Exhibit 10.16
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT (the "Agreement") is
entered into as of the 12th day of July, 2002 by and among CITICORP USA, INC., a
Delaware corporation, in its capacity as "Agent" (the "Agent") under that
certain Fifth Amended and Restated Credit Agreement dated of even date herewith
(as more particularly described below and herein referred to as the "Credit
Agreement") and under that certain Collateral Documents Amendment dated as of
February 18, 2000 (as more particularly described below and herein referred to
as the "Collateral Documents Amendment") and that certain Second Collateral
Documents Amendment dated as of February 14, 2001 (as more particularly
described below and herein referred to as the "Second Collateral Documents
Amendment"), CITICORP USA, INC., a Delaware corporation ("CUSA"), in its
capacity as holder of that certain Common Stock Warrant Certificate dated May
31, 2000 (as amended and more particularly described below and herein referred
to as the "Warrant"), and BANK OF AMERICA, N.A., a national banking association
("BofA"), in its capacity as holder of that certain Term Loan Note dated
February 14, 2001 (as re-evidenced by those certain Replacement Term Notes more
particularly described below and herein referred to as the "BofA Note").
Capitalized terms used herein which are defined in the Credit Agreement shall
have the meanings herein as ascribed thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Agent, AVIATION SALES DISTRIBUTION SERVICES COMPANY, a
Delaware corporation, AEROCELL STRUCTURES, INC., an Arkansas corporation,
AVS/M-2, INC., a Delaware corporation, WHITEHALL CORPORATION, a Delaware
corporation, TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation, AVS/M-3, INC., an Arizona corporation, AVS/CAI, INC., a Florida
corporation, AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation, AVIATION
SALES LEASING COMPANY, a Delaware corporation, and TIMCO ENGINE CENTER, INC., a
Delaware corporation, Aviation Sales Company, a Delaware corporation, now known
as TIMCO Aviation Services, Inc. ("AVS"), Citibank, N.A., as Issuing Bank, and
certain financial institutions a party thereto as lenders have entered into that
certain Fourth Amended and Restated Credit Agreement dated as of May 31, 2000,
as amended prior to the date hereof (the "Predecessor Credit Agreement"),
pursuant to which certain loans and other financial accommodations have
heretofore been made to the borrowers thereunder by the lenders thereunder and
the Issuing Bank;
WHEREAS, the Predecessor Credit Agreement has been amended and restated in
its entirety pursuant to that certain Fifth Amended and Restated Credit
Agreement of even date herewith among AEROCELL STRUCTURES, INC., an Arkansas
corporation, TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation, AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation, and TIMCO
ENGINE CENTER, INC., a Delaware corporation, (collectively, the "Borrowers"),
AVS, Citibank, N.A., as Issuing Bank,
and certain financial institutions a party thereto as Lenders (as the same may
be amended, supplemented, modified or extended, the "Credit Agreement");
WHEREAS, CUSA heretofore made a certain loan to the Borrowers and certain
of their Affiliates in the principal amount of $15,500,000 evidenced by a
certain Term Loan Note dated February 18, 2000, and in connection with which
that certain Common Stock Warrant Certificate was issued on February 18, 2000 by
AVS for the purchase of shares of common stock of AVS (as the same has been
amended by Amendment No. 1 to Common Stock Warrant Certificate dated as of May
31, 2000 and Amendment No. 2 to Common Stock Warrant Certificate dated as of the
date hereof, such Common Stock Warrant Certificate being herein referred to as
the "Warrant");
WHEREAS, the Agent, the Borrowers, AVS and certain of AVS' subsidiaries
(the Borrowers, AVS and such subsidiaries of AVS being herein referred to as the
"Grantors") have entered into certain agreements pursuant to which the
Obligations and certain payment and performance guarantees with respect to such
Obligations made by AVS and such subsidiaries of AVS (the "Credit Facility
Guarantees") are secured by security interests in the Collateral pursuant to
various security documents (the "Collateral Documents");
WHEREAS, the Grantors, the Agent and CUSA are parties to that certain
Collateral Documents Amendment dated as of February 18, 2000 (the "Collateral
Documents Amendment"), pursuant to which, inter alia, the Collateral Documents
were amended to provide for the security interests granted thereunder to secure
all of the Indebtedness of the Grantors under and with respect to, inter alia,
the Warrant;
WHEREAS, each of the Credit Agreement, the Warrant, the Collateral
Documents, and the Collateral Documents Amendment continue in full force and
effect as of the date of this Agreement;
WHEREAS, BofA has heretofore made a certain loan to, inter alia, the
Borrowers and the outstanding principal balance of such loan has been
re-evidenced by (i) that certain Replacement Term Loan Note in the principal
amount of $5,000,000 of even date herewith and (ii) that certain Replacement
Term Loan Note in the principal amount of $2,500,000 of even date herewith,
copies of which Replacement Term Loan Notes are attached hereto as Exhibit A-1
and made a part hereof (such Replacement Term Loan Notes being collectively
referred to as the "BofA Note"), which loan is secured pursuant to the terms of
that certain Second Collateral Documents Amendment dated as of February 14,
2001, a copy of which is attached hereto as Exhibit B and made a part hereof
(the "BofA Collateral Documents Amendment"), pursuant to which, inter alia, the
