Exhibit 4.3
GENERAL SECURITY AGREEMENT
(FLOATING LIEN)
SECURITY AGREEMENT, dated as of March 31, 2005, from FBO AIR, INC., a
Nevada corporation with offices at 0000 Xxxx Xxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxx
00000 (the "DEBTOR"), in favor of the secured parties (the "SECURED PARTIES")
set forth on Schedule 1 hereto,
W I T N E S S E T H :
WHEREAS, the Debtor has issued and hereafter may issue 10% senior secured
promissory notes (as at any time amended, expensed, restricted, renewed or
modified, the "NOTES") pursuant to the terms of the Debtor's Confidential
Investment Memorandum dated February 8, 2005 (the "PPM") in the aggregate
principal amount of up to $1,500,000 ; and
WHEREAS, the names of the Secured Parties and the original principal
amount of the Notes issued to them will be listed on a SCHEDULE 1 annexed hereto
and made a part hereof from time to time as Notes are issued; and
WHEREAS, it is a condition to the willingness of the Secured Parties to
enter into the Notes and make the loans evidenced thereby that the Debtor enter
into this Agreement and grant to the Secured Parties the security interest
provided for herein;
NOW, THEREFORE, FOR VALUE RECEIVED, IT IS AGREED:
Section 1. Terms. Unless otherwise defined herein, capitalized terms used
in this Agreement shall have the meaning specified therefor in the Notes. As
used herein the following terms shall have the meanings specified and shall
include in the singular number the plural and in the plural number the singular:
"ASSIGNED AGREEMENTS" shall mean all contracts and agreements of the
Debtor, other than subscription agreements, security agreements or other
agreements relating to financings.
"COLLATERAL" means all of the Debtor's right, title and interest in and
under or arising out of each and all of the following:
All personal property and fixtures of the Debtor of any type or
description, wherever located and now existing or hereafter arising or acquired,
including but not limited to the following:
(i) all of the Debtor's goods including, without limitation:
(a) all inventory, including, without limitation, equipment held for
lease, whether raw materials, in process or finished, all material or equipment
usable in processing the same and all documents of title covering any inventory
(all of the foregoing, "INVENTORY"), including, without limitation, that located
at the locations listed on SCHEDULE 2 annexed hereto;
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Exhibit 4.3
(b) all equipment (the "EQUIPMENT") employed in connection with the
Debtor's business, together with all present and future additions, attachments
and accessions thereto and all substitutions therefor and replacements thereof,
including, without limitation, that located at the locations listed on SCHEDULE
2 annexed hereto;
(ii) all of the Debtor's present and future accounts, accounts receivable,
general intangibles, contracts and contract rights (herein sometimes referred to
as "RECEIVABLES"), including but not limited to the Debtor's rights (including
rights to payment) under all Assigned Agreements, together with
(a) all claims, rights, powers or privileges and remedies of the
Debtor relating thereto or arising in connection therewith including, without
limitation, all rights of the Debtor to make determinations, to exercise any
election (including, but not limited to, election of remedies) or option or to
give or receive any notice, consent, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or receipt for any of
the foregoing or any property which is the subject of the Assigned Agreements,
to enforce or execute any checks, or other instruments or orders, to file any
claims and to take any action which (in the opinion of the Secured Parties) may
be necessary or advisable in connection with any of the foregoing,
(b) all liens, security, guaranties, endorsements, warranties and
indemnities and all insurance and claims for insurance relating thereto or
arising in connection therewith,
(c) all rights to property forming the subject matter of the
Receivables including, without limitation, rights to stoppage in transit and
rights to returned or repossessed property,
(d) all writings relating thereto or arising in connection therewith
including, without limitation, all notes, contracts, security agreements,
guaranties, chattel paper and other evidence of indebtedness or security, all
powers-of-attorney, all books, records, ledger cards and invoices, all credit
information, reports or memoranda and all evidence of filings or registrations
relating thereto, and
(e) all catalogs, computer and automatic machinery software and
programs, and the like, pertaining to operations by the Debtor in, on or about
any of its plants or warehouses, all sales data and other information relating
to sales or service of products now or hereafter manufactured on or about any of
its plants, and all accounting information pertaining to operations in, on or
about any of its plants, and all media in which or on which any of the
information or knowledge or data is stored or contained, and all computer
programs used for the compilation or printout of such information, knowledge,
records or data; and
(f) accounts, contract rights, general intangibles and other
property rights of any nature whatsoever arising out of or in connection with
the foregoing, including without limitation, payments due and to become due,
whether as repayments, reimbursements, contractual obligations, indemnities,
damages or otherwise;
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Exhibit 4.3
(iii) all of the Debtor's right, title, and market in and to any shares of
capital stock of any current and/or future Subsidiary corporation (as defined in
the Notes) and the certificates representing any such shares, together with all
goods, Inventory, Equipment, Receivables, and all other personal property of the
Subsidiaries;
(iv) all other personal property of the Debtor of any nature whatsoever,
including, without limitation, all accounts, bank accounts, deposits, credit
balances, contract rights, inventory, general intangibles, goods, equipment,
instruments, chattel paper, machinery, furniture, furnishings, fixtures, tools,
supplies, appliances, plans and drawings, together with all customer and
supplier lists and records of the business, and all property from time to time
described in any financing statement (UCC-1) signed by the Debtor naming the
Secured Parties as secured parties; and
(v) all items of Collateral hereafter acquired, credited or arising and
all additions, accessions, replacements, substitutions or improvements and all
products and proceeds including, without limitation, proceeds of insurance, of
any and all of the Collateral described in clauses (i) through (iv) above.
