Exhibit
10.2


 


GUARANTY
AGREEMENT


 


THIS
GUARANTY AGREEMENT dated as of April 23, 2010 (this “Guaranty”) is made by AAR CORP., a
Delaware corporation (“Guarantor”), in
favor of THE HUNTINGTON NATIONAL BANK, a
national banking association (“Lender”).


 


WHEREAS, pursuant to a
Master Loan Agreement, dated as of April 23, 2010, (the “Loan Agreement”), between Lender and EP Aviation, LLC, a
Delaware limited liability company, as borrower (“Borrower”),
Lender will from time to time make the Loans (as defined in the Loan Agreement)
to Borrower; and


 


WHEREAS, the Borrower is an indirect
subsidiary of the Guarantor;


 


WHEREAS, as a
condition to the effectiveness of the Loan Agreement, the Lender has required
that the Guarantor enter into this Guaranty with respect to certain obligations
of the Borrower under the Loan Agreement.


 


NOW,
THEREFORE, in order to induce Lender to execute and deliver
the Loan Agreement and make the Loans to Borrower, Guarantor agrees as follows:


 


Section 1.                                          Definitions.  For all purposes of this Guaranty,
capitalized terms not defined herein shall have the meanings assigned to them
(whether by reference to another document or otherwise) in the Loan Agreement.


 


Section 2.                                          Guaranty.  Guarantor hereby absolutely, unconditionally
and irrevocably guarantees to Lender the due and punctual payment and
performance of the obligations of the Borrower under the Loan Agreement
(collectively, the “Obligations”).


 


Section 3.                                          Absolute
Guaranty.  This
Guaranty shall be an absolute, continuing, unconditional and irrevocable
guarantee and shall remain in full force and effect until such time as the
Obligations have been discharged in full.


 


Section 4.                                          Strict Observance.


 


4.1                                 Guarantor
hereby agrees that the Obligations will be paid, performed and observed
strictly in accordance with their terms and strictly in accordance with the
terms of the Loan Agreement, regardless of the enforceability thereof against
Borrower and regardless of any law, regulation or decree now or hereafter in
effect which might in any manner affect the Obligations, or the rights of
Lender with respect thereto as against Borrower, but only to the extent
permitted by applicable law.


 


4.2                                 The obligations
of Guarantor under this Guaranty are absolute, irrevocable and unconditional,
without regard to the obligations of any other person, or of any lack of prior
enforcement or retention of any rights against Borrower or any other person or
any property, or of the partial or complete illegality, unenforceability or
invalidity of any of the Obligations, the Loan Agreement or any bankruptcy,
insolvency, reorganization, arrangement, assignment for the benefit of
creditors or similar proceedings with respect to Borrower or the failure of
Lender to file a claim in any bankruptcy or other such proceeding.


 

















 


4.3                                 No delay in
making demand on Guarantor for satisfaction of its obligations hereunder shall
prejudice the right of Lender to enforce the obligations of Guarantor hereunder
provided such demand is made within any period required by any applicable
statute of limitations or similar law affecting the demand.


 


Section 5.                                          Waivers.  Guarantor unconditionally waives, to the
fullest extent permitted by law:


 


(a)                                  diligence,
presentment, demand, protest or notice of any kind whatsoever with respect to
this Guaranty and the Obligations provided that all such requirements under the
Fundamental Agreements to which the diligence, presentment, demand, protest or
notice relates have been fulfilled;


 


(b)                                 any right to
consent to, or to receive any notice of, any supplement to or amendment of, or
waiver or modification of, the terms of the Loan Agreement;


 


(c)                                  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 Guarantor;


 


(d)                                 any right to
require Lender to proceed against any security or to enforce any right under
any of the Loan Agreement;


 


(e)                                  all defenses,
counterclaims and offsets of any kind or nature, arising directly or indirectly
from the present or future lack of perfection, sufficiency, validity or
enforceability of any of the Loan Agreement; and


 


(f)                                    all rights and
defenses arising out of an election of remedies by the creditor; provided that
Guarantor may assert any defense (legal or equitable), set-off, counterclaim or
claim which Borrower may now or at any time hereafter have under the Loan
Agreement.  Guarantor shall be bound by
any account settled between Borrower and Lender which gives rise to any of the
Obligations.


