Exhibit 10.11
AGREEMENT
(Loan Parties Agreement)
This Agreement (the "Agreement") dated as of July 12, 2002 is entered
into among AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware corporation
("Distribution"), AEROCELL STRUCTURES, INC., an Arkansas corporation
("Aerocell"), WHITEHALL CORPORATION, a Delaware corporation ("Whitehall"), TRIAD
INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation ("TIMCO"),
AVS/CAI, INC., a Florida corporation ("Caribe"), AIRCRAFT INTERIOR DESIGN, INC.,
a Florida corporation ("Design"), AVIATION SALES LEASING COMPANY, a Delaware
corporation ("Leasing"), TIMCO ENGINE CENTER, INC., a Delaware corporation
("TIMCO Engine"), TIMCO AVIATION SERVICES, INC., a Delaware corporation
("Parent"), AVIATION SALES PROPERTY MANAGEMENT CORP., a Delaware corporation
("Property"), HYDROSCIENCE, INC., a Texas corporation ("Hydro"), AVSRE, L.P., a
limited partnership organized under the laws of Delaware ("AVSRE"), AVS/M-1,
INC., a Delaware corporation ("AVSM1"), AVS/M-2, INC., a Delaware corporation
("AVSM2"), AVS/M-3, INC., an Arizona corporation ("AVSM3"), and TIMCO ENGINEERED
SYSTEMS, INC., a Delaware corporation ("TIMCO Engineered") (Distribution,
Aerocell, Whitehall, TIMCO, Caribe, Design, Leasing, TIMCO Engine, Parent,
Property, Hydro, AVSRE, AVSM1, AVSM2, AVSM3 and TIMCO Engineered being
hereinafter referred to, collectively, as "Loan Parties" and, individually, as a
"Loan Party"). Capitalized terms not otherwise defined herein are used as
defined in the Credit Agreement described below.
PRELIMINARY STATEMENT:
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, "Lender")
have extended to certain of the Loan Parties (namely, Aerocell, Design, TIMCO
and TIMCO Engine (hereinafter referred to collectively as the "Borrowers")) a
term loan in the principal amount of $1,000,000 pursuant to the terms of that
certain Term Loan Note of even date herewith executed by the Borrowers and
payable to the order of Lender (the "Term Note"); and
WHEREAS, the indebtedness evidenced by the Term Note has been
guaranteed by certain other of the Loan Parties (namely, Parent, Whitehall,
Caribe, Leasing, Property, Hydro, AVSRE, AVSM1, AVSM2, AVSM3 and TIMCO
Engineered (hereinafter referred to collectively as the "Guarantors")), pursuant
to the terms of that certain Guaranty of even date herewith executed by the
Guarantors in favor of Lender (the "Guaranty"); and
WHEREAS, Lender has required, as a condition to the extension of credit
evidenced by the Term Note, that the Loan Parties make certain covenants and
representations to Lender as more particularly stated in this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Representations and Warranties; Covenants. The Loan Parties
hereby represent and warrant as follows:
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1.1 Binding Obligations. This Agreement, the Term Note, the
Guaranty and the documents evidencing and securing its obligations evidenced by
the Term Note and the Guaranty (collectively "Loan Documents") as previously
executed and delivered and as amended hereby constitute legal, valid and binding
obligations of the Loan Parties and are enforceable against the Loan Parties in
accordance with their terms.
1.2 Representations and Warranties of Loan Parties. The
representations and warranties of the Loan Parties contained in the Loan
Documents, and all certificates and other documents delivered to the Lender
pursuant to the terms thereof, do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading. No Loan Party has intentionally withheld any fact from the
Lender in regard to any matter which will, or is reasonably likely to, result in
a "Material Adverse Effect" as defined in that certain Fifth Amended and
Restated Credit Agreement dated as of even date herewith, as amended, by and
among Parent, certain subsidiaries of Parent, as Co-Borrowers, the lenders party
thereto, and Citicorp USA, Inc., as Agent (the "Credit Agreement").
1.3 Future Pledges of Equity Securities, Other Collateral
Documents.
(i) Each Loan Party shall execute and deliver to the
Lender concurrently with the issuance of any equity securities to such Loan
Party in connection with any investment made by the Loan Party, or formation or
acquisition of a Subsidiary of the Loan Party, a pledge of (A) all of the equity
securities issued to or acquired by such Loan Party, if the person formed,
acquired or in which an investment is made is not domiciled outside of the
United States of America and its states, districts or possessions, and (B) 65%
of the equity securities of any such person domiciled outside of the United
States of America and its states, districts or possessions.
(ii) Each Loan Party shall execute and deliver to the
Lender an aircraft mortgage and security agreement concurrently with its
acquisition of any aircraft or aircraft engines registered with the Federal
Aviation Administration.
(iii) Each Loan Party shall execute and deliver to the
Lender such other security agreements, pledges, mortgages, assignments or any
other documents or instruments reasonably requested by the Lender with respect
to other property and interests in property of such Loan Party not otherwise
covered by the documents delivered to or for the benefit of the Lender as of the
date hereof or with respect to other property and interests in property of such
Loan Party acquired after the date hereof.
Delivery of such instruments required by this Section 1.3 to Citicorp
USA, Inc., as Agent for the benefit of Lender, the Lenders party to the Credit
Agreement and Bank of America, N.A. will constitute compliance with this
section.
