Exhibit 10.7
KEEPWELL AGREEMENT
This KEEPWELL AGREEMENT (as the same may be amended,
restated, supplemented or otherwise modified from time to time, this
"Agreement") is made as of the 11th day of October, 2002, by LJH, LTD., a Texas
limited partnership ("LJH"), in favor of the "Agent", "Lenders", the "Issuing
Banks" and the other "Holders" under that certain Fifth Amended and Restated
Credit Agreement dated as of July 12, 2002, by and among TMAS/ASI, INC., an
Arkansas corporation formerly known as Aerocell Structures, Inc. ("Aerocell"),
TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation ("TIMCO"),
AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation ("Design"), and TIMCO
ENGINE CENTER, INC., a Delaware corporation ("TIMCO Engine") (Aerocell, TIMCO,
Design, and TIMCO Engine being collectively referred to as the "Borrowers" and
each individually, a "Borrower"), TIMCO AVIATION SERVICES, INC., a Delaware
corporation ("Parent"), the Lenders and Issuing Banks from time to time parties
thereto and Citicorp USA, Inc., in its capacity as Agent for the Holders. Such
Fifth Amended and Restated Credit Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time, is hereinafter
referred to as the "Credit Agreement". Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in the
Credit Agreement.
WITNESSETH:
WHEREAS, the Borrowers are parties to the Credit Agreement
and, pursuant thereto, the Lenders and Issuing Banks have agreed to make and
extend certain loans and provide certain other financial accommodations to the
Borrowers for which the Borrowers are jointly and severally liable;
WHEREAS, as of the date hereof, the Parent has acquired all
of the issued and outstanding Capital Stock of Xxxxx Manufacturing Company, a
California corporation ("Xxxxx") pursuant to that certain Stock Purchase
Agreement dated as of October 2, 2002 between Xxxxxxxx Incorporated and Parent
(the transactions contemplated by such Stock Purchase Agreement being referred
to herein as the "Xxxxx Acquisition");
WHEREAS, LJH acknowledges that it has in the past benefited
and will in the future benefit from the Loans, Letters of Credit and other
financial accommodations extended to the Borrowers under the Credit Agreement;
WHEREAS, as a condition to consenting the Xxxxx Acquisition
and continuing to make credit facilities available under the Credit Agreement,
the Lenders and Issuing Banks have required that LJH execute and deliver this
Agreement for the benefit of the Agent, Lenders, Issuing Banks and other
Holders on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
1. Keepwell Agreement. (i) For value received and in
consideration of any loan, advance or financial accommodation of any kind
whatsoever heretofore, now or hereafter made, given or granted to the Borrowers
by the Lenders and the Issuing Banks and of the Requisite Lenders' consent to
the Xxxxx Acquisition, LJH unconditionally and irrevocably agrees for the
benefit of each of the Holders that LJH will pay to the Agent, for application
to the outstanding Revolving Loans (without reduction of the Revolving Credit
Commitment) or, if no Revolving Loans are then outstanding, to Xxxxx (which
shall be deemed to be an increase in the principal amount of the LJH Note and
an intercompany loan from Parent to Xxxxx), an amount equal to the "Xxxxx Xxxx
Shortfall" (as defined below) incurred during any calendar month, such payment
to be made to the Agent not later than ten (10) days after the delivery of the
monthly financial statements required to be delivered to the Agent and the
Lenders under Section 8.01(a) of the Credit Agreement (the "Monthly
Financials"). "Xxxxx Xxxx Shortfall" shall mean, for Xxxxx on a stand-alone
basis for any calendar month, the absolute value of an amount equal to the
lesser of (x) zero and (y) an amount equal to (1) Net Income, plus (2)
depreciation and amortization expense, plus (3) non-cash interest expense, plus
(4) federal, state and local income taxes deducted from Net Income, minus (5)
extraordinary gains, in each case determined in accordance with GAAP. In
addition, not later than 10 days after the delivery of the Monthly Financials
for October 2002, LJH shall pay to the Agent, for application to the
outstanding Revolving Loans (without reduction of the Revolving Credit
Commitment) or, if no Revolving Loans are then outstanding, to Parent (which
shall be deemed to be an increase in the principal amount of the LJH Note) an
amount equal to the aggregate amount of transaction costs incurred by Parent or
any of its Subsidiaries in connection with the Xxxxx Acquisition.
