Exhibit 10.8
LOAN AGREEMENT
This Loan Agreement (the "AGREEMENT") is made as of the 30 day of June, 2005 BY
AND BETWEEN
(1) TAT Technologies Ltd. (the 'TAT"), an Israeli public company, having its
registered office at the Industrial Xxxx Xxxxx, Xxxxxx, Xxxxxx; and
(2) Limco Airpair Inc. ("THE COMPANY") a private company having its register
office at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX.
RECITAL
WHEREAS, the Company has requested that TAT and TAT has agreed to lend the
Company an amount of U.S.$6 million in order to purchase Piedmont Aviation
Component Services L.L.C ("PIEDMONT"), all upon the terms and conditions more
fully set forth herein; and,
WHEREAS, TAT is borrowing the amount of US$ 6 million, to be lent to the
Company, from Bank Leumi Lelsreal Ltd. ("THE BANK" and "THE LEUMI LOAN",
respectively), according to a Loan Agreement between TAT and the Bank ("THE
LEUMI LOAN AGREEMENT") attached by reference as APPENDIX A to this Agreement and
constitute an integral part thereof, and providing securities for the Leumi
Loan;
THEREFORE, in consideration of the foregoing, the parties, intending to be
legally bound, agree as follows:
1. THE LOANS
Upon the terms and subject to the conditions set forth in this Agreement
and the Leumi Loan Agreement, TAT agrees to grant the Company, effective
as of July 1, 2005 (the "LOAN DATE"), two loans each in an amount of US$3
million (hereinafter - "THE FIRST LOAN" and "THE SECOND LOAN",
respectively and together "THE LOANS"), all upon the following terms and
conditions:
2. LOANS TERM.
The term of the Loans shall commence on the Loan Date and shall terminate
no later than June 30, 2010.
3. INTEREST.
(a) The First Loan shall bear annual rate of interest at 7.25% and shall
be compounded according the terms of the Leumi Loan Agreement and
until payment in full of the outstanding principal of the First Loan
pursuant to the provisions contained herein.
(b) The Second Loan shall bear annual rate of interest at L.I.B.O.R (3
months), as shall be determined from time to time by the Bank
according to the Leumi Loan Agreement, plus 3% and shall be
compounded on the outstanding principal of the Second Loan according
the terms of the Leumi Loan Agreement until payment in full of the
outstanding principal of the Second Loan pursuant to the provisions
contained herein.
(c) Interest on the Loans shall be computed on the basis of a 365-day
year.
4. PAYMENT OF INTEREST AND EXPENSES.
(a) Interest shall be paid on the last day of each quarter, commencing
as of the Loan Date, with each payment being.
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(b) Upon TAT demand the Company will immediately indemnify TAT for any
expense it may bear with respect to the Leumi Loan including due to
Event of Default under Section 7 hereinafter.
5. PAYMENT OF PRINCIPAL.
(a) Subject to the Event of Default provisions described below, the
principal amount of the Loans shall be repaid in three equal
installments on June 30, 2008; June 30, 2009; and June 30, 2010.
(b) Notwithstanding the above, in any event that the bank will demand a
prepayment of the Leumi Loan or any part thereof for any reason, the
Company will prepay TAT the respective portion of the Loans
including any Interest compounded on it until that date.
(c) The Company and TAT may mutually agree from time to time on
prepayment of the Loans or any part thereof.
6. CURRENCY; MANNER OF PAYMENT.
The delivery of the Loans to the Company by TAT and all payments that are
to be paid to TAT by the Company, pursuant to this Agreement, shall be
performed in US Dollars. Payment to be made to TAT shall be to TAT's bank
account, as SHALL be designated by TAT from time to time in a written
notice delivered by TAT to the Company. The Company shall make such
payments to such bank account by initiating such payments on a banking
day, before 11.00 a.m., Israel time, by bank wire transfer in immediately
available funds, marked for attention as indicated.
