Exhibit 10.4

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED.

 

EXECUTION VERSION

 

 

GUARANTEE (MSN 30241)

 

THIS GUARANTEE (MSN 30241) (this “Guarantee”) is dated as of July 26, 2019,
between:

 

(1)     CONTRAIL AVIATION SUPPORT, LLC, a limited liability company organized
and existing under the laws of the State of North Carolina, having its principal
place of business at 435 Investment Court, Verona, Wisconsin 53593
(“Guarantor”); and

 

(2)     SUN COUNTRY, INC. d/b/a Sun Country Airlines (formerly known as MN
Airlines, LLC), a corporation organized and existing under the laws of the State
of Minnesota and having its principal place of business at 1300 Corporate Center
Curve, Eagan, Minnesota 55121 (“Lessee”).

 

WHEREAS, Wells Fargo Trust Company, National Association, not in its individual
capacity, but solely as owner trustee (“Lessor”) and Lessee entered into that
certain Aircraft Lease Agreement, dated as of January 14, 2009 (as assigned,
assumed, amended, supplemented or otherwise modified from time to time,
collectively, the “Lease”) pertaining to one (1) Boeing model 737-700 aircraft
bearing manufacturer’s serial number 30241 and United States registration mark
N710SY and two (2) CFM International, Inc. CFM56-7B22 engines bearing
manufacturer’s serial numbers 889727 and 889728 (the “Aircraft”);

 

WHEREAS, Sapphire Finance I Holding Designated Activity Company, as seller
(“Seller”), Contrail Aviation Leasing, LLC, as buyer (“Buyer”) and Guarantor, as
Buyer Guarantor entered into that certain Aircraft Asset Sale and Purchase
Agreement relating to the sale of the beneficial interest in the trust holding
title to the Aircraft (the “Beneficial Interest”) by Seller to Buyer;

 

WHEREAS, Article 16(d) of the Lease requires that Buyer, as New Owner
Participant, at the time of transfer of the Beneficial Interest will have a net
worth of not less than $[___________] (or have its obligations under the Lease
guaranteed by a Person meeting such requirement); and

 

WHEREAS, Buyer does not have a net worth of at least $[___________] but
Guarantor, the parent of Buyer, has a net worth of at least $[___________] and
is willing to guarantee the obligations of Buyer under the Lease;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:

 

1.        Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings for all purposes of this Guarantee and
shall be equally applicable both to the singular and plural forms of the terms
defined. Any capitalized terms not defined herein shall have the meanings
ascribed to them in the Lease.

 

 

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“Guaranteed Agreements” means the Lease and the other Operative Agreements to
which Buyer is a party.

 

“Guaranteed Obligations” means all of Buyer’s obligations to the Lessee under
the Guaranteed Agreements (whether actual or contingent, whether now existing or
hereafter arising owed to the Lessee), and compliance with, all obligations,
covenants, terms, conditions and undertakings of Buyer contained in the
Guaranteed Agreements.

 

2.         Representations and Warranties of Guarantor. Guarantor represents and
warrants to the Lessee, as of the date hereof, as follows:

 

(a)    it is a limited liability company duly organized and validly existing
under the laws of the State of North Carolina and has the power and authority to
carry on its business as it is being conducted;

 

(b)   the execution and delivery of this Guarantee, the consummation of the
transactions contemplated herein, and compliance with the terms and provisions
hereof are within Guarantor’s limited liability company powers and do not and
will not result in any violation of its charter, by-laws or other constitutional
documents or any applicable law, rule, regulation, judgment or court order as
currently in effect or any provision in any existing agreement binding on
Guarantor;

 

(c)    all authorizations, consents, registrations and notifications required to
be obtained by Guarantor in connection with the entry into, performance,
validity and enforceability of this Guarantee and the transactions contemplated
by this Guarantee, have been (or will be on or before the date hereof) obtained
or effected (as appropriate) and are in full force and effect;

 

(d)    neither the execution, delivery nor performance of this Guarantee
requires any member approval or the approval or consent of any trustee or any
holder of any indebtedness or obligation of Guarantor, and if any approval or
consent is required, then such approval or consent has been obtained.

 

(e)    no consent or approval of, giving of notice to, registration with, or
taking of any action in respect of or by, any national or local governmental
authority or agency of Guarantor’s jurisdiction of formation or any other
government agency or authority or other Person is required with respect to the
execution, delivery or performance by Guarantor of this Guarantee.

 

(f)    there are no actions, suits or proceedings pending, or to Guarantor’s
knowledge threatened, against Guarantor, that, if adversely determined, would
hinder or prevent Guarantor’s performance of this Guarantee;

 

(g)    its obligations under this Guarantee are its direct, general and
unconditional obligations and rank, or will rank, at least pari passu with all
its other present and future unsecured and unsubordinated obligations (including
contingent obligations) save for obligations mandatorily preferred by law and
not otherwise;

 

 

(h)

as of the date hereof the Guarantor has a net worth of at least
US$[___________]; and

 

(i)    this Guarantee has been duly executed and delivered by Guarantor; and
this Guarantee will be, upon due execution and delivery hereof, a legal, valid
and binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as its enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws of general application affecting the
enforcement of creditors’ rights and general principles of equity (regardless of
whether such proceeding is considered a proceeding in equity or at law).

