EXHIBIT 10.4

RATIFICATION OF SUBORDINATION AGREEMENT

 

April 8, 2005

 

Monroe Capital Advisors LLC

Sears Tower

233 South Wacker Street, Suite 5210

Chicago, Illinois 60606

Attn:

Re:

Loan Arrangements with TIMCO Aviation Services, Inc., et al.

 

Gentlemen:

 

The undersigned, LJH, LTD., a Texas limited partnership (the “Subordinated
Creditor”) has entered into that certain Intercreditor and Subordination
Agreement dated as of April 5, 2004 (as amended, the “Subordination Agreement”)
with THE CIT GROUP/BUSINESS CREDIT INC., a New York corporation, and HILCO
CAPITAL LP, a Delaware limited partnership (“Hilco”). Capitalized terms used
herein without definition herein shall have the respective meanings set forth in
the Subordination Agreement.

Pursuant to that certain Financing Agreement, dated as of April 5, 2004 (as
amended, the “Existing Financing Agreement”) between and among Hilco and
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 being collectively called the “Borrowers” and
individually, a “Borrower”), Hilco made available to the Borrowers a term loan
in the original principal amount of $8,000,000 which was evidenced by that
certain Term Note dated as of April 5, 2004 made by the Borrowers to Hilco in
the face amount of $8,000,000 (the “Existing Term Note”).

Pursuant to that certain Assignment of Financing Agreement and Other Loan
Documents, dated as of the date hereof, by Hilco in favor of MONROE CAPITAL
ADVISORS LLC, a Delaware limited liability company (the “Lender”), Hilco has
assigned to Lender all of Hilco’s rights and obligations under the Existing
Financing Agreement and the other loan documents executed in connection
therewith, and has endorsed over and delivered the Existing Term Note to Lender.

The Borrowers and the Lender desire to amend and restate the Existing Financing
Agreement in its entirety (as amended to date, the “Amended and Restated
Financing Agreement”), all upon the terms and subject to the conditions set
forth therein.

 

Accordingly, in order to induce the Lender to enter into the Amended and
Restated Financing Agreement, the Subordinated Creditor hereby warrants,
represents, covenants and agrees as follows:

1.

Subordinated Creditor hereby ratifies, confirms and reaffirms, all and singular,
each of the terms and conditions of the Subordination Agreement and each of the
warranties and representations

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made in the Subordination Agreement. Without limiting the foregoing sentence,
Subordinated Creditor hereby confirms and reaffirms that all Subordinated Debt
remains subject and subordinate to the Senior Debt, as amended by the Amended
and Restated Financing Agreement.

2.

The undersigned hereby acknowledges and agrees that it has no offsets, defenses,
or counterclaims against the Lender with respect to Subordination Agreement or
otherwise, and to the extent that the undersigned has any such offsets,
defenses, or counterclaims, the undersigned hereby WAIVES and RELEASES the same.

3.

The undersigned hereby acknowledges that it has reviewed the Amended and
Restated Financing Agreement, and that such Amended and Restated Financing
Agreement shall, among other things, cause there to be an increase in the amount
of Senior Debt.

[SIGNATURE PAGES FOLLOW]

 

2

 

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This Ratification of Subordination Agreement shall take effect as a sealed
instrument as of the date first written above.

 

LJH, LTD., A Texas Limited Partnership

 

By: DLH MANAGEMENT, L.L.C., a Texas limited liability company, its general
partner

 

By: /s/ Lacy Harber

Lacy Harber, President

Signature Page to Ratification of Subordination Agreement - LJH

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