EX-10.166 4 d95706ex10-166.txt FORM OF GUARANTY EXHIBIT 10.166 [FORM OF GUARANTY] ================================================================================ GUARANTY ([N5___MC]) Dated as of October 30, 2001 given by ATLAS AIR WORLDWIDE HOLDINGS, INC. ================================================================================ TABLE OF CONTENTS
Page ---- SECTION 1. GUARANTY..............................................................................................1 SECTION 2. GENERAL PROVISIONS RELATING TO THE GUARANTY...........................................................2 SECTION 3. COVENANTS OF GUARANTOR................................................................................6 (a) No Assignment by Guarantor..........................................................................6 (b) Default Under Loan Documents........................................................................6 (c) Financial Statements and Reports....................................................................6 (d) Inspection..........................................................................................7 (e) GE Capital Loans....................................................................................7 SECTION 4. REPRESENTATIONS AND WARRANTIES OF GUARANTOR...........................................................7 SECTION 5. MISCELLANEOUS.........................................................................................7 (a) Waivers; Cumulative Effect..........................................................................7 (b) Amendments; Waivers.................................................................................8 (c) Severability........................................................................................8 (d) Counterparts........................................................................................8 (e) Notices.............................................................................................8 (f) Headings, References................................................................................8 (g) Governing Law.......................................................................................8 (h) Benefit and Binding Effect..........................................................................8 (i) Service of Process; Jurisdiction and Waiver.........................................................8 Annex A - Address for Notices to Guarantor Schedule I - Description of Lease Agreement
(i) GUARANTY GUARANTY (this "Guaranty") dated as of October 30, 2001, is given by Atlas Air Worldwide Holdings, Inc. (the "Guarantor"), a Delaware corporation, with respect to each and every obligation of the Lessee under the Lease Agreement, dated as of April 25, 2000, and more particularly described on Schedule I hereto (as amended and supplemented through the date hereof, and as amended, modified, or supplemented from time to time hereafter, the "Lease Agreement") and the other Loan Documents, and is given to and for the benefit of the Lessor, the Agent, and the Lenders (collectively, the "Guaranteed Beneficiaries" and individually, a "Guaranteed Beneficiary"). All capitalized terms used herein shall, unless otherwise defined herein, have the respective meanings set forth in the Lease Agreement. WITNESSETH: WHEREAS, as of the date hereof the Guarantor owns 100% of the issued and outstanding capital stock of the Lessee; WHEREAS, it is a condition precedent to the effectiveness of that certain Amendment No. 2 to Lease Agreement (the "Lease Amendment"), dated as of the date hereof, between the Lessor and the Lessee, that the Guarantor guarantee the obligations of the Lessee under the Lease Agreement and the other Loan Documents in favor of the Guaranteed Beneficiaries; WHEREAS, it is a condition precedent to the effectiveness of that certain Consent No. 4 to Credit Agreement (the "Consent"), dated as of the date hereof, among the Lessor (in its capacity as Borrower under the Credit Agreement), the lenders party thereto, and the Agent, that the Guarantor guarantee the obligations of the Lessee under the Lease Agreement and the other Loan Documents in favor of the Guaranteed Beneficiaries; WHEREAS, the Guarantor is entering into this Guaranty in order to induce the Lessor to enter into the Lease Amendment and to enter into a similar amendment to each Lease other than the Lease Agreement; and WHEREAS, the Guarantor is entering into this Guaranty in order to induce the Agent and each Lender to enter into the Consent; NOW, THEREFORE, the Guarantor hereby agrees on behalf of and for the benefit of the Guaranteed Beneficiaries as follows: SECTION 1. GUARANTY. The Guarantor does hereby unconditionally and irrevocably guarantee, as primary obligor and not merely as surety, the following (such obligations being the "Guaranteed Obligations"): (a) to each Guaranteed Beneficiary, the full and prompt payment when, where and as due, of each and every payment obligation of the Lessee to each such Guaranteed Beneficiary under the Lease Agreement and each other Loan Document, including, without limitation, Rent; and (b) to each Guaranteed Beneficiary entitled thereto under the terms of any Loan Document, the full and timely performance and observance by the Lessee of each and all other covenants and agreements not described in clause (a) above required to be performed or observed by the Lessee under such Loan Document. Without limiting the generality of the foregoing, the Guarantor's liability hereunder shall extend to all obligations that constitute part of the Guaranteed Obligations and would be owed by the Lessee under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, suspension of