Collateral Documents were further amended to provide for the security interests
granted thereunder to secure all of the Indebtedness of the Grantors under and
with respect to such loan, as re-evidenced by the BofA Note;
WHEREAS, the Guarantors (as defined in the Credit Agreement) have executed
that certain Guaranty of even date herewith in respect of the BofA Note, a copy
of which is attached hereto as Exhibit A-2 and made a part hereof (the "BofA
Guaranty");
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WHEREAS, the Agent, CUSA and BofA have heretofore entered into that certain
Intercreditor Agreement dated as of February 14, 2001 (the "Predecessor
Intercreditor Agreement") to set forth certain agreements with respect to the
rights and obligations of the Agent (on behalf of the Holders and CUSA) and BofA
under and with respect to the Credit Agreement, the Warrant, the Collateral
Documents, the Collateral Documents Amendment, the loans re-evidenced by the
BofA Note, and the BofA Collateral Documents Amendment; and
WHEREAS, the Agent, CUSA and BofA have agreed to enter into this Agreement
to amend and restate in their entirety the agreements with respect to the rights
and obligations of the Agent (on behalf of the Holders and CUSA) and BofA under
the Credit Agreement, the Warrant, the Collateral Documents, the Collateral
Documents Amendment, the BofA Note and the Second Collateral Documents Amendment
set forth in the Predecessor Intercreditor Agreement;
NOW, THEREFORE, the Agent and BofA hereby agree as follows:
SECTION 1. Defined Terms. As used in this Agreement, the capitalized terms
defined in the recitals hereto shall have the meanings specified therein and the
following terms shall have the meanings set forth below:
"Code" means the Uniform Commercial Code as in effect in the State of New
York.
"Collateral" means all of the property and assets (real, personal, tangible
and intangible and whether now or hereafter existing or arising) and interests
in such property and assets of the Grantors and shall be deemed to include,
without limitation, all payments and distributions of assets of any Grantor,
whether in cash or by distribution of any security, instrument or proceeds from
any assets of any Grantor, and proceeds of all extensions of credit made to or
for the benefit of the Grantors under the terms of the Loan Documents.
"Loan Documents" shall mean all of the "Loan Documents" as defined in the
Credit Agreement, together with the
Warrant.
"Permitted Payment" means (i) monthly interest payments under the terms of
the BofA Note, as in effect on the date hereof or modified with the consent of
the Agent, Requisite Lenders and CUSA, (ii) a principal payment in the amount of
$2,500,000 together with accrued and unpaid interest thereon made on the date of
this Agreement, and (iii) a principal payment in the amount of $2,500,000
together with accrued and unpaid interest thereon made on August 14, 2002;
provided that (a) with respect to interest payments described in clause (i)
above, such payments are payable and are paid no earlier than one (1) Business
Day prior to the date when the payments are due and (b) with respect to payments
described in clauses (i), (ii) and (iii) above, no Potential Event of Default or
Event of Default shall have occurred and be continuing or would result after
giving effect to any such payment.
"Satisfaction of the Obligations" means (i) all of the Obligations and the
Supplemental Term Loan Liabilities shall have been paid in full in cash, (ii)
all financing
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arrangements and accommodations among the Holders and the Grantors shall have
been terminated, and (iii) the Holders have no further obligation to make loans,
financial accommodations or advance funds which would constitute Obligations to
any of the Borrowers.
"Supplemental Term Loan Liabilities" means all Indebtedness evidenced by
the Warrant.
"Term Note Debt" means the Indebtedness of the Grantors arising under the
BofA Note and the BofA Guaranty.
"Term Note Debt Documents" means the BofA Note, the BofA Guaranty and the
Second Collateral Documents Amendment.
SECTION 2. Reaffirmation of Lien Priorities. BofA acknowledges and agrees
that the Agent, for the benefit of itself, the other Holders and CUSA, has been
granted a first priority lien and security interest in all of the Collateral to
secure the Obligations and the Supplemental Term Loan Liabilities. The Agent
acknowledges and agrees that a lien and security interest in the Collateral has
been granted to BofA pursuant to the terms of the Second Collateral Documents
Amendment to secure the indebtedness and obligations of the Grantors to BofA
under and with respect to the Term Note Debt, which lien and security interest
is junior and subordinate to that securing the Obligations and Supplemental Term
Loan Liabilities as aforesaid. BofA hereby acknowledges and agrees all liens and
security interests of BofA, whether now or hereafter existing or arising, in any
of the Collateral shall be and hereby are subordinated to the rights and
interests of the Agent (for the benefit of itself, the other Holders and CUSA)
in the Collateral irrespective of the time or order of attachment or perfection
of any liens or security interests, irrespective of the time or order of filing
of any financing statement or other document, and irrespective of any statute,
rule, law, or court decision to the contrary. BofA shall have no right to
possession of any of the Collateral or any proceeds thereof, or to foreclose
upon any of the Collateral or any proceeds thereof, whether by judicial action
or otherwise, unless and until Satisfaction of the Obligations has occurred.
