EXHIBIT 10.50 (e)
GUARANTY
(Atlantic Coast Airlines Trust No. N__)
dated as of September 30, 1997
of
ATLANTIC COAST AIRLINES, INC.
One Canadair Regional Jet Series 200ER Aircraft
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ii
TABLE OF CONTENTS
Page
1. Guarantee of Obligations.......................................................................................1
(a) Guarantee............................................................................................1
(b) Absolute Guarantee...................................................................................2
(c) Guarantee of Payment and Performance.................................................................3
(d) Waiver...............................................................................................3
(e) Termination..........................................................................................3
2. Rights Limited to Guaranteed Parties...........................................................................4
3. Bankruptcy, etc................................................................................................4
4. Subrogation....................................................................................................4
5. Amendments and Other Actions...................................................................................4
6. Assignment.....................................................................................................4
7. Written Changes Only...........................................................................................5
8. Payments.......................................................................................................5
9. Representations, Warranties, and Covenants.....................................................................5
(a) Organization.........................................................................................5
(b) Authorization; Compliance............................................................................5
(c) Approvals............................................................................................6
(d) Validity of Guaranty.................................................................................6
(e) Litigation...........................................................................................6
(f) Financial Statements.................................................................................6
(g) Tax Assessments......................................................................................6
(h) Annual Reporting.....................................................................................6
(i) ERISA................................................................................................6
10. Consent to Jurisdiction.......................................................................................7
11. Integration; Successors and Assigns...........................................................................7
12. Notices.......................................................................................................7
13. Governing Law.................................................................................................8
14. Costs and Expenses............................................................................................8
15. Performance...................................................................................................8
8
GUARANTY
(Atlantic Coast Airlines Trust No. N__)
This Guaranty (Atlantic Coast Airlines Trust No. N___) is issued as of
September 30, 1997 by Atlantic Coast Airlines, Inc. (the "Guarantor"), a
Delaware corporation, in favor of the parties listed in Schedule I hereto (the
"Guaranteed Parties").
The terms in this Guaranty have the same meanings and usage as in the
Participation Agreement (Atlantic Coast Airlines Trust No. _______) (the
"Participation Agreement"), dated as of the date of this Guaranty, among the
Guaranteed Parties and Atlantic Coast Airlines (the "Lessee"), a California
corporation.
The Guarantor is the direct or indirect owner of all of the common
stock of the Lessee.
The Guaranteed Parties are unwilling to consummate the transactions
contemplated by the Participation Agreement unless the Guarantor issues this
Guaranty.
The Guarantor therefore agrees as follows:
. 1. Guarantee of Obligations
(a) Guarantee. The Guarantor acknowledges that it is fully aware of the
terms and conditions of the Participation Agreement, the Lease (in the
unexecuted form attached to the Participation Agreement), and the other
Operative Agreements in effect on the date hereof (the "Guaranteed Documents"),
and hereby irrevocably and unconditionally guarantees to the Guaranteed Parties,
as primary obligor and not merely as surety, without offset or deduction, (1)
the Lessee's payment of all its payment obligations under the Guaranteed
Documents when due (including when due by virtue of the declaration of the Lease
to be in default) (the "Financial Obligations"), and (2) the Lessee's
performance of all its other obligations under the Guaranteed Documents (the
"Nonfinancial Obligations") (the Financial Obligations and Nonfinancial
Obligations being the "Obligations").
If the Lessee fails to pay any Financial Obligation within the
applicable grace period after it becomes due and payable, the Guarantor will pay
all Financial Obligations then due and payable, upon first demand of any
Guaranteed Party (such demand to be sent to the Lessee and the Guarantor;
provided, that the failure to make any such demand shall not relieve the
Guarantor of its obligations or liabilities hereunder and shall not impair or
affect the rights and remedies, express or implied, or as a matter of law, of
any Guaranteed Party against the Guarantor).
If the Lessee fails to perform any Nonfinancial Obligation for any
reason when it is required to be performed and any applicable grace period has
expired, the Guarantor will cause such Nonfinancial Obligation to be performed
within five Business Days following any Guaranteed Party's first demand (such
demand to be sent to the Lessee and the Guarantor; provided, that the failure to
make any such demand shall not relieve the Guarantor of its obligations or
liabilities hereunder and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of any Guaranteed Party against the
Guarantor).
