AMENDED AND RESTATED CREDIT AGREEMENT
dated as of October 15, 1998
among
THE HEICO COMPANIES L.L.C.,
HEICO HOLDING, INC.,
VARIOUS FINANCIAL INSTITUTIONS,
LASALLE NATIONAL BANK
and
THE NORTHERN TRUST COMPANY,
as Co-Agents,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS, ETC.................................................1
1.1 Certain Defined Terms...................................1
1.2 Other Interpretive Provisions..........................18
1.3 Accounting Principles..................................19
SECTION 2 COMMITMENTS OF THE BANKS; TYPES OF LOANS; BORROWING
AND CONVERSION PROCEDURES..............................19
2.1 Commitments............................................19
2.2 Various Types of Loans.................................20
2.3 Borrowing Procedures...................................20
2.4 Procedures for Continuation or Conversion of
Loan...................................................21
2.5 Letter of Credit Procedures............................22
2.6 Participations in Letters of Credit....................22
2.7 Reimbursement Obligations..............................23
2.8 Limitation on the Issuing Bank's Obligations...........23
2.9 Funding by Banks to the Issuing Bank...................23
2.10 Warranty...............................................24
2.11 Conditions.............................................24
2.12 Commitments Several....................................25
SECTION 3 NOTES EVIDENCING LOANS..........................................25
3.1 Notes..................................................25
3.2 Recordkeeping..........................................25
SECTION 4 INTEREST........................................................25
4.1 Interest Rates.........................................25
4.2 Interest Payment Dates.................................26
4.3 Setting and Notice of Eurodollar Rates.................26
4.4 Computation of Interest................................26
SECTION 5 FEES............................................................26
5.1 Non-Use Fee............................................26
5.2 Letter of Credit Fees..................................26
5.3 Agent's Fees...........................................27
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS............................................27
6.1 Voluntary Reduction or Termination of
Commitments............................................27
6.2 Prepayments............................................28
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.................28
7.1 Making of Payments.....................................28
7.2 Application of Certain Payments........................28
7.3 Due Date Extension.....................................28
7.4 Setoff.................................................29
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7.5 Proration of Payments..................................29
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
LOANS..................................................29
8.1 Increased Costs........................................29
8.2 Basis for Determining Interest Rate Inadequate
or Unfair..............................................31
8.3 Changes in Law Rendering Eurodollar Loans
Unlawful...............................................31
8.4 Funding Losses.........................................32
8.5 Right of Banks to Fund through Other Offices...........32
8.6 Discretion of Banks as to Manner of Funding............32
8.7 Mitigation of Circumstances; Replacement of
Affected Bank..........................................33
8.8 Conclusiveness of Statements; Survival of
Provisions.............................................33
SECTION 9 WARRANTIES......................................................34
9.1 Organization, etc......................................34
9.2 Authorization; No Conflict.............................34
9.3 Validity and Binding Nature............................35
9.4 Financial Information..................................35
9.5 No Material Adverse Change.............................35
9.6 Litigation and Contingent Liabilities..................35
9.7 Ownership of Properties; Liens.........................35
9.8 Subsidiaries...........................................36
9.9 Pension Plans..........................................36
9.10 Investment Company Act......................................36
9.11 Public Utility Holding Company Act..........................36
9.12 Regulation U................................................36
9.13 Taxes.......................................................36
9.14 Solvency, etc...............................................37
9.15 Hazardous Materials.........................................37
9.15.1 Release and Disposal...........................37
9.15.2 Treatment and Storage..........................37
9.16 Information.................................................38
9.17 Year 2000 Problem......................................38
SECTION 10 COVENANTS......................................................38
10.1 Reports, Certificates and Other Information.................38
10.1.1 Audit Report...................................38
10.1.2 Quarterly Reports..............................39
10.1.3 Compliance Certificates........................39
10.1.4 Reports to SEC and to Shareholders.............40
10.1.5 Notice of Default, Litigation and ERISA
Matters................................40
10.1.6 Subsidiaries...................................40
10.1.7 Management Reports.............................40
10.1.8 Other Information..............................40
10.2 Books, Records and Inspections..............................41
10.3 Insurance...................................................41
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10.4 Compliance with Laws; Payment of Taxes and
Liabilities............................................41
10.5 Maintenance of Existence, etc...............................42
10.6 Financial Covenants.........................................42
10.6.1 Minimum Net Worth..............................42
10.6.2 Fixed Charge Coverage Ratio....................42
10.6.3 Funded Debt Ratio..............................42
10.6.4 Capital Expenditures...........................42
10.7 Limitations on Debt..............................42
10.8 Liens.......................................................43
10.9 Inconsistent Agreements.....................................44
10.10 Dividends, etc.............................................44
10.11 Investments................................................45
10.12 Business Activities.........................................46
10.13 Limitation on Asset Sales..............................47
10.14 Merger, Consolidation and Sale of Property.............47
10.14.1 Company................................47
10.14.2 Restricted Subsidiaries................48
10.15 Guaranty...................................................49
10.16 Use of Proceeds............................................49
10.17 Transactions with Affiliates...............................49
10.18 Employee Benefit Plans.....................................49
10.19 Environmental Covenants....................................50
10.19.1 Environmental Response Obligation.............50
10.19.2 Environmental Liabilities.....................50
10.20 Unconditional Purchase Obligations.........................50
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING...........................51
11.1 Effectiveness...............................................51
11.1.1 Notes .......................................51
11.1.2 Resolutions....................................51
11.1.3 Consents, etc..................................51
11.1.4 Incumbency and Signature Certificates..........51
11.1.5 Guaranties.....................................51
11.1.6 Opinion of Counsel.............................52
11.1.7 Other .......................................52
11.2 All Loans and Letters of Credit........................52
11.2.1 No Default, etc................................52
11.2.2 Confirmatory Certificate.......................52
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.............................52
12.1 Events of Default......................................52
12.1.1 Non-Payment of the Loans, etc..................52
12.1.2 Non-Payment of Other Debt, etc.................53
12.1.3 Other Material Obligations.....................53
12.1.4 Bankruptcy, Insolvency, etc....................53
12.1.5 Non-Compliance with Provisions of this
Agreement..............................53
12.1.6 Warranties.....................................54
12.1.7 Pension Plans..................................54
12.1.8 Judgments......................................54
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12.1.9 Invalidity of Guaranties, etc..................54
12.1.10 Change in Control.............................54
12.2 Effect of Event of Default.............................55
SECTION 13 THE AGENT......................................................55
13.1 Appointment and Authorization; "Agent".................55
13.2 Delegation of Duties...................................56
13.3 Liability of Agent.....................................56
13.4 Reliance by Agent......................................57
13.5 Notice of Default......................................57
13.6 Credit Decision........................................58
13.7 Indemnification of Agent...............................58
13.8 Agent in Individual Capacity...........................59
13.9 Successor Agent........................................59
13.10 Withholding Tax........................................60
13.11 Co-Agents..................................................61
SECTION 14 GENERAL........................................................62
14.1 Waiver; Amendments.....................................62
14.2 Confirmations..........................................62
14.3 Notices................................................62
14.4 Confidentiality........................................63
14.5 Regulation U...........................................63
14.6 Costs, Expenses and Taxes..............................63
14.7 Designation of Restricted and Unrestricted
Subsidiaries...........................................64
14.8 Captions...............................................64
14.9 Assignments; Participations............................64
14.9.1 Assignments....................................64
14.9.2 Participations.................................66
14.10 Governing Law..............................................67
14.11 Counterparts...............................................67
14.12 Successors and Assigns.....................................67
14.13 Indemnification by the Borrowers...........................67
14.14 Forum Selection and Consent to Jurisdiction................68
14.15 Waiver of Jury Trial.......................................69
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SCHEDULE 2.1 Commitments and Percentages
SCHEDULE 2.5 Existing Letters of Credit
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 10.11 Investments
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section
10.1.3)
EXHIBIT C Form of Company Guaranty (Section 11.1.5) EXHIBIT D Form of
HHI Guaranty (Section 11.1.5) EXHIBIT E Form of Opinion of ▇▇▇▇▇▇▇▇▇,
Will & ▇▇▇▇▇
(Section 11.1.7)
EXHIBIT F Form of Assignment Agreement (Section 14.9)
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 15, 1998
(this "Agreement") is entered into among THE HEICO COMPANIES L.L.C., a Delaware
limited liability company (the "Company"), HEICO HOLDING, INC., a Delaware
corporation ("Heico Holding") the undersigned financial institutions (together
with their respective successors and assigns, collectively the "Banks" and
individually each a "Bank") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent for the Banks.
WHEREAS, the Company, the Banks and the Agent have entered into a
Credit Agreement dated as of July 30, 1998 (the "Existing Credit Agreement");
and
WHEREAS, the parties hereto have agreed to amend the Existing Credit
Agreement to add Heico Holding as a borrower hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1 DEFINITIONS, ETC.
1.1 Certain Defined Terms. The following terms shall have
the following meanings:
Affected Bank means any Bank that has given notice to a Borrower (which
has not been rescinded) of (i) any obligation by such Borrower to pay any amount
pursuant to Section 8.1 or (ii) the occurrence of any circumstances of the
nature described in Section 8.2 or 8.3.
Affected Loan - see Section 8.3.
Affiliate of any specified Person means (a) any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (b) any other Person who is a director or
officer of (i) such specified Person, (ii) any Subsidiary of such specified
Person or (iii) any Person described in clause (a) above. For the purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Section 10.17, "Affiliate"
1
shall also mean any beneficial owner of shares representing 10% or more of the
total voting power of the Voting Equity Interests (on a fully diluted basis) of
the Company or of rights or warrants to purchase such Voting Equity Interests
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
Agent means BofA in its capacity as agent for the Banks hereunder and
any successor thereto in such capacity.
Agent-Related Persons means BofA and any successor agent arising under
Section 13.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
Agreement - see the Preamble.
Asset Sale means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of (a) any
Equity Interests of a Restricted Subsidiary (other than directors' qualifying
shares) or (b) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary (other than, in the case of clauses (a) and (b) above, (i) any
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly-Owned Restricted Subsidiary, (ii) for purposes
of Section 10.13 only, any Investment permitted by Section 10.11, and (iii) any
disposition of assets of the Company or any Restricted Subsidiary in connection
with Floor Plan Financing in the ordinary course of business).
Assignee - see Section 14.9.1.
Assignment Agreement - see Section 14.9.1.
Attorney Costs means and includes all reasonable fees and charges of
any law firm or other external counsel and, without duplication, the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
Attributable Debt in respect of a Sale and Leaseback Transaction means,
at any date of determination, (a) if such Sale and Leaseback Transaction is a
Capital Lease Obligation, the amount of Debt represented thereby according to
the definition of "Capital Lease Obligation" and (b) in all other instances,
2
(i) the present value (discounted at the actual rate of interest implicit in
such transaction, compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction (including any period for which such lease has been
extended).
BofA means Bank of America National Trust and Savings Association, a
national banking association.
Bank - see the Preamble. References to "Banks" shall include BofA in
its capacity as Issuing Bank (or any successor thereto in such capacity); for
purposes of clarification only, to the extent that BofA (or any such successor)
may have any rights or obligations in addition to those of the other Banks due
to its status as Issuing Bank, its status as such will be specifically
referenced.
Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the rate per annum then most recently publicly announced by
BofA as its reference rate. (The "reference rate" is a rate set by BofA based
upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate.)
Base Rate Loan means any Loan which bears interest at or by reference
to the Base Rate.
Board of Directors means the Board of Directors of the Company.
Borrower means the Company or Heico Holding; and Borrowers means the
Company and Heico Holding.
Business Day means any day on which BofA is open for commercial banking
business in Chicago and San Francisco and, in the case of a Business Day which
relates to a Eurodollar Loan, on which dealings are carried on in the interbank
Eurodollar market.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (i)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
3
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person which is accounted for as a capital lease on the balance sheet of such
Person.
Capital Lease Obligation means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with GAAP. For
purposes of Section 10.8, a Capital Lease Obligation shall be deemed secured by
a Lien on the property being leased.
Cash Equivalent Investment means, at any time:
(a) any evidence of Debt, maturing not more than one year
after such time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than one year from the
date of issue, which is issued by
(i) a corporation (except an Affiliate of the
Company) organized under the laws of any State of the United
States of America or of the District of Columbia and rated at
least A-1 by Standard & Poor's Ratings Group or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc., at the time of investment, or
(ii) any Bank (or its holding company);
(c) any certificate of deposit or bankers' acceptance or
eurodollar time deposit, maturing not more than one year after the date
of issue, which is issued by either
(i) a financial institution that is a member of the
Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $100,000,000, or
(ii) any Bank; or
(d) any repurchase agreement with a term of one year
or less which
(i) is entered into with
(A) any Bank, or
(B) any other commercial banking institution
of the stature referred to in clause (c)(i),
4
(ii) is secured by a fully perfected Lien in any
obligation of the type described in any of clauses (a) through
(c), and
(iii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial
banking institution) thereunder;
(e) investments in money market funds that invest solely in
Cash Equivalent Investments described in clauses (a) through (d); or
(f) investments in short-term asset management accounts
offered by any Bank for the purpose of investing in loans to any
corporation (other than the Company or an Affiliate of the Company)
organized under the laws of any state of the United States or of the
District of Columbia and rated at least A-1 by Standard & Poor's
Ratings Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
Code means the Internal Revenue Code of 1986.
Commitment means, as to any Bank, such Bank's commitment to make Loans,
and to issue or participate in Letters of Credit, pursuant to this Agreement.
The amount of each Bank's initial Commitment is set forth on Schedule 2.1.
Company - see the Preamble.
Company Guaranty - see Section 11.1.5.
Consolidated Net Income means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries, less the amount
of Permitted Tax Distributions paid or to be paid by the Company or its
Restricted Subsidiaries with respect to such period, provided that there shall
not be included in such Consolidated Net Income (a) any net income (or loss) of
any Person (other than the Company) if such Person is not a Restricted
Subsidiary at the date of determination, (b) any net income (or loss) of any
Person acquired by the Company or any of its consolidated Subsidiaries for any
period prior to the date of such acquisition, (c) any net income (but not loss)
of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions, directly or indirectly, to the Company, except that the
Company's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash
5
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to another Restricted Subsidiary,
to the limitation contained in this clause), and (d) any extraordinary gain or
loss. Notwithstanding anything to the contrary contained herein, gains or losses
attributable to Asset Sales shall be included in Consolidated Net Income.
Consolidated Net Worth means the difference between (x) the
consolidated total assets of the Company minus (y) the consolidated total
liabilities, including minority interests, of the Company shown on the
consolidated balance sheet of the Company as of the end of the most recent
Fiscal Quarter of the Company.
