Exhibit 10.9(a)
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AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 1 , 1999
COMERICA BANK
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, made as of the 1 day of
September, 1999, by and between Aviation Holdings Int'l, Inc., a Florida
corporation formerly known as Jet Aviation Trading, Inc., (herein called
"Borrower") and COMERICA BANK, a Michigan banking corporation, of Detroit,
Michigan (herein called "Bank");
RECITALS:
A. Bank and Borrower entered into a Credit Agreement dated as of August
12, 1998 (the "Existing Credit Agreement").
B. Bank and Borrower wish to amend the Existing Credit Agreement in its
entirety as provided herein.
NOW, THEREFORE, the Bank and Borrower agree as follows:
WITNESSETH:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account" shall have the meaning assigned to it in the Michigan Uniform
Commercial Code on the date of this Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation for the purposes of this definition if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation
or (ii) to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business (including dealings in foreign exchange)
in Detroit, Michigan and Miami, Florida.
"Capital Expenditure" shall mean, without duplication, any payment made
directly or indirectly for the purpose of acquiring or constructing fixed
assets, real property or equipment which in accordance with GAAP would be added
as a debit to the fixed asset account of a Person, including, without
limitation, amounts paid or payable under any conditional sale or other title
retention agreement or under any lease or other periodic payment arrangement
which is of such a nature that payment obligations of such Person thereunder
would be required by GAAP to be capitalized and shown as liabilities on the
balance sheet of such Person.
"Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is, or
is required to be accounted for as a capital lease on the balance sheet such
Person, together with any renewals of such leases (or entry into new leases) on
substantially similar terms.
"Consolidated" or "Consolidating" shall, when used with reference to
any financial information pertaining to (or when used as a part of any defined
term or statement pertaining to the financial condition of) Borrower and its
Subsidiaries, mean the accounts of Borrower and its Subsidiaries determined on a
consolidated or consolidating basis, as the case maybe, all determined as to
principles of consolidation and, except as otherwise specifically required by
the definition of such term or by such statements, as to such accounts, in
accordance with GAAP.
"Credit Parties" shall mean the Parent, the Borrower, the Borrower's
Subsidiaries and their respective successors.
"Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of a Person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP.
"Domestic Subsidiary" shall mean any direct or indirect subsidiary of
the Borrower incorporated under the laws of the United States of America, or any
state, territory, possession or other political subdivision thereof
"Environmental Laws" shall mean all federal, state and local laws
including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements, relating to environmental pollution,
contamination or other impairment of the environment or any hazardous or toxic
substances of any nature. These Environmental Laws shall include but not be
limited to the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976, the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, and the Federal Superfund Amendments and Reauthorization
Act of 1986.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code.
"Event of Default" shall mean any of the Events of Default specified in
Section 8 hereof.
"Foreign Account" shall mean an account owing by an account debtor
which (i) does not maintain its chief executive office in the United States of
America, (ii) is not organized under the laws of the United States of America or
any state thereof, or (iii) is the government of any foreign country of
sovereign state, or of any state, province, municipality or other
instrumentality thereof.
"GAAP" shall mean, as of any applicable date of determination,
generally accepted accounting principles consistently applied, as in effect on
the date of this Agreement.
"Guarantor" shall mean any guarantor of any present and/or future
Indebtedness.
"Guaranty" shall mean the Parent Guaranty and any Guaranty of the
Indebtedness executed by any Domestic Subsidiary under Section 5.7A and
"Guaranties" shall mean all of them.
"Indebtedness" shall mean all loans, advances, indebtedness,
obligations and liabilities of Borrower to Bank under this Agreement, together
with all other indebtedness, obligations and liabilities whatsoever of Borrower
to Bank arising under or in connection with this Agreement, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising.
"Letter of Credit" shall have the meaning set forth in Section 2.4.
"Letter of Credit Reserve" shall mean as of any date of determination,
an amount equal to the undrawn amount of outstanding Letters of Credit as of
such date and the outstanding principal amount of draws under Letters of Credit
honored by Bank for which Borrower has not reimbursed Bank.
"Loan Documents" shall mean collectively, this Agreement, the Revolving
Credit Note, the Security Agreements, the Guaranties and any other instruments
or agreements executed at any time pursuant to or in connection with any such
documents.
"Material Adverse Effect" means (a) a material adverse effect on the
financial condition, operations, assets, business or proper-ties of the Borrower
and its Subsidiaries taken as a whole, (b) a material impairment of the ability
of the Borrower to perform its obligations under the Loan documents to which it
is a party, or (c) an impairment of the validity or enforceability of, or a
material impairment of the rights, remedies or benefits available to Bank under
this Agreement or any other Loan Document.
"Parent" shall mean Aviation Holdings Group, Inc., a Delaware
corporation.