(ii) LJH further agrees to pay to the Agent and reimburse
the Agent for, on demand and in immediately available funds, (a) all losses
(including, without limitation, lost profits), fees, costs and expenses
(including, without limitation, all court costs and attorneys' and paralegals'
fees, costs and expenses) paid or incurred by the Agent or any of the Holders
in: (1) endeavoring to collect all or any part of any Xxxxx Xxxx Shortfall
payable hereunder from, or in prosecuting any action against, LJH; and (2)
preserving, protecting or defending the enforceability of, or enforcing, this
Agreement or their respective rights hereunder (all such costs and expenses are
hereinafter referred to as the "Expenses") and (b) interest on (1) any Xxxxx
Xxxx Shortfall which is not paid when due pursuant to Section 1(i) above, and
(2) the Expenses, from the date of demand under this Agreement until paid in
full at the per annum rate of interest described in Section 5.01(c) of the
Credit Agreement (the "Interest Rate"). The obligations of LJH under this
Section 1 are collectively referred to as the "Keepwell Obligations".
2. Obligations Unconditional. LJH hereby agrees that
its obligations under this Agreement shall be unconditional, irrespective of:
(i) the validity, enforceability, avoidance or
subordination of any of the Obligations or any of the Loan Documents;
(ii) the absence of any attempt by, or on behalf of, any
Holder or the Agent to collect, or to take any other action to
enforce, all or any part of the Obligations whether from or against
any Borrower, any Guarantor, any other guarantor of the Obligations or
any other Person;
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(iii) the election of any remedy by, or on behalf of, any
Holder or the Agent with respect to all or any part of the Obligations
or the Keepwell Obligations;
(iv) the waiver, consent, extension, forbearance or
granting of any indulgence by, or on behalf of, any Holder or the
Agent with respect to any provision of any of the Loan Documents;
(v) the failure of the Agent to take any steps to
perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations;
(vi) the election by, or on behalf of, any one or more of
the Holders, in any proceeding instituted under Chapter 11 of Title 11
of the United States Code (11 U.S.C. 101 et seq.) (the "Bankruptcy
Code"), of the application of Section 1111(b)(2) of the Bankruptcy
Code;
(vii) any borrowing or grant of a security interest by any
Borrower or Guarantor, as debtor-in-possession, under Section 364 of
the Bankruptcy Code;
(viii) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of the claims of any of the
Holders or the Agent for repayment of all or any part of the
Obligations; or
(ix) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of any Borrower,
any Guarantor or LJH.
3. Enforcement; Application of Payments. Upon LJH's
failure to make any payment in respect of the Keepwell Obligations, the Agent
may proceed directly and at once, without notice, against LJH to obtain
performance of and to collect and recover the full amount, or any portion, of
the Keepwell Obligations, without first proceeding against any Borrower or any
other Person, or against any security or collateral for the Obligations.
Subject only to the express terms and provisions of this Agreement and the
Credit Agreement, the Agent shall have the exclusive right to determine the
application of payments and credits, if any, from LJH on account of the
Keepwell Obligations, any Borrower, any Guarantor or from any other Person on
account of the Obligations.
4. Waivers. (i) LJH hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
receivership or bankruptcy of any Borrower and any Guarantor, protest or notice
with respect to the Obligations, all setoffs and counterclaims and all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Agreement, the benefits of all statutes of limitation, and all other demands
whatsoever (and shall not require that the same be made on any Borrower or
Guarantor as a condition precedent to LJH's obligations hereunder), and
covenants that this Agreement will not be discharged, except by complete
payment (in cash) and performance of the Keepwell Obligations and the
Obligations. LJH further waives all notices of the existence, creation or
incurrence of new or additional indebtedness, arising either from additional
loans extended to the Borrowers or the Guarantors, or otherwise, and also
waives all notices that the principal amount, or any portion thereof, and/or
any interest on any instrument or document evidencing all or any part of the
Obligations is due, notices of any and all proceedings
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to collect from the maker, any endorser or any guarantor of all or any part of
the Obligations, or from any other Person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
collateral given to the Agent to secure payment of all or any part of the
Obligations.
