EXHIBIT 10.2
AMENDED AND RESTATED GUARANTY
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This Amended And Restated Guaranty, dated as of July 29, 2005, between
FIRST AVIATION SERVICES, INC., a Delaware corporation with an office at 00
Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Guarantor") and XXXXXX UNITED
BANK, a state banking corporation with an office located at 000 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Lender").
Recitals
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WHEREAS, AEROSPACE PRODUCTS INTERNATIONAL, INC., a Delaware corporation
(the "Borrower") and Bank entered into a Commercial Revolving Loan And Security
Agreement executed as of March 30, 2000, as amended by that certain First
Amendment To Commercial Revolving Loan And Security Agreement dated as of August
30, 2000, and as further amended by that certain Second Amendment To Commercial
Revolving Loan And Security Agreement dated as of April 27, 2001, and as further
amended by that certain Third Amendment To Commercial Revolving Loan And
Security Agreement dated as of June 28, 2001, and as further amended by that
certain Fourth Amendment To Commercial Revolving Loan And Security Agreement
dated as of July 31, 2002, and as further amended by that certain Fifth
Amendment To Commercial Revolving Loan And Security Agreement dated as of July
31, 2003, and as further amended by that certain Sixth Amendment To Commercial
Revolving Loan And Security Agreement dated as of July 31, 2004, as further
amended and restated by that Amended And Restated Commercial Revolving Loan And
Security Agreement dated as of July 29, 2005 which Loan Agreement provided,
inter alia, for a commercial revolving loan from the Bank to the Borrower in the
original amount of up to TWENTY FIVE MILLION DOLLARS ($25,000,000) ("Loan 1") as
it may be amended or modified further from time to time (the "Loan Agreement"),
providing, subject to the terms and conditions thereof, for extensions of credit
in the amount of up to $25,000,000 to be made by the Bank to the Borrower for
the benefit of the Borrower and the Guarantor; and
WHEREAS, in connection with the Loan Agreement, the Borrower executed
and delivered to Bank that certain Commercial Revolving Promissory Note from
Borrower to Bank in the original amount of up to TWENTY MILLION DOLLARS
($20,000,000) executed March 30, 2000, as amended by the Second Amendment To
Commercial Revolving Loan And Security Agreement dated as of April 27, 2001, and
as further amended by that certain Third Amendment To Commercial Revolving Loan
And Security Agreement dated as of June 28, 2001, and as further amended by that
certain Fourth Amendment To Commercial Revolving Loan And Security Agreement
dated as of July 31, 2002, and as further amended by that certain Fifth
Amendment To Commercial Revolving Loan And Security Agreement dated as of July
31, 2003, and as further amended by that certain Sixth Amendment To Commercial
Revolving Loan And Security Agreement dated as of July 31, 2004, and as further
amended and restated by that Amended And Restated Commercial Revolving
Promissory Note dated as of July 29, 2005, in an amount of up to TWENTY-FIVE
MILLION DOLLARS ($25,000,000) ("Note 1");
WHEREAS, in connection with the Loan Agreement, the Borrower also
executed and delivered that certain Line Of Credit Promissory Note dated as of
July 29, 2005, in the original amount of up to $3,000,000 ("Note 2") which
provides for, among other things, a one-time advance as provided therein and in
the Loan Agreement ("Loan 2"; Loan 1 and Loan 2 are collectively hereinafter
referred to as the "Loans", and Note 1 and Note 2 are collectively hereinafter
referred to as the "Notes");
WHEREAS, it is required by the Loan Agreement, that the Guarantor
execute and deliver this Guaranty whereby the Guarantor shall guarantee the
payment when due of all principal, interest and other amounts that shall be at
any time payable by the Borrower under the Loan Agreement, the Notes and the
other loan documents executed in connection therewith (collectively, the "Loan
Documents"); and
WHEREAS, in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower may
in the future provide, to Guarantor, whether directly or indirectly, and in
order to induce the Lender to enter into the Loan Agreement, the Guarantor is
willing to guarantee the obligations of the Borrower under the Loan Agreement,
the Notes and the other Loan Documents.
