower, in form and substance satisfactory to Agent and the
Lenders.
7.5 APPROVAL OF AGENT'S COUNSEL. On or prior to the date of this
Agreement, all legal matters in connection with the Loan Documents and the
transactions herein and therein contemplated and all documents and proceedings
shall be satisfactory in form and substance to Holland & Knight LLP, counsel for
Agent.
7.6 LOAN DOCUMENTS. On or prior to the date of this Agreement, Agent
shall have received, on behalf of the Lenders, duly executed, this Agreement and
the other Loan Documents, all in form and substance satisfactory to Agent,
counsel for Agent, and the Lenders.
7.7 INSURANCE. At the Closing under this Agreement, Agent shall have
received, on behalf of the Lenders, evidence of insurance coverage of Borrower
and all of its Subsidiaries, and their business and properties, satisfactory in
form, substance and amount, to the Agent, in its reasonable discretion,
including such insurance coverage for liability, casualty, property damage,
hazards, workmen's compensation and any other special coverages as the Agent may
reasonably require, subject to a standard loss-payee's and additional insured's
endorsement in favor of Agent for the benefit of the Lenders.
7.8 SUPPORTING DOCUMENTS. On or prior to the date of this Agreement,
Agent shall have received, on behalf of the Lenders, all other documents and
instruments required hereunder or otherwise reasonably required by Agent or any
Lender to be executed and delivered or otherwise provided in form and substance
satisfactory to Agent, counsel for Agent, and the Required Lenders, including
without limitation certified copies of organizational documents, including
bylaws, authorizing resolutions of the Board of Directors, incumbency
certificates, and good standing certificates for the Borrower and each
Guarantor; certified copies of all consents, approvals, authorizations,
registrations, or filings required to be made or obtained by the Borrower or any
Guarantor in connection with this Agreement or the credit extended hereunder;
executed, recorded and filed Uniform Commercial Code financing statements
perfecting first lien security interests in all of the Borrower's Collateral and
all of the Subsidiary's Collateral of each Subsidiary; and any and all other
agreements, documents or instruments reasonably required by Agent to obtain the
Guaranties and the security interests to be granted pursuant to Section 5 of
this Agreement.
SECTION 8. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that from the date of this Agreement
until payment in full of all present or future Indebtedness hereunder and
termination of all present or future credit facilities established hereunder,
unless the Required Lenders shall otherwise consent in writing, Borrower will
comply with the following provisions:
8.1 FINANCIAL REORTS AND OTHER INFORMATION. Borrower will deliver or
cause to be
47
delivered to Agent and the Lenders the following:
(a) As soon as practicable and in any event within
forty-five (45) days after the end of each of the first, second and third fiscal
quarters, then current financial statements of the Borrower and its Consolidated
Subsidiaries for such fiscal quarter, including without limitation a balance
sheet as of the last day of such quarter, a statement of income for such quarter
and cumulative year-to-date, and related statement of cash flows for such fiscal
quarter for Borrower and its Consolidated Subsidiaries, all in reasonable detail
and satisfactory in scope to Required Lenders and certified by the chief
financial officer of Borrower as to the fairness, completeness and accuracy in
all material respects of such financial statements and that the same have been
prepared in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis, subject to changes resulting from normal, recurring year-end
adjustments;
(b) As soon as practicable and in any event within ninety
(90) days after the end of each fiscal year, the then current audited financial
statements of the Borrower and its Consolidated Subsidiaries for such fiscal
year, including the balance sheet as of the end of such fiscal year, and related
statements of income, retained earnings, and cash flows for such fiscal year for
Borrower and its Consolidated Subsidiaries, setting forth in each case in
comparative form figures for the corresponding period in the preceding fiscal
year, all in reasonable detail and satisfactory in scope to Required Lenders
and, with respect to consolidated financial statements for Borrower, certified
by and containing an unqualified opinion of Deloitte & Touche LLP, or other
independent certified public accountants of recognized national standing, which
accountants shall be selected by Borrower and satisfactory to the Agent, and
certified by the chief financial officer of Borrower as to the fairness,
completeness and accuracy in all material respects of such financial statements
and that the same have been prepared in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis;
(c) Together with delivery of the items required in clause
(b), a detailed report of the Borrower's projections of its revenues, expenses,
results of operations, cash flows and financial position for the next fiscal
year, broken down by month, in such degree of specificity as may be reasonably
requested by Agent, and including without limitation projected income
statements, balance sheets and cash flow statements for each quarter of the next
fiscal year for the Borrower and its Consolidated Subsidiaries;
(d) Within ten (10) days after receipt thereof, copies of
any management audit letters provided to Borrower by the independent certified
public accountant who prepared Borrower's financial statements;
(e) As soon as practicable and in any event within
forty-five (45) days after the end of each fiscal quarter, a copy of any
quarterly 10-Q report or any other report filed by Borrower with the United
States Securities and Exchange Commission during or for such quarter, if any;
(f) As soon as practicable and in any event within ninety
(90) days after the end of each fiscal year, a copy of the annual 10-K report
filed by Borrower with the United States
48
Securities and Exchange Commission if any;
(g) Together with each delivery of the items required by
clauses (a) and (b) above, a certificate in the form attached hereto as Exhibit
C (the "Compliance Certificate") executed by the chief financial officer of
Borrower, (i) containing computations in reasonable detail indicating compliance
with Subsections 8.15(a), (b), (c), (d), (e), (f), and (g) hereof, and (ii)
certifying the matters contained in Subsections 7.1 and 7.2 hereof as of such
date (or specifying all exceptions thereto and what actions Borrower is taking
or proposes to take with respect thereto);
(h) With reasonable promptness, such additional financial or
other data relating to Borrower or any of its Subsidiaries as Agent or any
Lender may from time to time reasonably request.
Agent and the Lenders are hereby authorized to deliver upon request a
copy of any financial statements or any other information relating to the
business, properties, or financial condition of Borrower or any of its
Subsidiaries which may be furnished to them or come to their attention pursuant
to the Loan Documents or otherwise, to any regulatory body or agency having
jurisdiction over Agent or the Lenders or to any Person which shall, or shall
have the right or obligation to, succeed to all or any part of Agent's or the
Lenders' interest in the Loan Documents, subject to the provisions of Subsection
13.18 hereof.
8.2 PAYMENT OF INDEBTEDNESS TO AGENT; PERFORMANCE OF OTHER COVENANTS;
PAYMENT OF OTHER OBLIGATIONS. (a) Borrower will make full and timely payment of
the principal of and interest on the Indebtedness owed ATIONS hereunder, subject
to the grace periods set forth in Subsection 10.1, if any; (b) Borrower will
duly comply with all the terms and covenants contained in the Loan Documents;
and (c) Borrower will make full and timely payment of all other Indebtedness of
Borrower to Agent, whether now existing or hereafter arising, subject to any
applicable grace periods.
8.3 CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE AND RIGHTS. Borrower
will do or cause to be done all things necessary to preserve and to keep in full
force and effect its corporate existence and rights and privileges as a
corporation and its franchises, licenses, trade names, patents, trademarks, and
permits which are necessary for the continuance of its business, and continue to
engage principally in the business currently operated by Borrower and its
Subsidiaries.
8.4 MAINTENANCE OF PROPERTY. Borrower will maintain its property in
good condition and repair in all material respects and, from time to time, make
all necessary and proper repairs, renewals, replacements, additions, and
improvements thereto, so that the business carried on may be properly and
advantageously conducted at all times in accordance with prudent business
management; provided, however, that nothing contained herein shall prevent
Borrower from selling or abandoning items of property in the ordinary course of
business or, with concurrent written notice to Agent, from terminating, in the
discretion of the officers or directors of Borrower, any joint venture or any
non-material operation.
8.5 RIGHT OF INSPECTION; DISCUSSIONS. Borrower will permit any Person
designated by Agent or the Required Lenders to visit and inspect any of the
properties, corporate books, records,
49
papers, and financial reports of Borrower, including the making of any copies
thereof and abstracts therefrom, and to discuss its affairs, finances, and
accounts with its principal officers, all at such reasonable times during normal
business hours and with prior notice and as often as Agent or the Required
Lenders may reasonably request. Borrower will also permit Agent or the Required
Lenders, or their designated representatives, to audit or appraise, at Agent's
or such Required Lenders' expense, any of its assets or financial and business
records, provided that upon the occurrence and continuance of an Event of
Default, such audit or appraisal shall be at Borrower's expense. Any designated
representative of Agent or Required Lenders shall agree to be bound by the
provisions of Subsection 13.18 hereof.