(b) Absolute Guarantee. The Guarantor's obligations under this Guaranty
shall be absolute and unconditional, shall remain in full force and effect until
irrevocable payment, performance, or observance in full of all of the
Obligations, and shall not be affected by any action taken or not taken by any
Guaranteed Party, by any lack of prior enforcement or retention of any rights
against the Lessee or the Guarantor, by any illegality, unenforceability, or
invalidity of the Obligations or the Guaranteed Documents, by any other guaranty
or other obligations, or by any other circumstance or condition (whether or not
the Guarantor or the Lessee shall have any knowledge or notice thereof),
including: (1) any termination, amendment, modification, or other change in, or
supplement to, any of the Guaranteed Documents or any other agreement, or to the
Aircraft or any part thereof, or any assignment, mortgage, or transfer thereof,
or any leasing or subleasing of the Aircraft, or any furnishing or acceptance of
additional security, or release of any security, for the obligations of the
Lessee under the Guaranteed Documents, or the failure of any security or any
failure to perfect any interest in any collateral given by the Lessee under the
Guaranteed Documents; (2) any failure, omission, or delay on the part of any
Person to conform or comply with any term of any Guaranteed Document or any
other agreement, including failure to give notice to the Guarantor of the
occurrence of a Default; (3) any waiver of the payment, performance, or
observance of any of the obligations, conditions, covenants, or agreements
contained in any Guaranteed Document or any other agreement or any other waiver,
consent, extension, indulgence, compromise, settlement, release, or other action
or inaction under or in respect of any Guaranteed Document, or any exercise or
nonexercise of any right or remedy under any Guaranteed Document or any
obligation or liability of the Lessee or any Guaranteed Party, or any exercise
or nonexercise of any right, remedy, power, or privilege under or in respect of
any Guaranteed Document or any such obligation or liability; (4) any extension
of time for payment or performance of any Obligation; (5) the exchange,
modification, substitution, or surrender of any collateral; (6) any failure,
omission, or delay on the part of any Guaranteed Party to enforce, assert, or
exercise any right, power, or remedy conferred on it in connection with any
Guaranteed Document, or any other action on the part of any Guaranteed Party;
(7) any voluntary or involuntary bankruptcy, insolvency, assignment for the
benefit of creditors, receivership, conservatorship, custodianship, liquidation,
marshalling of assets and liabilities, or similar proceeding with respect to the
Lessee, the Guarantor, or any other Person or any of their respective properties
or creditors, or the disaffirmance in whole or in part of any of the Guaranteed
Documents in any such proceeding, or any action taken by any trustee or receiver
or by any court in any such proceeding; (8) any limitation on the Lessee's
liability or obligations (or the liabilities and obligations of any other
Person) or any discharge, termination, cancellation, frustration, irregularity,
invalidity, or unenforceability, in whole or in part, of any of the Guaranteed
Documents or any other agreement; (9) any defect in the title, compliance with
specifications, condition, design, operation, or fitness for use of the
Aircraft, or any damage to or loss or destruction of the Aircraft, or any
interruption or cessation of the use of the Aircraft for any reason (including
any force majeure and any act of a governmental or military authority); (10) any
merger or consolidation of the Lessee or the Guarantor into or with any other
corporation, or any sale, lease, or other transfer of any of the assets of the
Lessee or the Guarantor to any other Person or any change in the ownership of
the Guarantor or in the control of any such owner; (11) to the extent permitted
by law, any release or discharge, by operation of law, of the Guarantor from the
performance or observance of any obligation, covenant, or agreement contained in
this Guaranty; and (12) any other condition or circumstance which might
otherwise constitute a legal or equitable discharge, release, or defense of a
surety or guarantor, or which might otherwise limit recourse against the
Guarantor, including any discharge, release, defense, or limitation arising out
of any laws of the United States of America or any state thereof or any other
governmental entity having authority thereover which would exempt, modify, or
delay the due or punctual payment and performance of the obligations of the
Guarantor hereunder (it being agreed that the obligations of the Guarantor
hereunder shall not be discharged except by payment or performance). No failure
or delay in exercising any right under this Guaranty shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right of any
Guaranteed Party under this Guaranty or the Guaranteed Documents.
