EXHIBIT 10.3
LIMITED GUARANTY
This LIMITED GUARANTY ("Guaranty") is made as of February 14, 2001, by
_______________________, an individual (the "Guarantor"), in favor of BANK OF
AMERICA, N.A., a national banking association (the "Lender"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to them in the "Term Note" (as defined below).
WITNESSETH:
WHEREAS, AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware
corporation, AEROCELL STRUCTURES, INC., an Arkansas corporation, AVS/M-2, INC.,
a Delaware corporation, WHITEHALL CORPORATION, a Delaware corporation, TRIAD
INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation, AVS/M-3, INC., an
Arizona corporation, CARIBE AVIATION, INC., a Florida corporation, AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation, AVIATION SALES LEASING COMPANY, a
Delaware corporation, and TIMCO ENGINE CENTER, INC., a Delaware corporation
(each a "Borrower" and collectively, the "Borrowers"), have executed and
delivered to the Lender that certain Senior Subordinated Term Loan Note dated of
even date herewith (the "Term Note") and incurred certain indebtedness
thereunder for which the Borrowers are jointly and severally liable;
WHEREAS, the Guarantor acknowledges that it will benefit from the loan
made to the Borrowers by the Lender under the Term Note;
WHEREAS, as a condition to extending the loan evidenced by the Term
Note to the Borrowers, the Lender has required that the Guarantor execute and
deliver this Guaranty for the benefit of the Lender on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby agrees as follows:
1. Guaranty.
(i) For value received and in consideration of any loan, advance or
financial accommodation of any kind whatsoever heretofore, now or hereafter
made, given or granted to the Borrowers by the Lender under the Term Note, the
Guarantor unconditionally guarantees the full and prompt payment when due,
whether at maturity or earlier, by reason of acceleration or otherwise, and at
all times thereafter, of twenty-five percent (25%) of all of the indebtedness
evidenced by the Term Note (such twenty-five percent (25%) portion being
referred to herein as the "Obligations") (including, without limitation,
interest accruing following the filing of a bankruptcy petition by or against
any Borrower, at the applicable rate specified in the Term Note, whether or not
such interest is allowed or allowable as a claim in bankruptcy, but excluding
any increase in the principal amount of the Term Note, whether by amendment or
otherwise, which is not consented to in writing by the Guarantor).
(ii) At any time after the occurrence and during the continuation of
an Event of Default, the Guarantor agrees to pay to the Lender, on demand and in
immediately available funds, the full amount of the Obligations (including any
portion thereof which is not yet due and payable). The Guarantor further agrees
to pay to the Lender and reimburse the Lender for, on demand and in immediately
available funds, (a) all losses (including, without limitation, lost profits),
fees, costs and expenses (including, without limitation, all court costs and
attorneys' and paralegals' fees, costs and expenses) paid or incurred by the
Lender in: (1) endeavoring to collect all or any part of the Obligations from,
or in prosecuting any action against, any Borrower or the Guarantor relating to
the Term Note, this Guaranty and any other documents securing this Guaranty
(collectively, the "Loan Documents"), or the transactions contemplated thereby,
(2) taking any action with respect to any security or collateral securing the
Obligations or the Guarantor's obligations hereunder and under the other Loan
Documents to which the Guarantor is a party; and (3) preserving, protecting or
defending the enforceability of, or enforcing, this Guaranty or its respective
rights hereunder (all such costs and expenses are hereinafter referred to as the
"Expenses") and (b) interest on (1) the Obligations which do not constitute
interest, (2) to the extent permitted by applicable law, the Obligations which
constitute interest, and (3) the Expenses, from the date of demand under this
Guaranty until paid in full at the per annum rate of interest described as the
default rate of interest in the Term Note (the "Interest Rate"). The Guarantor
hereby agrees that this Guaranty is an absolute guaranty of payment and is not a
guaranty of collection.