8.6 NOTICES. Borrower will reasonably promptly (and in no case longer
than one Business Day after Borrower has knowledge thereof) give notice in
writing to Agent of:
(a) The occurrence of any Event of Default (or event which
would constitute an Event of Default but for the requirement that notice be
given or time elapse or both) hereunder in which case such notice shall specify
the nature thereof, the period of existence thereof, and the action that
Borrower proposes to take with respect thereto;
(b) the occurrence of any casualty to any facility of
Borrower or any of its Subsidiaries or any other force majeure (including,
without limitation, any strike or other labor disturbance) affecting the
operation or value of any such facility, and whether or not such casualty or
force majeure is covered by insurance, which casualty, facility, or force
majeure could reasonably be expected to give rise to a Material Adverse Effect;
(c) the commencement or any material change in the nature or
status of any litigation, dispute, or proceeding, or the instituting of any
attachment, levy, execution, or other process by or against any assets of
Borrower or any of its Subsidiaries, which could reasonably be expected to have
a Material Adverse Effect;
(d) the occurrence of a change in, modification to,
cancellation or early termination of, or default in (or event which would
constitute a default but for the requirement that notice be given or time elapse
or both) any obligation, contract, or agreement of Borrower or any of its
Subsidiaries with any other Person, which could reasonably be expected to give
rise to a Material Adverse Effect;
(e) any proposed Acquisition by Borrower or any Subsidiary,
which notice shall be given at least fifteen (15) days before the proposed
closing of any such Acquisition with a total acquisition price of less than U.S.
$25,000,000.00 or at least thirty (30) days before the proposed closing of any
such Acquisition with a total acquisition price of equal to or more than U.S.
$25,000,000.00, or with an acquisition price which when added to the total
acquisition prices of all other Acquisitions (excluding the XxXxxxx Acquisition
and the PTM International Acquisition) during any four consecutive fiscal
quarters of the Borrower in which the closing of such transaction will occur
will amount to an aggregate of U.S. $25,000,000.00 or more;
(f) any proposed incorporation or formation of any proposed
or potential
50
Subsidiary, which notice shall be given at least five (5) days (or such lesser
period as may be consented to in writing by Agent) before such incorporation or
formation;
(g) any transaction listed in Section 9.4, which notice
shall be given at least fifteen (15) days before such transaction is
consummated; and
(h) any assessment in an amount in excess of U.S.
$100,000.00 by any taxing authority for unpaid taxes.
In each case above, Borrower shall provide to Agent such other information in
respect thereof as the Agent may reasonably request.
8.7 PAYMENT OF TAXES; LIENS. Borrower will pay or cause to be paid when
due, subject to any permitted extensions, all taxes, assessments, and other
governmental charges which may lawfully be levied or assessed (a) upon the
income or profits of Borrower; (b) upon any property, real, personal or mixed,
belonging to Borrower, or upon any part thereof; or (c) by reason of employee
benefit plans sponsored by Borrower, and will also pay or cause to be paid when
due, subject to any permitted extensions, any lawful claims for labor, material,
or supplies which, if unpaid, might become a lien or charge against any property
of Borrower; provided, however, Borrower shall not be required to pay any such
tax, assessment, charge, levy, or claim that is past due so long as the validity
thereof shall be actively contested in good faith by appropriate proceedings and
Borrower shall have set aside on its books adequate reserves (determined in
accordance with Generally Accepted Accounting Principles) with respect to any
such tax, assessment, charge, levy, or claim so contested; but provided further
that any such tax, assessment, charge, levy, or claim shall be paid forthwith
upon the commencement of proceedings to foreclose any lien securing the same.
8.8 INSURANCE OF PROPERTIES. Borrower will keep its business and
properties insured at all times by insurance companies selected by it and
acceptable to Agent against the risks for which provision for such insurance is
usually made by other Persons engaged in a similar business similarly situated
(including without limitation insurance for fire and other hazards, insurance
against vandalism and theft, liability on account of damage to persons or
property, business interruption, products liability, and insurance under all
applicable xxxxxxx'x compensation laws) and to the same extent thereto and carry
such other types and amounts of insurance as are usually carried by Persons
engaged in the same or a similar business similarly situated, subject to a
standard loss-payee's and additional insured's endorsement in favor of Agent for
the benefit of the Lenders (subject to any requirements in the Bond Documents
with respect to the collateral covered by the Bond Documents, to the extent
applicable), and upon request deliver to Agent a certificate from the insurer
setting forth the nature of the risks covered by such insurance, the amount
carried with respect to each risk, and the name of the insurer.
8.9 TRUE BOOKS. Borrower will keep proper and true books of record and
account, satisfactory to Agent, in which entries that are full, true, and
correct in all material respects will be made of all of its dealings and
transactions customarily recorded in the books of businesses of types
substantially similar to that of Borrower, and establish on its books such
reserves as may be required by Generally Accepted Accounting Principles with
respect to all taxes, assessments, charges, levies,
51
and claims referred to in Subsection 8.7 hereof, and with respect to its
business in general, and will, to the extent required by Generally Accepted
Accounting Principles, include such reserves in any interim as well as year-end
financial statements.
8.10 OBSERVANCE OF LAWS. Borrower will conform to and duly observe in
all material respects, all laws, regulations, and other valid requirements of
any governmental authority with respect to the conduct of its business,
including without limitation all laws, rules and regulations referenced in
Subsection 6.1 above.
8.11 FURTHER ASSURANCES. At its cost and expense, upon request of
Agent, Borrower will duly execute and deliver or cause to be duly executed and
delivered to Agent such further instruments or documents and do and cause to be
done such further acts as may be reasonably necessary or proper in the opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement.
8.12 ERISA BENEFIT PLANS. Borrower will substantially comply with all
requirements of ERISA applicable to it. Borrower will furnish to Agent as soon
as possible and in any event within 10 days after Borrower or a duly appointed
administrator of a plan (as defined in ERISA) knows or has reason to know that
any reportable event, funding deficiency, or prohibited transaction (as defined
in ERISA) with respect to any plan has occurred, a statement of the chief
financial officer of Borrower describing in reasonable detail such reportable
event, funding deficiency, or prohibited transaction and any action which
Borrower proposes to take with respect thereto, together with a copy of the
notice of such event given to the Pension Benefit Guaranty Corporation or the
Internal Revenue Service or a statement that said notice will be filed with the
annual report of the United States Department of Labor with respect to such plan
if such filing has been authorized.
8.13 WITHHOLDING TAXES. Borrower will pay, as and when due, subject to
any permitted extensions, all employee withholding, FICA, and other tax payments
required by federal, state, and local governments with respect to wages paid to
employees; provided, however, Borrower shall not be required to pay any such tax
payment that is past due so long as the validity thereof shall be actively
contested in good faith by appropriate proceedings and Borrower shall have set
aside on its books adequate reserves (determined in accordance with Generally
Accepted Accounting Principles) with respect to any such tax payment, so
contested; but provided further that any such tax, assessment, charge, levy, or
claim shall be paid forthwith upon the commencement of proceedings to foreclose
any lien securing the same.
8.14 CHANGE OF NAME, PRINCIPAL PLACE OF BUSINESS, OFFICE, OR REGISTERED
AGENT. Borrower will notify Agent in writing of any change in the name of
Borrower or any of its Subsidiaries, the principal place of business of Borrower
or any of its Subsidiaries, the office where the books and records of Borrower
or any of its Subsidiaries are kept, or any change in the registered agent of
Borrower or any of its Subsidiaries for the purposes of service of process, in
each case within ten (10) days before any such change made.
8.15 FINANCIAL COVENANTS. Borrower will at all times hereunder, in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis, maintain with respect to
52
Borrower and its Consolidated Subsidiaries, on a consolidated basis:
(a) A ratio of Current Assets to Current Liabilities of
greater than or equal to 1.50 to 1.00 at the end of each fiscal quarter, with
both of Current Assets and Current Liabilities calculated as of such quarter
end;
(b) A ratio of Total Funded Debt to EBITDA of less than 4.00
to 1.00 at the end of each fiscal quarter, with Total Funded Debt calculated as
of such quarter end and EBITDA calculated at the end of such fiscal quarter for
the four consecutive quarters then ended;
(c) A ratio of Senior Funded Debt to EBITDA of less than 3.5
to 1.00, with Senior Funded Debt calculated as of such quarter end and EBITDA
calculated at the end of such fiscal quarter for the four consecutive quarters
then ended.