Debt means, with respect to any Person on any date of determination
(without duplication), (a) the principal of and premium (if any) in respect of
(i) debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (b) all Capital Lease Obligations of such
Person and all Attributable Debt in respect of Sale and Leaseback Transactions
entered into by such Person; (c) all obligations of such Person issued or
assumed as the deferred purchase price of property or services, all conditional
sale obligations of such Person and all obligations of such Person under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (d) all obligations (including contingent
reimbursement obligations) of such Person for the reimbursement of any obligor
on any letter of credit (including the Letters of Credit), banker's acceptance
or similar credit transaction (but excluding contingent reimbursement
obligations arising under any commercial letter of credit issued to support
obligations in respect of trade accounts payable arising in the ordinary course
of business); (e) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Preferred Stock (but
excluding any accrued dividends or preferential distributions); (f) all
obligations of the type referred to in clauses (a) through (e) of other Persons
secured by any Lien on any property of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the fair market value of such property or the amount
of the obligation so secured; (g) all Suretyship Liabilities of such Person and
(h) to the extent not otherwise included in this definition, obligations of such
Person under Hedging Agreements. The amount of Debt of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence
6
of the contingency giving rise to the obligation, of any
contingent obligations at such date.
Dollar and the sign "$" mean lawful money of the United States of
America.
EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in calculating Consolidated Net Income for such
period, (i) Interest Expense, (ii) income taxes and Permitted Tax Distributions,
(iii) depreciation and (iv) amortization.
Effective Date - see Section 11.1.
Environmental Laws means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
Equity Interests means, with respect to any Person, any shares or other
equivalents (however designated) of corporate stock, partnership interests or
membership interests in limited liability companies or any other participations,
rights, warrants, options or other interests in the nature of an equity interest
in such Person, including Preferred Stock, but excluding any debt security
convertible or exchangeable into any such equity interest.
ERISA means the Employee Retirement Income Security Act of 1974.
Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate maximum
reserve requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of such Board of Governors
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Office means with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or, if applicable, such
7
other office or offices through which such Bank determines the Eurodollar Rate.
A Eurodollar Office of any Bank may be, at the option of such Bank, either a
domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of BofA two Business Days
prior to the beginning of such Interest Period by major banks in the interbank
Eurodollar market as at or about the relevant local time of such Eurodollar
Office, for delivery on the first day of such Interest Period, for the number of
days comprised therein and in an amount equal or comparable to the amount of the
Eurodollar Loan of BofA for such Interest Period.
Eurodollar Rate (Reserve Adjusted) means, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
Exchange Act means the Securities Exchange Act of 1934.
Existing Credit Agreement - see the Recitals.
Existing Letter of Credit means each letter of credit listed on
Schedule 2.5.
Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York for the preceding Business Day
under the caption "Federal Funds (Effective)". If for any day such rate is not
so published for the preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m., New York City time, on
such day by each of three leading brokers of Federal funds transactions in New
York City, selected by the Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company, which period shall be
the 12-month period ending on March 31 of each year. References to a Fiscal Year
with a number corresponding to
8
any calendar year (e.g., "Fiscal Year 1998") refer to the Fiscal Year ending on
March 31 of such calendar year.
Fixed Charge Coverage Ratio means, as of the last date of any Fiscal
Quarter, the ratio of (a) EBITDA for the period of four consecutive Fiscal
Quarters ending on such day to (b) the sum of Interest Expense for such period
and Scheduled Principal Payments as of such day.
Floor Plan Financing means any financing arrangement entered into by
the Company or any of its Restricted Subsidiaries whereby the Company or such
Restricted Subsidiary sells to a Person notes receivable that the Company or
such Restricted Subsidiary received in the ordinary course of business and
agrees to reimburse such Person, on a limited recourse basis, any amount not
paid to such Person by the obligor or obligors of such notes receivable.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means all Debt of the Company and its Restricted
Subsidiaries, excluding (i) Debt described in clause (h) of the definition of
"Debt", (ii) Subordinated Debt, (iii) Floor Plan Financing (and Suretyship
Liabilities with respect thereto), (iv) Debt of the Company to Restricted
Subsidiaries and Debt of Restricted Subsidiaries to the Company or to other
Restricted Subsidiaries and (v) Suretyship Liabilities in respect of any
obligation of the Company or any Restricted Subsidiary permitted under this
Agreement (provided that any such obligation which constitutes Debt of the
primary obligor shall not be excluded from Funded Debt by this clause (v)).
Funded Debt Ratio means, as of the last day of any Fiscal Quarter, the
ratio of (a) Funded Debt as of such day to (b) EBITDA for the period of four
consecutive Fiscal Quarters ending on such day.
GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.
Guarantor means (a) as of the Effective Date, (i) with respect to the
obligations of the Company hereunder, each then-existing Restricted Subsidiary
(including Heico Holding), and (ii) with respect to the obligations of Heico
Holding hereunder, the Company and each then-existing Restricted Subsidiary
(excluding Heico Holding); and (b) thereafter, the Persons referred to in
subclause (i) or (ii), as applicable, of clause (a) and each other Person which
from time to time executes and delivers a counterpart of the Company Guaranty or
the HHI Guaranty, as applicable (except, in each case, any such Person which is
released from its obligations under the applicable Guaranty in accordance with
the terms hereof).
Guaranty means each of the Company Guaranty and the HHI Guaranty.
Hazardous Material means any hazardous, toxic or dangerous substance or
material defined as such in (or for purposes of) any Environmental Law.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices.
Heico Holding - see the Preamble.
▇▇▇▇▇▇▇ means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
HHI Guaranty - see Section 11.1.5.
HHI Preferred Stock means Preferred Stock of Heico Holding issued to
the Company to permit the Company to distribute Priority Amounts to ▇▇▇▇▇▇▇ as
provided in the Operating Agreement.
Indemnified Liabilities - see Section 14.13.
Interest Expense means for any period the consolidated interest expense
of the Company and its Restricted Subsidiaries for such period (including all
imputed interest on Capital Leases).
Interest Period means, as to any Eurodollar Loan, the period commencing
on the date such Loan is borrowed or on the date such Loan is converted into or
continued as a Eurodollar Loan, and ending on the date one, two, three or six
months thereafter as selected by the applicable Borrower pursuant to Section 2.3
or 2.4, as applicable; provided that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall
9
be extended to the following Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period that begins 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 the calendar
month at the end of such Interest Period; and
(iii) neither Borrower may select any Interest Period that
would extend beyond the scheduled Termination Date.
Investment means, with respect to any Person:
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any ownership or similar interest held by such
Person in any other Person; and
(c) the incurrence of any Suretyship Liability with respect to
any obligation of any other Person.
The amount of any Investment shall be the original principal or capital
amount thereof (or, in the case of Suretyship Liability, the amount of the
underlying obligations for which such Person may have any liability) less all
returns of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property.
Issuing Bank means BofA in its capacity as issuer of Letters of Credit
hereunder and any successor thereto in such capacity.
Letter of Credit - see subsection 2.1(b).
Letter of Credit Application means a letter of credit application in
the form then used by the Issuing Bank for the type of letter of credit
requested (with appropriate adjustments to indicate that any letter of credit
issued thereunder is to be issued pursuant to, and subject to the terms and
conditions of, this Agreement).
Lien means, with respect to any property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment,
10
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing and any Sale and
Leaseback Transaction).
Loan Documents means this Agreement, the Notes, the Letter of Credit
Applications and the Guaranties.
Loans - see subsection 2.1(a).
Margin means (a) initially, 1.00%, and (b) on and after any date
specified below on which the Margin is to be adjusted, the rate per annum set
forth in the table below opposite the applicable Funded Debt Ratio:
Funded
Debt Ratio Margin
Greater than 3.5 to 1 1.75%
Greater than 3.0 to 1
but equal to or less
than 3.5 to 1 1.50%
Greater than 2.5 to 1
but equal to or less
than 3.0 to 1 1.25%
Equal to or less
than 2.5 to 1 1.00%.
The Margin shall be adjusted, to the extent applicable, 45 days (or, in the case
of the last Fiscal Quarter of any Fiscal Year, 120 days) after the end of each
Fiscal Quarter (beginning with the Fiscal Quarter ending September 30, 1998)
based on the Funded Debt Ratio as of the last day of such Fiscal Quarter; it
being understood that if the Company fails to deliver the financial statements
required by Section 10.1.1 or 10.1.2, as applicable, by the 45th day (or, if
applicable, the 120th day) after any Fiscal Quarter, the Margin shall be 1.75%
until such financial statements are delivered.
Margin Stock means any "margin stock" as defined in Regulation U of the
FRB.
Material Adverse Effect means a material adverse effect on (a) the
financial condition, operations, business, assets or
11
business prospects of the Company and its Restricted Subsidiaries taken as a
whole or (b) the ability of either Borrower or any other Guarantor to timely and
fully perform any of its payment or other material obligations under this
Agreement or any other Loan Document to which it is a party.
Members means holders of Equity Interests in the Company.
Non-Use Fee Rate means (a) initially, 0.1875%, and (b) on and after any
date specified below on which the Non-Use Fee Rate is to be adjusted, the rate
per annum set forth in the table below opposite the applicable Funded Debt
Ratio:
Funded Non-Use
Debt Ratio Fee Rate
Greater than 3.5 to 1 0.3000%
Greater than 3.0 to 1
but equal to or less
than 3.5 to 1 0.2500%
Greater than 2.5 to 1
but equal to or less
than 3.0 to 1 0.2000%
Equal to or less
than 2.5 to 1 0.1875%.
The Non-Use Fee Rate shall be adjusted, to the extent applicable, 45
days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 120 days)
after the end of each Fiscal Quarter (beginning with the Fiscal Quarter ending
September 30, 1998) based on the Funded Debt Ratio as of the last day of such
Fiscal Quarter; it being understood that if the Company fails to deliver the
financial statements required by Section 10.1.1 or 10.1.2, as applicable, by the
45th day (or, if applicable, the 120th day) after any Fiscal Quarter, the
Non-Use Fee Rate shall be .30% until such financial statements are delivered.
Note - see Section 3.1.
Officers' Certificate means a certificate signed by the principal
executive officer or principal financial officer of the Company.
Operating Agreement means the Limited Liability Company Operating
Agreement of the Company dated March 31, 1997.
Participant - see Section 14.9.2.
12
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which the Company or any
corporation, trade or business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades or businesses,
as described in section 414 of the Code or section 4001 of ERISA, may have any
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
Percentage means as to any Bank the percentage set forth opposite such
Bank's name on Schedule 2.1, as adjusted by assignments pursuant to Section
14.9.
Permitted Holders means (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and his estate, spouse,
ancestors and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rider 13d-3 and 13d- 5 under the Exchange
Act) Voting Equity Interests representing at least 51% of the total voting power
of all classes of Voting Equity Interests of such Person (exclusive of any
matters as to which class voting rights exist) and (b) any corporation (or other
entity) which owns all the outstanding Equity Interests of the Company if such
entity acquires such ownership in a transaction in which the former owners of
all the Equity Interests of the Company acquire proportionate ownership of the
Equity Interests (or similar equity ownership interest) of such entity (or any
parent organization which owns all of the outstanding Equity Interests (or
similar equity ownership interest) of such entity).
Permitted Senior Debt means unsecured Debt of a Borrower which (i) has
covenants no more restrictive than the covenants set forth in Section 10, (ii)
has a final maturity date no earlier than July 30, 2004 and (iii) has a weighted
average life as of the date of incurrence thereof which is longer than the
period of time until the scheduled Termination Date as of such date of
incurrence.
Permitted Tax Distribution means, so long as the Company (or any
successor thereto) is treated as a partnership for United States Federal income
tax purposes, a distribution to Members to enable such Members to pay Federal
and state income
13
taxes (including quarterly estimated Federal and state income taxes) with
respect to the Company's Taxable Income allocated, or to be allocated, to such
Members ("Allocable Taxable Income"). The amount payable as Permitted Tax
Distributions in any applicable Fiscal Year will be determined separately for
ordinary income and capital gain, and will equal the product of (i) the
Allocable Taxable Income during such Fiscal Year and (ii) a rate equal to 6%
plus the highest marginal Federal tax rate applicable to individuals from time
to time with respect to an amount of Taxable Income equal to the Allocable
Taxable Income during such Fiscal Year, taking into account the character of
such Taxable Income. The Permitted Tax Distributions for each Fiscal Year will
be adjusted to reflect any tax losses of the Company arising in any prior Fiscal
Year (assuming that any such losses are carried forward and used to offset the
Company's Taxable Income in the applicable Fiscal Year) and to reflect the
Company's payment of any withholding taxes that would give rise to a credit or
other tax benefit to the Company (or its direct or indirect Members).
Permitted Tax Distributions will be payable in quarterly installments
during the applicable Fiscal Year, in each case no more than five days prior to
the dates upon which individuals are legally required to file their quarterly
estimated Federal income tax returns. Such quarterly payments will be based upon
the Company's then good faith estimate of its Allocable Taxable Income for such
Fiscal Year.
Upon the earlier of (i) the April 15 following the end of the
applicable Fiscal Year and (ii) the filing of a report on Form 10-K for such
Fiscal Year, the Company will make a determination of the aggregate amount of
Permitted Tax Distributions for such Fiscal Year. Such determination will be
based upon the Allocable Taxable Income during such Fiscal Year as reflected on
such Federal income tax return, or if such return is not filed when such
financial statements are filed with the SEC, the Company's then good faith
estimate of the amount of its Taxable Income for such Fiscal Year.
If the aggregate amount of Permitted Tax Distributions in any Fiscal
Year exceeds the amount determined by the Company, each Member will be required
to promptly repay any such excess to the Company, and no further Permitted Tax
Distributions will be paid to such Member until such Member has repaid such
excess to the Company. If the amount determined by the Company exceeds the
aggregate amount of Permitted Tax Distributions in any Fiscal Year, the Company
will promptly pay that difference to the Members as a Permitted Tax Distribution
for such Fiscal Year. In addition, the aggregate amount of Permitted Tax
Distributions will be adjusted appropriately under certain circumstances,
including in the event that the Company files an amended Federal
14
income tax return (or the Company files its original return for the applicable
Fiscal Year if the determination of the aggregate amount of Permitted Tax
Distributions for such Fiscal Year was based upon the Company's good faith
estimate of its Taxable Income) or the Internal Revenue Service determines that
information reflected in the Company's Federal income tax return for a relevant
Fiscal Year is inaccurate or incomplete.
Person means any natural person, corporation, partnership, joint
venture, trust, association, unincorporated organization, governmental authority
or unit, or any other entity, whether acting in an individual, fiduciary or
other capacity.
Preferred Stock means any Equity Interest of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Equity Interests issued by such Person.