"INSTRUMENT" shall have the meaning specified in Article 3 of the Uniform
Commercial Code, as in effect from time to time in the State of New York and
shall also include any other writing which evidences a right to the payment of
money and is not itself a security agreement or lease and is of a type which is
in the ordinary course of business transferred by delivery with any necessary
endorsement or assignment .
"LIEN" means any mortgage, pledge, hypothecation, assignment, security
interest, deposit arrangement, encumbrance (including any easement, right of
way, zoning restriction and the like), lien (statutory or other) or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease involving substantially the same economic effect
as any of the foregoing and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).
"PERMITTED LIENS" means:
(a) Liens for taxes, assessments or other governmental charges or levies
not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with generally accepted accounting principles shall have
been set aside on its books;
(b) Liens of carriers, warehousemen, mechanics, materialman and landlords
incurred in the ordinary course of business for sums not overdue or being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
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Exhibit 4.3
(c) Liens (other than Liens arising under the Employee Retirement Income
Security Act of 1974, as amended, or Section 412(n) of the Internal Revenue Code
of 1986, as amended) incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(d) a Lien for a Permitted FBO Acquisition (as defined in the Notes).
"PERSON" means any natural person, corporation, firm, association,
partnership, joint venture, limited liability company, joint-stock company,
trust, unincorporated organization, government, governmental agency or
subdivision, or any other entity, whether acting in an individual, fiduciary or
other capacity.
"RECEIVABLES" has the meaning specified therefor in clause (ii) of the
definition of Collateral.
"SECURED OBLIGATIONS" means all obligations of the Debtor, whether for
fees, expenses or otherwise, now existing or hereafter arising under this
Agreement and the Notes.
Section 2. Security Interests. As security for the payment and performance
of all Secured Obligations the Debtor does hereby grant and assign to the
Secured Parties a continuing security interest in all of the Collateral, whether
now existing or hereafter arising or acquired and wherever located, subject to
the priority, if any, of Permitted Liens.
Section 3. General Representations, Warranties and Covenants. The Debtor
represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:
(a) This Agreement is made with full recourse to the Debtor and pursuant
to and upon all the warranties, representations, covenants, and agreements on
the part of the Debtor contained herein, in the Notes and otherwise made in
writing in connection herewith or therewith.
(b) Except for the security interest of the Secured Parties therein, the
Debtor or a Subsidiary is, and as to Collateral acquired from time to time after
the date hereof the Debtor or a Subsidiary will be, the owner of all the
Collateral free from any lien, security interest, encumbrance or other right,
title or interest of any Person (other than Permitted Liens) and the Debtor
shall defend the Collateral against all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to the Secured Parties.
(c) There is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) now on file or registered in any
public office covering any interest of any kind in the Collateral, or intended
to cover any such interest, which has not been terminated or released by the
secured party named therein and so long as the Notes remain outstanding or any
of the Secured Obligations of the Debtor remain unpaid, the Debtor will not, and
will not permit any Subsidiary to, execute and there will not be on file in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except (i) financing statements filed or to be filed in respect of
and covering the security interest of the Secured Parties hereby granted and
provided for and (ii) as specified in SCHEDULE 2 and (iii) with respect to
Permitted Liens.
