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EXHIBIT 4.6
NATIONSBANK, N.A.
LOAN AGREEMENT
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE UNIFORM ARBITRATION
ACT, SECTION 15-48-10, ET SEQ., CODE OF LAWS OF SOUTH, CAROLINA 1976 AS
AMENDED
This Loan Agreement (the "Agreement") dated as of March 29, 1996, by
and between NationsBank, N.A., a national banking association ("Bank") and the
Borrower described below.
In consideration of the Loan or Loans described below and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, Bank and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other
terms defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. Accounts. Accounts means all accounts, accounts receivable,
contract rights, notes, bills, acceptances, chattel paper, instruments,
documents and other forms of obligations at such time owing to Borrower, the
proceeds thereof and all such rights with respect thereto together with all
customer lists, books and records, ledgers and account cards, computer tapes,
software, disks, printouts and records, whether now in existence or hereafter
created.
B. Accounting Terms. All accounting terms not specifically
defined or specified herein shall have the meanings generally attributed to
such terms under generally accepted accounting principles ("GAAP"), as in
effect from time to time, consistently applied, with respect to the financial
statements referenced in Section 3.H. hereof.
C. Borrower: Air South Airlines, Inc., a Delaware corporation.
D. Borrower's Address:
Post Office Box 11129 (29211)
0000 Xx. Xxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx (29204)
E. Current Assets. Current Assets means the aggregate amount of
all of Borrower's assets which would, in accordance with GAAP, properly be
defined as current assets.
F. Current Liabilities. Current Liabilities means the aggregate
amount of all current liabilities as determined in accordance with GAAP, but in
any event shall include all liabilities except those having a maturity date
which is more than one year from the date as of which such computation is being
made.
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G. Eligible Accounts. Eligible Accounts shall mean the gross
amount of Accounts of the Borrower in which Bank shall have a first priority,
perfected security interest arising out of goods or licenses sold or services
provided by Borrower to independent and unaffiliated persons or entities
located in the United States of America which are less than sixty (60) days
past due and which otherwise are deemed "eligible" by Bank in its sole
discretion.
H. Hazardous Materials. Hazardous Materials include all
materials defined as hazardous materials or substances under any local, state
or federal environmental laws, rules or regulations, and petroleum, petroleum
products, oil and asbestos.
I. Loan. Any loan described in Section 2 hereof and any
subsequent loan which states that it is subject to this Loan Agreement.
J. Loan Documents. Loan Documents means this Loan Agreement and
any and all promissory notes executed by Borrower in favor of Bank and all
other documents, instruments, guarantees, certificates and agreements executed
and/or delivered by Borrower, any guarantor or third party in connection with
any Loan.
K. Tangible Net Worth. Tangible Net Worth means the amount by
which total assets exceed total liabilities in accordance with GAAP, less
assets capitalized organization and development costs, capitalized interest,
debt discount and expense, goodwill, patents, trademarks, copyrights,
franchises, licenses, amounts due from officers, directors and stockholders and
affiliates and such assets as are properly classified "intangible assets" under
GAAP.
2. LOANS.
A. Loan. Bank hereby agrees to extend a revolving credit
facility to Borrower in the aggregate principal face amount of up to
$1,000,000.00. The obligation to repay the Loan is evidenced by a promissory
note dated of even date (the promissory note together with any and all
renewals, extensions or rearrangements thereof being hereafter collectively
referred to as the "Note") having a maturity date, repayment terms and interest
rate as set forth in the Note. Borrower may from time to time, borrow, repay
and re-borrow proceeds of the Loan. Borrower shall maintain a zero balance on
the Loan for a period of at least 30 consecutive days during the term of the
Loan.
B. Availability of Proceeds of the Loan. Except as provided
below, the maximum principal balance outstanding under the Loan shall be
limited to $500,000.00 in the aggregate at any one time. The remaining
$500,000.00 availability (the "Additional $500,000.00") under the Loan may be
drawn and utilized by Borrower only upon the approval and consent of Bank,
which may be given or withheld by Bank in its sole discretion. If Bank
approves the use by Borrower of the Additional $500,000.00 Bank reserves the
right to establish, in its sole discretion, additional terms, conditions and
provisions with respect to the Loan and the use and availability of the
Additional $500,000.00. The provisions with respect to the Additional
$500,000.00 shall not be construed as a commitment by Bank to allow Borrower to
use such funds. The principal balance outstanding under the Loan further shall
be
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limited, at all times, to an amount not to exceed fifty percent (50%) of the
value of Eligible Accounts, as reflected on the financial statements delivered
by Borrower to Bank pursuant to Section 4.B.(ii) of this Loan Agreement. In
addition to all other obligations, Borrower, upon demand, must repay principal
in the amount necessary such that all requirements of this Section 2.B. are
satisfied.
C. Requirements and Procedures For Advance. Advances shall be
made under the Loan by Bank in its discretion upon receipt and approval of a
draw request and other information acceptable to Bank related to such request,
and, upon such approval by Bank, Bank will disburse proceeds under the Loan
within three (3) business days after receipt of such request and under
requirements and procedures customarily established by Bank for loans of this
type.
D. Fees and Additional Requirements. Contemporaneously with the
execution of this Agreement, the Note and the Loan Documents, Borrower has
issued 7,500 shares (the "Initial Shares") of its common stock par value $0.001
per share ("Common Stock") to the Bank or such other person or entity as Bank
shall designate in writing (the "Bank's Designee"). The Initial Shares will be
issued pursuant to an exemption from registration under the Securities Act of
1933, as amended and any applicable state securities laws. Borrower will use
it best efforts to have the Initial Shares registered and sold in any firmly
underwritten initial public offering of Common Stock by the Borrower (an
"IPO"). If an IPO is closed, and the underwriter of the IPO refuses to
register and sell all or part of the Initial Shares, then, immediately
following such closing, the Bank may tender any Initial Shares not registered
and sold in the IPO to Borrower and Borrower immediately will purchase such
Initial Shares with cash or certified funds at the offering price (before
underwriting discounts and commissions, and related expenses) at which other
shares of Common Stock were sold in the IPO. In connection with such
registration and sale in the IPO, Bank will execute and deliver such powers of
attorney, custody agreements, certificates, and other documents and agreements
as the underwriters and the Borrower may reasonably request and the Bank may
approve, such agreements to be substantially the same as those obtained from
other shareholders of the Borrower who are selling Common Stock in the IPO.
Further, if Bank, upon the request of Borrower, allows Borrower to utilize all
or a portion of the Additional $500,000.00 prior to the closing of the IPO,
Borrower, prior to using any such portion of the Additional $500,000.00 and as
an additional non-refundable fee, shall issue to Bank, or Bank's Designee,
without charge, 15,000 shares of Common Stock (the "Additional Shares") and
provide Bank, or Bank's Designee, "piggy back" registration rights in form and
content and containing such conditions acceptable to Bank in its sole
discretion. Borrower and Bank shall execute such documents and instruments as
deemed necessary in connection with the foregoing, and Borrower shall pay for
all costs and expenses (including underwriter's discounts and commissions) with
respect to any registration and sale of the Initial Shares or the Additional
Shares.
E. Indemnity With Respect to IPO. The Borrower will indemnify
Bank, Bank's Designee, each of Bank's and Bank's Designee's officers and
directors, and each person controlling Bank or Bank's Designee with respect to
the IPO, against all claims, losses, damages and liabilities (or action in
respect thereto) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or
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other document (including any related registration statement, notification or
the like) incident to any such IPO or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the Borrower of any rule or regulation promulgated under the 1933 Act
applicable to the Borrower and relating to action or inaction required of the
Borrower in connection with the IPO, and will reimburse Bank, Bank's Designee,
each of Bank's and Bank's Designee's officers and directors, and each person
controlling Bank or Bank's Designee, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, provided that the Borrower will not
be liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon information furnished to the Borrower by Bank or Bank's Designee in
writing.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Bank as follows:
A. Good Standing. Borrower is a corporation, duly organized,
validly existing and in good standing under the laws of Delaware and has the
power and authority to own its property and to carry on its business in each
jurisdiction in which Borrower does business.
B. Authority and Compliance. Borrower has full power and
authority to execute and deliver the Loan Documents and to incur and perform
the obligations provided for therein, all of which have been duly authorized by
all proper and necessary action of the appropriate governing body of Borrower.
No consent or approval of any public authority or other third party which has
not been obtained is required as a condition to the validity of any Loan
Document, and Borrower is in material compliance with all laws and regulatory
requirements to which it is subject.
C. Binding Agreement. This Agreement and the other Loan
Documents executed by Borrower constitute valid and legally binding obligations
of Borrower, enforceable in accordance with their terms.
D. Litigation. There is no material proceeding involving
Borrower pending or, to the knowledge of Borrower, threatened before any court
or governmental authority, agency or arbitration authority, except as disclosed
to Bank in writing and acknowledged by Bank prior to the date of this
Agreement.
E. No Conflicting Agreements. There is no charter, bylaw, stock
provision, partnership agreement or other document pertaining to the
organization, power or authority of Borrower and no provision of any existing
agreement, mortgage, indenture or contract binding on Borrower or affecting its
property, which would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement and the other Loan
Documents other than those to which consent to such conflict has been obtained.
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F. Ownership of Assets. Borrower has good title to its assets,
and its assets are free and clear of liens, except those granted to Bank and as
disclosed to Bank in writing prior to the date of this Agreement.
G. Taxes. All taxes and assessments due and payable by Borrower
have been paid or are being contested in good faith by appropriate proceedings
and the Borrower has filed all tax returns which it is required to file.