(ii) LJH understands that it shall be liable for the full
amount of its liability under this Agreement, notwithstanding foreclosure of
any real property securing all or any part of the Obligations by trustee sale
or any other reason impairing the right of LJH , the Agent or any of the other
Holders to proceed against any Borrower, any guarantor of any or all of the
Obligations or any Borrower's or such guarantor's property. LJH agrees that all
of its obligations under this Agreement shall remain in full force and effect
without defense, offset or counterclaim of any kind, notwithstanding that LJH's
rights against the Borrowers or any Guarantors may be impaired, destroyed or
otherwise affected by reason of any action or inaction on the part of the Agent
or any other Holder. Without limiting the generality of the foregoing or any
other provision hereof, LJH hereby waives, to the fullest extent permitted by
applicable law in accordance with Section 2856 of the California Civil Code,
all rights and benefits under California Civil Code Sections 2787 to 2855,
inclusive (or any similar laws in other jurisdictions) and all rights and
benefits of California Civil Code Sections 2899 and 3433 (or any similar laws
in any other jurisdiction). In addition, without limiting the generality of the
foregoing or any other provision hereof, LJH hereby waives, in accordance with
Section 2856 of the California Civil Code, all rights and defenses (including,
without limitation, all rights and defenses arising out of an election of
remedies by the Agent or any Holder) that LJH may have because the Obligations
are secured by real property. This means, among other things:
(A) the Agent or any Holder may collect from
LJH without first foreclosing on any real or personal property
collateral pledged by any Borrower or any Guarantor; and
(B) if the Agent or any Holder forecloses on
any real property collateral pledged by any Borrower or any Guarantor:
(1) the amount of the debt may be
reduced only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is worth more
than the sale price; and
(2) the Agent or any Holder may
collect from LJH even if the Agent or any Holder, by
foreclosing on the real property collateral, has destroyed
any right LJH may have to collect from any Borrower or any
Guarantor.
This is an unconditional and irrevocable waiver of any rights and
defenses LJH may have because the Obligations are secured by real
property. These rights and defenses include, but are not limited to,
any rights or defenses based upon Section 580a, 580b, 580d or 726 of
the California Code of Civil Procedure (or any similar laws in any
other jurisdiction).
(C) Further, LJH waives all rights and defenses
arising out of an election to remedies by the Agent or any Holder,
even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for the Obligations, has
destroyed LJH's
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rights of subrogation and reimbursement against any Borrower or any
Guarantor by the operation of Section 580d of the California Code of
Civil Procedure (or any similar laws in any other jurisdiction).
(iii) In accordance with Section 13 below, this Agreement
shall be governed by, and shall be construed and enforced in accordance with,
the laws and decisions of the State of New York. The referenced provisions of
California law in this Section 4 and elsewhere in this Agreement are included
solely out of an abundance of caution, and shall not be construed to mean that
any of the referenced provisions of California law are in any way applicable to
this Agreement, the Obligations or the Keepwell Obligations.
(iv) The Holders, either themselves or acting through the
Agent, are hereby authorized, without notice or demand and without affecting
the liability of LJH hereunder, from time to time, (a) to renew, extend,
accelerate or otherwise change the time for payment of, or other terms relating
to, all or any part of the Obligations, or to otherwise modify, amend, change,
restate or supplement the terms of any of the Loan Documents; (b) to accept
partial payments on all or any part of the Obligations; (c) to take and hold
security or collateral for the payment of all or any part of the Obligations,
this Agreement, or any other guaranties of all or any part of the Obligations
or other liabilities of the Borrowers, (d) to exchange, enforce, waive and
release any such security or collateral; (e) to apply such security or
collateral and direct the order or manner of sale thereof as in their
discretion they may determine; (f) to settle, release, exchange, enforce,
waive, compromise or collect or otherwise liquidate all or any part of the
Obligations, this Agreement, any other guaranty of all or any part of the
Obligations, and any security or collateral for the Obligations or for any such
guaranty. Any of the foregoing may be done in any manner, without affecting or
impairing the obligations of LJH hereunder.
5. Setoff. At any time after all or any part of the
Keepwell Obligations have become due and payable (by acceleration or
otherwise), each Holder and the Agent may, without notice to LJH and regardless
of the acceptance of any security or collateral for the payment hereof,
appropriate and apply toward the payment of all or any part of the Keepwell
Obligations (i) any indebtedness due or to become due from such Holder or the
Agent to LJH, and (ii) any moneys, credits or other property belonging to LJH,
at any time held by or coming into the possession of such Holder or the Agent
or any of their respective affiliates.