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Exhibit 4.3
(d) The chief executive office and chief place of business of the Debtor
is located at the address of the Debtor listed on the signature page hereof, and
the Debtor will not move its chief executive office and chief place of business
except to such new location as the Debtor may establish in accordance with the
last sentence of this SECTION 3(D). The originals of all Assigned Agreements and
all documents (as well as all duplicates thereof) evidencing all Receivables and
all other contract rights or accounts and other property of the Debtor and the
only original books of account and records of the Debtor relating thereto are,
and will continue to be, kept at such chief executive office or at such new
location as the Debtor may establish in accordance with the last sentence of
this SECTION 3(D). Debtor shall establish no such new location until (i) it
shall have given to the Placement Agent (as defined in the PPM) or other
representative of the Secured Parties elected by holders owning no less than
50.1% of the then aggregate Principal Amount of Notes then outstanding (the
"REPRESENTATIVE"), as agent for the Secured Parties (the Placement Agent or the
Representative shall hereinafter be referred to as the "AGENT"), not less than
30 days' prior written notice of its intention to do so, clearly describing such
new location and providing such other information in connection therewith as the
Agent may reasonably request, and (ii) with respect to such new location, it
shall have taken such action, satisfactory to the Agent (including, without
limitation, all action required by SECTION 7 hereof), to maintain the security
interest of the Secured Parties in the Receivables intended to be granted at all
times fully perfected and in full force and effect.
(e) Other than personal computers, laptop computers, printers and related
office equipment with an aggregate value that is immaterial to its financial
condition, the Debtor has no Collateral located outside of the State of Arizona,
but its Subsidiaries will as they acquire FBOs.
(f) The name of the Debtor is as set forth on the signature page hereto
and the Debtor shall not change such name, conduct its business in any other
name or take title to the Collateral in any other name other than that of a
Subsidiary while this Agreement remains in effect. The Debtor has never had any
name, or conducted business under any name in any jurisdiction, other than its
name set forth on the signature page hereto, during the past six years other
than as set forth in SCHEDULE 2 annexed hereto.
(g) At the Debtor's own expense, the Debtor will: (i) without limiting the
provisions of the Notes, keep the Collateral fully insured at all times with
financially sound and responsible insurance carriers against loss or damage by
fire and other risks, casualties and contingencies and in such manner and to the
same extent that like properties are customarily so insured by other entities
engaged in the same or similar businesses similarly situated and keep adequate
insurance at all times against liability on account of damage to persons and
properties and under all applicable workers' compensation laws, by insurers and
in amounts approved by the Secured Parties, for the benefit of the Debtor, its
Subsidiaries and the Secured Parties, (ii) upon request by the Agent, promptly
deliver the insurance policies or certificates thereof to the Agent, and (iii)
keep the Collateral in good condition at all times (normal wear and tear
excepted) and maintain same in accordance with all manufacturer's specifications
and requirements. Upon any failure of the Debtor to comply with its obligations
pursuant to this SECTION 3(G), the Agent may at its option, and without
affecting any of the Secured Parties' other rights or remedies provided herein
or as secured parties under the Uniform Commercial Code, procure the insurance
protection it deems necessary and/or cause repairs or modifications to be made
to the Collateral and the cost of either or both of which shall be a lien
against the Collateral added to the amount of the indebtedness secured hereby
and payable on demand with interest at a rate per annum equal to 18%.
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Exhibit 4.3
(h) The Debtor hereby assigns, on behalf of itself and its Subsidiaries,
to the Secured Parties all of Debtor's and its Subsidiaries' right, title and
interest in and to any and all moneys which may become due and payable with
respect to the Collateral under any policy insuring the Collateral (except
proceeds relating to tangible personal property which are applied to restoration
or replacement), including return of unearned premium, and shall cause any such
insurance company to make payment directly to the Agent for application to
amounts outstanding under the Notes in accordance with the terms of the Notes
and, to the extent not provided therein, in such order as the Agent shall
determine.
(i) The Debtor will not, and will not permit any Subsidiary to, use the
Collateral in violation of any statute or ordinance or applicable insurance
policy and will promptly pay all taxes and assessments levied against the
Collateral.
(j) The Debtor will not, and will not permit any Subsidiary to, sell,
transfer, change the registration, if any, dispose of, attempt to dispose of,
substantially modify or abandon the Collateral or any part thereof other than
sales of Inventory in the ordinary course of business and the disposition of
obsolete or worn-out Equipment in the ordinary course of business.
(k) The Debtor will not assert against the Secured Parties any claim or
defense which the Debtor may have against any seller of the Collateral or any
part thereof or against any other Person with respect to the Collateral or any
part thereof.
(l) The Debtor will indemnify and hold the Secured Parties harmless from
and against any loss, liability, damage, costs and expenses whatsoever arising
from the Debtor's use, operation, ownership or possession of the Collateral or
any part thereof.