2. Obligations Unconditional. The Guarantor hereby agrees that his
obligations under this Guaranty shall be unconditional, irrespective of:
(1) the validity, enforceability, avoidance or subordination
of any of the Obligations or any of the Loan Documents;
(2) the absence of any attempt by, or on behalf of, the Lender
to collect, or to take any other action to enforce, all or any part of the
Obligations whether from or against any Borrower, any other guarantor of the
Obligations or any other person;
(3) the election of any remedy by, or on behalf of, the Lender
with respect to all or any part of the Obligations;
(4) the waiver, consent, extension, forbearance or granting of
any indulgence by, or on behalf of, the Lender with respect to any provision of
any of the Loan Documents,
(5) the failure of the Lender or any person acting for the
benefit of the Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations;
(6) the election by, or on behalf of, the Lender, in any
proceeding instituted under Chapter 11 of Title 11 of the United States Code (11
U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the application of Section
1111(b)(2) of the Bankruptcy Code;
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(7) any borrowing or grant of a security interest by any
Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;
(8) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of the Lender for repayment of all or
any part of the Obligations or any Expenses; or
(9) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of any Borrower or the Guarantor.
3. Limitation of Obligation. Notwithstanding anything contained in this
Guaranty to the contrary, the obligations of the Guarantor hereunder shall in no
event exceed, at any time, ninety-five percent (95%) of the lowest amount
sufficient to (1) render the Guarantor "insolvent", as that term is defined in
Section 101(31) of the Bankruptcy Code, Section 4 of the Uniform Fraudulent
Conveyance Act ("UFCA"), Section 2 of the Uniform Fraudulent Transfer Act
("UFTX') or any other similar fraudulent conveyance or transfer law or statute,
(2) leave the Guarantor with "unreasonably small capital", as that term is
defined in Section 548(a)(2)(ii) of the Bankruptcy Code or used in Section 5 of
the UFCA or any other similar fraudulent conveyance or transfer law or statute,
(3) leave the Guarantor with "unreasonably small" assets "in relation to the
business or transaction" as provided in Section 4(a)(2)(i) of the UFTA, or (4)
leave the Guarantor unable to pay its debts as they mature within the meaning of
Section 548(a)(2)(iii) of the Bankruptcy Code, Section 6 of the UFCA, Section
4(a)(2)(ii) of the UFTA or any other similar fraudulent conveyance or transfer
law or statute.
4. Ranking. The obligations evidenced by this Guaranty are secured by a
lien upon some or all of the assets of the Guarantor, and shall rank equal in
right of payment and on parity with all other indebtedness of the Guarantor.
5. Enforcement, Application of Payment. Upon the occurrence and during
the continuation of an Event of Default, the Lender may proceed directly and at
once, without notice, against the Guarantor to obtain performance of and to
collect and recover the full amount, or any portion, of the Obligations, without
first proceeding against any Borrower or any other person, or against any
security or collateral for the Obligations. Subject only to the terms and
provisions of the Term Note, the Lender shall have the exclusive right to
determine the application of payments and credits, if any, from the Guarantor,
any Borrower or from any other person on account of the Obligations or any other
liability of the Guarantor to the Lender.
6. Waivers.
(i) The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of receivership or
bankruptcy of any Borrower, protest or notice with respect to the Obligations,
all setoffs and counterclaims and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty, the benefits of all statutes of
limitation, and all other demands whatsoever (and shall not require that the
same be made on any Borrower as a condition precedent to
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the Guarantor's obligations hereunder), and covenants that this Guaranty will
not be discharged, except by complete payment (in cash) and performance of the
Obligations and any other obligations contained herein. The Guarantor further
waives all notices of the existence, creation or incurrence of new or additional
indebtedness, arising either from additional loans extended to the Borrowers or
otherwise (provided that this Guaranty shall not apply to any increases in the
principal amount of the Term Note without the written consent of the Guarantor),
and also waives all notices that the principal amount, or any portion thereof,
and/or any interest on any instrument or document evidencing all or any part of
the Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
collateral given to or for the benefit of the Lender to secure payment of all or
any part of the Obligations.