 

 

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3.         Guarantee.

 

(a)    For good and valuable consideration (the receipt and sufficiency whereof
is hereby acknowledged), Guarantor, with effect from the date hereof,
unconditionally and irrevocably, as a continuing obligation and guarantee of
performance, without set-off, abatement, deferment or deduction, guarantees to
Lessee the due and punctual payment and performance by Buyer of the Guaranteed
Obligations and undertakes with Lessee that whenever the Buyer does not promptly
pay or perform the Guaranteed Obligations when due, Guarantor shall promptly pay
upon the written demand from the Lessee the amount set forth in the demand or
perform (or procure the performance of) the Guaranteed Obligation as if it were
the principal obligor.

 

(b)    Guarantor as a principal obligor and not merely as surety, and as a
separate and independent primary stipulation shall indemnify Lessee upon written
demand against any documented loss, liability or cost or expense suffered by
Lessee (including reasonable attorneys’ fees and disbursements incurred by
Lessee in the enforcement of this Guarantee) if (i) it does not perform the
Guaranteed Obligations or (ii) any Guaranteed Obligation becomes unenforceable,
void, illegal or ineffective as against the Guarantor, the amount of such loss
or liability being the amount which the Lessee would otherwise be entitled to
recover from Guarantor.

 

(c)    Guarantor shall make any payment (including payments of damages for
breach of the Guaranteed Agreements by Buyer) or procure the performance of or
compliance with any Guaranteed Obligation set forth in a demand letter within
five (5) Business Days of Guarantor’s receipt of such written demand to an
account indicated by the Lessee in the demand, all subject to the requirements
of, and conditions associated with, the Guaranteed Obligations.

 

(d)   The guarantee by Guarantor contained in this Section 3 is a primary
obligation of Guarantor, is in addition to and not in substitution for any other
security which Lessee may now or hereafter hold for the obligations of Buyer
under the Guaranteed Agreements and is an unconditional, absolute, present and
continuing obligation and is not conditional in any way upon the institution of
suit or the taking of any other action or any attempt to enforce performance of
or compliance with the covenants, agreements, terms or conditions (including
without limitation any payment obligations) applicable to Buyer contained in the
Guaranteed Agreements and, to the extent permitted by law, shall be binding upon
and enforceable against Guarantor without regard to the validity or
enforceability of the Guaranteed Agreements.

 

(e)    To the extent that performance of or compliance with the guarantee by
Guarantor contained in this Section 3 requires the payment of money, such
guarantee is an absolute, unconditional, present and continuing guarantee of
payment and not of collectability and is in no way conditional or contingent
upon any attempt to collect from Buyer or any other entity or to institute a
suit against Buyer or any other entity or to perfect or to enforce any security
or upon any other condition or contingency.

 

 

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(f)     Guarantor’s guarantee of Guaranteed Obligations shall not be affected
by, discharged or diminished as a consequence of the Lessee being released from
the Lease pursuant to its terms.

 

4.         Preservation of Guarantor’s Obligations and Enforcement.

 

(a)    Guarantor’s obligations in this Guarantee are absolute, unconditional and
irrevocable. The liability of Guarantor under this Guarantee extends to and is
not affected by the grant of any time or indulgence to Buyer or by any
circumstance, act or omission which, but for this sub- clause, might otherwise
affect it at law or in equity, and Guarantor irrevocably waives any right it may
have to claim its liability has been so affected.

 

(b)    Until the Guaranteed Obligations have been unconditionally and
irrevocably satisfied in full, Guarantor may not: (a) exercise any rights as
surety in competition with Lessee; or (b) claim to be entitled by way of
contribution, indemnity, subrogation, marshalling or otherwise to the benefit of
any agreement or document to which Lessee is a party, nor prove in a liquidation
of Buyer in competition with Lessee.

 

(c)    Guarantor’s obligations in this Guarantee may be enforced against
Guarantor without Lessee first being required to (a) exhaust any remedy it may
have against Buyer or any other person; or (b) enforce any other guarantee or
security interest it may hold relating to the Guaranteed Obligations.

 

5.         Release.

 

(a)    Once all the Guaranteed Obligations have been satisfied in full and
Guarantor does not have any further actual or contingent liabilities hereunder,
this Guarantee shall automatically and immediately terminate and all of
Guarantor’s obligations under this Guarantee shall be irrevocably and
unconditionally released and discharged.

 

(b)    Notwithstanding the provisions of Section 5(a), any release, compromise
or discharge of the obligations of the Guarantor may only be made once the
Guaranteed Obligations have been unconditionally performed in full, and shall be
deemed to be made subject to the condition that this Guarantee will be
reinstated without further action if any payment or security which Buyer may
receive or has received is rescinded as a result of insolvency or bankruptcy of
Buyer or Guarantor.