Promptly after Satisfaction of the Obligations, the Agent shall deliver to BofA
(or a representative therefor designated in writing to the Agent by BofA) all of
the Collateral and proceeds thereof in the Agent's possession (other than
payments and distributions of assets through which Satisfaction of the
Obligations has been effected).
SECTION 3. Provisions in Furtherance of Lien Priorities (a) In the event
before Satisfaction of the Obligations, at the request of any Grantor in
connection with the sale or other disposition of the Collateral for fair value
or in accordance with the provisions of the Loan Documents, the Agent releases
any of the Collateral which constitutes part or all of the security for the Term
Note Debt, BofA shall thereupon execute and deliver to the Agent such
termination statements and releases as the Agent shall request to release BofA's
Lien against such property of a Grantor.
(b) Upon any distribution, division, or application, partial or complete,
voluntary or involuntary, by operation of law or otherwise, of all or any part
of any of the Collateral which is made upon or in connection with any
dissolution, recapitalization, distribution, winding up, liquidation,
arrangements, receivership, or reorganization of any Grantor or any other
Person, or
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upon any assignment of the Collateral for the benefit of creditors or any other
marshaling of the Collateral and/or liabilities of such Grantor or otherwise,
any payment, dividend or distribution of any kind (whether in cash, securities
or other property) other than Permitted Payments, and proceeds of any sale of
all or any part of the Collateral, which would otherwise be payable or
deliverable with respect to the Term Note Debt, shall be paid or delivered
directly to the Agent for application (in the case of cash) to, or as collateral
(in the case of securities or other property) for, the Obligations and
Supplemental Term Loan Liabilities.
(c) In the event that any payment or payments made to any Holder or CUSA
with respect to any of the Obligations or Supplemental Term Loan Liabilities or
otherwise made to the Agent for the benefit of the Holders or CUSA pursuant to
the Loan Documents and/or this Agreement, or any part thereof, are subsequently
invalidated, declared to be fraudulent or preferential, set aside or are
required to be repaid to any trustee, receiver or any other Person under any
bankruptcy statute, state or federal law, common law or equitable cause, then
(i) to the extent of such payment or payments, the obligations or part thereof
intended to be satisfied shall be revived and continued as part of the
Obligations or Supplemental Term Loan Liabilities, as applicable, in full force
and effect, as if such payment or payments had not been made and (ii) the Agent,
the other Holders and CUSA, as applicable, shall continue to have all rights and
benefits under the Loan Documents and this Agreement respecting the Collateral
related to such revived obligations which shall constitute Obligations or
Supplemental Term Loan Liabilities.
(d) Notwithstanding anything herein or elsewhere to the contrary, until
payment in full of the Obligations, no Grantor may use the Collateral or any
part thereof, directly or indirectly, to acquire, purchase, repurchase, redeem,
or otherwise make any prepayment (mandatory or voluntary) of any principal,
premium, if any, or interest on any of the Term Note Debt without the prior
written consent of the Agent, the other Holders and CUSA, which consent shall
not be unreasonably withheld.
(e) Notwithstanding anything herein or in any of the Term Note Debt
Documents to the contrary, BofA agrees that, until Satisfaction of the
Obligations, it will not exercise any rights or remedies against any of the
Collateral as a result of any default with respect to the Term Note Debt owing
to BofA, or otherwise, including, without limitation, as a result of any
Grantor's failure to make a Permitted Payment.
(f) Except for Permitted Payments received by BofA as and when permitted
under this Agreement, should any payment or distribution of Collateral be
received directly or indirectly by BofA from any Grantor upon or with respect to
the Term Note Debt or any other obligations of any Grantor to BofA prior to
Satisfaction of the Obligations, BofA shall receive and hold the same in trust,
as trustee, for the benefit of Holders and CUSA, and shall forthwith deliver the
same to the Agent, for the benefit of the Holders and CUSA, in precisely the
form received (except for the endorsement or assignment of BofA where
necessary), for application in accordance with the terms of the Loan Documents
(in the case of cash) or to be held as part of the Collateral for (in the case
of securities or other property) any of the Obligations and Supplemental Term
Loan Liabilities, due or not due, and, until so delivered, the same shall be
held in trust by BofA as the property of the Agent for the benefit of the
Holders and CUSA. In the event of the failure of BofA to make any such
endorsement or assignment to the Agent, the Agent, or any of its officers or
employees, is hereby irrevocably authorized to make the same.
