February 22, 2008 CHC Helicopter Corporation 4740 Agar Drive Richmond, British Columbia V7B 1A3 Ladies and Gentlemen:
February 22, 2008
Ladies and Gentlemen:
This guaranty (this “Guaranty”) is being delivered by FR Horizon AIV, L.P. (the
“Investor”) to CHC Helicopter Corporation (the “Company”), in connection with the execution
of that certain Arrangement Agreement dated as of the date hereof (as it may be amended from
time to time with the consent of Purchaser, the “Arrangement Agreement”), by and among
6922767 Canada Inc. ( “Purchaser”) and the Company pursuant to which Purchaser shall, among
other things and subject to the terms and conditions set forth in the Arrangement Agreement,
acquire all of the Class A Subordinate Voting Shares and Class B Multiple Voting Shares of the
Company. Capitalized terms used but not defined shall have the meaning ascribed to them in the
Arrangement Agreement.
1. OBLIGATIONS. To induce the Company to enter into the Arrangement
Agreement, the Investor hereby absolutely, unconditionally and irrevocably guarantees to the
Company, on the terms and conditions set forth herein, the due and punctual payment,
performance and discharge of 100% of the payment and/or indemnification obligations of
Purchaser under Section 2.4(5), Section 7.3(4)(b)(ii), Section 7.8(2), Section 7.9(5), Section
7.10(2) and Section 7.10(3)(b) of the Arrangement Agreement (as limited by the Investor Cap (as
defined below), the “Obligations”); provided that the maximum amount payable by the Investor
hereunder shall not exceed Cdn $61,400,000 (the “Investor Cap”), it being understood that the
Company will not seek to enforce this Guaranty without giving effect to the Investor Cap.
2. NATURE OF THE OBLIGATIONS. The Company shall not be
obligated to file any claim relating to the Obligations in the event that Purchaser becomes subject
to any insolvency, bankruptcy, reorganization or similar proceeding, and the failure of the
Company to so file shall not affect the Investor’s obligations hereunder. This is an unconditional
guaranty of payment and not of collectibility.
3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Investor
agrees that its obligations hereunder shall not be released or discharged, in whole or in part, or
otherwise affected by (a) the failure of the Company to assert any claim or demand or to enforce
any right or remedy against Purchaser or any other person interested in the transactions
contemplated by the Arrangement Agreement; (b) any change in the time, place or manner of
payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other
amendment or modification of any of the terms or provisions of the Arrangement Agreement or
any other agreement evidencing, securing or otherwise executed in connection with any of the
Obligations (provided that any such change, rescission, waiver, compromise, consolidation or
other amendment or modification shall be subject to the prior written consent of Purchaser to the
extent required under the Arrangement Agreement); (c) the addition, substitution or release of
any entity or other person interested in the transactions contemplated by the Arrangement
Agreement (provided that any such addition, substitution or release shall be subject to the prior
written consent of Purchaser to the extent required under the Arrangement Agreement); (d) any
change in the corporate existence, structure or ownership of Purchaser or any other person
interested in the transactions contemplated by the Arrangement Agreement; (e) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting Purchaser or any other person
interested in the transactions contemplated by the Arrangement Agreement; (f) the existence of
any claim, set-off or other right which the Investor may have at any time against Purchaser or the
Company, whether in connection with the Obligations or otherwise; or (g) the adequacy of any
other means the Company may have of obtaining payment of any of the Obligations. The
Investor acknowledges that it will receive substantial direct and indirect benefits from the
transactions contemplated by the Arrangement Agreement and that the waivers set forth in this
Guaranty are knowingly made in contemplation of such benefits.
The Company hereby covenants and agrees that it shall not institute, and shall
cause its affiliates (as defined in the Arrangement Agreement) not to institute, any proceeding or
bring any other claim arising under, or in connection with, the Arrangement Agreement or the
transactions contemplated thereby, against the Investor, the Investor Affiliates or Purchaser
Affiliates (as defined below), or as it relates to the Obligations, Purchaser, except for claims
against the Investor under this Guaranty or against Purchaser under the Arrangement Agreement,
and the Investor hereby covenants and agrees that it shall not institute, and shall cause its
affiliates not to institute, any proceeding asserting that this Guaranty is illegal, invalid or
unenforceable, in whole or in part, in accordance with its terms. The Company shall not have
any obligation to proceed at any time or in any manner against, or exhaust any or all of the
Company’s rights against, any person liable for any Obligations prior to proceeding against the
Investor hereunder.
4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the
Company to exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right,
remedy or power hereunder preclude any other or future exercise of any right, remedy or power.