(d) A ratio of Total Funded Debt to Total Capitalization of
less than 0.60 to 1.00 at the end of each fiscal quarter, with both of Total
Funded Debt and Total Capitalization calculated as of such quarter end; and
(e) Capital Expenditures (excluding Acquisitions of
businesses) calculated as of the end of each fiscal quarter, for the four
consecutive quarters then ended, in an aggregate amount of $15,000,000.00 or
less (unless the Required Lenders shall have given their prior written consent
to such amount of Capital Expenditures as is in excess of $15,000,000.00 during
such four quarter period);
(f) A Fixed Charge Coverage Ratio of greater than or equal
to 1.50 to 1.00 at the end of each fiscal quarter, calculated at the end of such
fiscal quarter for the four consecutive quarters then ended;
(g) Consolidated Net Worth of the Borrower and its
Consolidated Subsidiaries at all times greater than or equal to the sum of (i)
Fifty-Nine Million Dollars ($59,000,000.00) plus (ii) the amount equal to Eighty
Percent (80%) of Consolidated Net Income, plus (iii) the amount equal to One
Hundred Percent (100%) of the net cash proceeds of any equity offering received
by Borrower, plus (iv) the amount equal to One Hundred Percent (100%) of any
increase to Consolidated Net Worth caused by any acquisition, less (v) the
amount of cash proceeds paid to shareholders of the Borrower for stock
repurchases up to a maximum total amount not in excess of $12,500,000.00 during
the period from the Closing Date through and including the later to occur of (A)
the Revolving Credit Termination Date or (B) the last to occur Term Loan
Maturity Date of any Term Loan hereunder (or such greater maximum amount as the
Required Lenders shall have consented to in writing), all calculated for the
most recently ended fiscal quarter; provided that at all times on or prior to
October 31, 1998, the amount set forth in (ii) above shall be calculated for the
fiscal year ended October 31, 1998, and thereafter shall be calculated for the
most recently ended fiscal quarter.
8.16 HEDGING REQUIREMENTS. At all times when the aggregate of (i)
outstanding principal balances of Loans hereunder plus (ii) amounts available to
be drawn under Letters of Credit (plus, without duplication, all reimbursement
obligations with respect to Letters of Credit) hereunder
53
exceeds Sixty Million United States Dollars (U.S. $60,000,000.00), Borrower
shall maintain one or more Interest Rate Hedge Agreements with respect to the
Loans covering an aggregate combined notional principal amount of not less than
Fifty Percent (50%) of the aggregate combined principal balances of the Loans
plus Letter of Credit Obligations then outstanding. Such Interest Rate Hedge
Agreements shall each (a) have a term of not less than the lesser of (A) two (2)
years from the date entered or (B) the period from the date entered through and
including the last to occur of the Revolving Credit Termination Date or the last
to occur Term Loan Maturity Date of any outstanding Term Loans, (b) be with
Agent, with a counterparty rated by Standard & Poor's or Xxxxx'x rating services
for financial strength of "A+" or "AA-" or better, or with financial
institutions approved by Agent in writing, and (c) be in form and substance
satisfactory to Agent.
8.17 AFFIRMATIVE COVENANTS RELATING TO SUBSIDIARIES. Borrower will
cause each Subsidiary to do, with respect to itself, its business, and its
assets, all of the things required of Borrower in Subsections 8.2, 8.3, 8.4,
8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13, and 8.14.
SECTION 9. NEGATIVE COVENANTS.
Borrower covenants and agrees that from the date of this Agreement
until payment in full of all present or future indebtedness hereunder and
termination of all present or future credit facilities established hereunder,
unless the Required Lenders shall otherwise consent in writing, Borrower will
comply with the following provisions:
9.1 OTHER INDEBTEDNESS. Borrower will not, directly or indirectly,
create, incur, assume, or permit to exist any Indebtedness, except: (a)
Indebtedness under this Agreement; (b) Indebtedness secured by the Permitted
Prior Liens, but not including any future advances, extensions, renewals,
modifications or increases of any such Indebtedness; (c) obligations with
respect to Capital Leases incurred in the ordinary course of business to finance
Capital Expenditures (other than expenditures for equipment purchases or
equipment leases permitted under Section 9.1(d)), provided that such
indebtedness shall be incurred within 365 days after the making of the Capital
Expenditures financed thereby; (d) indebtedness incurred in the ordinary course
of business of the Borrower and its Subsidiaries which are Guarantors in
connection with the purchase or lease of equipment or vehicles, whether or not
secured by purchase money security interests therein; (e) Interest Rate Hedging
Agreements and currency hedging arrangements; (f) Real Estate Debt incurred or
assumed, and (g) any other Indebtedness in a total aggregate amount not in
excess of U.S. $100,000.00 at any time outstanding for Borrower and all
Subsidiaries on a consolidated basis.
9.2 LIMITATIONS ON MORTGAGES, LIENS, ETC. Borrower will not, directly
or indirectly, create, incur, assume, or suffer or permit to exist any mortgage,
pledge, lien, security interest, or other charge or encumbrance (including the
lien or retained security title of a conditional vendor or lessor, but excluding
liens, if any, evidenced by operating leases) upon or with respect to any of its
assets, or assign or otherwise convey any right to receive income, except
(without duplication): (a) Capital Leases described in Subsection 9.1(c) hereof;
(b) purchase money security interests described in Subsection 9.1(d) hereof; (c)
liens on assets acquired after the date hereof if such liens were in place at
the time of acquisition, to the extent permitted in connection with Permitted
Acquisitions
54
pursuant to Section 2.3; (d) non-consensual liens which are removed within ten
(10) days after the incurrence thereof or for so long as the enforcement thereof
is stayed and bonded on appeal, provided that adequate reserves shall have been
provided therefor pursuant to GAAP; (e) deposits or pledges in connection with
worker's compensation, unemployment insurance, or other social security
obligations incurred in the ordinary course of business; (f) liens securing the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money), leases, statutory obligations, surety and appeal bonds; (g)
mechanics', workmen's, materialmen's, or other like liens arising in the
ordinary course of business in respect of obligations which are not due or which
are being contested in good faith; (h) liens for taxes not yet due or being
contested in good faith by appropriate proceedings, and in the case of those
being contested, as to which Borrower shall have set aside on its books adequate
reserves; (i) liens imposed by operation of law, unless the amount of the claim
or the value of the affected property is in excess of U.S. $100,000.00 and the
lien is not discharged within sixty (60) days after it has attached; (j)
easements, rights-of-way, restrictions, and other similar encumbrances incurred
in the ordinary course of business and not interfering with the ordinary course
of the business; (k) liens and mortgages on real estate not included within the
Borrower's Collateral or the Subsidiary's Collateral or any of the Subsidiaries,
(l) mortgages securing permitted Real Estate Debt, (m) banker's liens of a bank
or financial institution arising by operation of law with respect to funds on
deposit in that bank or financial institution, (n) attachment or judgment liens
arising in a court proceeding and discharged within sixty (60) days after the
incurrence thereof or for so long as the enforcement thereof is stayed and
bonded on appeal, provided that adequate reserves shall have been provided
therefor pursuant to GAAP; and (o) Permitted Prior Liens permitted to be
incurred hereafter pursuant to Section 5.4.
9.3 GUARANTIES. Borrower will not, directly or indirectly, guarantee,
assume, endorse, become a surety or accommodation party for, or otherwise in any
way extend credit or become responsible for or remain liable or contingently
liable in connection with any Indebtedness or other obligations of any other
Person or entity except, to the extent only that the following do not cause a
violation of Section 8.15: (i) guaranties and endorsements made in connection
with the deposit of negotiable instruments and other items for collection or
credit in the ordinary course of business and (ii) guaranties by the Borrower of
debts incurred by suppliers of the Borrower or its Subsidiaries or others having
business relationships with the Borrower or its Subsidiaries for business
purposes of the Borrower or any Subsidiary, provided that (A) the debts
guaranteed by such guaranties shall not exceed an aggregate amount of U.S.
$5,000,000.00 outstanding at any time hereunder and (B) each of such guaranties
results in a benefit to the Borrower or a Subsidiary of value equal to or
greater than the amount of the debt guaranteed by such guaranty.
9.4 MERGER, ACQUISITION, SALE OF ASSETS, DISSOLUTION, ETC. Borrower
will not, directly or indirectly: (a) enter into any transaction of merger or
consolidation unless Borrower is the surviving entity, permit any Subsidiary to
enter into any transaction of merger or consolidation unless such Subsidiary is
the surviving entity, or permit any Subsidiary to enter into any transaction of
merger or consolidation with another Subsidiary unless the Subsidiary in which
the Borrower holds the greater ultimate direct or indirect ownership interest
therein is the surviving corporation, (b) enter into any merger, consolidation,
or Acquisition other than a Permitted Acquisition having a total cash purchase
price not in excess of Twenty-Five Million United States Dollars (U.S.