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Notwithstanding the foregoing, unless BofA has actual knowledge that a payment
purportedly made as a Permitted Payment hereunder was not in fact a Permitted
Payment or shall have received notice from a Grantor or the Agent of the
existence of any condition which would prohibit the receipt of such payment as a
purportedly Permitted Payment by BofA hereunder within one year following the
date any payment purportedly made as a Permitted Payment is received, BofA shall
not be required to deliver the proceeds of such purportedly Permitted Payment to
the Agent.
(g) In any action or proceeding of the type referenced in clause (b) above,
the Agent is hereby irrevocably authorized and empowered, in the Agent's
discretion, to file, make and present for and on behalf of BofA such proofs of
claims against any Grantor, if BofA has not filed the same 10 days before any
applicable bar date, on account of all of any portion of the Term Note Debt and
to vote such proofs of claims in issues of the Collateral in any such proceeding
and to receive and collect any and all dividends or other payments or
disbursements made in respect of Collateral in whatever form the same may be
paid or issued and to apply the same on account of any of the Obligations and
Supplemental Term Loan Liabilities. In voting such proofs of claim in any
proceeding, the Agent may act in a manner consistent with the sole interests of
the Holders and CUSA in respect of Collateral and shall have no duty to take any
action to maximize BofA's recovery with respect to its claim. BofA authorizes
the Agent to sell such property to such buyers in accordance with law on such
terms as the Agent shall determine. BofA will execute and deliver to the Agent
such powers of attorney, assignments and other instruments or documents,
including notes and stock certificates (together with such assignments or
endorsements as the Agent shall deem necessary), as may be requested by the
Agent in order to enable the Agent to enforce any and all claims upon the
Collateral deliverable at any time upon or with respect to the Term Note Debt,
all for the Holders' and CUSA's own benefit for application in accordance with
the terms hereof. After Satisfaction of the Obligations, the Agent will remit to
BofA, in accordance with written directions from BofA, all dividends or other
payments or distributions in respect of the Collateral paid to and held by the
Agent and Holders in excess of the Obligations and Supplemental Term Loan
Liabilities.
SECTION 4. Bankruptcy Issues. BofA agrees that the Agent, the other
Holders, and CUSA may consent to the use of cash collateral or provide financing
to any Grantor on such terms and conditions and in such amounts as such Person,
in its sole discretion, and the applicable court may decide and that, in
connection with such cash collateral usage or such financing. Subject to
applicable court orders, each Grantor (or a trustee appointed for the estate of
any or all of them) may grant Liens to the Agent, other Holders or CUSA upon all
assets of such Grantor, as applicable, which Liens (i) shall secure payment of
all Obligations or Supplemental Term Loan Liabilities, as applicable (whether
such Obligations or Supplemental Term Loan Liabilities arose prior to the filing
of the petition for relief or arise thereafter); and (ii) shall be superior in
priority to the Liens, if any, held by BofA on the assets of such Grantor. All
allocations of payments constituting Collateral between the Holders and/or CUSA
and BofA shall, subject to any court order, continue to be made after the filing
of a petition under the Bankruptcy Code on the same basis that the payments were
to be allocated prior to the date of such filing. BofA agrees that it will not
object to or oppose a sale or other disposition of any assets securing the
Obligations or Supplemental Term Loan Liabilities (or any portion thereof) free
and clear of Liens or other claims of BofA under Section 363 of the Bankruptcy
Code or any
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other provision of the Bankruptcy Code if the Agent, the other Holders, CUSA and
the applicable court have consented to such sale or disposition of such assets.
For purposes of Satisfaction of the Obligations and applying payments or
proceeds of Collateral to the Obligations and Supplemental Term Loan
Liabilities, the Obligations and Supplemental Term Loan Liabilities shall be
deemed to include, without limitation, all interest, fees, and other amounts to
be paid on any of the Obligations or Supplemental Term Loan Liabilities pursuant
to the terms of any Loan Document regardless of whether any such interest, fees
or other amounts are or would be recognized or allowed as a claim in any
bankruptcy or similar proceeding.
