EXHIBIT 10.23
AIRCRAFT MORTGAGE AND SECURITY AGREEMENT
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THIS AIRCRAFT MORTGAGE AND SECURITY AGREEMENT, dated as of December
21, 1995 (this "Agreement"), is between GENERAL MANUFACTURED HOUSING, INC.,
a Georgia corporation, ("Debtor"), and FIRST SOURCE FINANCIAL LLP, an
Illinois registered limited liability partnership ("Secured Party").
PRELIMINARY STATEMENT:
A. Secured Party and Debtor have entered into a Secured Credit
Agreement of even date herewith (such Secured Credit Agreement, as the same
may be amended, supplemented or modified from time to time, hereinafter is
referred to as the "Credit Agreement") pursuant to which Secured Party has
agreed to make loans and other financial accommodations to Debtor
(collectively, the "Loans"), subject to the terms and conditions set forth
in the Credit Agreement.
B. One of the conditions precedent to the obligations of Secured
Party under the Credit Agreement is that Debtor shall have executed and
delivered this Agreement.
NOW, THEREFORE, in order to induce Secured Party to make the Loans,
and for other good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, Debtor hereby agrees as follows:
1. DEFINITIONS. All capitalized terms used but not elsewhere
defined in this Agreement shall have the respective meanings ascribed to
such terms in the Credit Agreement. As used in this Agreement, the
following terms shall have the following meaning:
AIRCRAFT: the Airframe together with (i) the Parts, (ii) the
Engines, (iii) the Propellers, (iv) spare parts or ancillary equipment
or devices used in connection therewith, (v) all flight manuals,
maintenance manuals, wiring diagrams, parts catalogs, customer
bulletins and service bulletins, logbooks, landing gear service
manuals, training manuals and other logs, manuals and records with
respect thereto and (vi) all substitutions, replacements, renewals and
proceeds of any and all of the foregoing.
AIRFRAME: collectively, (i) the Beechcraft King Air 200, Serial
Number BB464, FAA Registration Number N561SS (except Engines or
engines from time to time installed thereon) and (ii) any and all
Parts so long as the same shall be incorporated in, installed on or
attached to the Airframe, or so long as title thereto shall remain
vested in Debtor after removal from the Airframe.
ENGINES: collectively, (i) each of the two model PT6A-41 engines
manufactured by Xxxxx & Xxxxxxx bearing serial numbers 80897 and 80900
and initially installed on the Airframe, whether or not from time to
time thereafter no longer installed on the Airframe or installed on
any other aircraft or airframe, each having 750 or more rated take-off
horsepower, and (ii) any replacement engine which may from time to
time be substituted therefor, together in each case with any and all
Parts incorporated or installed in or attached thereto or any and all
Parts removed therefrom so long as title thereto after removal from
such Engine shall remain vested in Debtor.
PARTS: all avionics, appliances, components, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature (excluding Engines and Propellers), which may now or from time
to time be incorporated or installed in or attached to, or were
provided by the manufacturer with, the Airframe or any Engine or any
Propeller or, so long as title thereto shall remain vested in Debtor,
if removed from such Airframe or Engine or Propeller.
PROPELLERS: collectively, (i) each of the two Model No. HC-D4N-3A
propellers manufactured by Xxxxxxxx bearing serial numbers FY848A and
FY587 and initially installed on the Airframe, whether or not from time
to time thereafter no longer installed on the Airframe or installed on
any other aircraft or airframe, each of which is capable of absorbing
750 or more shaft horsepower, and (ii) any replacement propeller which
may from time to time be substituted therefor.
2. SECURITY INTEREST. In order to secure the performance and payment
of the Liabilities, Debtor hereby grants to Secured Party a security
interest in all of Debtor's right, title and interest in and to the
Aircraft. The Aircraft sometimes hereinafter is referred to as the
"Collateral." The security interest of Secured Party in the Collateral
shall be superior and prior to all other Liens except Permitted Prior Liens.
3. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and
warrants to Secured Party as follows:
3.1 CITIZENSHIP. Debtor is a citizen of the United States within
the meaning of Section 101(16) of the Federal Aviation Act.
3.2 ENGINE CAPABILITY. The Aircraft's engines have more than 750
rated take-off horsepower or its equivalent.
3.3 PROPELLER CAPABILITY. The Aircraft's propellers are capable
of absorbing 750 or more shaft horsepower.