(ii) The Guarantor understands that if all or any part of the
Obligations is secured by real property, the Guarantor shall be liable for the
full amount of his liability under this Guaranty, notwithstanding foreclosure of
such real property by trustee sale or any other reason impairing the right of
the Guarantor or the Lender to proceed against any Borrower or any Borrower's
property. The Guarantor hereby waives, to the fullest extent permitted by law,
all rights and benefits under Section 2809 of the California Civil Code (or any
similar law in any other jurisdiction) purporting to reduce a guarantor's
obligation in proportion to the principal obligation. The Guarantor hereby
waives, to the fullest extent permitted by law, all rights and benefits under:
(a) Section 580a of the California Code of Civil Procedure (or any similar law
in any other jurisdiction) purporting to limit the amount of any deficiency
judgment which might be recoverable following the occurrence of a trustee's sale
under a deed of trust, (b) Section 580b of the California Code of Civil
Procedure (or any similar law in any other jurisdiction) providing that no
deficiency may be recovered on a real property purchase money obligation, (c)
Section 580d of the California Code of Civil Procedure (or any similar law in
any other jurisdiction) providing that no deficiency may be recovered on a note
secured by a deed of trust on real property in case such real property is sold
under the power of sale contained in such deed of trust, and (d) Section 726 of
the California Code of Civil Procedure (or any similar law in any other
jurisdiction) providing that only one form of action may be maintained to
enforce a mortgage on real property or indebtedness secured by a mortgage on
real property, if such sections, or any of them, have any application hereto or
any application to the Guarantor. In addition, the Guarantor hereby waives, to
the fullest extent permitted by law, without limiting the generality of the
foregoing or any other provision hereof, all rights and benefits under
California Civil Code Sections 2810, 2819, 2839, 2845, 2849, 2850, 2899, and
3433 (or any similar law in any other jurisdiction). The Guarantor waives all
rights and defenses arising out of an election of remedies by the Lender, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed the Guarantor's rights of
subrogation and reimbursement against the Borrowers by the operation of Section
580d of the California Code of Civil Procedure or otherwise.
(iii) The Lender, either itself or acting through any of its agents
or representatives, is hereby authorized, without notice or demand and without
affecting the liability of the Guarantor hereunder, from time to time, (a) to
renew, extend, accelerate or otherwise change the time for payment of, or other
terms relating to, all or any part of the Obligations, or to otherwise
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modify, amend, change, restate or supplement the terms of any of the Loan
Documents; (b) to accept partial payments on all or any part of the Obligations,
(c) to take and hold security or collateral for the payment of all or any part
of the Obligations, this Guaranty, or any other guaranties of all or any part of
the Obligations or other liabilities of the Borrowers, (d) to exchange, enforce,
waive and release any such security or collateral, (e) to apply such security or
collateral and direct the order or manner of sale thereof as in their discretion
they may determine; (f) to settle, release, exchange, enforce, waive, compromise
or collect or otherwise liquidate all or any part of the Obligations, this
Guaranty, any other guaranty of all or any part of the Obligations, and any
security or collateral for the Obligations or for any such guaranty. Any of the
foregoing may be done in any manner, without affecting or impairing the
obligations of the Guarantor hereunder; provided, however, that this Guaranty
shall not apply to any increases in the principal amount of the Term Note
without the written consent of the Guarantor.
7. Setoff. At any time after all or any part of the Obligations have
become due and payable (by acceleration or otherwise), the Lender may, without
notice to the Guarantor and regardless of the acceptance of any security or
collateral for the payment hereof, appropriate and apply toward the payment of
all or any part of the Obligations (i) any indebtedness due or to become due
from the Lender to the Guarantor, and (ii) any moneys, credits or other property
belonging to the Guarantor, at any time held by or coming into the possession of
the Lender or any of their respective affiliates.
8. Financial Information. The Guarantor hereby assumes responsibility
for keeping itself informed of the financial condition of the Borrowers and any
and all endorsers and/or other guarantors of all or any part of the Obligations,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations, or any part thereof, that diligent inquiry would reveal, and the
Guarantor hereby agrees that the Lender shall have no duty to advise the
Guarantor of information known to the Lender regarding such condition or any
such circumstances. In the event the Lender, in its sole discretion, undertakes
at any time or from time to time to provide any such information to the
Guarantor, the Lender shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose any
information which the Lender, pursuant to accepted or reasonable commercial
finance or banking practices, wishes to maintain confidential or (iii) to make
any other or future disclosures of such information or any other information to
the Guarantor.