SECTION 5. Waivers of BofA. (a) All of the Obligations and Supplemental
Term Loan Liabilities shall be deemed to have been made or incurred in reliance
upon this Agreement. BofA expressly waives (i) all notice of the acceptance by
the Agent, the other Holders and CUSA of the lien subordination and other
provisions of this Agreement, (ii) all other notices not specifically required
pursuant to the terms of this Agreement whatsoever, and (iii) reliance by the
Agent, the other Holders and CUSA upon the lien subordination and other
agreements as herein provided. BofA agrees that it will not interfere with or in
any manner oppose a disposition of any assets securing the Obligations or
Supplemental Term Loan Liabilities by the Agent, other Holders or CUSA. BofA
agrees that neither the Holders nor CUSA has made any warranties or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Loan Documents, or the collectability of
the Obligations or Supplemental Term Loan Liabilities, that the Holders shall be
entitled to manage and supervise the Obligations and that CUSA shall be entitled
to manage and supervise the Supplemental Term Loan Liabilities in accordance
therewith, modified from time to time as the Holders or CUSA, as applicable,
deem appropriate under the circumstances, and in accordance with applicable law,
without regard to the existence of any rights that BofA may now or hereafter
have in or to any of the assets of any Grantor, and that neither the Holders nor
CUSA shall have any liability to BofA for, and waives any claim which BofA may
now or hereafter have against, any Holder or CUSA arising out of any and all
actions which such Holder, CUSA, or the Agent, on its behalf, in good faith,
takes or omits to take (including, without limitation, actions with respect to
the creation, perfection or continuation of liens or security interests in the
Collateral and other security for the Obligations and Supplemental Term Loan
Liabilities, actions with respect to the occurrence of an Event of Default or
Potential Event of Default, actions with respect to the foreclosure upon, sale,
release, or depreciation of, or failure to realize upon, any of the Collateral
and actions with respect to the collection of any claim for all or any part of
the Obligations or Supplemental Term Loan Liabilities from any account debtor,
guarantor or any other party) with respect to the Loan Documents or Supplemental
Term Loan Note, or any other agreement related thereto, or to the collection of
the Obligations or Supplemental Term Loan Liabilities, or the valuation, use,
protection or release of the Collateral and/or other security for the
Obligations and Supplemental Term Loan Liabilities.
(b) BofA agrees that (i) it will not take or cause to be taken any action,
the purpose or effect of which is to make any security interest securing the
Term Note Debt pari passu with, or to give BofA any preference or priority
relative to, any security interest securing the Obligations or Supplemental Term
Loan Liabilities; (ii) it will not interfere with, hinder or delay, in any
manner, whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral by the Agent, any other Holder or CUSA or
any action taken by or
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on behalf of the Agent, any other Holder or CUSA permitted to be taken by it
pursuant to the Loan Documents; (iii) it will have no right to (A) direct the
Agent, any other Holder or CUSA to exercise any right, remedy or power with
respect to the Collateral or pursuant to the Loan Documents or (B) consent to
the exercise by the Agent, any other Holder, or CUSA of any right, remedy or
power with respect to the Collateral or pursuant to the Loan Documents; (iv) it
will not institute any suit or assert in any suit, Bankruptcy Proceeding or
other proceeding any claim against the Agent, any other Holder or CUSA seeking
damages from or other relief by way of specific performance, instructions or
otherwise, with respect to, and none of the Agent, any other Holder or CUSA
shall be liable for, any action taken or omitted to be taken by the Agent, such
other Holder or CUSA with respect to the Collateral or pursuant to the Loan
Documents; (v) until the Satisfaction of the Obligations, it will not make any
judicial or non-judicial claim or demand or commence any judicial or
non-judicial proceedings against any Grantor under or with respect to the
Collateral Documents or Second Collateral Documents Amendment seeking payment or
damages from or other relief by way of specific performance, instructions, or
otherwise under or with respect to the Collateral Documents or Second Collateral
Documents Amendment (other than the filing of a proof of claim as and to the
extent permitted herein) or exercise any right, remedy or power under or with
respect to, or otherwise take any action to enforce, other than filing of a
proof of claim as and to the extent permitted herein, any Collateral Document or
the Second Collateral Documents Amendment; (vi) until the Satisfaction of the
Obligations, it will not commence judicial or non-judicial foreclosure
proceedings with respect to, seek to have a trustee, receiver, liquidator or
similar official appointed for or over, attempt any action to take possession of
any Collateral, exercise any right, remedy or power with respect to, or
otherwise take any action to enforce its interest in or realize upon, the
Collateral or pursuant to the Collateral Documents or Second Collateral
Documents Amendment; (vii) it will not seek, and hereby waives any right, to
have the Collateral or any part thereof marshaled upon any foreclosure or other
disposition of the Collateral, and (viii) it will not attempt, directly or
indirectly, whether by judicial proceedings or otherwise, to challenge the
enforceability of any provision of this Agreement or any Loan Document or the
validity, perfection, priority or enforceability of security interests securing
the Obligations or Supplemental Term Loan Liabilities.
SECTION 6. Enforcement. To the extent permitted by law, the right of the
Agent, other Holders and CUSA to enforce the lien subordination provisions and
any other provisions hereof shall not in any way be prejudiced or impaired by
any act or failure to act on the part of the Agent, any other Holder, any
Grantor or CUSA, or by any noncompliance by any Grantor or BofA with the terms,
provisions and covenants of this Agreement.
