Exhibit 10.1
[Execution Copy]
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of September 26, 2003 between BE AEROSPACE,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware (the "Borrower"), each of the lenders that is a signatory
hereto under the caption "LENDERS" on the signature pages hereto (individually a
"Lender" and collectively the "Lenders") and JPMORGAN CHASE BANK (formerly known
as The Chase Manhattan Bank) as administrative agent (in such capacity, together
with its successors in such capacity, the "Administrative Agent") under the
Credit Agreement referred to below.
The Borrower, the Lenders and the Administrative Agent are parties to
a Credit Agreement dated as of August 21, 2001 (as heretofore amended, the
"Credit Agreement"). The Borrower, the Lenders and the Administrative Agent wish
to amend the Credit Agreement in certain respects and, accordingly, the parties
hereto hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
set forth in Section 6 hereof, the Credit Agreement shall be amended as of the
date hereof as follows:
Section 2.01. Definitions. Section 1.01 of the Credit Agreement is
hereby amended by adding the following definitions in the appropriate
alphabetical order (to the extent not already included), and amending in their
entirety the following definitions (to the extent already included):
"Account" has the meaning set forth in Article 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York.
"Account Debtor" has the meaning set forth in Article 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York.
"Amendment No. 4" means Amendment No. 4 to this Agreement dated as of
September 26, 2003 between the Borrower, Lenders constituting the Required
Lenders and the Administrative Agent.
"Applicable Rate" means, for any day, for any Type of Revolving Credit
Loans, or with respect to the commitment fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the
caption "ABR Spread", "Eurodollar Spread" or "Commitment Fee Rate",
respectively, based upon the Leverage Ratio as of the most recent
determination date:
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------------------------------------- ---------------- ---------------- ---------------------
Leverage Ratio: ABR Eurodollar Commitment
---------------
Spread Spread Fee Rate
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 1 1.00% 2.00% 0.300%
----------
Less than 4.00 to 1
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 2 1.25% 2.25% 0.375%
----------
Less than 4.50 to 1, but greater
than or equal to 4.00 to 1
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 3 1.75% 2.75% 0.500%
----------
Less than 5.00 to 1, but greater
than or equal to 4.50 to 1
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 4 2.00% 3.00% 0.500%
----------
Less than 5.50 to 1, but greater
than or equal to 5.00 to 1
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 5 2.50% 3.50% 0.500%
----------
Less than 6.00 to 1 but greater
than or equal to 5.50 to 1
------------------------------------- ---------------- ---------------- ---------------------
------------------------------------- ---------------- ---------------- ---------------------
Category 6 3.00% 4.00% 0.500%
----------
Greater than or equal to 6.00 to 1
------------------------------------- ---------------- ---------------- ---------------------
For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Borrower's fiscal year based upon the
Borrower's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date three Business Days after delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category 6 (A)
at any time that an Event of Default has occurred and is continuing and (B) if
the Borrower fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 5.01(a), (b) or (f), during the period
from the expiration of the time for delivery thereof until such consolidated
financial statements are delivered; provided further, that that the Leverage
Ratio shall be deemed to be in Category 6 for the period from and including the
effective date of Amendment No. 4 to but excluding the date of delivery of the
first quarterly financial statements following such date as required by Section
5.01(a).
Notwithstanding the foregoing, the "Applicable Rate" for any Series of
Incremental Loans shall be the respective rates as shall be agreed upon at the
time Incremental Loan Commitments of such Series are established; provided that,
if the Applicable Rate for either Type of any Series of Incremental Loans shall
be greater than .50% above the Applicable Rate for such Type of Revolving Credit
Loans for any Category of Leverage Ratio set forth above, the Applicable Rate
for such Type of Revolving Credit Loans shall be automatically adjusted upwards
on the date upon which the Incremental Loan Commitments of such Series are
established pursuant to Section 2.01(b) so that the Applicable Rate for such
Type of such Series of Incremental Loans is .50% above such Applicable Rate for
such Type of Revolving Credit Loans.
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"Availability Block" means an amount equal to $10,000,000.
"Borrowing Base" means, at the time of any determination thereof, an amount
equal to the sum, without duplication, of:
(a) 85% of Eligible Domestic Accounts Receivable plus
(b) 75% of Eligible Foreign Accounts Receivables plus
(c) 20% of Eligible Raw Materials plus
(d) the lesser of (i) the product of 70% of the Net
Recovery Rate multiplied by the Inventory Values of the
aggregate gross inventory at the Xxxxxx Aerospace, M&M
Aerospace, Winston Aftermarket divisions of the Borrower, and
at any other divisions of the Borrower to be determined by the
Administrative Agent in its sole discretion, and (ii) 65% of
Eligible Finished Goods plus
(e) the PP&E Component (which may be included, or not
included, at the sole discretion of the Administrative Agent
but, if included, shall not represent more than 15% of the
aggregate Borrowing Base), minus
(f) the Availability Block.
