Exhibit 10.3
GUARANTY AGREEMENT
This
GUARANTY AGREEMENT (this "Guaranty"), dated as of December 20,
2007,
is made by John Sawyer, an individual (the "Guarantor") in favor of
Victory Park
Master Fund, Ltd., as Lead Secured Party for the Secured Parties
referred to
below (in such capacity, together with its successors in such
capacity, the
"Lead Secured Party").
WHEREAS, Global Aircraft Solutions Inc., a Nevada corporation
("Parent"),
and Hamilton Aerospace Technologies, Inc., a Delaware corporation
("Hamilton"),
World Jet Corporation, a Nevada corporation ("World Jet"), and
Hamilton
Aerospace Mexico S.A. de C.V. a Mexican corporation ("Hamilton
Mexico") as
subsidiaries of the Parent (each, including the Parent, an "Issuer"
and
together, including the Parent, the "Issuers"), have entered into
that certain
Securities Purchase Agreement, dated as of the date hereof (as the
same from
time to time hereafter may be amended, modified, supplemented or
restated,
respectively the "Securities Purchase Agreement"), by and among the
Lead Secured
Party and the Holders of the Debentures as defined below (together
the "Secured
Parties"), whereby the Secured Parties agreed to purchase those
certain Senior
Secured Debentures and Junior Secured Debenture due December 19,
2008 (or other
date as set forth therein) in the original aggregate principal
amount of
$10,000,000, as the same may be amended from time to time (the
"Debentures");
WHEREAS, the Issuers and Secured Parties have entered into that
certain
Pledge and Security Agreement (the "Security Agreement") and those
certain
Aircraft Security Agreements (the "Aircraft Security Agreements")
of even date
herewith, whereby the assets of the Issuers are pledged to the
Secured Parties;
WHEREAS, it is a condition precedent to the purchase of the
Debentures by
the Secured Parties that the Guarantor shall have executed and
delivered this
Guaranty to the Secured Parties; and
WHEREAS, the Guarantor expects to realize direct and indirect
benefits as
the result of the purchase of the Debentures from the Issuers.
NOW
THEREFORE, to induce the Secured Parties to purchase the
Debentures
pursuant to the Securities Purchase Agreement, the Guarantor has
agreed to
guarantee the amount of $2,000,000 upon the terms and conditions of
this
Guaranty. Accordingly, the Guarantor agrees as follows:
SECTION 1. DEFINITIONS.
1.01. Definitions. Unless otherwise defined herein, all capitalized
terms
used in this Guaranty that are defined in the Securities Purchase
Agreement, the
Security Agreement and the Debentures (including those terms
incorporated by
reference) shall have the respective meanings assigned to them in
the Securities
Purchase Agreement, the Security Agreement and the Debentures. In
addition, the
following terms shall have the following meanings under this
Guaranty:
"Bankruptcy Code" shall mean Title 11 of the United States
Code.
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"Guaranteed Obligations" shall mean (a) any and all obligations of
the
Issuers and any and all other obligations of the Issuers for the
performance of
their agreements, covenants and undertakings under or in respect of
the
Transaction Documents (as defined in the Securities Purchase
Agreement, and (b)
any and all other obligations of the Issuers for the payment of all
amounts,
liabilities and indebtedness (whether for principal, interest,
reimbursement,
fees, charges, indemnification or otherwise) now or in the future
owed to the
Lead Secured Party, the Secured Parties or any such Person
individually, and for
the performance by the Issuers of their agreements, covenants and
undertakings,
in each case under or in respect of any and all of the Transaction
Documents, it
being acknowledged by the Guarantor that such other obligations may
arise or be
created, incurred or assumed at any time and from time to time and
in such
manner and such circumstances and with such terms and provisions as
the Issuers,
the Lead Secured Party and the Secured Parties or any such Person
individually
may agree without notice or demand of any kind or nature whatsoever
to the
Guarantor.