$25,000,000.00), (c) invest more than Five Million United States Dollars
(U.S.$5,000,000.00) in any joint venture or other
55
alliance or contractual arrangement with another Person or in any Person or
entity having other shareholders, members, partners or owners other than
Borrower or any Subsidiary, or make an aggregate of more than Twenty Million
United States Dollars (U.S. $20,000,000.00) of such investments during the
period from the Closing Date through and including the later to occur of (A) the
Revolving Credit Termination Date or (B) the last to occur Term Loan Maturity
Date of any Term Loan outstanding hereunder, without the Required Lenders' prior
written consent to such transaction; (d) except as otherwise specifically
permitted herein, transfer, sell, assign, lease, or otherwise dispose of all or
a substantial part of its properties or assets or any assets or properties
necessary for the proper conduct of its business (unless such properties
constituting all or a substantial part of its properties or assets or necessary
for the proper conduct of its business have a total aggregate fair market value
of U.S. $100,000.00 or less in any fiscal year of the Borrower), or any capital
stock of any Subsidiary, or permit any Subsidiary to issue any capital stock to
any Person other than Borrower or a Subsidiary (except that, subject to the
provisions of this Agreement, a Subsidiary may issue its capital stock to a
Person other than the Borrower or other Subsidiaries in an equity offering or
private issuance to raise equity capital or establish a joint venture; provided
that at no time shall any Person other than the Borrower or its Subsidiaries or
Lufthansa Technik AG own more than 20% of the outstanding common stock nor more
than 20% of the voting control of any Subsidiary, and at no time shall Lufthansa
Technik AG own more than 30% of the outstanding common stock nor more than 30%
of the voting control of any Subsidiary); (e) transfer, sell, assign, discount,
lease, or otherwise dispose of any of its notes or other instruments, accounts
receivable, or contract rights with or without recourse, except for collection
in the ordinary course of business; (f) change the scope or nature of its
business except that Borrower may expand its business by internal growth and not
by acquisitions, (A) into any business substantially similar or related to the
types of businesses it or any Subsidiary currently conducts or (B) into other
lines of business, provided that revenues generated from such other lines of
business shall not constitute more than fifteen percent (15%) of the net sales
of Borrower and its Consolidated Subsidiaries, on a consolidated basis, during
any fiscal quarter and provided that such other businesses or lines of business
singly or in the aggregate shall not have a Material Adverse Effect; (g) enter
into any arrangement, directly or indirectly, with any Person whereby Borrower
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property for a term of more than three (3) years which Borrower intends to
use for substantially the same purpose or purposes as the property being sold or
transferred, provided that the foregoing shall not be construed as prohibiting
equipment leases to the extent permitted pursuant to Section 9.1(d); provided
further that the foregoing shall not prohibit the transactions described in (g)
with respect to real property up to a total cumulated aggregate (A) sale price
or (B) present value of amortized lease payments, whichever is greater, not in
excess of such amount as shall equal ten percent (10%) of the tangible net
assets of the Borrower and its Consolidated Subsidiaries at any time during the
period from the Closing Date to and including the last to occur of the Revolving
Credit Termination Date or the last occurring Term Loan Maturity Date of any
Term Loan outstanding hereunder; (h) change its independent public accountants
to other than a firm of recognized national standing to which Agent has given
its prior written consent, (i) wind up, liquidate, or dissolve itself or its
business; or (j) agree to any of the foregoing.
9.5 FEDERAL RESERVE REGULATIONS. Borrower will not and will not permit
any Subsidiary to take any action, or permit any part of the proceeds of any
Loans made pursuant to this
56
Agreement to be used in any manner, which will violate or result in
non-compliance of the Loans made hereunder with Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System. Borrower represents that
neither it nor any of its Subsidiaries is engaged, and covenants that neither it
nor any of its Subsidiaries will become engaged, as one of its principal or
important activities in extending credit for the purpose of purchasing or
carrying margin stock. If requested by Agent, Borrower will furnish to Agent in
connection with any Loan or Loans hereunder, a statement in conformity with the
requirements of Federal Reserve Form U-1 or other forms referred to in said
regulations. In addition, Borrower covenants that no part of the proceeds of any
of the Loans hereunder will be used for the purchase of commodity future
contracts (or margins therefor for short sales) for any commodity not required
for the normal raw material inventory of Borrower.
9.6 CHANGES IN GOVERNING DOCUMENTS, ACCOUNTING METHODS, FISCAL YEAR.
Borrower will not (a) amend, in a manner that could reasonably be expected to
give rise to a Material Adverse Effect, its certificate of incorporation or
bylaws from that in existence on the date of this Agreement, or (b) change in
any material respect its accounting methods or practices or depreciation or
amortization policy or rates (except as provided in and pursuant to the
requirements of Section 1.2(b)), except in each case as required to comply with
law or with Generally Accepted Accounting Principles (subject to the
requirements of Section 1.2(b)). Borrower shall give notice to Agent of any such
amendment or change permitted hereunder.
9.7 CAPITAL EXPENDITURES. Borrower will not make or be committed to
make, or permit any of its Subsidiaries to make or be committed to make, any
Capital Expenditure (excluding Acquisitions of businesses), by purchase or
capitalized lease, other than Capital Expenditures which would not cause the
aggregate amount of all such Capital Expenditures calculated at the end of each
fiscal quarter for the four consecutive fiscal quarters then ended to exceed the
aggregate amount of Fifteen Million United States Dollars (U.S. $15,000,000.00),
unless the Required Lenders shall have given their prior written consent to such
amount of Capital Expenditures as is in excess of U.S. $15,000,000.00 during
such four quarter period.
9.8 DIVIDENDS, ETC. Without the prior written consent of the Required
Lenders, Borrower will not declare or pay any cash dividends in any fiscal year
in an aggregate amount in excess of twenty percent (20%) of Consolidated Net
Income for such fiscal year. Without the prior written consent of the Required
Lenders, Borrower shall not (without duplication) (i) purchase, redeem, or
otherwise acquire for value any of its capital stock now or hereafter
outstanding for an aggregate amount of consideration in excess of U.S.
$12,500,000.00 during the period from the Closing Date through and including the
later to occur of (A) the Revolving Credit Termination Date or (B) the last to
occur Term Loan Maturity Date of any Term Loan hereunder; (ii) return any
capital to its stockholders as such, or make any other payment or distribution
of assets to its stockholders as such; (iii) permit any of its Subsidiaries to
do any of the foregoing or to purchase or otherwise acquire for value any stock
of the Borrower or its Subsidiaries, provided that nothing herein shall prevent
Borrower from contributing proceeds of Advances to Subsidiaries who are
Guarantors hereunder either in the form of equity contributions (for issuance of
additional shares of Subsidiary stock to Borrower or otherwise) or in the form
of inter-company loans; or (iv) make any payment or prepayment of principal of,
premium, if any, or interest on, or redeem, defease or otherwise retire, any
Indebtedness before its scheduled due date, except for any required mandatory
prepayments
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(other than by acceleration upon default) under any Indebtedness secured by
Permitted Prior Liens existing as of the date hereof and permitted pursuant to
Section 5.4. Upon the occurrence of an Event of Default or an event which, with
the giving of notice or the passage of time, or both, would constitute an Event
of Default, as well as during the continuance thereof, Borrower shall not, and
shall not permit any Subsidiary to: (a) redeem, retire, purchase or otherwise
acquire, directly or indirectly, for value or set apart any sum for the
redemption, retirement, purchase or other acquisition of, directly or
indirectly, any shares of its common stock or warrants or options to purchase
any shares of its common stock; or (b) declare any dividends or make any other
distribution with respect to its stock (whether by reduction of capital or
otherwise), without Agent's prior written consent.
9.9 CHANGE IN CONTROL. Borrower shall not permit a Change in Control
with respect to the Borrower or any Subsidiary to occur without the prior
written consent thereto of the Required Lenders.
9.10 HEICO AEROSPACE HOLDINGS CORP. Notwithstanding anything else
contained in this Agreement, Borrower will not, and will not permit any
Subsidiary to, convey, transfer, assign, or otherwise deliver title or ownership
(whether by merger, consolidation, reorganization or otherwise) of any assets or
properties of any kind to HEICO Aerospace Holdings Corp. and will not permit
HEICO Aerospace Holdings Corp. to acquire (whether by purchase, conveyance,
transfer, assignment, merger, consolidation, acquisition, or any other means) or
to hold any assets or property (other than the capital stock of the direct
subsidiaries of HEICO Aerospace Holdings Corp.) at any time hereunder until the
sooner to occur of the following: (i) Agent for the benefit of the Lenders
receives from Lufthansa Technik AG a written waiver, release and consent, in
form and substance satisfactory to the Agent, waiving, releasing and terminating
the provision contained in Article 18 of that certain Shareholders Agreement
dated as of October 30, 1997 by and among HEICO Aerospace Holdings Corp., HEICO
Aerospace Corporation, and all of the shareholders of HEICO Aerospace Holdings
Corp., including Lufthansa Technik AG, and any similar contractual provisions or
(ii) Lufthansa Technik AG ceases to be a shareholder of HEICO Aerospace Holdings
Corp. and the foregoing Shareholders Agreement and all similar contractual
provisions have been terminated and released pursuant to documentation in form
and substance satisfactory to the Agent. Notwithstanding this Section 9.10, the
direct Subsidiaries of HEICO Aerospace Holdings Corp. may declare and pay cash
dividends to HEICO Aerospace Holdings Corp., provided and only to the extent
that HEICO Aerospace Holdings Corp. shall have declared dividends to its common
stockholders in the same amount and shall immediately pay such cash dividends to
the common stockholders of HEICO Aerospace Holding Corp. within one (1) hour of
the time such dividends are received by HEICO Aerospace Holdings Corp., such
that no cash remains in HEICO Aerospace Holdings Corp. for longer than one (1)
hour.