H. Financial Statements. The financial statements of Borrower
heretofore delivered to Bank have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly present
Borrower's financial condition as of the date or dates thereof, and there has
been no material adverse change in Borrower's financial condition or operations
since January 31, 1996. All factual information furnished by Borrower to Bank
in connection with this Agreement and the other Loan Documents is and will be
accurate and complete on the date as of which such information is delivered to
Bank and is not and will not be incomplete by the omission of any material fact
necessary to make such information not misleading.
I. PLACE OF BUSINESS. Borrower's chief executive office is
located at
0000 Xx. Xxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
J. Environmental. The conduct of Borrower's business operations
and the condition of Borrower's property does not and will not violate any
federal laws, rules or ordinances for environmental protection, regulations of
the Environmental Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials.
K. Continuation of Representations and Warranties. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and at and as of the date of any advance
under any Loan.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will, unless Bank
consents otherwise in writing (and without limiting any requirement of any
other Loan Document):
A. Financial Condition. Maintain Borrower's financial condition
as follows, determined in accordance with GAAP applied on a consistent basis
throughout the period involved except to the extent modified by the following
definitions:
i. Maintain a ratio of Current Assets (meaning the
aggregate amount of all of Borrower's assets which would, in accordance with
GAAP, properly be defined as current assets) to Current Liabilities (meaning
the aggregate amount of all current liabilities as determined in accordance
with GAAP, but in any event shall include all
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liabilities except those having a maturity date which is more than one
year from the date as of which such computation is being made) of not less
than 1.50 to 1.0 upon the completion of an IPO and at all times thereafter;
ii. Maintain a Net Worth (meaning the amount by which
total assets exceed total liabilities in accordance with GAAP) of equal to
and not less than a negative $21,000,000 as of the date hereof and at all
times prior to an IPO; and equal to or greater than $10,500,000 at all
times after an IPO; and
iii. Maintain a ratio of total indebtedness (meaning total
liabilities) to Net Worth of not more than negative 1.70 to 1.0 prior to an
IPO; provided, however, upon the completion of an IPO and at all times
thereafter the ratio must not be greater than 2.20 to 1.0.
B. Financial Statements and Other Information. Maintain a system
of accounting satisfactory to Bank and in accordance with GAAP applied on a
consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's books of account and
other records at such reasonable times and as often as Bank may desire, and pay
the reasonable fees and disbursements of any accountants or other agents of
Bank selected by Bank for the foregoing purposes. Unless written notice of
another location is given to Bank, Borrower's books and records will be located
at Borrower's chief executive office set forth above. All financial statements
called for below shall be prepared in form and content acceptable to Bank and
by independent certified public accountants acceptable to Bank. The accounting
firm of Deloitte and Touche will be acceptable to Bank.
In addition, Borrower will:
i. Furnish to Bank annual, audited financial statements
of Borrower for each fiscal year of Borrower, within 150 days after the close
of each such fiscal year.
ii. Furnish to Bank monthly, internally prepared
financial statements (including a balance sheet and profit and loss statement
and a detailed listing of Accounts) of Borrower for each calendar month within
45 days after the end of each month.
iii. Furnish to Bank a compliance certificate for (and
executed by an authorized representative of) Borrower concurrently with and
dated as of the date of delivery of each of the financial statements as
required in paragraphs i and ii above, containing (a) a certification that the
financial statements of even date are true and correct and that the Borrower is
not in default under the terms of this Agreement, and (b) computations and
conclusions, in such detail as Bank may request, with respect to compliance
with this Agreement, and the other Loan Documents, including computations of
all quantitative covenants.
iv. Furnish to Bank promptly such additional information,
reports and statements respecting the business operations and financial
condition of Borrower, from time to time, as Bank may reasonably request.
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any of Borrower's places of business or any other property of Borrower at any
reasonable times upon three (3) days prior notice for the purposes of
conducting an environmental investigation and audit (including taking physical
samples) to insure that Borrower is complying with this covenant and Borrower
shall reimburse Bank on demand for the costs of any such environmental
investigation and audit. Borrower shall provide Bank, its agents, contractors,
employees and representatives with access to and copies of any and all data and
documents relating to or dealing with any Hazardous Materials used, generated,
manufactured, stored or disposed of by Borrower's business operations within
five (5) days of the request therefore.
I. Initial Public Offering. Continuously use its good
faith best efforts and take all necessary or appropriate actions to close, or
cause the closing of, the IPO.
J. Additional Compliance. Comply with all terms and
conditions of (i) any lease agreements related to any aircraft used in
connection with Borrower's business, and (ii) all loan agreements, notes and
other documents related to that certain loan in the original principal amount
of $12,000,000.00 (the "JEDA Loan") extended to Borrower by the South Carolina
Jobs-Economic Development Authority ("JEDA"), as assignee of Lexington County,
South Carolina.
K. Aircraft Equipment. Provide Bank prior written
notice of any purchases by Borrower of aircraft, parts or equipment and
undertake any action and execute any documents which are necessary to perfect
Bank's security interest in such aircraft, parts or equipment.
5. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without
the prior written consent of Bank (and without limiting any requirement of any
other Loan Documents):
A. Transfer of Assets or Control. Sell, lease, assign
or otherwise dispose of or transfer any assets, except in the normal course of
its business, or enter into any merger or consolidation, or transfer control or
ownership of the Borrower or form or acquire any subsidiary.
B. Liens. (i) Grant, suffer or permit any contractual or
noncontractual lien on or security interest in its assets, except in favor of
Bank or purchase money liens, or (ii) fail to promptly pay when due all lawful
claims, whether for labor, materials or otherwise, except for claims contested
in good faith and for which Borrower has established adequate reserves to pay.
C. Extensions of Credit. Make or permit any subsidiary
to make, any loan or advance to any person or entity, or purchase or otherwise
acquire, or permit any subsidiary to purchase or other wise acquire, any
capital stock, assets, obligations, or other securities of , make any capital
contribution to, or otherwise invest in or acquire any interest in any entity,
or participate as a partner or joint venturer with any person or entity, except
for the purchase of direct obligations of the United States or any agency
thereof, stocks of subsidiaries and other "investment grade" instruments and
securities.
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D. Borrowings. Create, incur, assume or become liable
in any manner for any indebtedness (for borrowed money, deferred payment for
the purchase of assets, lease payments, as surety or guarantor for the debt for
another, or otherwise) in excess of $500,000 prior to the consummation of the
IPO other than to Bank, except for normal trade debts incurred in the ordinary
course of Borrower's business, and except for existing indebtedness reflected
in the latest balance sheet of Borrower provided to the Bank.
E. Dividends and Distributions. Make any distribution
(other than dividends payable in capital stock of Borrower) on any shares of
any class of its capital stock or apply any of its property or assets to the
purchase, redemption or other retirement of any shares of any class of capital
stock of Borrower.
F. Character of Business. Change the general character
of business as conducted at the date hereof, or engage in any type of business
not reasonably related to its business as presently conducted.
G. Management Change. Make any change in its present
executive officers, including the Chairman of the Board.
6. DEFAULT. Borrower shall be in default under this Agreement
and under each of the other Loan Documents if it shall default in the payment
of any amounts due and owing under the Loan or the JEDA Loan or should it fail
to timely and properly observe, keep or perform any term, covenant, agreement
or condition in any Loan Document or in any document executed in connection
with the JEDA Loan or in any other loan agreement, promissory note, security
agreement, deed of trust, deed to secure debt, mortgage, assignment or other
contract securing or evidencing payment of any indebtedness of Borrower to Bank
or any affiliate or subsidiary of NationsBank Corporation.
7. REMEDIES UPON DEFAULT. If an event of default shall occur,
Bank shall have all rights, powers and remedies available under each of the
Loan Documents as well as all rights and remedies available at law or in
equity.
8. NOTICES. All notices, requests or demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to the other party at the following
address:
Borrower: Air South Airlines, Inc.
X.X. Xxx 00000 (29211)
0000 Xx. Xxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxx, XX (00000)
Bank: NationsBank, N.A.
Xxxx X. Xxxxxx
Assistant Vice President
NationsBank, N.A.
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0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax No. (000) 000-0000
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or
made as follows:
A. If sent by mail, upon the earlier of the date of
receipt or five (5) days after deposit in the U.S. Mail, first class postage
prepaid;
B. If sent by any other means, upon receipted delivery.
9. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of Bank's in-house counsel if permitted by applicable law),
incurred by Bank in connection with (a) negotiation and preparation of this
Agreement and each of the Loan Documents, and (b) all other costs and
attorneys' fees incurred by Bank for which Borrower is obligated to reimburse
Bank in accordance with the Terms of the Loan Documents.
10. MISCELLANEOUS. Borrower and Bank further covenant and agree
as follows, without limiting any requirement of any other Loan Document:
A. Cumulative Rights and No Waiver. Each and every
right granted to Bank under any Loan Document, or allowed it by law or equity
shall be cumulative of each other and may be exercised in addition to any and
all other rights of Bank, and no delay in exercising any right shall operate as
a waiver thereof, nor shall any single or partial exercise by Bank of any right
preclude any other or future exercise thereof or the exercise of any other
right. Borrower expressly waives any presentment, demand, protest or other
notice of any kind, including but not limited to notice of intent to accelerate
and notice of acceleration. No notice to or demand on Borrower in any case
shall, of itself, entitle Borrower to any other or future notice or demand in
similar or other circumstances.
B. Applicable Law. This Loan Agreement and the rights
and obligations of the parties hereunder shall be governed by and interpreted
in accordance with the laws of South Carolina and applicable United States
federal law.