(m) The Debtor will maintain the confidentiality of all customer lists of
it and its Subsidiaries (and cause the Subsidiaries to do the same) and not (nor
permit its Subsidiary to) sell or otherwise dispose of such lists except that
the Debtor shall deliver copies thereof to the Agent upon its request, which may
be made at any time and from time to time after an Event of Default.
(n) The Debtor will not, and it will not permit any Subsidiary to, enter
into any agreement that is inconsistent with the Debtor's obligations under this
Agreement, without the prior written consent of the Required Holders.
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Exhibit 4.3
Section 4. Special Provisions Concerning Assigned Agreements. The Debtor
represents, warrants and agrees as follows:
(a) The Assigned Agreements constitute the legal, valid and binding
obligations of the Debtor or one of its Subsidiaries and, to the best of the
Debtor's knowledge, the other parties thereto, enforceable in accordance with
their respective terms.
(b) The Debtor or its Subsidiaries will faithfully abide by, perform and
discharge each and every material obligation, covenant and agreement to be
performed by the Debtor or its Subsidiaries under the Assigned Agreements.
(c) The Debtor will not, and will not permit any Subsidiary to, act or
fail to act in a manner likely (directly or indirectly) to entitle any party
thereto to claim that the Debtor or such Subsidiary is in default under the
terms thereof.
(d) The Debtor will not, and will not permit any Subsidiary to, terminate
or permit the termination of any Assigned Agreement, except in accordance with
its terms, other than in the ordinary course of business or as it deems
necessary or desirable in the normal course of its business.
(e) Without the prior written consent of the Agent, the Debtor will not,
and will not permit any Subsidiary to, other than in the ordinary course of
business, waive or in any manner release or discharge any party to any Assigned
Agreement from any of the material obligations, covenants, conditions and
agreements to be performed by it under such Assigned Agreement including,
without limitation, the obligation to make all payments in the manner and at the
time and places specified.
(f) If the Agent so requests after occurrence of an Event of Default and,
if prior to the Maturity Date, acceleration of the Notes ("ACCELERATION"), the
Debtor or its Subsidiaries will hold any payments received by it which are
assigned and set over to the Secured Parties by this Agreement for and on behalf
of the Secured Parties and turn them promptly over to the Agent forthwith in the
same form in which they are received (together with any necessary endorsement)
for application to amounts outstanding under the Notes in accordance with the
terms of the Notes and, to the extent not provided therein, in such order as the
Secured Parties shall determine.
(g) The Debtor, on behalf of itself or its Subsidiary, will appear in and
defend every action or proceeding arising under, growing out of or in any manner
connected with the Assigned Agreements or the obligations, duties or liabilities
of the Debtor or its Subsidiary and any assignee thereunder.
(h) Should the Debtor or its Subsidiary fail to make any payment or to do
any act as herein provided after ten (10) days' notice to the Debtor, the Agent
may (but without obligation on the Agent's part to do so and without notice to
or demand on the Debtor and without releasing the Debtor or any Subsidiary from
any obligation hereunder) make or do the same in such manner and to such extent
as the Agent may deem necessary to protect the security interests provided
hereby, including specifically, without limiting the general powers, the right
to appear in and defend any action or proceeding purporting to affect the
security interests provided hereby and the Debtor or a Subsidiary thereof, and
the Agent may also perform and discharge each and every obligation, covenant and
agreement of the Debtor or its Subsidiary contained in any Assigned Agreement
and, in exercising any such powers, pay necessary costs and expenses, employ
counsel and incur and pay reasonable attorneys' fees.
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Exhibit 4.3
(i) Upon the request of the Agent, the Debtor will send to the Agent
copies of all material notices, documents and other papers furnished or received
by it or its Subsidiary with respect to any of the Assigned Agreements.
Section 5. Special Provisions Concerning Receivables.
(a) As of the time when each Receivable arises, the Debtor shall be deemed
to have warranted as to each such Receivable that such Receivable and all papers
and documents relating thereto are genuine and in all respects what they purport
to be, and that all papers and documents relating thereto:
(i) will be signed by the account debtor named therein (or such account
debtor's duly authorized agent) or otherwise be binding on the account debtor;
(ii) will represent the genuine, legal, valid and binding obligation of
the account debtor evidencing indebtedness unpaid and owed by such account
debtor arising out of the performance of labor or services or the sale and
delivery of merchandise or both;
(iii) to the extent evidenced by writings, will be the only original
writings evidencing and embodying such obligation of the account debtor named
therein; and
(iv) will be in compliance and will conform with all applicable federal,
state and local laws (including applicable usury laws) and applicable laws of
any relevant foreign jurisdiction.