9.11 NEGATIVE COVENANTS RELATING TO SUBSIDIARIES. Borrower will not
permit any of its Subsidiaries to do, with respect to itself, its business, or
its assets, any of the things prohibited to Borrower in Subsections 9.1, 9.2,
9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, or 9.10; provided that notwithstanding
Section 9.8, any Subsidiary may declare and pay cash dividends to its
shareholders.
SECTION 10. EVENTS OF DEFAULT.
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The following events shall constitute "Events of Default" hereunder.
10.1 PAYMENT OF INDEBTEDNESS UNDER LOAN DOCUMENTS. Borrower fails to
make payment of any principal, interest, fee or other amount due on any
indebtedness owed to Agent or Lenders under the Loan Documents, or fails to make
any other payment to Agent or Lenders as contemplated thereunder either by the
terms hereof or otherwise, and, in the case of interest, such failure continues
for ten (10) days after the interest payment is due.
10.2 REPRESENTATION OR WARRANTY. Any representation or warranty made or
deemed, pursuant to Subsection 7.1 hereof, made by Borrower or any executive
officer of Borrower in this Agreement, in any of the Loan Documents, or in any
writing furnished in connection with or pursuant to the Loan Documents, or any
report, certificate, financial statement, or other information provided by
Borrower or any executive officer of Borrower to Agent or a Lender in connection
with or pursuant to the Loan Documents, shall be false or misleading in any
material respect on the date when made or when deemed made.
10.3 COVENANTS UNDER THE LOAN DOCUMENTS. Borrower fails to fully and
promptly perform when due any agreement, covenant, term, or condition binding on
it, other than as described in Subsection 10.1 hereof, contained in this
Agreement or any other Loan Document, or otherwise a part of the transactions
covered hereby, if such failure continues for thirty (30) days after written
notice thereof has been provided to Borrower by Agent or the Required Lenders.
10.4 CROSS-DEFAULT. A default or event of default occurs under any
present or future Indebtedness of Borrower to Agent or any Lender not evidenced
by the Loan Documents, which Indebtedness has an outstanding principal amount,
notional amount, or total amount of Indebtedness in excess of U.S. $500,000.00,
or a default or event of default occurs under any guaranty or security document
executed by any Person in connection therewith, and any such default or event of
default continues beyond the expiration of any applicable grace or cure period.
10.5 PAYMENT, PERFORMANCE, OR DEFAULT OF OTHER INDEBTEDNESS. Borrower
fails to make payment on any Indebtedness other than as described in Subsections
10.1 and 10.4 above, which Indebtedness has an outstanding principal amount,
notional amount, or total amount of Indebtedness in excess of U.S. $500,000.00,
if such failure, default, or event of default continues beyond the expiration of
any applicable grace or cure period, or Borrower fails to fully and promptly
perform any other obligation, agreement, term, or condition contained in any
agreement under which any such other Indebtedness is created, or there is
otherwise a default or event of default thereunder if such failure, default, or
event of default results in the acceleration of or entitles the obligee to
accelerate the maturity of the Indebtedness thereunder, in each case if such
failure, default, or event of default could reasonably be expected to give rise
to a Material Adverse Effect.
10.6 LIQUIDATION; DISSOLUTION; BANKRUPTCY; ETC. Borrower liquidates or
dissolves, the entire business of Borrower is suspended; Borrower files or
commences a voluntary petition, case, proceeding, or other action seeking
reorganization, arrangement, readjustment of its debts, or any other relief
under any existing or future law of any jurisdiction, domestic or foreign, state
or federal,
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relating to bankruptcy, insolvency, reorganization, or relief of debtors, or
Borrower takes any other action indicating its consent to, approval of, or
acquiescence in, any such petition, case, proceeding, or other action seeking to
have an order for relief entered with respect to it or its debts; Borrower
applies for, or consents to or acquiesces in, the appointment of a receiver,
trustee, custodian, or other similar official for Borrower or for all or a
substantial part of its property; Borrower makes an assignment for the benefit
of creditors; or Borrower is unable to pay its debts as they mature or admits in
writing its inability to pay its debts as they mature.
10.7 INVOLUNTARY BANKRUPTCY, ETC. An involuntary petition, case,
proceeding, or other action is commenced against Borrower under the Bankruptcy
Code or seeking reorganization, arrangement, readjustment of its debts, or any
other relief under any existing or future law of any jurisdiction, domestic or
foreign, state or federal, relating to bankruptcy, insolvency, reorganization,
or relief of debtors; a receiver, trustee, custodian, or other similar official
is involuntarily appointed for Borrower or for all or a substantial part of
Borrower's property or assets; or any case, proceeding, or other action seeking
issuance of a warrant of attachment, execution, distraint, or similar process
against all or a substantial part of Borrower's assets or property results in
the entry of an order for such relief; and any of the foregoing continues for
sixty (60) days without being vacated, discharged, stayed, bonded, or dismissed.
10.8 CHANGE IN CONTROL. The occurrence of any Change in Control with
respect to the Borrower or any Subsidiary, without the prior written consent
thereto of the Agent.
10.9 JUDGMENTS. A judgment is entered against Borrower for the payment
of damages or money in excess of Two Million Five Hundred Thousand Dollars
($2,500,000.00), if the same is not discharged or if a writ of execution or
similar process is issued with respect thereto and is not bonded or stayed
within the time allowed by law for filing notice of appeal of the final
judgment.
10.10 ATTACHMENT, GARNISHMENT, LIENS IMPOSED BY LAW. A writ of
attachment or garnishment is issued against, or a lien is imposed by operation
of law on, any property of Borrower, and the lesser of the amount of the claim
or the value of the affected property is in excess of $1,000,000.00, if the lien
is not discharged within sixty (60) days after it has attached (not counting for
this purpose any period for so long as enforcement thereof is stayed and bonded
during appeal with adequate reserves provided therefor pursuant to GAAP).
10.11 CORPORATE EXISTENCE, TRANSFER OF PROPERTY. Any act or omission
(formal or informal) of Borrower or its officers, directors, or shareholders
leading to, or resulting in, the termination, invalidation (partial or total),
revocation, suspension, interruption, or unenforceability of its corporate
existence, rights, licenses, franchises, or permits, which act or omission will
have a Material Adverse Effect, or the transfer or disposition (whether by sale,
lease, or otherwise) to any Person of all or a substantial part of its property
(except as specifically permitted pursuant to Section 9.4(d)).
10.12 SUBSIDIARIES. Any of the matters described at Subsections 10.2,
10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10 or 10.11 hereof occurs with
respect to any Subsidiary, its business, or its assets.
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SECTION 11. RIGHTS AND REMEDIES.
11.1 REMEDIES AVAILABLE UNDER LOAN DOCUMENTS AND OTHERWISE. Agent and
the Lenders shall have, in addition to the rights and remedies contained in this
Agreement and the other Loan Documents, all of the rights and remedies of
creditors now or hereafter available at law or in equity. Agent may, at its
option, and shall, at the direction of the Required Lenders, exercise any one or
more of such rights and remedies individually, partially, or in any combination
from time to time, after the occurrence of an Event of Default. No right, power,
or remedy conferred upon Agent or the Lenders by the Loan Documents shall be
exclusive of any other right, power, or remedy referred to therein or now or
hereafter available at law or in equity.
11.2 REMEDIES UPON EVENT OF DEFAULT. If any one or more of the Events
of Default described in Subsections 10.6 or 10.7 shall occur with respect to
Borrower, the unpaid principal amount and accrued interest under the Revolving
Credit Facility and all other obligations under the Loan Documents shall
automatically become immediately due and payable, without presentment, demand,
protest, or other requirement of any kind, all of which are expressly waived by
Borrower and the commitments of each Lender to make Advances hereunder shall
thereupon terminate; and if any one or more of any other Event of Default shall
occur (including under Subsections 10.6 or 10.7 with respect to any Subsidiary),
Agent shall, upon the written request or with the written consent of the
Required Lenders, take any one or more of the following actions: (a) declare all
or any portion of the unpaid principal amount and accrued interest under the
Revolving Credit Facility and all other obligations under the Revolving Credit
Facility to be, and the same shall forthwith become, immediately due and
payable, without presentment, demand, protest, or other requirement of any kind,
all of which are expressly waived by Borrower, and (b) declare all commitments
to make Advances hereunder to be terminated. Agent may immediately proceed to do
all other things provided for, or pursue any and all remedies available, under
any applicable law or the Loan Documents to enforce the rights of Agent and the
Lenders hereunder and to collect all amounts owing to the Agent and the Lenders
by Borrower.