The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
to Section 5.01(i). Standards of eligibility and reserves and advance rates of
the Borrowing Base may be revised and adjusted from time to time by the
Administrative Agent in its sole discretion, with any changes in such standards
to be effective three Business Days after delivery of notice thereof to the
Borrower. Without limiting the generality of the foregoing, it is acknowledged
and agreed that, in the event the Borrower shall modify its accounting
practices, systems or reserves relating to the components of the Borrowing Base
in a manner that, in the judgment of the Administrative Agent, is adverse to the
Lenders in any material respect, the Administrative Agent shall be entitled to
establish such additional reserves (for purposes of computing the Borrowing
Base) in respect of the components of the Borrowing Base and make such other
adjustments to the Borrowing Base (which may include modifying the advance rates
or modifying the eligibility criteria for the components of the Borrowing Base),
as the Administrative Agent shall in its sole discretion deemed appropriate.
"Borrowing Base Certificate" means a certificate substantially in the form
of Exhibit F (with such changes therein as may be required by the Administrative
Agent to reflect the components of, and reserves against, the Borrowing Base as
provided for herein from time to time), executed and certified as accurate and
complete by a senior financial officer of the Borrower, which certificate shall
include appropriate exhibits, schedules, supporting documentation, and
additional reports as (i) outlined in Schedule Y
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to Exhibit F, (ii) reasonably requested by the Administrative Agent, and (iii)
provided for in Section 5.01(i).
"Collateral Access Agreement" means a written agreement granting access
rights with respect to any Accounts or Inventory of the Borrower located at any
third party location, in form and substance reasonably satisfactory to the
Administrative Agent.
"Distribution Center" means any distribution center, regional distribution
center and/ or main depot owned or leased and operated by the Borrower.
"Eligible Domestic Accounts Receivable" means, at the time of any
determination thereof, each Account that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Account (i) has been invoiced to, and represents the bona
fide amounts due to the Borrower from, the purchaser of goods or services, in
each case originated in the ordinary course of business of the Borrower and (ii)
is not ineligible for inclusion in the calculation of the Borrowing Base
pursuant to any of clauses (a) through (r) below or otherwise deemed by the
Administrative Agent in its sole discretion to be ineligible for inclusion in
the calculation of the Borrowing Base as described below. Without limiting the
foregoing, to qualify as Eligible Domestic Accounts Receivable, an Account shall
indicate no Person other than the Borrower (including the M&M Aerospace division
of the Borrower and including any other name under which the Borrower conducts
its business) as payee or remittance party.
In determining the amount of any Account to be included as an "Eligible
Domestic Account Receivable", the face amount of an Account shall be reduced by,
without duplication, to the extent not reflected in such face amount, (x) the
amount of all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Borrower, as applicable, may be
obligated to rebate to a customer pursuant to the terms of any agreement or
understanding (written or oral)), (y) the aggregate amount of all limits and
deductions provided for in this definition and elsewhere in this Agreement and
(z) the aggregate amount of all cash received in respect of such Account but not
yet applied by the Borrower to reduce the amount of such Account. Standards of
eligibility (including the standards of eligibility set forth in clauses (a)
through (r) below) may be fixed from time to time by the Administrative Agent in
the exercise of its sole discretion, with any changes in such standards to be
effective three Business Days after delivery of notice thereof to the Borrower.