(b) The Debtor will keep and maintain at the Debtor's own cost and expense
satisfactory and complete records of the Receivables, including, but not limited
to, records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and the Debtor will make
the same available to the Agent at the Debtor's own cost and expense, at any and
all reasonable times upon demand of the Agent. The Debtor shall, at the Debtor's
own cost and expense, deliver the Receivables (including, without limitation,
all documents evidencing the Receivables) and such books and records to the
Agent or to its representatives upon its demand at any time after the occurrence
of an Event of Default and, if prior to the Maturity Date, Acceleration. If the
Agent shall so request, the Debtor shall legend, in form and manner satisfactory
to the Agent the Receivables and other books, records and documents of the
Debtor evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables have been assigned to the Secured Parties and
that the Secured Parties has a security interest therein.
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Exhibit 4.3
(c) Except in the ordinary course of business prior to an Event of Default
and, if prior to the Maturity Date, Acceleration, the Debtor will not, and will
cause its Subsidiary not to, rescind or cancel any indebtedness evidenced by any
Receivable or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
interest therein, without the prior written consent of the Agent, except that
the Debtor or its Subsidiary may grant discounts in connection with the
prepayment of any Receivable in an amount which is customary in the line of
business in which the Debtor and its Subsidiaries are engaged and consistent
with the Debtor's or its Subsidiary's past practices.
(d) The Debtor will, and will cause its Subsidiary to, duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and will do nothing to impair the rights of the Secured Parties in
the Receivables.
(e) The Debtor shall, and will cause its Subsidiary to, endeavor to
collect or cause to be collected from the account debtor named in each
Receivable, as and when due (including, without limitation, Receivables which
are delinquent, such Receivables to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable, and credit forthwith (on a daily basis) upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable. The costs and expenses (including attorneys' fees) of collection,
whether incurred by the Debtor or the Secured Parties, shall be borne by the
Debtor.
(f) Upon request of the Agent, at any time when an Event of Default and,
if prior to the Maturity Date, Acceleration shall exist, the Debtor shall
promptly notify (in manner, form and substance satisfactory to the Agent all
Persons who are at any time obligated under any Receivable that the Secured
Parties possesses a security interest in such Receivable and that all payments
in respect thereof are to be made to such account as the Agent directs.
Section 6. Special Provisions Concerning Equipment. The Debtor will do
nothing, and will cause its Subsidiaries not to do anything, to impair the
rights of the Secured Parties in the Equipment. The Debtor shall cause the
Equipment to at all times constitute and remain personal property. The Debtor
will at all times keep all Equipment insured with financially responsible
insurance companies in favor of the Secured Parties, at the expense of the
Debtor, against such perils and in such amounts as are customary for Persons in
the same general line of business as the Debtor and its Subsidiaries and
operating in similar geographic locations and markets. If the Debtor shall fail
to insure the Equipment to the satisfaction of the Agent, or if the Debtor shall
fail so to endorse and deposit all policies or certificates with respect
thereto, the Agent shall have the right (but shall be under no obligation) to
procure such insurance and the Debtor agrees to reimburse the Agent for all
costs and expenses of procuring such insurance, together with interest at a rate
per annum equal to 18%. The Agent may apply any proceeds of such insurance when
received by it pursuant to the terms of this SECTION 6 or SECTION 3(H) hereof
toward the payment of any of the Secured Obligations, whether or not the same
shall then be due. The Debtor retains all liability and responsibility in
connection with the Equipment and the liability of the Debtor to pay the Secured
Obligations shall in no way be affected or diminished by reason of the fact that
such Equipment may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to the Debtor.
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Exhibit 4.3
Section 7. Financing Statements; Documentary Stamp Taxes.
(a) The Debtor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Agent from time to time such lists,
descriptions and designations of Inventory, warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Collateral and other property or rights covered by the
security interest hereby granted, which the Agent deems appropriate or advisable
to perfect, preserve or protect its security interest in the Collateral. The
Debtor hereby constitutes the Agent its attorney-in-fact to execute and file in
the name and on behalf of the Debtor and its Subsidiaries such additional
financing statements as the Agent may request, such acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, is
irrevocable until the Secured Obligations are paid in full. Further, to the
extent permitted by applicable law, the Debtor authorizes the Agent to file any
such financing statements without the signature of the Debtor or any Subsidiary.
The Debtor will pay all applicable filing fees and related expenses in
connection with any such financing statements.