C. Amendment. No modification, consent, amendment or
waiver of any provision of this Loan Agreement, nor consent to any departure by
Borrower therefrom, shall be effective unless the same shall be in writing and
signed by an officer of Bank, and then shall be effective only in the specified
instance and for the purpose for which given. This Loan Agreement is binding
upon Borrower, its successors and assigns, and inures to the benefit of Bank,
its successors and assigns; however, no assignment or other transfer of
Borrower's rights or obligations hereunder shall be made or be effective
without Bank's prior written consent, nor
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shall it relieve Borrower of any obligations hereunder. There is no third
party beneficiary of this Loan Agreement.
D. Documents. All documents, certificates and other
items required under this Loan Agreement to be executed and/or delivered to
Bank shall be in form and content satisfactory to Bank and its counsel.
E. Partial Invalidity. The unenforceability or
invalidity of any provision of this Loan Agreement shall not affect the
enforceability or validity of any other provision herein and the invalidity or
unenforceability of any provision of any Loan Document to any person or
circumstance shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.
F. Indemnification. Notwithstanding anything to the
contrary contained in Section 10(G), Borrower shall indemnify, defend and hold
Bank and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs
or other expenses (including reasonable attorneys' fees and court costs)
arising from or in any way related to any of the transactions contemplated
hereby, including but not limited to actual or threatened damage to the
environment, agency costs of investigation, personal injury or death, or
property damage, due to a release or alleged release of Hazardous Materials,
arising from Borrower's business operations, any other property owned by
Borrower or in the surface or ground water arising from Borrower's business
operations, or gaseous emissions arising from Borrower's business operations or
any other condition existing or arising from Borrower's business operations
resulting from the use or existence of Hazardous Materials, whether such claim
proves to be true or false. Borrower further agrees that its indemnity
obligations shall include, but are not limited to, liability for damages
resulting from the personal injury or death of an employee of the Borrower,
regardless of whether the Borrower has paid the employee under the workmen's
compensation laws of any state or other similar federal or state legislation
for the protection of employees. The term "property damage" as used in this
paragraph includes, but is not limited to, damage to any real or personal
property of the Borrower, the Bank, and of any third parties. The Borrower's
obligations under this paragraph shall survive the repayment of the Loan and
any deed in lieu of foreclosure or foreclosure of any Deed to Secure Debt, Deed
of Trust, Security Agreement or Mortgage securing the Loan.
G. Survivability. All covenants, agreements,
representations and warranties made herein or in the other Loan Documents shall
survive the making of the Loan and shall continue in full force and effect so
long as the Loan is outstanding or the obligation of the Bank to make any
advances under the Line shall not have expired.
11. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THE LOAN DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF
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NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE
FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY
SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY
PARTY TO TIES AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE CITY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS
INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT
AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING
THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
ARBITRATION PROVISION; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW;
OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR
ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION,
TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
12. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
12
13
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
13
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed under seal by their duly authorized representatives as of the
date first above written.
BORROWER: BANK:
AIR SOUTH AIRLINES, INC. NATIONSBANK, N.A.
By:/s/ Xxxxxxx X. Xxxxx (Seal) By: /s/ Xxxx X. Xxxxxx
-------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxx X. Xxxxxx
Title: Chairman of the Board and Title: Assistant Vice President
Chief Executive Officer
[Corporate Seal]
Attest: /s/ Xxxxx X. Xxxxxxxx(Seal)
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
14
15
[NATIONSBANK LOGO] Of South Carolina, N.A. shall be deemed to be
NationsBank of South Carolina, N.A. references to "NationsBank, N.A."
SECURITY AGREEMENT
===================================================================================================================================
NOTICE: THIS SECURITY AGREEMENT IS SUBJECT TO MANDATORY ARBITRATION PURSUANT Date March 29, 1996
TO SOUTH CAROLINA AND PURSUANT TO THE FEDERAL ARBITRATION ACT. ------------------
Between and
-----------------------------------------------------------------------------------------------------------------------------------
BANK: (SECURED PARTY) DEBTOR/PLEDGOR:
NationsBank of south Carolina, N.A. Air South Airlines, Inc.
Banking Center: Central Commercial Post Office Box 11129
0000 Xxxx Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
0000 Xx. Xxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
(address including county) Richland (Name and address including county) Richland
------------------------------------------------------------------------------------------------------------------------------------
Debtor/Pledgor is: [ ] Individual [X] Corporation [ ] Partnership [ ] Other
------------------------------------------------------------------------------------------------------------------------------------
Address is Debtor's: [ ] Residence [ ] Place of Business [X] Chief Executive Office if more than one place of business.
------------------------------------------------------------------------------------------------------------------------------------
(THIS AGREEMENT CONTAINS SOME PROVISIONS PRECEDED BY BOXES. XXXX ONLY THESE
BOXES BESIDE PROVISIONS WHICH WILL BE APPLICABLE TO THIS TRANSACTION. A BOX
WHICH IS NOT MARKED MEANS THAT THE PROVISION BESIDE IT IS NOT APPLICABLE TO
THIS TRANSACTION.)
A. SECURITY INTEREST. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged and subject to the applicable terms
of this agreement, Debtor/Pledgor (hereinafter referred to as Debtor) assigns
and grants to Bank (also known as Secured Party), a security interest and lien
in the Collateral to secure the payment and the performance of the Obligation.
D. COLLATERAL. The security interest is granted in the following
("Collateral") (Check as applicable)
1.
[X]ACCOUNTS. Any and all accounts, accounts receivable, receivables, contract
rights, book debts, checks, notes, drafts, instruments, chattel paper,
acceptances, choses in action, any and all amounts due to Debtor from a
factor or other forms of obligations and receivables now existing or
hereafter arising out of the business of the Debtor, as well as any and
all returned, refused and repossessed goods, and the cash or non-cash
proceeds resulting therefrom.
[X]INVENTORY. Any and all of Debtor's Inventory, including without
limitation any and all goods held for sale or lease or being processed
for sale or lease in Debtor's business as now or hereafter conducted, whether
now owned or hereinafter acquired, including all materials, goods and work in
process, finished goods, and other tangible property held for sale or lease
or furnished or to be furnished under contracts of service or used or
consumed in Debtor's business, along with all documents (including documents
of title) covering inventory, all cash and non-cash proceeds from the sale of
inventory including proceeds from insurance and specifically including but
not limited to (attach Schedule if necessary):
N/A
[X]EQUIPMENT. Any and all of Debtor's furnishings, mixtures and equipment,
wherever located, whether now owned or hereafter acquired, together with all
increases, parts, fittings, accessories, equipment, and special tools now or
hereafter affixed to any part thereof or used in connection therewith, and
all products, additions, substitutions, accessions, and all cash and
non-cash proceeds, including proceeds from insurance thereof and thereto,
including without limitation the following (attach Schedule if necessary):
engines, propellers and any other parts or replacement
parts for aircraft owned or leased by Debtor.
[X]FIXTURES. All of Debtor's fixtures now existing or hereafter acquired,
together with all substitutes and replacements therefor, all accessions and
attachments thereto, and all tools, parts and equipment now or hereafter
added to or used in connection therewith. These goods are or will become
fixtures on the following described real estate in _________________
County, _________________ (State), owned by: __________________ [name of
owner] more particularly described as follows: See Schedule A attached hereto
and incorporated herein by reference. _________________________________
[insert legal description (or attach Exhibit) of property, not street
address], including without limitation the following (attach schedule if
necessary):_____________________________________________________________
[X]INSTRUMENTS AND/OR INVESTMENT DOCUMENTS. The following described instruments
and documents including, without limitation, negotiable instruments,
promissory notes, and documents or title owned or to be owned by Debtor,
certificates of deposit, and all liens, security agreements, leases and other
contracts securing or otherwise relating to any of said instruments or
documents, and all cash and non-cash proceeds and products thereof and such
additional property receivable or distributed in respect of or in exchange
for all or any of such instruments or documents (attach Schedule if
necessary): N/A
[X]GENERAL INTANGIBLES. All patents, trademarks, service marks, trade secrets,
copyrights and exclusive licenses (whether issued or pending) and all
documents, applications, materials and other matters related thereto, all
inventions, and all manufacturing, engineering and production plans,
drawings, specifications, processes and systems, all trade names, computer
programs, data bases, systems and software (including source and object
codes), goodwill, choses in action and all other general intangibles of
Debtor whether now owned or hereafter acquired and all cash and non-cash
proceeds thereof, including without limitation the following described in
intangible personal property, and all chattel paper, documents and
instruments relating to such intangibles, including without limitation
(attach schedule if necessary): credit card receivables
[ ]TIMBER. All of Debtor's uncut timber growing or to be grown on the following
described property, and cash and non-cash proceeds including proceeds from
insurance, and all products thereof (complete legal description of real
property required) (attach Exhibit if necessary):__________________________
[ ]OTHER:_____________________________________________________________________
_________________ (hereinafter referred to as "Goods" and all proceeds thereof).
2. All substitutes and replacements for, accessions, attachments and other
additions to, tools, parts and equipment used in connection with, and proceeds
and products of, the above Collateral (including all income and benefits
resulting from any of the above, such as dividends payable or distributable in
cash, property or stock; interest, premium and principal payments; redemption
proceeds and subscription rights; all certificates of title, manufacturer's
statements of origin, other documents, accounts and chattel paper arising from
or related to the above Collateral, and returned or repossessed Collateral, any
of which, if received by Debtor, upon request shall be delivered immediately to
Bank.
16
H. GENERAL
1. PARTIES BOUND. Bank's rights here under shall inure to the benefit of its
successors and assigns, and in the event of any assignment or transfer of any
of the Obligation, or the Collateral, Bank thereafter shall be fully discharged
from any responsibility with respect to the Collateral so assigned or
transferred, but Bank shall retain all rights and powers hereby given with
respect to any of the Obligation or Collateral not so assigned or transferred.
All representations, warranties and agreements of Debtor if more than one are
joint and several and all shall be binding upon the personal representatives,
heirs, successors and assigns of Debtor.