Definitions
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Unless otherwise indicated, capitalized terms used herein shall have
the respective meanings ascribed to such terms in the Loan Agreement. As used
herein, the following words and terms shall have the following meanings:
(a) "Contingent Liability" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes, or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss), the debt,
obligation or other liability of any other Person (other than by endorsements of
negotiable instruments in the course of collection), or guarantees the payment
of dividends or other distributions upon the shares of any other Person. The
amount of the obligor's obligation under any Contingent Liability shall be
deemed to be the outstanding principal amount (or maximum permitted principal
amount, if larger) of the debt, obligation or other liability guaranteed thereby
(subject to any limitation set forth therein).
(b) "Material Adverse Effect" means a material adverse effect on (i)
the business, operations, property or condition (financial or otherwise) of the
Guarantor taken as a whole, (ii) the ability of the Guarantor to perform its
obligations under this Guaranty or any of the other Loan Documents, or (iii) the
validity or enforceability of this Guaranty or any of the other Loan Documents
or the rights or remedies of the Bank.
(c) "Leverage Ratio" for any period shall mean the ratio of (i) Total
Liabilities to (ii) Tangible Net Worth.
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(d) "Tangible Net Worth" shall mean, as at any date the sum of the
Capital Stock and paid-in surplus, plus retained earnings (or minus accumulated
deficit) of the Guarantor and its Subsidiaries on a consolidated basis minus
intangible assets (including, without limitation, franchises, patents and patent
applications, trademarks and brand names, goodwill, research and development
expenses, unamortized debt discount and expense, and all write-ups in the book
value of any asset).
(e) "Total Liabilities" shall mean at any time of determination, amount
equal to all liabilities of the Guarantor and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
Agreement
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In consideration of the Recitals, which are incorporated by reference
and the representations, covenants and warranties contained herein, the parties,
intending to be bound legally, agree as follows:
1. Guaranty. The Guarantor unconditionally guaranties the punctual
payment when due, whether at stated maturity, by acceleration or otherwise, of
the obligations of the Borrower under the Notes and under any amendment,
modification, renewal, extension, substitution or replacement thereof or
thereto, whether for principal, interest, fees, expenses or otherwise and all
expenses incurred by the Lender in enforcing any of its rights under this
Guaranty (such obligations being referred to collectively as the "Obligations").
2. Guaranty Absolute.
(a) The Guarantor guaranties that the Obligations will be paid strictly
in accordance with the terms thereof regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Lender with respect thereto. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Obligations or
any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the Obligations; or
(iii) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any other
guaranty, for any of the Obligations.
(b) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Obligations is
rescinded or must otherwise be returned by the Lender due to the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
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3. Subrogation; Contribution. The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Obligations shall have been
paid in full. If any amount shall be paid to the Guarantor on account of such
subrogation rights or by way of contribution or indemnification at any time when
all the Obligations shall not have been paid in full, such amount shall be held
in trust for the benefit of the Lender and shall forthwith be paid to the Lender
to be credited and applied upon the Obligations, whether matured or unmatured,
in accordance with the terms of the Obligations. If the Guarantor shall make
payment to the Lender of all or any part of the Obligations and all the
Obligations shall be paid in full, the Lender will, at the Guarantor's request,
execute and deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor.
4. Affirmative Covenants. The Guarantor covenants and agrees that so
long as this Guaranty shall remain in effect and so long as the Obligations
shall remain unpaid, the Guarantor shall:
4.1 Access to Records and Premises. Keep adequate records and
books of account, in which complete entries will be made in accordance with GAAP
consistently applied with prior years, reflecting all financial transactions of
the Guarantor. At any reasonable time during normal business hours and upon
reasonable prior written notice, from time to time, permit the Lender or any
agents or representatives thereof, for the purpose of ascertaining whether or
not each and every provision hereof and of any related documents, instrument or
document is being performed and to make reasonable examinations and make
reasonable number of copies of and abstracts from the records and books of
account of, and visit, examine and inspect the properties of, the Lender and to
discuss the affairs, finances and accounts of the Lender with the President, the
Directors and the chief financial officer or the Lender's management, including,
without limitation, permitting the Lender or its agents or representatives to
conduct periodic audits of the Guarantor at the Guarantor's reasonable expense,
as often as the Lender may reasonably request, but not, in any event, more than
once every six (6) months. The Lender agrees to exercise its rights under this
Section 4.1 in a manner which will not unreasonably interfere with the business
of the Guarantor.