payments, reorganization or similar proceeding involving the Lessee. SECTION 2. GENERAL PROVISIONS RELATING TO THE GUARANTY. (a) Each and every default in any payment or performance of any obligation of the Lessee under any Loan Document to which the Lessee is a party shall give rise to a separate claim and cause of action hereunder to the extent that each such default by the Lessee would give rise to a separate claim or cause of action under the applicable Loan Document, and separate claims or suits may be made and brought, as the case may be, hereunder as each such default occurs. (b) This Guaranty shall be a continuing, absolute, irrevocable and unconditional guaranty of payment and performance and not of collection and shall remain in full force and effect until each and all of the obligations of the Lessee guaranteed hereunder shall have been fully and indefeasibly discharged or performed in accordance with the terms and provisions of the Loan Documents (and no longer subject to recoupment, preference claims or clawback under applicable bankruptcy, insolvency or similar laws), and the Guarantor shall have fully discharged or performed all of its obligations under this Guaranty to each Guaranteed Beneficiary. (c) This Guaranty and the liability of the Guarantor provided for in Section 1 hereunder shall remain in full force and effect irrespective of: (i) the legality, validity, regularity or enforceability, or the absence of any thereof, of any Loan Document (or other document or agreement) or of any assignment, amendment, modification, or termination of any Loan Document (or other document or agreement) or any subleasing or further subleasing of the Aircraft or Spare Engines (or any interest therein or portion thereof), and shall in no way be affected or impaired by (and no notice to the Guarantor shall be required in respect of) any compromise, waiver, settlement, release, renewal, extension, indulgence, amendment, addition, deletion, change or modification with respect to, or release of any security for any of the obligations or liabilities of the Lessee under, any Loan Document or any redelivery, repossession, sale, transfer or other disposition, surrender or destruction of, or other event 2 or circumstance with respect to, the Aircraft or Spare Engines (or any interest therein or portion thereof), in whole or part; or (ii) the transfer, assignment, subletting, or mortgaging, or the purported transfer, assignment, subletting, or mortgaging, of all or any part of the interest of any Guaranteed Beneficiary or the Lessee in the Aircraft or Spare Engines (or any interest therein or portion thereof) in accordance with the Loan Documents; or (iii) any absence or defect or failure of title or lack of recordation or registration with respect to any Guaranteed Beneficiary's or the Lessee's interest in the Aircraft or Spare Engines (or any interest therein or portion thereof); or (iv) any failure of delivery of, or loss of perfection of any security interest with respect to, any portion of the Aircraft or Spare Engines (or any interest therein or portion thereof); or (v) any matter relating to any agreement or approval (or the absence thereof) in connection with the Aircraft or Spare Engines (or any interest therein or portion thereof); or (vi) any failure, neglect or omission on the part of any Guaranteed Beneficiary or any other Person to give the Guarantor notice of the occurrence of any Default or Lease Event of Default or Potential Event of Default or Event of Default or to realize upon any collateral held by any Guaranteed Beneficiary or any other Person with respect to any obligations or liabilities of the Lessee, or to provide for any insurance on the Aircraft or Spare Engines (or any interest therein or portion thereof), or to establish or maintain a security or other interest in the Aircraft or Spare Engines (or any interest therein or portion thereof) or any collateral provided under any Loan Document or to establish or maintain the priority or perfection of any thereof; or (vii) any defect in the compliance with specifications, warranties or any insurance policy or the condition, design, operation or fitness for use of, or any damage to or loss or destruction of, or any interruption or cessation in the use of, the Aircraft or Spare Engines (or any interest therein or any portion thereof) by the Lessee or any other Person for any reason whatsoever (including, without limitation, any governmental prohibition or restriction, condemnation, requisition, seizure or any other act on the part of any governmental or military authority, or any act of God or of the public enemy) regardless of the duration thereof (even though such duration would otherwise constitute a frustration under any Loan Document), whether or not without fault on the part of the Lessee or any other Person; or (viii) any merger, consolidation or other restructuring or termination of the corporate structure, reorganization or transaction with respect to the Lessee or the Guarantor into, with or in respect of, any other Person or any sale, lease, assignment or transfer of any of the assets of the Lessee or Guarantor to any other Person; or 3 (ix) any disposition by the Guarantor of its interest in the Lessee, or any change in the ownership of any shares of capital stock of the Guarantor or the Lessee, or any change, restructuring or termination of the corporate structure or existence of the Lessee; or (x) the imposition of any Tax or other charge against the Lessee, the Guarantor or any other Person; or (xi) any exchange, release or nonperfection, or lapse of perfection, of any security for any Guaranteed Obligation or the acceptance of any security therefor; or (xii) any