Exhibit 10.9
GUARANTY
This GUARANTY ("Guaranty") is made as of July 12, 2002, by TIMCO AVIATION
SERVICES, INC., a Delaware corporation formerly known as Aviation Sales Company
(the "Parent"), AVS/M-1, INC., a Delaware corporation, AVIATION SALES PROPERTY
MANAGEMENT CORP., a Delaware corporation, AVIATION SALES DISTRIBUTION SERVICES
COMPANY, a Delaware corporation, AVS/M-2, INC., a Delaware corporation,
WHITEHALL CORPORATION, a Delaware corporation, AVIATION SALES LEASING COMPANY, a
Delaware corporation, AVS/M-3, INC., an Arizona corporation, AVS/CAI, INC., a
Florida corporation, HYDROSCIENCE, INC., a Texas corporation, TIMCO ENGINEERED
SYSTEMS, INC., a Delaware corporation and AVSRE, L.P., a Delaware limited
partnership (each a "Guarantor" and, collectively, the "Guarantors"), 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 Notes" (as defined below).
WITNESSETH:
WHEREAS, the Borrowers have executed and delivered to the Lender those
certain Replacement Term Loan Notes dated of even date herewith (the "Term
Notes"), in renewal and replacement of the indebtedness evidenced by that
certain $13,000,000 Replacement Term Loan Note, from, among others, the
Borrowers in favor of the Lender, and incurred certain indebtedness thereunder
for which the Borrowers continue to be jointly and severally liable;
WHEREAS, each Guarantor acknowledges that it will benefit from the loans
made to the Borrowers by the Lender evidenced by the Term Notes;
WHEREAS, as a condition to renewing a portion of the loans evidenced by the
Term Notes to the Borrowers, the Lender has required that the Guarantors 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 parties hereto
hereby agree 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 Notes, the
Guarantors, jointly and severally, unconditionally guarantee the full and prompt
payment when due, whether at maturity or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of all of the indebtedness evidenced by
the Term Notes (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 Notes, whether or not
such interest is allowed or allowable as a claim in bankruptcy).
(ii) At any time after the occurrence of an Event of Default, the
Guarantors, jointly and severally, agree 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 Guarantors, jointly and severally, further agree 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 Guarantor relating to the Term
Notes, this Guaranty, any other agreements or documents executed and delivered
in connection with the Term Notes or 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 any
Guarantor's obligations hereunder and under the other Loan Documents to which a
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 Notes (the "Interest Rate"). Each Guarantor
hereby agrees that this Guaranty is an absolute guaranty of payment and is not a
guaranty of collection.
2. Obligations Unconditional. Each Guarantor hereby agrees that its
obligations under this Guaranty shall be unconditional, irrespective of:
(i) the validity, enforceability, avoidance or subordination of any
of the Obligations or any of the Loan Documents;
(ii) 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;
(iii) the election of any remedy by, or on behalf of, the Lender with
respect to all or any part of the Obligations;
(iv) 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,
(v) 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;
(vi) 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;
(vii) any borrowing or grant of a security interest by any Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;
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(viii) 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
(ix) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of any Borrower or any Guarantor.
3. Limitation of Obligation. Notwithstanding anything contained in this
Guaranty to the contrary, the obligations of each Guarantor hereunder shall in
no event exceed, at any time, the greater of (i) the aggregate amount of
proceeds theretofore received by or for the account of the Guarantor from the
proceeds of the loans, advances or other financial accommodations from time to
time made by the Lender to or for the account of the Borrowers minus the
aggregate of all prior payments made by such Guarantor pursuant to this Guaranty
and (ii) ninety-five percent (95%) of the lowest amount sufficient to (1) render
such 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 such 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 such 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 such 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 each Guarantor, and shall constitute
"Senior Debt" of each Guarantor, as defined in that (i) certain Indenture dated
as of February 17, 1998 by and among Parent, certain subsidiaries of Parent, and
SunTrust Bank, Central Florida, National Association as supplemented by that
certain Supplemental Indenture dated as of February 28, 2002 by and among
AVIATION SALES COMPANY, certain subsidiaries of AVIATION SALES COMPANY and
SunTrust Bank (formerly SunTrust Bank, Central Florida, National Association)
(the "SunTrust Indenture") and (ii) that certain Indenture dated February 28,
2002 among AVIATION SALES COMPANY, certain subsidiaries of AVIATION SALES
COMPANY, and HSBC Bank USA, as Trustee (the "HSBC Bank Indenture"), equal in
right of payment and on parity with all other "Senior Debt" of each Guarantor as
defined in the SunTrust Indenture and the HSBC Bank Indenture.
5. Enforcement, Application of Payment. Upon the occurrence of an Event of
Default, the Lender may proceed directly and at once, without notice, against
the Guarantors 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 Notes, the
Lender shall have the exclusive right to determine the application of payments
and credits, if any, from the Guarantors, any Borrower or from any other person
on account of the Obligations or any other liability of the Guarantors to the
Lender.
6. Waivers.
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(i) Each 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 such 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. Each 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, 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) Each Guarantor understands that if all or any part of the
Obligations is secured by real property, the Guarantors shall be liable for the
full amount of their liability under this Guaranty, notwithstanding foreclosure
of such real property by trustee sale or any other reason impairing the right of
the Guarantors or the Lender to proceed against any Borrower or any Borrower's
property. Each 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. Each 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 Guarantors. In addition, each 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 such 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.
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(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 Guarantors 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 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 any Guarantor hereunder.
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 any 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 any Guarantor, and (ii) any moneys, credits or other property
belonging to any Guarantor, at any time held by or coming into the possession of
the Lender or any of their respective affiliates.