Unless otherwise approved from time to time in writing by the
Administrative Agent, no Account shall be an Eligible Domestic Account
Receivable if, without duplication:
(a) the Borrower does not have sole lawful and absolute title to such
Account; or
(b) (i) it is unpaid more than 90 days from the original date of invoice
or 60 days from the original due date or (ii) it has been written off
the books of
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the Borrower or has been otherwise designated on such books as
uncollectible, it being understood that in determining the aggregate
amount from the same Account Debtor that is unpaid more than 90 days
from the date of invoice or more than 60 days from the due date
pursuant to this clause (b), there shall be excluded the amount of any
net credit balances relating to Accounts due from an Account Debtor
with invoice dates more than 90 days from the date of invoice or more
than 60 days from the due date; or
(c) more than 50% in face amount of all Accounts of the same Account
Debtor are ineligible pursuant to clause (b) above; or
(d) the Account Debtor is insolvent or the subject of any bankruptcy case
or insolvency proceeding of any kind, or
(e) (i) such Account is not payable in Dollars or (ii) the Account Debtor
is either not organized under the laws of the United States of
America, any state thereof or the District of Columbia, or is located
outside or has its principal place of business or substantially all of
its assets outside the United States; or
(f) the Account Debtor is the United States of America or any department,
agency or instrumentality thereof; or
(g) such Account is subject to any adverse security deposit, progress
payment, retainage or other similar advance made by or for the benefit
of the applicable Account Debtor, in each case to the extent thereof;
or
(h) such Account was invoiced (i) in advance of goods or services
provided, or (ii) twice or more, or (iii) the associated income has
not been earned; or
(i) such Account is a non-trade Account, or relates to payments for
interest; or
(j) the sale to the Account Debtor is on a xxxx-and-hold, guarantee sale,
sale-and-return, ship-and-return, sale on approval, or consignment or
other similar basis or made pursuant to any other agreement providing
for repurchases or return of any merchandise which has been claimed to
be defective or otherwise unsatisfactory; or
(k) the goods giving rise to such Account have not been shipped and title
has not been transferred to the Account Debtor, or such Account
represents a progress-billing or otherwise does not represent a
complete sale; for purposes hereof, "progress-billing" means any
invoice for goods sold or leased or services rendered under a contract
or agreement pursuant to which the Account Debtor's obligation to pay
such invoice is conditioned
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upon the Borrower's completion of any further performance under the
contract or agreement; or
(l) it arises out of a sale made by the Borrower to an employee, officer,
agent, director, stockholder of 5% or more of the outstanding shares
of capital stock of any class of the Borrower, Subsidiary or Affiliate
of the Borrower; or
(m) such Account was not paid in full, and the Borrower created a new
receivable for the unpaid portion of the Account, and other Accounts
constituting chargebacks, debit memos and other adjustments for
unauthorized deductions; or
(n) the Account Debtor (i) is a creditor, (ii) has or has asserted a right
of set-off against the Borrower or (iii) has disputed its liability
(whether by chargeback or otherwise) or made any asserted or
unasserted claim with respect to such Account or any other Account of
the Borrower which has not been resolved, in each case, without
duplication, to the extent of the amount owed by the Borrower to the
Account Debtor, the amount of such actual or asserted right of
set-off, or the amount of such dispute or claim, as the case may be;
or
(o) as to all or any part of such Account, a check, promissory note,
draft, trade acceptance or other instrument for the payment of money
has been received, presented for payment and returned uncollected for
any reason; or
(p) if such Account is for goods that have been sold under a purchase
order or pursuant to the terms of a contract or other agreement or
understanding (written or oral) that indicates that any Person other
than the Borrower has or has had or has purported to have or have had
an ownership interest in such goods; or
(q) such Account is an extended terms account, which is due and payable
more than 120 days from the original date of invoice; or
(r) such Account is created on cash on delivery terms.
Notwithstanding the foregoing, all Accounts of any single Account Debtor
and its Affiliates that in the aggregate exceed (i) 20% in respect of an Account
Debtor whose securities are rated Investment Grade or (ii) 10% in respect of all
other Account Debtors, of the total amount of all Accounts at the time of any
determination shall be deemed not to be "Eligible Domestic Accounts Receivable"
to the extent of such excess.
"Eligible Finished Goods" means, at the time of any determination thereof,
Eligible Inventory defined as Finished Goods by the Borrower on such date as
shown on
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the Borrower's perpetual inventory records in accordance with its
current and historical accounting practices.
"Eligible Foreign Accounts Receivable" means, any Account
meeting all of the criteria set forth in the definition of Eligible
Domestic Accounts Receivable (other than the requirement set forth in
clause (e)(ii) thereof), originating from an Account Debtor organized
under the laws of Canada, Germany, the United Kingdom, or Australia (or
any political subdivision of any of the foregoing, located in any such
jurisdiction or whose principal place of business or substantially all
of its assets is located in any such jurisdiction), and that the
Administrative Agent determines in its sole discretion shall be treated
as an "Eligible Foreign Account Receivable" for purposes hereof.
"Eligible Inventory" means, at the time of any determination
thereof, without duplication, the Inventory Value of all Inventory of
the Borrower at the time of such determination that is not ineligible
for inclusion in the calculation of the Borrowing Base pursuant to any
of clauses (a) through (o) below, minus any reserve otherwise deemed by
the Administrative Agent in its sole discretion to be ineligible for
inclusion in the calculation of the Borrowing Base. Without limiting
the foregoing, to qualify as "Eligible Inventory" no Person other than
the Borrower shall have any direct or indirect ownership, interest or
title to such Inventory and no Person other than the Borrower, shall be
indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein.