7. EVENTS OF DEFAULT AND REMEDIES THEREOF
(a) EVENTS OF DEFAULT. Any one or more of the following shall constitute
an "Event of Default" as the term is used herein;
(1) Any default in the payment of principal or interest when due,
which default shall continue for more than 5 days following
the delivery of a written notice by TAT to the Company; or,
(2) The Company is generally not paying its debts as they become
due, or makes an assignment of its substantial assets for the
benefit of creditors, or applies for or consents to the
appointment of a trustee or receiver for or over all the
assets of the Company or a substantial part thereof; or,
(4) A Liquidator, trustee or receiver is appointed for or over all
of the assets of the Company or a substantial part thereof and
is not discharged within 45 days after such appointment; or
(5) Liquidation, reorganization, arrangement, insolvency or other
similar proceeding under the Companies Law for the relief of
debtors, is instituted by or against the Company and, if
instituted against the Company, is consented to or is not
dismissed within 45 days of such institution.
(b) NOTICE TO TAT. When any Event of Default described in Section 7(a)
(other than an Event of Default described in Section 7(a)(l)) has
occurred, the Company shall give TAT a written notice within five
business days of its becoming aware regarding such event.
(c) ACCELERATION OF MATURITIES. When any Event of Default described in
Section 7(a) has happened and is continuing, TAT may, by notice in
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writing (the "DEFAULT NOTICE") sent to the Company, declare the
Loans due and payable, without any additional presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived.
Upon the Loans becoming due and payable as a result of any Event of
Default as aforesaid, the Company will forthwith pay to TAT all
principal of and interest accrued on the Loans.
Such amounts shall be supplemented by additional interest accrued
thereon as an arrears interest according to Leumi Loan Agreement
from the date when the Event of Default has occurred and until the
payment date.
Neither any course of dealing on the part of TAT nor any delay or
failure on the part of TAT to exercise any right shall operate as a
waiver of such right or otherwise prejudice TAT' rights, powers and
remedies.
The Company further agrees, to pay TAT all expenses incurred by it
in the implementation of its rights, powers and remedies under this
Section 7.
8. MISCELLANEOUS
(a) Recital and EXHIBITS. The Recital and the Exhibits attached to this
Agreement constitute integral parts thereof. They are incorporated
herein by reference and shall have the same force and effect as if
set forth in full in the main body of this Agreement.
(b) GOVERNING LAW; FORUM FOR DISPUTE RESOLUTION. This Agreement shall be
governed by the laws of the State of Israel. Any dispute arising
under or with respect to this Agreement shall be resolved
exclusively in the appropriate court in Tel Aviv, Israel.
(c) NOTICES.
All notices required or permitted hereunder to be given to a party
pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given to the addressee thereof (i) if hand
delivered, on the day of delivery, (ii) if given by facsimile
transmission, on the business day on which such transmission is sent
and confirmed, (iii) if given by air courier, two business days
following the date it was sent or (iv) if mailed by registered mail,
return receipt requested, five business days following the date it
was mailed, to such party's address as set forth in the preamble of
this Agreement or at such other address as such party shall have
furnished to each other party in writing in accordance with this
provision.
(d) ENTIRE AGREEMENT.
This Agreement constitute the entire agreement among the parties
regarding the transactions contemplated herein, and may not be
amended except by written instrument, executed by both parties.
(e) HEADINGS.
The headings contained in this Agreement are solely for convenience
of reference and shall not affect the interpretation of this
Agreement.
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(f) COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(g) ASSIGNMENT.
Except if mutually agreed upon, the Company will not sell, assign,
transfer, or otherwise convey any of its rights or delegate any of
its duties under this Agreement.
TAT may assign its right herein by simple notice to the Company.
(h) DELAYS OR OMISSIONS: WAIVER.
No delay or omission to exercise any right, power, or remedy
accruing to either the Company or TAT upon any breach or default by
the other party under this Agreement shall impair any such right or
remedy nor shall it be construed to be a waiver of any such breach
or default, or any acquiescence therein or in any similar breach or
default thereafter occurring.
(i) FURTHER ACTIONS.
At any time and from time to time, each party agrees, without
further consideration, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate
the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TAT TECHNOLOGIES LTD.
By: /s/ Dov Zeelim
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Name: Dov Zeelim
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Title: President
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LIMCO AIRPAIR INC.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
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Title: President
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