6. Financial Information. LJH hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrowers, the Guarantors and any and all endorsers and/or other guarantors of
all or any part of the Obligations, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations, or any part thereof, that diligent
inquiry would reveal, and LJH hereby agrees that none of the Holders nor the
Agent shall have any duty to advise LJH of information known to any of them
regarding such condition or any such circumstances. In the event any Holder, in
its sole discretion, undertakes at any time or from time to time to provide any
such information to LJH, such Holder shall be under no obligation (i) to
undertake any investigation not a part of its regular business routine, (ii) to
disclose any information which such Holder, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any other
information to LJH.
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7. No Marshalling; Reinstatement. LJH consents and
agrees that none of the Holders or the Agent nor any Person acting for or on
behalf of the Holders or the Agent shall be under any obligation to marshal any
assets in favor of LJH or against or in payment of any or all of the Obligations
or the Keepwell Obligations.
8. Subrogation. Until the Obligations have been paid in
full, in cash, LJH (i) shall have no right of subrogation with respect to such
Obligations and (ii) waives any right to enforce any remedy which the Holders
or the Agent (or any of them) now have or may hereafter have against any
Borrower, any endorser or any guarantor of all or any part of the Obligations
or any other Person, and LJH waives any benefit of, and any right to
participate in, any security or collateral given to the Holders and the Agent
(or any of them) to secure the payment or performance of all or any part of the
Obligations or any other liability of the Borrowers to the Holders.
9. Enforcement; Amendments; Waivers. No delay on the
part of any of the Holders or the Agent in the exercise of any right or remedy
arising under this Agreement, the Credit Agreement, any of the other Loan
Documents or otherwise with respect to all or any part of the Obligations, the
Keepwell Obligations, the Collateral or any other guaranty of or security for
all or any part of the Obligations shall operate as a waiver thereof, and no
single or partial exercise by any such Person of any such right or remedy shall
preclude any further exercise thereof. No modification or waiver of any of the
provisions of this Agreement shall be binding upon the Holders or the Agent,
except as expressly set forth in a writing duly signed and delivered by the
Agent or by the party making such modification or waiver. Failure by any of the
Holders or the Agent at any time or times hereafter to require strict
performance by LJH of any of the provisions, warranties, terms and conditions
contained in this Agreement shall not waive, affect or diminish any right of
the Agent or such Holder at any time or times hereafter to demand strict
performance thereof and such right shall not be deemed to have been waived by
any act or knowledge of the Agent or any Holder, or their respective agents,
officers or employees, unless such waiver is contained in an instrument in
writing, directed and delivered to LJH, specifying such waiver, and is signed
by the party or parties necessary to give such waiver under the Credit
Agreement. No waiver of any default in LJH's performance of its obligations
under this Agreement shall operate as a waiver of any other default or the same
such default on a future occasion, and no action by the Agent or any Holder
permitted hereunder shall in any way affect or impair the Agent's or any
Holder's rights and remedies or the obligations of LJH under this Agreement.
10. Effectiveness; Termination. This Agreement shall
become effective upon its execution by LJH. This Agreement shall continue in
full force and effect and may not be terminated or otherwise revoked until the
Obligations shall have been fully paid (in cash) and discharged and the Credit
Agreement and all financing arrangements between the Borrowers and the Holders
shall have been terminated. LJH hereby expressly waives the benefits of Section
2815 of the California Civil Code (or any similar law in any other
jurisdiction) purporting to allow a guarantor to revoke a continuing guaranty
with respect to any transactions occurring after the date of such guaranty. If,
notwithstanding the foregoing, LJH shall have any right under applicable law to
terminate or revoke this Agreement, LJH agrees that such termination or
revocation shall not be effective until a written notice of such revocation or
termination, specifically referring hereto, signed by LJH, is actually received
by the Agent. Any such
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termination, revocation or notice thereof shall constitute an automatic Event
of Default under the Credit Agreement. Such notice shall not affect the right
and power of any of the Holders or the Agent to enforce rights arising prior to
receipt thereof by the Agent. If any Holder grants loans or takes other action
after LJH terminates or revokes this Agreement but before the Agent receives
such written notice, the rights of such Holder with respect thereto shall be
the same as if such termination or revocation had not occurred.
