EXHIBIT 10.29
GUARANTY AND SUBORDINATION AGREEMENT
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement") is made
as of May 7, 1997 to and for the benefit of Wilmington Trust Company, not in its
individual capacity but solely as Trustee for the benefit of 747 Inc., Xxxxxxx
X. Xxxxx and Xxxx, Xxxxxxxxx Inc., as Owner Participants under the Second
Amended and Restated Trust Agreement, dated as of September 29, 1995 (the
"Lessor"), by Evergreen International Aviation, Inc., an Oregon corporation (the
"Guarantor").
RECITALS
WHEREAS, Lessor and Evergreen International Airlines, Inc. ("Lessee")
have entered into the Lease Agreement, dated as of February 25, 1986, as amended
by the Amended and Restated Lease Agreement dated as of August 31, 1987, and by
the Second Amended and Restated Lease Amendment dated as of September 29, 1995,
and propose to enter into a Third Amendment to Lease Agreement (as so amended,
the "Lease");
WHEREAS, Lessor is unwilling to enter into the Lease unless the
parties hereto enter into this Agreement in order to secure the obligations of
the Lessee under the Lease;
WHEREAS, FINOVA Capital Corporation (the "Lender") and Lessor, as
borrower, have entered into a Secured Loan Agreement, dated as of May 7, 1997;
WHEREAS, the Lender has required, as a condition to the loan under the
Loan Agreement, the execution and delivery of this Agreement by the Guarantor.
NOW, THEREFORE, in order to induce the Lessor to enter into the Third
Amendment to Lease Agreement and the Lender under the Loan Agreement, the
Guarantor covenants and agrees with the Lessor as follows:
1. Definitions. All terms not otherwise defined herein shall have the
meanings given such terms in the Lease.
2. Guaranty. (a) The Guarantor hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety to the Lessor the full
and faithful payment and performance of all the obligations of the Lessee under
the Lease (the
"Guaranteed Liabilities"), including, without limitation, all Rent and the cost
of any materials and labor and other expenses required for the Aircraft to
satisfy the conditions set forth in Section 5 of the Lease.
(b) In the event the Lessee shall fail to perform any of the
Guaranteed Liabilities, the Guarantor shall forthwith perform or shall cause
Lessee to perform such Guaranteed Liabilities within ten (10) Banking Days of
the receipt of notice from the Lessor.
3. Nature of Obligations. The guaranties provided for in Section 2:
(a) are the primary obligations of Guarantor; (b) are absolute, unconditional,
present, and continuing guaranties of payment and performance and not just of
collection; (c) shall not be subject to any recoupment, offset, counterclaim or
defense based upon any claim that the Guarantor may have against the Lessor, the
Lessee, any Owner Participant or any of the Obligors (as hereinafter defined);
(d) are independent of and in no way conditioned upon:
(i) any attempt by the Lessor to collect from or enforce its
rights against the Lessee;
(ii) any attempt by the Lessor to collect from, or the exercise
of any rights and remedies against, any person other than the
Lessee who may at any time now or hereafter be primarily or
secondarily liable for any or all of the Guaranteed Liabilities,
including, without limitation, any other maker, endorser, surety,
or guarantor of all or a portion of the Guaranteed Liabilities or
any person who is now or hereafter a party to any of the
Operative Documents (all of the aforementioned being herein
called collectively the "Obligors" and individually an
"Obligor"); and
(iii) any resort or recourse to or against any security or
collateral now or hereafter pledged, assigned, or granted to the
Lessor under the provisions of any instrument or agreement, or
otherwise assigned or conveyed to it; and
(e) are independent of and in no way limited, modified, waived or terminated by:
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(i) any extension or indulgence in respect of the performance of
any covenant, agreement, term or condition, under any Operative
Document;
(ii) any amendment or modification of or addition or supplement
to or deletion of any of the terms of any Operative Document, or
any assignment, mortgage, pledge or transfer of any thereof or of
any interest therein;
(iii) any compromise, waiver, release, consent, extension,
indulgence or other action or inaction in respect of any of the
terms of any Operative Document;
(iv) any exercise or non-exercise by the Lessor of any right,
power, privilege or remedy under or in respect of any Operative
Document, or any waiver of any such right, power, privilege or
remedy or of any default in respect of any Operative Document;
(v) any bankruptcy, insolvency, reorganization, arrangement,
adjustment, composition, dissolution, liquidation, or similar
proceeding with respect to the Lessee or any of its properties;
(vi) any limitation of the liability or obligations of the Lessee
under the terms of any Operative Document which may now or
hereafter be imposed by any statute, regulation or rule of law,
or any invalidity or unenforceability, in whole or in part, of
such Operative Document or any term thereof;
(vii) any merger or consolidation of the Lessee, any corporate
Owner Participant or the Guarantor into or with any other Person,
or any sale, lease or transfer of any or all of the assets of the
Lessee, any corporate Owner Participant or the Guarantor to any