SECTION 12. THE AGENT.
12.1 APPOINTMENT, AUTHORIZATION, AND ACTION.
(a) Each Lender hereby irrevocably appoints and authorizes
Agent to act as its agent hereunder and take such action on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. The relationship between Agent and
each Lender is and shall be that of agent and principal only and nothing herein
shall be construed to constitute Agent a trustee for any Lender or to establish
a fiduciary relationship with any Lender or impose on Agent any duties,
responsibilities, or obligations other than those expressly set forth in this
Agreement or the other Loan Documents.
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(b) Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights or taking any
actions which may be vested in it or which it may be able to take under or in
respect of this Agreement and the other Loan Documents, unless this Agreement
expressly otherwise provides or unless Agent shall have been instructed by the
Required Lenders to exercise or refrain from exercising such rights or taking
such actions (in which case it shall be required to so act or refrain from
acting pursuant to the directions of the Required Lenders); provided, however,
that Agent shall not be required to take any action or refrain from acting in
any manner which in its judgment exposes Agent to personal liability or which is
contrary to this Agreement or applicable law. Agent agrees to give to each
Lender prompt notice of each notice given to it by Borrower pursuant to the
terms of this Agreement.
12.2 EXCULPATION; RELIANCE BY THE AGENT. Agent (which term as used in
this Subsection, Subsection 12.6, and Subsection 13.2, shall include reference
to its affiliates and its own and its affiliates' directors, officers, agents,
and employees) shall not be liable for any action taken or omitted to be taken
by it or them, under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat the Lender that made any
Advance as the holder of the indebtedness resulting therefrom until Agent
receives and accepts an assignment and acceptance instrument entered into by
such Lender, as assignor, and an assignee, as provided in Subsection 13.17; (ii)
may consult with legal counsel (including counsel for Borrower), independent
public accountants, and other experts selected by it, and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants, or experts; (iii) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties, or representations made in or in
connection with the Loan Documents; (iv) shall not have any duty to any Lender
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants, or conditions of any Loan Document on the part of Borrower or
to inspect the property (including the books and records) of Borrower, and may
assume that no Event of Default has occurred or is continuing unless it has
actual knowledge, has been notified by Borrower of such fact, or has been
notified in writing by a Lender that such Lender considers that an Event of
Default has occurred and is continuing and such Lender specifies in detail the
nature thereof in writing; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency, or
value of any Loan Document or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability to any Lender, Borrower, any
Subsidiary or any affiliate of Borrower under or in respect of any Loan Document
by acting upon any notice, consent, certificate, or other instrument or writing
(which may be by telegram, telecopy, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties. Agent shall not be
liable to the Lenders or to any Lender in acting or refraining from acting under
this Agreement or any other Loan Document in accordance with the instructions of
the Required Lenders (or of all the Lenders if the consent or direction of all
the Lenders is required hereunder), and any action taken or failure to act
pursuant to such instructions shall be binding on all the Lenders.
12.3 AGENT AND AFFILIATES. With respect to its Revolving Credit
Commitment and the Advances made by it, Agent, in its capacity as a Lender (and
any successor acting as agent) shall have the same rights and powers under the
Loan Documents as any other Lender and may exercise the same as though it were
not Agent; and the term "Lender" or "Lenders" shall, unless otherwise
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indicated, include Agent (and any successor acting as Agent) in its capacity as
a Lender. Agent and its affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, act as trustee under indentures
of, accept investment banking engagements from, and generally engage in any kind
of business with, Borrower, any of its Subsidiaries, and any Person who may do
business with or own securities of Borrower or any such Subsidiary, all as if it
were not Agent. Agent and its affiliates may accept fees and other consideration
from Borrower for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
12.4 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender, and based on
the financial statements of Borrower and such other documents and information as
it has deemed appropriate, made its own credit analysis of Borrower and its own
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently, and without reliance upon Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement or the other Loan Documents. Except for any notices,
reports, and other documents expressly required to be furnished to the Lenders
by Agent hereunder, or as otherwise required by law or regulation, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition, business, or
property of Borrower which may come into the possession of Agent or any of its
affiliates.
12.5 ENFORCEMENT BY AGENT. All rights of action under this Agreement
and the other Loan Documents may be enforced by Agent and any suit or proceeding
instituted by Agent in furtherance of such enforcement may be brought in its
name as Agent without the necessity of joining any Lenders as plaintiffs or
defendants, and the recovery of any judgment shall be for the benefit of
Lenders, subject to the expenses of Agent. No Lender (other than Agent) shall
attempt to enforce any rights of action under this Agreement and the other Loan
Documents, except as permitted pursuant to Subsection 13.1 hereof.
12.6 INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not promptly reimbursed by Borrower and without limiting the obligations of
Borrower to do so) ratably according to the respective principal amounts of the
Advances then owing to each of them (or if no Advances are at the time
outstanding, ratably according to the respective amounts of their Revolving
Credit Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements or any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against Agent in any way relating to or arising out of this
Agreement or any other Loan Documents or the transactions contemplated thereby,
or any action taken or omitted by Agent in connection therewith (including,
without limitation, the costs and expenses payable by Borrower under Subsection
13.2); provided, however, that no Lender shall be liable for any of the
foregoing to the extent they arise from Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for such Lender's ratable share of any costs and
expenses payable by Borrower under Subsection 13.2, to the extent that Agent is
not promptly reimbursed for such costs and expenses by Borrower. The agreements
contained in this Subsection shall survive the repayment of the Advances and
termination of the facilities hereunder.
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12.7 FAILURE TO ACT. Except for actions expressly required of Agent
hereunder and under the other Loan Documents, Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from the Lenders of their
indemnification obligations hereunder against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
12.8 SUCCESSOR AGENT. Agent may resign at any time by giving written
notice thereof to the Lenders and Borrower, and may be removed at any time with
or without cause by the Required Lenders. Upon any such resignation or removal,
and after consultation with and, provided that no Event of Default has occurred
and is continuing, consent of (which shall not be unreasonably withheld)
Borrower, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, and after consultation with and, provided that no Event of Default has
occurred and is continuing, consent of (which shall not be unreasonably
withheld) Borrower, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Section shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 13. MISCELLANEOUS.
13.1 LIEN ON DEPOSITS; SET-OFF. Borrower hereby grants to Agent and
each of the Lenders a continuing lien to secure all indebtedness of Borrower to
Agent and the Lenders, whether created hereunder, pursuant hereto, or otherwise,
upon any and all deposits and credits of Borrower, if any, at Agent or such
Lender, at any time existing (other than trust accounts or other special
accounts). Upon the occurrence of any Event of Default, each of Agent and the
Lenders is hereby authorized at any time and from time to time, with prompt
notice to Borrower, to set off, appropriate, and apply any or all items
hereinabove referred to against all indebtedness of Borrower owed to such
Person, whether under the Loan Documents or otherwise, whether now existing or
hereafter arising. Any such Person exercising the right of set-off shall be
deemed to have exercised such right and to have made a charge against such items
immediately upon the occurrence of such Event of Default although made or
entered on its books subsequent thereof.
13.2 PAYMENT OF EXPENSES, INCLUDING ATTORNEYS' FEES AND TAXES. Borrower
agrees: (a) to pay or reimburse Agent for all its reasonable and customary
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, execution, and delivery of, and any amendment, supplement, or
modification to, or waiver or consent under, the Loan Documents, and the
consummation of the transactions contemplated thereby, including, without
limitation, the
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reasonable and customary fees and disbursements of counsel for Agent,
transaction taxes, and all recording or filing fees, if any, but excluding any
costs or expenses associated with any assignment or participation pursuant to
Subsection 13.17 hereof; (b) to pay or reimburse Agent and the Lenders for all
of their reasonable and customary out-of-pocket costs and expenses incurred in
connection with the collection or enforcement of, or the preservation of any
rights under, the Loan Documents, including, without limitation, the reasonable
and customary fees and disbursements of counsel for each of Agent and the
Lenders, including reasonable and customary attorneys' fees out of court, in
trial, on appeal, in bankruptcy proceedings, or otherwise; (c) without limiting
the generality of provision (a) hereof, to pay or reimburse Agent and the
Lenders for, and indemnify and hold Agent and the Lenders harmless against
liability for, any and all documentary stamp taxes or non-recurring intangible
taxes, together with any interest, penalties, or other liabilities in connection
therewith, that Agent or any Lender now or hereafter determines are payable with
respect to the Loan Documents, the obligations evidenced by the Loan Documents,
and any Advances under the Loan Documents; and (d) to pay, indemnify, and hold
Agent and the Lenders harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance, and administration of the Loan
Documents. The agreements in this Subsection shall survive repayment of all
other amounts payable hereunder or pursuant hereto, now or in the future.
