EXHIBIT 10.2
AMENDED AND RESTATED GUARANTY
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This Amended And Restated Guaranty, dated as of July 29, 2005,
between
FIRST AVIATION SERVICES, INC., a Delaware
corporation with an office at 15
Riverside Avenue, Westport, Connecticut
06880 ("Guarantor") and HUDSON UNITED
BANK, a state banking corporation with an
office located at 101 Post Road East,
Westport, Connecticut 06880 (the
"Lender").
Recitals
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WHEREAS, AEROSPACE PRODUCTS INTERNATIONAL, INC., a Delaware
corporation
(the "Borrower") and Bank entered into a
Commercial Revolving Loan And Security
Agreement executed as of March 30, 2000, as
amended by that certain First
Amendment To Commercial Revolving Loan And
Security Agreement dated as of August
30, 2000, and as further amended by that
certain Second Amendment To Commercial
Revolving Loan And Security Agreement dated
as of April 27, 2001, and as further
amended by that certain Third Amendment To
Commercial Revolving Loan And
Security Agreement dated as of June 28,
2001, and as further amended by that
certain Fourth Amendment To Commercial
Revolving Loan And Security Agreement
dated as of July 31, 2002, and as further
amended by that certain Fifth
Amendment To Commercial Revolving Loan And
Security Agreement dated as of July
31, 2003, and as further amended by that
certain Sixth Amendment To Commercial
Revolving Loan And Security Agreement dated
as of July 31, 2004, as further
amended and restated by that Amended And
Restated Commercial Revolving Loan And
Security Agreement dated as of July 29,
2005 which Loan Agreement provided,
inter alia, for a commercial revolving loan
from the Bank to the Borrower in the
original amount of up to TWENTY FIVE
MILLION DOLLARS ($25,000,000) ("Loan 1") as
it may be amended or modified further from
time to time (the "Loan Agreement"),
providing, subject to the terms and
conditions thereof, for extensions of credit
in the amount of up to $25,000,000 to be
made by the Bank to the Borrower for
the benefit of the Borrower and the
Guarantor; and
WHEREAS, in connection with the Loan Agreement, the Borrower
executed
and delivered to Bank that certain
Commercial Revolving Promissory Note from
Borrower to Bank in the original amount of
up to TWENTY MILLION DOLLARS
($20,000,000) executed March 30, 2000, as
amended by the Second Amendment To
Commercial Revolving Loan And Security
Agreement dated as of April 27, 2001, and
as further amended by that certain Third
Amendment To Commercial Revolving Loan
And Security Agreement dated as of June 28,
2001, and as further amended by that
certain Fourth Amendment To Commercial
Revolving Loan And Security Agreement
dated as of July 31, 2002, and as further
amended by that certain Fifth
Amendment To Commercial Revolving Loan And
Security Agreement dated as of July
31, 2003, and as further amended by that
certain Sixth Amendment To Commercial
Revolving Loan And Security Agreement dated
as of July 31, 2004, and as further
amended and restated by that Amended And
Restated Commercial Revolving
Promissory Note dated as of July 29, 2005,
in an amount of up to TWENTY-FIVE
MILLION DOLLARS ($25,000,000) ("Note
1");
<PAGE>
WHEREAS, in connection with the Loan Agreement, the Borrower
also
executed and delivered that certain Line Of
Credit Promissory Note dated as of
July 29, 2005, in the original amount of up
to $3,000,000 ("Note 2") which
provides for, among other things, a
one-time advance as provided therein and in
the Loan Agreement ("Loan 2"; Loan 1 and
Loan 2 are collectively hereinafter
referred to as the "Loans", and Note 1 and
Note 2 are collectively hereinafter
referred to as the "Notes");
WHEREAS, it is required by the Loan Agreement, that the
Guarantor
execute and deliver this Guaranty whereby
the Guarantor shall guarantee the
payment when due of all principal, interest
and other amounts that shall be at
any time payable by the Borrower under the
Loan Agreement, the Notes and the
other loan documents executed in connection
therewith (collectively, the "Loan
Documents"); and
WHEREAS, in consideration of the financial and other support that
the
Borrower has provided, and such financial
and other support as the Borrower may
in the future provide, to Guarantor,
whether directly or indirectly, and in
order to induce the Lender to enter into
the Loan Agreement, the Guarantor is
willing to guarantee the obligations of the
Borrower under the Loan Agreement,
the Notes and the other Loan Documents.
Definitions
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Unless otherwise indicated, capitalized terms used herein shall
have
the respective meanings ascribed to such
terms in the Loan Agreement. As used
herein, the following words and terms shall
have the following meanings:
(a) "Contingent Liability" shall mean any agreement, undertaking
or
arrangement by which any Person guarantees,
endorses or otherwise becomes, or is
contingently liable upon (by direct or
indirect agreement, contingent or
otherwise, to provide funds for payment, to
supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure
a creditor against loss), the debt,
obligation or other liability of any other
Person (other than by endorsements of
negotiable instruments in the course of
collection), or guarantees the payment
of dividends or other distributions upon
the shares of any other Person. The
amount of the obligor's obligation under
any Contingent Liability shall be
deemed to be the outstanding principal
amount (or maximum permitted principal
amount, if larger) of the debt, obligation
or other liability guaranteed thereby
(subject to any limitation set forth
therein).