Pro forma means, with respect to any calculation made or required to be
made pursuant to the terms hereof, a calculation (i) performed in accordance
with Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company, (ii) to the extent not
determinable under clause (i) hereof, made in accordance with GAAP, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company or (iii) to the extent
not determinable under clauses (i) and (ii) hereof, made in good faith by the
Board of Directors after consultation with the independent certified public
accountants of the Company.
Prohibited Environmental Event means any event or condition described
in clause (a), (b) or (c) of Section 9.15.1 or clause (a) or (b) of Section
9.15.2 which, when aggregated with all other such events and conditions, (i) has
had or is reasonably likely to have a Material Adverse Effect or (ii) is
reasonably likely to require payments by the Company and its Restricted
Subsidiaries in excess of $3,000,000 during the then-current Fiscal Year
(including all payments previously made in such Fiscal Year) or in any one of
the succeeding four Fiscal Years.
Required Banks means Banks having an aggregate Percentage of 66 2/3% or
more.
Restricted Subsidiary means (a) the Subsidiaries designated as such on
Schedule 9.8 and (b) any other Subsidiary which the Company designates as a
Restricted Subsidiary pursuant to
15
Section 14.7; provided that no Subsidiary of an Unrestricted Subsidiary may be a
Restricted Subsidiary.
Sale and Leaseback Transaction means any arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to another Person and the Company or a
Restricted Subsidiary leases it from such Person.
Scheduled Principal Payments means, as of any date, all mandatory
payments of Funded Debt scheduled to be made by the Company and its Restricted
Subsidiaries during the one-year period after such date.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933.
Stated Amount means, with respect to any Letter of Credit at any date
of determination, the maximum aggregate amount available for drawing thereunder
at any time during the then ensuing term of such Letter of Credit under any and
all circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means any Debt of the Company or any Restricted
Subsidiary which has maturities and other terms, and which is subordinate or
junior in right of payment to the obligations of the Borrowers hereunder and the
obligations of each applicable Guarantor under each Guaranty pursuant to a
written agreement, satisfactory to the Required Banks acting in good faith.
Subsidiary of a Person means any corporation, association, partnership,
limited liability company, joint venture or other business entity of which more
than 50% of the Voting Equity Interests is owned or controlled directly or
indirectly by such Person, or one or more of the Subsidiaries of such Person, or
a combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.
Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon
16
the shares of any other Person. The amount of any Person's obligation under any
Suretyship Liability shall (subject to any limitation set forth therein) be
deemed to be the principal amount of the debt, obligation or other liability
guaranteed thereby.
Taxable Income means the amount that the Company would have calculated
as its taxable income if the Company were treated as a C Corporation for United
States Federal income tax purposes without regard to the dividends-received
deduction contained in Section 243 of the Code.
Termination Date means July 30, 2003 or such earlier date on which the
Commitments shall terminate pursuant to Section 6 or 12.
Total Outstandings means at any time the sum of (i) the aggregate
principal amount of all outstanding Loans plus (ii) the Stated Amount of all
Letters of Credit.
Type of Loan or Borrowing - see Section 2.2. The Types of Loans or
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event which if it continues
uncured will, with lapse of time or notice or both, constitute an Event of
Default.
Unrestricted Subsidiary means any Subsidiary other than a Restricted
Subsidiary.
Voting Equity Interests of a corporation or other Person means all
Equity Interests in such corporation or other Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
Wholly-Owned Restricted Subsidiary means, at any time, a Restricted
Subsidiary all the Voting Equity Interests of which (except directors'
qualifying shares) is at such time owned, directly or indirectly, by the Company
and its other Wholly-Owned Restricted Subsidiaries.
1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural
forms of such terms.
(b) The term "including" is not limiting and means
"including without limitation."
17
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding", and the word "through" means "to and
including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.
1.3 Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided that if the Company
notifies the Agent that the Company wishes to amend any covenant in Section 10
to eliminate the effect of any change in GAAP on the operation of such covenant,
or if the Agent notifies the Company that the Required Banks wish to amend any
covenant in Section 10 for such purpose, then the Company's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Company
and the Required Banks.
SECTION 2 COMMITMENTS OF THE BANKS; TYPES OF LOANS;
BORROWING AND CONVERSION PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each Bank, severally and for itself alone, agrees as follows:
(a) Each Bank agrees to make loans to either Borrower on a revolving
basis ("Loans") from time to time before the Termination Date in such Bank's
Percentage of such aggregate amounts as such Borrower may request from all Banks
hereunder; provided that the Total Outstandings shall not at any time exceed the
aggregate amount of the Commitments.
(b) The Issuing Bank agrees to issue letters of credit, in each case
containing such terms and conditions as are permitted by this Agreement and are
reasonably satisfactory to the Issuing Bank (collectively the "Letters of
Credit" and individually each a "Letter of Credit"), at the request of and for
the account of either Borrower from time to time before the date which is seven
18
days prior to the Termination Date and, as more fully set forth in Section 2.7,
each Bank agrees to purchase a participation in each such Letter of Credit;
provided that (i) the aggregate Stated Amount of all Letters of Credit shall not
at any time exceed $50,000,000 and (ii) the Total Outstandings shall not at any
time exceed the aggregate amount of the Commitments.
2.2 Various Types of Loans. Each Loan shall be either a Base Rate Loan
or a Eurodollar Loan (each a "Type" of Loan), as the applicable Borrower shall
specify in the related notice of borrowing or conversion pursuant to Section 2.3
or 2.4. Eurodollar Loans to the same Borrower having the same Interest Period
are sometimes called a "Group" or collectively "Groups". Base Rate Loans and
Eurodollar Loans may be outstanding at the same time, provided that (i) not more
than eight different Groups of Eurodollar Loans shall be outstanding at any one
time and (ii) the aggregate principal amount of each Group of Eurodollar Loans
shall at all times be $1,000,000 or a higher integral multiple of $100,000. All
borrowings, conversions, continuations and repayments of Loans shall be effected
so that each Bank will have a pro rata share (according to its Percentage) of
all Types and Groups of Loans.
2.3 Borrowing Procedures. The applicable Borrower shall give written or
telephonic notice to the Agent of each proposed borrowing not later than (a) in
the case of a Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed
date of such borrowing, and (b) in the case of a Eurodollar borrowing, 11:00
A.M., Chicago time, at least two Business Days prior to the proposed date of
such borrowing. Each such notice shall be effective upon receipt by the Agent,
shall be irrevocable, and shall specify the date, amount and Type of borrowing
and, in the case of a Eurodollar borrowing, the initial Interest Period
therefor. Promptly upon receipt of such notice, the Agent shall advise each Bank
thereof. Not later than 2:00 p.m., Chicago time, on the date of a proposed
borrowing, each Bank shall provide the Agent at the principal office of the
Agent in Chicago with immediately available funds covering such Bank's
Percentage of such borrowing and, subject to the satisfaction of the conditions
precedent set forth in Section 11 with respect to such borrowing, the Agent
shall pay over the requested amount to the applicable Borrower on the requested
borrowing date. Each borrowing shall be on a Business Day and shall be in an
aggregate amount of $1,000,000 or a higher integral multiple of $100,000. Unless
the applicable Borrower shall otherwise direct in writing, the proceeds of all
borrowings shall be deposited to a demand deposit account of such Borrower
maintained with BofA.
19
2.4 Procedures for Continuation or Conversion of Loan.
(a) Subject to the provisions of Section 2.2, either Borrower may, upon
irrevocable written or telephonic notice to the Agent in accordance with
subsection (b) below,
(i) elect, as of any Business Day, to convert any Loans to
such Borrower (or any part thereof in an aggregate amount of $1,000,000
or a higher integral multiple of $100,000) into Loans of the other
Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Eurodollar Loans to such Borrower having
Interest Periods expiring on such day (or any part thereof in an
aggregate amount of $1,000,000 or a higher integral multiple of
$100,000);
provided that if at any time the aggregate amount of any Group of Eurodollar
Loans is reduced, by payment, prepayment or conversion of part thereof, to be
less than $1,000,000, such Eurodollar Loans shall automatically convert into
Base Rate Loans.
(b) The applicable Borrower shall give written or telephonic notice to
the Agent of each proposed conversion or continuation not later than (i) 11:00
A.M., Chicago time, at least two Business Days in advance of the date of
conversion or continuation, if the Loans are to be converted into or continued
as Eurodollar Loans; and (ii) 11:00 A.M., Chicago time, on the date of
conversion, if the Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed date of conversion or continuation
(which shall be a Business Day);
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) in the case of a continuation of, or conversion into,
Eurodollar Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Loans, the applicable Borrower has failed to select timely a new
Interest Period to be applicable to such Eurodollar Loans, such Borrower shall
be deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
20
(d) The Agent will promptly notify each Bank of its receipt of a notice
of conversion or continuation pursuant to this Section 2.4, or, if no timely
notice is provided by the applicable Borrower, the Agent will promptly notify
each Bank of the details of any automatic conversion.
2.5 Letter of Credit Procedures. (a) The applicable Borrower shall give
notice to the Agent and the Issuing Bank of the proposed issuance of each Letter
of Credit for the account of such Borrower on a Business Day which is at least
two Business Days (or such lesser period as the Agent and the Issuing Bank may
agree) prior to the proposed date of issuance of such Letter of Credit. Each
such notice shall be accompanied by a Letter of Credit Application, duly
executed by the applicable Borrower and in all respects reasonably satisfactory
to the Issuing Bank, together with such other documentation as the Issuing Bank
may reasonably request in support thereof, it being understood that each Letter
of Credit Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such Letter of
Credit (which shall not be later than the then-scheduled Termination Date unless
the applicable Borrower shall have pledged cash collateral to the Agent therefor
in an amount, and pursuant to documentation, reasonably satisfactory to the
Required Banks and the Agent) and whether such Letter of Credit is to be
transferable in whole or in part. Subject to the satisfaction of the conditions
precedent set forth in Section 11 with respect to the issuance of such Letter of
Credit, the Issuing Bank shall issue such Letter of Credit on the requested
issuance date.
(b) The Borrower, the Banks, the Issuing Bank and the Agent agree that,
on the Effective Date, each Existing Letter of Credit shall be deemed to have
been issued for the account of the Company (or jointly for the account of the
Company and any applicable Subsidiary) hereunder and to be subject to the terms
and provisions hereof.
2.6 Participations in Letters of Credit. Concurrently with the issuance
of each Letter of Credit (or, with respect to each Existing Letter of Credit, on
the Effective Date), the Issuing Bank shall be deemed to have sold and
transferred to each other Bank, and each other Bank shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such other Bank's Percentage, in such Letter of Credit and the
applicable Borrower's reimbursement obligations with respect thereto. For the
purposes of this Agreement, the unparticipated portion of each Letter of Credit
shall be deemed to be the Issuing Bank's "participation" therein. The Issuing
Bank hereby agrees, upon request of any Bank, to deliver to such Bank a list of
all outstanding Letters of Credit,
21
together with such information related thereto as such other Bank may reasonably
request.
2.7 Reimbursement Obligations. Each Borrower hereby unconditionally and
irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit issued for the
account of such Borrower honoring any demand for payment made by the beneficiary
thereunder, in each case on the date that such payment or disbursement is made.
Any amount not reimbursed on the date of such payment or distribution shall bear
interest from the date of such payment or disbursement to the date that the
Issuing Bank is reimbursed by the applicable Borrower therefor, payable on
demand, at a rate per annum equal to the sum of the Base Rate from time to time
in effect plus the Margin plus, beginning on the second Business Day after
demand by the Issuing Bank, 2%. The Issuing Bank shall promptly notify the
applicable Borrower whenever any demand for payment is made under any Letter of
Credit issued for the account of such Borrower by the beneficiary thereunder;
provided that the failure of the Issuing Bank to so notify such Borrower shall
not affect the rights of the Issuing Bank or the Banks in any manner whatsoever.
2.8 Limitation on the Issuing Bank's Obligations. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall have no
obligation to either Borrower or any Bank other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon the
Issuing Bank any liability to either Borrower or any Bank and shall not reduce
or impair the applicable Borrower's reimbursement obligations set forth in
Section 2.7 or the obligations of the Banks pursuant to Section 2.9.
2.9 Funding by Banks to the Issuing Bank. If the Issuing Bank makes any
payment or disbursement under any Letter of Credit and the applicable Borrower
has not reimbursed the Issuing Bank in full for such payment or disbursement by
11:00 A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by the Issuing Bank from or on behalf of a Borrower is or
must be returned or rescinded upon or during any bankruptcy or reorganization of
such Borrower or otherwise, each other Bank shall be obligated to pay to the
Issuing Bank, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its pro rata share (according to its
Percentage) of such payment or disbursement (but no such payment shall diminish
the obligations of the applicable Borrower under
22
Section 2.7), and the Agent shall promptly notify each other Bank thereof. Each
other Bank irrevocably and unconditionally agrees, severally and for itself
alone, to so pay to the Agent in immediately available funds for the account of
the Issuing Bank the amount of such other Bank's Percentage of such payment or
disbursement. If and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 P.M., Chicago time, on the Business Day on which
such Bank receives notice from the Agent of such payment or disbursement or such
return or rescission of reimbursement (it being understood that any such notice
received after noon, Chicago time, on any Business Day shall be deemed to have
been received on the next following Business Day), such Bank agrees to pay
interest on such amount to the Agent for the account of the Issuing Bank
forthwith on demand for each day from the date such amount was to have been
delivered to the Agent to the date such amount is paid, at a rate per annum
equal to (a) for the first three days after demand, the Federal Funds Rate from
time to time in effect and (b) thereafter, the Base Rate from time to time in
effect. Any Bank's failure to make available to the Agent its Percentage of any
such payment or disbursement or such return or rescission of reimbursement shall
not relieve any other Bank of its obligation hereunder to make available to the
Agent such other Bank's Percentage of such amount, but no Bank shall be
responsible for the failure of any other Bank to make available to the Agent
such other Bank's Percentage of any such payment or disbursement or such return
or rescission of reimbursement.
2.10 Warranty. Each notice of borrowing, continuation or conversion
pursuant to Section 2.3 or 2.4 and the delivery of each Letter of Credit
Application pursuant to Section 2.5 shall automatically constitute a warranty by
the Borrowers to the Agent and each Bank to the effect that on the date of such
requested borrowing, continuation or conversion or the issuance of the requested
Letter of Credit, as the case may be, (a) the warranties of the Borrowers
contained in Section 9 (excluding Sections 9.5, 9.6 and 9.8) of this Agreement
shall be true and correct as of such requested date as though made on the date
thereof and (b) no Event of Default or Unmatured Event of Default shall have
then occurred and be continuing or will result therefrom.