Standards of eligibility may be fixed from time to time by the
Administrative Agent in the exercise of its sole discretion, with any
changes in such standards to be effective three Business Days after
delivery of notice thereof to the Borrower. Unless otherwise from time
to time approved in writing by the Administrative Agent, no Inventory
shall be deemed Eligible Inventory if, without duplication:
(a) it is not owned solely by the Borrower or the
Borrower does not have sole and good, valid and
unencumbered title thereto; or
(b) it is not located in the United States; or
(c) it is located in a third party warehouse or is
located at a closed facility owned or leased by the
Borrower (other than Inventory approved by the
Administrative Agent in its sole discretion and
subject to reserves as determined by the
Administrative Agent in its sole discretion); or
(d) it is goods returned or rejected due to quality
issues by the Borrower's customers or goods in
transit to third parties; or
(e) it is operating supplies, packaging or shipping
materials, cartons, repair parts, labels or
miscellaneous spare parts and other such materials
not considered used for sale in the ordinary course
of business by the Administrative Agent from time to
time; or
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(f) it is not subject to a valid and perfected first
priority Lien in favor of the Administrative Agent;
or
(g) it is classified as work in process by the Borrower
or requires further manufacturing or processing; or
(h) it is consigned or at a customer location but still
accounted for in the Borrower's perpetual inventory
balance (other than Inventory approved by the
Administrative Agent in its sole discretion and for
which the Administrative Agent has received a
Collateral Access Agreement); or
(i) it is Inventory which is being processed offsite at a
third party location or outside processor, or is
in-transit to or from the said third party location
or outside processor; or
(j) it is seconds or thirds or stale or it is obsolete or
slow moving or unmerchantable or is identified as
overstock or excess by the Borrower, or does not
otherwise conform to the representations and
warranties contained in the Agreement; or
(k) it is Inventory used as a sample or prototype,
displays or display items, not first quality or
non-saleable in the ordinary course of business or it
has been returned by a customer; or
(l) it is a discontinued product or component thereof; or
(m) it is Finished Goods not located at a Distribution
Center; or
(n) it is Inventory that is damaged, returned or marked
for return to vendor; or
(o) it is not in good condition, does not meet all
material standards imposed by any Governmental
Authority having regulatory authority over it, is
repair or replacement parts for machinery and
equipment, is rejected, defective or undergoing
quality review.
"Eligible Raw Materials" means, on any date, Eligible
Inventory defined as Raw Materials by the Borrower on such date as
shown on the Borrower's perpetual inventory records in accordance with
its current and historical accounting practices.
"Finished Goods" means completed goods which require no
additional processing or manufacturing, to be sold to third party
customers by the Borrower in the ordinary course of business.
"Inventory" has the meaning set forth in Article 9 of the
Uniform Commercial Code as in effect from time to time in the State of
New York.
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"Investment Grade" means a rating established by a third party
rating agency, equivalent to a Standard & Poors Ratings Group BBB- or a
Xxxxx'x Investor's Services, Inc. Baa3 or better.
"Inventory Value" means with respect to any Inventory of the
Borrower at the time of any determination thereof, the standard cost or
average cost carried on the perpetual records of the Borrower stated on
a basis consistent with their current and historical accounting
practices, in Dollars, determined in accordance with the standard cost
method and average cost method of accounting less, (i) any markup on
Inventory from an Affiliate and (ii) in the event variances under the
standard cost method (a) are capitalized, favorable variances shall be
deducted from Eligible Inventory, and unfavorable variances shall not
be added to Eligible Inventory, and (b) are expensed, a reserve shall
be determined as appropriate in order to adjust the standard cost of
Eligible Inventory to approximate actual cost.
"Net Recovery Rate" means (a) the estimated amount that would
be realized upon a net orderly liquidation of all Inventory of the
Borrower at locations selected by the Administrative Agent (as such
amount shall have been determined by the most recent analysis conducted
by outside inventory appraisers retained or approved by the
Administrative Agent) divided by (b) the Inventory Value of all
Inventory at such locations.
"PP&E Component" means, at the time of any determination, an
amount equal to 50% of the net orderly liquidation value of machinery
and equipment owned by the Borrower, all as determined in the
Administrative Agent's sole discretion from time to time.
