GUARANTY (SPV INDEBTEDNESS)
GUARANTY, dated as of April 1, 1997, of TRITON INVESTMENTS
LIMITED, a Bermuda corporation ("Guarantor"), in favor of TRITON AVIATION
SERVICES II LLC, a California limited liability company ("Lender").
W I T N E S S E T H:
WHEREAS, Triton Aviation Services Limited, a Bermuda
corporation and a majority-owned and controlled subsidiary of Guarantor ("TASL")
is the record and beneficial owner of 99% of the member interests in each of
Lender and Triton Aviation Services III LLC, Triton Aviation Services IV LLC and
Triton Aviation Services V LLC, each a California limited liability company
(each a "Triton LLC"; collectively, the "Triton LLC's"); and
WHEREAS, Guarantor, as the majority owner of TASL, will derive
substantial direct and indirect economic benefit from the making of loans from
time to time by Lender to the Triton LLC's ("SPV Loans"); and
WHEREAS, in connection with the making of SPV Loans from time
to time to the Triton LLC's, Lender is requiring that Guarantor shall have
executed and delivered this Guaranty;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce Lender to make SPV Loans, it is
agreed as follows:
1. DEFINITIONS. The following shall have (unless otherwise
provided elsewhere in this Guaranty) the following respective meanings (such
meanings being equally applicable to both the singular and plural form of the
terms defined):
"Letter of Credit" means an irrevocable direct pay letter of credit
issued by a bank (i) whose long term debt is rated "AA" or better by Xxxxxxxx'x
Bankwatch or (ii) rated "AA" or better by Standard & Poor's in the Financial
Institutions Rating Service and that is payable upon presentation by the
beneficiary of such Letter of Credit of a sight draft (it being understood, but
without any impairment of the issuing bank's obligations under such Letter of
Credit, that the beneficiary shall not present such sight draft unless (x) there
has been a default under the promissory note secured by such Letter of Credit or
(y) the Letter of Credit would expire within 45 days of such presentation and an
extension of such expiration date shall not have been granted nor an acceptable
replacement Letter of Credit been provided).
"Obligations" means all obligations of any kind or nature, present or
future, owed by any of the Triton LLC's to Lender with respect to any SPV
Indebtedness incurred by such Triton LLC.
"SPV Indebtedness" means any and all monies borrowed by a Triton LLC
from Lender pursuant to an SPV Loan.
References to this "Guaranty" shall mean this Guaranty, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Guaranty as the same may be in effect
at the time such reference becomes operative.
2. THE GUARANTY. The guaranty of Guarantor hereunder is as
follows:
2.1. Guaranty of Obligations of Triton LLC's. Guarantor hereby
unconditionally guarantees to Lender, and its respective successors, endorsees,
transferees and assigns, the prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of the Obligations. Guarantor agrees
that this Guaranty is a guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be primary,
absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity,
enforceability or any future amendment of, or change in this Guaranty,
any SPV Indebtedness or any other agreement, document or instrument to
which the Triton LLC's, Lender and/or Guarantor is or are or may become
a party;
(b) the absence of any action to enforce this
Guaranty, any SPV Indebtedness or any other agreement, document or
instrument to which the Triton LLC's, Lender and/or Guarantor is or are
or may become a party, or the waiver or consent by Lender with respect
to any of the provisions thereof;
(c) the existence, value or condition of, or failure
to perfect its lien against, any security for the Obligations or any
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action, or the absence of any action, by Lender in respect thereof
(including, without limitation, the release of any such security); or
(d) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor,
it being agreed by Guarantor that its obligations under this Guaranty shall not
be discharged until the payment and performance, in full, of the Obligations.
Guarantor shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations. Guarantor expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel Lender to proceed in respect of the
Obligations against any Triton LLC or any other party or against any security
for the payment and performance of the Obligations before proceeding against, or
as a condition to proceeding against, Guarantor. Guarantor agrees that any
notice or directive given at any time to Lender which is inconsistent with the
waiver in the immediately preceding sentence shall be null and void and may be
ignored by Lender, and, in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless Lender has specifically agreed otherwise in writing. It is
agreed among Guarantor and Lender that the foregoing waivers are of the essence
of the transactions contemplated in connection with the making of SPV Loans and
that, but for this Guaranty and such waivers, Lender would decline to make such
SPV Loan(s).