Each and every right, remedy and power hereby granted to the Company or allowed it by law,
equity or other agreement shall be cumulative and not exclusive of any other, and may be
exercised by the Company at any time or from time to time.
5. REPRESENTATIONS AND WARRANTIES. (a) The Investor hereby
represents and warrants to the Company as follows and acknowledges that the Company is
relying upon such representations and warranties and that the Company would not enter into the
Arrangement Agreement but for the execution and delivery of this Guaranty by the Investor:
(i) the Investor is duly organized, validly existing and in good
standing under the laws of the Investor’s jurisdiction of organization;
(ii) the execution, delivery and performance of this Guaranty have
been duly authorized by all necessary action and do not contravene any provision of the
Investor’s charter, partnership agreement, operating agreement or similar organizational
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documents or any law, regulation, rule, decree, order, judgment or contractual restriction
binding on the Investor or its assets;
(iii) all consents, approvals, authorizations, permits of, filings with and
notifications to, any governmental authority necessary for the due execution, delivery and
performance of this Guaranty by the Investor have been obtained or made and all conditions
thereof have been duly complied with, and no other action by, and no notice to or filing
with, any governmental authority or regulatory body is required in connection with the
execution, delivery or performance of this Guaranty;
(iv) this Guaranty constitutes a legal, valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, subject to (A) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting creditors’ rights generally, and (B) general equitable principles (whether
considered in a proceeding in equity or at law); and
(v) the Investor has the financial capacity to pay and perform its obligations under
this Guaranty, and all funds necessary for the Investor to fulfill its Obligations under this
Guaranty shall be available to the Investor for so long as this Guaranty shall remain in
effect in accordance with Section 8 hereof.
(b) The Company hereby represents and warrants to the Investor as follows and acknowledges
that the Investor is relying upon such representations and warranties:
(i) the execution, delivery and performance of this Guaranty have been duly authorized
by all necessary action and do not contravene any provision of the Company’s articles of
amalgamation or by-laws or any law, regulation, rule, decree, order, judgment or contractual
restriction binding on the Company or its assets;
(ii) all consents, approvals, authorizations, permits of, filings with and notifications
to, any governmental authority necessary for the due execution, delivery and performance of
this Guaranty by the Company have been obtained or made and all conditions thereof have been
duly complied with, and no other action by, and no notice to or filing with, any governmental
authority or regulatory body is required in connection with the execution, delivery or
performance of this Guaranty; and
(iii) this Guaranty constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to (A) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting creditors’ rights generally, and (B) general equitable principles (whether
considered in a proceeding in equity or at law).
6. NO ASSIGNMENT. Neither the Investor nor the Company may assign its rights, interests or
obligations hereunder to any other person (except by operation of law) without the prior written
consent of the Company or the Investor, as the case may be;
provided, however, that the Investor
may assign all or a portion of its obligations hereunder to an affiliate or to an
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entity managed or advised by an affiliate of the Investor, provided that no such assignment shall
relieve the Investor of any liability or obligation hereunder except to the extent actually
performed or satisfied by the assignee.
7. NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or e-mail transmission, or as of the
following business day if sent by prepaid overnight courier, to the parties at the following
addresses (or such other addresses as shall be specified by any party by notice to the other party
given in accordance with these provisions):
if to the Investor:
FR Horizon AIV, L.P.
c/o First Reserve Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxxxxxx@xxxxxxxxxxxx.xxx
c/o First Reserve Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxxxxxx@xxxxxxxxxxxx.xxx
with copies to (which shall not constitute notice):
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxx@xxxxxx.xxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxx@xxxxxx.xxx
and
Blake, Xxxxxxx & Xxxxxxx LLP
000 Xxxx 00xx Xx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxx.xxxx@xxxxxx.xxx
000 Xxxx 00xx Xx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxx.xxxx@xxxxxx.xxx
if to the Company, the notice address set forth in Section 9.1(b) of the
Arrangement Agreement.