"Raw Materials" means materials used or consumed in the
manufacture of goods to be sold by the Borrower in the ordinary course
of business.
Section 2.02. Mandatory Prepayments. Section 2.09(b) of the Credit
Agreement shall be amended by adding a new clause (iv) at the end thereof to
read as follows:
"(iv) Borrowing Base. The Borrower shall from time to time
prepay the Revolving Credit Loans (and/or provide cover for LC Exposure
as specified in Section 2.04(k)) in such amounts as shall be necessary
so that at all times the aggregate Revolving Credit Exposure, shall not
exceed the Borrowing Base, such amounts to be applied, first to the
prepayment of outstanding Loans and, second, as cover for LC Exposure,
in each case without reduction of the Revolving Credit Commitments."
Section 2.03. Reporting Requirements. Section 5.01 of the Credit
Agreement shall be amended by (i) deleting the word "and" at the end of
paragraph (h) therein, (ii) adding new paragraph (i) therein and (iii)
relettering the existing paragraph (i) as paragraph (j)):
"(i) no later than 15 days following the end of each monthly
accounting period (no later than October 3, 2003 in the case of the
monthly accounting period ending August 31, 2003), a completed
Borrowing Base Certificate showing the Borrowing Base
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as of the close of business on the last day of such monthly accounting
period and, if requested by the Administrative Agent at any other time
that the Administrative Agent reasonably believes the then-existing
Borrowing Base Certificate may be materially inaccurate, as soon as
reasonably available but in no event later than 5 Business Days after
such request, a completed Borrowing Base Certificate showing the
Borrowing Base as of the date so requested, in each case with
supporting documentation and additional reports with respect to the
Borrowing Base as the Administrative Agent may reasonably request;
and"
Section 2.04. Existence; Conduct of Business. Section 5.03 of the
Credit Agreement shall be amended by adding a new paragraph at the end thereof
to read as follows:
"Without limiting the generality of the foregoing clause (f),
the Borrower will permit any representatives designated by the
Administrative Agent (including employees of the Administrative Agent
or any consultants, accountants, lawyers and appraisers retained by the
Administrative Agent) to conduct evaluations and appraisals of the
Borrower's computation of the Borrowing Base and the assets included in
the Borrowing Base and such other assets and other financial
information and properties of the Borrower as the Administrative Agent
may require, all at such reasonable times and as often as reasonably
requested. The Borrower shall pay the fees including internally
allocated fees and expenses of employees of the Administrative Agent
and expenses of any such representatives retained by the Administrative
Agent as to which invoices have been furnished to conduct any such
evaluation or appraisal, including the reasonable fees and expenses
associated with collateral monitoring services performed by the
Collateral Agent Services Group of the Administrative Agent. To the
extent required by the Administrative Agent as a result of any such
evaluation, appraisal or monitoring, the Borrower also agrees to modify
or adjust the computation of the Borrowing Base (which may include
maintaining additional reserves, modifying the advance rates or
modifying the eligibility criteria for the components of the Borrowing
Base)."
Section 2.05. Certain Financial Covenants. Sections 6.08(a), 6.08(c)
and 6.08(d) of the Credit Agreement shall be amended in their entirety to read
as follows:
"SECTION 6.08. Certain Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio to
exceed the following respective ratios at any time during the following
respective periods:
Fiscal Period Ratio
------------- -----
From (but not including) the Fiscal Date in November 7.50 to 1
2002 through the Fiscal Date in December 2002.
From (but not including) the Fiscal Date in December 7.75 to 1
2002 through the Fiscal Date
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in March 2003.
From (but not including) the Fiscal Date in March 9.50 to 1
2003 through the Fiscal Date in June 2004.
From (but not including) the Fiscal Date in June 2004 9.25 to 1
through the Fiscal Date in December 2004.
From (but not including) the Fiscal Date in December 9.00 to 1
2004 through the Fiscal Date in March 2005.
From (but not including) the Fiscal Date in March 8.25 to 1
2005 through the Fiscal Date in June 2005.
From (but not including) the Fiscal Date in June 2005 8.00 to 1
through the Fiscal Date in September 2005.
From (but not including) the Fiscal Date in September 7.00 to 1
2005 through the Fiscal Date in December 2005.
Thereafter 5.50 to 1
(c) Interest Coverage Ratio. The Borrower will not permit the Interest
Coverage Ratio to be less than the following respective ratios at any time
during the following respective periods:
Fiscal Period Ratio
------------- -----
From (but not including) the Fiscal Date in November 1.15 to 1
2002 through the Fiscal Date in March 2004.