11. Successors and Assigns. This Agreement shall be
binding upon LJH and upon the successors and assigns of LJH and shall inure to
the benefit of the Holders and the Agent and their respective successors and
assigns; all references herein to any Borrower, any Guarantor and to LJH shall
be deemed to include their respective successors and assigns. The successors
and assigns of LJH, any Borrower and any Guarantor shall include, without
limitation, their respective receivers, trustees and debtors-in-possession. All
references to the singular shall be deemed to include the plural where the
context so requires.
12. Officer Authority. The undersigned hereby certifies that
he/she has all necessary authority to grant and execute this Agreement on
behalf of LJH.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
14. Certain Consents and Waivers of LJH.
(a) Personal Jurisdiction. (i) EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND
ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN
ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY
OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. LJH
IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, 0000 XXXXXXXX, XXX
XXXX, XXX XXXX 00000, AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. LJH WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
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(ii) LJH AGREES THAT THE AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST LJH IN A COURT IN ANY LOCATION TO ENABLE THE AGENT TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY OTHER
HOLDER. LJH AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE AGENT OR ANY OTHER HOLDER TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE AGENT OR ANY OTHER HOLDER. LJH WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR
ANY OTHER HOLDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. LJH IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR LJH'S NOTICE ADDRESS SPECIFIED BELOW,
SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. LJH IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED UPON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING PROCEEDINGS
AGAINST LJH IN THE COURTS OF ANY OTHER JURISDICTION.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. ANY OF THE PARTIES HERETO MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF SUCH PARTY'S
RIGHT TO TRIAL BY JURY.
15. Waiver of Bond. LJH waives the posting of any bond
otherwise required of the Agent or other Holders in connection with any
judicial process or proceeding to enforce any judgment or other court order
entered in favor of the Agent or other Holders, or to enforce by specific
performance, temporary restraining order, or preliminary or permanent
injunction, this Agreement or any other agreement or document between the Agent
or any other Holder and LJH.
16. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, sent by facsimile transmission or courier service or United States
certified mail and shall be deemed to have been given when delivered in person
or by courier service, upon transmission thereof in the case of a facsimile
transmission, or four (4) Business Days after deposit in the United States mail
with postage prepaid and properly addressed. Notices to the Agent shall not be
effective until received by the Agent. For purposes hereof, the addresses of
the parties hereto shall be as set forth below, or at
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such other address as may be designated by such party in a written notice to
the Agent and the other Holders.
if to LJH, at
LJH, Ltd.
c/o Xx. Xxx Xxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
with copies to:
TIMCO Aviation Services, Inc.
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
and
Akerman, Senterfitt & Xxxxxx, P.A.
Suntrust International Center
00xx Xxxxx
Xxx X.X. 0xx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
if to the Agent, at
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to
Sidley Xxxxxx Xxxxx & Xxxx
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
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17. Severability. Wherever 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 such 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.
18. Status of this Agreement. This Agreement is a Loan
Document, and LJH acknowledges that his/its execution, delivery and performance
of this Agreement is a material inducement to the consent to the Xxxxx
Acquisition by the Agent and the Lenders and in the willingness of the Agent,
the Lenders and the Issuing Bank to continue to make the credit facilities
under the Credit Agreement available to the Borrowers.
19. Taxes. Any and all payments by LJH, or any of them,
hereunder shall be made free and clear of and without reduction for any and all
present or future taxes, levies, imposts, deductions, charges, withholdings,
and all stamp or documentary taxes, excise taxes, ad valorem taxes and other
taxes imposed on the value of the property, charges or levies which arise from
the execution, delivery or registration, or from payment or performance under,
or otherwise with respect to, such payments and all other liabilities with
respect thereto excluding, in the case of each Lender, each Issuing Bank and
the Agent, taxes imposed on or measured by net income or overall gross receipts
and capital and franchise taxes imposed on it by (i) the United States, (ii)
the Governmental Authority of the jurisdiction in which such Lender's Domestic
Lending Office is located or any political subdivision thereof or (iii) the
Governmental Authority in which such Person is organized, managed and
controlled or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges and withholdings being hereinafter
referred to as "Taxes"). If LJH shall be required by law to withhold or deduct
any Taxes from or in respect of any sum payable hereunder to any Lender, any
Issuing Bank or the Agent, (x) the sum payable to such Lender, Issuing Bank, or
the Agent shall be increased as may be necessary so that after making all
required withholding or deductions (including withholding or deductions
applicable to additional sums payable under this Section 20) such Lender, such
Issuing Bank or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such withholding or deductions been made, (y)
LJH shall make such withholding or deductions, and (z) LJH shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law.