(c) Guarantee of Payment and Performance. This Guaranty is a guarantee
of payment and performance and not merely of collection, and the Guarantor
waives any right to require that any action against the Lessee or any other
Person or any collateral or security be taken or exhausted before action is
taken against the Guarantor. No Guaranteed Party shall be required (1) to file
suit or to proceed to obtain or assert a claim against the Lessee for the
Obligations, (2) to make any effort at collection of the Obligations from the
Lessee, (3) to foreclose against or seek to realize upon any present or future
security for the Obligations, (4) to file suit or to proceed to obtain or assert
a claim for personal judgment against any other Person liable for the
Obligations, or to make any effort at collecting the Obligations from any such
other Person, or to exercise or assert any other right or remedy to which any
Guaranteed Party is or becomes entitled in connection with the Obligations or
any security or other guarantee therefor, or (5) to assert or to file any claim
against the assets of the Lessee or any other guarantor or any other Person
liable for the Obligations, or any part thereof, either before or as a condition
to enforcing the Guarantor's liability under this Guaranty or to require the
Guarantor to pay or perform the Obligations at any time thereafter.
(d) Waiver. Except as otherwise expressly provided in this Guaranty or
any other Operative Agreement, the Guarantor hereby waives diligence,
presentment, demand, protest, and notice of any kind whatsoever with respect to
this Guaranty or the Obligations, including (1) notice of acceptance of this
Guaranty, notice of nonpayment or nonperformance of any of the Obligations, and
notice of a Default; (2) any requirement to exhaust any remedies exercisable
upon a default under any Guaranteed Document or other agreement; (3) any notice
of any sale, transfer, or other disposition of any right or title to or interest
in the Aircraft or any part thereof; and (4) any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge, release, or
defense of a guarantor or surety or which might otherwise limit recourse against
the Guarantor.
(e) Termination. The Guarantor's obligations under this ss. 1 shall
terminate (subject to reinstatement under ss. 3 hereof) when the Obligations
have been irrevocably paid and performed in full.
2. Rights Limited to Guaranteed Parties. This Guaranty shall not create
any right in any Person except the Guaranteed Parties (and their permitted
successors and assigns), and shall not be construed in any respect to be a
contract in whole or in part for the benefit of any other Person.
If at any time all or any part of any payment or performance theretofore
applied to any of the Obligations is or must be rescinded or returned for any
reason whatsoever (including the bankruptcy, insolvency, or reorganization of
the Lessee), such Obligations shall, for purposes of this Guaranty, to the
extent rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by any Guaranteed Party, and this Guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Obligations all as though such application by any Guaranteed Party had not been
made. If an event permitting the declaration of default under a Guaranteed
Document exists at any time, and such declaration of default is prevented by the
pendency against Lessee or any other Person of a case or proceeding under a
bankruptcy or insolvency law, then for purposes of this Guaranty and the
Guarantor's obligations hereunder, such Guaranteed Document shall be deemed to
have been declared in default with the same effect as if such Guaranteed
Document had been enforceable in accordance with the terms thereof, and the
Guarantor shall forthwith pay the amounts due hereunder as specified by any
Guaranteed Party, any interest thereon, and any other amounts guaranteed
hereunder, without further notice or demand.
4. Subrogation. If the Guarantor makes a payment to a Guaranteed Party
under this Guaranty, the Guarantor shall be subrogated to that Guaranteed
Party's claims against the Lessee or any other Person relating to that payment.
Any such subrogation right shall be subject and subordinate to the Guaranteed
Parties' rights under the Guaranteed Documents. No payment or performance
hereunder by the Guarantor shall give rise to any claim of the Guarantor against
any of the Guaranteed Parties; provided, that this sentence shall not prevent
the Guarantor from being subrogated to any claim available to the Lessee.
5. Amendments and Other Actions. Any Guaranteed Party may, in its
discretion, and without affecting the Guarantor's absolute and unconditional
liability under this Guaranty, agree to amendments, modifications, or
supplements to the Lease, the Indenture, the other Guaranteed Documents, or any
other agreement, give or withhold consents, waivers, or approvals, and exercise
or refrain from exercising rights under the Lease, the Indenture, the other
Guaranteed Documents, or any other agreement.