other person;
(viii) any indebtedness of the Lessee to any other person;
(ix) any claim, set-off, deduction or defense that the Lessee or
may have against the Lessor whether hereunder or under any
Operative Document or independent of or unrelated to the
transactions contemplated by the Operative Documents;
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(x) any change in law;
(xi) any sale, transfer or other disposition of any right, title
to or interest in any Operative Document, unless in connection
therewith a guaranty agreement from the third party, in form and
substance reasonably satisfactory to the Lessor, is delivered in
substitution for this Agreement;
(xii) any change in the ownership of any shares of capital stock
of Lessee;
(xiii) to the extent as may be waived by applicable law, the
benefit of all principles or provisions of law, statutory or
otherwise, which may be in conflict with the terms hereof,
including, without limitation, any law which provides that the
obligation of a guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal
obligation or which reduces a guarantor's obligation in
proportion to the principal obligation;
(xiv) any disability or other defense of the Lessee with respect
to any Guaranteed Liability under any Operative Document,
including the effect of any statute of limitations that may bar
the enforcement of any Guaranteed Liability under any Operative
Document;
(xv) any failure of the Lessor to file or enforce a claim in
bankruptcy or other proceeding with respect to any entity;
(xvi) any agreement or stipulation with respect to the provision
of adequate protection in any bankruptcy proceeding; or
(xvii) any other circumstance which might otherwise constitute a
legal or equitable discharge, release or defense of a guarantor
or surety, or which might otherwise limit recourse against the
Guarantor (it being agreed that the obligations of the Guarantor
hereunder shall not be discharged except by payment or
performance as herein provided).
4. Waiver. The Guarantor waives, to the extent permitted by applicable
laws: (a) notice of the execution and delivery of the Operative Documents; (b)
notice of
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the Lessor's acceptance of and reliance on this Agreement or of the creation of
any of the Guaranteed Liabilities; (c) notice of any of the matters referred to
in Section 3 hereof; (d) all notice required by statute, rule of law, or
otherwise to preserve any rights against the Guarantor hereunder or under any of
the Operative Documents, including, without limitation, any demand, proof, or
notice of non-payment of any of the Guaranteed Liabilities by the Lessee or any
other Obligor and notice of any failure or default on the part of the Lessee or
any other Obligor to perform or comply with any term of any of the Operative
Documents to which the Lessee or any other Obligor is a party; (e) until such
time as the provisions of this Agreement are no longer in effect, any right to
subrogation, reimbursement, and indemnity against any property or other security
servicing at any time as collateral for any or all of the Guaranteed Liabilities
or under any of the Operative Documents; and (f) any other circumstance which
might otherwise constitute a legal or equitable discharge, release or defense of
a guarantor or surety, or which might otherwise limit recourse against the
Guarantor (it being understood that the obligations of the Guarantor hereunder
shall not be discharged except by payment or performance as herein provided). To
the extent that the Guarantor has any claim (arising by right of subrogation,
indemnification, or otherwise) against the Lessee or the Owner Participant,
arising on account of this Agreement or the obligations of the Guarantor
hereunder and any such claim would cause a payment or other benefit to the
Lessor to be deemed to be preferential under the applicable provisions of the
Federal Bankruptcy Code or other similar law, the Guarantor hereby waives and
releases the Lessee from each and every such claim.
5. Subordination, Waiver of Rights of Subrogation. All rights that the
Guarantor may at any time have against the Lessee for the Guaranteed Liabilities
(including rights of subrogation, exoneration, reimbursement and contribution
and whether arising under applicable law or otherwise), and all obligations that
the Lessee may at any time have arising by virtue of the Guarantor's obligations
hereunder or any payment made pursuant hereto are expressly subordinated to the
prior performance in full of the Guaranteed Liabilities. The Guarantor agrees
not to enforce any of the rights, or attempt to obtain payment or performance of
any of the obligations subordinated pursuant to this Section 5 until the
Guaranteed Liabilities have been paid, observed and performed in full. If any
amount shall be paid to or recovered by the Guarantor (whether directly or by
way of set-off, recoupment or counterclaim) on account of any right or
obligation subordinated pursuant to this Section 5, such amount shall be held in
trust by the Guarantor for the benefit of the Lessor, not commingled with any of
the Guarantor's other funds and forthwith paid over to the Lessor, in the exact
form received, together with any necessary endorsements, to be applied and
credited against, or held as security for, the Guaranteed Liabilities and the
obligations of the Guarantor hereunder.