20. Representations and Warranties of LJH. LJH
represents that: (i) the execution and delivery of this Agreement and the
performance of the obligations it imposes do not violate any law, conflict with
the terms of any agreement by which it/he is bound or require the consent or
approval of any governmental authority or any third party; (ii) this Agreement
is a valid and binding agreement, enforceable according to its terms; (iii)
true and correct copies of LJH's Organizational Documents as in effect on the
date hereof have been delivered to the Agent; and (iv) all balance sheets,
income statements, and other financial statements furnished to the Agent or any
Holder are accurate and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,
including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates.
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21. Covenants of LJH. LJH covenants and agrees that so
long as any Revolving Credit Commitments are outstanding and thereafter until
payment in full of all of the Obligations (other than indemnities not yet due),
unless the Requisite Lenders shall otherwise give prior written consent:
(a) Existence, Etc. LJH shall at all times maintain its
existence as a corporation and preserve and keep in full force and effect its
rights and franchises material to its business.
(b) Corporate Powers; Conduct of Business. LJH shall
qualify and remain qualified to do business and maintain its good standing in
its jurisdiction or organization and each other jurisdiction in which the
nature of its business and the ownership of its Property requires it to be so
qualified and in good standing, except in the case where the failure to
qualify, remain qualified or maintain good standing in such other jurisdiction
is not reasonably likely to result in a Material Adverse Effect.
(c) Compliance with Laws, Etc. LJH shall comply with all
Requirements of Law and all restrictive covenants affecting it or its business,
Property, assets or operations, except in the case where noncompliance is not
reasonably likely to result in a Material Adverse Effect.
(d) Payment of Taxes and Claims. LJH shall file all tax
returns and reports as and when required by the related Governmental Authority
and pay on a timely basis all taxes, assessments and other governmental charges
imposed upon it or on any of its Property or assets or in respect of any of its
franchises, business, income or Property; provided, however, that no such
taxes, assessments and governmental charges need be paid if being contested in
good faith by appropriate proceedings diligently instituted and conducted and
if such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
(e) Delivery of Financial Statements; Inspection of
Property; Books and Records; Discussions. LJH shall deliver annual financial
statements, substantially in the form of the financial statements required to
be delivered to the Agent within three (3) Business Days after the Second
Amendment Effective Date, within 90 days after the end of each fiscal year of
LJH (which fiscal year corresponds to a calendar year). At any time when LJH
has defaulted in its obligations under this Agreement, LJH shall permit any
authorized representative(s) designated by the Agent to visit and inspect,
whether by access to LJH's MIS or otherwise, any of LJH's property, to examine,
audit, check and make copies of LJH's financial and accounting records, books,
journals, orders, receipts and any correspondence (other than privileged
correspondence with legal counsel) and other data relating to their respective
businesses or the transactions contemplated hereby or referenced herein, and to
discuss their affairs, finances and accounts with their management personnel
and independent certified public accountants, all upon reasonable written
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested. Each such visitation and inspection by or on
behalf of the Agent shall be at LJH's expense. LJH shall keep and maintain in
all material respects proper books of record and account in which entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its respective businesses and activities.
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(f) Organizational Documents. LJH shall not amend,
modify or otherwise change any of the material terms or provisions in any of
its Organizational Documents as in effect on the date hereof unless, prior to
the effective date of such change, copies of such revised Organizational
Document(s) have been delivered to the Agent.
22. Entire Agreement. This Agreement represents the
entire agreement and understanding of the parties hereto and supersedes all
prior understandings, written and oral, relating to the subject matter hereof.
23. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute one and
the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed by
LJH as of the day and year first set forth above.
LJH, LTD.
By: DLH Management, L.L.C.
General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
President
Signature Page 1 of 2
Acknowledged and agreed to
as of the day and year first above written
TIMCO AVIATION SERVICES, INC.
By: /s/ C. Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
Vice President and Chief Financial Officer
XXXXX MANUFACTURING COMPANY, INC.
By: /s/ C. Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
Vice President and Chief Financial Officer
CITICORP USA, INC., as Agent
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
Vice President
Signature Page 2 of 2