6. Assignment. Any Guaranteed Party may at any time sell, assign,
transfer, or otherwise dispose of its interest in all or any part of this
Guaranty, the Lease, the Indenture, the other Guaranteed Documents, or any other
agreement and in the property and interests subject thereto and hereto, subject
to any limitations and conditions thereon in any such Guaranteed Document or
other agreement. To the extent of the interest acquired by it, any purchaser,
assignee, transferee, or other party so acquiring any Guaranteed Party's
interest shall have the same rights as such assigning Guaranteed Party hereby
and shall be deemed and declared a "Guaranteed Party" hereunder. The Guarantor
shall not assign any of its rights or obligations hereunder, including any claim
arising by subrogation.
. No amendment, waiver, or consent under the terms of this Guaranty shall be
effective unless evidenced by an instrument in writing signed by the Guarantor
and each Guaranteed Party.
. All payments by the Guarantor hereunder shall be made in the United States in
U.S. dollars and in immediately available funds, and otherwise as provided in
the Guaranteed Documents pursuant to which the relevant Obligations are created.
All payments hereunder shall be made free and clear of, and without deduction or
withholding for or on account of, any taxes, levies, fees, imposts, duties,
expenses, commissions, withholdings, assessments, or other charges, together
with all penalties, fines, additions to tax, and interest thereon (collectively,
"Taxes") to the extent that any such Taxes would reduce the amount that the
Guaranteed Party receiving the payment otherwise would have received had the
Lessee made such payment. If any Taxes must be deducted or withheld from any
payment hereunder, the Guarantor shall increase the amount paid so that the
Guaranteed Party receiving the payment receives the full amount of the payment
provided for in this Guaranty on an After-Tax Basis.
9. Representations, Warranties, and Covenants. The Guarantor hereby represents, warrants, and
covenants to the Guaranteed Parties as follows:
(a) Organization. The Guarantor is a corporation duly organized and
existing under the laws of Delaware, and has the power and authority to carry on
its business as now conducted, to own or to hold under lease the properties it
holds itself out as owning or leasing, and to enter into and perform its
obligations under this Guaranty.
(b) Authorization; Compliance. The Guarantor has the power and
authority to issue this Guaranty. This Guaranty has been duly authorized by all
necessary action on the Guarantor's part, and does not require any approval or
other action of the shareholders of the Guarantor or approval or consent of any
trustee or holders of any indebtedness or obligations of the Guarantor or of any
other Person, except such as have been obtained, and the Guarantor has duly
executed and delivered this Guaranty. The Guarantor's execution, delivery, and
performance of this Guaranty are not inconsistent with the Guarantor's
certificate of incorporation or by-laws, do not contravene any law, judgment,
decree, governmental rule, regulation, or order applicable to or binding on the
Guarantor, and do not contravene, result in any breach of, or constitute any
default or result in the creation of any Lien under, any indenture, mortgage,
security agreement, deed of trust, or other agreement or instrument to which the
Guarantor is a party or by which the Guarantor or its properties are bound which
reasonably may be expected to have a materially adverse effect on the
Guarantor's financial condition or ability to perform its obligations under this
Guaranty.
(c) Approvals. Neither the Guarantor's execution and delivery of this
Guaranty, nor the Guarantor's consummation of any of the transactions
contemplated hereby, requires the consent or approval of, giving of notice
(other than subsequent reporting requirements) to, registration with, or taking
of any other action in respect of, any governmental authority or agency, except
any which are in full force and effect.
(d) Validity of Guaranty. This Guaranty has been duly entered into,
executed, and delivered and constitutes a legal, valid, and binding obligation
of the Guarantor, enforceable against the Guarantor in accordance with its
terms. The Guarantor's obligations under this Guaranty rank, and until
discharged in full will continue to rank, in right of payment and security,
equally and ratably in all respects with all the Guarantor's present and future
unsecured and unsubordinated indebtedness for borrowed money.
(e) Litigation. There are no pending or, to the Guarantor's knowledge,
threatened actions or proceedings before any court or administrative agency of
the United States or any state thereof, which may be expected to have a
materially adverse effect on the Guarantor's financial condition or ability to
perform its obligations under this Guaranty.
(f) Financial Statements. All financial statements of the Guarantor
that the Guarantor or its agents delivered to any Guaranteed Party before the
date of this Guaranty have been prepared in accordance with generally accepted
accounting principles and are true and correct as of the date thereof. No
materially adverse change has occurred in the Guarantor's financial condition
since the latest date of such financial statements.