8. Financial Information. Each 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 each
Guarantor hereby agrees that the Lender shall have no duty to advise the
Guarantors or any of them 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 any 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 any Guarantor.
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9. No Marshalling, Reinstatement. Each 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 any Guarantor or against
or in payment of any or all of the Obligations. Each Guarantor further agrees
that, to the extent that any Borrower, any 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 such
Borrower, such Guarantor, such other guarantor or any other person, or their
respective estates, trustees, receivers or any other party, including, without
limitation, such 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
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)
no Guarantor shall have any right of subrogation with respect to such
Obligations and (ii) each 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
each 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 Notes, 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, any 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 such Guarantor, as
applicable, specifying such waiver, and is signed by the party or parties
necessary to give such waiver under the Term Notes. 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 any 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 Guarantors irrespective of whether any Guarantor
was a party to the suit or action in which such determination was made.
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12. Effectiveness, Termination. This Guaranty shall become effective upon
its execution by the Guarantors. 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 Notes
cancelled. If, notwithstanding the foregoing, any Guarantor shall have any right
under applicable law to terminate or revoke this Guaranty, such 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 such 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 such Guarantor arising prior to receipt thereof
by the Lender. If the Lender grants loans or takes other action after any
Guarantor terminates or revokes this Guaranty as aforesaid, but before the
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 each
Guarantor and upon the successors and assigns of each Guarantor and shall inure
to the benefit of the Lender and its successors and assigns; all references
herein to any Borrower and any Guarantor shall be deemed to include their
respective successors and assigns. The successors and assigns of any 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. Officer Authority. The undersigned hereby certifies that he has all
necessary authority to grant and execute this Guaranty on behalf of the
respective Guarantors.
15. 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.
16. Personal Jurisdiction.
(i) EACH OF THE PARTIES HERETO 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. EACH GUARANTOR IRREVOCABLY DESIGNATES
AND APPOINTS XXXXX & XXXXXX, P.C., 0000 XXX XXXXXX, XXXXX 0000, XXXXXXX, XXXXX
00000, AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE PARTIES HERETO
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
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MANNER PROVIDED BY LAW. EACH GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) EACH GUARANTOR AGREES THAT THE LENDER SHALL HAVE THE RIGHT TO
PROCEED AGAINST SUCH 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. EACH 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. EACH GUARANTOR WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE LENDER MAY COMMENCE A
PROCEEDING DESCRIBED IN THIS SECTION.
17. Service of Process. EACH 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 GUARANTORS' NOTICE ADDRESS SPECIFIED BELOW,
SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. EACH 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.
18. 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.
19. Advice of Counsel. Each 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.
20. Waiver of Bond. Each 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 any Guarantor.
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21. 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.
If to the Borrowers:
c/o TIMCO Aviation Services, Inc.
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Financial Officer
Facsimile: 000-000-0000
with a copy to:
Akerman, Senterfitt & Edison, P.A.
Xxx Xxxxx Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: 305-374-5095
If to the Lender:
Bank of America, N.A.
Private Bank
000 Xxxxxxxxx, 0/xx/ Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Facsimile: 000-000-0000
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22. 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.
23. Subordination. Each Guarantor agrees that any and all claims of such
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 any Guarantor to ask, demand,
xxx for, take or receive any payment from any Borrower, all rights, liens and
security interests of such 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. No Guarantor shall 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 any Borrower 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 such Borrower to any Guarantor ("Borrower
Indebtedness") shall be paid or delivered directly to the Lender for application
on any of the Obligations, due or to become due, until the Obligations shall
have first been fully paid and satisfied in cash. Each 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 such Guarantor such proofs of claim and take such
other action, in the Lender's own name or in the name of such 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 any 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, such 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 such Guarantor where necessary), for application to the
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by such Guarantor as the property of the Lender. If any 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
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the same. Each 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, no Guarantor will assign or
transfer to any person any claim such Guarantor has or may have against any
Borrower.
24. 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.
25. 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 GUARANTORS
(OR BY THE BORROWERS OR THE GUARANTORS FOR THE BENEFIT OF THE LENDER) REPRESENT
THE FINAL AGREEMENT BETWEEN THE BORROWERS, THE GUARANTORS, 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.
26. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN THE GUARANTORS 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 SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED
IN ANY COURT HAVING JURISDICTION. THE GUARANTORS 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.
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(2) RESERVATION OF RIGHTS. NOTHING IN THIS SECTION 26 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.
27. Replacement Guaranty. This Guaranty is issued as a replacement for (but
not a novation of) the Guaranty dated May 24, 2001, executed by certain of the
Guarantors in favor of the Lender (the "Existing Guaranty"). Notwithstanding
anything herein to the contrary, each Guarantor that was not a party to the
Existing Guaranty assumes and agrees to be bound by the terms and conditions of
the Existing Guaranty.
[Signature Pages Follow]
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IN WITNESS WHEREOF, this Guaranty has been duly executed by each Guarantor
as of the day and year first set forth above.
TIMCO AVIATION SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVS/M-1, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVIATION SALES PROPERTY MANAGEMENT CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVIATION SALES DISTRIBUTION SERVICES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVS/M-2, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
13
WHITEHALL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVIATION SALES LEASING COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVS/M-3, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVS/CAI, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
HYDROSCIENCE, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
14
TIMCO ENGINEERED SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
AVSRE, L.P.
By: Aviation Sales Property Mangement Corp.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------------
Title: Treasurer
-----------------------------------------------
Acknowledged and agreed to as
of July 12, 0000
XXXX XX XXXXXXX, N.A.
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------------------------
Xxxxxxxx Xxxxxxx
Vice President
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