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6. Representations and Warranties and Covenants of the Guarantor. The
Guarantor makes the following representations, warranties and covenants:
(a) The Guarantor is a corporation duly organized and validly existing
in good standing over the laws of the State of Oregon and has the corporate
power and authority to own or hold under lease its properties and to enter into
and perform its obligations under this Agreement. The Guarantor is duly
qualified to do business as a foreign corporation in each jurisdiction in which
failure to so qualify would have a material adverse effect on its financial
condition or on its ability to perform its obligations under this Agreement.
(b) The execution and delivery by the Guarantor of this Agreement:
(i) has been duly authorized by all necessary corporate action
and does not require any stockholder approval or the approval or
consent of or notice to any trustee or holders of any
indebtedness or obligations of the Guarantor;
(ii) does not conflict with or result in any violation of the
certificate of incorporation or any other charter documents of
the Guarantor or any agreement or instrument or any applicable
law, by which the Guarantor or an Affiliate thereof or the
properties or assets of any of them are bound; and
(iii) does not require the authorization, consent or approval of,
the giving of notice to, the registration with or the taking of
any other action by or in respect of any governmental authority,
agency or judicial body, or the taking of any other action under
any Applicable Law except for those that have been or, on or
before the date hereof will have been, duly made, given or
accomplished.
(c) This Guaranty constitutes a legal, valid and binding obligation of
the Guarantor enforceable against it in accordance with its terms except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and by
general principles of equity.
(d) There are no pending or, to the knowledge of the Guarantor,
threatened actions or proceedings before any court or administrative agency or
arbitrator which could, if adversely determined, materially adversely affect the
financial condition
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of the Guarantor or the ability of the Guarantor to perform its obligations
under this Agreement.
(e) The Guarantor has filed or caused to be filed all material tax
returns which are required to be filed by it and has paid or caused to be paid
all taxes which has been shown to be due and payable by such returns or (except
to the extent being contested in good faith and for the payment of which
adequate reserves have been provided) tax assessments received by the Guarantor
to the extent that such taxes have become due and payable.
(f) No documents prepared and furnished by the Guarantor to the Lessor
in connection with the transactions contemplated by this Agreement contain any
untrue statement of a material fact or omits a material fact necessary to make
the statements contained therein (in the case of statements referred to in
paragraph (e), as of the date made) not misleading.
(g) The Guarantor is the parent corporation of Lessee and, by virtue
thereof, has a financial interest in the transactions contemplated by the
Operative Documents.
(h) The execution and delivery by the Guarantor of this Agreement and
each Operative Document to which it is a party are not, and the performance by
the Guarantor of its obligations under each will not be, inconsistent with its
charter or bylaws, do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to it, and do not and will not
contravene the provisions of, or constitute a default or result in the creation
of any Lien upon any property of the Guarantor under any indenture, mortgage,
contract, agreement or other instrument to which it is a party or by which it is
bound or require the consent or approval of, the giving of notice to, the
registration with or the talking of any action in respect of or under any
federal, state or local governmental authority or agency, except such as has
been obtained, given or accomplished.
(i) The Guarantor shall furnish to the Lessor from time to time, with
reasonable promptness, such other information regarding the business,
operations, affairs and financial condition of the Guarantor as the Lessor may
reasonably request;
(j) The Guarantor shall permit, as may be reasonably requested, any
duly authorized representatives of the Lessor at all reasonable times: to
examine its books and records, to take memoranda and extracts therefrom and to
make copies thereof; to visit
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and inspect its properties and operation; and, upon notice to the Guarantor, to
discuss the affairs, finances and accounts of the Lessee or the Owner
Participant with any of its trustees, directors, employees or accountants.
(k) The Guarantor shall at all times maintain (i) its existence in
good standing under the laws of Oregon, and (ii) its right to transact business
in each jurisdiction in which the character of the properties owned or leased by
it or the business conducted by it makes such qualification necessary and the
failure to so qualify would preclude the Guarantor from enforcing its rights or
meeting its obligations under or with respect to any Operative Documents.