(b) The Debtor agrees to procure, pay for, affix to any and all documents
and cancel any documentary tax stamps required by and in accordance with,
applicable law and the Debtor will indemnify and hold the Secured Parties
harmless against any liability (including interest and penalties) in respect of
such documentary stamp taxes.
Section 8. Special Provisions Concerning Remedies and Sale.
(a) In addition to any rights and remedies now or hereafter granted under
applicable law and not by way of limitation of any such rights and remedies,
upon the occurrence of an Event of Default and, if prior to the Maturity Date,
Acceleration, the Secured Parties shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code as enacted in any applicable
jurisdiction in addition to the rights and remedies provided herein, in the
Notes and in any other agreement executed in connection with the Note whereby
the Debtor has granted any Lien to the Secured Parties. Without in any way
limiting the foregoing, upon the giving of notice to the Debtor of intent of the
Agent to pursue any one or all of the following or any other remedies:
(i) to ask for, demand, collect, receive, compound and give
acquaintance for the Receivables or any part thereof;
(ii) to extend the time of payment of, compromise or settle for
cash, credit or otherwise, and upon any terms and conditions, any of the
Receivables;
(iii) to endorse the name of the Debtor on any checks, drafts or
other orders or instruments for the payment of moneys payable to the Debtor
which shall be issued in respect of any Receivable;
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Exhibit 4.3
(iv) to file any claims, commence, maintain or discontinue any
actions, suits or other proceedings deemed by the Agent necessary or advisable
for the purpose of collecting or enforcing payment of any Receivable;
(v) to make test verifications of the Receivables or any portion
thereof;
(vi) to notify any or all account debtors under any or all of the
Receivables to make payment thereof directly to the Agent for the account of the
Agent and to require the Debtor to forthwith give similar notice to the account
debtors;
(vii) to require the Debtor forthwith to account for and transmit to
the Agent in the same form as received all proceeds (other than physical
property) of collection of Receivables received by the Debtor or a Subsidiary
and, until so transmitted, to hold the same in trust for the Secured Parties and
not commingle such proceeds with any other funds of the Debtor;
(viii) to take possession of any or all of the Collateral and, for
that purpose, to enter, with the aid and assistance of any Person or Persons and
with or without legal process, any premises where the Collateral, or any part
thereof, are, or may be, placed or assembled, and to remove any of such
Collateral;
(ix) to execute any instrument and do all other things necessary and
proper to protect and preserve and realize upon the Collateral and the other
rights contemplated hereby;
(x) upon notice to such effect, to require the Debtor to deliver, at
the Debtor's expense, any or all Collateral to the Agent at a place designated
by the Agent; and
(xi) without obligation to resort to other security, at any time and
from time to time, to sell, re-sell, assign and deliver all or any of the
Collateral, in one or more parcels at the same or different times, and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery, and at such price or prices and on such terms as the Agent may
determine, with the amounts realized from any such sale to be applied to the
Secured Obligations in the manner determined by the Agent.
The Debtor hereby agrees that all of the foregoing may be effected without
demand, advertisement or notice (except as otherwise provided herein or as may
be required by law), all of which (except as otherwise provided) are hereby
expressly waived, to the extent permitted by law. The Agent shall not be
obligated to do any of the acts hereinabove authorized, but in the event that
the Agent elects to do any such act, the Agent shall not be responsible to the
Debtor except for its gross negligence or willful misconduct.
(b) The Agent may take legal proceedings for the appointment of a receiver
or receivers (to which the Agent shall be entitled as a matter of right) to take
possession of the Collateral pending the sale thereof pursuant either to the
powers of sale granted by this Agreement or to a judgment, order or decree made
in any judicial proceeding for the foreclosure or involving the enforcement of
this Agreement. If, after the exercise of any or all of such rights and
remedies, any of the Secured Obligations shall remain unpaid, the Debtor shall
remain liable for any deficiency. After the indefeasible payment in full of the
Secured Obligations, any proceeds of the Collateral received or held by the
Agent shall be turned over to the Debtor and the Collateral shall be reassigned
to the Debtor by the Agent without recourse to the Agent or the Secured Parties
and without any representations, warranties or agreements of any kind.