2. WAIVER. No delay of Bank in exercising any power or right shall operate as a
waiver thereof, nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other power
or right. No waiver by Bank of any right hereunder or of any default by Debtor
shall be binding upon Bank unless in writing, and no failure by Bank to
exercise any power or right hereunder or waiver of any default by Debtor shall
operate as a waiver of any other or further exercise of such right or power or
of any further default. Each right, power and remedy of the Bank as provided
for in any of the loan documents, or which shall now or hereafter exist at law
or in equity or by statute or otherwise, shall be cumulative and concurrent and
shall be in addition to every other such right, power or remedy. The exercise
or beginning of the exercise by the Bank of any one or more or such rights,
powers or remedies shall not preclude the simultaneous or later exercise by the
Bank of any or all other such rights, powers or remedies.
3. AGREEMENT CONTINUING. This agreement shall constitute a continuing
agreement, applying to all future as well as existing transactions, whether or
not of the character contemplated at the date of this agreement, and if all
transactions between Bank and Debtor shall be closed at any time, shall be
equally applicable to any new transactions thereafter. Provisions of this
agreement, unless by their terms exclusive, shall be in addition to other
agreements between the parties. Time is of the essence of this agreement.
4. DEFINITIONS. Unless the context indicates otherwise, definitions in the UCC
apply to words and phrases in this agreement; if UCC definitions conflict,
Article 9 definitions apply.
5. Notice. Notices shall be delivered in accordance with Section 8 of that
certain Loan Agreement dated of even date by and between Debtor and Bank.
6. MODIFICATIONS. No provision hereof shall be modified or limited except by a
written agreement expressly referring hereto and to the provisions so modified
or limited and signed by the Debtor and Bank, nor by course of conduct, usage
of trade.
7. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision of
this security agreement shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision
of any loan document to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons
or circumstances.
8. GENDER AND NUMBER. Where appropriate, the use of one gender shall be
construed to include the others or any of them; and the singular number shall
be construed to include the plural, and vice versa.
9. APPLICABLE LOW AND VENUE. This agreement has been delivered in the State of
South Carolina and shall be construed in accordance with the laws of that
State. It is performable by Debtor in the county or city of Bank's address set
out above and Debtor expressly waives any objection as to venue in any such
location. Wherever possible each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this agreement.
10. FINANCING STATEMENT. To the extent permitted by applicable law, a carbon,
photographic or other reproduction of this security agreement or any financing
statement covering the Collateral shall be sufficient as a Financing statement.
11. COUNTERPARTS. This agreement may be executed in any number of counterparts,
each of which shall be considered to be an original, but all of which shall
constitute one in the same instrument. As used herein "this agreement" shall
include all attachments and addenda.
12. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
(X.X M.S.) AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
BORROWER'S DOMICILE AT THE TIME OF THIS AGREEMENT'S EXECUTION AND ADMINISTERED
BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR
UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATIONS OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO (I)
LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR
REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) BE A WAIVER BY THE
BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE
BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT
BANK'S OPTION, FORECLOSURE UNDER A DEED OF TRUST OR MORTGAGE MAY BE
ACCOMPLISHED BY ANY OF THE FOLLOWING: THE EXERCISE OF A POWER OF SALE UNDER THE
DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL SALE UNDER THE DEED OF TRUST OR
MORTGAGE, OR BY JUDICIAL FORECLOSURE. NEITHER THIS EXERCISE OR SELF HELP
REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF
THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES. DEBTOR AGREES
THAT BANK AT ITS SOLE OPTION MAY CHOOSE MEDIATION, AND/OR BINDING ARBITRATION
PROCEDURES PERTAINING TO ANY CONTROVERSY(IES) OR DISPUTE(S) ARISING BETWEEN
DEBTOR AND BANK. DEBTOR AGREES TO ABIDE BY THE SELECTION THAT BANK MAKES TO
RESOLVE ANY CONFLICTS OR DISPUTES BETWEEN DEBTOR AND BANK AND TO PARTICIPATE IN
THE MEDIATION AND/OR BINDING ARBITRATION PROCESS IF SELECTED. DEBTOR AND BANK
AGREE THAT EACH WILL BEAR THEIR PORTION OF EXPENSES RELATED TO MEDIATION AND/OR
BINDING ARBITRATION.
13. NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS BETWEEN
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed under seal by their duly authorized representatives as of the date
first above written.
BANK/SECURED PARTY: Debtor/Pledgor:
NATIONSBANK OF SOUTH CAROLINA, N.A.
By: /S/ Xxxx X. Xxxxxx (Seal)
----------------------------------------------------------- --------------------------------------------------
Print Individual's Name:
Name: Xxxx X. Xxxxxx (Seal)
--------------------------------------------------------- ---------------------------------------------
Title: Assistant Vice President
-------------------------------------------------------- ---------------------------------------------------
Print Individual's Name:
(Seal)
---------------------------------------------
Corporate Borrower or Partnership: AIR SOUTH AIRLINES, INC.
---------------------------------------------------
(Name of Corporation, Partnership, etc)
Attest (If Applicable) By: /s/ Xxxxxxx X. Xxxxx (Seal)
----------------------------------------------
/s/Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxx, Chairman of the Board and
------------------------------------------------------------- ---------------------------------------------------
Xxxxx X. Xxxxxxxx Print Name and Title: Chief Executive Officer
Secretary
(Corporate Seal) By:
------------------------------------------------
---------------------------------------------------
Print Name and Title:
17
3. The balance of every deposit account of Debtor under control of Bank and any
other claim of Debtor against Bank, now or hereafter existing, liquidated or
unliquidated, and all money, instruments, securities, documents, chattel paper,
credits, claims, demands, income, and any other property, rights and interests
of Debtor which at any time shall come into the possession or custody or under
the control of Bank or any of its agents, affiliates or correspondents, for any
purpose, and the proceeds or any thereof. Bank shall be deemed to have
possession of any of the Collateral in transit to or set apart for it or any of
its agents, affiliates or correspondents.
C. OBLIGATION.
1. DESCRIPTION OF OBLIGATION. The following obligations ("Obligation") are
secured by this agreement: (a) All debts, obligations, liabilities and
agreements of Debtor to Bank, now or hereafter existing, arising directly or
indirectly between Debtor and Bank whether absolute or contingent, joint or
several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, and all
renewals, extensions or rearrangement of any of the above; (b) Bank's
participation in any loan or other debt of Debtor to another person; (c) All
costs incurred by Bank to obtain, preserve, perfect and enforce this agreement
and maintain, preserve, collect and enforce the Collateral; (d) Interest on the
above amounts as agreed between Bank and Debtor; (e) All debt, obligations and
liabilities of
N/A
(if the preceding space is completed, such party, together with the Debtor
named above, is hereinafter referred to collectively as "Debtor") to Bank of
the kinds described in this Item C, now existing or hereafter arising; (1) All
expenses of the Bank, including fees and expenses of the Bank's counsel,
incident to the enforcement of payment of all obligations of the Debtor by any
action or participation in, or in connection with a case or proceeding under
the Bankruptcy Code, or any successor statute thereto; (g) If the Debtor is not
the obligor of any of the Obligations, and in the event any amount paid to the
Bank on any Obligation is subsequently recovered from the Bank in or as a
result of any bankruptcy, insolvency or fraudulent conveyance proceeding, the
Debtor shall be liable to the Bank for the amounts so recovered up to the fair
market value of the Collateral whether or not the Collateral has been released
or the security interest terminated. In the event the Collateral has been
released or the security interest terminated, the fair market value of the
Collateral shall be determined, at the Bank's option, as of the date the
Collateral was released, the security interest terminated, or said amounts were
recovered; and (h) All amounts which may be owed to Bank pursuant to all other
loan documents executed between Bank and any other Debtor.
Notwithstanding the foregoing, if the Collateral is personal property used as a
principal residence (such as a mobile home or a houseboat) or "household goods"
(as that term is defined at 12 C.F.R. Section 227.12, as it may be amended from
time to time) which are not in the Bank's possession and which are not
fixtures, such Collateral shall not secure any liability contracted for
personal family or household purposes between the Debtor or an obligor and the
Bank already in existence on the date hereof that arises hereafter, unless the
Debtor otherwise expressly agrees.
D. DEBTOR'S WARRANTIES. Debtor hereby represents and warrants to Bank as
follows:
1. FINANCING STATEMENTS. Except as may be noted by schedule attached hereto and
incorporated herein by reference, no financing statement covering the
Collateral is or will be on file in any public office, except the financing
statements relating to this security interest, and no Security interest, other
than the one herein created, has attached or been perfected in the Collateral
or any part thereof.
2. OWNERSHIP. Debtor owns, or will use the proceeds of any loans by Bank to
become the owner of, the Collateral free from any setoff, claim, restriction,
lien, security interest or encumbrance except liens for taxes not yet due and
the security interest hereunder.
3. FIXTURES AND ACCESSIONS. None of the Collateral is affixed to real estate or
is an accession to any goods, or will become a fixture or accession, except as
expressly set out herein.
4. CLAIMS OF DEBTORS AN COLLATERAL. All account debtors and other obligors
whose debts or obligations are part of the Collateral have no right to setoffs,
counterclaims or adjustments, and no defenses in connection therewith.
5. POWER AND AUTHORITY. Debtor has full power and authority to make this
agreement.
E. DEBTOR'S COVENANTS. Until full payment and performance of all Obligations
and termination or expiration of any obligation or commitment of Bank to make
advances or loans to Debtor, unless Bank otherwise consents in writing:
1. OBLIGATION AND THIS AGREEMENT. Debtor shall perform all of its agreements
herein and in any other agreements between it and Bank.