13.3 NOTICES. Unless otherwise expressly agreed herein, and
notwithstanding any provisions to the contrary contained in the other Loan
Documents, all notices, requests, and demands to or upon the parties hereto
pursuant to any Loan Document shall be deemed to have been given or made when
delivered by hand or by courier service, when provided to a nationally
recognized overnight delivery service for overnight delivery, when transmitted
to a receiving facsimile transmission machine (with machine-generated
transmittal confirmation), or three days after deposit in the mail, postage
prepaid by registered or certified mail, return receipt requested, addressed as
shown on the signature pages hereof or any assignment documents pursuant to
Subsection 13.17 hereof.
13.4 GOVERNING LAW. The validity, interpretation, and enforcement of
the Loan Documents and the rights and obligations of the parties thereto, shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of Florida excluding those laws relating to the resolution of
conflicts between laws of different jurisdictions.
13.5 VENUE; PERSONAL JURISDICTION. In any litigation in connection with
or to enforce any of the Loan Documents, Borrower irrevocably consents to and
confers personal jurisdiction on the courts of the State of Florida or the
United States courts located within Broward County in the State of Florida,
expressly waives any objections as to venue in any of such courts, and agrees
that service of process may be made on Borrower by mailing a copy of the summons
and complaint by registered or certified mail, return receipt requested, to the
address set forth herein (or otherwise expressly provided in writing). Nothing
contained herein shall, however, prevent Agent from bringing any action or
exercising any rights within any other state or jurisdiction or from obtaining
personal jurisdiction by any other means available by applicable law.
13.6 SEVERABILITY AND ENFORCEABILITY OF PROVISIONS. In the event that
any one or more of the provisions of the Loan Documents is determined to be
invalid, illegal, or unenforceable in any
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respect as to one or more of the parties, all remaining provisions nevertheless
shall remain effective and binding on the parties thereto and the validity,
legality, and enforceability thereof shall not be affected or impaired thereby.
If any such provision is held to be illegal, invalid, or unenforceable, there
will be deemed added in lieu thereof a provision as similar in terms to such
provision as is possible, that is legal, valid, and enforceable. To the extent
permitted by applicable law, the parties hereby waive any law that renders any
such provision invalid, illegal, or unenforceable in any respect.
13.7 COUNTERPARTS; FACSIMILE SIGNATURES; EFFECTIVE DATE. The Loan
Documents and any amendments, waivers, consents, or supplements hereto may be
signed in original counterparts and by facsimile transmission of signed
counterparts, in any number, each of which shall be deemed an original, no one
of which need contain all of the signatures of the parties, and as many of such
counterparts as shall together contain all of the signatures of the parties
shall be deemed to constitute one and the same instrument. A set of the
counterparts of this Agreement signed by all parties hereto shall be lodged with
Agent. This Agreement shall become effective upon the receipt by Agent of
original signed counterparts or facsimile confirmation of signed counterparts of
this Agreement, each of which shall be deemed an original, from each of the
parties hereto.
13.8 NO WAIVER. No omission or failure of Agent or the Lenders to
exercise and no delay in exercising by Agent or the Lenders of any right, power,
or privilege under any of the Loan Documents shall impair such right, power, or
privilege, shall operate as a waiver thereof or be construed to be a waiver
thereof; nor shall any single or partial exercise of any right, power, or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege.
13.9 CUMULATIVE REMEDIES. The rights and remedies provided in the Loan
Documents are cumulative, and not exclusive of any rights or remedies provided
by law or in equity, and may be pursued singularly, successively, or together,
and may be exercised as often as the occasion therefor shall arise. The
warranties, representations, covenants, and agreements made herein and therein
shall be cumulative, except in the case of irreconcilable inconsistency, in
which case the provisions of this Agreement shall control.
13.10 COURSE OF DEALING; AMENDMENTS; WAIVER. No course of dealing
between the parties hereto shall be effective to amend, modify, or change any
provision of this Agreement or any other Loan Document. No amendment or waiver
of any provision of this Agreement or any other Loan Document, nor consent to
any departure by Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given (and in the case of amendments, by Borrower);
provided, however, that (a) no amendment, waiver, or consent shall, unless in
writing and signed by all of the Lenders, do any of the following: (i) change
the percentage of the Revolving Credit Commitments, the aggregate unpaid
principal amount of Advances, or the number of Lenders, that are required for
the Lenders or any of them to take action hereunder; (ii) extend the Revolving
Credit Termination Date; or (iii) amend this Subsection; and (b) no amendment,
waiver, or consent shall, unless in writing and signed by the Required Lenders
and each affected Lender: (i) increase the Revolving Credit Commitment of such
Lender or subject such Lender to any additional obligations (other than pursuant
to assignments permitted under
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Subsection 13.17 hereof); (ii) reduce the principal of, or interest on, the
Advances payable to such Lender or any fees or other amounts payable hereunder
to the Lender; or (iii) postpone any date for any payment of principal of, or
interest on, the Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender; and provided further, that no amendment,
waiver, or consent shall, unless in writing and signed by Agent in addition to
the Lenders required to take such action, affect the rights or duties of the
Agent under this Agreement.
13.11 WAIVER OF DEFAULT. The Required Lenders may, in accordance with
the provisions of Subsection 13.10 hereof, by written notice to Borrower, at any
time and from time to time, waive any Event of Default or default and its
consequences, or any default in the performance or observance of any condition,
covenant, or other term of the Loan Documents and its consequences. Any such
waiver shall be for such period and subject to such conditions as shall be
specified in any such notice. In the case of any such waiver, the parties shall
be restored to their former positions prior to such Event of Default or default
and shall have the same rights as they had prior thereto, and any Event of
Default or default so waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Event of Default or
default, or impair any right consequent thereto.
13.12 TABLE OF CONTENTS; HEADINGS. The Table of Contents and the
headings preceding the text of this Agreement or any of the Loan Documents have
been included solely for convenience of reference and shall neither constitute a
part of this Agreement or the other Loan Documents nor affect their meaning,
interpretation, or effect.
13.13 RELIANCE UPON, SURVIVAL OF AND MATERIALITY OF REPRESENTATIONS AND
WARRANTIES, AGREEMENTS, AND COVENANTS. All representations and warranties,
agreements, and covenants made in the Loan Documents shall be deemed to have
been relied upon by Agent and the Lenders, shall survive the execution and
delivery of the Loan Documents and the making of the loan or loans herein
contemplated, and shall continue in full force and effect so long as any
indebtedness is owed to Agent and the Lenders pursuant hereto or so long as
there shall be any commitment by Lenders to make loans hereunder. All
representations and warranties by or on behalf of Borrower contained in any
certificate or other paper delivered to Agent at any time pursuant to the Loan
Documents shall constitute representations and warranties under the Loan
Documents.
13.14 COMPLETE AGREEMENT; NO OTHER CONSIDERATION. The Loan Documents
contain the final, complete, and exclusive expression of the understanding of
the parties thereto with respect to the transactions contemplated by the Loan
Documents and supersede any prior or contemporaneous agreement or
representation, oral or written, by or between the parties related to the
subject matter hereof. Without limiting the generality of the foregoing, there
does not exist any consideration or inducement other than as stated herein for
the execution, delivery, and performance by Borrower of the Loan Documents.
13.15 LEGAL OR GOVERNMENTAL LIMITATIONS. Anything contained in the Loan
Documents to the contrary notwithstanding, the Lenders shall not be obligated to
extend credit or make loans to Borrower in an amount in violation of any
limitations or prohibitions provided by any applicable statute or regulation.
13.16 BINDING OBLIGATIONS ON SUCCESSORS AND ASSIGNS. This Agreement
shall be binding
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upon the parties hereto and their respective successors and assigns, and shall
inure to the benefit of the parties hereto and their permitted successors and
assigns.
13.17 ASSIGNMENTS AND PARTICIPATIONS.
(a) Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Lenders and Agent.