1.4 Further Assurances. Each Loan Party agrees that from time
to time, at the expense of such Loan Party, such Loan Party will promptly
execute and deliver all further instruments and documents, and take all further
action which may be necessary or desirable in the opinion of the Lender or its
counsel, or that the Lender may reasonably request, in order to
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perfect and protect any security interest granted or purported to be granted for
the benefit of the Lender by the Loan Parties, and enable the Lender to exercise
and enforce its rights and remedies with respect to any collateral. Without
limiting the generality of the foregoing, each Loan Party shall execute such
further instruments and documents as may be reasonably requested by the Lender
in connection with any lien granted by the Loan Parties with respect to real
property or interests in real property.
1.5 Solvency. After giving effect to this Agreement, the loan
to be made pursuant to the Term Note, and the disbursement of the proceeds of
such loan, each Loan Party is Solvent (as such term is defined in the Credit
Agreement).
1.6 Authority.
(i) The execution, delivery, performance and filing or
recording, as the case may be, of each of the agreements or documents which are
required to be executed, filed or recorded by or on behalf of the Loan Parties
in connection with or as required by the Term Note on or prior to the date
hereof and to which any Loan Party is party and the consummation of the
transactions contemplated thereby are within such person's, as applicable,
corporate powers, have been duly authorized by all necessary corporate action
and such authorization has not been rescinded. No other corporate action or
proceedings on the part of any Loan Party are necessary to consummate such
transactions.
(ii) Each of the Term Note, the Guaranty and the Loan
Documents to which any Loan Party is a party (A) has been duly executed,
delivered, filed or recorded, as the case may be, on behalf of such person, as
applicable, (B) where applicable, creates valid and perfected liens in the
Collateral covered thereby (except for Customary Permitted Liens (as defined in
the Credit Agreement) which might be senior to the liens granted under such
documents) securing the payment of all of the obligations purported to be
secured thereby, (C) constitutes such person's, as applicable, legal, valid and
binding obligation, enforceable against such person, as applicable, in
accordance with its terms, and (D) is in full force and effect. All filings and
recordings and other actions which are necessary or desirable to perfect and
protect the liens granted pursuant to the Collateral Documents and preserve
their required priority have been duly taken, and no Event of Default (as
defined in the Term Note) or breach of any covenant by any such party exists
thereunder.
1.7 Inspection of Property, Books and Records, Discussions.
(i) Each Loan Party shall permit any authorized
representative(s) designated by the Lender to visit and inspect, whether by
access to such Loan Party's MIS or otherwise, any of such Loan Party's property,
to examine, audit, check and make copies of such Loan Party'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 (including, without limitation, in connection with
environmental compliance, hazard or liability), 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. If
an
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Event of Default has occurred and is continuing and the obligations have been
accelerated pursuant to the Term Note, each Loan Party, upon the Lender's
request in connection with efforts to enforce the rights and remedies of the
Lender under the Term Note and the documents securing the Term Note, shall turn
over copies of any such records requested by the Lender to the Lender or its
representatives.
(ii) All information obtained by Lender hereunder or
otherwise in connection with the loan evidenced by the Term Note except
information which (a) is or becomes generally available to the public; (b) is or
becomes available to Lender or its Representatives (as defined below) from a
source other than Parent and its subsidiaries or its Representatives, provided
such source is not known by Lender or its Representatives to be bound by a
confidentiality agreement with Parent and its subsidiaries or is not otherwise
prohibited from transmitting the information by a contractual, legal or
fiduciary obligation; or (c) is disclosed on the order of any court of competent
jurisdiction, shall be deemed "Confidential Information".
Unless otherwise agreed to in writing by Parent, Lender agrees (a)
except as required by law, to keep all Confidential Information confidential and
not to disclose or reveal any Confidential Information to any person other than
those employed by Lender or acting on its behalf who are actively and directly
participating in matters related to the Term Note or who otherwise need to know
the Confidential Information (including, without limitation, accountants,
attorneys, or advisors) ("Representatives") and (b) not to use Confidential
Information for any purposes other than in connection with the Term Note. Lender
shall inform its Representatives of the existence and terms of this Agreement
and shall take all such steps as are used by Lender in protecting its own
confidential information to assure adherence to this Agreement by its
Representatives, who shall be considered agents of Lender for all purposes of
this Agreement. In the event that Lender is requested pursuant to, or required
by, applicable law or regulation or by legal process to disclose any
Confidential Information, Lender agrees that it will provide Parent with prompt
notice of such request(s) to enable Parent to seek an appropriate protective
order and/or waive compliance by it with the provisions of this Agreement.
SECTION 2. Execution in Counterparts. 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.
SECTION 3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
SECTION 4. 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.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officer thereunto duly authorized as of the date
first above written.
TIMCO AVIATION SERVICES, INC.
AEROCELL STRUCTURES, INC.
TRIAD INTERNATIONAL MAINTENANCE CORPORATION
WHITEHALL CORPORATION
AIRCRAFT INTERIOR DESIGN, INC.
AVS/CAI, INC.
AVIATION SALES DISTRIBUTION SERVICES COMPANY
AVIATION SALES LEASING COMPANY
TIMCO ENGINE CENTER, INC.
AVIATION SALES PROPERTY MANAGEMENT CORP.
AVS/M-1, INC
AVS/M-2, INC
AVS/M-3, INC
HYDROSCIENCE, INC.
TIMCO ENGINEERED SYSTEMS, INC.
AVSRE, L.P.
By Aviation Sales Property Management Corp., as general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇, Treasurer for each of the
above Companies
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