From (but not including) the Fiscal Date in March 1.20 to 1
2004 through the Fiscal Date in December 2004.
From (but not including) the Fiscal Date in December 1.30 to 1
2004 through the Fiscal Date in March 2005.
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From (but not including) the Fiscal Date in March 1.40 to 1
2005 through the Fiscal Date in June 2005.
From (but not including) the Fiscal Date in June 2005 1.50 to 1
through the Fiscal Date in September 2005.
From (but not including) the Fiscal Date in September 1.60 to 1
2005 through the Fiscal Date in December 2005.
Thereafter 2.00 to 1
(d) Adjusted Net Worth. The Borrower will not at any date permit
Adjusted Net Worth to be less than the sum of (a) $95,000,000 plus (b) 50%
of the aggregate amount of Net Available Proceeds of Equity Issuances since
May 26, 2001 plus (c) 50% of the sum of consolidated net earnings of the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) for each fiscal quarter of the
Borrower ending after May 26, 2001; provided that consolidated net earnings
for any fiscal quarter in which there is a consolidated net loss shall be
deemed to be zero."
Section 3. Reduction of Aggregate Revolving Credit Commitments. Upon
the effectiveness of the amendments to the Credit Agreement provided for in
Section 2 of this Amendment No. 4, the aggregate amount of the Revolving Credit
Commitments of the Lenders shall be reduced, on a ratable basis as provided in
Section 2.07(d) of the Credit Agreement, to $120,000,000, such reduction to
occur automatically, and without delivery of any notice, as would otherwise be
required under Section 2.07 of the Credit Agreement.
Section 4. Representations and Warranties. The Borrower represents and
warrants to the Lenders that the representations and warranties set forth in
Article III of the Credit Agreement (as amended hereby) are true and complete on
the date hereof as if made on and as of the date hereof (or, if such
representation or warranty is expressly stated to be made as of a specific date,
as of such specific date) and as if each reference in said Article III to "this
Agreement" included reference to this Amendment No. 4.
Section 5. Condition Precedent. The effectiveness of the amendments to
the Credit Agreement set forth in Section 2 hereof shall be subject to the
satisfaction of the following conditions precedent:
(a) Execution. The Administrative Agent shall have received
counterparts of this Amendment No. 4, duly executed and delivered by the
Borrower, the Required Lenders and the Administrative Agent.
(b) Fees and Expenses. The Borrower shall have paid all fees and
expenses that it shall have agreed to pay to any Lender or the
Administrative Agent in connection with this Amendment No. 4, including (i)
an amendment fee to each Lender executing this
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Amendment No. 4 prior to 5:00 p.m. on September 26, 2003, in an amount
equal to 0.25% of such Lender's Revolving Credit Commitment (after giving
effect to the reduction of such Commitments provided for in Section 3
hereof and (ii) the reasonable fees and expenses of Milbank, Tweed, Xxxxxx
& XxXxxx LLP, special New York counsel to the Administrative Agent.
(c) Prepayment. To the extent that, after giving effect to the
reduction of Revolving Credit Commitments contemplated by Section 3 hereof,
the total Revolving Credit Exposure shall exceed the total Revolving Credit
Commitments, the Borrower shall have prepaid an amount of the Loans, or
provided cover for LC Exposure, so that the total Revolving Credit Exposure
does not in exceed the total Revolving Credit Commitments.
(d) Other Documents. The Administrative Agent shall have received such
other documents as it, or special New York counsel to Administrative Agent,
shall have reasonably requested.
Section 6. Miscellaneous. Except as expressly provided herein, the
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 4 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 4 by signing any such
counterpart. This Amendment No. 4 shall be governed by, and construed in
accordance with, the law of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
4 to be duly executed as of the day and year first above written.
BE AEROSPACE, INC.
By /s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: Chairman
14
LENDERS
JPMORGAN CHASE BANK (formerly known
as The Chase Manhattan Bank)
By /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
BANK OF AMERICA, N.A.
By ________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch
By /s/ Xxx Xxxxx
-----------------------
Name: Xxx Xxxxx
Title: Director
By /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
Title: Associate
15
XXXXXXX XXXXX CREDIT PRODUCTS LLC
By /s/ Xxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
THE BANK OF NEW YORK
By /s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
GE CAPITAL CORPORATION
By /s/ Xxxx Xxxxxxx
------------------------
Name: Xxxx Xxxxxxx
Title: Duly Authorized Signatory
BARCLAYS
By /s/ Xxxxxx Landizberg
-------------------------
Name: Xxxxxx Landizberg
Title: Director
XXXXXXXX MASTER FUND, LTD.