(b) Each Lender may assign to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving Credit
Commitment, the Advances owing to it, its Pro Rata Portion of Term Loan
Availability and the Term Loans owing to it); provided, however, that (i) the
assignment shall be of a uniform, and not a varying, percentage of all of the
assigning Lender's rights and obligations under and in respect of the facility
being assigned; (ii) the amount of the Revolving Credit Commitment being
assigned pursuant to the assignment (determined as of the date of the
assignment) shall be in the amount of $10,000,000.00 or an integral multiple of
$1,000,000.00 in excess thereof; (iii) Borrower and Agent shall consent to the
assignment, which consent, in either case, shall not be unreasonably withheld,
and if withheld by Borrower, shall be supported by a written statement of
reasons for such nonconsent provided to Agent, except that no consent by
Borrower or Agent shall be required in the case of any assignment to another
Lender, and no consent by Borrower shall be required after an Event of Default
shall have occurred and be continuing if the proposed assignee is a financial
institution or other institutional lender; and (iv) the parties to the
assignment shall execute and deliver to the Agent an assignment and acceptance
instrument satisfactory in form and substance to Agent (the "Assignment and
Acceptance Agreement"), together with a processing and recordation fee of
$2,500.00. Upon such execution and delivery, the assignee shall be a party
hereto, shall be deemed a "Lender," and shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the consent of
Borrower and Agent), the obligations, rights, and benefits of a Lender
hereunder, and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from obligations under this Agreement so
assigned.
(c) By executing and delivering an Assignment and Acceptance
Agreement, the assigning Lender thereunder and the assignee thereunder shall
thereby confirm to and agree with each other and the other parties hereto as
follows:
(i) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties, or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other instrument or document furnished pursuant
hereto;
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(ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of Borrower or the performance or observance by Borrower of any of its
obligations or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Subsection 8.1 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance Agreement;
(iv) such assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement;
(v) such assignee appoints and authorizes Agent to
take such action as Agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto; and
(vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) Each Lender may sell participations to one or more banks
or other entities in all or a portion of its rights and obligations under this
Revolving Credit Agreement (including, without limitation, all or a portion of
its Revolving Credit Commitment and the Advances owing to it); provided,
however, that (i) the Lender's obligations under this Agreement (including,
without limitation, its Revolving Credit Commitment) shall remain unchanged;
(ii) the Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations; (iii) Borrower, Agent, and the other
Lenders shall continue to deal solely and directly with the Lender in connection
with the Lender's rights and obligations under this Agreement; and (iv) the
Lender may not agree with the participant to require the participant's consent
or permit the participant to vote on whether to take or refrain from taking any
action or to approve any amendment or waiver of any provision of any Loan
Document, or any consent or any departure by any party therefrom, except that
the Lender may agree with the participant that the Lender will not, without the
consent or vote of the participant, agree to (1) increase the Revolving Credit
Commitment of such Lender or subject such Lender to any additional obligations;
(2) extend the Revolving Credit Termination Date affecting the Lender; (3)
reduce the principal of, or interest on, the Advances payable to the Lender or
any fees or other amounts payable to the Lender; or (4) postpone any date for
any payment of principal of, or interest on, the Advances payable to the Lender
or any fees or other amounts payable to the Lender, in each case if the rights
of the participant are or would be affected thereby.
(e) In the case of an assignment or participation no
information shall be distributed to a potential assignee or participant unless
Agent shall have approved the potential assignee or participant, and in any
event, such information shall be distributed in accordance with Subsection 13.18
hereof.
(f) Notwithstanding any of the foregoing to the contrary,
nothing herein is
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intended to prohibit the assigning, discounting, or pledging of all or any
portion of a Lender's interest in the Advances or its Revolving Credit Note to
any Federal Reserve Bank as collateral security pursuant to regulations of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, and such Advances or a Revolving Credit
Note shall be fully transferrable as provided therein. No such assignment shall
release the assigning Lender from its obligations hereunder.
(g) Borrower agrees that any participants shall have the same
rights of set-off against Borrower as granted the Lenders in Subsection 13.1
hereof. Upon the written request of Borrower, the Lenders will advise Borrower
of the names of any participants and the extent of their interest herein.
13.18 CONFIDENTIAL INFORMATION.
(a) Agent and the Lenders shall exercise their best efforts
not to make any disclosure of confidential information obtained pursuant to the
Loan Documents; PROVIDED, that the foregoing shall not be construed to, now or
in the future, apply to any information reflected in any publicly recorded
document, information obtained from sources other than Borrower, its officers,
directors, employees, representatives, or agents, or otherwise in the public
domain nor shall it be construed to prevent Agent or any Lender from (i) making
any disclosure of any information (A) if required to do so by any applicable law
or regulation or if normally engaged in pursuant to accepted banking practice
and not contrary to confidentiality and privacy requirements of applicable
statutory and case law, (B) to any governmental agency or regulatory body having
authority to regulate or oversee any aspect of Agent's or such Lender's business
or any of its subsidiaries or affiliates in connection with the exercise of such
authority, (C) pursuant to subpoena, (D) to the extent Agent or such Lender or
their respective counsel deems necessary or appropriate to do so to enforce any
remedy provided for in the Loan Documents or otherwise available by law, (ii)
subject to the immediately succeeding sentence, making such disclosures as such
Lender reasonably deems necessary or appropriate to any bank or financial
institution (and/or counsel thereto) which is a prospective assignee or
participant under Subsection 13.17 (each such bank or financial institution, a
"Prospective Lender") or (iii) making, on a confidential basis, such disclosures
as Agent or such Lender deems necessary or appropriate to Agent's or such
Lender's counsel or accountants (including outside auditors).
(b) Each Lender agrees that prior to (a) disclosing to any
Prospective Lender any information which the Lenders have agreed hereunder to
hold as confidential or (b) entering into an agreement granting to a Prospective
Lender an interest in the Advances, the Prospective Lender shall execute an
agreement in form and substance similar to the provisions of this Subsection for
the benefit of Borrower and shall deliver the same to Borrower; PROVIDED, that
in no event shall such Lender or the Agent be liable for any breach of such
agreement by the Prospective Lender.
13.19 COOPERATION IN SYNDICATION OF CREDIT; PUBLICITY. Borrower agrees
to cooperate in all reasonable respects and ways with Agent in connection with
any attempt Agent may, in its discretion make toward further syndication of the
credit provided herein, such cooperation to include, but not be limited to,
attendance by management personnel of Borrower at meetings arranged by Agent
with representatives of potentially participating commercial lending
institutions, provision of
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information, and an information memorandum in form and substance satisfactory to
Agent, regarding Borrower's and its Subsidiaries' business operations and
financial condition, and response to questions and inquiries regarding Borrower
and its Subsidiaries. Agent shall have the right, from time to time hereafter
and until the Revolving Credit Termination Date, to publicize and advertise in
any manner Agent's participation as Agent and Lender in connection with this
Agreement.
13.20 WAIVER OF TRIAL BY JURY. BORROWER, AGENT, AND EACH LENDER HEREBY
KNOWINGLY, IRREVOCABLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY OTHER DOCUMENT EXECUTED IN CONJUNCTION WITH THE
TRANSACTIONS CONTEMPLATED THEREUNDER, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER ORAL OR WRITTEN), OR ACTION OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR AGENT, BORROWER, AND EACH LENDER TO ENTER
INTO THE TRANSACTIONS EVIDENCED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
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SIGNATURE PAGE
Credit Agreement Among HEICO Corporation, SunTrust Bank, South Florida,
National Association, as Agent, and the Lenders party thereto.
Witness: HEICO CORPORATION,
a Florida corporation
By:
---------------------- ----------------------------------------------------
Name:
Title:
(SEAL)
Address:
HEICO CORPORATION
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
Fax No. (000) 000-0000
Confirming Tel. No. (000) 000-0000
72
SIGNATURE PAGE
Credit Agreement Among HEICO Corporation, SunTrust Bank, South Florida,
National Association, as Agent, and the Lenders party thereto.
Witness: SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
a National Banking Association,
as Agent
By:
---------------------- ----------------------------------------------------
Name:
Title:
Address of Lending Office for Notice:
000 Xxxx Xxx Xxxx Xxxxxxxxx, 0xx Xxxxx
Corporate Banking Division
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Vice President
Corporate Banking Division
Fax No. (000) 000-0000
Confirming Tel. No. (000) 000-0000
73
SIGNATURE PAGE
Credit Agreement Among HEICO Corporation, SunTrust Bank, South Florida,
National Association, as Agent, and the Lenders party thereto.
Witness: SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION,
a National Banking Association,
as Lender
By:
---------------------- ----------------------------------------------------
Name:
Title:
Address and Lending Office:
000 Xxxx Xxx Xxxx Xxxxxxxxx, 0xx Xxxxx
Corporate Banking Division
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Vice President
Corporate Banking Division
Fax No. (000) 000-0000
Confirming Tel. No. (000) 000-0000
Revolving Credit Commitment: $120,000,000.00
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