(g) Tax Assessments. The Guarantor does not know of any proposed tax
assessment against it and, in the Guarantor's opinion, all the Guarantor's tax
liabilities are adequately provided for.
(h) Annual Reporting. During the Term, the Guarantor shall furnish to
each Guaranteed Party: (x) in such quantities as each Guaranteed Party
reasonably requests, within 120 days after close of each fiscal year, an audited
balance sheet and related statements of operations and changes in financial
position of the Guarantor as of the end of such fiscal year, and (y) within the
period set forth in clause (x) above, a certificate of the Guarantor signed on
its behalf by the President or a financial officer stating that it has reviewed
the activities of the Lessee and that, to the best of its knowledge, no Default
exists (or if a Default exists, specifying the nature and period of existence
thereof and the action that Lessee has taken or proposes to take with respect
thereto).
(i) ERISA. The Guarantor does not maintain or contribute to, and is not
obligated to contribute to, any Plan.
10. Consent to Jurisdiction. The Guarantor irrevocably agrees that any
legal action or proceeding brought against the Guarantor with respect to this
Guaranty may be brought and determined in the Supreme Court of the State of New
York, New York County, or in the United States District Court for the Southern
District of New York, and the Guarantor hereby irrevocably accepts with regard
to any such action or proceeding, for itself and in respect of its properties,
generally and unconditionally, the nonexclusive jurisdiction of those courts.
The Guarantor hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense or counterclaim, or otherwise, in any such action or
proceeding, any claim that it is not personally subject to the jurisdiction of
the foregoing courts, that it or its property is exempt or immune from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise), and, to the extent permitted by law, 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 courts, and further irrevocably waives,
to the extent permitted by law, the benefit of any defense that would hinder or
delay the levy, execution, or collection of any amount to which any Guaranteed
Party is entitled pursuant to a final judgment of any court having jurisdiction
(provided, that this sentence shall not waive any requirement of service of
process). Nothing herein shall affect any Guaranteed Party's right to commence
legal proceedings or otherwise proceed against the Guarantor in any other
jurisdiction in which the Guarantor shall be subject to suit.
11. Integration; Successors and Assigns. This Guaranty constitutes the
entire agreement, and supersedes all prior agreements and understandings, both
written and oral, among the Guarantor and the Guaranteed Parties, with respect
to the subject matter hereof. This Guaranty shall bind the Guarantor's
successors and assigns, and shall benefit, and be enforceable by, the Guaranteed
Parties and their successors and assigns.
12. Notices. All requests, demands, notices, and other communications
hereunder shall be in writing (including telecopies), shall be in English, shall
be effective on delivery, and shall be addressed as follows (or to such other
address as any such person shall designate by notice to each other such person):
if to the Guarantor:
Atlantic Coast Airlines, Inc.
515A Shaw Road
Dulles, VA 20166
Attention: General Counsel
Fax: (703) 925-6294
Tel: (703) 925-6006
if to any Guaranteed Party:
to its address set forth in the Participation Agreement.
. This Guaranty is delivered in, and shall in all respects be governed by and
construed in accordance with the laws of, the state of New York, U.S.A.
(excluding any conflicts-of-laws rule that would apply the laws of any other
jurisdiction).
. The Guarantor agrees to pay to any Guaranteed Party any and all reasonable
expenses (including reasonable legal fees and expenses) incurred by such
Guaranteed Party in enforcing this Guaranty, together with any reasonable
expenses (including reasonable legal fees) incurred on account of the
Guarantor's bankruptcy or insolvency.
. The Guarantor's performance of any or all of the Obligations shall, for all
purposes of the Guaranteed Documents, constitute performance by the Lessee of
such Obligations.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty (Atlantic Coast Airlines Trust No. N___).
ATLANTIC COAST AIRLINES, INC.
By: ___________________________
Title: ___________________________
Schedule I
to Guaranty
Guaranteed Parties
State Street Bank and Trust Company of Connecticut, National Association, individually and as trustee [Owner
Trustee and Lessor]
The First National Bank of Maryland, individually and as trustee [Indenture Trustee, Pass-Through Trustee and
Subordination Agent]
ING Bank N.V. [Liquidity Provider]