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Director
PAMCO CAYMAN, LTD.
By: Highland Capital Management, L.P.
As Collateral Manager
By /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx, CFA, CPA
Title: President
16
PRESIDENT & FELLOWS OF HARVARD
COLLEGE
By: Regiment Capital Management, LLC,
as its Investment Advisor
By: Regiment Capital Advisors, LLC,
its Manager and pursuant to delegated
authority
By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
REGIMENT CAPITAL, LTD
By: Regiment Capital Management, LLC,
as its Investment Advisor
By: Regiment Capital Advisors, LLC,
its Manager and pursuant to delegated
authority
By /s/Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
RESTORATION FUNDING CLO, LTD.
By: Highland Capital Management, L.P.,
as Collateral Manager
By /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx, CFA, CPA
Title: President
17
Exhibit F
Page 1 of 4
BE Aerospace
Form of Monthly Borrowing Base Certificate
For the Month Ended _______________________
($ in 000's)
A. Available accounts receivable (from page 2 of 4) $
--------------
B. Available inventory (from page 4 of 4) $
--------------
C. Available Machinery and Equipment (50% of Net Orderly Liquidation Value) $
--------------
D. Less: Availability Block $ (10,000)
--------------
E. Borrowing Base Availability (sum of A through D) $
--------------
F. Lower of::
Borrowing Base (line E) $
--------------
Revolving Credit Commitment $ 120,000 $
-------------- -------------
G. Aggregate Revolving Credit loans outstanding $
--------------
H. L/C obligations outstanding $
--------------
I. Aggregate outstanding (lines G +H) $
--------------
J. Excess availability /(overadvance) (line F minus line I) $
--------------
*The Borrowing Base Certificate is to be accompanied by documentation
outlined in Schedule Y to this Exhibit F
Officer's Certification:
Pursuant to the Credit Agreement dated as of [enter date], the undersigned
certifies on behalf of the Borrower that the information provided in this
Borrowing Base Certificate is accurate and complete in all material respects.
------------------------------------------
Signature & Title Date
Exhibit F
Page 2 of 4
BE Aerospace
Form of monthly Borrowing Base Certificate
For the Month Ended _______________________
($ in 000's)
Calculation of available accounts receivable
Domestic Foreign Total
Total A/R per aging $ - $ - $ -
--------- --------- -------
Less Ineligibles:
> 90 days past due - - -
Extended terms (>120 day terms)
Cross age @ 50% - - -
Credit reclass - - -
Bankruptcy - - -
Foreign - - -
Government - - -
Customer Deposits - - -
Non Trade - - -
Consignment invoices - - -
Progress Xxxxxxxx - - -
InterCompany / Affiliate - - -
Contra accounts - - -
Chargeback / Deductions - - -
Xxxx and hold - - -
Notes receivable - - -
Cash in advance - - -
Unapplied cash - - -
Concentration Cap - - -
Other (per terms of the Credit Agreement) - - -
Total Ineligibles - - -
--------- --------- -------
Eligible Accounts Receivables - - -
--------- --------- -------
Advance rate 85% 75%
--- ---
Available A/R $ - $ - $ -
========== ========= =======
Exhibit F
Page 3 of 4
BE Aerospace
Form of Monthly Borrowing Base Certificate
For the Month Ended _______________________
($ in 000's)
Calculation of available Inventory
Total Company
-------------
Total Raw Materials and work in process $ -
Less Ineligibles: -
Not solely owned by Borrower or Grantor -
Not located in the United States -
Supplies / packaging / spare parts / Scrap -
Work in process -
Outside Processor -
Consigned -
Located at a 3rd party warehouse / closed facility -
Return to vendor -
Sample / Display -
Damaged -
Other (per terms of the Credit Agreement) -
-------------------
Total Ineligibles -
Eligible Raw Materials $ -
Advance Rate 20%
---
Available Raw Materials $ -
-------------------
Total Finished Goods -
Less Ineligibles:
Not solely owned by Borrower or Grantor -
Not located in the United States -
Consigned -
Located at a 3rd party warehouse / closed facility -
Returned inventory -
Non Distribution Finished Goods -
Sample / Display -
Damaged / Discontinued -
Components -
Slow moving / Obsolete reserve -
Shrink reserve -
Outside Processor -
Other (per terms of Credit Agreement) -
-----------------
Total Ineligibles -
Eligible Finished Goods $ -
Advance rate 65%
---
Available Finished Goods $ -
-----------------
Exhibit F
Page 4 of 4
BE Aerospace
Form of Monthly Borrowing Base Certificate
For the Month Ended _______________________
($ in 000's)
Inventory Availability Calculation:
(a) Available Raw Materials $
(b) Lower of:
i) the product of (x) 70% of the Net Recovery Rate after expenses
(as determined by the most recent inventory appraisal) multiplied by (y)
the aggregate gross Inventory at Xxxxxx Aerospace plus M&M Aerospace plus
Winston Aftermarket $
and
ii) Available Finished Goods $ $
Available Inventory ((a) + (b)) (to page 1 of 4) $
Schedule Y
to Exhibit F
BE Aerospace
Collateral Monitoring Reporting Requirements
Documents to be Submitted to the Bank
The following information is to be submitted on a monthly basis (unless
otherwise noted), by the 15th calendar day subsequent to month end (for Accounts
Receivable, Inventory and Other as noted below). The Accounts Receivable,
Inventory, other information shall be provided for all the divisions (unless
otherwise noted).