2.2. Additional Provisions Relating to SPV Indebtedness. (a)
Guarantor hereby acknowledges and agrees that it is a condition to the
incurrence of each SPV Loan that the Triton LLC incurring such SPV Indebtedness
obtain a Letter of Credit in favor of Lender in an amount equal to the
outstanding principal amount of such SPV Loan plus six months interest thereon
(calculated at the lesser of 10% per annum and the maximum rate under applicable
law) and Guarantor hereby agrees that it will cause such Triton LLC to obtain
and maintain in existence such Letter of Credit so long as there is any SPV
Indebtedness outstanding under such SPV Loan.
(b) Upon the failure of a Triton LLC to pay any amounts demanded under
any promissory note evidencing any SPV Indebtedness, Guarantor (i) hereby
waives, releases and disclaims any right of subrogation, reimbursement,
contribution or other similar rights against the Triton LLC that is the borrower
in respect of such SPV Indebtedness, (ii) is hereby deemed to release, forgive
and discharge such Triton LLC from any obligation of such Triton LLC to pay any
amount to Guarantor in the event that Guarantor is obligated to make any payment
hereunder or to the issuer of any Letter of Credit with respect to such SPV
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Indebtedness; provided, however that any such payment by Guarantor hereunder or
to the issuer of any Letter of Credit shall be deemed to be a capital
contribution by Guarantor to such Triton LLC.
2.3. Demand by Lender. In addition to the terms of the
Guaranty set forth in Sections 2.1 and 2.2 hereof, and in no manner imposing any
limitation on such terms, it is expressly understood and agreed that, if the
then outstanding principal amount of any of the Obligations (together with all
accrued interest thereon) is declared to be immediately due and payable, then
Guarantor shall, upon demand in writing therefor by Lender to Guarantor but
subject to Section 2.6(b) hereof, pay to Lender the entire outstanding
Obligations due and owing to Lender.
2.4. Enforcement of Guaranty. In no event shall Lender have
any obligation (although it is entitled, at its option) to proceed against any
Triton LLC or any other Person or any Letter of Credit or any real or personal
property pledged to secure the Obligations before seeking satisfaction from
Guarantor. Lender may proceed, prior or subsequent to, or simultaneously with,
the enforcement of Lender's rights hereunder, to exercise any right or remedy
which it may have against any Letter of Credit or any property, real or
personal, as a result of any lien it may have as security for all or any portion
of the Obligations.
2.5. Waiver. In addition to the waivers contained in Section
2.1 or 2.2 hereof, Guarantor waives, and agrees that it shall not at any time
insist upon, plead or in any manner whatever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension, marshalling of assets
or redemption laws, or exemption, whether now or at any time hereafter in force,
which may delay, prevent or otherwise affect the performance by Guarantor of its
obligations under, or the enforcement by Lender of, this Guaranty. Guarantor
hereby waives diligence, presentment and demand (whether for non-payment or
protest or of acceptance, maturity, extension of time, change in nature or form
of the Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Obligations, notice of adverse change in any Triton LLC's financial condition or
any other fact which might materially increase the risk to Guarantor) with
respect to any of the Obligations or all other demands whatsoever and waives the
benefit of all provisions of law which are or might be in conflict with the
terms of this Guaranty. Guarantor represents, warrants and agrees that, as of
the date of this Guaranty, its obligations under this Guaranty are not subject
to any offsets or defenses against Lender or any Triton LLC of any kind.
Guarantor further agrees that its obligations under this Guaranty shall not be
subject to any counterclaims, offsets or defenses against Lender or against any
Triton LLC of any kind which may arise in the future.
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2.6. Benefit of Guaranty. (a) Except as provided in paragraph
(b) below, the provisions of this Guaranty are solely for the benefit of Lender
and its successors, transferees, endorsees and assigns. Nothing herein contained
shall impair, as between any Triton LLC and Lender, the obligations of such
Triton LLC under any SPV Indebtedness. In the event all or any part of the
Obligations are transferred, indorsed or assigned by Lender to any Person or
Persons, any reference to "Lender" herein shall be deemed to refer equally to
such Person or Persons.
