EXECUTION COPY
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of December 14, 2001 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 (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 5 hereof, the Credit Agreement shall be amended as follows:
Section 2.01. Section 1.01 of the Credit Agreement is hereby
amended by adding the following defined term in the appropriate alphabetical
order:
"Amendment No. 1" means Amendment No. 1 to this Agreement
dated as of December 14, 2001 between the Borrower and the Required Lenders.
Section 2.02. The definition of "Applicable Rate" in Section
1.01 of the Credit Agreement shall be amended in its entirety to read as
follows:
"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:
============================================== ============ ================ ====================
Leverage Ratio: ABR Eurodollar Commitment
---------------
Spread Spread Fee Rate
- ---------------------------------------------- ------------ ---------------- --------------------
Category 1 0.50% 1.50% 0.300%
----------
Less than 4.00 to 1
- ---------------------------------------------- ------------ ---------------- --------------------
Category 2 0.75% 1.75% 0.375%
----------
Less than 4.50 to 1, but greater than or
equal to 4.00 to 1
- ---------------------------------------------- ------------ ---------------- --------------------
Category 3 1.25% 2.25% 0.500%
----------
Less than 5.00 to 1, but greater than or
equal to 4.50 to 1
- ---------------------------------------------- ------------ ---------------- --------------------
Category 4 1.50% 2.50% 0.500%
----------
Less than 5.50 to 1, but greater than or
equal to 5.00 to 1
- ---------------------------------------------- ------------ ---------------- --------------------
Category 5 2.00% 3.00% 0.500%
----------
Greater than or equal to 5.50 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 5 (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 3 for the period from and including the
effective date of Amendment No. 1 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."
Section 2.03. Sections 6.08(a) and (b) of the Credit
Agreement shall be amended and restated 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:
(A) (B)
Pre Change in Fiscal Post Change in Fiscal Ratio
Year Period Year Period
From (but not including) the From (but not including) the 7.00 to 1
Effective Date through the Effective Date through the Fiscal
Fiscal Date in November 2002 Date in December 2002
From (but not including) the From (but not including) the 6.00 to 1
Fiscal Date in November 2002 Fiscal Date in December 2002
through the Fiscal Date in through the Fiscal Date in
May 2003 June 2003
From (but not including) the From (but not including) the 5.50 to 1
Fiscal Date in May 2003 Fiscal Date in June 2002
through the Fiscal Date in through the Fiscal Date in
November 2003 December 2003
From (but not including) the From (but not including) the 4.75 to 1
Fiscal Date in November 2003 Fiscal Date in December 2003
through the Fiscal Date in through the Fiscal Date in
November 2004 December 2004
Thereafter Thereafter 4.00 to 1
For purposes hereof, the periods set forth in column (A) above shall be
applicable until such time as the Borrower shall have delivered the pro
forma financial statements referred to in Section 5.01(h) following a
change in the Borrower's fiscal year as contemplated in Section
1.04(c), in which event the periods set forth in column (B) above shall
be applicable.
(b) 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:
(A) (B)
Pre Change in Fiscal Post Change in Fiscal Ratio
Year Period Year Period
From (but not including) the From (but not including) the 1.50 to 1
Effective Date through the Effective Date through the Fiscal
Fiscal Date in November 2002 Date in December 2002
From (but not including) the From (but not including) the 1.75 to 1
Fiscal Date in November 2002 Fiscal Date in December 2002
through the Fiscal Date in through the Fiscal Date in
May 2003 June 2003
From (but not including) the From (but not including) the 2.00 to 1
Fiscal Date in May 2003 Fiscal Date in June 2002
through the Fiscal Date in through the Fiscal Date in
November 2003 December 2003
From (but not including) the From (but not including) the 2.25 to 1
Fiscal Date in November 2003 Fiscal Date in December 2003
through the Fiscal Date in through the Fiscal Date in
November 2004 December 2004
From (but not including) the From (but not including) the 2.50 to 1
Fiscal Date in November 2004 Fiscal Date in December 2004
through the Fiscal Date in through the Fiscal Date in
November 2005 December 2005
Thereafter Thereafter 3.00 to 1
For purposes hereof, the periods set forth in column (A) above shall be
applicable until such time as the Borrower shall have delivered the pro
forma financial statements referred to in Section 5.01(h) following a
change in the Borrower's fiscal year as contemplated in Section
1.04(c), in which event the periods set forth in column (B) above shall
be applicable."
Section 3. Covenants.
---------
Section 3.01. Notwithstanding anything to the contrary
contained in the Credit Agreement, during the period from and including the date
of this Amendment No. 1 to and excluding the date on which the Borrower
demonstrates compliance with the ratios set forth in Section 6.08(a) and (b) as
in effect prior to the effectiveness of this Amendment No. 1, the Borrower
agrees as follows:
A. The Borrower will not permit the aggregate amount of
Capital Expenditures to exceed $25,000,000 in any fiscal year.