2. OWNERSHIP OF COLLATERAL. Debtor shall defend the Collateral against all
claims and demands of all persons at any time claiming any interest therein
adverse to Bank. Debtor shall keep the Collateral free from all liens and
security interests except those for taxes not yet due and the security interest
hereby created.
3. INSURANCE. Debtor shall insure the Collateral with companies acceptable to
Bank. Such insurance shall be in an amount not less than the fair market value
of the Collateral and shall be against such casualties, with such deductible
amounts as Bank shall approve. All insurance policies shall be written for the
benefit of Debtor and Bank as their interests may appear, payable to Bank as
loss payee, or in other form satisfactory to Bank, and such policies or
certificates evidencing the same shall be furnished to Bank. All policies of
insurance shall provide for written notice to Bank at least 10 days prior to
cancellation. Risk of loss or damage is Debtor's to the extent of any
deficiency in any effective insurance coverage.
4. MAINTENANCE. Debtor shall keep all tangible Collateral in good condition.
5. BANK'S COSTS. Debtor shall pay all costs necessary to obtain, preserve,
perfect, defend and enforce this security interest, collect the Obligation, and
preserve, defend, enforce and collect the Collateral including but not limited
to taxes, assessments, insurance premiums, repairs, reasonable attorney's fees
and legal expenses, feed, rent, storage costs and expenses of sales. Whether
Collateral is or is not in Bank's possession, and without any obligation to do
so and without waiving Debtor's default for failure to make any such payment,
Bank at its option may pay any such costs and expenses, discharge encumbrances
on Collateral, and pay for insurance of Collateral, and such payment shall be a
part of the Obligation and bear interest at the rate set out in the Obligation.
Debtor agrees to reimburse Bank on demand for any costs so incurred.
6. INFORMATION AND INSPECTION. Debtor shall (i) promptly furnish Bank any
information with respect to Collateral requested by Bank; (ii) allow Bank or
its representatives to inspect the Collateral, at any time and wherever
located, and to inspect and copy, or furnish Bank or its representatives with
copies of, all records relating to the Collateral and the Obligation; (iii)
furnish Bank or its representatives such information as Bank may request to
identify Collateral, at the time and in the form requested by Bank; and iv)
deliver upon request to Bank shipping and delivery receipts evidencing the
shipment of goods and invoices evidencing the receipt of, and the payment for,
Collateral.
7. ADDITIONAL DOCUMENTS. Debtor shall sign and deliver any papers furnished by
Bank which are necessary or desirable in the judgment of Bank to obtain,
maintain and perfect the security interest hereunder and to enable Bank to
comply with the Federal Assignment of Claims Act or any other federal or state
law in order to obtain or perfect Bank's interest in Collateral or to obtain
proceeds of Collateral.
13. PARTIES LIABLE ON COLLATERAL. Debtor will preserve the liability of all
obligors on any Collateral, will preserve the priority of all security
therefor, and will deliver to Bank the original certificates of title on all
motor vehicles or other titled vehicles constituting the Collateral. Bank
shall have no duty to preserve such liability or security, but may do so at the
expense of Debtor, without waiving Debtor's default.
9. RIGHT OF BANK TO NOTIFY DEBTORS. At any time, whether Debtor is or is not in
default hereunder, Bank may notify persons obligated on any Collateral to make
payments directly to Bank and Bank may take control of all proceeds of any
Collateral. Until Bank elects to exercise such rights, Debtor, as agent of
Bank, shall collect and enforce all payments owed on Collateral.
10. RECORDS OF COLLATERAL. Debtor at all times will maintain accurate books and
records covering the Collateral. Debtor immediately will xxxx all books and
records with an entry showing the absolute assignment of all Collateral to Bank
and Bank is hereby given the right to audit the books and records of Debtor
relating to Collateral at any time and from time to time. The amounts shown as
owed to Debtor on Debtor's books and on any assignment schedule will be the
undisputed amounts owing and unpaid.
11. DISPOSITION OF COLLATERAL. If disposition of any Collateral gives rise to
an account, chattel paper or instrument, Debtor immediately shall notify Bank,
and upon request of Bank shall assign or endorse the same to Bank. No
Collateral may be sold, leased, manufactured, processed or otherwise disposed
of by Debtor in any manner without the prior written consent of Bank, except
Collateral sold, leased, manufactured, processed or consumed in the ordinary
course of business.
12. ACCOUNTS. Each account held as Collateral will represent the valid and
legally enforceable obligation of third parties, and shall not be evidenced by
any instrument or chattel paper.
13. LOCATION OF COLLATERAL. Debtor shall give Bank written notice of each
office of Debtor in which records of Debtor pertaining to accounts held as
Collateral are kept, and each location at which Collateral is or will be kept,
and of any change of any such location. If no such notice is given, all
records of Debtor pertaining to Collateral are and shall be kept at Debtor's
address shown above. All Collateral or Debtor will be kept at Debtor's address
shown above unless otherwise noted as follows: See those locations described
on Schedule A attached hereto and incorporated herein by reference.
14. NOTICE OF CHANGES. Debtor will notify Bank immediately of any material
change in the Collateral, of a change in Debtor's residence or location, of a
change in any matter Warranted or represented by Debtor in this agreement or
furnished to Bank, and of any event of default.
15. USE AND REMOVAL OF COLLATERAL. Debtor will not use the Collateral illegally
nor, unless previously indicated as a fixture, permit the Collateral to be
affixed to real or personal property without the prior written consent of Bank.
Debtor will not permit any or the Collateral to be removed from the locations
specified herein without the prior written consent of Bank, except for the sale
of inventory in the ordinary course of business.
18
16. POSSESSION OF COLLATERAL. Debtor will deliver all other instruments,
documents and chattel paper which are part or the Collateral and in Debtor's
possession to the Bank immediately, or if hereafter acquired, immediately
following acquisition, appropriately endorsed to Bank's order, or with
appropriate, executed powers. Debtor waives presentment, notice of
acceleration, demand, notice of dishonor, protest, and all other notices with
respect thereto.
17. CONSUMER CREDIT. If any Collateral or proceeds includes obligations of
third parties to Debtor, the transactions giving rise to the Collateral shall
conform in all respects to the applicable state or federal law including but
not limited to consumer credit law. Debtor shall hold harmless and indemnify
Bank against any cost, loss or expense arising from Debtor's breach of this
covenant.
18. CHANGE OF NAME/STATUS. Without the written consent of Bank, Debtor shall
not change its name, change its corporate status, use any trade name or engage
in any business in which it was not engaged on the date or this agreement.
19. POWER OF ATTORNEY. Debtor appoints Bank as Debtor's attorney-in-fact with
full power in Debtor's name and behalf to do every act which Debtor is
obligated to do or may be required to do hereunder; however, nothing in this
paragraph shall be construed to obligate Bank to take any action hereunder nor
shall Bank be liable to Debtor for failure to take any action hereunder. This
appointment shall be deemed a power coupled with an interest and shall not be
terminable as long as the Obligations are outstanding and shall not terminate
on the disability or incompetence of the Debtor.
20. WAIVERS BY DEBTOR. Debtor waives notice of the creation, advance, increase,
existence, extension or renewal of, and of any indulgence with respect to, the
Obligation; waives presentment, demand, notice of dishonor, and protest; waives
notice of the amount of the Obligation outstanding at any time, notice of any
change in financial condition or any person liable for the Obligation or any
part thereof, notice of any event of default, and all other notices respecting
the Obligation; and agrees that maturity of the Obligation and any part
thereof may be accelerated, extended or renewed one or more times by Bank in
its discretion, without notice to Debtor. Debtor waives any right to require
that any action be brought against any other person or to require that resort
be had to any other security or to any balance of any deposit account. The
Debtor further waives any right of subrogation or to enforce any right of
action against any other Debtor until the Obligation is paid in full.
21. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extension of or any other
indulgence with respect to the Obligation or any part thereof, no release of
any security, no release of any person (including any maker, endorser,
guarantor or surety) liable on the Obligation, no delay in enforcement of
payment, and no delay or omission or lack of diligence or care in exercising
any right or power with respect to the Obligation or any security therefor or
guaranty thereof or under this agreement shall in any manner impair or affect
the rights of Bank under the law, hereunder, or under any other agreement
pertaining to the Collateral. Bank need not file suit or assert a claim for
personal judgment against any person for any part of the Obligation or seek to
realize upon any other security for the Obligation, before foreclosing or
otherwise realizing upon the Collateral for the purpose of paying the
Obligation. Debtor waives any right to the benefit of or to require or control
application of any other security or proceeds thereof, and agrees that Bank
shall have no duty or obligation to Debtor to apply to the Obligation any such
other security or proceeds thereof.
22. COLLECTION AND SEGREGATION OF ACCOUNTS. The Bank hereby authorizes the
Debtor to collect the Collateral, subject to the direction and control of the
Bank, but the Bank may, without cause or notice, curtail or terminate said
authority at any time. Upon notice by the Bank, whether oral or in writing, to
the Debtor, the Debtor shall forthwith upon receipt of all checks, drafts,
cash, and other remittances in payment of or on account of the Collateral,
deposit the same in one or more special accounts maintained with the Bank over
which the Bank alone shall have the power of withdrawal. The remittance of the
proceeds of such Collateral shall not, however, constitute payment or
liquidation of such Collateral until the Bank shall receive good funds for such
proceeds. Funds placed in such special accounts shall be held by the Bank as
security for all Obligations secured hereunder. These proceeds shall be
deposited in precisely the form received, except for the indorsement of the
Debtor where necessary to permit collection of items, which endorsement the
Debtor agrees to make, and which indorsement the Bank is also hereby
authorized, as attorney-in-fact, to make an behalf of the Debtor. In the event
the Bank has notified the Debtor to make deposits to a special account, pending
such deposit, the Debtor agrees that it will not commingle any such checks,
drafts, cash or other remittances with any funds or other property of the
Debtor, but will hold them separate and apart therefrom, and upon an express
trust for the Bank until deposit thereof is made in the special account. The
Bank will, from time to time, apply the whole or any part of the Collateral
funds on deposit in this special account against such Obligations as are
secured hereby as the Bank may in its sole discretion elect. At the sole
election of the Bank, any portion of said funds on deposit in the special
account which the Bank shall elect not to apply to the Obligations, may be paid
over by the Bank to the Debtor.