8. CONTINUING OBLIGATION. This Guaranty shall remain in full force
and effect and shall be binding on the Investor, its successors and assigns until all of the
Obligations have been satisfied in full. Notwithstanding the foregoing, this Guaranty shall
terminate and the Investor shall have no further obligations under this Guaranty as of the earlier
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of (i) the Effective Time, and (ii) the termination of the Arrangement Agreement in accordance
with its terms, except as to a claim for payment of any Obligation presented by the Company to
Purchaser or the Investor within twelve months after the date of such termination, in which case
the date such claim is finally satisfied or otherwise resolved. Notwithstanding the foregoing, in
the event that the Company or any of its affiliates asserts in any litigation or other proceeding
that the provisions of Section 1 hereof limiting the Investor’s liability to the amount of the
Investor Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or
unenforceable in whole or in part, or asserting any theory of liability against the Investor, the
Investor Affiliates, or the Purchaser Affiliates with respect to the transactions contemplated by
the Arrangement Agreement, or against Purchaser as they relate to the Obligations, other than
liability of the Investor under this Guaranty (as limited by the provisions of Section 1) or the
liability of Purchaser under the Arrangement Agreement, then (i) the obligations of the Investor
under this Guaranty shall terminate ab initio and be null and void, (ii) if the Investor has
previously made any payments under this Guaranty, it shall be entitled to recover such payments,
and (iii) neither the Investor nor any of its affiliates shall have any liability to the Company
with
respect to the transactions contemplated by the Arrangement Agreement as they relate to the
Obligations or under this Guaranty.
9. NO RECOURSE. The Company acknowledges that the sole assets of
Purchaser are cash in a de minimis amount and its rights under the Arrangement Agreement, and
that no additional funds are expected to be contributed to Purchaser unless and until the closing
of the transactions contemplated by the Arrangement Agreement occurs. Notwithstanding
anything that may be expressed or implied in this Guaranty or any document or instrument
delivered contemporaneously herewith, and notwithstanding the fact that the Investor may be a
partnership or limited liability company, by its acceptance of the benefits of this Guaranty, the
Company acknowledges and agrees that it has no right of recovery against, and no personal
liability shall attach to, the former, current or future security holders, directors, officers,
employees, agents, affiliates, members, managers, general or limited partners or assignees of the
Investor, Purchaser or any former, current or future security holder, director, officer, employee,
general or limited partner, member, manager, affiliate, agent, assignee or representative of any of
the foregoing (collectively, but not including Purchaser, the
“Investor Affiliates” or “Purchaser
Affiliates”), through Purchaser or otherwise, whether by or through attempted piercing of the
corporate, partnership or limited liability company veil, by or through a claim by or on behalf of
Purchaser against the Investor, Investor Affiliates, or Purchaser Affiliates, (including a claim to
enforce the commitment letter dated as of the date hereof from the Investor to Purchaser) by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute,
regulation or applicable law, or otherwise, except for its rights to recover from the Investor (but
not the Investor Affiliates or Purchaser Affiliates (including any general partner or managing
member)) the Obligations under and to the extent provided in this Guaranty subject to the
limitations described herein. Recourse against the Investor under this Guaranty shall be the sole
and exclusive remedy of the Company and all of its subsidiaries and affiliates against the
Investor, the Investor Affiliates, and Purchaser Affiliates in respect of any liabilities or
obligations arising under, or in connection with, the Arrangement Agreement or the transactions
contemplated thereby or hereby. Nothing set forth in this Guaranty shall be construed to confer
or give to any person (including any person acting in a representative capacity) other than the
Company and the Investor any rights or remedies against any person other than the Company
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and the Investor as expressly set forth herein. The Company hereby covenants and agrees that it
shall not institute, and it shall cause its affiliates not to institute, any proceeding or bring
any
other claim arising under, or in connection with, the Arrangement Agreement or the transactions
contemplated thereby, against the Investor, any Investor Affiliates or any Purchaser Affiliates
except for claims against the Investor under this Guaranty.
10. GOVERNING LAW. This Guaranty shall be governed by and construed
and enforced in accordance with the laws of the State of New York. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York and the courts of the United States of America located in the
State of New York for any litigation arising out of or relating to this Guaranty. Each of the
parties hereby irrevocably and unconditionally waives any objection to the laying of venue of
any litigation arising out of this letter or the transactions contemplated hereby in the courts of
the
State of New York or the courts of the United States of America located in the State of New
York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such litigation brought in any such court has been brought in an
inconvenient forum.
11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.
12. COUNTERPARTS. This Guaranty may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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Very truly yours,
| FR HORIZON AIV, L.P. | ||||
| By: | FR HORIZON GP, L.P., its general partner | |||
| By: | FR HORIZON GP LIMITED, its general partner | |||
| By: | (signed) Xxxx X. XxXxxxxxxx | |||
| Name: Xxxx X. XxXxxxxxxx Title: Director |
||||
| Acknowledged and accepted: | |||||
| CHC HELICOPTER CORPORATION | |||||
| By: | (signed) Xxxx Xxxxxx | ||||
| Name: Xxxx Xxxxxx Title: Chairman |
|||||
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