9. No Marshalling, Reinstatement. The Guarantor consents and agrees
that neither the Lender nor any person acting for or on behalf of the Lender
shall be under any obligation to xxxxxxxx any assets in favor of the Guarantor
or against or in payment of any or all of the Obligations. The Guarantor further
agrees that, to the extent that the Borrower, the Guarantor or any other
guarantor of all or any part of the Obligations makes a payment or payments to
the Lender, or the Lender receives any proceeds of any collateral for the
Obligations, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to any Borrower, the Guarantor, such other guarantor or
any other person, or their respective estates, trustees, receivers or any other
party, including, without limitation, the Guarantor, under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or repayment, the part of the Obligations which has been paid, reduced
or satisfied by such
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amount shall be reinstated and continued in full force and effect as of the time
immediately preceding such initial payment, reduction or satisfaction.
10. Subrogation. Until the Obligations have been paid in full, in cash,
(i) Guarantor shall not have any right of subrogation with respect to such
Obligations and (ii) Guarantor waives any right to enforce any remedy which the
Lender now has or may hereafter have against any Borrower, any endorser or any
guarantor of all or any part of the Obligations or any other person, and the
Guarantor waives any benefit of, and any right to participate in, any security
or collateral given to or for the benefit of the Lender to secure the payment or
performance of all or any part of the Obligations.
11. Enforcement, Amendments, Waivers. No delay on the part of any of
the Lender in the exercise of any right or remedy arising under this Guaranty,
the Term Note, any of the other Loan Documents or otherwise with respect to all
or any part of the Obligations or any other guaranty of or security for all or
any part of the Obligations shall operate as a waiver thereof, and no single or
partial exercise by any such person of any such right or remedy shall preclude
any further exercise thereof. No modification or waiver of any of the provisions
of this Guaranty shall be binding upon the Lender, except as expressly set forth
in a writing duly signed and delivered by the party making such modification or
waiver. Failure by the Lender at any time or times hereafter to require strict
performance by any Borrower, the Guarantor, any other guarantor of all or any
part of the Obligations or any other person of any of the provisions,
warranties, terms and conditions contained in any of the Loan Documents now or
at any time or times hereafter executed by such persons and delivered to the
Lender shall not waive, affect or diminish any right of the Lender at any time
or times hereafter to demand strict performance thereof and such right shall not
be deemed to have been waived by any act or knowledge of the Lender, or its
agents, officers or employees, unless such waiver is contained in an instrument
in writing, directed and delivered to such Borrower or the Guarantor, as
applicable, specifying such waiver, and is signed by the party or parties
necessary to give such waiver under the Term Note. No waiver of any Event of
Default by the Lender shall operate as a waiver of any other Event of Default or
the same Event of Default on a future occasion, and no action by the Lender
permitted hereunder shall in any way affect or impair the Lender's rights and
remedies or the obligations of the Guarantor under this Guaranty. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest owing by the Borrowers to the Lender shall be
conclusive and binding on the Guarantor irrespective of whether the Guarantor
was a party to the suit or action in which such determination was made.
12. Effectiveness, Termination. This Guaranty shall become effective
upon its execution by the Guarantor. This Guaranty shall continue in full force
and effect and may not be terminated or otherwise revoked until the Obligations
shall have been fully paid (in cash) and discharged and the Term Note cancelled.
If, notwithstanding the foregoing, the Guarantor shall have any right under
applicable law to terminate or revoke this Guaranty, the Guarantor agrees that
such termination or revocation shall not be effective until a written notice of
such revocation or termination, specifically referring hereto, signed by the
Guarantor, is actually received by the Lender. Such notice shall not affect the
obligations of any other guarantor or any right or power of the Lender to
enforce rights against the Guarantor arising prior to receipt thereof by the
Lender. If the Lender grants loans or takes other action after the Guarantor
terminates or revokes this Guaranty as aforesaid, but before the
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Lender receives such written notice, the rights of the Lender with respect
thereto shall be the same as if such termination or revocation had not occurred.
13. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor and upon the heirs, personal representatives, successors and assigns
of the Guarantor and shall inure to the benefit of the Lender and its successors
and assigns; all references herein to any Borrower and the Guarantor shall be
deemed to include their respective successors and assigns and the Guarantor's
heirs and personal representatives. The successors and assigns of the Guarantor
and any Borrower shall include, without limitation, their respective receivers,
trustees and debtors-in-possession. All references to the singular shall be
deemed to include the plural where the context so requires.
14. Governing Law. THIS GUARANTY SHALL BE INTERPRETED, AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
15. Personal Jurisdiction.
(i) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY TEXAS STATE
COURT OR FEDERAL COURT SITTING IN TEXAS AND ANY COURT HAVING JURISDICTION OVER
APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT
OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE GUARANTOR AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE GUARANTOR AGREES THAT THE LENDER SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE AGENT TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE LENDER. THE GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE LENDER TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE LENDER. THE GUARANTOR WAIVES ANY
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OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE LENDER MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
16. Service of Process. THE GUARANTOR IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE GUARANTOR'S NOTICE ADDRESS
SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. THE GUARANTOR
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED UPON THE GROUNDS OF FORUM NON CONVENIENS) WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET
FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE LENDER TO BRING
PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
17. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS GUARANTY WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES HERETO TO THE WAIVER OF SUCH PARTY'S RIGHT TO TRIAL BY JURY.
18. Advice of Counsel. The Guarantor confirms that it has obtained its
own counsel with respect to the terms of this Guaranty and represents and
warrants to the Lender that it has discussed this Guaranty with its counsel.
19. Waiver of Bond. The Guarantor waives the posting of any bond
otherwise required of the Lender in connection with any judicial process or
proceeding to realize on any collateral or other security for the Obligations,
to enforce any judgment or other court order entered in favor of the Lender, or
to enforce by specific performance, temporary restraining order, or preliminary
or permanent injunction, this Guaranty or any other agreement or document
between the Lender and the Guarantor.
20. Notices. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, sent by
facsimile transmission or courier service or United States certified mail and
shall be deemed to have been given when delivered in person or by courier
service, upon transmission thereof in the case of a facsimile transmission, or
four (4) Business Days after deposit in the United States mail with postage
prepaid and properly addressed. Notices to the Lender shall not be effective
until received by the Lender. For purposes hereof, the addresses of the parties
hereto shall be as set forth below, or at such other address as may be
designated by such party in a written notice to the Lender.
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if to the Guarantor, as follows:
_______________________________
_______________________________
Houston, Texas_________________
Attention:_____________________
Telecopy:______________________
if to the Lender, as follows:
Bank of America, N.A.