23. COMPLIANCE WITH STATE AND FEDERAL LAWS. Debtor will comply with all State
and Federal laws and regulations applicable to its business, whether now in
effect or hereafter enacted including but not limited to the wage and hours
laws and relating to the use or disposal of hazardous materials and wastes.
F. RIGHTS AND POWERS OF BANK
1. GENERAL. Bank, before or after default, without liability to Debtor may:
obtain from any person information regarding Debtor or Debtor's business, which
information any such person also may furnish without liability to Debtor;
require Debtor to give possession or control of any Collateral to Bank; indorse
as Debtor's agent any instruments, documents or chattel paper in Collateral or
representing proceeds of Collateral; contact account debtors directly to verify
information furnished by Debtor; take control of proceeds, including stock
received as dividends or by reason of stock splits; release Collateral in its
possession to any Debtor, temporarily or otherwise; require additional
Collateral; reject as unsatisfactory any property hereafter offered by Debtor
as Collateral; set standards from time to time to govern what may be used as
after acquired Collateral; designate, from time to time, a certain percent of
the Collateral as the loan value and require Debtor to maintain the Obligation
at or below such figure; take control of funds generated by the Collateral,
such as cash dividends, interest and proceeds or refunds from insurance, and
use same to reduce any part of the Obligation and exercise all other rights
which an owner of such Collateral may exercise, except the right to vote or
dispose of Collateral before an event of default; at any time transfer any of
the Collateral or evidence thereof into its own name or that of its nominee; and
demand, collect, convert, redeem, receipt for, settle, compromise, adjust, xxx
for, foreclose or realize upon Collateral, in its own name or in the name of
Debtor, as Bank may determine. Bank shall not be liable for failure to collect
any account or instruments, or for any act or omission on the part of the Bank,
its officers, agents or employees, except willful misconduct and gross
negligence. The foregoing rights and powers of Bank will be in addition to,
and not a limitation upon, any rights and powers of Bank given by law,
elsewhere in this agreement, or otherwise. If Debtor fails to maintain any
required insurance, to the extent permitted by applicable law Bank may (but is
not obligated to) purchase single interest insurance coverage for the
Collateral which insurance may at Bank's option 6) protect only Bank and not
provide any remuneration or protection for Debtor directly and (II) provide
coverage only after the Obligation has been declared due as herein provided.
The premiums for any such insurance purchased by Bank shall be a part of the
Obligation and shall bear interest as provided in B. 1. d. hereof.
2. CONVERTIBLE COLLATERAL. Bank, may present for conversion any Collateral
which is convertible into any other instrument or investment security or a
combination thereof with cash, but Bank shall not have any duty to present for
conversion any Collateral unless it shall have received from Debtor detailed
written instructions to that effect at a time reasonably far in advance of the
final conversion date to make such conversion possible.
G. DEFAULT
1. EVENT OF DEFAULT. An event of default shall occur if: (i) there is a loss,
theft, damage or destruction of any material portion of the Collateral for
which there is no insurance coverage or for which, in the opinion of the Bank
there is insufficient insurance coverage; or (ii) if Debtor or any other
obligor on the Obligation shall fail to timely and properly pay or observe,
keep or perform any term, covenant, agreement or condition in this agreement or
in any other agreement between Debtor and any other obligor on the Obligation,
including in any other note or instrument, loan agreement, security agreement,
deed of trust, mortgage, promissory note, assignment or other agreement or
instrument concerning the Obligation.
2. RIGHTS AND REMEDIES. If any Event of Default shall occur, then, in each and
every such case, the Bank may, without presentment, demand, or protest; notice
of default, dishonor, demand, non-payment, or protest; notice of intent to
accelerate all or any part of the Obligation; notice of acceleration of all or
any part of the Obligation; or notice of any other kind, all of which Debtor
hereby expressly waives, (except for any notice required under this agreement,
any other loan document or applicable law); at any time thereafter exercise
and/or enforce any of the following rights and remedies:
A) POSSESSION AND COLLECTION OF COLLATERAL. At its option: (i) take
possession or control of, store, lease, operate, manage, sell or otherwise
dispose of, all or any part of the Collateral; (ii) notify all parties under
any account or contract right forming all or any part of the Collateral to make
any payments otherwise due to the Debtor directly to the Bank; (iii) in the
Bank's own name, or in the name of the Debtor, demand, collect, receive, xxx
for, and give receipts and releases for, any and all amounts due under such
accounts and contract rights; iv) indorse as the agent of the Debtor any check,
note, chattel paper, documents, or instruments forming all or any part of the
Collateral; (v) make formal application for transfer to the Bank (or to any
assignee of the Bank to any purchaser of any of the Collateral) of all of the
Debtor's permits, licenses, approvals, agreements, and the like relating to the
Collateral or to the Debtor's business; (vi) take any other action which the
Bank deems necessary or desirable to protect and realize upon its security
interest in the Collateral; and (vii) in addition to the foregoing, and not in
substitution therefor, exercise any one or more of the rights and remedies
exercisable by the Bank under any other provision of this agreement, under any
of the other loan documents, or as provided by applicable law (including,
without limitation, the Uniform Commercial Code as in effect in South Carolina
(hereinafter referred to as the "UCC")). In taking possession of the
Collateral the Bank may enter the Debtor's premises and otherwise proceed
without legal process, if this can be done without breach of the peace. The
Debtor shall, upon the Bank's demand, promptly make the Collateral or other
security available to the Bank at a place designated by the Bank, which place
shall be reasonably convenient to both parties.
The Bank shall not be liable for, nor be prejudiced by, any loss, depreciation
or other damages to the Collateral, unless caused by the Bank's willful and
malicious act. The Bank shall have no duty to take any action to preserve or
collect the Collateral.
B) RECEIVER. Obtain the appointment of a receiver for all or any of the
Collateral, the Debtor hereby consenting to the appointment of such a receiver
and agreeing not to oppose any such appointment.
C) RIGHT OF SET OFF. Without notice or demand to the Debtor, set off and apply
against any and all of the Obligations any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness, at
any time held or owing by the Bank to or for the credit of the account of the
Debtor.
Bank shall be entitled to immediate possession of all books and records
evidencing any Collateral or pertaining to chattel paper covered by this
agreement and it or its representatives shall have the authority to enter upon
any premises upon which any of the same, or any Collateral, may be situated and
remove the same therefrom without liability. Bank may surrender any insurance
policies in Collateral and receive the unearned premium thereon. Debtor shall
be entitled to any surplus and shall be liable to Bank for any deficiency. The
proceeds of any disposition after default available to satisfy the Obligation
shall be applied to the Obligation in such order and in such manner as Bank in
its discretion shall decide.
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INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT (this "Agreement") is
made as of March 29, 1996, by and between NATIONSBANK, N.A., a national banking
association ("NationsBank"), and SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT
AUTHORITY ("JEDA").
WITNESSETH
WHEREAS, JEDA as assignee of the County of Lexington, South Carolina
(the "County") and AIR SOUTH AIRLINES, INC., a Delaware corporation, as
successor to Air South, Inc., an Illinois corporation ("Debtor") are parties to
a certain Loan Agreement dated as of July 15, 1994 (hereinafter referred to,
together with all amendments and modifications thereto as, the "108 Loan
Agreement"), pursuant to which JEDA extended a loan to Debtor in the principal
amount of $12,000,000; and
WHEREAS, all obligations and rights of the County under the 108 Loan
Agreement and other notes, documents and agreements executed in connection
therewith (collectively, the "JEDA Loan Documents") were assigned to JEDA
pursuant to that certain Assignment and Servicing Agreement dated as of July
15, 1994 by and between the County and JEDA; and
WHEREAS, to secure all indebtedness, liabilities and obligations
owning by Debtor to JEDA under the JEDA Loan Documents, Debtor has granted to
XXXX x xxxx upon and security interest in all of Debtor's personal property,
including, without limitation, all accounts, inventory, equipment, fixtures,
general intangibles, instruments, documents and chattel paper, whether now
owned or hereafter acquired; and
WHEREAS, NationsBank and Debtor are parties to a certain Loan
Agreement dated as of even date, (hereinafter referred to, together with all
amendments and modifications thereto as, the "NationsBank Loan Agreement"),
pursuant to which NationsBank has agreed to make a revolving credit facility
available to Debtor; and
WHEREAS, to secure all indebtedness, liabilities and obligations owing
by Debtor to NationsBank under the NationsBank Loan Agreement and any notes,
documents and agreements executed in connection therewith (collectively, the
"NationsBank Loan Documents"), Debtor has granted to NationsBank a lien upon and
security interest in all of Debtor's personal property, including, without
limitation, all accounts, inventory, equipment, fixtures, general intangibles,
instruments, documents and chattel paper, whether now owned or hereafter
acquired; and
WHEREAS, the parties hereto desire to enter into this Agreement for
the purpose of establishing the priorities of their respective liens and
security interests in the assets of the Debtor and setting forth certain other
agreements between them with respect to the Debtor;
NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and in
consideration of the foregoing premises, the mutual covenants and conditions
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the parties hereto,
intending to be bound hereby, agree as follows:
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1. CERTAIN DEFINITIONS. In addition to the terms defined in the
recitals hereto, as used in this Agreement, the following terms shall have the
following meanings for the purposes of this Agreement:
"Bankruptcy Case" shall mean any case hereafter commenced by or
against Debtor under any chapter of the Bankruptcy Code.