1.02. Interpretation. In this Guaranty, unless otherwise indicated,
the
singular includes the plural and plural the singular; words
importing any gender
include the other gender; references to statutes or regulations are
to be
construed as including all statutory or regulatory provisions
consolidating,
amending or replacing the statute or regulation referred to;
references to
"writing" include printing, typing, lithography and other means of
reproducing
words in a tangible visible form; the words "including," "includes"
and
"include" shall be deemed to be followed by the words "without
limitation";
references to articles, sections (or subdivisions of sections),
exhibits,
annexes or schedules are to this Guaranty; references to agreements
and other
contractual instruments shall be deemed to include all subsequent
amendments,
extensions and other modifications to such instruments; and
references to
Persons include their respective successors and permitted assigns
and, in the
case of governmental authorities, Persons succeeding to their
respective
functions and capacities.
SECTION 2. THE GUARANTEE.
2.01. Guarantee. Subject to the limitation set forth in Section
2.09, the
Guarantor hereby agrees that if the Issuers shall fail to pay in
full when due
(whether at stated maturity, by acceleration or otherwise) all or
any part of
the Debentures, and in case that the proceeds of any sale by
foreclosure of the
assets of the Issuers shall not satisfy the Debentures, the
Guarantor will
immediately pay to the Secured Parties the unpaid obligations of
the Issuers,
provided, that, the Guarantor shall not be obligated to pay an
amount greater
than $2,000,000. Such payment shall be made without any demand or
notice
whatsoever, and upon any extension of time of payment or renewal of
all or any
part of the Debentures, the same will be timely paid when due
(whether at
extended maturity, by acceleration or otherwise) in accordance with
the terms of
such extension or renewal. This Guaranty is absolute, irrevocable
and
unconditional (except as provided herein) in nature and is made
with respect to
any and all obligations now existing or in the future arising. The
Guarantor's
liability under this Guaranty shall continue until full
satisfaction of the
Debentures. This Guaranty constitutes a guaranty of payment and not
collection.
The Guarantor shall not be obligated to make any payment under this
Guaranty
unless the proceeds of the Collateral have been insufficient to
repay in full
the First Lien Indebtedness.
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2.02. Acknowledgments, Waivers and Consents. The Guarantor
acknowledges
that the obligations undertaken by it under this Guaranty involve
the guarantee
of obligations of Persons other than the Guarantor and that such
obligations of
the Guarantor are absolute, irrevocable and unconditional (except
as provided
herein) under any and all circumstances. In full recognition and in
furtherance
of the foregoing, the Guarantor agrees that:
(a)
Without affecting the enforceability or effectiveness of this
Guaranty
in accordance with its terms and without affecting, limiting,
reducing,
discharging or terminating the liability of the Guarantor, or the
rights,
remedies, powers and privileges of the Lead Secured Party and the
Secured
Parties under this Guaranty, the Lead Secured Party and the Secured
Parties may,
at any time and from time to time and without notice or demand of
any kind or
nature whatsoever:
(i) amend, supplement, modify, extend, renew, waive, accelerate
or
otherwise change the time for payment or performance of, or the
terms of, all or
any part of the Debentures pursuant to the terms thereof;
(ii) amend,
supplement, modify, extend, renew, waive or otherwise
change, or enter into or give, any agreement, security document,
guarantee,
approval, consent or other instrument with respect to all or any
part of the
Debentures, any Transaction Document or any such other instrument
or any term or
provision of the foregoing pursuant to the terms thereof;
(iii) accept or enter into new or additional agreements,
security
documents, guarantees (including letters of credit) or other
instruments in
addition to, in exchange for or relative to any Transaction
Document, all or any
part of the Debentures or any collateral now or in the future
serving as
security for the Debentures;
(iv) accept or receive (including from any other guarantor)
partial
payments or performance on the Debentures (whether as a result of
the exercise
of any right, remedy, power or privilege or otherwise);
(v) accept, receive and hold any additional collateral for all or
any
part of the Debentures (including from any other guarantor);
(vi) release, reconvey, terminate, waive, abandon, allow to lapse
or
expire, fail to perfect, subordinate, exchange, substitute,
transfer, foreclose
upon or enforce any collateral, security documents or guarantees
(including
letters of credit or the obligations of any other guarantor) for or
relative to
all or any part of the Debentures;
(vii) apply any collateral or the proceeds of any collateral or
guarantee (including any letter of credit or the obligations of any
other