SECTION 7. Agent's, Holders' and CUSA's Rights; Certain Duties. (a) Without
notice to BofA and without affecting or releasing any obligation or agreement of
BofA under this Agreement, the Agent, the other Holders, and CUSA may at any
time or times do any of the following with respect to any of the Obligations or
Supplemental Term Loan Liabilities: (i) waive or rescind any Potential Event of
Default, Event of Default or other default, (ii) exercise any rights or remedies
with respect to the Obligations or Supplemental Term Loan Liabilities, (iii)
amend, modify, alter or waive any of the terms of any of the Loan Documents,
(iv) renew or extend the time for payments of all or any part of the Obligations
or Supplemental Term Loan Liabilities, (v) increase or decrease the amount of
the Obligations or Supplemental
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Term Loan Liabilities, (vi) accept additional collateral security or guaranties
for all or any part of the Obligations or Supplemental Term Loan Liabilities and
sell, exchange, fail to perfect, release or otherwise deal with all or any part
of any such collateral or guaranties in connection with a sale or other
disposition, (vii) release any party primarily or secondarily obligated on the
Obligations or Supplemental Term Loan Liabilities, (viii) grant indulgences and
take or refrain from taking any action with regard to the collection or
enforcement of all or any part of the Obligations or Supplemental Term Loan
Liabilities, and (ix) take any action which might otherwise give rise to any
claim by BofA. Nothing in this Agreement shall impair any right of the Agent,
any other Holder or CUSA with respect to any of the Obligations or Supplemental
Term Loan Liabilities or any collateral security or guaranties therefor or the
proceeds thereof.
(b) The Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with such Collateral in the same
manner as it customarily deals with similar collateral of other parties held by
it.
(c) The Agent shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties contained
in the Collateral Documents by any of the Grantors, all of which are made solely
by the Grantors. The Agent makes no representations as to the value or condition
of the Collateral or any part thereof, or as to the title of the Grantors
thereto, or as to the security afforded by the Collateral Documents, the Second
Collateral Documents Amendment, or this Agreement or as to the validity,
execution (except its own execution thereof), enforceability, legality or
sufficiency of the Collateral Documents or the Second Collateral Documents
Amendment or of the Obligations or Supplemental Term Loan Liabilities and shall
incur no liability or responsibility with respect to any such matters. The Agent
shall not be responsible for insuring the Collateral or for the payment of
taxes, charges, assessments or liens upon the Collateral or otherwise as to the
maintenance of the Collateral.
(d) The Agent shall not be required to ascertain or inquire as to the
performance by any Grantor or any other Person of any of the covenants or
agreements contained in any Collateral Document or the Second Collateral
Documents Amendment.
(e) The Agent shall not be personally liable for any action taken or
omitted to be taken by it in accordance with this Agreement, any Collateral
Document or the Second Collateral Documents Amendment, except for such actions
or omissions that constitute gross negligence or willful misconduct by the
Agent. BofA hereby acknowledges that the Agent and its affiliates have made and
may hereafter make credit extensions to, accept deposits from and generally
engage in business with the Grantors and agree that the Agent and its affiliates
may continue to do so as though the Agent were not acting as agent with respect
to the Collateral under and to the extent described in the Second Collateral
Documents Amendment. With respect to any Obligations or Supplemental Term Loan
Liabilities owing to it, the Agent, in its individual capacity as a Holder and
as a holder of the Warrant, shall have the same rights and powers under this
Agreement as any other Holder and may exercise the same as though it were not
the Agent with respect to the Collateral.
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(f) The Agent may rely, and shall be fully protected in acting, upon any
resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order, bond or other paper or document which it has no reason
to believe to be other than genuine and to have been signed or presented by the
proper party or parties or, in the case of telecopies and telexes, to have been
sent by the proper party or parties. The Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to it and conforming to the
requirements of this Agreement, the Collateral Documents or Second Collateral
Documents Amendment. The Agent may consult with counsel, and any opinion of such
counsel (whether in-house counsel or independent outside counsel) shall be full
and complete authorization and protection in respect of any action taken or
suffered by it hereunder in accordance therewith.
(g) The Agent shall not be under any obligation to BofA to exercise any of
the rights or powers vested in the Agent by this Agreement, the Collateral
Documents or Second Collateral Documents Amendment, unless it shall have been
provided adequate security and indemnity against the costs, expenses and
liabilities which may be incurred by it in compliance with such request or
direction, including, without limitation, such reasonable advances as may be
requested by the Agent.
SECTION 8. Representations and Warranties of BofA. BofA represents and
warrants to the Agent for the benefit of itself and other Holders and to CUSA
that each of the following statements are true and correct in all material
respects:
(a) BofA has not previously assigned any interest in the Term Note Debt
owing to it or any security interest in connection therewith, that no other
party owns an interest in such Term Note Debt or security therefor other than
BofA (whether as joint holders of such Term Note Debt, participants or
otherwise) and that all of such Term Note Debt is owing only to BofA.
(b) The Indebtedness owing to BofA under the BofA Note as of the date
hereof constitutes, as of the date hereof, all of the now existing liabilities
of any nature whatsoever of the Grantors to BofA under the Term Note Debt
Documents. To the knowledge of BofA, there is no event of default or default
existing which with the giving of notice, passage of time or both would
constitute an event of default under the Term Note Debt Documents.
