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RATIFICATION AGREEMENT AND RELEASE

Release Agreement

RATIFICATION AGREEMENT AND RELEASE | Document Parties: TIMCO AVIATION SERVICES INC | AIRCRAFT INTERIOR DESIGN, INC., You are currently viewing:
This Release Agreement involves

TIMCO AVIATION SERVICES INC | AIRCRAFT INTERIOR DESIGN, INC.,

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Title: RATIFICATION AGREEMENT AND RELEASE
Governing Law: Delaware     Date: 4/21/2006
Industry: Aerospace and Defense     Sector: Capital Goods

RATIFICATION AGREEMENT AND RELEASE, Parties: timco aviation services inc , aircraft interior design  inc.
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EXHIBIT 10.139

RATIFICATION AGREEMENT AND RELEASE

      RATIFICATION AGREEMENT AND RELEASE , dated as of April 20, 2006 (this “ Agreement ”), among LJH, LTD., a Texas limited partnership, with offices located at 377 Neva Lane, Denison, Texas 75020 (together with its successors and assigns, the “ Lender ”), AIRCRAFT INTERIOR DESIGN, INC. , a Florida corporation (“ AID ”), BRICE MANUFACTURING COMPANY, INC. , a California corporation (“ Brice ”), TIMCO AVIATION SERVICES, INC. , a Delaware corporation (“ Parent ”), TIMCO ENGINE CENTER, INC. , a Delaware corporation (“ Engine ”), TIMCO ENGINEERED SYSTEMS, INC. , a Delaware corporation (“ Engineered Systems ”), and TRIAD INTERNATIONAL MAINTENANCE CORPORATION , a Delaware corporation (“ TIMCO ”; AID, Brice, Parent, Engine, Engineered Systems and TIMCO each individually being referred to herein as a “Borrower” and collectively as the “ Borrowers ”), AVIATION SALES DISTRIBUTION SERVICES COMPANY , a Delaware corporation (“ Distribution Services ”), AVIATION SALES LEASING COMPANY , a Delaware corporation (“ Leasing ”), AVIATION SALES PROPERTY MANAGEMENT CORP. , a Delaware corporation (“ Property Management ”), AVS/CAI, INC. , a Florida corporation (“ AVS/CAI ”), AVS/M-1, INC. , a Delaware corporation (“ AVS/M-1 ”), AVS/M-2, INC. , a Delaware corporation (“ AVS/M-2 ”), AVS/M-3, INC. , an Arizona corporation (“ AVS/M-3 ”), AVSRE, L.P. , a Delaware limited partnership (“ AVSRE ”), HYDROSCIENCE, INC. , a Texas corporation (“ Hydroscience ”), TMAS/ASI, INC. , an Arkansas corporation (“ TMAS/ASI ”), and WHITEHALL CORPORATION , a Delaware corporation (“ Whitehall ”; Distribution Services, Leasing, Property Management, AVS/CAI, AVS/M-1, AVS/M-2, AVS/M-3, AVSRE, Hydroscience, TMAS/ASI and Whitehall each being individually referred to herein as a “ Guarantor ” and collectively as the “ Guarantors ”; the Borrowers and the Guarantors each being individually referred to herein as a “ Company ” and collectively as the “ Company ”).

W I T N E S S E T H:

     WHEREAS, pursuant to the Amended and Restated Financing Agreement, dated as of April 8, 2005, among Monroe Capital Advisors, LLC (“ Monroe ”) and the Companies, Monroe made certain Term Loans (as defined in the Financing Agreement referred to below) to the Borrowers (such Financing Agreement, as amended and in effect on the date hereof, the “ Financing Agreement ”);

     WHEREAS, pursuant to the Assignment and Acceptance (the “ Assignment and Acceptance ”) dated as of April 10, 2006, among Monroe, Fortress Credit Opportunities I LP (“ Fortress ”) and Monroe Investments, Inc., as assignors (collectively, the “ Assignors ”), and the Lender, as assignee, the Assignors have sold, transferred and assigned to the Lender, and the Lender has purchased, assumed and accepted from the Assignors, all of the Assignors’ rights, interests and obligations in and under the Loan Documents (as defined in the Financing Agreement) including all of the Term Loans;

     WHEREAS, pursuant to a Participation Agreement dated as of April 10, 2006 (as amended, the “Participation Agreement”) between Lender and Owl Creek Asset Management L.P. (“OCAM”), OCAM, acting for the benefit and account of Owl Creek I, L.P., Owl Creek II, L.P., Owl Creek Overseas Fund Ltd., Owl Creek Overseas Fund II, Ltd. (collectively, the “Owl