"Collateral" shall mean and collectively include all personal
property of Borrower which is pledged to secure the JEDA Obligations
and the NationsBank Obligations.
"Collection Remedy" shall mean any remedy available to
NationsBank under any of the NationsBank Loan Documents or under
applicable law to enforce collection of any of the NationsBank
Obligations following the occurrence of an Event of Default, and any
remedy available to JEDA under any of the JEDA Loan Documents or under
applicable law to enforce collection of any of the JEDA Obligations
following the occurrence of an Event of Default, including, but not
limited to, in the case of NationsBank, any acceleration of the
maturity or demand for payment of any of the NationsBank Obligations
and any suit to collect any of the NationsBank Obligations; in the
case of JEDA, any acceleration of the maturity or demand for payment
of any of the JEDA Obligations and any suit to collect any of the JEDA
Obligations; and any attachment or garnishment of, or judicial or
nonjudicial repossession or foreclosure upon, any of the Collateral by
either NationsBank or JEDA.
"Event of Default" shall mean an event or condition that
constitutes a default or event of default under the JEDA Loan
Documents or the NationsBank Loan Documents.
"JEDA Loan Documents" shall mean and include the 108 Loan
Agreement, that certain Promissory Note dated August 8, 1994 executed
by Debtor in favor of the County and assigned to JEDA, that certain
Security Agreement and Chattel Mortgage executed by Borrower dated
July 15, 1994 and all other instruments or agreements now or hereafter
evidencing or securing the payment of the whole or any part of the
JEDA Obligations.
"JEDA Obligations" shall mean and include all indebtedness,
liabilities and obligations of Debtor to JEDA, whether now or
hereafter created, incurred or arising, and whether direct or
indirect, absolute or contingent, primary or secondary, due or to
become due, joint or several, including, without limitation, all
liabilities now or at any time or times hereafter owing to JEDA under
any of the JEDA Loan Documents.
"NationsBank Loan Documents" shall mean and include the
NationsBank Loan Agreement, that certain Promissory Note, made by
Debtor to the order of NationsBank, in the principal amount of
$1,000,000, that certain Security Agreement executed by Debtor in
favor or Bank and all other instruments or agreements now or hereafter
evidencing or securing the payment of the whole or any part of the
NationsBank Obligations.
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"NationsBank Obligations" shall mean and include all
indebtedness, liabilities and obligations of Debtor to NationsBank,
now or at any time or times hereafter owing to NationsBank under any
of the NationsBank Loan Documents in the amount not to exceed
$1,000,000.00 in principal, plus all accrued interest on such
principal sum plus all expenses (including reasonable legal fees and
other professional fees and expenses) related thereto or incurred in
connection with or under the NationsBank Loan Documents including
expenses related to modifications, negotiations or collections of the
NationsBank Obligations.
2. CONSENT TO SECURITY INTEREST. JEDA hereby consents to any
security interest or lien granted or conveyed by Debtor to NationsBank in any
of the Collateral.
3. PRIORITY OF LIENS AND SECURITY INTERESTS. JEDA and
NationsBank agree at all times, whether before, after or during the pendency of
any Bankruptcy Case, reorganization or other insolvency proceeding and
notwithstanding the priorities which would ordinarily result from the order of
granting of any security interests or liens, or the order of filing or
recording of any financing statements or mortgages in respect of any of the
Collateral:
3.1 Superiority of NationsBank's Liens and Security
Interests. NationsBank's liens and security interests in the
Collateral shall constitute first priority liens and security
interests in the Collateral to secure the NationsBank Obligations and
shall be superior to any interest of JEDA in the Collateral arising
pursuant to the JEDA Loan Documents or otherwise; and JEDA's security
interests and liens therein shall be subordinate to the security
interests and liens of NationsBank therein. NationsBank specifically
acknowledges that the priority of NationsBank's lien shall secure, at
the time of realization on any of the Collateral an amount not in
excess of the amount of the NationsBank Obligations.
4. NOTICE OF DEFAULT. Each party hereto agrees to give to the
other copies of any written notices of default which such party hereafter may
give to Debtor, concurrently with, or as soon as practicable after, the giving
of such notice to Debtor and provide such other party thirty (30) days from the
delivery of such notice to cure any default. No failure of any party to give a
copy of such notice as provided herein shall in any event affect the relative
priorities of the security interests and liens established in Section 3 hereof
or other rights provided herein.
5. EXERCISE OF REMEDIES. In the event of the commencement of
foreclosure, liquidation or similar actions with respect to the Collateral by
either party to this Agreement with respect to the Collateral, the parties
shall cooperate with each other and act reasonably and in good faith in
connection with such foreclosure, liquidation or similar action.
6. RECEIPT OF MONIES BY JEDA. JEDA agrees that if JEDA receives
any money from the sale, liquidation, casualty or other disposition of, or as a
result of its security interest in or lien upon any of the Collateral at any
time prior to payment in full of all the NationsBank Obligations, JEDA will
(unless otherwise restricted by law) hold the same in trust for NationsBank and
promptly pay over the same to NationsBank for application to the
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NationsBank Obligations. NationsBank acknowledges that the terms of this
provision of Section 6 do not apply to moneys received by JEDA in the ordinary
course of the payment of the JEDA Obligations by Debtor which (i) are received
by JEDA so long as Debtor is paying NationsBank as agreed under the NationsBank
Obligations; (ii) are not paid with the proceeds of the sale of Collateral
outside of the ordinary course of Debtor's business; or (iii) are not paid with
insurance proceeds.
7. CERTAIN BANKRUPTCY MATTERS. If in any Bankruptcy Case
NationsBank returns, refunds or repays to Debtor or any trustee or committee
appointed in the Bankruptcy Case any payment or proceeds of the Collateral in
connection with any action, suit or proceeding alleging that NationsBank's
receipt of such payments or proceeds was a transfer voidable under state or
federal law, then NationsBank shall not be deemed ever to have received such
proceeds for purposes of this Agreement in determining whether and when all of
the NationsBank Obligations have been paid in full.
8. AGREEMENT TO RELEASE. JEDA agrees that it will (if requested
to do so by NationsBank after and during the continuance of an Event of
Default) release, upon the consummation of the sale of any portion of the
Collateral, its security interest and lien in such Collateral in connection
with and in order to facilitate any orderly liquidation sale of such Collateral
by Debtor or any bankruptcy trustee or receiver for Debtor. JEDA will, in
connection with the sale, execute and deliver such documents, instruments and
agreements as are necessary to effectuate such release and to evidence such
release in the appropriate public records.
9. WAIVER OF MARSHALLING; APPLICATION OF PAYMENTS, COLLECTIONS
AND PROCEEDS. JEDA hereby waives any right to require NationsBank to xxxxxxxx
any of the Collateral or otherwise to compel NationsBank to seek recourse
against or satisfaction of the NationsBank Obligations from one source before
seeking recourse or satisfaction from another source. NationsBank shall be
authorized to apply any and all payments, collections and proceeds of
Collateral received by it to such portion of the NationsBank Obligations as
NationsBank may lawfully elect consistent with the provisions of the
NationsBank Loan Documents.
10. PROVISIONS CONCERNING INSURANCE. Proceeds of the Collateral
include insurance proceeds, and therefore the priorities set forth in Section 3
hereof govern the ultimate disposition of casualty insurance proceeds.
NationsBank shall, subject to NationsBank's rights under its agreement with
Debtor, have the right after good faith consultations and negotiations with
JEDA and JEDA's agreement, which agreement will not unreasonably be withheld or
delayed to adjust settlement of insurance claims in the event of any covered
loss, theft or destruction of such Collateral. All proceeds of such insurance
shall inure to NationsBank to the extent of the NationsBank Obligations and to
JEDA to the extent of JEDA obligations, in that order, and NationsBank and JEDA
shall cooperate in a reasonable manner in effecting the payment of insurance
proceeds as specified to NationsBank. NationsBank shall have the right after
good faith consultations and negotiations with JEDA and JEDA's agreement, which
agreement will not unreasonably be withheld or delayed to determine whether
such proceeds will be applied to the NationsBank Obligations or used to
rebuild, replace or repair the affected Collateral. If such proceeds are
applied to the NationsBank Obligations, any proceeds
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remaining after payment of the NationsBank Obligations shall be promptly
remitted to JEDA. The proceeds of business interruption insurance shall be
deemed to be proceeds of the Collateral and shall be dealt with as set forth in
this Section 10. To the extent that the proceeds of any insurance do not
relate to any specific items or Collateral, such proceeds shall be dealt with
as set forth in this Section 10.
11. NOTICES. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be delivered by hand, sent by certified or
registered mail, return receipt requested or by telecopier and shall be deemed
to have been validly served, given or delivered when delivered against receipt
or two business days after deposit in the mail, postage prepaid, or, in the
case of telecopy notice, when received at the office of the noticed party, in
each case addressed as follows:
(A) If to JEDA: 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
(B) If to NationsBank: NationsBank, N.A.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Post Office Box 448 (29202)
Xxxxxxxx, XX 00000
Location Code: SC 3 240-03-07
Attn: Xxxx X. Xxxxxx
or to such other address as each party may designate for itself by Re notice
given in accordance with this Section 12.