3.4 OWNERSHIP OF COLLATERAL. Debtor is the owner of all of
the Collateral, except the portion thereof consisting of after-
acquired Property, and Debtor will be the owner of such after-
acquired Property, free from any Lien except for Permitted Liens.
3.5 PLACES OF BUSINESS. The principal base of the Aircraft is the
Waycross Xxxx County Airport in Waycross, Georgia.
3.6 FINANCING STATEMENTS. Except for the financing statements of
Secured Party and the financing statement showing NationsBank of
Georgia, N.A. as a secured party, a termination statement for which
will be delivered to Secured Party on the date hereof, no financing
statement covering any Collateral or any proceeds thereof is on file in
any public office.
4. AFFIRMATIVE COVENANTS. Until all of the Liabilities are paid and
performed in full, Debtor agrees that it will:
4.1 TAXES. Pay or cause to be paid promptly when due all taxes,
levies, assessments and governmental charges upon and relating to any
of the Collateral or otherwise for which Debtor is or may be liable,
except to the extent that the failure to pay any of such taxes, levies,
assessments or charges is permitted by the Credit Agreement.
4.2 INSURANCE. At its sole expense, maintain or cause to be
maintained in full force and effect at all times such insurance with
respect to the Collateral as may be required by law or otherwise by
Secured Party.
4.3 COLLATERAL.
4.3.1 MAINTENANCE. At its own expense, cause the Aircraft to
be maintained, serviced, repaired, overhauled and tested, and
cause all parts, replacements, mechanisms, devices and servicing
required therefor to be furnished, so that the value, condition
and operating efficiency thereof will at all times be maintained
and preserved, at not less than the level required by any
governmental body having jurisdiction with respect thereto, and,
in any case, the level necessary to enable the airworthiness
certification of the Aircraft to be maintained in good standing at
all times under the Federal Aviation Act, or as shall be required
by any and all applicable FAA Airworthiness Directives, Operators
Letters and Service Bulletins.
4.3.2 INSURANCE REQUIREMENTS. Cause the Collateral at all
times to be maintained in accordance with the requirements of all
insurance
carriers which provide insurance with respect to such Collateral so
that such insurance shall remain in full force and effect.
4.3.3 REGISTRATION. Cause the Aircraft to be and remain at
all times duly registered in the name of Debtor in accordance with
the Federal Aviation Act.
4.3.4 BOOKS AND RECORDS. Cause all books, records and
materials required by the FAA to be maintained with respect to the
Aircraft.
4.3.5 OPERATION. Cause the Aircraft to be used in compliance
with all federal, state and local laws, ordinances, requirements
and regulations and all judgments, orders, injunctions and decrees
applicable thereto.
4.4 FINANCING STATEMENTS, FURTHER ASSURANCES. Concurrently with
the execution of this Agreement, and from time to time hereafter as
requested by Secured Party, execute and deliver to Secured Party such
financing statements, continuation statements, termination statements,
amendments to any of the foregoing and other documents, in form
satisfactory to Secured Party, as Secured Party may require to perfect
and continue in effect the security interest of Secured Party granted
pursuant to this Agreement, to carry out the purposes of this Agreement
and to protect Secured Party's rights hereunder. Debtor, upon demand,
shall pay the cost of filing all such financing statements,
continuation statements, termination statements, amendments to any of
the foregoing and other documents.
5. NEGATIVE COVENANTS. Until all of the Liabilities are paid and
performed in full, Debtor agrees that it will not:
5.1 SALES AND TRANSFER OF COLLATERAL. Sell, lease, assign or
otherwise dispose of any of the Collateral.
5.2 LOCATIONS. Change or permit to be changed the principal base
of the Aircraft.
5.3 OPERATION OF AIRCRAFT. Operate the Aircraft or permit the
Aircraft to be operated (i) outside the continental United States, (ii)
in any area excluded from coverage by any insurance required by the
terms of Section 4.2 hereof, (iii) in any way other than in a careful
and proper manner by competent and duly qualified personnel, (iv) in
violation of any governmental laws, rules and regulations relating
thereto, the requirements of the insurance policies required by Section
4.2 hereof or the manufacturer's or supplier's instructions or manuals
with respect to the Aircraft or (v) in any jurisdiction which is
not a signatory to the Geneva Convention on International Recognition of
Rights in Aircraft or in any area of recognized or threatened hostilities.
