GUARANTY GUARANTY, dated as of December 21, 2001, by AVIALL, INC.("Holdings") and each of the other entities listed on the signature pages hereofor that becomes a party hereto pursuant to Section 23 (Additional Guarantors)hereof (each a "Subsidiary Guarantor" and, together with Holdings, collectively,the "Guarantors" and individually a "Guarantor"), in favor of the AdministrativeAgent, each Lender, each Issuer and each other holder of an Obligation (as eachsuch term is defined in the Credit Agreement referred to below) (each, a"Guarantied Party" and, collectively, the "Guarantied Parties"). WITNESSETH: WHEREAS, pursuant to the Credit Agreement dated as of December17, 2001 (together with all appendices, exhibits and schedules thereto and asthe same may be amended, restated, supplemented or otherwise modified from timeto time, the "Credit Agreement"; capitalized terms defined therein and usedherein having the meanings given to them in the Credit Agreement) among AviallServices, Inc. (the "Borrower"), Holdings, the Lenders and Issuers party theretoand Citicorp USA, Inc., as agent for the Lenders and Issuers, the Lenders andIssuers have severally agreed to make extensions of credit to the Borrower uponthe terms and subject to the conditions set forth therein; WHEREAS, Holdings is the sole shareholder of the Borrower andeach Subsidiary Guarantor is a direct or indirect Subsidiary of the Borrower; WHEREAS, each Guarantor will receive substantial direct andindirect benefits from the making of the Loans, the issuance of the Letters ofCredit and the granting of the other financial accommodations to the Borrowerunder the Credit Agreement; and WHEREAS, a condition precedent to the obligation of theLenders and the Issuers to make their respective extensions of credit to theBorrower under the Credit Agreement is that the Guarantors shall have executedand delivered this Guaranty for the benefit of the Guarantied Parties; NOW, THEREFORE, in consideration of the premises set forthabove, the terms and conditions contained herein, and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, theparties hereto hereby agree as follows: SECTION 1 GUARANTY (a) To induce the Lenders to make the Loans and the Issuers toissue Letters of Credit, each Guarantor hereby absolutely, unconditionally andirrevocably guarantees, as primary obligor and not merely as surety, the fulland punctual payment when due, whether at stated maturity or earlier, by reasonof acceleration, mandatory prepayment or otherwise in accordance herewith or anyother Loan Document, of all the Obligations, whether or not from time to timereduced or extinguished or hereafter increased or incurred, whether or notrecovery may be or hereafter may become barred by any statute of limitations,whether or not enforceable as against the Borrower, whether now or hereafterexisting, and whether due or to become due, including principal, interest(including interest at the contract rate applicable upon default accrued oraccruing after the commencement of any proceeding under the Bankruptcy Code,whether or<PAGE>not such interest is an allowed claim in such proceeding), fees and costs ofcollection. This Guaranty constitutes a guaranty of payment and not ofcollection. (b) Each Guarantor further agrees that, if (i) any paymentmade by Borrower or any other person and applied to the Obligations is at anytime annulled, avoided, set aside, rescinded, invalidated, declared to befraudulent or preferential or otherwise required to be refunded or repaid, or(ii) the proceeds of Collateral are required to be returned by any GuarantiedParty to the Borrower, its estate, trustee, receiver or any other party,including any Guarantor, under any bankruptcy law, equitable cause or any otherRequirement of Law, then, to the extent of such payment or repayment, any suchGuarantor's liability hereunder (and any Lien or other Collateral securing suchliability) shall be and remain in full force and effect, as fully as if suchpayment had never been made. If, prior to any of the foregoing, this Guarantyshall have been cancelled or surrendered (and if any Lien or other Collateralsecuring such Guarantor's liability hereunder shall have been released orterminated by virtue of such cancellation or surrender), this Guaranty (and suchLien or other Collateral) shall be reinstated in full force and effect, and suchprior cancellation or surrender shall not diminish, release, discharge, impairor otherwise affect the obligations of any such Guarantor in respect of theamount of such payment (or any Lien or other Collateral securing suchobligation). SECTION 2 LIMITATION OF GUARANTY Any term or provision of this Guaranty or any other LoanDocument to the contrary notwithstanding, the maximum aggregate amount of theObligations for which any Subsidiary Guarantor shall be liable shall not exceedthe maximum amount for which such Subsidiary Guarantor can be liable withoutrendering this Guaranty or any other Loan Document, as it relates to suchSubsidiary Guarantor, subject to avoidance under applicable law relating tofraudulent conveyance or fraudulent transfer (including Section 548 of theBankruptcy Code or any applicable provisions of comparable state law)(collectively, "Fraudulent Transfer Laws"), in each case after giving effect (a)to all other liabilities of such Subsidiary Guarantor, contingent or otherwise,that are relevant under such Fraudulent Transfer Laws (specifically excluding,however, any liabilities of such Subsidiary Guarantor in respect of intercompanyIndebtedness to the Borrower to the extent that such Indebtedness would bedischarged in an amount equal to the amount paid by such Subsidiary Guarantorhereunder) and (b) to the value as assets of such Subsidiary Guarantor (asdetermined under the applicable provisions of such Fraudulent Transfer Laws) ofany rights to subrogation, contribution, reimbursement, indemnity or similarrights held by such Subsidiary Guarantor pursuant to (i) applicable Requirementsof Law, (ii) Section 3 (Contribution) of this Guaranty or (iii) any otherContractual Obligations providing for an equitable allocation among suchSubsidiary Guarantor and other Subsidiaries or Affiliates of the Borrower
View Full Document
Unlocking...