Guaranty - Aviall Product Repair Services Inc. and Inventory Locator Services LLC
EXECUTION COPY
GUARANTY
(AVIALL PRODUCT REPAIR SERVICES, INC. AND
INVENTORY LOCATOR SERVICE, LLC)
GUARANTY (this "GUARANTY"), dated as of December 21, 2001, is made by
each of the entities executing this Guaranty as "Subsidiaries" (each Subsidiary
being a "GUARANTOR").
WITNESSETH:
WHEREAS, pursuant to that certain Securities Purchase Agreement (the
"PURCHASE AGREEMENT") by and among Aviall Services, Inc. (the "COMPANY"), a
Delaware corporation, Aviall, Inc. ("HOLDINGS"), a Delaware corporation, J. H.
Whitney Mezzanine Fund, L.P. ("WMF"), a Delaware limited partnership, Whitney
Private Debt Fund, L.P. ("WHITNEY DF"), a Delaware limited partnership, Whitney
Limited Partner Holdings, LLC, a Delaware limited liability company ("WHITNEY
LLC" and together with WMF and Whitney DF, the "WHITNEY FUNDS"), Blackstone
Mezzanine Partners L.P. ("BLACKSTONE PARTNERS"), a Delaware limited partnership,
Blackstone Mezzanine Holdings L.P. ("BLACKSTONE HOLDINGS" and together with
Blackstone Partners, "BLACKSTONE"), a Delaware limited partnership, Carlyle High
Yield Partners, LLP, a Delaware limited partnership ("CARLYLE") and Oak Hill
Securities Fund, L.P., a Delaware limited partnership ("OAK HILL") (the Whitney
Funds, Blackstone, Carlyle and Oak Hill are sometimes referred to herein
individually, as a "PURCHASER" and collectively, as the "PURCHASERS") each
Purchaser will purchase from the Company a 14% senior promissory note (each note
sometimes referred to herein individually as a "NOTE" and collectively as the
"NOTES") due December 21, 2007 in the aggregate principal amount of $80,000,000;
and
WHEREAS, in order to induce the Purchasers to purchase the Notes, each
Guarantor will execute and deliver this Guaranty pursuant to which the
Guarantors will, jointly and severally, guaranty, among other things, payment of
all of the Obligations, as hereinafter defined; and
WHEREAS, it is of material benefit to each Guarantor that the
Purchasers purchase the Notes and that the Purchasers provide to the Company the
capital represented thereby.
Accordingly, each Guarantor agrees for the benefit of the Purchasers as
follows:
1. CERTAIN TERMS.
(a) Capitalized terms used herein without definition have the
respective meanings set forth in the Purchase Agreement.
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(b) "OBLIGATIONS" means all (i) acts, performances and
obligations when due of the Company under the Notes, (ii) costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred in connection with the enforcement of this Guaranty and (iii)
Indemnification Obligations.
(c) "INDEMNIFICATION OBLIGATIONS" means all acts, performances
and obligations when due of the Company or Holdings under Article 7 and 11.14 of
the Purchase Agreement, including, without limitation, the costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred in connection with the enforcement of this Guaranty.
2. GUARANTY. The Guarantors hereby, jointly and severally, absolutely,
unconditionally and irrevocably guarantee to the Purchasers the full and
punctual payment when due of all Obligations, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, and such
guaranty is not conditional or contingent upon pursuit by the Purchasers of any
prior action or proceeding for collection, or for any other remedies the
Purchasers may have, against the Company or any other Person.