5.4 CHANGES TO AIRCRAFT. Make, authorize or permit to be made any
improvement, change, addition or alteration to the Aircraft if such
improvement, change, addition or alteration will impair the originally
intended function or use of the Aircraft, impair the value of the
Aircraft as it existed immediately prior to such improvement, change,
addition or alteration, or violate any applicable governmental rule,
regulation or standard.
6. PROTECTION OF COLLATERAL. In the event of any failure of Debtor
to (i) maintain in force and pay for any insurance or bond which Debtor is
required to provide pursuant to this Agreement or the other Collateral
Documents, (ii) keep the Aircraft in good repair and operating condition,
(iii) keep the Collateral free from all Liens except for Permitted Liens,
(iv) pay when due all taxes, levies and assessments on or in respect of the
Collateral, except as permitted pursuant to the terms of Section 4.1 above,
(v) make all payments and perform all acts on the part of Debtor to be paid
or performed with respect to any of the Collateral, including, without
limitation, all expenses of protecting, storing, warehousing, insuring,
handling and maintaining the Aircraft, and (vi) keep fully and perform
promptly any other of the obligations of Debtor under this Agreement or the
other Collateral Documents with respect to the Collateral, Secured Party, at
its option, may (but shall not be required to) procure and pay for such
insurance, place such Collateral in good repair and operating condition, pay
or contest or settle such Liens or taxes or any judgments based thereon or
otherwise make good any other aforesaid failure of Debtor. Debtor shall
reimburse Secured Party immediately upon demand for all sums paid or
advanced on behalf of Debtor for any such purpose, together with all costs,
expenses and attorneys' fees paid or incurred by Secured Party in connection
therewith and interest at the Default Rate on all sums so paid or advanced
from the date of such payment or advancement until repaid to Secured Party.
All such sums paid or advanced by Secured Party, with interest thereon,
immediately upon payment or advancement thereof, shall be deemed to be part
of the Liabilities secured hereby.
7. EVENT OF DEFAULT. Debtor shall be in default under this Agreement
upon the occurrence of an Event of Default under the Credit Agreement.
8. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of
Default:
8.1 RIGHTS OF SECURED PARTY. Secured Party shall have all of the
rights and remedies of a secured party under the Code and the Federal
Aviation Act and all other rights
and remedies accorded to Secured Party at equity or law with respect to the
Collateral, including, without limitation, the right to apply for and have
a receiver appointed by a court of competent jurisdiction to manage,
protect and preserve the Collateral and to continue operating and using the
Collateral. Any notice of sale or other disposition of Collateral given not
less than 10 Business Days prior to such proposed action shall constitute
reasonable and fair notice of such action. To the extent permitted by
applicable law, Secured Party may postpone or adjourn any such sale from
time to time by announcement at the time and place of sale stated in the
notice of sale or by announcement of any adjourned sale, without being
required to give a further notice of sale. Any such sale may be for cash
or, unless prohibited by applicable law, upon such credit or installment
terms as Secured Party shall determine. To the extent permitted by
applicable law, Debtor shall be credited with the net proceeds of such sale
only when such proceeds actually are received by Secured Party. Despite the
consummation of any such sale, Debtor shall remain liable for any
deficiency on the Liabilities which remains outstanding following any such
sale. All net proceeds received pursuant to a sale shall be applied in the
manner set forth in Section 7.3 of the Credit Agreement.
8.2 ASSEMBLY OF COLLATERAL. Upon the request of Secured Party,
Debtor shall assemble and make the Collateral available to Secured
Party at a place within the state of Georgia designated by Secured
Party.
8.3 PROCEEDS. At the request of Secured Party, Debtor shall hold
all proceeds of the Collateral collected by Debtor in trust for Secured
Party, and promptly upon receipt thereof, turn over such proceeds to
Secured Party in the exact form in which they were received.
All monies received by Secured Party pursuant to this Section 8 shall be
applied by Secured Party in accordance with the applicable provisions of
Section 7.3 of the Credit Agreement.
9. POWER OF ATTORNEY. To effectuate the rights and remedies of
Secured Party under this Agreement, Debtor hereby irrevocably appoints
Secured Party its attorney-in-fact, in the name of Debtor or in the name of
Secured Party, to execute and file from time to time financing statements,
continuation statements, termination statements and amendments thereto,
covering the Collateral, in form satisfactory to Secured Party. The power
of attorney granted pursuant to this Section 9 is coupled with an interest
and shall be irrevocable until all of the Liabilities have been paid and
performed in full.
10. CERTAIN AGREEMENTS OF DEBTOR.
10.1 WAIVER OF NOTICE. Debtor hereby waives notice of the
acceptance of this Agreement and, except as otherwise specifically
provided in Section 8.1 above or in the Credit Agreement, all other
notices, demands or protests to which Debtor otherwise might be
entitled by law (and which lawfully may be waived) with respect to this
Agreement, the Liabilities and the Collateral.
10.2 RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party
(i) shall have no duty, beyond the duty to act in a commercially
reasonable manner to protect the Collateral in any action it takes with
respect to the Collateral, as to the collection or protection of the
Collateral or any income thereon, (ii) may exercise the rights and
remedies of Secured Party with respect to the Collateral without resort
or regard to other security or sources for payment and (iii) shall not
be deemed to have waived any of the rights or remedies granted to
Secured Party hereunder unless such waiver shall be in writing and
shall be signed by Secured Party.
10.3 NO DELAY; SINGLE OR PARTIAL EXERCISE PERMITTED. No delay or
omission on the part of Secured Party in exercising any rights or
remedies contained herein shall operate as a waiver of such right or
remedy or of any other right or remedy, and no single or partial
exercise of any right or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right or remedy. A
waiver of any right or remedy on any one occasion shall not be
construed as a bar or waiver of any right or remedy on future
occasions, and no delay, omission, waiver or single or partial exercise
of any right or remedy shall be deemed to establish a custom or course
of dealing or performance between the parties hereto.
11. RIGHTS CUMULATIVE. All rights and remedies of Secured Party
pursuant to this Agreement, the Credit Agreement or otherwise, shall be
cumulative and non-exclusive, and may be exercised singularly or
concurrently.
12. SEVERABILITY. In the event that any provision of this Agreement
is deemed to be invalid by reason of the operation of any law, including,
but not limited to, the rules, regulations and policies of the FAA, or by
reason of the interpretation placed thereon by any governmental body, this
Agreement shall be construed as not containing such provision and the
invalidity of such provision shall not affect the validity of any other
provisions hereof, and any and all other provisions hereof which otherwise
are lawful and valid shall remain in full force and effect.
13. NOTICES. All notices and communications under this Agreement
shall be in writing and delivered in the manner set forth in the Credit
Agreement.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of Secured Party and Debtor.
15. CAPTIONS. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which, when taken together, shall be one and the same instrument.
17. SURVIVAL OF AGREEMENT; TERMINATION. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of the Credit Agreement and shall continue in full force and effect
until the Liabilities are paid and performed in full.
18. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. SECURED PARTY MAY
ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT, ANY COLLATERAL OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR ARISING FROM OR RELATED TO
ANY CREDIT RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND LOCATED IN
CHICAGO, ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED
WITH RESPECT TO ANY SUCH CLAIM, DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND ALSO HAS IRREVOCABLY DESIGNATED THE PERSON
WHOSE NAME AND ADDRESS ARE SET FORTH IN THE CREDIT AGREEMENT TO RECEIVE FOR
AND ON BEHALF OF DEBTOR SERVICE OF PROCESS IN ILLINOIS. DEBTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY
THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO DEBTOR AND AGREES THAT SUCH
SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (A) SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION
OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE
UPON AND PERSONAL DELIVERY TO IT. NOTHING HEREIN CONTAINED SHALL AFFECT THE
RIGHT OF SECURED PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR PRECLUDE SECURED PARTY FROM BRINGING AN ACTION OR PROCEEDING IN RESPECT
HEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH
ACTION. DEBTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED IN
CHICAGO, ILLINOIS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH
PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING OR ARISING FROM ANY CREDIT
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
19. GOVERNING LAW; INTERPRETATION. THIS AGREEMENT HAS BEEN DELIVERED
AT CHICAGO, ILLINOIS, AND SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
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 SUCH
LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION
OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE
REMAINING PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
both of the parties hereto by a duly authorized officer of each such party
on the date first set forth above.
GENERAL MANUFACTURED HOUSING, INC.
By: /s Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Its: President
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc., its
Agent/Manager
By: /s/ Xxxxx X. Szarbowicz, Jr.
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Name: Xxxxxx X. Szarbowicz. Jr.
Its: Vice President
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Contract Administration
Telecopy: (000) 000 0000
Telephone: (000) 000-0000