(c) This Agreement has been executed and delivered by or on behalf of BofA
and constitutes the legal, valid and binding obligation of BofA, enforceable in
accordance with its terms subject to bankruptcy, insolvency, moratorium and
other laws affecting creditors' rights generally and equitable principles.
SECTION 9. Covenants. (a) BofA agrees it will not accept any collateral
security from the Grantors for any Term Note Debt, except to the extent provided
in the Second Collateral Documents Amendment and subject to the terms of this
Agreement, without the prior written consent of the Holders and CUSA.
(b) BofA covenants that all Term Note Debt and collateral therefor shall be
and continue to be held solely for the benefit of BofA, its successors and
assigns, until the Satisfaction of the Obligations, unless otherwise consented
to by the Holders and CUSA or
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unless the transferee agrees to be bound by the terms of this Agreement. BofA
may assign or transfer the Term Note Debt and the collateral therefore, subject
to the assumption of all of the terms and provisions of this agreement, only to
(a) any affiliate of BofA, (b) the Federal Reserve Bank, and (c) any commercial
bank, financial institution or other institutional "accredited investor" (as
defined in Regulation D of the Securities Act of 1933, as amended) with the
prior written consent of the Agent and CUSA; provided, that in the case of such
assignment or transfer to an affiliate of BofA or to the Federal Reserve Bank no
consent of the Agent or CUSA shall be required, and provided, further, that in
the case of an assignment to a commercial bank, financial institution or other
institutional accredited investor the consent of the Agent and CUSA to such
transfer shall not be unreasonably withheld. Notwithstanding the foregoing, in
no event shall BofA, or its successors or assigns, be permitted to assign or
transfer or assign the Term Note Debt and the collateral therefore directly or
indirectly to any person who is, or is affiliated with, an "insider" (as defined
in 11 U.S.C. 101(31)) of any Borrower or any Guarantor or Grantor.
(c) Promptly upon obtaining knowledge thereof, BofA shall deliver written
notice to the Agent of the occurrence of an event of default or default which
with the giving of notice, passage of time or both would constitute an event of
default existing under the Term Note Debt Documents, together with a description
of the nature thereof.
(d) BofA shall not initiate or prosecute or encourage any other Person to
initiate or prosecute any claim, action or other proceeding (i) challenging the
enforceability or priority of the Agent, other Holders' or CUSA's respective
claims to the Collateral, or (ii) challenging the enforceability or priority of
any liens or security interests in the Collateral other than in connection with
a breach by the Agent, any Holder or CUSA of its obligations hereunder.
(e) BofA hereby agrees to pay, indemnify and hold the Agent harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the Collateral Documents on
behalf of BofA, and the Second Collateral Documents Amendment on behalf of BofA.
Notwithstanding the foregoing, the Agent shall not be indemnified under this
clause to the extent such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements are determined by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Agent.
SECTION 10. Continuing Nature of Agreement. This Agreement shall be
effective and may not be terminated or otherwise revoked by BofA until the
Satisfaction of the Obligations. In the event BofA shall have any right under
applicable law otherwise to terminate or revoke this Agreement which right
cannot be waived, such termination or revocation shall not be effective until
written notice of such termination or revocation, signed by BofA, is actually
received by the Agent in accordance with the notice provisions of this Agreement
set forth in Section 14. In the absence of the circumstances described in the
immediately preceding sentence, this is a continuing agreement as to the lien
subordination and other provisions hereof and the Agent and other Holders may
continue, at any time and without notice to BofA, to extend credit or other
financial accommodations and loan monies to or for the benefit of the Grantors
on the faith hereof. Any termination or revocation described hereinabove shall
not affect this Agreement in relation to (a) any of the Obligations or
Supplemental Term Loan
11
Liabilities which arose prior to receipt thereof or (b) any of the Obligations
or Supplemental Term Loan Liabilities created after receipt thereof, if such
Obligations or Supplemental Term Loan Liabilities were incurred for the purpose
of protecting any collateral or in respect of enforcement costs, expenses, and
attorneys' and paralegals' fees, whensoever made, advanced or incurred by the
Holders or CUSA in connection with the Obligations or Supplemental Term Loan
Liabilities. If, in reliance on this Agreement, any Holder or CUSA makes loans
or other advances to or for the benefit of the Grantors or takes other action
under the Loan Documents after such aforesaid termination or revocation by BofA
but prior to the receipt by the Agent of said written notice as set forth above,
the rights of the Agent, the other Holders and CUSA hereunder shall be the same
as if such termination or revocation had not occurred.
SECTION 11. Subrogation. After the Satisfaction of the Obligations, BofA
shall be subrogated to the rights of the Holders and CUSA to receive payments or
distributions of cash, property or securities of the Grantors in respect of the
Collateral applicable to the Obligations and Supplemental Term Loan Liabilities
until the obligations and liabilities under the Term Note Debt Documents shall
be paid in full, and, for the purposes of such subrogation, no payments or
distributions to the Holders or CUSA of any cash, property or securities to
which BofA would be entitled except for the provisions of this Agreement, and no
payment over pursuant to the provisions of this Agreement to the Holders or CUSA
by BofA shall, as among the Grantors, their respective creditors other than the
Holders and CUSA, and BofA, be deemed to be a payment by the Grantors to or on
account of the Obligations or Supplemental Term Loan Liabilities.
SECTION 12. Remedies; Severability. (a) The Agent's, other Holders' and
CUSA's rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies which the Agent, other Holders or
CUSA may have under any other agreement, by operation of law or otherwise.
(b) If any one or more of the provisions contained in this Agreement should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction).
SECTION 13. Execution in Counterparts; Binding Effect. (a) This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
(b) This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and each of the Holders and their respective successors
and assigns, and nothing herein or in the Collateral Documents or Second
Collateral Document Amendment is intended or shall be construed to give any
other person any right, remedy or claim under, to or in respect of this
Agreement or the Collateral.
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(c) Upon this Agreement becoming effective, the terms and provisions of the
Predecessor Intercreditor Agreement shall be and hereby are amended, superseded
and restated in their entirety by the terms and provisions of this Agreement.
This Agreement shall not constitute a novation with respect to the Predecessor
Intercreditor Agreement.
SECTION 14. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telecopy or e-mail communications) and shall be sent by mail,
telecopier, hand delivery or e-mail delivery as follows:
(a) if to Agent, at its address at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxx X. Xxxxxxx, Telecopy No. 000-000-0000, e-mail
address: xxxxx.x.xxxxxxx@xxxx.xxx, with a copy to Sidley Xxxxxx Xxxxx & Xxxx,
Bank One Plaza, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxx
X. Xxxxxx, Telecopy No. 312-853-7036, e-mail address: xxxxxxx@xxxxxx.xxx
(b) if to CUSA, at its address at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxx X. Xxxxxxx, Telecopy No. 000-000-0000, e-mail
address: xxxxx.x.xxxxxxx@xxxx.xxx, with a copy to Sidley Xxxxxx Xxxxx & Xxxx,
Bank One Plaza, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxx
X. Xxxxxx, Telecopy No. 312-853-7036, e-mail address: xxxxxxx@xxxxxx.xxx
(c) if to BofA, at its address at 000 Xxxxxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx
00000, Attn: Xxxxxxxx Xxxxxxx, Telecopy No. 000-000-0000, e-mail address:
xxxxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx with a copy to Xxxxxx & Xxxxxx, L.L.P., 000
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attn: Xxxx X. Xxxxxxxx, Telecopy
No. 000-000-0000, e-mail address: XXxxxxxxx@xxxxxxxxxxxx.xxx
or, in each instance, at such other address as shall be designated by it in a
written notice to the other party to this Agreement. All such notices, requests,
demands and communications shall be deemed to have been duly given or made, if
sent by mail, five (5) days after deposit (as evidenced by the postmark
appearing thereon) in the U.S. mails, postage prepaid; if sent by telecopy or
e-mail, as of the time of such telecopy or e-mail transmission; and, if
delivered by hand, when so delivered.
SECTION 15. Governing Law; Consent to Jurisdiction. (a) This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits to the non-exclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, any Collateral Document or the Second Collateral
Documents Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that, to the
extent permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and
13
determined in such New York State or, to the extent permitted by law, Federal
court. 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.
(c) Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of our relating to this Agreement in any New
York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each of the parties hereto irrevocably consents to service of process
in the manner provided for notices in Section 14. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
(e) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. EACH PARTY HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 16. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
CITICORP USA, INC., CITICORP USA, INC.,
as Agent as holder of the Warrant
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxx
---------------------------- ----------------------------
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Vice President Vice President
BANK OF AMERICA, N.A.
By /s/ Xxxxxxxx Xxxxxxx
----------------------------
Xxxxxxxx Xxxxxxx
Vice President
15
Acknowledged and agreed as of the 12th day of July, 2002.
AVIATION SALES DISTRIBUTION SERVICES COMPANY
AEROCELL STRUCTURES, INC.
AVS/M-2, INC.
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE CORPORATION
AVS/M-3, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AVS/CAI, INC.
AVIATION SALES COMPANY
AVIATION SALES LEASING COMPANY
TIMCO ENGINE CENTER, INC.
AVS/M-1, INC.
AVIATION SALES PROPERTY MANAGEMENT CORP.
HYDROSCIENCE, INC.
AVSRE, L.P.
By Aviation Sales Property Management
Corp., as general partner
TIMCO ENGINEERED SYSTEMS, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Treasurer
LJH, LTD. XXXXX INVESTMENTS, INC.
By DHL Management, L.L.C.
General Partner
By /s/ Xxxx X. Xxxxxx By /s/ Xxxxxx Xxxxxx
-------------------------------- -------------------
Xxxx X. Xxxxxx Xxxxxx Xxxxxx
President President
/s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx
16