(b) Guarantor and Lender agree that this Guaranty is executed
in part to induce Polaris Aircraft Income Fund II, a California limited
partnership ("Polaris"), to enter into that certain Purchase, Assignment and
Assumption Agreement dated as of April, 1997 with Lender and to accept the
delivery by Lender of that certain Promissory Note effective as of April 1, 1997
in connection therewith, and accordingly the provisions of this Guaranty are
hereby declared to be for the benefit of Polaris and its successors,
transferees, endorsees and assigns, and may be enforced by them. Guarantor and
Lender further agree that in the event Polaris notifies Guarantor that any
amounts are due and owing to it by Lender, then until such notice has been
revoked by Polaris, any payments to be made by Guarantor hereunder shall instead
be made by Guarantor directly to Polaris and Polaris shall apply all payments
received from Guarantor in the same manner as though paid directly by Lender.
2.7. Modification of Obligations, Etc. If Lender shall at any
time or from time to time, with or without the consent of, or notice to,
Guarantor:
(a) change or extend the manner, place or terms of
payment of, or renew or alter all or any portion of, the Obligations;
(b) take any action under or in respect of any SPV
Indebtedness in the exercise of any remedy, power or privilege
contained therein or available to it at law, equity or otherwise, or
waive or refrain from exercising any such remedies, powers or
privileges;
(c) amend or modify, in any manner whatsoever, any
document, instrument or agreement with respect to SPV Indebtedness;
(d) extend or waive the time for any of Guarantor's,
any Triton LLC's or other Person's performance of, or compliance with,
any term, covenant or agreement on its part to be performed or observed
under any document, instrument or agreement with respect to SPV
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Indebtedness, or waive such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;
(e) take and hold security or collateral for the
payment of the Obligations guaranteed hereby or sell, exchange,
release, dispose of, or otherwise deal with, any property pledged,
mortgaged or conveyed, or in which Lender has been granted a lien, to
secure any indebtedness of Guarantor or any Triton LLC to Lender;
(f) release anyone who may be liable in any manner
for the payment of any amounts owed by Guarantor or any Triton LLC to
Lender;
(g) modify or terminate the terms of any
intercreditor or subordination agreement pursuant to which claims of
other creditors of Guarantor or any Triton LLC are subordinated to the
claims of Lender and/or
(h) apply any sums by whomever paid or however
realized to any amounts owing by Guarantor or any Triton LLC to Lender
in such manner as Lender shall determine in its discretion;
then Lender shall not incur any liability to Guarantor pursuant hereto as a
result thereof, and no such action shall impair or release the obligations of
Guarantor under this Guaranty.
2.8. Reinstatement. This Guaranty shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Triton LLC or Guarantor for liquidation or reorganization, should
such Triton LLC or Guarantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of such Triton LLC's or Guarantor's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by Lender, whether as a "voidable preference", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
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2.9. Waiver of Claims, Etc. If Lender may, under applicable
law, proceed to realize its benefits under any SPV Indebtedness, giving Lender a
lien upon any collateral, whether owned by the Triton LLC that is the borrower
under such SPV Indebtedness or by any other Person, either by judicial
foreclosure or by non-judicial sale or enforcement, Lender may, at its sole
option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Guaranty. If, in the
exercise of any of its rights and remedies, Lender shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against a
Triton LLC or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, Guarantor hereby consents to
such action by Lender and waives any claim based upon such action. Any election
of remedies which results in the denial or impairment of the right of Lender to
seek a deficiency judgment against a Triton LLC or any other Person shall not
impair Guarantor's obligation to pay the full amount of the Obligations. In the
event Lender shall bid at any foreclosure or trustee's sale or at any private
sale permitted by law or the under any SPV Indebtedness, Lender may bid all or
less than the amount of the Obligations and the amount of such bid need not be
paid by Lender but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Lender or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Guaranty, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Lender might otherwise be entitled but
for such bidding at any such sale.
2.10. Continuing Guaranty. Guarantor agrees that this Guaranty
is a continuing guaranty and shall remain in full force and effect until the
payment and performance in full of the Obligations.