4.2. Financial Statements; Reports. Furnish to the Lender:
(a) intentionally deleted;
(b) intentionally deleted;
(c) Quarterly Covenant Compliance Certificates, to be
submitted within thirty (30) days following April 30,
July 31, October 30 and January 31;
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(d) Copies of Guarantor's Form 10-K and 10-Q to be
submitted within fifteen (15) days of filing with the
Securities and Exchange Commission; and
(e) intentionally deleted.
4.3. Notice Requirements. Furnish to Lender:
(a) Within five (5) days of a formal proposal made to the
Board of Directors of the Guarantor, notification of
any proposed or pending change in the senior executive
management or corporate structure of the Guarantor;
(b) Written notification within seven (7) Business Days of
any Material Adverse Change in the financial condition
of the Guarantor; and
(c) Written notification within ten (10) Business Days of
becoming aware of any Event of Default, or any
occurrence but for the giving of notice on the passage
of time would constitute an Event of Default.
4.4. Primary Bank. Maintain its primary operating accounts with
the Lender.
4.5 ERISA Reports. Comply in all material respects with the
provisions of ERISA applicable to any Plan maintained by the Guarantor and
furnish to the Lender as soon as possible, and in any event within ten (10) days
after the Guarantor knows or has reason to know that any Reportable Event with
respect to any Plan has occurred, a statement of the chief financial officer of
the Guarantor setting forth details as to such Reportable Event and the action
which the Guarantor proposes to take with respect thereto.
4.6 Litigation. Furnish to Lender within thirty (30) days after
the commencement thereof, notice of all actions, suits and proceedings before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, the subject matter of which may result in
an adverse decision affecting the Guarantor in an amount which would have a
Material Adverse Effect.
5. Representations and Warranties. The Guarantor represents and
warrants to the Lender as follows:
(a) The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the state indicated at the beginning of
this Guaranty.
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(b) The Guarantor is qualified as a foreign corporation in each state
in which the character of its properties or the nature of its business requires.
(c) The execution, delivery and performance by the Guarantor of this
Guaranty has been duly authorized by all necessary corporate action and does not
and will not:
(i) require any consent or approval of the stockholders of
the Guarantor;
(ii) contravene the Guarantor's certificate of incorporation
or by-laws;
(iii) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Guarantor;
(iv) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other material agreement,
lease, document or instrument to which the Guarantor is a party or by
which it or its respective properties may be bound or affected;
(v) result in or require the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance of any nature (other than arising under any
document delivered to the Lender in connection herewith) upon or with
respect to any of the properties now owned or hereafter acquired by
the Guarantor; or
(vi) render the Guarantor "insolvent" within the meaning of
such term as defined in ss. 101 of Title 11 of the United States Code
or ss. 2 of either the Uniform Fraudulent Transfer Act or the Uniform
Fraudulent Conveyance Act, as each is amended from time to time
(d) The Guarantor is not in default under any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award having
applicability to the Guarantor or any indenture, agreement, lease, document or
instrument to which the Guarantor is a party or by which it or its respective
properties may be bound or affected;
(e) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Guarantor of this Guaranty.
(f) This Guaranty is the legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms.
(h) There is no pending or threatened action or proceeding affecting
the Guarantor before any court, governmental agency or arbitrator which may
materially and adversely affect the financial condition or operations of the
Guarantor.
(i) The Guarantor has filed all federal, state and municipal tax
returns required to be filed and has paid all taxes shown thereon to be due,
including interest and penalties, or provided adequate reserves for payment
thereof.
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(j) No information, exhibit or report furnished by the Guarantor to the
Lender in connection with the negotiation of this Guaranty, or any other
document executed by the Guarantor, contains or contained any material
misstatement of fact or omitted to state a material fact necessary to make the
statements contained therein not misleading.