3. CONSENT. The Guarantors hereby consent and agree that the whole or
any part of the security now or hereafter held for any Obligation may be
exchanged, compromised, released or surrendered from time to time; that the time
or place of payment of any Obligation or of any security therefor may be
exchanged or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; that the Company and any
Guarantor or any other obligor on the Obligations may be granted indulgences
generally; that any of the provisions of the Notes may be renewed, extended,
modified, increased, accelerated, compromised, refinanced or waived; that
neither the insolvency, bankruptcy and/or dissolution of the Borrower, any
Guarantor or any other obligor on the Obligations, shall affect the obligations
hereunder of any Guarantor; that neither the invalidity or unenforceability of
any of the Obligations shall affect the obligations hereunder of any Guarantor;
that no claim need be asserted against any trustee in bankruptcy or receiver or
other representative in the event the Borrower, any Guarantor or any other
obligor on the Obligations is adjudicated bankrupt or becomes insolvent; and
that any property to the credit of the Borrower or any Guarantor or any other
party liable for payment of any of the Obligations or liable upon any security
therefor may be released from time to time, in whole or in part, at, before or
after the stated, extended or accelerated maturity of such Obligations, all of
which (i) may be affected without notice to or further assent by any Guarantor
and (ii) shall not affect the obligations of any Guarantor under this Guaranty.
4. WAIVER. The Guarantors hereby expressly waive:
(a) Notice of acceptance of this Guaranty;
(b) Presentment and demand for payment of any Obligation;
(c) Protest and notice of dishonor or default to such
Guarantor or to any other party with respect to any Obligation or any
security for any Obligation;
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(d) Demand for payment under this Guaranty;
(e) Notice of disposition of any security for any Obligation; and
(f) Any defense by reason of impairment of: (i) any security now
or hereafter held for any Obligation; or (ii) recourse against any
party liable for the payment of any Obligation.
5. GUARANTY OF PAYMENT. This Guaranty is a guaranty of payment and not
of collection. Each Guarantor: (a) waives any claim to marshaling of assets; (b)
waives any right to require that an action be brought against Borrower or any
other Person prior to action against such Guarantor or any other Guarantor
hereunder; and (c) waives any right to require that resort be had to any
security, as applicable, for the Notes or any other Obligations guaranteed
hereunder prior to action by any Purchaser against such Guarantor hereunder.
Each Guarantor shall be released from all liability hereunder only upon payment
in full in cash of all the Obligations.
6. BINDING EFFECT. The obligations of each Guarantor hereunder shall be
joint and several obligations of all of the Guarantors. The provisions of this
Guaranty shall be binding upon each Guarantor and its successors and assigns,
and shall inure to the benefit of the Purchasers and their respective successors
and assigns; it being understood that each Purchaser is free to assign its
rights, benefits, duties and obligations under this Guaranty without the consent
of any other party, and each Guarantor may not assign its rights, benefits,
duties and obligations under this Guaranty without the prior written consent of
each of the Purchasers.
7. RIGHT OF SET OFF. The Purchasers agree that to the extent that the
Guarantors have made payment hereunder of all or any portion of principal and
interest required under the Notes, the full amount of such payment shall be
deducted from amounts allocable and payable to the Purchasers pursuant to the
Notes.
8. LIMITATION OF GUARANTY. Any term or provision of this Guaranty or
any other Transaction Document to the contrary notwithstanding, the maximum
aggregate amount of the Obligations for which the Guarantors shall be liable
shall not exceed the maximum amount for which the Guarantors can be liable
without rendering this Guaranty or any other Transaction Document, as it relates
to the Guarantors, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer.
9. REINSTATEMENT. This Guaranty shall remain in full force and effect
and continue to be effective or be reinstated, as the case may be, if at any
time payment or performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations or such part thereof,
whether as a "voidable preference," "fraudulent transfer," or otherwise, all as
though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall, to the fullest extent permitted
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by law, be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
10. SUBROGATION. After (and not before) all amounts payable under or in
respect of all the Notes have been indefeasibly paid in full in cash, the
Guarantors shall be subrogated to the rights of the Purchasers to receive
payments in respect of the Notes, but only to the extent of amounts paid by the
Guarantors pursuant to this Guaranty.
11. AMENDMENT. This Guaranty may not be modified or amended except by a
writing duly executed by the party to be charged.
12. LAW. THIS GUARANTY SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE
WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE.