o Monthly BBC as outlined in Exhibit F
o Accounts Receivable:
1) A monthly rollforward of the A/R aging. The monthly rollforward should
separately identify beginning of the month A/R aging balance, gross
xxxxxxxx, cash receipts, credit memos and other adjustments issued
(recorded directly to the aging), write-offs, other debit and credit
adjustments (if significant, please provide explanation), end of month
A/R aging balance and should be supported by the following system
generated information:
o Summary totals of A/R aging.
o Total amount of invoices/sales.
o Total amount of cash receipts.
o Total amount of credits and adjustments (should include credit memos
issued, write-offs, returns, discounts and other credit
adjustments).
2) Terms, addresses, credit ratings and aging of top 10 customer accounts
receivable balances per the most recent aging.
3) Accounts receivable aging, consolidated and for each subsidiary.
4) Reconciliations of A/R aging report to the general ledger and financial
statements
5) Supporting documentation (system generated extract report where
applicable) for the A/R ineligibles as per the Credit Agreement and
Borrowing Base Certificate as follows:
o > 90 days past due
o Extended Terms (> 120 days)
o Cross age at 50%
o Credit reclass
o Bankruptcy
o Foreign
o Government
o Customer Deposits
o Non Trade
o Progress Xxxxxxxx
o Consignment Invoices
o Intercompany / Affiliates
o Contra accounts
o Chargeback / Deductions
o Xxxx and hold
o Notes receivables
o Cash in advance
o Unapplied cash
o Concentration cap
o Other (per terms of the Credit Agreement)
o Inventory:
1) Summary of inventory by component (i.e., raw materials, finished
goods), product group and location.
2) Summarized inventory perpetual reports.
3) Gross margin and turnover by product group and location for Xxxxxx
Aerospace, Winston Aftermarket and M&M Aerospace. On a quarterly basis
gross margin and turnover by product group and location for all
divisions.
4) Supporting documentation (system generated extract report where
applicable) for all Inventory ineligibles as per the Credit Agreement
and Borrowing Base Certificate as follows:
o Not solely owned by Borrower
o Not located in the United States
o Supplies / packaging / spare parts / Scraps
o Work in process
o Consigned
o Located at a 3rd party warehouse / closed facility
o Return to vendor
o Sample / Display
o Damaged / Discontinued
o Returned inventory
o Non DC inventory
o Components
o Slow moving / Obsolete reserve
o Shrink reserve
o Outside processor
o Other (per terms of Credit Agreement)
5) Reconciliation of perpetual inventory reports to general ledger and
financial statements for Xxxxxx Aerospace, Winston Aftermarket and M&M
Aerospace. On a quarterly basis, a reconciliation of perpetual
inventory reports to general ledger and financial statements for all
divisions.
6) Summary results of cycle counts and physical inventory counts by plant
indicating gross positive and negative adjustments on a quarterly
basis.
2
o Other:
1) Consolidated accounts payable aging and top tem accounts payable
balances for all divisions on the XX Xxxxxxx system and M&M Aerospace.
On a quarterly basis, consolidated accounts payable aging for all
divisions.
2) Top five aged vendor payable balances for Xxxxxx Aerospace, Winston
Aftermarket, M&M Aerospace and Miami General Aviation Seats.
3) Consolidating financial statements by legal entity (Balance Sheet,
Income Statement, Cash Flows) on a quarterly basis.
Submit to: Xxxxx Xxxxx
JPMorgan
Collateral Agent Services Group
000 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx.X.Xxxxx@xxxxxxxx.xxx
--------------------------
3