3. REPRESENTATIONS AND WARRANTIES. To induce Lender to make
SPV Loans from time to time, Guarantor makes the following representations and
warranties to Lender, each and all of which shall survive the execution and
delivery of this Guaranty:
3.1. Corporate Existence; Compliance with Law. Guarantor (i)
is a corporation duly organized, validly existing and in good standing under the
laws of Bermuda; (ii) is duly qualified to do business and is in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification (except for
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jurisdictions in which such failure so to qualify or to be in good standing
would not have a materially adverse effect on (A) the business, operations,
prospects or financial condition of Guarantor or (B) Guarantor's ability to pay
the Obligations in accordance with the terms hereof); (iii) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage and
operate its properties, to lease the property it operates under lease, and to
conduct its business as now, heretofore and proposed to be conducted; (iv) has
all material licenses, permits, consents or approvals from or by, and has made
all material filings with, and has given all material notices to, all
governmental authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (v) is in compliance with its articles of
incorporation and by-laws or other organizational documents; and (vi) is in
compliance with all applicable provisions of law where the failure to so comply
would have a materially adverse effect on (A) the business, operations,
prospects, assets or financial or other condition of Guarantor or (B) the
Guarantor's ability to pay the Obligations in accordance with the terms hereof.
3.2. Corporate Power; Authorization; Enforceable Obligations.
The execution, delivery and performance of this Guaranty and all other
instruments and documents to be delivered by Guarantor hereunder and under the
Purchase Agreement are within Guarantor's corporate powers, have been duly
authorized by all necessary or proper corporate action, including the consent of
stockholders where required, are not in contravention of any provision of
Guarantor's articles of incorporation or by-laws (or other organizational
documents), will not violate any law or regulation, or any order or decree of
any court or governmental instrumentality, will not conflict with or result in
the breach of, or constitute a default under, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Guarantor is a party or by
which Guarantor or any of its property is bound, will not result in the creation
or imposition of any lien upon any of the property of Guarantor and the same do
not require the consent or approval of any governmental body, agency, authority
or any other Person except those already obtained. At or prior to the closing
date for any SPV Indebtedness, this Guaranty shall have been duly executed and
delivered for the benefit of or on behalf of Guarantor, and shall then
constitute a legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally and, with
respect to the enforceability of this Guaranty, by general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
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3.3. No Material Adverse Change. Since December 31, 1996,
there has been no material adverse change in the business, financial condition,
results of operations or liabilities of Guarantor.
4. NO ASSIGNMENT. Neither Guarantor nor Lender may assign
their respective rights or delegate their respective duties under this Guaranty.
5. FURTHER ASSURANCES. Guarantor agrees, upon the written
request of Lender, to execute and deliver to Lender, from time to time, any
additional instruments or documents reasonably considered necessary by Lender to
cause this Guaranty to be, become or remain valid and effective in accordance
with its terms.
6. PAYMENTS FREE AND CLEAR OF TAXES.All payments required to
be made by Guarantor hereunder shall be made to Lender free and clear of, and
without deduction for, any and all present and future taxes, withholdings,
levies, duties, and other governmental charges ("Taxes"), excluding such income
and franchise taxes thereof which would otherwise have been payable by Lender if
the Triton LLC that is the borrower under any SPV Indebtedness, as the case may
be, had paid the Obligations to Lender in accordance with the terms of any SPV
Indebtedness. Upon request by Lender, Guarantor shall furnish to Lender a
receipt for any Taxes paid by Guarantor pursuant to this Section 6 or, if no
Taxes are payable with respect to any payments required to be made by Guarantor
hereunder, either a certificate from each appropriate taxing authority or an
opinion of counsel acceptable to Lender, in either case stating that such
payment is exempt from or not subject to Taxes. If Taxes are paid by Lender in
the good faith belief that such taxes are owing, Guarantor will, upon demand of
Lender, and whether or not such Taxes shall be correctly or legally asserted,
indemnify Lender for such payments, together with any interest, penalties and
expenses in connection therewith plus interest thereon at the lesser of 10% or
the maximum rate under applicable law. Lender shall thereafter cooperate in a
commercially reasonable manner with Guarantor in seeking any refunds of such
taxes, interest, penalties and expenses which refunds and any interest thereon
shall be paid by Lender to Guarantor within five (5) business days of receipt by
Lender; provided, that in no event shall Lender be required to expend its own
funds in seeking any such refund and provided, further, that any expenses
incurred in connection therewith shall be paid by Guarantor.