guarantor) to all or any part of the Debentures in such manner and
extent as the
Lead Secured Party or any Secured Party may in its discretion
determine;
(viii) release any Person (including any other guarantor) from
any
personal liability with respect to all or any part of the
Debentures;
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(ix) settle, compromise, release, liquidate or enforce upon such
terms
and in such manner as the Lead Secured Party or the Secured Parties
may
determine or as applicable law may dictate all or any part of the
Debentures or
any collateral on or guarantee of (including any letter of credit
issued with
respect to) all or any part of the Debentures (including with any
other
guarantor);
(x)
consent to the merger or consolidation of, the sale of
substantial
assets by, or other restructuring or termination of the existence
of the Issuers
or any other Person (including any other guarantor);
(xi) proceed against the Issuers, the Guarantor or any other
guarantor
of all or any part of the Debentures or any collateral provided by
any Person
and exercise the rights, remedies, powers and privileges of the
Lead Secured
Party and the Secured Parties under the Transaction Documents or
otherwise in
such order and such manner as the Lead Secured Party or any Secured
Party may,
in its discretion, determine, without any necessity to proceed upon
or against
or exhaust any right, remedy, power or privilege (other than
against Collateral)
before proceeding to call upon or otherwise enforce this Guaranty
as to the
Guarantor;
(xii) obtain the appointment of a receiver with respect to any
collateral for all or any part of the Debentures and apply the
proceeds of such
receivership as the Lead Secured Party or any Secured Party may in
its
discretion determine (it being agreed that nothing in this clause
(xii) shall be
deemed to make the Lead Secured Party or any Secured Party a party
in possession
in contemplation of law, except at its option); and
(xiii) do all or any combination of the actions set forth in
this
Section 2.02(a).
(b)
The enforceability and effectiveness of this Guaranty and the
liability
of the Guarantor and the rights, remedies, powers and privileges of
the Lead
Secured Party and the Secured Parties under this Guaranty shall not
be affected,
limited, reduced, discharged or terminated, and the Guarantor
hereby expressly
waives to the fullest extent not prohibited by applicable law any
defense now or
in the future arising (other than a defense that the Debentures
have been paid
in full in cash), by reason of:
(i) the illegality, invalidity or unenforceability of all or any
part
of the Debentures, any Transaction Document or any agreement,
security document,
guarantee or other instrument relative to all or any part of the
Debentures;
(ii) [Reserved.]
(iii) the illegality, invalidity or unenforceability of any
security
or guarantee (including any letter of credit) for all or any part
of the
Debentures or the lack of perfection or continuing perfection or
failure of the
priority of any lien on any collateral for all or any part of the
Debentures;
(iv) [Reserved.]
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(v)
any failure of the Lead Secured Party or any Secured Party to
give
notice of sale or other disposition of any collateral (including
any notice of
any judicial or nonjudicial foreclosure or sale of any interest in
real property
serving as collateral for all or any part of the Debentures) for
all or any part
of the Debentures to the Issuers, the Guarantor or any other Person
or any
defect in, or any failure by the Guarantor or any other Person to
receive, any
notice that may be given in connection with any sale or disposition
of any
collateral;
(vi) any failure of the Lead Secured Party or any Secured Party
to
comply with applicable laws in connection with the sale or other
disposition of
any collateral for all or any part of the Debentures;
(vii) [Reserved.]
(viii) any law which provides that the obligation of a surety
or
guarantor must neither be larger in amount nor in other respects
more burdensome
than that of the principal or which reduces a surety's or
guarantor's obligation
in proportion to the principal obligation;
(ix) the possibility that the obligations of the Issuers to the
Lead
Secured Party and the Secured Parties may at any time and from time
to time
exceed the aggregate liability of the Guarantor under this
Guaranty;
(x) [Reserved.]
(xi) any failure of the Lead Secured Party or any Secured Party
to
file or enforce a claim in any bankruptcy or other proceeding with
respect to
any Person.
(xii) the election by the Lead Secured Party or any Secured Party
in
any bankruptcy proceeding of any Person, of the application or
nonapplication of
Section 1111(b)(2) of the Bankruptcy Code;
(xiii) any extension of credit or the grant of any Lien under
Section
364 of the Bankruptcy Code;
(xiv) any use of cash collateral under Section 363 of the
Bankruptcy
Code;
(xv) any agreement or stipulation with respect to the provision
of
adequate protection in any bankruptcy proceeding of any Person;
(xvi) the
avoidance of any Lien in favor of the Lead Secured Party or
any Secured Party for any reason;
(xvii) any ba