For purposes of this Section 3, "Capital Expenditures"
means, for any period, expenditures (including the aggregate amount of
Capital Lease Obligations incurred during such period) made by the
Borrower or any of its Subsidiaries to acquire or construct fixed
assets, plant and equipment (including renewals, improvements and
replacements, but excluding normal replacements and maintenance which
are properly charged to current operations) during such period computed
in accordance with GAAP. For the purposes hereof, the acquisition of
any capital asset by the Borrower or any of its Subsidiaries
constituting a reinvestment of Net Available Proceeds of any Equity
Issuance or Disposition, shall constitute a "Capital Expenditure"
hereunder only to the extent of any consideration paid by the Borrower
and its Subsidiaries in excess of such Net Available Proceeds so
reinvested.
B. In the event the Borrower makes any Restricted Payment,
the portion of such Restricted Payment attributable to the $25,000,000
basket contained in clause (A) of the first proviso of Section 6.06 of
the Credit Agreement shall only be made with (i) Net Available Proceeds
resulting from a Disposition or an Equity Issuance consummated on or
after the date hereof and otherwise permitted under the Credit
Agreement and (ii) any settlement proceeds awarded to the Borrower in
connection with the Sextant arbitration.
C. The Borrower shall not finance Acquisitions directly or
indirectly with more than $25,000,000 of the proceeds of the Revolving
Credit Loans then outstanding; provided, however, that the Borrower may
finance Acquisitions with more than $25,000,000 (but not in excess of
$100,000,000) of the proceeds of the Revolving Credit Loans then
outstanding to the extent the Borrower applies an equivalent amount of
any combination of the following to such Acquisition: (i) Net Available
Proceeds resulting from a Disposition or an Equity Issuance consummated
on or after the date hereof and otherwise permitted under the Credit
Agreement and (ii) any settlement proceeds awarded to the Borrower in
connection with the Sextant arbitration.
For the purposes of this Section 3, "Net Available Proceeds"
in the case of any Equity Issuance means the aggregate amount of all cash
received by the Borrower and its Subsidiaries in respect of such Equity Issuance
net of reasonable expenses incurred by the Borrower and its Subsidiaries in
connection therewith.
Section 3.02. The Borrower shall, on or prior to the Fiscal
Date in February 2002, provide evidence to the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent, of the merger of
M&M Aerospace, Inc. with and into the Borrower. Notwithstanding anything to the
contrary contained in the Credit Agreement, the Borrower shall be permitted to
transfer to a Wholly Owned Subsidiary those assets substantially relating to the
operations of M& M Aerospace, Inc. on the date hereof if, at the time of such
transfer, (i) the Borrower demonstrates compliance with the ratios set forth in
Section 6.08(a) and (b) as in effect prior to the effectiveness of this
Amendment No. 1 and (ii) no Default or Event of Default shall have occurred and
be continuing.
Section 4. Representations and Warranties. The Borrower
represents and warrants to the Lenders that the representations and warranties
set forth in Section 3 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 Section 3 to "this
Agreement" included reference to this Amendment No. 1.
Section 5. Condition Precedent. The amendments to the Credit
Agreement set forth in Section 2 above shall become effective as of the date
hereof upon (a) receipt by the Administrative Agent of this Amendment No. 1,
duly executed and delivered by the Borrower and the Required Lenders, (b)
payment of all fees and expenses as the Borrower shall have agreed to pay to any
Lender or the Administrative Agent in connection with this Amendment No. 1,
including the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy
LLP, special New York counsel to the Administrative Agent and (c) other
documents that the Administrative Agent or special New York counsel to the
Administrative Agent may reasonably request.
Section 6. Miscellaneous.
-------------
Except as expressly herein provided, the Credit Agreement
shall remain unchanged and in full force and effect. This Amendment No. 1 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. 1 by signing any such counterpart. This Amendment
No. 1 shall be governed by, and construed in accordance with, the law of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed as of the day and year first above written.
BE AEROSPACE, INC.
By_________________________
Name:
Title:
LENDERS
JPMORGAN CHASE BANK (formerly known as The
Chase Manhattan Bank)
By_________________________
Name:
Title:
BANK OF AMERICA, N.A.
By_________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By_________________________
Name:
Title:
By_________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By_________________________
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION
By_________________________
Name:
Title:
THE BANK OF NEW YORK
By_________________________
Name:
Title:
CREDIT LYONNAIS
NEW YORK BRANCH
By_________________________
Name:
Title: