Exhibit 10.28
MUTUAL RELEASE
This MUTUAL RELEASE (this "Release") is made this 17 day of July, 2002,
among TIMCO AVIATION SERVICES, INC., a Delaware corporation formerly known as
Aviation Sales Company ("AVS"), and AVIATION SALES DISTRIBUTION SERVICES
COMPANY, a Delaware corporation ("AVSDC"); BANK OF AMERICA, N.A. ("BofA"), in
its capacity as "Xxxxxxxxx Agent" (as defined below); each of the lenders
identified on the signature pages below as "Xxxxxxxxx Lenders" (each a
"Xxxxxxxxx Lender" and, collectively, the "Xxxxxxxxx Lenders"); BANC OF AMERICA
SECURITIES LLC, in its capacity as "Syndication Agent" (as defined below); and
BANK OF AMERICA, N.A., in its capacity as the "KAV Agent" (as defined below) and
the sole existing "KAV Lender" (as defined below).
Preamble:
Xxxxxxxxx Industries, Inc. ("Xxxxxxxxx"), AVS, and AVSDC, are parties
to a certain Post-Closing Resolution Agreement dated as of June 10, 2002 (as at
any time amended, the "Resolution Agreement"), pursuant to which, subject to the
approval of the United States Bankruptcy Court for the District of Delaware and
satisfaction of all conditions precedent set forth therein, the parties have
agreed to settle various claims that each party thereto may have against the
others. A condition to the effectiveness of the agreements contained in the
Resolution Agreement is the consent of the Xxxxxxxxx Agent and Xxxxxxxxx Lenders
to Xxxxxxxxx'x entry into and performance of the Resolution Agreement. .
In connection with the Resolution Agreement, Xxxxxxxxx Agent, Xxxxxxxxx
Lenders and various other parties are entering into a Proceeds Sharing Agreement
dated July __, 2002 (the "Sharing Agreement"). A condition to the effectiveness
of the agreements contained in the Sharing Agreement is the execution and
delivery of this Release by the parties hereto.
Xxxxxxxxx Agent, Syndication Agent, Xxxxxxxxx Lenders, KAV Lenders and
KAV Agent, on the one hand, and AVS and AVSDC, on the other hand, desire that
the Sharing Agreement and the Resolution Agreement become effective and,
therefore, are willing to execute and deliver this Release to settle and release
certain disputes that may exist between AVS and AVSDC, on the one hand, and any
or all of Xxxxxxxxx Agent, Xxxxxxxxx Lenders, KAV Agent and KAV Lenders, on the
other hand.
NOW, THEREFORE, in consideration of the premises and the mutual
releases and covenants contained herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
Section 1. Definitions. As used herein, the following terms shall have
the following meanings ascribed to them:
"AVS Investor Indebtedness" shall mean indebtedness of any
Borrower to any AVS Investor under or with respect to any AVS Investor
Letter of Credit Document.
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"AVS Investor Intercreditor Agreement" shall mean the
intercreditor agreement dated as of December 1, 2000, between Agent and
AVS Investors with respect to the liens of AVS Investors arising from
the AVS Investor Letter of Credit Documents, as at any time amended.
"AVS Investor Letter of Credit Documents" shall mean all
documents executed and/or delivered in connection with any AVS Investor
Letter of Credit, including, without limitation, that certain Purchase
and Sale Agreement between AVS Investor Trustee and Xxxxxxxxx dated
December 1, 2000, and all reimbursement agreements, warrants,
promissory notes, credit agreements, certificates and other documents
with respect thereto, in each case as amended from time to time.
"AVS Investor Letters of Credit" shall mean those certain
standby letters of credit procured by the AVS Investors in favor of
Xxxxxxxxx Agent in the aggregate principal amount of $8,000,000.
"AVS Investor Trustee" shall mean J. Xxxxxxx Xxxxx, an
individual resident of the State of Texas not individually but solely
as trustee for the AVS Investors.
"AVS Investors" shall mean, collectively, Xxxxx Ventures,
L.P., a Texas limited partnership, Xxxxxx Xxxxxx, an individual
resident of the State of New York, LJH Ltd., a Texas limited
partnership and successor-in-interest to LJH Corporation, and Xxx X.
Xxxxxxx, an individual resident of the State of Texas.
"AVSDC Asset Purchase Agreement" shall mean that certain Asset
Purchase Agreement among Xxxxxxxxx, AVS and AVSDC dated as of September
20, 2000, as amended by four letter agreements dated as of September
20, 2000, a letter agreement dated as of November 14, 2000, a letter
agreement dated as of November 17, 2000, and a letter agreement dated
as of December 1, 2000.
"AVSDC Asset Purchase Documents" shall mean, collectively, the
AVSDC Asset Purchase Agreement, the KAV Consignment Agreement and each
other agreement, instrument, certificate or other document executed
and/or delivered in connection with the AVSDC Asset Purchase Agreement.
"Bank Group Members" shall mean, collectively, the Xxxxxxxxx
Bank Group Members and the KAV Bank Group Members, and, for purposes of
Section 2 of this Release, their respective officers, directors,
agents, attorneys, shareholders, subsidiaries, affiliates, successors
and assigns.
"Claim" shall mean (i) a right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (ii) a right to an equitable remedy for breach
of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
"KAV" shall mean KAV Inventory, LLC, a Delaware limited
liability company.
"KAV Agent" shall mean BofA, in its capacity as agent for the
KAV Lenders.
"KAV Bank Group Members" shall mean KAV Agent and KAV Lenders.
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"KAV Consigned Inventory" shall mean all aircraft parts,
engines and other inventory at any time consigned by KAV to Xxxxxxxxx
pursuant to the KAV Consignment Agreement.
"KAV Consignment Agreement" shall mean that certain
Consignment Agreement between Xxxxxxxxx and KAV dated as of December 1,
2000, as at any time amended.
"KAV Lenders" shall mean the various financial institutions
from time to time party to the KAV Loan Agreement as lenders.
"KAV Letters of Credit" shall mean the standby letters of
credit in the aggregate amounts of $8,500,000 and $6,500,000 obtained
by AVS and Xxxxxxxxx, respectively, in favor of KAV Agent in support of
KAV's obligations to the KAV Agent and KAV Lenders under the KAV Loan
Agreement.
"KAV Loan Agreement" shall mean that certain Loan and Security
Agreement dated as of December 1, 2000, among the KAV Lenders, KAV
Agent and KAV, as at any time amended.
"Xxxxxxxxx" shall have the meaning ascribed to it in the
Recitals.
"Xxxxxxxxx Agent" shall mean BofA, in its capacity as agent
for the Xxxxxxxxx Lenders.
"Xxxxxxxxx Borrowers" shall mean Xxxxxxxxx and its
subsidiaries that are parties to the Xxxxxxxxx Loan Agreement.
"Xxxxxxxxx Bank Group Members" shall mean Xxxxxxxxx Agent,
Syndication Agent and Xxxxxxxxx Lenders.
"Xxxxxxxxx Lenders" shall mean the various financial
institutions from time to time party to the Xxxxxxxxx Loan Agreement as
lenders.
"Xxxxxxxxx Loan Agreement" shall mean that certain Amended and
Restated Loan and Security Agreement dated as of December 14, 1998,
among the Xxxxxxxxx Lenders, Xxxxxxxxx Agent, Syndication Agent and the
Kellstrom Borrowers, as at any time amended.
"Miramar Facility" shall mean the office building and
warehouse facility located at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx.
"Miramar Sublease" shall mean Kellstrom the Sublease dated as
of December 1, 2000 between Kellstrom and AVS pursuant to which
Kellstrom subleases the Miramar Facility from AVS.
"Party" shall mean a person or entity who is a party to this
Release.
"Resolution Agreement" shall have the meaning ascribed to it
in the Recitals.
"SNDA" shall mean the Subordination, Non-Disturbance and
Attornment Agreement dated as of December 1, 2000, among Xxxxxxxxx
Agent, AVS and Trustee/Lessor, as at any time amended.
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"Syndication Agent" shall mean Banc of America Securities LLC,
in its capacity as syndication agent under the Xxxxxxxxx Loan
Agreement.
"Trustee/Lessor" shall mean First Security Bank, National
Association, as owner trustee under the Aviation Sales Trust 1998-1,
which leases the Miramar Facility to AVS.
"VRDN Real Estate" shall mean Xxxxxxxxx'x owned real property
located at 0000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx.
Section 2. Release of Bank Group Members. Each of AVS and AVSDC, for
itself and its respective representatives, successors and assigns, hereby
releases, acquits and forever discharges each of the Bank Group Members of and
from any and all Claims of any nature whatsoever arising prior to or on the date
hereof, which either AVS or AVSDC ever had, now has or claims to have against
the Bank Group Members, or any one or more of them, or which either AVS or AVSDC
at any time hereafter acquires, by reason of any matter, cause, or thing arising
out of or relating to (i) any of the AVS Investor Letters of Credit, the AVS
Investor Letter of Credit Documents, the AVSDC Asset Purchase Documents, the AVS
Investor Intercreditor Agreement, or the KAV Consignment Agreement or any action
or failure to act by any of the Bank Group Members under or in connection with
any of the aforesaid documents; (ii) any of the AVS Investor Indebtedness; (iii)
the efforts by AVS Investors and AVS Investor Trustee to purchase the VRDN Real
Estate from Xxxxxxxxx; or (iv) any of the KAV Letters of Credit, the Miramar
Sublease or the SNDA, or any action or failure to act by any of the Bank Group
Members under or in connection with any of the aforesaid documents; provided,
however, that the foregoing provisions of this Section 2 shall not be deemed in
any manner whatsoever to release, waive, or otherwise affect any liability of
any Bank Group Member in respect of any Claim arising solely under this Release.
Section 3. Release of AVS and AVSDC. Each of the Bank Group Members,
for itself and its respective successors and assigns, hereby releases, acquits
and forever discharges each of the AVS and AVSDC of and from any and all Claims
of any nature whatsoever arising prior to or on the date hereof, which any of
the Bank Group Members ever had, now have or claim to have against either or
both of AVS and AVSDC or which any of the Bank Group Members at any time
hereafter acquires, by reason of any matter, cause, or thing arising out of or
relating to (i) any of the AVS Investor Letters of Credit, the AVS Investor
Letter of Credit Documents, the AVSDC Asset Purchase Documents, the AVS Investor
Intercreditor Agreement, or the KAV Consignment Agreement, or any action or
failure to act by any of the AVS Investors or the AVS Investor Trustee under or
in connection with any of the aforesaid documents; (ii) any of the AVS Investor
Indebtedness; (iii) the efforts by AVS Investors and AVS Investor Trustee to
purchase the VRDN Real Estate from Xxxxxxxxx; or (iv) any of the KAV Letters of
Credit, or any action or failure to act by any of the AVS Investors or the AVS
Investor Trustee under or in connection with any of the aforesaid documents;
provided, however, that the foregoing provisions of this Section 3 shall not be
deemed in any manner whatsoever to release, waive or otherwise affect any
liability of any AVS or AVSDC in respect of any Claim arising solely under this
Release.
Section 4. Covenant Not To Xxx. Each Party, for and on behalf of such
Party and for each of such Party's respective successors, assigns, and personal
representatives, covenants and agrees never to commence, aid in any way,
prosecute or cause to be commenced or prosecuted, or permit any of its
subsidiaries or affiliates to commence or prosecute, against any other Party
hereto, any action, suit or other proceeding based upon a Claim that has been
released pursuant to the terms of this Release.
Section 5. Representations and Warranties. Each Bank Group Member
hereby represents and warrants to each of AVS and AVSDC that such Bank Group
Member is duly authorized and empowered to
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execute this Release; that it has taken such actions as may be required to
obtain corporate or shareholder approval for the execution and delivery of this
Release; that the individual signing on its behalf below is duly authorized and
empowered to execute this Release; and that it has not sold, assigned,
transferred, conveyed, or otherwise disposed of any Claim relating to any matter
covered by this Release. Each of AVS and AVSDC hereby represents and warrants to
each Bank Group Member that such company is duly authorized and empowered to
execute this Release; that it has taken such actions as may be required to
obtain corporate or shareholder approval for the execution and delivery of this
Release; that the individual signing on its behalf below is duly authorized and
empowered to execute this Release; and that such company has not sold, assigned,
transferred, conveyed, or otherwise disposed of any Claim relating to any matter
covered by this Release. Each of the Parties represents and warrants to each of
the other Parties hereto that such representing and warranting Party has freely
and voluntarily entered into and executed this Release, with the benefit of
advice of counsel of such Party's own selection.
Section 6. No Admission. This Release is made without admission or
concession by any Party of any liability whatsoever on the part of such Party to
any other Party.
Section 7. Acknowledgments. Each Party acknowledges and agrees that no
other consideration has been or will be paid or furnished to such Party on
account of or in connection with such Party's execution and delivery of this
Release and that such Party has not made or relied upon any other warranty or
representation or promise except as expressly set forth in this Release and the
Resolution Agreement.
Section 8. Mistake of Fact. If any fact with respect to which this
Release is executed is hereafter found to be other than or different from what
is now believed by any Party to be true, each Party hereto accepts and assumes
the risk of such possible difference in fact and agrees that this Release shall
be and remain effective, notwithstanding such difference in facts.
Section 9. Complete Defense. This Release shall be a full and complete
defense to and may be used as the basis for an injunction against any action,
suit, or other proceeding that may be instituted, prosecuted or attempted in
breach of this Release.
Section 10. Execution; Effectiveness; Waiver of Jury Trial. This
Release 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 counterparts taken together
shall constitute but one and the same instrument. In proving this Release in any
judicial proceeding, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is
sought. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto. The effectiveness of this Release is
subject to the execution and delivery of this Release by each Party shown on the
signature pages hereof. Each of the Parties hereby waives any right that such
Party may have to a trial by jury in respect of any litigation based hereon, or
arising out of, under or in connection with this Release, and this provision is
material inducement for this Release.
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Section 11. Miscellaneous. This Agreement expresses the entire
understanding of the Parties with respect to the subject matter hereof and
thereof and supersedes any and all prior agreements or understandings, written
or oral, express or implied; may not be amended except by written agreement of
the Parties; shall be binding upon the parties hereto and their respective
successors and assigns; and shall be governed in all respects by and construed
in accordance with the internal laws of the State of Georgia.
IN WITNESS WHEREOF, the Parties have caused this Release to be signed,
sealed, and delivered on the day and year first above written.
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