 

6.         Continuing Guarantee

 

(a)   The obligations of the Guarantor contained in this Guarantee shall
constitute and be continuing obligations notwithstanding any settlement of
account or other matter or thing whatsoever, and shall not be considered
satisfied by any intermediate performance or satisfaction of all or any of the
Guaranteed Obligations and shall continue in full force and effect until total
satisfaction of all Guaranteed Obligations.

 

(b)    No delay or omission in exercising any powers or privileges hereunder
shall be construed as a waiver thereof. Any exercise of any part of the rights
shall not preclude subsequent enforcement of any such rights which have not, or
have not fully, been exercised.

 

 

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7.         Notice. Any notice required or related to this Guarantee will be in
writing and will, unless otherwise stated, be given and will become effective in
the same manner as provided in the Lease:

 

in the case of Guarantor:

 

435 Investment Court

Verona, Wisconsin 53593

United States of America

Attention: Joe Kuhn

Facsimile: +1 808-848-8101

Email: joe@contrail.com

 

 

in the case of Lessee:

 

1300 Corporate Center Curve

Eagan, MN 55121

Attention: General Counsel

Facsimile:

Email:

 

8.         Miscellaneous.

 

(a)    Governing Law. THIS GUARANTEE IS DELIVERED IN NEW YORK AND PURSUANT TO
NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, SHALL IN ALL RESPECTS BE
GOVERNED BY NEW YORK LAW WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

 

(b)    Jurisdiction. Section 19.2 (Governing Law and Jurisdiction) of the Lease
is hereby incorporated by reference as if set forth in full length herein,
mutatis mutandis.

 

(c)   Successors and Assigns. The terms of this Guarantee shall be binding on,
and inure to the benefit of, Lessee and Guarantor and their respective permitted
successors and assigns.

 

(d)    Waiver of Notice and Defense. Except as otherwise provided in this
Guarantee, Guarantor hereby waives, to the fullest extent permitted by law:

 

(i)     diligence, promptness, presentment, demand for payment or performance
and protest and notice of protest, notice of acceptance and any other notice in
respect of the Guaranteed Obligations or any part of them, and any defense
arising by reason of any disability or other defense; and

 

(ii)     any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge, release or defense of a guarantor or surety, or
which might otherwise limit recourse against Guarantor.

 

 

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(e)    Severability. Should any one or more of the provisions of this Guarantee
be held to be invalid, illegal or unenforceable in any jurisdiction, the same
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity,
illegality or unenforceability of a particular provision in a particular
jurisdiction shall not render such provision invalid, illegal or unenforceable
in any other jurisdiction.

 

(f)     Payments. Guarantor shall make each payment to Lessee under this
Guarantee without any set-off, counterclaim or any other deduction, or
withholding in respect of Taxes or otherwise.

 

(g)    Waivers, Amendments and Variations in Writing. The provisions of this
Guarantee shall not be capable of being waived, amended or varied otherwise than
by an express waiver or amendment in writing signed by both Guarantor and
Lessee; and in particular any failure to exercise or any delay in exercising any
of such rights shall not operate as a waiver, amendment or variation of that or
any other such right; any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any other such
right; and no act or course of conduct or negotiation on Lessee’s part or on its
behalf shall in any way preclude it from exercising any such right or constitute
a suspension of any variation or amendment of any such right. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity.

 

(h)    Counterparts; Delivery by Email. This Guarantee may be executed in two or
more counterparts, each of which will be an original, but all of which will
constitute but one and the same instrument.

 

This Guarantee and any document contemplated hereby may be delivered by a party
hereto by way of e-mail transmission and such delivery shall be deemed completed
for all purposes upon the completion of such e-mail transmission. A party that
so delivers this Guarantee or any such document by way of e-mail transmission
agrees to promptly thereafter deliver to the other party hereto an original
signed counterpart. The signature of any party transmitted by e-mail
transmission shall be considered to have the same binding legal effect as an
originally executed document. In consideration of the mutual covenants herein
contained, the parties agree that neither of them shall raise the use of e-mail
as a defense in any suit or controversy related to this guarantee or any of such
other documents and forever waive any such defense.

 

(j)     Entire Agreement. This Guarantee constitutes the complete agreement of
the parties hereto regarding the subject matter hereof and supersedes all prior
understandings, communications and agreements (written or oral).

 

*     *     *

 

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Guarantee by their duly authorized officers or attorneys on the date shown at
the beginning of this Guarantee.

 

 

GUARANTOR:

 

CONTRAIL AVIATION SUPPORT,

LLC

 

 

By:        /s/ Joseph G. Kuhn

Name:   Joseph G. Kuhn

Title:     CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Signature Page

Guarantee

MSN 30241

 

 

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LESSEE:

 

SUN COUNTRY, INC. d/b/a Sun country

Airlines (formerly known as MN Airlines,

LLC)

 

 

By:      /s/ Jude Bricker

Name: Jude Bricker

Title:   President & CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Signature Page -

Guarantee

MSN 3024 1