 


Section 6.                                          Extensions.  Guarantor consents and agrees that Lender
may, in its sole discretion, at any time from time to time:


 


(a)                                  renew, extend,
change or modify the time, manner, place or terms of payment, performance or
observance of any or all of the Obligations;


 


(b)                                 apply payments
by Borrower or Guarantor to any Obligations;


 


(c)                                  exchange,
release or surrender any security or property which may at any time be held by
it in respect of the Obligations;


 


(d)                                 release any
surety or guarantor for or of any of the Obligations;


 


(e)                                  settle or
compromise any or all of the Obligations with Borrower or any other person
liable in relation thereto; and


 


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(f)                                    subordinate the
payment, performance or observance of all or any part of the Obligations to the
payment, performance or observance of any other debts or obligation which may
be due or owing to Borrower or any other person, all in such manner and upon
such terms as Lender may deem proper, without notice to or further assent from
Guarantor (who agrees to remain bound by this Guaranty notwithstanding any such
thing as aforesaid).


 


Section 7.                                          No Waiver.  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 Lender under this Guaranty or the
Loan Agreement.


 


Section 8.                                          Guaranty of Payment and Performance.


 


8.1                                 This Guaranty
is a guarantee of payment and performance and not of collection and Guarantor
waives any right to require that any action against Lender be taken or
exhausted prior to action being taken against Guarantor.


 


8.2                                 Guarantor shall
pay to Lender on demand all reasonable attorneys’ fees and other reasonable
expenses incurred by Lender in protecting its interests hereunder or in
exercising the rights and remedies provided to it hereunder.


 


Section 9.                                          Further
Representations, Warranties and Covenants of Guarantor.  Guarantor hereby represents, warrants and
covenants that:


 


(a)                                  it is a
corporation duly organized and validly existing under the laws of Delaware, and
has the corporate power and authority to enter into, and perform its
obligations under this Guaranty;


 


(b)                                 the execution
and delivery by Guarantor of this Guaranty have been duly authorized by all
requisite action and proceedings of Guarantor;


 


(c)                                  this Guaranty
has been duly executed and delivered by Guarantor;


 


(d)                                 this Guaranty
is the legal, valid and binding obligation of Guarantor, enforceable against
Guarantor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally, and except as such enforceability
may be subject to the application of equitable principles in any proceeding,
legal or equitable;


 


(e)                                  the execution
and delivery by Guarantor of this Guaranty will not (A) violate any
provision of Guarantor’s articles of incorporation or by-laws, (B) materially
conflict with or result in a material breach of any indenture or other material
agreement to which Guarantor is a party or by which Guarantor is bound, (C) violate
any judgment, order, injunction, decree or award of any court, administrative
agency or governmental body against, or binding upon, Guarantor or (D) constitute
a violation by Guarantor of any law or regulation applicable to Guarantor;


 


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(f)                                    the execution
and delivery of this Guaranty does not require any shareholder approval or the
approval or consent of any trustee or any holder of any indebtedness or
obligation of Guarantor;


 


(g)                                 there are no
actions, suits or proceedings pending, or to Guarantor’s knowledge threatened,
against Guarantor that could reasonably be expected to have a material adverse
effect on Guarantor’s ability to carry out this Guaranty;


 


(h)                                 the execution
and delivery of this Guaranty by Guarantor will not violate any provision of,
or create a relationship which would be in violation of, any laws, orders or
regulations; and


 


(i)                                     upon any
consolidation or merger, or any conveyance, transfer or lease of substantially
all of the assets of Guarantor as an entirety, the successor corporation or
Person formed by such consolidation or into which Guarantor is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Guarantor under
this Guaranty with the same effect as if such successor, corporation or Person
had been named as Guarantor herein.  No
such conveyance, transfer or lease of substantially all of the assets of
Guarantor as an entirety shall have the effect of releasing Guarantor or any
successor corporation or Person which shall theretofore have become such in the
manner prescribed herein from its liability in respect of this Guaranty.


 


Section 10.                                   Bankruptcy.  Guarantor agrees that if at any time all or
any part of any payment or performance thereof applied by Lender to any of the
Obligations is or must be rescinded or returned by Lender for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower), such Obligations shall, for the purposes of this
Guaranty, to the extent that such payment or performance is or must be
rescinded or returned, be deemed to have continued in existence notwithstanding
such application by Lender, 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 had not been made.  Guarantor
further agrees that it shall be liable for full and immediate repayment to
Lender of the Loan, including but not limited to any unpaid principal together
with accrued interest thereon, in the event of the insolvency, bankruptcy or
reorganization of Borrower.


 


Section 11.                                   Subrogation.  Guarantor shall be subrogated to the rights,
if any, of Lender in respect of any matter with respect to which an amount has
been paid by Guarantor hereunder, provided however that any subrogation rights
to which Guarantor becomes entitled by reason of performance of any of its
obligations hereunder shall be subject and subordinate to the rights of Lender
against Borrower under the Loan Agreement and the exercise of any such
subrogation rights of Guarantor shall be deferred until all Obligations have
been fully performed.


 


Section 12.                                   Assignment of
Rights.  Guarantor agrees that Lender
may assign all of its rights under this Guaranty to any successors or permitted
assigns of Lender’s rights under the Loan Agreement.


 


Section 13.                                   Notices.  All notices required to be delivered
hereunder shall be in English and in writing, and may be given by airmail,
telegram, cable, facsimile (confirmed by telephone


 


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in the case of notice by facsimile) or any
other customary means of communication, and any such notice shall  be effective when delivered to each party as follows:


 


if to Lender:


 


THE HUNTINGTON NATIONAL BANK


105 East 4th Street (CN01)


Cincinnati, OH  45202


Attention:  Kim Trombetta, Sr. Vice President


Telephone Number: (513) 762-5194


Facsimile
Number: (513) 762-1873


 


if to Guarantor:


 


AAR, CORP.


1100 North Wood Dale Road


Wood Dale, Illinois  60191


Attention:  Michael Carr, Vice President


Telephone
No. (630) 227-2140


Facsimile
Number:  (630) 227-2149


 


with a copy to:


 


AAR CORP.


1100 Wood Dale Road


Wood Dale, Illinois 60191


Attn:  General Counsel


Telephone:  (630) 227-2050


Telecopier:  (630) 227-2058


 


or to such other address or facsimile numbers
as either party shall from time to time designate by notice in writing to the
other party.


 


Section 14.                                   Miscellaneous.


 


14.1                           Any provision
of this Guaranty which is prohibited or unenforceable in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.


 


14.2                           No provision of
this Guaranty may be changed, waived, discharged or terminated orally; but only
by an instrument in writing signed by Guarantor and Lender.


 


14.3                           The 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 and, unless
otherwise indicated, all references herein to numbered clauses are to clauses
of this Guaranty.


 


14.4                           All payments by
Guarantor hereunder shall be made free and clear of, and without deduction or
withholding for or on account of, any taxes, unless such deduction or
withholding is required by law.  If
Guarantor shall be required by law to make any such payment subject to


 


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deduction or withholding for or on account of
any taxes, Guarantor shall pay to Lender such additional amounts as may be
necessary to ensure that the net amount received by Lender after such deduction
or withholding, is equal to the full amount that Lender would have received had
no such deduction or withholding been required.


 


Section 15.                                   Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN WITHOUT REGARD
TO ANY CONFLICT OF LAWS RULE WHICH MIGHT RESULT IN THE APPLICATION OF THE LAWS
OF ANY OTHER JURISDICTION.


 


Section 16.                                   Non-Exclusive
Jurisdiction; Waiver of Jury Trial.  Guarantor hereby consents to the
non-exclusive jurisdiction of the Michigan located in Grand Rapids and the
United States District Court for the Western District of Michigan.  Guarantor irrevocably waives any objection to
such courts as the forum to hear and determine any suit, action or proceeding,
and to settle any disputes, which may arise out of this Guaranty or the Loan
Agreement and agrees not to claim that such court is not a convenient or
appropriate forum whether on the grounds of venue or forum non conveniens or
otherwise.  Nothing herein will prevent
Lender from bringing suit in any other appropriate jurisdiction.  Guarantor hereby agrees that service of
process for any matter or proceeding in the state courts located in Grand
Rapids, Michigan and the United States District Court for the Western District
of Michigan may be made upon it by mailing copies of the summons and complaint
to it by air mail or certified or registered mail to the address set forth in Section 13,
postage prepaid, return receipt requested.


 


GUARANTOR IRREVOCABLY WAIVES
ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY PROCEEDING RELATING TO ANY DISPUTE
ARISING UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY OF THE FUNDAMENTAL
AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


(The balance of this page is
intentionally blank.  Signature appears
on the following page)


 


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IN
WITNESS WHEREOF, the hand of the duly authorized representative of
Guarantor is set hereunto on the day and year first above written.


 


 


	
   

  	
  AAR CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Storch

  
	
   

  	
  Name:

  	
  David P. Storch

  
	
   

  	
  Title:

  	
  Chairman & CEO

  



 


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