bankruptcy, insolvency, winding up, dissolution, liquidation, receivership, or reorganization of, or similar proceedings affecting, the Lessee or the Guarantor or its assets or any resulting release or discharge of any of the Guaranteed Obligations (except to the extent resulting from performance thereof); or (xiii) any regulatory change or other governmental action (whether or not adverse); or (xiv) any partial payment or performance of the Guaranteed Obligations (whether as a result of the exercise of any right, remedy, power or privilege or otherwise) that is accepted or received (except, subject to paragraph (f) of this Section 2, to the extent of such payment or performance); or (xv) any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, whether or not foreseeable, that might otherwise constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against the Guarantor. The obligations of the Guarantor set forth herein constitute the full recourse obligations of the Guarantor enforceable against it to the full extent of all its assets and properties. (d) The obligation and liability of the Guarantor hereunder shall not be impaired, diminished, abated or otherwise affected (i) by any set-off, defense or counterclaim that the Lessee, the Guarantor or any other Person may have or claim to have, at any time or from time to time, or (ii) by the commencement by or against the Lessee, the Guarantor or any other Person of any proceedings under any bankruptcy or insolvency law or laws relating to the relief of debtors, readjustment of indebtedness, reorganizations, arrangements, compositions or extension or other similar laws. (e) It is the intent and purpose hereof that the Guarantor shall not be entitled to and does hereby waive, to the fullest extent permitted by applicable law, any and all defenses available to guarantors, sureties and other secondary parties at law or in equity. Without limiting the generality of the foregoing, the Guarantor hereby waives notice of acceptance of this Guaranty and of the nonperformance by the Lessee, diligence, presentment, protest, dishonor, demand for payment from the Lessee or any other Person and notice of nonpayment or failure to perform on the part of the Lessee and all other notices whatsoever. The guaranty hereunder is a guaranty of payment, performance and compliance and not of collectability only. The Guarantor specifically 4 agrees that it shall not be necessary, and the Guarantor shall not be required, before or as a condition of enforcing the liability of the Guarantor under this Guaranty or requiring payment or performance of the Guaranteed Obligations by the Guarantor hereunder, or at any time thereafter, that any of the Guaranteed Beneficiaries (i) file suit or proceed to obtain or assert a claim for personal judgment against any Person that may be liable for any Guaranteed Obligation; (ii) make any other effort to obtain payment or performance of any Guaranteed Obligation from the Lessee or any other Person that may be liable for such Guaranteed Obligation; (iii) foreclose against or seek to realize upon any security now or hereafter existing for such Guaranteed Obligation; (iv) exercise or assert any other right or remedy to which any of the Guaranteed Beneficiaries is or may be entitled in connection with any Guaranteed Obligation or any security or other guaranty therefor; (v) assert or file any claim against the assets of the Lessee or any other Person liable for any Guaranteed Obligation; or (vi) join the Lessee or any other Person as a party to any proceeding for the enforcement of any provision of this Guaranty. Without limiting the foregoing, it is understood that repeated and successive demands may be made and recoveries may be had hereunder as and when, from time to time, a Lease Event of Default shall have occurred and be continuing or a Guaranteed Obligation shall otherwise arise (in either case, a "Recovery Event"), and that, notwithstanding recovery hereunder for or in respect of any such Recovery Event, this Guaranty shall remain in force and effect and shall apply to each and every subsequent Recovery Event. The Guarantor further agrees that, without limiting the generality of this Guaranty, if any Recovery Event shall have occurred and be continuing and any Guaranteed Beneficiary (or any assignee thereof) is prevented by applicable law from exercising its remedies under any applicable Loan Document for any reason, such Guaranteed Beneficiary (or any assignee thereof) shall be entitled to receive hereunder from the Guarantor, upon demand therefor, the sums that otherwise would have been due from the Lessee had such remedies been exercised. If the Guarantor makes any payment or performs any obligation hereunder in respect of any of the obligations to be performed by the Lessee, the Guarantor shall become subrogated to the extent of such payment or performance to the rights of the Guaranteed Beneficiary under the relevant agreement to which the Lessee is a party against the Lessee in respect of such obligations and any collateral security or guaranty held by or for the benefit of such Guaranteed Beneficiary for the payment of such obligations; provided, however, that such rights of subrogation shall not commence until such time subsequent to the end of the Term as the Lessee or the Guarantor, as the case may be, shall have paid and performed each and every Guaranteed Obligation to each Guaranteed Beneficiary and the Guarantor shall have fully performed its obligations hereunder. (f) The guaranty hereunder shall not be deemed to have terminated and shall continue to be effective (or if terminated for any reason shall be reinstated, as the case may be), if at any time payment, or any part thereof, of any of the obligations hereunder or under any Loan Document is rescinded and must be (and actually is) returned by any Guaranteed Beneficiary to the Person who made the payment or on behalf of whom the payment was made upon the insolvency, bankruptcy or reorganization (or similar event) with respect to the Lessee, the Guarantor or otherwise, all as though such payment had not been made. (g) If the Guarantor fails to pay any amount hereunder when due to any Guaranteed Beneficiary, the Guarantor shall pay to such Guaranteed Beneficiary interest, on demand, on such amount at the appropriate rate described in Section 2.2D of the Credit Agreement. 