2.11 Conditions. Notwithstanding any other provision of this Agreement,
(a) no Bank shall be obligated to make any Loan, (b) no Bank shall be obligated
to convert into or permit the continuation at the end of the applicable Interest
Period of any Eurodollar Loan and (c) the Issuing Bank shall not be obligated to
issue any Letter of Credit if, in any such case, an Event of Default or
Unmatured Event of Default exists or would result therefrom.
23
2.12 Commitments Several. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation to make a
Loan on such date, but no Bank shall be responsible for the failure of any other
Bank to make any Loan to be made by such other Bank.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank to each Borrower shall be evidenced
by a promissory note (individually each a "Note" and collectively for all Banks
the "Notes") of such Borrower substantially in the form of Exhibit A, with
appropriate insertions, dated the Effective Date (or such earlier date as shall
be satisfactory to the Agent), payable to the order of such Bank in an amount
equal to such Bank's Commitment (or, if less, in the aggregate unpaid principal
amount of all of such Bank's Loans) on the Termination Date.
3.2 Recordkeeping. Each Bank shall record in its records the date and
amount of each Loan made by such Bank, each repayment or conversion thereof and,
in the case of each Eurodollar Loan, the dates on which each Interest Period for
such Loan shall begin and end. The aggregate unpaid principal amount so recorded
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid on the applicable Note of such Bank. The failure to so record any such
amount or any error in so recording any such amount shall not, however, limit or
otherwise affect the obligations of the applicable Borrower hereunder or under
any Note to repay the principal amount of the Loans evidenced by such Note
together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. Each Borrower promises to pay interest on the
unpaid principal amount of each Loan to such Borrower for the period from the
date of such Loan to the date such Loan is paid in full, as follows:
(a) at all times while such Loan is a Base Rate Loan, at a
rate per annum equal to the Base Rate from time to time in effect; and
(b) at all times while such Loan is a Eurodollar Loan, at a
rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan plus the
Margin from time to time in effect;
provided, however, that at any time an Event of Default exists, the interest
rate applicable to each Loan shall be increased by 2%.
24
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan
shall be payable on the last day of each calendar quarter and at maturity.
Accrued interest on each Eurodollar Loan shall be payable on the last day of
each Interest Period relating to such Loan (and, in the case of each Eurodollar
Loan with an Interest Period in excess of three months, on each three-month
anniversary of the first day of such Interest Period) and at maturity. After
maturity, accrued interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Agent, and notice
thereof shall be given by the Agent promptly to the applicable Borrower and each
Bank. Each determination of the applicable Eurodollar Rate by the Agent shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable
error. The Agent shall, upon written request of the applicable Borrower or any
Bank, deliver to such Borrower or such Bank a statement showing the computations
used by the Agent in determining any applicable Eurodollar Rate hereunder.
4.4 Computation of Interest. Interest on Base Rate Loans when the Base
Rate is determined by reference to BofA's reference rate shall be computed for
the actual number of days elapsed on the basis of a year of 365 or, if
applicable, 366 days. All other interest shall be computed for the actual number
of days elapsed on the basis of a year of 360 days. The applicable interest rate
for each Base Rate Loan shall change simultaneously with each change in the Base
Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Borrowers jointly and severally agree to pay to
the Agent for the account of each Bank a non-use fee, for the period from the
Effective Date to the Termination Date at a rate per annum equal to the Non-Use
Fee Rate from time to time in effect, on the unused amount of such Bank's
Commitment. Such non-use fee shall be payable in arrears on the last day of each
calendar quarter and on the Termination Date, in each case for the period then
ending for which such non-use fee shall not have been theretofore paid. The
non-use fee shall be computed for the actual number of days elapsed on the basis
of a year of 365 or, if applicable, 366 days.
5.2 Letter of Credit Fees. (a) Each Borrower agrees to pay to the Agent
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each stand-by Letter of Credit issued for the account
of such Borrower at a rate per annum equal to the Margin from time to time in
effect multiplied by the maximum amount available to be drawn
25
under such Letter of Credit from time to time, computed for the actual number of
days elapsed on the basis of a year of 360 days and payable in arrears on the
last day of each calendar quarter and on the Termination Date (and thereafter,
if applicable, on demand) for the period from the date of the issuance of such
Letter of Credit to the date such payment is due or, if earlier, the date on
which such Letter of Credit expired or was terminated.
(b) Each Borrower agrees to pay to the Agent for the account of the
Banks pro rata according to their respective Percentages an issuance fee for
each commercial Letter of Credit issued for the account of such Borrower in an
amount equal to the greater of 0.125% of the face amount of such Letter of
Credit and $75. Such fee shall be payable in arrears on the last day of each
calendar quarter and on the Termination Date for all commercial Letters of
Credit for which such fee has not previously been paid.
(c) In addition, each Borrower agrees, with respect to each Letter of
Credit issued for the account of such Borrower, to pay to the Issuing Bank (i) a
fronting fee in an amount mutually agreed to by such Borrower and the Issuing
Bank and (ii) such reasonable fees and expenses as the Issuing Bank customarily
requires in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations.
(d) With respect to the Existing Letters of Credit,(i) the Company
shall only be responsible for fees pursuant to clauses (a) and (b) above with
respect to such Letters of Credit commencing on the Effective Date and (ii) the
Company shall be responsible for fees and expenses pursuant to clause (c) above
only to the extent not previously paid in respect of such Letters of Credit.
5.3 Agent's Fees. The Company agrees to pay to the Agent periodic
agent's fees at such times and in such amounts as are mutually agreed upon by
the Company and the Agent.
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
6.1 Voluntary Reduction or Termination of Commitments. The
-------------------------------------------------
Borrowers may from time to time on at least five Business Days'
prior written notice received by the Agent (which shall promptly
advise each Bank thereof) permanently reduce the aggregate amount
of the Commitments to an amount not less than the Total
Outstandings. Any such reduction shall be in an aggregate amount
of $5,000,000 or a higher integral multiple of $1,000,000. The
Borrowers may at any time on like notice terminate the
Commitments upon payment in full of all Loans and all other
26
obligations of the Borrowers hereunder. All reductions of the Commitments shall
be pro rata among the Banks according to their respective Percentages.
6.2 Prepayments. Either Borrower may from time to time prepay Loans to
such Borrower in whole or in part, provided that (a) the applicable Borrower
shall give the Agent (which shall promptly advise each Bank) written notice
thereof not less than one Business Day prior to such prepayment, in the case of
Base Rate Loans, and not less than two Business Days prior to such prepayment,
in the case of Eurodollar Loans, in each case specifying the Loans to be prepaid
and the date and amount of prepayment, and (b) each partial prepayment shall be
in an integral multiple of $100,000. Any prepayment of a Eurodollar Loan shall
include accrued interest to the date of prepayment on the principal amount being
repaid, and any prepayment of a Eurodollar Loan prior to the end of the Interest
Period therefor shall be subject to Section 8.4.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
Loans, and of all fees, shall be made by the applicable Borrower to the Agent in
immediately available funds at its office in Chicago not later than noon,
Chicago time, on the date due; and funds received after that hour shall be
deemed to have been received by the Agent on the next following Business Day.
Each Borrower hereby authorizes the Agent to charge any demand deposit account
of such Borrower maintained with BofA for the amount of any such payment on the
due date therefor, but the Agent's failure to so charge such account shall in no
way affect the obligation of such Borrower to make any such payment. The Agent
shall promptly remit to each Bank its share of all such payments received in
collected funds by the Agent for the account of such Bank.
All payments under Sections 8.1 and 8.4 shall be made by the applicable
Borrower directly to the Bank or Banks entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the applicable Borrower shall direct by notice to be
received by the Agent on or before the date of such payment or, in the absence
of such notice, as the Agent shall determine in its reasonable discretion.
Concurrently with each remittance to any Bank of its share of any such payment,
the Agent shall advise such Bank as to the application of such payment.
7.3 Due Date Extension. If any payment of principal or
interest with respect to any of the Loans, or of any fees, falls
27
due on a day which is not a Business Day, then such due date shall be extended
to the next following Business Day (unless, in the case of a Eurodollar Loan,
such next following Business Day is the first Business Day of a calendar month,
in which case such due date shall be the immediately preceding Business Day)
and, in the case of principal, additional interest shall accrue and be payable
for the period of any such extension.
7.4 Setoff. Each Borrower agrees that the Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, each Borrower agrees that at any time (a) any payment or other amount
owing by such Borrower under this Agreement is then due to the Agent or any Bank
or (b) any Unmatured Event of Default under Section 12.1.4 or any Event of
Default exists, the Agent and each Bank may apply to the payment of such payment
or other amount (or, in the case of clause (b), to any obligation of the
applicable Borrower hereunder, whether or not then due) any and all balances,
credits, deposits, accounts or moneys of such Borrower then or thereafter with
the Agent or such Bank.
7.5 Proration of Payments. If any Bank shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Loan in excess of its
pro rata share of payments and other recoveries obtained by all Banks on account
of principal of and interest on Loans then held by them (other than in respect
of an Affected Loan or as a result of replacement of a Bank pursuant to Section
8.7), such Bank shall purchase from the other Banks such participation in the
Loans held by them as shall be necessary to cause such purchasing Bank to share
the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Bank, the purchase shall be rescinded
and the purchase price restored to the extent of such recovery.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of, or
any change in, any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such
Bank) to any tax, duty or other charge with respect
28
to its Eurodollar Loans, its Notes or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to any Bank of
the principal of or interest on its Eurodollar Loans or any other
amounts due under this Agreement in respect of its Eurodollar Loans or
its obligation to make Eurodollar Loans (except for changes in the rate
of tax on the overall net income of such Bank or its Eurodollar Office
imposed by the jurisdiction in which such Bank's principal executive
office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve
included in the determination of interest rates pursuant to Section 4),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Bank (or any
Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any
other condition affecting its Eurodollar Loans, its Notes or its
obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or, in the
case of Regulation D of the FRB, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under its Notes with respect thereto,
then within 15 days after demand by such Bank (which demand shall be accompanied
by a statement setting forth in reasonable detail the basis for and a
calculation of the amount of such demand, a copy of which shall be furnished to
the Agent), the applicable Borrower shall pay directly to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or such reduction.
(b) If any Bank shall reasonably determine that, after the date of this
Agreement, the adoption or phase-in of, or any change in, any applicable law,
rule or regulation regarding capital adequacy, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Eurodollar Office) or any Person
controlling such Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's or such controlling Person's capital as a consequence of such
Bank's obligations hereunder to a level below that which such Bank or such
controlling Person
29
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or such controlling Person's policies with respect to
capital adequacy) by an amount deemed by such Bank or such controlling Person to
be material, then from time to time, within 15 days after demand by such Bank
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for and a calculation of the amount of such demand, a copy of
which shall be furnished to the Agent), the Borrowers jointly and severally
agree to pay to such Bank such additional amount or amounts as will compensate
such Bank or such controlling Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Agent in the interbank Eurodollar market for such
Interest Period, or the Agent otherwise reasonably determines (which
determination shall, absent demonstrable error, be binding and
conclusive on the Borrowers) that by reason of circumstances affecting
the interbank Eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate;
(b) Banks having an aggregate Percentage of 30% or more advise
the Agent that the Eurodollar Rate (Reserve Adjusted) as determined by
the Agent will not adequately and fairly reflect the cost to such Banks
of maintaining or funding such Loans for such Interest Period (taking
into account any amount to which such Banks may be entitled under
Section 8.1), or that the making or funding of Eurodollar Loans has
become impracticable as a result of an event occurring after the date
of this Agreement which in the opinion of such Banks materially affects
such Loans,
then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. If, after the
date of this Agreement, any change in (including the adoption of any new)
applicable laws or regulations, or any change in the interpretation of
applicable laws or regulations by any governmental or other regulatory body
charged with the administration thereof, should make it (or in the good faith
judgment of any Bank cause a substantial question as to whether it is) unlawful
for any Bank to make, maintain or fund Eurodollar Loans, then such Bank shall
promptly notify each of the other
30
parties hereto and, so long as such circumstances shall continue, (a) such Bank
shall have no obligation to make or convert into Eurodollar Loans (but shall
make Base Rate Loans concurrently with the making of or conversion into
Eurodollar Loans by the Banks which are not so affected, in each case in an
amount equal to such Bank's Percentage of all Eurodollar Loans which would be
made or converted into at such time in the absence of such circumstances) and
(b) on the last day of the current Interest Period for each Eurodollar Loan of
such Bank (or, in any event, on such earlier date as may be required by the
relevant law, regulation or interpretation), such Eurodollar Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate
Loan made by a Bank which, but for the circumstances described in the foregoing
sentence, would be a Eurodollar Loan (an "Affected Loan") shall remain
outstanding for the same period as the Group of Eurodollar Loans of which such
Affected Loan would be a part absent such circumstances.
8.4 Funding Losses. Each Borrower hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the calculations of the amount being claimed, a copy of which shall be
furnished to the Agent), such Borrower will indemnify such Bank against any net
loss or expense which such Bank may sustain or incur (including any net loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain any Eurodollar Loan), as
reasonably determined by such Bank, as a result of (a) any payment or prepayment
or conversion by such Borrower of any Eurodollar Loan of such Bank on a date
other than the last day of an Interest Period for such Loan (including any
conversion pursuant to Section 8.3) or (b) any failure by such Borrower to
borrow or convert any Loans on a date specified therefor in a notice of
borrowing or conversion pursuant to this Agreement. For this purpose, all
notices to the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the applicable Borrower to repay such Loan
shall nevertheless be to such Bank and shall be deemed held by it, to the extent
of such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being
31
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Bank had actually funded and maintained each
Eurodollar Loan during each Interest Period for such Loan through the purchase
of deposits having a maturity corresponding to such Interest Period and bearing
an interest rate equal to the Eurodollar Rate for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
Bank shall promptly notify the Borrowers and the Agent of any event of which it
has knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by either
Borrower to pay any amount pursuant to Section 8.1 or (ii) the occurrence of any
circumstances of the nature described in Section 8.2 or 8.3 (and, if any Bank
has given notice of any such event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Bank shall promptly so notify the
Borrowers and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the Borrowers of) any event described in clause (i) or (ii) of the
preceding sentence and such designation will not, in such Bank's good faith
judgment, be otherwise disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Agent, such bank(s)
or financial institution(s) to have Commitments in such amounts as shall be
reasonably satisfactory to the Agent (and upon notice from the Company such
Affected Bank shall assign pursuant to an Assignment Agreement, and without
recourse or warranty, its Commitment, its Loans, its Notes, its participation in
Letters of Credit and all of its other rights and obligations hereunder to such
replacement bank(s) or other financial institution(s) for a purchase price equal
to the sum of the principal amount of the Loans so assigned, all accrued and
unpaid interest thereon, its ratable share of all accrued and unpaid non-use
fees and Letter of Credit fees, any amounts payable under Section 8.4 as a
result of such Bank receiving payment of any Eurodollar Loan prior to the end of
an Interest Period therefor and all other obligations owed to such Affected Bank
hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Banks may use reasonable
averaging and attribution methods in determining compensation under
32
Sections 8.1 and 8.4, and the provisions of such Sections shall survive
repayment of the Loans, cancellation of the Notes, cancellation or expiration of
the Letters of Credit and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement, to
induce the Issuing Bank to issue Letters of Credit and to induce the Banks to
make Loans and participate in Letters of Credit, the Company (and, with respect
to Sections 9.1, 9.2 and 9.3, Heico Holding) warrants to the Agent and the Banks
that:
9.1 Organization, etc. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware; Heico Holding is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware; each other Restricted
Subsidiary is duly organized, validly existing and in good standing under the
laws of the state of its organization; the Company and each Subsidiary is duly
qualified to do business in each jurisdiction where the nature of its business
makes such qualification necessary, except where the failure to be so qualified
would not have a Material Adverse Effect; and the Company and each Restricted
Subsidiary has full corporate, limited liability company or partnership power
and authority to own its property and conduct its business as presently
conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by each
Borrower of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
applicable Guaranty and the performance by each of the Company, Heico Holding
and each other Guarantor of its obligations under each Loan Document to which it
is a party are within the corporate, limited liability company or partnership
powers of such entity, have been duly authorized by all necessary corporate,
limited liability company or partnership action on the part of such entity
(including any necessary shareholder, member or partner action), have received
all necessary governmental approval (if any shall be required), and do not and
will not (a) violate any provision of law applicable to the Company or any
Subsidiary or any order, decree or judgment of any court or other government
agency which is binding on the Company or any Subsidiary, (b) contravene or
conflict with, or result in a breach of, any provision of the operating
agreement, Certificate of Incorporation, By-Laws or other organizational
documents of the Company, Heico Holding or any other Guarantor or of any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is binding on the Company or any Subsidiary or (c) result in, or
33
require, the creation or imposition of any Lien on any property
of the Company or any Restricted Subsidiary.