"Parent Guaranty" shall mean the Parent's Guaranty of the Indebtedness
in form attached as Exhibit "D".
"Permitted Liens" means for a Person:
(a) liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty, or
which are being contested in good faith by proceedings diligently pursued;
(b) unfilled inchoate mechanics' and materialmen's liens for
construction work in progress;
(c) workmen's, repairmen's, warehousemen's and carriers' liens and
other similar liens, if any, arising in the ordinary course of business;
(d) all of the following, if they do not in the opinion of Bank, upon
advice of its legal counsel or professional engineer, individually or in the
aggregate materially impair the use of such Person's material properties by such
Person: any easements, restrictions, mineral, oil, gas and mining rights and
reservations, zoning laws and defects in title;
(e) any lien for the satisfaction and discharge of which a sum of money
deemed adequate by Bank is on deposit with Bank or an institution acceptable to
Bank;
(f) liens created by or resulting from any litigation or other
proceeding (including liens arising out of judgments or awards against such
Person) with respect to which such Person is in good faith prosecuting an appeal
or proceeding for review, if such liens do not in the opinion of counsel for
Bank individually or in the aggregate materially impair the use of any of such
Person's material properties by such Person;
(g) any other lien, encumbrance or charge acceptable to and approved in
writing by Bank.
"Person" or "person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated association, joint stock company, government, municipality,
political subdivision or agency, or other entity.
"Prime Rate" shall mean the per annum. interest rate established by
Bank as its prime rate for its borrowers as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Bank at any
such time.
"Request for Advance" shall mean a Request for Advance issued by
Borrower under this Agreement in the form annexed to this Agreement as Exhibit
"A".
"Revolving Credit Note" shall mean the Note described in Section 2.1
hereof made by Borrower to Bank in the form annexed to this Agreement as Exhibit
"B".
"SEC" shall mean the United States Securities and Exchange Commission
and any successor thereto.
"Security Agreements" shall mean the Security Agreement (All Assets)
dated August 12, 1998 between Borrower and Bank, and Security Agreements in the
form and content of Exhibit "C" to this Agreement to be executed by each
Guarantor pursuant to which Borrower has granted and each Guarantor shall grant
to Bank a first priority security interest in all accounts, chattel paper,
documents, equipment, fixtures, general intangibles, goods, instruments and
inventory, parts, aircraft, aircraft engines and all other tangible and
intangible personal property wherever located and whether now owned or hereafter
acquired, together with all replacements thereof, substitutions therefor,
accessions thereto and all proceeds and products of all the foregoing.
"Subsidiary" shall mean a corporation or other entity of which more
than fifty percent (50%) of the outstanding voting stock or other equity
interests is owned by Borrower, either directly or indirectly, through one or
more intermediaries.
"Tangible Net Worth" shall mean the excess of (i) the net book value of
the assets of Borrower and its Consolidated Subsidiaries (excluding from assets
however, amounts due, if any, from affiliates, officers, directors and employees
and patents, patent rights, trademarks, trade names, franchises, copyrights,
licenses, good will and similar intangible assets) after all appropriate
deductions determined in accordance with generally accepted accounting
principles, consistently applied (including, without limitation, reserves for
doubtful receivables, obsolescence, etc.), over (ii) all Debt of Borrower and
its Consolidated Subsidiaries.
2. THE INDEBTEDNESS: Revolving Credit
2.1 Bank may lend to Borrower at any time and from time to time from
the effective date hereof until the earlier to occur of (i) demand or (ii) the
occurrence of an Event of Default sums not to exceed under the line of credit
Three Million Five Hundred Thousand Dollars ($3,500,000) in aggregate principal
amount at any one time outstanding. The borrowings hereunder shall be evidenced
by the Revolving Credit Note under which advances, repayments and readvances may
be made, subject to the terms and conditions of this Agreement; provided,
however, in no event shall Bank be obligated to make any advance under this
Agreement.
2.2 The Revolving Credit Note shall be payable upon demand, and the
balance from time to time outstanding shall bear interest at a per annum. rate
equal to one percent (1%) above the Bank's Prime Rate. Upon the occurrence of
any Event of Default hereunder, interest shall accrue on the unpaid principal
balance at the per annum rate of three percent (3%) above the rate otherwise in
effect. Interest shall be payable monthly as provided in the Revolving Credit
Note. Interest shall be computed on a daily basis using a year of 360 days,
assessed for the actual number of days elapsed, and in such computation effect
shall be given to any change in the interest rate resulting from a change in the
Prime Rate on the date of such change in the Prime Rate.