6. Covenants. The Guarantor covenants and agrees that so long as this
Guaranty shall remain in effect and so long as the Obligations shall remain
unpaid, the Guarantor will not, directly or indirectly, without the written
consent of the Lender, which in the case of Section 6.2 and 6.5, shall not be
unreasonably withheld.
6.1. Leverage Ratio. Permit the ratio of its Total Liabilities to
Tangible Net Worth to be more than 1.25 to 1.0 for any fiscal quarter of the
Guarantor, measured quarterly.
6.2. Borrowing. Create, incur, assume or suffer to exist any
liability for Indebtedness, except Indebtedness under the Notes and Loan
Documents.
6.3. Merger and Acquisition or Sale of Property. Consolidate with,
be acquired by, or merge into or with any Person, or sell, lease or otherwise
dispose of all or substantially all of its properties or any of its capital
stock, or acquire all or substantially all of the stock or property of any
person, or permit any Subsidiary to do so.
6.4. Business Changes. Materially change the nature of its
business as conducted by the Guarantor and its Subsidiaries taken as a whole on
the date hereof, or alter or modify its corporate name, structure or status
(including, without limitation, its tax status) or alter its accounting
principles, treatment or recording practices, except as permitted or required by
GAAP, the SEC or NASDAQ or permit any Subsidiary so to do.
6.5. Contingent Liabilities. Assume, guaranty, endorse or
otherwise become liable for any Indebtedness or Contingent Liability of any
Person, except as required by this Agreement and by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
6.6. Investment, Loan, Guaranties, Revolving Loan. Intentionally
Deleted.
6.7. Change of Control. Permit a Change in Control of the
Borrower.
6.8. Change Name or Location. Change the Borrower's names or
conduct the Borrower's businesses under any trade name or style other than as
hereinabove set forth or change its chief executive office, place of business or
the present locations of its business assets or records relating thereto from
the address set forth in the first paragraph of this Agreement.
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6.9. Certificate of Incorporation and By-laws. Amend or otherwise
modify its certificate of incorporation or by-laws, or permit any Subsidiary so
to do, in any way which would adversely and materially affect the interest of
the Lender under any of the Loan Documents or the obligations of the Guarantor
or Borrower under the Loan Documents.
7. Continuing Guaranty; Transfer of Note. This Guaranty is a
continuing guaranty and shall:
(a) remain in full force and effect until payment in full of the
Obligations and all other amounts payable under this Guaranty;
(b) be binding upon the Guarantor, its successors and assigns; and
(c) inure to the benefit of and be enforceable by the Lender, and its
respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), the
Lender may assign or otherwise transfer the Notes or any of the Obligations held
by it to any other person or entity, and such other person or entity shall
thereupon become vested with all the rights in respect thereof granted to the
Lender herein or otherwise.
8. Amendments. No amendment or waiver of any provision of this
Guaranty and no consent to any departure by the Guarantor there from shall in
any event be effective unless the same shall be in writing and signed by the
Lender.
9. Addresses for Notices. Any notice provided for under this Agreement
shall be in writing and shall be effective upon receipt or upon failure of the
addressee to accept delivery if and when mailed by registered or certified mail,
postage prepaid, or express parcel service, addressed to such party at such
address. Any party and any representative designated below may, by notice to the
other in the manner provided herein, change its address for receiving such
notices. All notices and consents on behalf of any party hereto shall be signed
by such party and shall be sent:
If to the Guarantor:
First Aviation Services, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxx, CFO
If to the Lender:
XXXXXX UNITED BANK
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxx
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10. Severability. If any clause or provision of this Guaranty is
determined to be illegal, invalid or unenforceable under any present or future
law by the final judgment of a court of competent jurisdiction, the remainder of
this Guaranty will not be affected thereby.
11. Headings. Section headings are for convenience of reference only,
and shall not affect the interpretation or meaning of any provision of this
Guaranty.
12. Entire Agreement. This Guaranty constitutes the entire agreement
between the parties, and supersedes all prior discussions and negotiations
relating to the subject matter hereof. The terms of this Guaranty cannot be
changed or terminated orally, and shall be deemed effective as of the date
accepted by the Lender by its duly authorized officer. This Guaranty may not be
amended or terminated except by a writing signed by the party against whom
enforcement thereof is sought.