9.3 Validity and Binding Nature. This Agreement is, and upon the
execution and delivery thereof each other Loan Document to which either Borrower
is a party will be, the legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law); and each Guaranty will be, upon the execution and delivery thereof by
each applicable Guarantor, the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except that enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in
equity or at law).
9.4 Financial Information. The audited combined financial statements of
the Company and its Restricted Subsidiaries at March 31, 1997, copies of which
have been delivered to each Bank, have been prepared in accordance with GAAP and
present fairly the combined financial condition of the Company and its
Restricted Subsidiaries taken as a whole as at such date and the results of
their operations for the Fiscal Year then ended.
9.5 No Material Adverse Change. Since the date of the financial
statements described in Section 9.4, no event or events have occurred which,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect.
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental proceeding is
pending or, to the Company's knowledge, threatened against the Company or any
Subsidiary which is reasonably likely to have a Material Adverse Effect except
as set forth in Schedule 9.6. Other than any liability incident to such
litigation or proceedings, neither the Company nor any Restricted Subsidiary has
any material contingent liabilities not provided for or disclosed in the
financial statements referred to in Section 9.4 or listed in Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Restricted Subsidiary owns good and marketable title to, or a valid leasehold
interest in, all of its material properties and assets, real and personal,
tangible and intangible, of any
34
nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, copyrights and the
like) except as permitted pursuant to Section 10.8.
9.8 Subsidiaries. The Company has no Subsidiaries except those listed
in Schedule 9.8.
9.9 Pension Plans. Except as disclosed to the Banks in writing prior to
the date of this Agreement, during the twelve-consecutive-month period prior to
the date of the execution and delivery of this Agreement or the making of any
Loan hereunder, (a) no steps have been taken to terminate any Pension Plan which
would be reasonably likely to result in the Company being required to make a
contribution to such Pension Plan, or incurring a liability or obligation to
such Pension Plan, in excess of $1,000,000, and (b) no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by the Company of any material liability, fine or penalty.
9.10 Investment Company Act. Neither the Company nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. Neither Borrower is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it (except for such
tax returns and reports with respect to which the failure to file timely would
not have a Material Adverse Effect) and has paid all taxes and governmental
charges thereby shown to be owing, except for (a) any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books and (b) other taxes and governmental charges which in the
aggregate
35
(including all interest and penalties) for the Company and its Restricted
Subsidiaries do not exceed $1,000,000 (excluding amounts for which the Company
or the applicable Restricted Subsidiary has been indemnified by a creditworthy
third party which has not contested such indemnity, but including any such tax
or charge imposed upon an Unrestricted Subsidiary to the extent the Company or a
Restricted Subsidiary may have liability therefor).
9.14 Solvency, etc. On the Effective Date (or, in the case of any
Person which becomes a Guarantor after the Effective Date, on the date such
Person becomes a Guarantor), and immediately prior to and after giving effect to
the issuance of each Letter of Credit and each borrowing hereunder and the use
of the proceeds thereof, (a) each of each Borrower's and each other Guarantor's
assets will exceed its liabilities and (b) each of the Company, Heico Holding
and each other Guarantor will be solvent, will be able to pay its debts as they
mature, will own property with fair saleable value greater than the amount
required to pay its debts and will have capital sufficient to carry on its
business as then constituted.
9.15 Hazardous Materials.
9.15.1 Release and Disposal. Except as previously disclosed to the
Agent and the Banks in writing prior to the date of this Agreement, (a) neither
the Company nor, to the best of the Company's knowledge, any other Person has
ever caused or permitted a "reportable quantity" (as defined in the
Comprehensive Environmental Response, Compensation and Liability Act) of any
Hazardous Material to be released or disposed of on, under or at any real
property owned, leased or operated by the Company or any Subsidiary, (b) no such
real property has ever been used (by the Company or, to the best of the
Company's knowledge, by any other Person) as a site for intentional disposal of
any Hazardous Material or a permanent storage site for any Hazardous Material,
and (c) neither the Company nor, to the best of the Company's knowledge, any of
its predecessors has ever caused or permitted any Hazardous Material to be
disposed of at any locations other than those identified pursuant to clause (a),
except (in the case of clauses (a), (b) and (c)) for any of the foregoing which
(together with all other events and conditions described in this Section 9.15)
does not constitute a Prohibited Environmental Event.
9.15.2 Treatment and Storage. Except in compliance with applicable law,
or except as previously disclosed to the Agent and the Banks in writing prior to
the date of this Agreement, (a) neither the Company nor, to the best of the
Company's knowledge, any other Person has ever caused or permitted any Hazardous
Material to be treated or stored on, under or at any real
36
property owned, leased or operated by the Company or any Subsidiary and (b)
neither the Company nor, to the best of the Company's knowledge, any of its
predecessors has ever caused or permitted any Hazardous Material (except for any
which may have been present in raw materials or any products) to be transported
to, treated, or stored at any locations other than those identified pursuant to
clause (a), except (in the case of clauses (a) and (b)), for any of the
foregoing which (together with all other events and conditions described in this
Section 9.15) does not constitute a Prohibited Environmental Event.
9.16 Information. All written information heretofore or
contemporaneously herewith furnished by the Company or any Subsidiary to the
Agent or any Bank for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of the Company or any Subsidiary to the Agent or any
Bank pursuant hereto or in connection herewith will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading.
9.17 Year 2000 Problem. The Company and its Subsidiaries have reviewed
or are reviewing the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999). Based on such review and program, the
Company reasonably believes that the "Year 2000 Problem" will not have a
Material Adverse Effect.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Borrowers hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent
and each Bank:
10.1.1 Audit Report. Promptly when available and in any event not later
than the earlier of two Business Days after filing with the SEC and 120 days
after the close of the applicable Fiscal Year, a copy of the annual audit report
of the
37
Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year, which audit report (i) shall
be without qualification, (ii) shall have supplemental financials on a
consolidating basis reflecting (A) the Company, (B) its Restricted Subsidiaries,
(C) the combined Company and its Restricted Subsidiaries, (D) the Unrestricted
Subsidiaries and (E) the consolidated Company and its Subsidiaries and (iii)
shall be prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent auditors of
recognized standing selected by the Company and reasonably acceptable to the
Required Banks, together with a written statement from such auditors to the
effect that in making the examination necessary for the signing of such audit
report by such accountants, they have not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or, if they
have become aware of any such event, describing it in reasonable detail.
10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Restricted Subsidiaries as of the end of such Fiscal Quarter
and consolidated and consolidating statements of earnings and cash flow of the
Company and its Restricted Subsidiaries for such Fiscal Quarter and for the
period beginning with the first day of such Fiscal Year and ending on the last
day of such Fiscal Quarter, together with a certificate of the chief executive
officer or the chief financial officer of the Company, certifying that such
financial statements fairly present the financial condition and results of
operations of the Company and its Restricted Subsidiaries as of the dates and
periods indicated, subject to changes resulting from normal year-end
adjustments.
10.1.3 Compliance Certificates. Contemporaneously with the furnishing
of a copy of each annual audit report pursuant to Section 10.1.1 and of each set
of quarterly statements pursuant to Section 10.1.2, a duly completed certificate
in the form of Exhibit B, with appropriate insertions, dated the date of such
annual report or such quarterly statements and signed by the chief executive
officer or the chief financial officer of the Company, containing a computation
of each of the financial ratios and restrictions set forth in this Section 10
and to the effect that such officer has not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or, if there
is any such event, describing it and the steps, if any, being taken to cure it.
38
10.1.4 Reports to SEC and to Shareholders. Promptly upon the filing or
sending thereof, a copy of (a) any annual, periodic or special report or
registration statement (inclusive of exhibits thereto) filed with the SEC or any
securities exchange and (b) any report, proxy statement or other communication
to the Company's members generally (excluding, in the case of this clause (b),
any such item delivered solely to Permitted Holders).
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly (and
in any event within one Business Day in the case of clause (a) and within five
days in the case of clauses (b) through (e)) after any officer of the Company
learns of any of the following, written notice describing the same and the steps
being taken by the Company or the Subsidiary affected thereby with respect
thereto: (a) the occurrence of an Event of Default or an Unmatured Event of
Default; (b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Agent and the Banks
which has been instituted or, to the knowledge of the Company, is threatened
against the Company or any Subsidiary or to which any of the properties of any
thereof is subject which has had or is reasonably likely to have a Material
Adverse Effect; (c) any material adverse development which occurs in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed pursuant to clause (b); (d) the institution of any steps by the
Company, any of its Subsidiaries or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a Lien under Section 302(f) of ERISA, or
the taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the PBGC or
such Pension Plan, or the occurrence of any event with respect to any Pension
Plan which could result in the incurrence by the Company of any material
liability, fine or penalty; and (e) the occurrence of any other event or
circumstance which has had or is reasonably likely to have a Material Adverse
Effect.
10.1.6 Subsidiaries. Promptly upon the occurrence thereof, a written
report of any change in the list of its Subsidiaries.
10.1.7 Management Reports. Promptly upon the request of the Agent or
any Bank, copies of all detailed financial and management reports submitted to
the Company by independent auditors in connection with any annual or interim
audit made by such auditors of the books of the Company or any Restricted
Subsidiary.
10.1.8 Other Information. Promptly from time to time, such other
information concerning the Company and its Subsidiaries as any Bank or the Agent
may reasonably request.
39
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Restricted Subsidiary to permit, on reasonable
notice and at reasonable times and intervals (or at any time without notice
during the existence of an Event of Default) any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Restricted Subsidiary; and permit, and cause each Restricted
Subsidiary to permit, on reasonable notice and at reasonable times and intervals
(or at any time without notice during the existence of an Event of Default) any
Bank or the Agent or any representative thereof to visit any or all of its
offices, to discuss its financial matters with its officers and its independent
auditors (and the Company hereby authorizes such independent auditors to discuss
such financial matters with any Bank or the Agent or any representative thereof,
provided that the Company shall have the right to be present at any such
discussions so long as no Event of Default or Unmatured Event of Default
exists), and to examine (and, at the expense of the Company or the applicable
Restricted Subsidiary, photocopy extracts from) any of its books or other
corporate records. The Company agrees to pay the fees of its auditors incurred
in connection with any reasonable exercise of the rights of the Agent and the
Banks pursuant to this Section.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
reputable, financially sound insurance companies, insurance to such extent and
against such hazards and liabilities as is customarily maintained by companies
similarly situated (and, in any event, such insurance as may be required by any
law or governmental regulation or any court order or decree); and, upon request
of the Agent or any Bank, furnish to the Agent or such Bank a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by the Company and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
Comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations and orders the noncompliance with which
would be reasonably likely to have a Material Adverse Effect; and (b) pay, and
cause each Subsidiary to pay, prior to delinquency, all taxes and other
governmental charges against it or any of its property; provided, however, that
(i) the foregoing shall not require the Company or any Subsidiary to pay any
such tax or charge so long as it shall contest the validity thereof in good
faith by appropriate proceedings and shall set aside on its books adequate
reserves with respect thereto in accordance with GAAP; and (ii) no Event of
Default or Unmatured Event of Default shall arise under this clause (b) if the
aggregate amount of all taxes and
40
other governmental charges which have not been paid when due (and are not
covered by clause (i)) does not exceed $1,000,000.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.12) cause each Restricted Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its organization and (b)
its qualification and good standing as a foreign limited liability company,
corporation or partnership in each jurisdiction where the nature of its business
makes such qualification necessary (except in those instances in which the
failure to be qualified or in good standing would not be reasonably likely to
result in a Material Adverse Effect).
10.6 Financial Covenants.
10.6.1 Minimum Net Worth. Not permit Consolidated Net Worth at the end
of any Fiscal Quarter to be less than (a) $120,000,000 plus (b) 50% of
cumulative Consolidated Net Income for the period beginning April 1, 1998 and
ending on the last day of the most recently ended Fiscal Quarter (provided that
if Consolidated Net Income is less than zero for any Fiscal Year or for the
completed portion of the then-current Fiscal Year, Consolidated Net Income for
such Fiscal Year or portion thereof shall be deemed to be zero).
10.6.2 Fixed Charge Coverage Ratio. Not permit the Fixed Charge
Coverage Ratio as of the last day of any Fiscal Quarter to be less than 1.5 to
1.
10.6.3 Funded Debt Ratio. Not permit the Funded Debt Ratio as of the
last day of any Fiscal Quarter to exceed (a) 4.0 to 1 at any time prior to June
30, 2000, (b) 3.75 to 1 at any time on or after June 30, 2000 and prior to June
30, 2002 and (c) 3.5 to 1 at any time on or after June 30, 2002.