2.3 Bank shall not make any advances under the Revolving Credit Note
unless Borrower shall have first filed with Bank a Request for Advance executed
by an authorized officer of Borrower; provided, however, at the option of Bank,
in lieu of written Requests for Advances, Borrower may utilize Bank's "Sweep to
Loan" automated system for obtaining advances. Each time
an advance is made using the "Sweep to Loan" system, it shall constitute a
certificate by Borrower of the matters set forth in the Request for Advance form
as of such date. Bank may revoke Borrower's privilege to use the "Sweep to Loan"
system at any time and after any such revocation, the regular procedures set
forth herein shall apply. Bank may, at its option, lend under the Revolving
Credit Note upon the telephone request of an authorized officer of Borrower and,
in the event Bank makes any such advance upon a telephone request, the
requesting officer shall mail to Bank, on the same day as such telephone
request, a Request for Advance. Borrower hereby authorizes Bank to disburse
advances under the Revolving Credit Note pursuant to the telephone instructions
of any person purporting to be an authorized officer of Borrower and Borrower
shall bear all risk of loss resulting from disbursements made upon any telephone
request.
2.4 In addition to advances under the Revolving Credit Note to be
provided to Borrower by Bank under and pursuant to Section 2.1 of this
Agreement, Bank may issue, or commit to issue, from time to time, standby and
trade letters of credit for the account of Company (herein individually called a
"Letter of Credit" and collectively "Letters of Credit") provided, however that
the sum of the aggregate amount of advances outstanding under the Revolving
Credit Note plus the Letter of Credit Reserve shall not exceed Three Million
Five Hundred Thousand Dollars ($3,500,000) at any one time. In addition to the
terms and conditions of this Agreement, the issuance of any Letters of Credit
shall also be subject to the terms and conditions of any letter of credit
applications and agreements executed and delivered by Company unto Bank with
respect thereto.
2.5 Borrower may prepay the Revolving Credit Note in whole or in part
without premium or penalty.
2.6 The aggregate principal amount at any one time outstanding under
the Revolving Credit Note and the Letter of Credit Reserve shall never exceed
the formula set forth in the Advance Formula Agreement dated August 12, 1998 or
in any Advance Formula Agreement delivered by Borrower to Bank in substitution
therefor. Borrower shall immediately make all payments necessary to comply with
this provision.
2.7 Advances under the Revolving Credit Note shall be used for working
capital purposes and, subject to the prior approval of Bank (which approval may
be given or withheld in the sole discretion of Bank) for permitted acquisitions.
2.8 Borrower acknowledges that the Revolving Credit Note and the
Indebtedness under this Section 2 matures upon issuance and that the Bank, at
any time, without notice, and without reason, may demand that the Revolving
Credit Note and the Indebtedness be immediately repaid in full.
3. CONDITIONS
3.1 Borrower agrees to furnish Bank prior to the initial borrowing
under this Agreement, in form and substance to be satisfactory to Bank, with (i)
certified copies of resolutions of the Board of Directors of each Credit Party
evidencing approval of the borrowings hereunder in the case of the
Borrower's Board of Directors, the Guaranties and, if applicable, the Security
Agreements, in the case of the other Credit Parties' Boards of Directors and in
each case the relevant transactions contemplated hereunder; (ii) certificates of
good standing of each Credit Party from their respective states of formation and
from the states in which they are required to be qualified to do business; and
(iii) such other documents, instruments and legal opinions as Bank may
reasonably require.
3.2 As security for all indebtedness of Borrower to Bank hereunder,
Borrower agrees to furnish, execute and deliver to Bank, or cause to be
furnished, executed and delivered to Bank, prior to or simultaneously with the
initial borrowing hereunder, in form to be satisfactory to Bank and supported by
appropriate resolution in certified form authorizing same, the following:
(a) The Security Agreements;
(b) Financing Statements required or requested by Bank to perfect
all security interests to be conferred upon Bank under this
Agreement and to accord Bank a perfected first priority
security position under the Uniform Commercial Code (subject
only to the encumbrances permitted hereunder);
(c) The Guaranties;
(d) Such other documents or agreements of security and appropriate
assurances of validity and perfected first priority of lien or
security interest as Bank may reasonably request at any time,
including, without limitation, landlord waivers.
4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants and such representations and
warranties shall be deemed to be continuing representations and warranties
during the entire life of this Agreement:
4.1 Each Credit Party is a corporation duly organized and existing in
good standing under the laws of its jurisdiction of incorporation, is duly
qualified and authorized to do business as a foreign corporation in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary; execution, delivery and performance of each
Loan Document to which the Credit Party is a party are within the Credit Party's
corporate powers, have been duly authorized, are not in contravention of law or
the terms of the Credit Party's Articles of Incorporation or Bylaws, and do not
require the consent or approval of any governmental body, agency or authority;
and this Agreement and any other documents and instruments required under this
Agreement, when issued and delivered under this Agreement, will be valid and
binding in accordance with their terms.