Private Bank
000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
Telecopy: 000-000-0000
21. Severability. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
22. Subordination. The Guarantor agrees that any and all claims of the
Guarantor against any Borrower, any endorser or any other guarantor of all or
any part of the Obligations, or against any of their respective properties,
shall be subordinate and subject in right of payment to the prior payment, in
full and in cash, of all Obligations (including, without limitation, interest
accruing following the filing of a bankruptcy petition by or against any
Borrower, at the Interest Rate, whether or not such interest is allowed as a
claim in bankruptcy). Notwithstanding any right of the Guarantor to ask, demand,
xxx for, take or receive any payment from any Borrower, all rights, liens and
security interests of the Guarantor, whether now or hereafter arising and
howsoever existing, in any assets of any Borrower (whether constituting part of
the collateral or other security given to secure payment of all or any part of
the Obligations or otherwise) shall be and hereby are subordinated to the rights
of the Lender in those assets. The Guarantor shall not have any right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Obligations shall have
been fully paid and satisfied and all financing arrangements between the
Borrowers and the Lender have been terminated. If all or any part of the assets
of any Borrower, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of any Borrower, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding, or if the business of any Borrower is
dissolved or if substantially all of the assets of the Borrowers are sold, then,
and in any such event, any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of any Borrower to the
Guarantor ("Borrower Indebtedness") shall be paid or delivered directly to the
Lender for application on any of the
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Obligations, due or to become due, until the Obligations shall have first been
fully paid and satisfied in cash. The Guarantor irrevocably authorizes and
empowers the Lender to demand, xxx for, collect and receive every such payment
or distribution and give acquittance therefor and to make and present for and on
behalf of the Guarantor such proofs of claim and take such other action, in the
Lender's own name or in the name of the Guarantor or otherwise, as the Lender
may deem necessary or advisable for the enforcement of this Guaranty. The Lender
may vote such proofs of claim in any such proceeding, receive and collect any
and all dividends or other payments or disbursements made thereon in whatever
form the same may be paid or issued and apply the same on account of any of the
Obligations. Should any payment, distribution, security or instrument or
proceeds thereof be received by the Guarantor upon or with respect to the
Borrower Indebtedness prior to the satisfaction of all of the Obligations and
the termination of all financing arrangements between the Borrower and the
Lender, the Guarantor shall receive and hold the same in trust, as trustee, for
the benefit of the Lender and shall forthwith deliver the same to the Lender, in
precisely the form received (except for the endorsement or assignment of the
Guarantor where necessary), for application to the Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Guarantor as the
property of the Lender. If the Guarantor fails to make any such endorsement or
assignment to the Lender, the Lender or any of its officers or employees are
hereby irrevocably authorized to make the same. The Guarantor agrees that until
the Obligations have been paid in full (in cash) and satisfied and all financing
arrangements between the Borrowers and the Lender have been terminated, the
Guarantor will not assign or transfer to any person any claim the Guarantor has
or may have against any Borrower.
23. Counterparts. This Guaranty may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute one and the same
agreement.
24. NO ORAL AGREEMENTS. A LOAN TRANSACTION IN WHICH THE AMOUNT INVOLVED
EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING
AND SIGNED BY THE PARTY TO BE BOUND OR BY THAT PARTY'S AUTHORIZED
REPRESENTATIVE. THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY
PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH
WRITINGS. THIS GUARANTY (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER
WRITTEN LOAN DOCUMENTS EXECUTED BY THE BORROWERS, THE LENDER OR THE GUARANTOR
(OR BY THE BORROWERS OR THE GUARANTOR FOR THE BENEFIT OF THE LENDER) REPRESENT
THE FINAL AGREEMENT BETWEEN THE BORROWERS, THE GUARANTOR, AND THE LENDER AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
25. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN THE GUARANTOR AND THE
LENDER INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, INCLUDING ANY CLAIM BASED ON OR ARISING
FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE
WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE
LAW). THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC. (J.A.M.S.), AND
THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE
SPECIAL RULES
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SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. THE GUARANTOR OR THE LENDER MAY BRING AN ACTION, INCLUDING
A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS GUARANTY APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
(1) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
THE BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS GUARANTY
AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP
TO AN ADDITIONAL 60 DAYS.
(2) RESERVATION OF RIGHTS. NOTHING IN THIS SECTION 25 SHALL BE DEEMED
TO (i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS GUARANTY; OR
(ii) BE A WAIVER BY THE LENDER OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii)
LIMIT THE RIGHT OF THE LENDER (A) TO EXERCISE SELF HELP REMEDIES SUCH
AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL; OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF,
WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE LENDER MAY
EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN
SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
GUARANTY. NEITHER THE EXERCISE OF SELF HELP REMEDIES, NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL
OR ANCILLARY REMEDIES, SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
26. Headings. Section headings in this Guaranty are included for
convenience only and shall not constitute a part of this Guaranty for any other
purpose.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of the day and year first set forth above.
GUARANTOR:
Acknowledged and agreed to as ________________________________________
of February 14, 2001 Name:___________________________________
BANK OF AMERICA, N.A.
By:
-------------------------------------
Xxxxxxxx Xxxxxxx
Vice President
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