(l) The Guarantor shall give prompt written notice to the Lessor, in
form and detail satisfactory to the Lessor, of any litigation or governmental
proceeding pending or, to its knowledge, threatened against the Guarantor which,
if adversely determined, could reasonably be expected to have a material adverse
effect on its financial condition or on its ability to perform its obligations
under this Agreement.
(m) The Guarantor by entering into of this Agreement hereby covenants
and agrees that it will not at any time institute against the Lessee make a
voluntary filing with respect to itself or cause the Lessee to make a voluntary
filing with respect to itself in any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any United
Stated Federal or state bankruptcy or similar law.
(n) The Guarantor shall furnish to the Lender:
(i) within 90 days of the first, second and third quarterly
fiscal periods in each fiscal year of the Guarantor, a copy of:
(A) a balance sheet of the Guarantor as at the end of
such quarter setting forth comparative form the figures for the end of
the corresponding period of the preceding fiscal year;
(B) statements of income and retained earnings of the
Guarantor for such quarterly period, setting forth in comparative form
the figures for the corresponding period of the preceding year;
(ii) within 120 days after the end of each fiscal year of
the Guarantor, a copy of:
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(A) a consolidated balance sheet of the Guarantor as at
the end of such year; and
(B) consolidated statements of income and retained
earnings and of cash flow of the Guarantor for such year setting forth
in each case in comparative form the figures for the previous fiscal
year, together with a certificate of the chief financial officer of
the Guarantor certifying that such statements are true and accurate.
7. Enforcement Expenses. The Guarantor shall indemnify and hold
harmless the Lessor against any loss, liability, or reasonable out-of-pocket
expenses, including reasonable attorneys' fees and disbursements and any other
fees and disbursements, that may result from any failure of the Guarantor to
pay or perform any of the Guaranteed Liabilities when and as due and payable.
8. Delay and Waiver by the Lessor. No delay by the Lessor in the
exercise of, or failure to exercise, any right, remedy, or power accruing upon
any default or failure of the Guarantor in the performance of any obligation
under this Agreement shall impair any such right, remedy, or power or shall be
construed to be a waiver thereof, but any such right, remedy, or power may be
exercised from time to time and as often as may be deemed by the Lessor
expedient. In order to entitle the Lessor to exercise any right, remedy or power
reserved to it in this Agreement, it shall not be necessary to give any notice
to the Guarantor. If the Guarantor shall default in the performance of any
obligation under this Agreement, and such default should thereafter be waived by
the Lessor, such waiver shall be limited to the particular default so waived. No
waiver, amendment, release, or modification of this agreement shall be
established by conduct, custom, or course of dealing. All obligations of the
Guarantor and the rights of the Lessor shall be in additional to, and not in
limitation of, those provided by Applicable Law.
9. Consent to Assignment. Guarantor acknowledges that Borrower, as
Lessor under the Lease has assigned its rights under the Lease and this Guaranty
to Lender under the First Priority Chattel Mortgage and Security Agreement,
dated as of the date hereof, and that, pursuant to Section 22 of the Lease,
Lessee has consented thereto. Guarantor hereby consents to such assignment and
agrees that, upon the occurrence of an Event of Default under and as defined in
the Loan Agreement, Guarantor shall perform all of its obligations hereunder
for, and at the direction of, the Lender, as assignee of Lessor.
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10. Notices and Communications. All notices and other communications
hereunder shall be given in writing (along with all required copies) as provided
in the Lease, or if to the Guarantor, at 0000 Xxxxx Xxxx Xxxx, XxXxxxxxxxx,
Xxxxxx 00000.