13. SEVERABILITY. Wherever possible, each provision of this Guaranty
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be invalid under
such laws, such provision shall be effective only to the extent of such
prohibition or invalidity, without affecting the remainder of such provision or
the remaining provisions of this Guaranty, which shall be binding and
enforceable to the fullest extent allowable by law.
14. WAIVER. Waiver by any Purchaser of a breach of this Guaranty shall
not operate as a waiver of any subsequent breach thereof.
15. SIGNATURES; COUNTERPARTS. Telefacsimile transmissions of any
executed original document and/or retransmission of any executed telefacsimile
transmission shall be deemed to be the same as the delivery of an executed
original. At the request of any party hereto, the other parties hereto shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting party or parties. This Guaranty may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
16. NOTICES. All notices, requests and other communications to be given
or otherwise made to any party hereto shall be deemed to be sufficient if
contained in a written instrument duly transmitted by telecopy or telex or duly
sent by overnight courier service or first class registered or certified mail,
postage prepaid, addressed to such party at the address set forth below or at
such other address as may hereafter be designated in writing by the addressee to
the addressor listing all parties:
(a) if to any Guarantor:
Aviall, Inc.
2750 Regent Boulevard
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DFW Airport, TX 75261
Telecopier No.: (972) 586-1010
Attention: Jeffrey J. Murphy
with a copy to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
Telecopier No. (214) 200-0676
Attention: Janice V. Sharry
(b) if to WMF, Whitney DF or Whitney LLC:
c/o Whitney & Co
177 Broad Street
Stamford, Connecticut 06901
Telecopier No.: (203) 973-1422
Attention: Mr. Michael Salvator
James H. Fordyce
Joseph D. Carrabino, Jr.
James A. Feeley III
with a copy to:
Chadbourne & Parke, LLP
30 Rockefeller Plaza
New York, NY 10112I
Telecopier No.: (212) 541-5369
Attention: Thomas Meriam
(c) if to Blackstone Partners:
The Blackstone Mezzanine Group
345 Park Avenue
New York, NY 10154
Telecopier No.: (212) 583-5482
Attention: Sal Gentile
(d) if to Blackstone Holdings:
The Blackstone Mezzanine Group
345 Park Avenue
New York, NY 10154
Telecopier No.: (212) 583-5482
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Attention: Sal Gentile
(e) if to Carlyle:
The Carlyle Group
520 Madison Avenue
41st Floor
New York, New York 10022
Attention: Michael Zupon
David Waxman
(f) if to Oak Hill:
Oak Hill Advisors, Inc.
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Attention: Scott Krase
(g) if to Lerner Enterprises:
Oak Hill Asset Management, Inc.
Park Avenue Tower
65 East 55th Street
32nd Floor
New York, NY 10022
Attention: Megan McCann
And to:
Lerner Enterprises
11501 Huff Court
Kensington, Maryland 20895-1094
Attention: Margaret Mekenie
(h) if to P & PK Limited Partnership:
Oak Hill Asset Management Inc.
Park Avenue Tower
65 East 55th Street
32nd Floor
New York, New York 10022
Attention: Megan McCann
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17. CONSENTS AND WAIVERS RELATING TO LEGAL PROCEEDINGS.
(a) EACH PARTY TO THIS GUARANTY HEREBY IRREVOCABLY AGREES THAT
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO
THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND
EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE
AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 16 SUCH SERVICE TO BECOME
EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(b) EACH GUARANTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EACH GUARANTOR (X) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PURCHASER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS
AND (Y) ACKNOWLEDGES THAT THE PURCHASERS HAVE BEEN INDUCED TO ENTER INTO THE
PURCHASE AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of
the 21st day of December, 2001.
SUBSIDIARIES:
AVIALL PRODUCT REPAIR SERVICES, INC.
By: /s/ Cornelius Van Den Handel
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Name: Cornelius Van Den Handel
Title: Vice President and Treasurer
INVENTORY LOCATOR SERVICE, LLC
By: /s/ Cornelius Van Den Handel
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Name: Cornelius Van Den Handel
Title: Vice President and Treasurer
[SIGNATURE PAGE TO GUARANTY]
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