E-37
Exhibit 4.3
(c) Upon any sale of any of the Collateral, whether made under the power
of sale hereby given or under judgment, order or decree in any judicial
proceeding for the foreclosure or involving the enforcement of this Agreement:
(i) the Agent may, to the extent permitted by law, bid for and
purchase the property being sold, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property in its own absolute right
without further accountability, and may, in paying the purchase money therefor,
deliver any Notes or claims for interest thereon and any other instruments
evidencing the Secured Obligations or agree to the satisfaction of all or a
portion of the Secured Obligations in lieu of cash in payment of the amount
which shall be payable thereon, and the Notes and such instruments, in case the
amounts so payable thereon shall be less than the amount due thereon, shall be
returned to the Agent after being appropriately stamped to show partial payment;
(ii) the Agent may make and deliver to the purchaser or purchasers a
good and sufficient deed, xxxx of sale and instrument of assignment and transfer
of the property sold;
(iii) the Agent is hereby irrevocably appointed the true and lawful
attorney-in-fact of the Debtor in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment and transfer of the property
thus sold and for such other purposes as are necessary or desirable to
effectuate the provisions (including, without limitation, this Section 8) of
this Agreement, and for that purpose it may execute and deliver all necessary
deeds, bills of sale and instruments of assignment and transfer, and may
substitute one or more Persons with like power, the Debtor hereby ratifying and
confirming all that its said attorney, or such substitute or substitutes, shall
lawfully do by virtue hereof; but if so requested by the Agent or by any
purchaser, the Debtor shall ratify and confirm any such sale or transfer by
executing and delivering to the Agent or to such purchaser all property, deeds,
bills of sale, instruments or assignment and transfer and releases as may be
designated in any such request;
(iv) all right, title, interest, claim and demand whatsoever, either
at law or in equity or otherwise, of the Debtor or a Subsidiary of, in and to
the property so sold shall be divested; such sale shall be a perpetual bar both
at law and in equity against the Debtor, its Subsidiaries, its successors and
assigns, and against any and all Persons claiming or who may claim the property
sold or any part thereof from, through or under the Debtor, its successors or
assigns;
(v) the receipt of the Agent or of the officer thereof making such
sale shall be a sufficient discharge to the purchaser or purchasers at such sale
for his or their purchase money, and such purchaser or purchasers, and his or
their assigns or personal representatives, shall not, after paying such purchase
money and receiving such receipt of the Agent or of such officer therefor, be
obliged to see to the application of such purchase money or be in any way
answerable for any loss, misapplication or non-application thereof; and
E-38
Exhibit 4.3
(vi) to the extent that it may lawfully do so, and subject to any
legal requirement that the Agent act in a commercially reasonable manner, the
Debtor agrees that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any appraisement,
valuation, stay, extension or redemption laws, or any law permitting it to
direct the order in which the Collateral or any part thereof shall be sold, now
or at any time hereafter in force, which may delay, prevent or otherwise affect
the performance or enforcement of this Agreement, the Notes or any other
agreement executed in connection with the Notes whereby the Debtor has granted
any Lien to the Secured Parties, and the Debtor hereby expressly waives all
benefit or advantage of any such laws and covenants that it will not hinder,
delay or impede the execution of any power granted or delegated to the Agent in
this Agreement, but will suffer and permit the execution of every such power as
though no such laws were in force. In the event of any sale of Collateral
pursuant to this Section, the Agent shall, at least 10 days before such sale,
give the Debtor written, telecopied or telex notice of its intention to sell.
Section 9. Application of Moneys.
(a) Except as otherwise provided herein or in the Notes, all moneys which
the Secured Parties shall receive, in accordance with the provisions hereof,
shall be applied (to the extent thereof) in the following manner: First, to the
payment of all costs and expenses reasonably incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Agreement or any of the reasonable expenses and disbursements of the Agent
(including, without limitation, the fees and disbursements of its counsel and
agents); Second, to the payment of all Secured Obligations arising out of the
Notes in accordance with the terms of the Notes and, if not therein provided, in
such order as the Agent may determine; and Third, to the payment of all other
Secured Obligations in such order as the Agent may determine.
(b) If after applying any amounts which the Agent has, as the Secured
Parties have, received in respect of the Collateral any of the Secured
Obligations remain unpaid, the Debtor shall continue to be liable for any
deficiency, together with interest.
Section 10. Fees and Expenses, etc. Any and all fees, costs and expenses
of whatever kind or nature, including but not limited to the reasonable
attorneys' fees and legal expenses incurred by the Agent in connection with this
Agreement, the filing or recording of any documents (including all taxes in
connection therewith) in public offices, the payment or discharge of any taxes,
counsel fees, maintenance fees, fees and other costs relating to the
encumbrances or otherwise protecting, maintaining, preserving the Collateral, or
in defending or prosecuting any actions or proceedings arising out of or related
to the Collateral, shall be borne and paid by the Debtor on written demand by
the Agent setting forth in reasonable detail the nature of such expenses and
until so paid shall be added to the principal amount of the Secured Obligations
and shall bear interest at a rate per annum equal to 18%. In addition, the
Debtor will pay, and indemnify and hold the Agent and the Secured Parties
harmless from and against, any and all liabilities, obligations, losses, damages
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the Collateral, including (without
limitation) claims of patent or trademark infringement and any claim of unfair
competition or anti-trust violation.