11. Governing Law: Consent to Jurisdiction. THIS AGREEMENT SHALL BE
DEEMED TO HAVE BEEN MADE IN AND SHALL BE GOVERNED AND INTERPRETED BY THE LAWS OF
THE STATE OF ARIZONA WITH RESPECT TO AGREEMENTS MADE BY RESIDENTS OF THE STATE
OF NEW YORK AND TO BE WHOLLY PERFORMED WITHIN SAID STATE AND THE RIGHTS OF THE
LESSOR HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT TO THE
EXTENT THAT THE LAW OF SOME OTHER JURISDICTION MAY BE MANDATORILY APPLICABLE TO
PROCEEDINGS TAKEN FOR THE ENFORCEMENT OF THE RIGHTS OF THE LESSOR HEREUNDER;
PROVIDED, HOWEVER, THAT ANY REMEDIES HEREIN PROVIDED WHICH SHALL BE VALID UNDER
THE LAWS OF THE JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT HEREOF SHALL
BE TAKEN SHALL NOT BE AFFECTED BY ANY INVALIDITY THEREOF UNDER THE LAWS OF THE
STATE OF. If any provision of this Agreement shall be held invalid or
inapplicable to any circumstance or in any jurisdiction, such invalidity or
inapplicability shall not affect any other provision hereof or any other
agreement between the parties hereto which can be given effect without regard to
the invalid provision, nor to the same provision to the extent valid or
enforceable in any other applicable jurisdiction, nor shall any such
inapplicability to any circumstance affect the applicability of such terms to
any other or different or subsequent circumstance, all of such terms, conditions
or provisions are deemed severable. The Guarantor and the Lessor each hereby
agrees that all actions or proceedings initiated by Guarantor and arising
directly or indirectly out of this Agreement may be litigated in the Superior
Court of Arizona, Maricopa County or the United States District Court for the
District of Arizona and any action or proceeding initiated by Lessor and arising
directly or indirectly out of this Agreement may be litigated in either such
jurisdiction or in any other jurisdiction in which the Aircraft, the Guarantor
or any of its assets may be located, at Lessor's discretion. Each party hereby
expressly submits and consents in advance to such jurisdiction and venue in any
action or proceeding commenced by either party in any of such courts, and hereby
waives personal service of the summons and complaint, or other process of papers
issued therein, and agrees that such service of the summons and complaint may be
made by registered mail, return receipt requested, addressed to either party, at
the respective addresses referred to Section 10 hereof. Each party waives any
claim that Phoenix, Arizona the District of Arizona or such other jurisdiction
is an inconvenient forum or an improper forum based on lack of
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venue. Should either party, after being so served, fail to appear or answer any
summons, complaint, process or paper so served within 30 days after the mailing
thereof, each party acknowledges that as a result thereof, an order and/or
judgment may be entered by either party against the other as demanded or pleaded
for in such summons, complaint, process or papers. The choice of forum set forth
herein shall not be deemed to preclude the enforcement by either party of any
judgment in any other appropriate jurisdiction.
12. Waiver of Trial by Jury. GUARANTOR HEREBY WAIVES TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING BROUGHT BY IT OR BY THE LESSOR INVOLVING DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATING TO, OR CONNECTED WITH
THE OPERATIVE DOCUMENTS.
13. No Withholding; Gross Up.
(a) All payments hereunder shall be made without deduction by
reason of any defense, set-off or counterclaim of any kind, nature or
description whatever.
(b) All payments hereunder shall be made free and clear of, and
without deduction for, any taxes, levies, imposts, charges, duties, fees or
withholding of any nature whatsoever now or hereafter imposed by or within any
governmental authority or pursuant to any governmental rule or regulation or any
administrative subdivision or taxing authority thereof or therein, respectively,
unless the obligor is compelled by law to deduct or withhold such taxes, levies,
imposts, charges, duties or fees, in which event the obligor shall pay to the
Lessor such additional amounts as shall result in the effective receipt by the
Lessor of the gross amount of all sums due the Lessor under the Operative
Documents had no such deduction or withholding been made.
14. Successors and Assigns. All covenants and agreements of the
Guarantor set forth in this Agreement shall bind the Guarantor and its
successors and assigns and shall inure to the benefit of, and be enforceable by,
the Lessor and its successors and assigns.
15. Miscellaneous. Neither this Agreement nor any them hereof may be
terminated, amended, supplemented, waived, released, or modified orally, but
only by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver, release, or
modification is sought. Whenever used herein, the singular feminine, or neuter
gender shall include all genders.
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Whenever used herein, the word "person" or "persons" shall mean and include a
corporation, an association, a partnership, an organization, a business, an
individual, a governmental or political subdivision or agency thereof, or an
estate or trust. If any term of this Agreement or any obligation hereunder shall
be held to be invalid, illegal, or unenforceable, the remainder of this
Agreement and any other application of such term shall not be affected thereby.
The paragraph and section headings of this Agreement have been inserted for
convenience only and shall not modify, define, limit, or expand the express
provisions hereof. This Agreement may be executed in duplicate originals or in
several counterparts, each of which shall be deemed an original but all of which
together shall constitute one instrument, and it shall not be necessary in
making proof hereof to produce or account for more than one such duplicate
original or counterpart.
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IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be
executed and delivered by their duly authorized officers as of the day and year
first written above.
EVERGREEN INTERNATIONAL AVIATION, INC.
By: /s/ Xxxxxxx X. Xxx
------------------------------------
Name: Xxxxxxx X. Xxx
Title: Treasurer
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Senior Financial Services Officer
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