10.6.4 Capital Expenditures. Not permit all Capital Expenditures made
by the Company and its Restricted Subsidiaries in any Fiscal Year to exceed the
sum of (a) $20,000,000 plus (b) the remainder (but not more than $20,000,000) of
the amount of Capital Expenditures permitted in the preceding Fiscal Year minus
the amount of Capital Expenditures made in the preceding Fiscal Year.
10.7 Limitations on Debt. Not, and not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Debt, except (a)
Debt arising under the Loan Documents; (b) Debt in respect of Capital Leases not
exceeding in the aggregate 5% of the Company's consolidated total assets; (c)
Debt of Restricted Subsidiaries to the Company or to other Restricted
Subsidiaries; (d) unsecured Debt of the Company to Restricted
41
Subsidiaries; (e) Debt arising under Hedging Agreements entered into by the
Company or any Restricted Subsidiary in the ordinary course of business as bona
fide hedging transactions (and not for speculation); (f) Suretyship Liabilities
in respect of any obligation of the Company or any Restricted Subsidiary
permitted under this Agreement; (g) Debt in respect of taxes, assessments or
governmental charges to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 10.4; (h) other Debt outstanding
on the date hereof and listed on Schedule 10.7 or hereafter incurred in
connection with Liens permitted by Section 10.8, and extensions, renewals and
refinancings of any Debt described in this clause (h) so long as the principal
amount thereof is not increased; (i) Permitted Senior Debt (and guaranties
thereof) in an aggregate amount not at any time exceeding $75,000,000; (j)
Subordinated Debt; (k) Debt relating to Floor Plan Financing, provided that the
aggregate liability (contingent or otherwise) of the Company and its Restricted
Subsidiaries in respect of all such arrangements shall not at any time exceed
$15,000,000; (l) Suretyship Liabilities in respect of obligations of
Unrestricted Subsidiaries to the extent permitted by subsection 10.11(k); (m)
HHI Preferred Stock; (n) the Series A Cumulative Redeemable Preferred Stock of
▇▇▇▇▇ Wire Corporation; and (o) other Debt, in addition to Debt permitted by
clauses (a) through (n), not at any time exceeding $10,000,000.
10.8 Liens. Not, and not permit any Restricted Subsidiary to, create or
permit to exist any Lien on any of its real or personal properties, assets or
rights of whatsoever nature (whether now owned or hereafter acquired), except
(a) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or being contested in good faith by
appropriate proceedings and, in each case, for which it maintains adequate
reserves; (b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations (excluding appeal bonds and other
bonds related to litigation)) for sums not overdue or being contested in good
faith by appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or services, and, in
each case, for which it maintains adequate reserves; (c) Liens identified on
Schedule 10.8; (d) Liens in connection with Capital Leases to the extent
permitted by clause (b) of Section 10.7; (e) any Lien arising in connection with
the acquisition, construction or improvement of property after the date hereof,
and attaching only to the property being acquired, constructed or improved, if
the Debt secured thereby
42
does not exceed 100% of the fair market value of the property acquired at the
time of acquisition thereof or 100% of the cost of such construction or
improvement, as the case may be, nor 10% of the consolidated total assets of the
Company (as of the end of the most recent Fiscal Year for which the Company has
delivered audited financial statements pursuant to Section 10.1.1) in the
aggregate for all such Debt of the Company and all Restricted Subsidiaries at
any one time outstanding; (f) Liens securing appeal bonds and similar bonds
relating to litigation, and attachments, judgments and other similar Liens
arising in connection with court proceedings so long as the execution or other
enforcement of such Liens is effectively stayed and claims secured thereby are
being actively contested in good faith and by appropriate proceedings, provided
that the aggregate amount secured by all such Liens (excluding any portion
thereof which is covered by insurance so long as the insurer is reasonably
likely to be able to pay and has accepted a tender of defense and
indemnification without reservation of rights) shall not exceed $10,000,000; (g)
easements, rights of way, restrictions, minor defects or irregularities in title
and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole; (h) leases or subleases granted by the Company or any
Restricted Subsidiary in the ordinary course of its business; (i) the interest
or title of the lessor of any lease with respect to which the Company or a
Restricted Subsidiary is lessee; (j) Liens arising in connection with the Floor
Plan Financing; (k) extensions, renewals or replacements of any Lien permitted
by the foregoing provisions of this Section 10.8, but only if the principal
amount of the Debt secured thereby immediately prior to such extension, renewal
or replacement is not increased and such Lien is not extended to any other
property; and (l) other Liens, in addition to Liens permitted by clauses (a)
through (k), securing aggregate Debt not exceeding $10,000,000.
10.9 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any material agreement containing any provision which would be
violated or breached by any borrowing by either Borrower hereunder or by the
performance by the Company or any Subsidiary of any of its obligations hereunder
or under any other Loan Document.
10.10 Dividends, etc. Not, and not permit any Restricted Subsidiary to,
(a) declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any capital stock of the Company or any
Subsidiary or any warrants, options or other rights in respect of such stock,
(c) make any other distribution to shareholders of the Company or any
Subsidiary, (d) prepay, purchase, redeem or defease any Subordinated Debt or (e)
set aside funds for any of the foregoing (any of the foregoing a "Restricted
Payment"); provided that (i)
43
any Restricted Subsidiary may declare and pay dividends to the Company or to
another Wholly-Owned Restricted Subsidiary; (ii) so long as no Event of Default
exists or would result therefrom, the Company may (x) prepay, purchase, redeem
or defease Subordinated Debt with the net proceeds of any sale of Equity
Interests in the Company and (y) make distributions to members consisting of HHI
Preferred Stock or other assets of the Company in an amount not greater than the
Priority Amount (as defined in the Operating Agreement); provided that the
aggregate value of all distributions pursuant to this clause (y) in any Fiscal
Year shall not exceed $10,000,000 plus the cash amount of any tax payable by the
recipient with respect to any such payment; (iii) so long as no Event of Default
or Unmatured Event of Default exists or would result therefrom, the Company may
make Permitted Tax Distributions; and (iv) so long as (A) no Event of Default or
Unmatured Event of Default has occurred and is continuing or would result
therefrom, (B) after giving effect thereto, the Company will be in pro forma
compliance with each of the financial covenants set forth in Section 10.6 and
(C) after giving effect thereto, the aggregate amount of all Restricted Payments
made since July 30, 1998 (other than Restricted Payments permitted by clauses
(i), (ii) and (iii) above) will not exceed 50% of the Company's Consolidated Net
Income after March 31, 1997, the Company may make any other Restricted Payment.
10.11 Investments. Not, and not permit any Restricted Subsidiary to,
make, incur, assume or suffer to exist any Investment in any other Person,
except the following:
(a) Investments existing on the Effective Date and
identified in Schedule 10.11;
(b) Cash Equivalent Investments;
(c) Investments by the Company in Restricted Subsidiaries or
by any Restricted Subsidiary in any other Restricted Subsidiary, in the
form of contributions to capital or loans or advances; provided that,
immediately before and after giving effect to such Investment, no Event
of Default or Unmatured Event of Default shall have occurred and be
continuing;
(d) Suretyship Liabilities arising under the Loan
Documents;
(e) loans or advances made by any Restricted
Subsidiary to the Company;
(f) loans or advances to officers and directors of the Company
the net proceeds of which are used solely to purchase Equity Interests
in the Company pursuant to a
44
restricted stock or stock purchase plan, provided that the aggregate
outstanding amount of all such loans and advances shall not at any time
exceed $3,000,000;
(g) loans or advances to officers and employees of the Company
or of any Restricted Subsidiary (in addition to those permitted by
clause (f), not in excess of $250,000 in the aggregate at any time;
(h) loans or advances to, or deposits with, contractors and
suppliers in the ordinary course of business not in excess of $500,000
in the aggregate at any time;
(i) any loan to a Person purchasing real property or equipment
from the Company or any Subsidiary;
(j) bank deposits in the ordinary course of business (i) with
any Bank or (ii) with any other commercial banking institution so long
as all deposits permitted solely by this clause (ii) do not at any time
exceed $10,000,000 for more than ten consecutive days; and
(k) Investments (including acquisitions) not otherwise
permitted by the foregoing clauses (a) through (j) so long as (x) no
Event of Default or Unmatured Event of Default exists at the time of
the making thereof or would result therefrom and (y) if such Investment
is to be made in, or result in the acquisition of, an Unrestricted
Subsidiary, then, after giving effect to such Investment, the Funded
Debt Ratio, calculated on a pro forma basis as of the last day of the
most recently-ended Fiscal Quarter for which the Company has delivered
financial statements pursuant to Section 9.4, 10.1.1 or 10.1.2 (and
assuming that such Investment had been made on the first day of the
period of four Fiscal Quarters then ended), would be at least 0.25%
less than the Funded Debt Ratio then required to be in effect pursuant
to Section 10.6.3; provided that this clause (y) shall not apply to any
Investment so long as (1) the amount of such Investment (including Debt
assumed in connection therewith) does not exceed $15,000,000 and (2)
after giving effect to such Investment, the aggregate net amount (after
giving effect to any payment of principal of any loan or advance or
return of equity resulting from any sale or other disposition of an
Investment, but not counting any interest on any loan or advance or any
dividend or similar returns on equity) of all Investments (including
any Debt assumed in connection with Investments) in the applicable
Fiscal Year will not exceed $50,000,000.
10.12 Business Activities. Not, and not permit any
Restricted Subsidiary to, engage primarily in any line of
45
business other than manufacturing, construction and other industrial businesses
and businesses reasonably related thereto.
10.13 Limitation on Asset Sales. Not, and not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale; provided that
the Company or any Subsidiary may make any Asset Sale so long as (a) no Event of
Default or Unmatured Event of Default exists or would result therefrom; (b) at
least 75% of the consideration paid to the Company or such Restricted Subsidiary
in connection with such Asset Sale is in the form of cash or marketable
securities or the assumption by the purchaser of liabilities of the Company or
any Restricted Subsidiary (other than Subordinated Debt) as a result of which
the Company or such Restricted Subsidiary, as the case may be, is no longer
obligated with respect to such liabilities; and (c) not later than 365 days
after the date of such Asset Sale, the net proceeds of such Asset Sale which
have not been used to acquire productive assets that will be used in the
business of the Company or a Restricted Subsidiary ("Unused Proceeds") are used
to offer to reduce all senior Debt (or, in the case of this Agreement and any
other senior Debt arising under a revolving credit arrangement, the applicable
commitment to create senior Debt) on a pro rata basis by an amount (rounded to
the nearest $100,000) equal to the excess, if any, of (x) all proceeds of Asset
Sales (including such Asset Sale) which have become Unused Proceeds in the
then-current Fiscal Year (excluding the portion of any such Unused Proceeds
which was previously the subject of an offer to reduce senior Debt pursuant to
this clause (c)) over (y) $10,000,000. Notwithstanding the foregoing, the
Company and/or its Restricted Subsidiaries may make Asset Sales so long as the
aggregate book value of all assets disposed of in all Asset Sales in any Fiscal
Year (and not permitted by the foregoing provisions of this Section 10.13) does
not exceed 10% of the consolidated total assets of the Company and its
Restricted Subsidiaries at the end of the preceding Fiscal Year.
10.14 Merger, Consolidation and Sale of Property.
10.14.1 Company. Not merge, consolidate or amalgamate with or into any
other Person (other than a merger of a Wholly-Owned Restricted Subsidiary into
the Company) or sell, transfer, assign, lease, convey or otherwise dispose of
all or substantially all its property in any one transaction or series of
transactions unless: (a) the Company shall be the surviving Person (the
"Surviving Person") or the Surviving Person (if other than the Company)
surviving or formed by such merger, consolida tion or amalgamation or to which
such sale, transfer, assignment, lease, conveyance or disposition is made shall
be a corporation, partnership or limited liability company organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia; (b) the Surviving Person (if other than the Company)
expressly assumes, by documentation in form
46
satisfactory to the Required Banks, executed and delivered to the Agent by such
Surviving Person, the due and punctual payment of all obligations of the Company
hereunder and under the other Loan Documents; (c) in the case of a sale,
transfer, assignment, lease, conveyance or other disposition of all or
substantially all the property of the Company, such property shall have been
transferred as an entirety or virtually as an entirety to one Person; (d)
immediately before and after giving effect to such transaction or series of
transactions on a pro forma basis (and treating, for purposes of this clause (d)
and clauses (e) and (f) below, any Debt which becomes, or is anticipated to
become, an obligation of the Surviving Person or any Restricted Subsidiary as a
result of such transaction or series of transactions as having been incurred by
the Surviving Person or such Restricted Subsidiary at the time of such
transaction or series of transactions), no Event of Default or Unmatured Event
of Default shall have occurred and be continuing; (e) immediately after giving
effect to such transaction or series of transactions, the Company or the
Surviving Person will be in pro forma compliance with each of the financial
covenants set forth in Section 10.6; (f) immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the Company or the
Surviving Person shall have a Consolidated Net Worth in an amount which is not
less than the Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions; and (g) the Company shall deliver to the
Agent, in form and substance reasonably satisfactory to the Required Banks, an
Officers' Certificate stating that such transaction complies with this Section
and that all conditions precedent herein provided for relating to such
transaction have been satisfied.
10.14.2 Restricted Subsidiaries. Not permit any Restricted Subsidiary
to merge, consolidate or amalgamate with or into any other Person (other than a
merger of a Restricted Subsidiary into the Company or another Restricted
Subsidiary) or sell, transfer, assign, lease, convey or otherwise dispose of all
or substantially all its property in any one transaction or series of
transactions unless: (a) the Surviving Person (if other than such Restricted
Subsidiary) formed by such merger, consolidation or amalgamation or to which
such sale, transfer, assignment, lease, conveyance or disposition is made shall
be a corporation, partnership or limited liability company organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia; (b) the Surviving Person (if other than such
Restricted Subsidiary) expressly becomes a party to each Guaranty as provided in
Section 10.15 (or, if such transaction involves Heico Holding, expressly
assumes, by documentation in form satisfactory to the Required Banks, executed
and delivered by such Surviving Person to the Agent, the due and punctual
payment of all obligations of Heico Holding hereunder and under the other Loan
Documents); (c) in the case of a sale, transfer, assignment, lease, conveyance
or other
47
disposition of all or substantially all the property of such Restricted
Subsidiary, such property shall have been transferred as an entirety or
virtually as an entirety to one Person; (d) immediately before and after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (d) and clause (e) below, any Debt which
becomes, or is anticipated to become, an obligation of the Surviving Person, the
Company or any Restricted Subsidiary as a result of such transaction or series
of transactions as having been incurred by the Surviving Person, the Company or
such Restricted Subsidiary at the time of such transaction or series of
transactions), no Event of Default or Unmatured Event of Default shall have
occurred and be continuing; (e) immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the Company will be
in pro forma compliance with each of the financial covenants set forth in
Section 10.6; (f) the Company shall deliver to the Agent, in form and substance
reasonably satisfactory to the Required Banks, an Officers' Certificate stating
that such transaction complies with this Section and that all conditions
precedent herein provided for relating to such transaction have been satisfied.