5 (h) The Guarantor further agrees to pay to each Guaranteed Beneficiary any and all costs and expenses, including reasonable legal fees (which shall include allocated costs of internal counsel) and disbursements, incurred by such party in connection with enforcing its rights under this Guaranty. SECTION 3. COVENANTS OF GUARANTOR. The Guarantor hereby covenants for the benefit of each Guaranteed Beneficiary as follows: (a) No Assignment by Guarantor. Except as expressly permitted herein, the Guarantor agrees that it shall not assign any of its rights or obligations hereunder without the prior written consent of the Lessor, the Agent, and the Requisite Lenders. The Guarantor acknowledges that the Lessor intends to mortgage, grant, and assign all of the Lessor's right, title, and interest in and to this Guaranty and the Guarantor's obligations hereunder to the Agent, as administrative agent for and representative of the Lenders, as security for the Secured Obligations (as defined in the relevant Aircraft Chattel Mortgage), and the Guarantor hereby consents to such mortgage, grant, and assignment. (b) Default Under Loan Documents. The Guarantor agrees that it shall not take any action or fail to take any action that would cause a Default or Lease Event of Default under any Lease or a Potential Event of Default or Event of Default under any of the other Loan Documents. (c) Financial Statements and Reports. (i) The Guarantor agrees that, beginning with its quarterly report for the fiscal quarter ending September 30, 2001, it shall provide each Guaranteed Beneficiary with copies of the Guarantor's quarterly and annual financial statements for each fiscal quarter as soon as available and in any event within 45 days after the end of the relevant fiscal quarter and for each fiscal year within 90 days after the end of the relevant fiscal year. All such financial statements shall be prepared in accordance with GAAP and the annual financial statements shall be audited by an independent firm of certified public accountants of recognized national standing selected by the Guarantor and satisfactory to the Lessor and the Agent, and shall be accompanied by an unqualified report of such accounting firm, which report shall express no doubts about the ability of the Guarantor and its Subsidiaries to continue as a going concern, and shall state that such consolidated financial statements fairly present the consolidated financial position of the Guarantor and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards. (ii) The Guarantor shall provide each Guaranteed Beneficiary with copies of any interim financial statements that it may prepare for public dissemination from time to time (it being understood that the Guarantor shall have no obligation hereunder to prepare 6 any such interim financial statements for public dissemination) simultaneously with the dissemination thereof. (iii) Within 15 days after receipt by the Guarantor of a notice of request therefor from the Lessor, the Agent, or the Requisite Lenders, the Guarantor shall provide such explanations or related additional information as any Guaranteed Beneficiary may reasonably request with respect to any financial statement provided pursuant to Section 3(d)(i) or (ii) above. (d) Inspection. The Guarantor will permit each Guaranteed Beneficiary (or such Person as such Guaranteed Beneficiary may designate), upon reasonable notice and at a mutually convenient time and, so long as no Event of Default has occurred and is continuing, at such Guaranteed Beneficiary's expense, to visit the headquarters of the Guarantor in order to discuss with the relevant officers of the Guarantor the financial affairs and condition of the Guarantor or of any Subsidiary thereof, to the extent related to the performance of (or ability to perform) its obligations under this Guaranty; provided, that, unless a Lease Event of Default shall have occurred and be continuing, such actions may not unreasonably interfere with the business and operations of the Guarantor or any Subsidiary. (e) GE Capital Loans. The Guarantor will ensure that no default or event of default (or the equivalent thereof) under any of the credit documents entered into or to be entered into in connection with the GE Capital Loans (as defined in the Lease Amendment) occurs or continues. The Guarantor will notify the Lessor, the Agent, and each of the Lenders immediately (i) upon the occurrence of any default or event of default (or the equivalent thereof) or other breach under any of such credit documents, (ii) upon any notice given by any party to such credit documents of the existence of any such default or event of default (or the equivalent thereof) or other breach, regardless of whether such default or event of default (or the equivalent thereof) or other breach shall have actually occurred, and (iii) upon the occurrence of any other event or omission that could reasonably be construed as a default or event of default (or the equivalent thereof) under, or as a breach of, any of such credit documents. SECTION 4. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The Guarantor makes, for the benefit of each Guaranteed Beneficiary, each of the representations and warranties made in the Lease Agreement by the Lessee as to the Guarantor, its assets, financial condition, operations, organization, legal status, business, and the Loan Documents to which it is a party. SECTION 5. MISCELLANEOUS. (a) Waivers; Cumulative Effect. A waiver by any Guaranteed Beneficiary of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Guaranteed Beneficiary (or any other Guaranteed Beneficiary) would otherwise have had on any future occasion with regard to any subsequent breach. No failure to exercise nor any delay in exercising on the part of any Guaranteed Beneficiary any right, power, or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any 7 other right, power, or privilege. The rights and remedies herein provided are cumulative and may be exercised singularly or concurrently, and are not exclusive of any rights and remedies provided by law or by the Lease Agreement or the other Loan Documents. (b) Amendments; Waivers. This Guaranty may not be terminated, amended, supplemented, waived, or modified orally, but may be terminated, amended, supplemented, waived, or modified upon the prior written consent of the Guarantor, the Lessor, the Agent, and the Requisite Lenders. (c) Severability. Any provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (d) Counterparts. This Guaranty may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. (e) Notices. Any notice to the Guarantor hereunder may be directed to the Guarantor at its address set forth in Annex A, or to such other address as the Guarantor may designate by notice given to the other parties hereto. (f) Headings, References. The section and paragraph headings in this Guaranty are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof. (g) Governing Law. THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS GUARANTY HAS BEEN DELIVERED IN THE STATE OF NEW YORK. (h) Benefit and Binding Effect. The terms of this Guaranty shall be binding upon the Guarantor, and shall inure to the benefit of the Guarantor, each Guaranteed Beneficiary, and their respective successors and permitted assigns (to the extent permitted hereunder and under the Loan Documents). (i) Service of Process; Jurisdiction and Waiver. The Guarantor (A) hereby irrevocably submits to the nonexclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County (without prejudice to the right of any party to remove to the United States District Court for the Southern District of New York) and (ii) the United States District Court for the Southern District of New York for the purposes of any suit, action, or other proceeding arising out of this Guaranty or the subject matter hereof brought by any Guaranteed Beneficiary or its successors or permitted assigns, (B) hereby irrevocably agrees that all claims in 8 respect of such suit, action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court, and (C) to the extent permitted by applicable law, hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action, or proceeding any claim that it is not personally subject to the jurisdiction of the above-named courts, that the suit, action, or proceeding is brought in an inconvenient forum, that the venue of the suit, action, or proceeding is improper, or that this Guaranty or the subject matter hereof may not be enforced in or by such court. THE GUARANTOR WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY. A final judgment obtained in respect of any suit, action, or proceeding referred to in this Section 5(i) shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any manner as provided by applicable law. The Guarantor hereby consents to service of process in connection with the subject matter specified in the first sentence of this Section 5(i) in connection with the above-mentioned courts by registered mail, FedEx, DHL, or similar courier at the address to which notices to it are to be given as provided in Annex A hereto, it being agreed that service in such manner shall constitute valid service upon the Guarantor and its successors and assigns in connection with any such suit, action, or proceeding only; provided, however, that nothing in this Section 5(i) shall affect the right of any of the Guaranteed Beneficiaries or their successors or assigns to serve legal process in any other matter permitted by law or affect the right of any of the Guaranteed Beneficiaries or their successors or assigns to bring any suit, action, or proceeding against the Guarantor or its properties in the courts of other jurisdictions. * * * * * 9 IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed as of the day and year first written above for the benefit of the parties named herein. ATLAS AIR WORLDWIDE HOLDINGS, INC. By: -------------------------------- Name: Title: 10 Annex A Address for Notices to Guarantor ATLAS AIR WORLDWIDE HOLDINGS, INC. 2000 Westchester Avenue Purchase, New York 10577-2543 Attention: Richard H. Shuyler SCHEDULE I Lease Agreement, dated as of April 25, 2000, between the Lessor and the Lessee, as supplemented by Lease Supplement No. 1, dated as of April 25, 2000, which were recorded together as one instrument by the Federal Aviation Administration (the "FAA") on [May 24], 2000, as Conveyance No. [__________] [,and as further supplemented by Lease Supplement No. 2, dated as of __________, 2000, which was recorded by the FAA on __________, 20___, as Conveyance No. __________], and as amended by Amendment No. 1 to Lease Agreement, dated as of October 15, 2001, and as further amended by Amendment No. 2 to Lease Agreement, dated as of the date of this Guaranty.