13. Successors and Assigns. This Guaranty shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Guarantor shall not assign this Guaranty, or any
related document, or any of its rights without the prior written consent of the
Lender.
14. Waiver; Failure or Delay not a Waiver. The Guarantor waives
promptness, diligence, notice of acceptance, notice or presentment, demand or
protest and any other notice with respect to any of the Obligations and this
Guaranty and any requirement that the Lender exhaust any right or take any
action against the Borrower or any other person or entity or any collateral.
No delay or omission by the Lender to exercise any right hereunder shall impair
any such right, and any such delay or omission shall not be construed to be a
waiver thereof. A waiver of any single breach of default hereunder shall not be
deemed a waiver of any other breach or default. Any waiver, amendment to,
consent or approval under this Guaranty by the Lender must be in writing to be
effective and must be signed by the Lender.
15. Governing Law; Consent to Jurisdiction. This Guaranty is, and shall
be deemed to be, a contract entered into under and pursuant to the laws of the
State of Connecticut and shall be in all respects governed, construed, applied
and enforced in accordance with the laws of said State; and no defense given or
allowed by the laws of any other State or Country shall be interposed in any
action or proceeding hereon unless such defense is also given or allowed by the
laws of the State of Connecticut. The undersigned irrevocably appoints each and
every officer of the undersigned as its attorneys upon whom may be served any
notice, process or pleading in any action or proceeding against it arising out
of or in connection with this Guaranty or any other Loan Document (as defined in
the Loan Agreement). The undersigned hereby consents that any action or
proceeding against it may be commenced and maintained in any court within the
State of Connecticut or in the United States District Court for the District of
Connecticut or, at the option of Bank, any court in which Bank shall initiate
legal or equitable proceedings and which has subject matter jurisdiction over
the matter in controversy, and that such action or proceeding may be commenced
by service of process on any such officer. The undersigned agrees that the
courts of the State of Connecticut and the United States District Court for the
District of Connecticut shall have jurisdiction with respect to the subject
matter hereof and the person of the undersigned. The undersigned agrees not to
assert any defense to any proceeding initiated by Bank based upon improper venue
or inconvenient forum.
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16. Other Guarantors. The Guarantor acknowledges that other individuals
or entities may also guaranty the liabilities of the Borrower (the "Other
Guarantors") and that it is unconditionally delivering this Guaranty to the
Lender. The Guarantor further acknowledges that the failure of any of the Other
Guarantors to execute and deliver their respective guaranties or the discharge
of any of the Other Guarantors of their respective guarantied obligations shall
not discharge the liability of the Guarantor.
17. THE GUARANTOR ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THE NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY OTHER
STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY
DESIRE TO USE, AND FURTHER, WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS GUARANTY THE GUARANTOR ACKNOWLEDGES THAT IT MAKES THIS
WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
18. THE GUARANTOR WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
ACTION, PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THIS GUARANTY OR THE FINANCING TRANSACTION OF WHICH THIS GUARANTY IS
A PART OR THE DEFENSE OR ENFORCEMENT OF ANY OF THE HOLDER'S RIGHTS AND REMEDIES
IN CONNECTION THEREWITH. THE GUARANTOR ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER EXTENSIVE CONSIDERATION OF
THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
date and year above written.
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/s/ Xxxxxx X. Xxxxxxxx FIRST AVIATION SERVICES, INC
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Xxxxxx X. Xxxxxxxx By /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
--------------------------- Its Chief Financial Officer
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STATE OF CONNECTICUT )
) ss. Fairfield
COUNTY OF FAIRFIELD )
On this the 29th day of July, 2005, before me, the undersigned officer,
personally appeared XXXXXX XXXXXXXXXX, who acknowledged himself to be the duly
authorized Chief Financial Officer of FIRST AVIATION SERVICES, INC., a Delaware
corporation, and that he, as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained and acknowledged the
same to be his free act and deed individually and as such officer, and the free
act and deed of the corporation.
IN WITNESS WHEREOF, I hereunto set my hand.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission Expires:
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