 

Creek Investors”) purchased a 19.48% participation in the Financing Agreement on the terms and conditions stated therein;

     WHEREAS, Lender has, with the consent of OCAM, agreed to amend the terms of the Financing Agreement to, among other things, decrease the interest rate and fees payable thereunder and to waive certain existing events of default for the benefit of the Company and to advance to the Company additional working capital in the amount of $6.0 million pursuant to a Second Amendment to Amended and Restated Financing Agreement dated April 20, 2006 between Lender and the Company (the “Second Amendment to Financing Agreement”) and a related Intercreditor and Subordination Agreement dated as of April 20, 2006, between Lender and CIT Group/Business Credit, Inc. (“CIT”), as a consequence of which CIT has agreed to amend the terms of the Company’s indebtedness to CIT pursuant to an Amendment No. 4 to Financing Agreement between CIT as Agent and sole lender and the Company (as so amended, the “CIT Financing Agreement”) to resolve certain existing events of default and to increase the amount of funding available under that facility; and

     WHEREAS, Lender and the Owl Creek Investors have recently engaged in discussions with the Parent regarding a proposed Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which a newly organized corporation owned by Lender and the Owl Creek Investors was to merge with and into Parent with the stockholders of Parent (other than Lender and Owl Creek) receiving cash for their shares of common stock of the Parent (the “Merger”); and

     WHEREAS, the Lender and the Owl Creek Investors have advised the Parent that they have decided to suspend the negotiations of the Merger Agreement and their consideration of the Merger at this time, with the understanding among the parties that such discussions will not resume unless and until the Parent, the Lender and/or the Owl Creek Investors agree to the resumption of such negotiations.

     NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

 

SECTION 1.

 

Defined Terms. Capitalized terms used herein and defined in the Financing Agreement or in this Agreement shall have the meanings given to such terms in the Financing Agreement or in this Agreement, as applicable.

 

 

 

SECTION 2.

 

Ratification of Obligations Under the Loan Documents. Each of the Companies hereby (a) acknowledges and agrees that, immediately prior to the effective date of the Second Amendment to Financing Agreement (the “Amendment Effective Date”), (i) the outstanding principal amount of the Term Loan A-1 is $8,190,294.32, (ii) the outstanding principal amount of the Term Loan A-2 is $7,166,489.67, and (iii) the outstanding principal amount of the Term Loan B is $2,956,471.09; (c) the aggregate outstanding default interest on the Term Loans is $319,466.38; and (d) acknowledges and agrees that upon the occurrence of the Amendment Effective Date, the Lender is the sole “Lender” under the Financing Agreement and the other Loan Documents in all respects and for all purposes, and

2


 

 

 

 

 

 

the Obligations shall be due and payable to the Lender as provided in the Loan Documents without any offset, deduction, defense, recoupment or counterclaim.

 

 

 

2.1

 

Ratification of Liens Under the Loan Documents . Each Company hereby (a) acknowledges, confirms, ratifies and reaffirms all of the security interests and liens created under the Loan Documents in effect on the date hereof to which it is a party; (b) represents and warrants and covenants and agrees that all of such security interests and liens constitute valid, enforceable, perfected, security interests and liens in and to the Collateral in favor of the Lender with the priority required by the Loan Documents, and (c) authorizes the Lender to create (or cause to be created) and file (or cause to be filed) or record (or cause to be recorded), in each case at such Company’s sole cost and expense, any and all UCC-3 amendments, UCC-3 assignments, and UCC-1 financing statements in any jurisdiction to further perfect, protect and preserve the security interests and liens created under the Collateral Documents in favor of the Lender.

 

 

 

2.2

 

Reaffirmation of Obligations . Each Company hereby ratifies and reaffirms all of its obligations under the Loan Documents and agrees that each of the Loan Documents to which it is a party is and shall be enforceable against such Company by the Lender in accordance with its terms.

 

 

 

2.3

 

No Set-Off, Etc . Each Company hereby acknowledges and agrees that there is no basis nor set of facts on which any amount (or any portion thereof) owed by such Company under any Loan Document could be reduced, offset, waived, or forgiven, by rescission or otherwise; nor is there any claim, counterclaim, offset, recoupment, or defense (or other right, remedy, or basis having a similar effect) available to such Company with regard thereto; nor is there any basis on which the terms and conditions of any of the Obligations could be claimed to be other than as stated on t


 
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