Collateral Sharing Agreement

COLLATERAL SHARING AGREEMENT


Agreement dated June __, 1996 between The Bank of New York Commercial Corporation ("BNYCC"), as agent for the Lenders under and as defined in the Loan Agreement (as defined below) (BNYCC, in such capacity, the "Agent"), American Stock Transfer & Trust Company ("ASTC") as Trustee for the Holders of Securities under and as defined in the Indenture (as defined below) (ASTC, in such capacity, the "Trustee"), and BNYCC as collateral agent for Agent and Trustee.


BACKGROUND


Greenwich Air Services, Inc. ("Greenwich"), Gas Turbine Corporation ("GTC"), Greenwich Turbine, Inc. ("GTI"), GASI Engine Services Corporation ("Engine"), Greenwich Air Services - Texas, L.P. ("Texas") and McAllen Components, L.P. ("Components") (Greenwich, GTC, GTI, Engine, Texas and Components, each a "Borrower" and collectively, "Borrowers") are parties to a Fourth Amended and Restated Revolving Credit and Security Agreement dated as of this date (as amended, modified, restated or supplemented from time to time, the "Loan Agreement") among Borrowers, The Bank of New York Commercial Corporation ("BNYCC"), the other financial institutions named therein or which hereafter become a party thereto (BNYCC and such other financial institutions, collectively, "Lenders") and BNYCC, as agent thereunder.


Greenwich Caledonian Limited ("Caledonian") is a party to a Revolving Credit Agreement dated as of this date (as amended, modified, restated or supplemented from time to time, the "Caledonian Agreement") between Caledonian, BNYCC, the other financial institutions named therein or which hereafter become a party thereto (BNYCC and such other financial institutions, collectively, "Caledonian Lenders") and BNYCC as agent for Lenders (in such capacity, "Caledonian Agent"). In connection with the execution of the Caledonian Agreement, each of the Borrowers executed and delivered a guaranty to Lenders of the obligations of Caledonian to Lenders under the Caledonian Agreement (each, a "Guaranty" and collectively, the "Guaranties").


Concurrently with entering into the Loan Agreement, Greenwich is offering $150,000,000 aggregate principal amount of Senior Notes due 2006 pursuant to an Indenture dated June ____, 1996 (the "Indenture") between Greenwich and Trustee. In connection therewith each of the Subsidiary Guarantors (as defined in the Indenture) executed and delivered a guaranty of the obligations of Greenwich to the Holders (each, a "Holder Guaranty" and collectively, the "Holder Guaranties").


AGREEMENTS


NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby agree as follows:


1. DEFINITIONS.


1.1 GENERAL TERMS. For purposes of this Agreement, the following terms shall have the following meanings:


"AGREEMENTS" shall mean, collectively, the Credit Agreements, the Pledge Agreement and the Indenture.


"COLLATERAL" shall mean 65% of the issued and outstanding capital stock of Caledonian pledged by Engine to Agent and Trustee pursuant to the Pledge Agreement.


"COLLATERAL AGENT" shall mean The Bank of New York Commercial Corporation acting in its capacity for the Creditors hereunder.


"COLLATERAL AGENT AGREEMENTS" shall mean, collectively, this Agreement, together with such other written agreements among the Creditors and Collateral Agent, or written instructions from any Creditor to Collateral Agent, as now or at any time hereafter may be executed and/or delivered in connection herewith, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.


"COLLECTIONS" shall mean any payments or amounts realized or recovered or otherwise received in respect of the Obligations from the recovery or realization on any Collateral.


"CREDIT AGREEMENTS" shall mean, collectively, the Loan Agreement, Guaranties, Indenture, Holder Guaranties and all agreements, documents and instruments now or at any time hereafter executed and/or delivered by the Borrowers and/or the Subsidiary Guarantors in connection therewith or related thereto, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.


"CREDITORS" shall mean, collectively, Agent, Lenders, Trustee and Holders of Securities and their respective successors and assigns.


"HOLDERS" shall have the meaning given to it in the Indenture.


"INDENTURE OBLIGATIONS" shall mean all obligations of Greenwich and the Subsidiary Guarantors to the Trustee and the Holders of Securities under the Indenture.


"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance (including, but not limited to, easements, rights of way and the like), lien (statutory or other), security agreement or transfer intended as security, including without limitation, any conditional sale or other title retention agreement, the interest of a lessor under a capital lease or any financing lease having substantially the same economic effect as any of the foregoing.


"LOAN OBLIGATIONS" shall have the meaning given to the term "Obligations" in the Loan Agreement and the Guaranties.


"OBLIGATIONS" all Loan Obligations and Indenture Obligations.


"PERSON" shall mean an individual, a partnership, a corporation (including a business trust), a joint stock company, a trust, an unincorporated association, a joint venture, or other entity or a government or any agency, instrumentality or political subdivision thereof.