The foregoing provisions (other than clause (d)) shall not apply to any
transaction which constitutes an Asset Sale permitted under Section 10.13.
10.15 Guaranty. Immediately upon the creation or acquisition of any
Restricted Subsidiary, cause such Restricted Subsidiary to execute and deliver a
counterpart of both Guaranties.
10.16 Use of Proceeds. Use, and cause Heico Holding to use, the
proceeds of the Loans and the Letters of Credit for working capital and for
other general corporate purposes; and not, and not permit any Subsidiary to, use
any proceeds of any Loan (a) to make any acquisition of a Person unless the
board of directors (or equivalent governing body) of the Person being acquired
has approved such acquisition; or (b) for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying" any Margin Stock.
10.17 Transactions with Affiliates. Not, and not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than the Company or any
Restricted Subsidiary) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates. Nothing set forth
in this Section 10.17 shall prevent any dividend, purchase, redemption or other
distribution permitted by Section 10.10.
10.18 Employee Benefit Plans. Maintain, and cause each
Subsidiary to maintain, each Pension Plan in compliance in all
material respects with all applicable requirements of law and
48
regulations, and, without limiting the generality of the foregoing, not at any
time permit the excess of the aggregate accumulated benefit obligations of all
Pension Plans over aggregate assets of all Pension Plans (as shown on the most
recent Form 5500 filed with the Internal Revenue Service with respect to each
such Pension Plan) to exceed 10% of Consolidated Net Worth.
10.19 Environmental Covenants.
10.19.1 Environmental Response Obligation. (a) Comply, and cause each
Restricted Subsidiary to comply, with any Federal or state judicial or
administrative order requiring the performance at any real property owned,
operated or leased by the Company or any Restricted Subsidiary of activities in
response to the release or threatened release of a Hazardous Material, except
for the period of time that the Company or such Restricted Subsidiary is
diligently in good faith contesting such order; (b) notify the Agent within ten
days of the receipt of any written claim, demand, proceeding, action or notice
of liability by any Person arising out of or relating to the release or
threatened release of a Hazardous Material, except with respect to any such
release or threatened release with respect to which the amount for which the
Company or any Restricted Subsidiary may be expected to be liable is less than
$500,000; and (c) notify the Agent within ten days of any release, threat of
release, or disposal of Hazardous Material reported by the Company or any
Restricted Subsidiary to any governmental or regulatory authority at any real
property owned, operated, or leased by the Company or any Restricted Subsidiary.
10.19.2 Environmental Liabilities. (a) Comply, and cause each
Restricted Subsidiary to comply, in all material respects with all material
Environmental Laws; (b) without limiting clause (a), not commence disposal of
any Hazardous Material into or onto any real property owned, operated or leased
by the Company or any Restricted Subsidiary; and (c) without limiting clause
(a), not allow any Lien imposed pursuant to any law, regulation or order
relating to Hazardous Materials or the disposal thereof to remain on any real
property owned, operated or leased by the Company or any Restricted Subsidiary.
10.20 Unconditional Purchase Obligations. Not, and not permit any
Restricted Subsidiary to, enter into or be a party to any contract for the
purchase of materials, supplies or other property or services, if such contract
requires that payment be made by it regardless of whether or not delivery is
ever made of such materials, supplies or other property or services.
49
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING.
11.1 Effectiveness. This Agreement shall become effective, and all
loans made and letters of credit issued under the Existing Credit Agreement
shall be deemed to be Loans made and Letters of Credit issued under this
Agreement, on the date (the "Effective Date") on which the Agent shall have
received all of the following, each duly executed and dated the Effective Date
(or such earlier date as shall be satisfactory to the Agent), in form and
substance satisfactory to the Agent and the Banks, and each (except for the
Notes, of which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for the Agent and each Bank:
11.1.1 Notes. The Notes of each Borrower.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors authorizing or ratifying the execution, delivery and performance by
the Company of this Agreement and the other Loan Documents to which the Company
is a party; certified copies of resolutions of the board of directors of Heico
Holding authorizing or ratifying the execution, delivery and performance by
Heico Holding of this Agreement and the other Loan Documents to which Heico
Holding is a party; and certified copies of resolutions of the board of
directors, manager or other appropriate governing body of each other Guarantor
authorizing or ratifying the execution, delivery and performance by such
Guarantor of each Guaranty.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance of the Loan Documents by
the Company, Heico Holding and each other Guarantor.
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company, Heico Holding and each other
Guarantor certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents to which such entity is a party, together
with a sample of the true signature of each such officer (it being understood
that the Agent and each Bank may conclusively rely on each such certificate
until formally advised by a like certificate of any changes therein).
11.1.5 Guaranties. A guaranty, substantially in the form of Exhibit C
(the "Company Guaranty"), executed by each Guarantor of the obligations of the
Company; and a guaranty, substantially in the form of Exhibit D (the "HHI
Guaranty"), executed by each Guarantor of the obligations of Heico Holding.
50
11.1.6 Opinion of Counsel. The opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇,
substantially in the form of Exhibit E.
11.1.7 Other. Such other documents as the Agent or any Bank may
reasonably request.
11.2 All Loans and Letters of Credit. The obligation of each Bank to
make each Loan and of the Issuing Bank to issue each Letter of Credit is subject
to the conditions precedent that:
11.2.1 No Default, etc. (a) No Event of Default or Unmatured Event of
Default has occurred and is continuing or will result from the making of such
Loan or the issuance of such Letter of Credit, (b) the warranties of the
Borrowers contained in Section 9 (excluding Sections 9.5, 9.6 and 9.8) are true
and correct as of the date of such requested Loan or the issuance of such Letter
of Credit, with the same effect as though made on such date, and (c) since the
date of the financial statements described in Section 9.4 or, if later, the date
of the most recent financial statements delivered to the Banks pursuant to
Section 10.1.1 or 10.1.2, no event has occurred or condition exists that has
resulted or is reasonably expected to result in a Material Adverse Effect.
11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank,
the Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 11.2.1 (it being understood that each request by a Borrower
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by such Borrower that the conditions precedent set
forth in Section 11.2.1 will be satisfied at the time of the making of such Loan
or the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due
of the principal of any Loan; default, and continuance thereof for two Business
Days after demand by the Issuing Bank, in the payment when due of any
reimbursement obligation with respect to any Letter of Credit; or default, and
continuance thereof for five days, in the payment when due of any interest, fee
or other amount payable by either Borrower hereunder or under any other Loan
Document.
51
12.1.2 Non-Payment of Other Debt, etc. Any default shall occur under
the terms applicable to any Debt of the Company or any Restricted Subsidiary in
an aggregate amount (for all Debt so affected) exceeding $5,000,000 and such
default shall (a) consist of the failure to pay such Debt when due (subject to
any applicable grace period), whether by acceleration or otherwise, or (b)
accelerate the maturity of such Debt or permit the holder or holders thereof, or
any trustee or agent for such holder or holders, to cause such Debt to become
due and payable prior to its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment when due, or
in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Restricted Subsidiary with respect to any
material purchase or lease of goods or services (except only to the extent that
the existence of any such default is being contested by the Company or such
Restricted Subsidiary in good faith and by appropriate proceedings and
appropriate reserves have been made in respect of such default) if, in the
reasonable judgment of the Required Banks, such default has had, or is
reasonably likely to have, a Material Adverse Effect.
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Restricted
Subsidiary becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or the Company or any
Restricted Subsidiary applies for, consents to, or acquiesces in the appointment
of a trustee, receiver or other custodian for the Company or such Restricted
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Restricted Subsidiary or for a substantial part of the property
of any thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of any Restricted Subsidiary other than Heico Holding), is commenced in respect
of the Company or any Restricted Subsidiary, and if such case or proceeding is
not commenced by the Company or such Restricted Subsidiary, it is consented to
or acquiesced in by the Company or such Restricted Subsidiary, or remains for 60
days undismissed; or the Company or any Restricted Subsidiary takes any action
to authorize, or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of this Agreement. Failure by the
Company to comply with or to perform any covenant set forth in Section 10.6
through 10.15, 10.17 or 10.19 (excluding clause (c) of Section 10.19.2); or
failure by either
52
Borrower to comply with or to perform any other provision of this Agreement (and
not constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure for 30 days after written notice
thereof to the Company from the Agent or any Bank.
12.1.6 Warranties. Any warranty made by either Borrower herein is
breached or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
either Borrower to the Agent or any Bank is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or
any other Person to terminate a Pension Plan if as a result of such termination
the Company could be required to make a contribution to such Pension Plan, or
could incur a liability or obligation to such Pension Plan, of $5,000,000 or
more, or (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
12.1.8 Judgments. Final judgments which exceed an aggregate of
$5,000,000 (excluding any portion thereof which is covered by insurance so long
as the insurer is reasonably likely to be able to pay and has accepted a tender
of defense and indemnification without reservation of rights) shall be rendered
against the Company or any Restricted Subsidiary and shall not have been
discharged or vacated or had execution thereof stayed pending appeal within 30
days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranties, etc. Either Guaranty shall cease to be
in full force and effect with respect to any applicable Guarantor (except as a
result of a transaction permitted hereunder); any Guarantor shall fail (subject
to any applicable grace period) to comply with or to perform any applicable
provision of either Guaranty; or any Guarantor (or any Person by, through or on
behalf of such Guarantor) shall contest in any manner the validity, binding
nature or enforceability of an applicable Guaranty with respect to such
Guarantor.
12.1.10 Change in Control. Heico Holding shall fail to be a
Wholly-Owned Restricted Subsidiary; or Permitted Holders shall fail to directly
or indirectly own and control Equity Interests in the Company which provide such
Permitted Holders with the sole right and power (exercisable either directly or
indirectly) to elect a majority of the Board of Directors.
53
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and each Borrower shall
become immediately obligated to deliver to the Agent cash collateral in an
amount equal to the outstanding face amount of all Letters of Credit issued for
the account of such Borrower, all without presentment, demand, protest or notice
of any kind; and, in the case of any other Event of Default, the Agent may (and
upon written request of the Required Banks shall) declare the Commitments (if
they have not theretofore terminated) to be terminated and/or declare all Notes
and all other obligations hereunder to be due and payable and/or demand that
each Borrower immediately deliver to the Agent cash collateral in an amount
equal to the outstanding face amount of all Letters of Credit issued for the
account of such Borrower, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and payable and/or each
Borrower shall immediately become obligated to deliver to the Agent cash
collateral in an amount equal to the face amount of all Letters of Credit issued
for the account of such Borrower, all without presentment, demand, protest or
notice of any kind. The Agent shall promptly advise the Borrowers of any such
declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in Section 12.1.1 or Section 12.1.4 may be waived by the
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the Agent (without liability for interest thereon) and applied to
obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations of the
applicable Borrower hereunder or under any other Loan document and any excess
shall be delivered to the applicable Borrower or as a court of competent
jurisdiction may direct.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization; "Agent". (a) Each Bank hereby
irrevocably (subject to Section 13.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
54
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or any other Loan Document, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligation arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to the Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Required Banks to act for the Issuing Bank with respect thereto;
provided, however, that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Section 13 with respect to any acts
taken or omissions of the Issuing Bank in connection with Letters of Credit
issued by it or proposed to be issued by it and the Letter of Credit
Applications as fully as if the term "Agent", as used in this Section 13,
included the Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.
13.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by either Borrower or any Subsidiary
or Affiliate of either Borrower, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan
55
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
either Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of either Borrower or any of their respective Subsidiaries or
Affiliates.
13.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed in good faith by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company or Heico Holding), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Banks
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Banks (unless otherwise agreed, in accordance with their
Percentages) against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 11.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Bank.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or a Borrower referring
to this Agreement, describing such Event of Default or Unmatured Event of
Default and stating that such
56
notice is a "notice of default". The Agent will promptly notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to
such Event of Default or Unmatured Event of Default as may be requested by the
Required Banks; provided, however, that unless and until the Agent has received
any such request, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default or Unmatured Event of Default as it shall deem advisable or in the best
interest of the Banks.
13.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of
either Borrower, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers
and their respective Subsidiaries, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrowers hereunder. Each
Bank also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrowers and their respective
Subsidiaries. Except for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company or any Subsidiary which may come
into the possession of any of the Agent-Related Persons.
13.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to any Agent-Related Person of any
portion of the Indemnified
57
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrowers. The undertaking in this Section shall survive repayment of the
Loans, cancellation of the Notes, the termination of this Agreement and the
resignation or replacement of the Agent.
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrowers and their
respective Subsidiaries and Affiliates as though BofA were not the Agent
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, BofA or its Affiliates may receive
information regarding either Borrower or its Subsidiaries or Affiliates
(including information that may be subject to confidentiality obligations in
favor of the applicable entity) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, BofA
and any Affiliate thereof shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent.
13.9 Successor Agent. The Agent may, and at the request of the Required
Banks shall, resign as Agent upon 30 days' written notice to the Borrowers and
the Banks. If the Agent resigns under this Agreement, the Required Banks shall
appoint from among the Banks a successor agent for the Banks. If no successor
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Banks and the Borrowers, a
successor agent from among the Banks. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Section 13 and Sections 14.6 and 14.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a
58
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Agent hereunder until such time, if any, as the Required Banks
appoint a successor agent as provided for above. Notwithstanding the foregoing,
BofA shall not be obligated to resign as Agent at the request of the Required
Banks unless BofA is replaced as the "Issuing Bank" hereunder pursuant to
documentation in form and substance satisfactory to BofA.
13.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees, with and in favor of the Agent, to deliver
to the Borrowers and the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed
IRS Forms 1001 and W-8 before the payment of any interest in the first
calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Each such Bank agrees to promptly notify the Borrowers and the Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
obligations of either Borrower to such Bank hereunder, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of such obligations. To the extent
59
of such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the obligations of either Borrower to
such Bank hereunder, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the Internal Revenue Service or any other governmental authority
of the United States or any other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Bank shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligations
of the Banks under this subsection shall survive repayment of the Loans,
cancellation of the Notes, the termination of this Agreement and the resignation
or replacement of the Agent.