7. MISCELLANEOUS.
7.1. Entire Agreement; Amendments. This Guaranty, together
with any documents, instruments and agreements with respect to SPV Indebtedness,
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constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements relating to a guaranty of
payment and performance of the Obligations and may not be amended or
supplemented except by a writing signed by Guarantor, Lender and Polaris.
7.2. Headings. The headings in this Guaranty are for
convenience of reference only and are not part of the substance of this
Guaranty.
7.3. Severability. In the event that any one or more of the
provisions contained in this Guaranty shall be determined to be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Guaranty shall not be in any way impaired.
7.4. Notices. All notices, demands, declarations and other
communications required by this Guaranty shall be in writing and shall be
effective (i) if given by facsimile, when transmitted, (ii) if given by
registered or certified mail, three (3) Business Days after being deposited with
the U.S. Postal Service, (iii) if given by courier, when received, or (iv) if
personally delivered, when so delivered, addressed:
(a) If to Lender at:
Triton Aviation Services II LLC
00 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: President
Telecopy Number: (000) 000-0000
With a copy to:
Polaris Investment Management Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention:
Telecopy Number: (000) 000-0000
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or to such other address as Lender may from time to time designate in writing to
Guarantor.
(b) If to Guarantor, at:
Triton Investments Limited
00 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: President
Telecopy Number: (000) 000-0000
or to such other address as Guarantor may from time to time designate in writing
to Lender.
(c) If to Polaris at:
c/o Polaris Investment Management Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: President
Telecopy Number: (000) 000-0000
With a copy to:
c/o Polaris Investment Management Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Portfolio Management
Telecopy Number: (000) 000-0000
or to such other address as Polaris may from time to time designate in writing
to Lender and Guarantor.
7.5. Binding Effect. This Guaranty shall bind Guarantor and
shall inure to the benefit of Lender and its respective successors and assigns.
Guarantor may not assign this Guaranty.
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7.6. Non-Waiver. The failure of Lender to enforce any right or
remedy hereunder, or promptly to enforce any such right or remedy, shall not
constitute a waiver thereof, nor give rise to any estoppel against Lender, nor
excuse Guarantor from its Obligations hereunder. Any waiver of any such right or
remedy by Lender must be in writing and signed by Lender.
7.7. Termination. This Guaranty shall terminate and be of no
further force or effect at such time as the Obligations shall be paid and
performed in full. Upon payment and performance in full of the Obligations,
Lender shall deliver to Guarantor such documents as Guarantor may reasonably
request to evidence such termination.
7.8. Governing Law. The terms of this Guaranty shall be
governed by, and shall be construed and enforced in accordance with, the laws of
the State of California (exclusive of any rules as to conflict of laws) and the
laws of the United States applicable therein. Guarantor hereby submits to
personal jurisdiction and waives any objection as to venue in the County of San
Francisco, State of California. Service of process on Guarantor in any action
arising out of or relating to this Guaranty shall be effective if mailed to
Guarantor in accordance with Section 7.4 hereof. Nothing herein shall preclude
Lender from bringing suit or taking other legal action in any other
jurisdiction.
7.9. Counterparts. This Guaranty may be executed in any number
of counterparts which shall individually and collectively constitute one
agreement.
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IN WITNESS WHEREOF, Guarantor has executed and delivered this
Guaranty as of the date first above written.
TRITON INVESTMENTS LIMITED
By: /S/ XXXXXX X. XXXXX
------------------------------
Name: XXXXXX X. XXXXX
Title: EXECUTIVE VICE PRESIDENT
Accepted and acknowledged by:
TRITON AVIATION SERVICES II LLC
By: Triton Aviation Services Limited,
its Manager
By: /S/ XXXX X. XXXXX
----------------------------
Name: XXXX X. XXXXX
Title: PRESIDENT
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Solely in its capacity as a
third party beneficiary,
POLARIS AIRCRAFT INCOME FUND II
By: Polaris Investment Management Corporation,
General Partner
By: /S/ XXXX X. XXXXXXX
----------------------------
Name: XXXX X. XXXXXXX
Title: VICE PRESIDENT
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