"PLEDGE AGREEMENT" means that certain Shares Pledge dated this date pursuant to which Engine pledges 65% of the issued and outstanding capital stock of Caledonian to Agent, as collateral agent for itself, the Lenders, the Trustee and the Holders of Securities.


"SECURED PARTY REMEDIES" means any action which results in the sale, foreclosure, realization upon, or a liquidation of any of the Collateral.


"SECURITIES" shall have the meaning given to it in the Indenture.


"SUBSIDIARY GUARANTORS" shall have the meaning given to it in the Indenture.


"TRUSTEE" shall have the meaning given to it in the preamble to this Agreement.


1.2 CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein in the singular also include the plural and VICE VERSA. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. All references to any instruments or agreements, including, without limitation,


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references to any of the Lending Agreements shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.


2. COLLATERAL AGENCY.


2.1 APPOINTMENT OF COLLATERAL AGENT.


(a) For purposes of this Agreement, Agent (on behalf of itself and Lenders) and Trustee (on behalf of itself and Holders of Securities) hereby irrevocably designate and appoint BNYCC to act as Collateral Agent and attorney- in-fact for and on behalf of each of the Creditors to take such action on behalf of the Creditors under the provisions of this Agreement, and to exercise such powers and to perform such duties, with respect to the management, supervision, servicing, administration and disbursement of the Collateral (including, without limitation, perfecting its security interest in the Collateral by filing financing statements, holding physical possession of instruments or otherwise) and the Collections of the Collateral as are specifically delegated to or required of Collateral Agent by the terms of this Agreement or the other Collateral Agent Agreements, together with such other powers as are incidental thereto, with, (1) full power of substitution and (2) the power to select one or more sub-agents or designees to carry out certain specific powers and obligations of Collateral Agent pursuant hereto. This power of attorney being coupled with an interest is irrevocable while this Agreement remains in effect.


(b) The Collateral Agent agrees to act as such on the express conditions contained herein. The provisions of this Agreement and any other Collateral Agent Agreements are solely for the benefit of Collateral Agent and Creditors and neither Borrowers nor any other person shall have any right to rely on, inquire into or enforce any of the provisions hereof. In performing its functions and duties under this Agreement, the other Collateral Agent Agreements and the Pledge Agreement, Collateral Agent shall act solely as Collateral Agent of Creditors and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for Borrowers, or any of their Affiliates (as defined in the Loan Agreement). Collateral Agent shall have no duties or responsibilities except as expressly set forth in this Agreement or the other Collateral Agent Agreements. Collateral Agent shall not have, by reason of this Agreement or the other Collateral Agent Agreements, a fiduciary relationship in respect of the Creditors. In no event shall Collateral Agent be required to take any action which, in Collateral Agent's opinion, exposes Collateral Agent to liability or which is contrary to any of the Credit Agreements or applicable law. Collateral Agent shall not be removed as collateral agent for the term of this Agreement,


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without the prior written consent of Agent and Trustee. Collateral Agent shall at all times have the right to resign as collateral agent without the consent of the Creditors upon thirty (30) days prior written notice to Agent and Trustee provided that such resignation shall not be effective until the appointment of a successor collateral agent by Agent and Trustee.


2.2 GENERAL POWERS OF COLLATERAL AGENT. Subject to the terms of this Agreement, Creditors agree that Collateral Agent shall have the right to and shall exercise the following powers as long as this Agreement remains in effect:


(a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and/or Collections, as the case may be;


(b) execute and/or file in its name as Collateral Agent for the benefit of the Creditors any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Pledge Agreement and hold and maintain physical possession of the instruments constituting the Collateral;


(c) exclusively receive, apply and distribute the Collections as provided in this Agreement and the other Collateral Agent Agreements;


(d) open and maintain such bank accounts as Collateral Agent deems necessary and appropriate, in its discretion, for the foregoing purposes with respect to the Collections;


(e) perform, exercise and enforce any and all other rights and remedies of Creditors with respect to the Collateral or otherwise related to any of same as provided in the Pledge Agreement, this Agreement and the other Collateral Agent Agreements;


(f) incur and pay such reasonable expenses as Collateral Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Pledge Agreement, this Agreement and the other Collateral Agent Agreements.


3. MANAGEMENT OF COLLATERAL. Collateral Agent, on behalf of Creditors, shall have the exclusive right to manage, perform and enforce the terms of this Agreement, the other Collateral Agent Agreements and the Pledge Agreement with respect to the Collateral and to exercise and enforce all privileges and rights thereunder according to its discretion and the exercise of


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its business judgment, including, without limitation, the exclusive right to take or retake control or possession of such Collateral and to hold, prepare for sale, pro ...