12. RELATIONSHIP OF PARTIES. This Agreement is entered into
solely for the purposes set forth herein, and, except as is expressly provided
otherwise herein, neither party assumes any responsibility to the other party
to advise such other party of information known to such party regarding the
financial condition of Debtor or regarding the Collateral, or of any other
circumstances bearing upon the risk of nonpayment of the obligations of Debtor
under the NationsBank Loan Documents or the JEDA Loan documents. Each party
shall be responsible for managing its relationship with Debtor and neither
party shall be deemed the agent of the other for any purpose. NationsBank and
JEDA each may alter, amend, supplement, release, discharge or otherwise modify
any terms of the NationsBank Loan Documents or of the JEDA Loan Documents,
respectively, without the consent of the other.
13. SPECIFIC ENFORCEMENT. If either party fails to comply with any
provision of this Agreement that is applicable to such party, the other party
may demand specific performances of this Agreement and may exercise any other
remedy available at law or equity.
14. NO ADDITIONAL RIGHTS OF DEBTOR HEREUNDER. Nothing herein
shall be construed to confer additional rights upon Debtor. Without limiting
the generality of the foregoing, if any party hereto shall enforce its rights
or remedies in violation of this Agreement, Debtor shall not be authorized to
use such violation as a defense to the Collection Remedy exercised by such
party, nor assert such violation as a counterclaim or basis of setoff
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24
or recoupment against such party, unless the other party hereto consents in
writing and itself asserts that the exercise of Collection Remedy is in
violation of this Agreement.
15. INDEPENDENT CREDIT INVESTIGATIONS. Neither the parties hereto
nor any of their respective directors, officers, agents or employees shall be
responsible to the others or to any other person, firm or corporation, for
Debtor's solvency, financial condition or ability to repay any of the
NationsBank Obligations or any of the JEDA Obligations, or for statements of
Debtor, oral or written, or for the validity, sufficiency or enforceability of
any of the NationsBank Loan Documents or any of the JEDA Loan Documents, or the
validity or priority of any liens or security interests granted by Debtor to
either party in connection with any of the NationsBank Loan Documents or any of
the JEDA Loan Documents. Each party hereto has entered into its agreements
with Debtor based upon its own independent investigation, and makes no warranty
or representation to the other party nor does it rely upon any representation
of the other party with respect to matters identified or referred to in this
paragraph.
16. TERM OF AGREEMENT. This Agreement shall continue in full
force and effect and shall be irrevocable by any party hereto until the
earliest to occur of the following: (i) the parties hereto in writing mutually
agree to terminate this Agreement; (ii) the NationsBank Obligations are fully
paid and discharged and the NationsBank Loan Documents are terminated; or (iii)
the JEDA Obligations are fully paid and discharged and the JEDA Loan Documents
are terminated.
17. GOVERNING LAW. This Agreement shall be interpreted, and the
rights and obligations of the parties hereto determined, in accordance with the
internal laws of the State of South Carolina.
18. NO THIRD PARTY BENEFICIARIES. Nothing contained in this
Agreement shall be deemed to indicate that this Agreement has been entered into
for the benefit of any person other than the parties hereto.
19. CONFLICT WITH LOAN DOCUMENTS. The provisions of this
Agreement are intended by the parties to control any conflicting provisions in
the JEDA Loan Documents or the NationsBank Loan Documents.
20. SECTION TITLES. The section titles contained in this Agreement
are and shall be deemed to be without substantive meaning or content of any
kind whatsoever and are not a part of the Agreement between the parties hereto.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument. In proving this Agreement in any judicial proceeding, it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom such enforcement is sought.
22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. In no
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event, however, shall either party hereto transfer or assign any security
interest or lien that it may have in any of the Collateral to any other person
or entity unless the transferee or assignee thereof shall first agree to be
bound by the terms of this Agreement the same as if an original signatory
hereto.
23. FURTHER ASSURANCES. JEDA hereto agrees to execute such other
documents as may be necessary to reflect of record the existence of this
Agreement and the relative priorities established pursuant to Section 3 hereof;
provided such acknowledgement is required in connection with any judicial
proceeding at law or in bankruptcy involving the Collateral.
24. ENTIRE AGREEMENT; AMENDMENTS. This Agreement expresses the
entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior understandings and
agreements of the parties regarding the same subject matter. This Agreement may
not be amended or modified except by a writing signed by the parties hereto.
25. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provisions of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
26. JURY TRIAL WAIVER. JEDA AND NATIONSBANK EACH HEREBY WAIVES
ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION, SUIT OR OTHER
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
NATIONSBANK, N.A. SOUTH CAROLINA JOBS-ECONOMIC
DEVELOPMENT AUTHORITY
By: /s/ By: /s/
----------------------------- ------------------------------
Its: Asst. Vice President Its: CEO
-------------------------- ---------------------------
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ACKNOWLEDGEMENT AND AGREEMENT
The undersigned hereby accepts and acknowledges receipt of a copy of
the foregoing Intercreditor and Subordination Agreement and consents to and
agrees to be bound by all provisions thereof, including, without limitation,
the agreements between NationsBank and JEDA with respect to the payment by.
each to the other of certain proceeds derived from the liquidation of the
Collateral. The undersigned further acknowledges and understands that the
Intercreditor and Subordination Agreement may be modified or amended at any
time or times without notice to or the consent of the undersigned. The
undersigned accepts and agrees to be bound by the provisions of Section 14 of
the Intercreditor and Subordination Agreement.
Capitalized terms used in this Acknowledgment and Agreement without
definition have the meanings specified in the foregoing Intercreditor and
Subordination Agreement unless the context otherwise requires.
As of March ___, 1996.
AIR SOUTH AIRLINES, INC.
By: /s/
-----------------------------
Title:
--------------------------
27
INVESTMENT REPRESENTATION
and
REGISTRATION RIGHTS
AGREEMENT
This Investment Representation and Registration Rights Agreement
("Agreement") is made between Air South Airlines, Inc., a Delaware corporation
(the "Issuer") and Atlantic Equity Corporation, (the "Holder"), as of the 29th
day of March, 1996.
WITNESSETH
WHEREAS, the Issuer has on even date herewith issued to the Holder
certificate number C-16 for 7,500 shares (the "Shares") of Common Stock par
value $0.001 of the Issuer ("Common Stock");
WHEREAS, under certain circumstances, the Issuer may issue to the
Holder an additional 15,000 shares of Common Stock (the "Additional Shares");
WHEREAS, the Issuer and the Holder wish to take certain actions to
establish the availability of exemptions from registration under various state
and federal securities laws of the Shares and, when issued, the Additional
Shares (collectively, the "Securities;")
WHEREAS, the Issuer wishes to provide certain rights to the Holder for
the registration of the Additional Shares under the Securities Act of 1933, as
amended (the "Securities Act") under certain circumstances and the Holder
wishes to have such registration rights.
NOW THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, the parties hereto agree as follows:
(1) The Holder represents, understands and agrees: (a) that it is
taking or will take the Securities for investment and not with a view to a
distribution other than a distribution which is in compliance with applicable
federal and state law; (b) that an investment in the Securities involves a high
degree of risk; and (c) that the Securities are restricted securities and may
not be sold or otherwise transferred unless registered under any applicable
state and federal securities laws or an exemption from such registration is
available.
(2) The Holder shall have "piggy-back" registration rights for the
Additional Shares as follows:
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(a) The Issuer shall notify the Holder in writing 10 days
prior to the filing of any registration statement under the Securities Act for
purposes of a firmly underwritten public offering of any equity securities of
the Issuer (but excluding a registration statement relating to the initial
public offering of equity securities of the Issuer, employee benefit plans and
corporate reorganizations) such notice to include to the extent then known by
the Issuer (i) name of the underwriter(s); (ii) proposed filing dates (iii)
estimate of range of prices and (iv) number of shares to be offered. The
Issuer will afford Holder an opportunity to include in such registration
statement all of the Additional Shares. If the Holder desires to include in any
such registration statement all of the Additional Shares it shall within five
business days after receipt of the above-described notice from the Issuer, so
notify the Issuer in writing.
(b) The right of the Holder to be included in a
registration shall be conditioned upon the Holder's participation in such
underwriting and the inclusion of the Additional Shares in the underwriting to
the extent provided herein. The Holder shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting. If the underwriter determines in good faith that marketing
factors require a limitation of the number of shares to be underwritten, the
number of shares that may be included in the underwriting shall be allocated,
first, to the Issuer; second, to Xxxxxxxxx & Xxxxx, L.L.C.; and third, any
other selling stockholders of the Issuer on a pro-rata basis.
(c) The Issuer shall bear all fees and expenses incurred
in connection with any registration provided for in this Agreement, including
without limitation, underwriters' discounts and commissions related to the
Additional Shares all state and federal registration, filing, qualification,
printers' and accounting fees, fees and disbursements of counsel to the Issuer,
and the reasonable fees and disbursements of a single counsel to any selling
shareholders (which counsel shall also be counsel to the Issuer unless counsel
to the Issuer has a conflict of interest with respect to the representation of
any selling shareholders or the underwriters object to the selling shareholders
representation by Issuer counsel).
(3) The issuer will indemnify Holder, each of Holder's officers
and directors, and each person controlling Holder with respect to any such
registration contemplated hereby, against all claims, losses, damages and
liabilities (or action in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Issuer of any rule or
regulation promulgated under the 1933 Act applicable to the Issuer and relating
to action or inaction required of the Issuer in connection with any such
registration, and will reimburse Holder, each of Holder's officers and
directors, and each person controlling Holder, for any legal and any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, provided that the Issuer will
not be liable in any such case to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission
based upon information furnished to the Issuer by Holder in writing,
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IN WITNESS WHEREOF the undersigned have executed this Agreement as of
the day and year first above mentioned.
AIR SOUTH AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chairman of the Board and
Chief Executive Officer
NATIONSBANK, N.A.
By /s/ Xxxx X. Xxxxxx
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Name /s/ Xxxx X. Xxxxxx
----------------------------
Title Assistant Vice President
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