(b) "Material Adverse Effect" means a material adverse effect on
(i)
the business, operations, property or
condition (financial or otherwise) of the
Guarantor taken as a whole, (ii) the
ability of the Guarantor to perform its
obligations under this Guaranty or any of
the other Loan Documents, or (iii) the
validity or enforceability of this Guaranty
or any of the other Loan Documents
or the rights or remedies of the Bank.
(c) "Leverage
Ratio" for any period shall mean the ratio of (i) Total
Liabilities to (ii) Tangible Net Worth.
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(d) "Tangible Net Worth" shall mean, as at any date the sum of
the
Capital Stock and paid-in surplus, plus
retained earnings (or minus accumulated
deficit) of the Guarantor and its
Subsidiaries on a consolidated basis minus
intangible assets (including, without
limitation, franchises, patents and patent
applications, trademarks and brand names,
goodwill, research and development
expenses, unamortized debt discount and
expense, and all write-ups in the book
value of any asset).
(e) "Total Liabilities" shall mean at any time of determination,
amount
equal to all liabilities of the Guarantor
and its Subsidiaries determined on a
consolidated basis in accordance with
GAAP.
Agreement
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In consideration of the Recitals, which are incorporated by
reference
and the representations, covenants and
warranties contained herein, the parties,
intending to be bound legally, agree as
follows:
1. Guaranty. The Guarantor unconditionally guaranties the
punctual
payment when due, whether at stated
maturity, by acceleration or otherwise, of
the obligations of the Borrower under the
Notes and under any amendment,
modification, renewal, extension,
substitution or replacement thereof or
thereto, whether for principal, interest,
fees, expenses or otherwise and all
expenses incurred by the Lender in
enforcing any of its rights under this
Guaranty (such obligations being referred
to collectively as the "Obligations").
2. Guaranty Absolute.
(a) The Guarantor guaranties that the Obligations will be paid
strictly
in accordance with the terms thereof
regardless of any law, regulation or order
now or hereafter in effect in any
jurisdiction affecting any of such terms or
the rights of the Lender with respect
thereto. The liability of the Guarantor
under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Obligations
or
any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or
in
any other term of, all or any of the
Obligations, or any other amendment or
waiver of or any consent to departure from
the Obligations; or
(iii) any exchange, release or non-perfection of any
collateral,
or any release or amendment or waiver of or
consent to departure from any other
guaranty, for any of the Obligations.
(b) This Guaranty shall continue to be effective or be reinstated,
as
the case may be, if at any time any payment
of any of the Obligations is
rescinded or must otherwise be returned by
the Lender due to the insolvency,
bankruptcy or reorganization of the
Borrower or otherwise, all as though such
payment had not been made.
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3. Subrogation; Contribution. The Guarantor will not exercise
any
rights which it may acquire by way of
subrogation under this Guaranty, by any
payment made hereunder or otherwise, until
all the Obligations shall have been
paid in full. If any amount shall be paid
to the Guarantor on account of such
subrogation rights or by way of
contribution or indemnification at any time when
all the Obligations shall not have been
paid in full, such amount shall be held
in trust for the benefit of the Lender and
shall forthwith be paid to the Lender
to be credited and applied upon the
Obligations, whether matured or unmatured,
in accordance with the terms of the
Obligations. If the Guarantor shall make
payment to the Lender of all or any part of
the Obligations and all the
Obligations shall be paid in full, the
Lender will, at the Guarantor's request,
execute and deliver to the Guarantor
appropriate documents, without recourse and
without representation or warranty,
necessary to evidence the transfer by
subrogation to the Guarantor of an interest
in the Obligations resulting from
such payment by the Guarantor.
4. Affirmative Covenants. The Guarantor covenants and agrees that
so
long as this Guaranty shall remain in
effect and so long as the Obligations
shall remain unpaid, the Guarantor
shall:
4.1 Access to Records and Premises. Keep adequate records and
books of account, in which complete entries
will be made in accordance with GAAP
consistently applied with prior years,
reflecting all financial transactions of
the Guarantor. At any reasonable time
during normal business hours and upon
reasonable prior written notice, from time
to time, permit the Lender or any
agents or representatives thereof, for the
purpose of ascertaining whether or
not each and every provision hereof and of
any related documents, instrument or
document is being performed and to make
reasonable examinations and make
reasonable number of copies of and
abstracts from the records and books of
account of, and visit, examine and inspect
the properties of, the Lender and to
discuss the affairs, finances and accounts
of the Lender with the President, the
Directors and the chief financial officer
or the Lender's management, including,
without limitat