E-39
Exhibit 4.3
Section 11. Miscellaneous.
(a) All notices, communications and distributions hereunder shall be in
writing (including telecopied communication) and mailed by certified mail,
telecopied, personally delivered or delivered by Federal Express or other
reputable overnight courier service, if to the Debtor addressed to it at its
address set forth opposite its signature below, if to the Secured Parties,
addressed to it at its address set forth opposite its signature below, or as to
any party at such other address as shall be designated by such party in a
written notice to such other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective (i)
if mailed by certified mail, three days after the date of deposit thereof with
the U.S. Postal Service, properly addressed with postage prepaid, (ii) if
telecopied, upon receipt by the addressee, (iii) if personally delivered, upon
such delivery and (iv) if delivered by overnight courier service, on the
business day following delivery thereof to such courier service in time for
next-business-day delivery.
(b) No delay on the part of the Agent or the Secured Parties in exercising
any of their rights, remedies, powers and privileges hereunder or partial or
single exercise thereof, shall constitute a waiver thereof. None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner whatsoever unless in writing duly signed by the Debtor and the Agent.
No notice to or demand on the Debtor in any case shall entitle the Debtor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Secured Parties to any other or
further action in any circumstances without notice or demand.
(c) The obligations of the Debtor hereunder shall remain in full force and
effect without regard to, and shall not be impaired by, (i) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of the Debtor; (ii) any exercise or non-exercise, or any waiver of,
any right, remedy, power or privilege under or in respect of the Notes, this
Agreement or any other agreement executed in connection with the Notes whereby
the Debtor has granted any Lien to the Secured Parties or any other agreement
executed in connection with any of the foregoing, the Secured Obligations or any
security for any of the Secured Obligations; or (iii) any amendment to or
modification of any of the foregoing; whether or not the Debtor shall have
notice or knowledge of any of the foregoing. The rights and remedies of the
Secured Parties herein provided are cumulative and not exclusive of any rights
or remedies which the Secured Parties would otherwise have.
(d) This Agreement shall be binding upon the Debtor, its Subsidiaries and
their successors and assigns and shall inure to the benefit of the Secured
Parties and their successors and assigns, except that the Debtor may not
transfer or assign any of its obligations, rights or interest hereunder without
the prior written consent of the Required Holders and any such purported
assignment by the Debtor shall be void. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement.
E-40
Exhibit 4.3
(e) The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
(f) Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(g) All rights, remedies and powers provided by this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and the provisions hereof are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
(h) Notwithstanding the above governing law relating to matters of title,
or creation, perfection and priority of the security interests created hereby,
or procedural issues of foreclosure are required to be governed by the laws of
the state in which the Collateral, or part thereof, is located.
(i) EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING,
COUNTERCLAIM OR OTHER LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY FINANCING DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY SUCH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTY'S ENTERING INTO THIS AGREEMENT.
(j) It is expressly agreed, anything herein, in the Notes or in any other
agreement or instrument executed in connection with the Notes to the contrary
notwithstanding, that the Debtor shall remain liable to perform all of the
obligations, if any, assumed by it with respect to the Collateral and the
Secured Parties shall not have any obligations or liabilities with respect to
any Collateral by reason of or arising out of this Agreement, nor shall the
Secured Parties be required or obligated in any manner to perform or fulfill any
of the obligations of the Debtor under or pursuant to any or in respect of any
Collateral.
(k) This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which counterparts taken
together shall be deemed to constitute one and the same instrument.
E-41
Exhibit 4.3
(l) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without regard to the conflicts of
laws principles thereof. The parties hereto hereby irrevocably agree that any
suit or proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York (and/or at the option of Agent, the
jurisdiction where any collateral is located). By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York (and/or at the option of Agent, the jurisdiction where any collateral is
located) and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City and/or at the option of Agent, the
jurisdiction where any collateral is located). The parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements.
E-42
Exhibit 4.3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
FBO AIR, INC.
as Debtor
By:
--------------------------------------
Name: Xxx Xxxxxxxxx
Title: President and CEO
E-43