13.11 Co-Agents. None of the Banks identified on the facing page of
this Agreement as a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks so identified as a "Co-Agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
60
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by Banks
having an aggregate Percentage of not less than the aggregate Percentage
expressly designated herein with respect thereto or, in the absence of such
designation as to any provision of this Agreement or the Notes, by the Required
Banks, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No amendment, modification, waiver or consent shall (i) extend or
increase the amount of the Commitments, (ii) extend the date for payment of any
principal of or interest on the Loans or any fees payable hereunder, (iii)
reduce the principal amount of any Loan, the rate of interest thereon or any
fees payable hereunder, (iv) subject to Section 14.7, release any Person from
its obligations under either Guaranty or (v) change the aggregate Percentage
required to effect an amendment, modification, waiver or consent without, in
each case, the consent of all Banks. No provisions of Section 13 shall be
amended, modified or waived without the consent of the Agent. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement affecting the rights or duties of the Issuing Bank shall be effective
without the consent of the Issuing Bank.
14.2 Confirmations. Each Borrower and each holder of a Note of such
Borrower agree from time to time, upon written request received by it from the
other, to confirm to the other in writing (with a copy of each such confirmation
to the Agent) the aggregate unpaid principal amount of the Loans then
outstanding under such Note.
14.3 Notices. Except as otherwise provided in Sections 2.3 and 2.4, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown below its signature
hereto or at such other address as such party may, by written notice received by
the other parties hereto, have designated as its address for such purpose.
Notices sent by facsimile transmission shall be deemed to have been given when
sent; notices sent by mail shall be deemed to have been given three Business
Days after the date when sent by registered or certified mail, postage prepaid;
and notices sent by hand delivery shall be deemed to have been given when
received. For purposes of Sections 2.3 and 2.4, the Agent
61
shall be entitled to rely on telephonic instructions from any person that the
Agent in good faith believes is an authorized officer or employee of a Borrower,
and each Borrower shall hold the Agent and each Bank harmless from any loss,
cost or expense resulting from any such reliance. Any notice received or deemed
received by either Borrower shall be conclusively presumed to have been received
by both Borrowers.
14.4 Confidentiality. The Agent and the Banks shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Borrowers in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and, in any event, may make
disclosure on the same confidential basis as provided for herein that is
reasonably required by any actual or bona fide potential transferee or
participant in connection with the contemplated transfer of any Note or any
participation therein or in any Letter of Credit or as required or requested by
any governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each of the Agent and each Bank shall promptly notify the applicable Borrower of
any request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of the
Agent or such Bank by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information.
14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Borrowers jointly and severally
agree to pay on demand (a) all reasonable out-of-pocket costs and expenses of
the Agent (including Attorney Costs) in connection with the preparation,
execution, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (including any amendment,
supplement or waiver to any Loan Document), and (b) all reasonable out-of-pocket
costs and expenses (including Attorney Costs) incurred by the Agent and each
Bank after an Event of Default in connection with the enforcement of this
Agreement, the other Loan Documents or any such other documents. Each Bank
agrees to reimburse the Agent for such Bank's pro rata share (based on its
respective Percentage) of any such costs and expenses of the Agent not paid by
the Borrowers. In addition, the Borrowers jointly and severally agree to pay,
and to save the Agent and the Banks harmless from all liability for, any stamp
or
62
other taxes which may be payable in connection with the execution and delivery
of this Agreement, the borrowings hereunder, the issuance of the Notes or the
execution and delivery of any other Loan Document or any other document provided
for herein or delivered or to be delivered hereunder or in connection herewith.
All obligations provided for in this Section 14.6 shall survive repayment of the
Loans, cancellation of the Notes and any termination of this Agreement.
14.7 Designation of Restricted and Unrestricted Subsidiaries. The
Company may from time to time (and shall upon the acquisition or creation of any
Subsidiary) designate any Subsidiary as a Restricted Subsidiary or an
Unrestricted Subsidiary; provided that (a) no Subsidiary that is not primarily
engaged in manufacturing, construction or another industrial business and
related activities may be designated as a Restricted Subsidiary; (b) any
reclassification of a Subsidiary from a Restricted Subsidiary to an Unrestricted
Subsidiary or vice versa may be made only (i) upon five Business Days' prior
written notice to the Agent and the Banks and (ii) if, immediately after giving
pro forma effect to such designation, (x) the Company will be in pro forma
compliance with each of the financial covenants set forth in Section 10.6 and
(y) no Event of Default or Unmatured Event of Default would exist; (c) no
Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary
owns any Equity Interests or Debt of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary; and (d) Heico Holding shall at all
times be a Restricted Subsidiary. Upon any reclassification of a Restricted
Subsidiary to an Unrestricted Subsidiary, the Agent shall, upon the request (and
at the expense) of the Company or such Subsidiary, execute and deliver such
releases and other documents as are necessary to release such Subsidiary from
its obligations under the Guaranties.
14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Bank may, with the prior written consents of
the Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee"), all or any fraction of such Bank's
Loans and Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Bank's Loans and of such
Bank's Commitment) in a minimum aggregate amount equal to the lesser of (i) the
sum of
63
the assigning Bank's remaining Loans and (to the extent not used) Commitment and
(ii) $5,000,000; provided, however, that (a) no assignment and delegation may be
made to any Person if, at the time of such assignment and delegation, either
Borrower would be obligated to pay any greater amount under Section 8 to the
Assignee than such Borrower is then obligated to pay to the assigning Bank under
such Section; and (b) the Borrower and the Agent shall be entitled to continue
to deal solely and directly with such Bank in connection with the interests so
assigned and delegated to an Assignee until the date when all of the following
conditions shall have been met:
(x) five Business Days (or such lesser period of time as the
Agent and the assigning Bank shall agree) shall have passed after
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agent by such
assigning Bank and the Assignee,
(y) the assigning Bank and the Assignee shall have executed
and delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit F (an "Assignment Agreement"),
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Company and the
Agent, and
(z) the assigning Bank or the Assignee shall have paid the
Agent a processing fee of $2,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after the effectiveness of any assignment
and delegation, the Borrowers shall execute and deliver to the Agent (for
delivery to the Assignee and the assigning Bank, as applicable) new Notes in the
principal amount of the Assignee's Commitment and, if the assigning Bank has
retained a Commitment hereunder, replacement Notes in the principal amount of
the Commitment retained by the assigning Bank (such Notes to be in exchange for,
but not in payment of, the predecessor Notes held by such assigning Bank). Each
such Note shall be dated the effective date of such assignment. The assigning
Bank shall ▇▇▇▇ the predecessor Notes "exchanged" and
64
deliver them to the Company. Accrued interest on that part of the predecessor
Notes being assigned shall be paid as provided in the Assignment Agreement.
Accrued interest and fees on that part of the predecessor Notes not being
assigned shall be paid to the assigning Bank. Accrued interest and accrued fees
shall be paid at the same time or times provided in the predecessor Notes and in
this Agreement. Any attempted assignment and delegation not made in accordance
with this Section 14.9.1 shall be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Notes to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Notes held by such Bank, the Commitment of such Bank or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"). In the event of a sale by a Bank
of a participating interest to a Participant, (x) such Bank shall remain the
holder of its Notes for all purposes of this Agreement, (y) the Borrowers and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations hereunder and (z) all amounts
payable by the Borrowers shall be determined as if such Bank had not sold such
participation and shall be paid directly to such Bank. No Participant shall have
any direct or indirect voting rights hereunder except with respect to any of the
events described in the penultimate sentence of Section 14.1. Each Bank agrees
to incorporate the requirements of the preceding sentence into each
participation agreement which such Bank enters into with any Participant. The
Borrowers agree that if amounts outstanding under this Agreement and the Notes
are due and payable (as a result of acceleration or otherwise), each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement; provided that such right of setoff shall be subject
to the obligation of each Participant to share with the Banks, and the Banks
agree to share with each Participant, as provided in Section 7.5. Each Borrower
also agrees that each Participant shall be entitled to the benefits of Section 8
as if it were a Bank (provided that no Participant shall receive any greater
compensation pursuant to Section 8 than would have been paid to the
participating Bank if no participation had been sold).
65
14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the laws of the State of Illinois applicable to
contracts made and to be fully performed in such State. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Borrowers and rights of the Agent and the
Banks expressed herein or in any other Loan Document shall be in addition to and
not in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed counterpart shall
not have been so lodged, the Agent shall have received confirmation from such
Bank of execution of a counterpart hereof by such Bank), the Agent shall notify
the Company and each Bank.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Borrowers, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Borrowers, the Banks and the Agent and the
permitted successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Borrowers.
(a) In consideration of the execution and delivery of this Agreement by
the Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Borrowers hereby jointly and severally agree to indemnify,
exonerate and hold the Agent-Related Persons, each Bank and each of their
respective officers, directors, employees and agents (collectively the "Bank
Parties" and individually each a "Bank Party") free and harmless from and
against any and all actions, claims, judgments, causes of action, suits, losses,
liabilities, damages, penalties and expenses, including Attorney Costs
(collectively the "Indemnified Liabilities"), incurred by the Bank Parties or
any of them as a result of, or arising out of, or relating to (i) any tender
offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans or (ii) the execution,
delivery, performance or
66
enforcement of this Agreement or any other Loan Document by any of the Bank
Parties, except for any such Indemnified Liabilities arising on account of such
Bank Party's bad faith, gross negligence or willful misconduct. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrowers hereby jointly and severally agree to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Nothing set forth above shall be construed to
relieve any Bank Party from any obligation it may have under this Agreement.
(b) Without limiting the provisions of clause (a) above, the Borrowers
jointly and severally agree to reimburse each Bank Party against any and all
Indemnified Liabilities which any Bank Party may pay, incur or become subject to
arising out of or relating to the use, handling, release, emission, discharge,
transportation, storage, treatment or disposal of any Hazardous Material at any
real property owned or leased by the Company or any Subsidiary or used by the
Company or any Subsidiary in its business or operations, except to the extent
caused by the acts or omissions of such Bank Party.
(c) All obligations provided for in this Section 14.13 shall survive
repayment of the Loans, cancellation of the Notes and any termination of this
Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. EACH OF THE COMPANY, HEICO HOLDING, THE AGENT AND EACH BANK HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE
COMPANY, HEICO HOLDING, THE AGENT AND EACH BANK FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT EITHER
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
67
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH BORROWER HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 Waiver of Jury Trial. EACH OF THE COMPANY, HEICO HOLDING, THE
AGENT AND EACH BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY
OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
68
Delivered at Chicago, Illinois, as of the day and year first above written.
THE HEICO COMPANIES L.L.C.
By
Title
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
HEICO HOLDING, INC.
By
Title
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Agent
By
Title
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-1
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as a Bank
By
Title
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
LASALLE NATIONAL BANK
By
Title
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE NORTHERN TRUST COMPANY
By
Title
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Division Head,
Division IV
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By
Title
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-2
FIRSTAR BANK MILWAUKEE, N.A.
By
Title
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
FIRST MIDWEST BANK, NATIONAL
ASSOCIATION
By
Title
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-3
SCHEDULE 2.1
COMMITMENTS AND PERCENTAGES
Amount of
Name of Bank Commitment Percentage
Bank of America NT&SA $40,000,000 26.66666667
LaSalle National Bank 30,000,000 20.00000000
The Northern Trust Company 30,000,000 20.00000000
The First National Bank of Chicago 20,000,000 13.▇▇▇▇▇▇▇▇
Firstar Bank Milwaukee, N.A. 20,000,000 13.33333333
First Midwest Bank, National
Association 10,000,000 6.66666667
TOTALS $150,000,000 100%
SCHEDULE 2.5
EXISTING LETTERS OF CREDIT
Amount
Letter of Credit Number Beneficiary ($000)
7317719 Carnegie Hall Tower $ 103
7352403 Bank of Nova Scotia 208
▇▇▇▇▇▇▇ Reliance Insurance 3,262
7320476 Nestle 5,500
▇▇▇▇▇▇▇ ▇▇▇▇▇ National Chemical 21
7400376 Kumho Tire Co., Ltd. 20
---------
$ 9,114
SCHEDULE 9.6
LITIGATION AND CONTINGENT LIABILITIES
-NONE-
SCHEDULE 9.8
SUBSIDIARIES
OF THE HEICO COMPANIES, L.L.C.:
*▇▇▇▇▇ Wire Corporation
*Heico Holding, Inc.
▇▇▇▇▇▇▇▇▇-Ceco Corporation (a 65.4% owned Subsidiary)
▇▇▇▇▇ Wire Pueblo Corporation
Hawthorne Partners, L.L.C.
▇▇▇▇ Management Inc.
*KenMor Electric Company, ▇.▇.
▇▇▇▇▇▇▇ Machinery, L.L.C.
▇▇▇▇▇▇▇ Machinery Limited
OF HEICO HOLDING, INC.
CECO Concrete Construction Corp.
▇▇▇▇▇▇▇ Holding, L.L.C.
▇▇▇▇▇▇▇ Member, Inc.
*Jaenson Wire Company, L.L.C.
*▇▇▇▇▇▇▇▇▇, L.L.C.
TFH Corp. (a 55% owned Subsidiary)
*Ancra International, LLC
OF ▇▇▇▇▇▇▇▇▇, L.L.C.
*▇▇▇▇▇ Hydraulics, L.L.C.
*Davies Molding, L.L.C.
*Field Controls, L.L.C.
*Stenograph, L.L.C.
*▇▇▇▇▇▇▇▇▇ Michigan, L.L.C.
*The Steelastic Company, L.L.C.
*Tiffin Parts, L.L.C.
*Ardco/Traverse Lift, L.L.C.
*Ceco Concrete Construction, L.L.C.
*▇▇▇▇ ▇▇▇▇▇▇▇ Fabricators, L.L.C.
*Steelform Rental, L.L.C.
*Spartan Tool, L.L.C.
Rior, Industrie-on Handelsondememing B.V.
OF TFH CORP.:
Tom's Foods Inc.
OF ▇▇▇▇ MANAGEMENT INC.
▇▇▇▇ Building L.L.C.
OF HAWTHORNE PARTNERS, L.L.C.
NEO Industries Inc.
Ohmite Holding, L.L.C. (a 72% owned Subsidiary)
*Designates Restricted Subsidiary as of the Effective Date
S9.8-1
SCHEDULE 10.7
EXISTING DEBT
-NONE-
S9.8-2
SCHEDULE 10.8
LIENS
NONE
S9.8-3
SCHEDULE 10.11
INVESTMENTS
INVESTMENT IN: AMOUNT OF INVESTMENT
▇▇▇▇▇▇▇▇▇-Ceco Corporation 78,730,000
▇▇▇▇▇ Wire Pueblo 17,458,000
Hawthorne Partners, LLC 51,000
NEO Industries, Inc. 4,300,000
Ohmite Holding, L.L.C. 7,000,000
▇▇▇▇▇▇▇ 16,360,000
Envirodyne Stock 2,550,000
World Port Common Stock 630,000
NSD Stock 100,000
HPF, LLC Note 660,000
Nutri/System Direct Note 100,000
▇▇▇▇ Management, Inc. 5,000
▇▇▇▇ Building, LLC 5,998,000
S9.8-4