4.2 The execution, delivery and performance of this Agreement and any
other documents and instruments required under this Agreement, and the issuance
of the Revolving Credit Note by Borrower, are not in contravention of the
unwaived terms of any indenture, agreement or undertaking to which any Credit
Party is a party or by which it is bound.
4.3 No litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the officers of the
Borrower is threatened against any Credit Party, the outcome of which could
materially impair any Credit Party's financial condition or its ability to carry
on its business.
4.4 There are no security interests in, liens, mortgages, or other
encumbrances on any Credit Party's assets, except to Bank, or as permitted in
this Agreement.
4.5 Except as set forth in Schedule 4.5 attached hereto, there are no
Subsidiaries of Borrower.
4.6 There exists no default by any Credit Party under the provisions of
any instrument evidencing any permitted debt or of any agreement relating
thereto.
4.7 No Credit Party maintains or contributes to any Pension Plans
subject to ERISA except the plans listed on Schedule 4.7 hereto ("Pension
Plans"). The "unfunded past service liability" of the Pension Plans, as of
__________, 1999, was as noted on Schedule 4.7, and there is no accumulated
funding deficiency within the meaning of ERISA, or any existing liability with
respect to the Pension Plans owed to the Pension Benefit Guaranty Corporation or
any successor thereto.
4.8 The balance sheets and operating statements of Borrower dated
August 31, 1997, November 30, 1997, May 31, 1998 and August 31, 1998, previously
furnished Bank, are complete and correct and fairly present the financial
condition of Borrower and the results of its operations; the balance sheets and
operating statements of Borrower and its Consolidated Subsidiaries dated
December 31,1998, March 31, 1999 and July 31, 1999, previously furnished Bank,
are complete and correct and fairly represent the financial condition of
Borrower and its Consolidated Subsidiaries and the results of their operations;
since said dates there has been no material adverse change in the financial
condition of Borrower or its Consolidated Subsidiaries; to the knowledge of
Borrower's officers, neither Borrower nor any of its Subsidiaries has any
contingent obligations (including any liability for taxes) not disclosed by or
reserved against in said balance sheets, and at the present time there are no
material unrealized or anticipated losses from any present commitment of
Borrower or any of its Subsidiaries.
4.9 All tax returns and tax reports of the Credit Parties required by
law to be filed have been duty filed or extensions obtained, and all taxes,
assessments and other governmental charges or levies (other than those presently
payable without penalty and those currently being contested in good faith for
which adequate reserves have been established) upon any Credit Party (or any of
their properties) which are due and payable have been paid. The charges,
accruals and reserves on the books of the Credit Parties in respect of the
Federal income tax for all periods are adequate in the opinion of the Credit
Parties.
4.10 Each Credit Party is in the conduct of its business, in compliance
in all material respects with all federal, state or local laws, statutes,
ordinances and regulations applicable to it, the enforcement of which, if it
were not in compliance, would adversely affect its business or the value of its
property or assets. Each Credit Party has all approvals, authorizations,
consents, licenses, orders and other permits of all governmental agencies and
authorities, whether federal, state or local, required to permit the operation
of its business as presently conducted, except such approvals, authorizations,
consents, licenses, orders and other permits with respect to which the failure
to have can be cured without having an adverse effect on the operation of such
business.
4.11 No representation or warranty by Borrower in this Agreement, nor
any statement or certificate (including financial statements) furnished or to be
furnished to Bank pursuant hereto contains or will contain any materially untrue
statement of any fact or omits or will omit to state a fact necessary to make
such representation, warranty, statement or certificate not misleading.
4.12 No Credit Party is a party to any litigation or administrative
proceeding, nor so far as is known by any Credit Party is any litigation or
administrative proceeding threatened against any Credit Party, which in either
case (A) asserts or alleges that any Credit Party violated Environmental Laws
(B) asserts or alleges that any Credit Party is required to clean up, remove, or
take remedial or other response action due to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or materials,
(C) asserts or alleges that any Credit Party is required to pay all or a portion
of the cost of any past, present, or future cleanup, removal or remedial or
other response action which arises out of or is related to the disposal,
depositing, discharge, leaking or other release of any hazardous substances or
materials by any Credit Party.
4.13 To the best knowledge of Borrower, there are no conditions
existing currently or likely to exist during the term of this Agreement which
would subject any Credit Party to damages, penalties, injunction relief or
cleanup costs under any applicable Environmental Laws or which require or are
likely to require cleanup, removal, remedial action or other response pursuant
to applicable Environmental Laws by any Credit Party.
4.14 No Credit Party subject to anyjudgment, decree, order or citation
related to or arising out of applicable Environmental Laws and to the best
knowledge of the Borrower, no Credit Party has been named or listed as a
potentially responsible party by any governmental body or agency in a matter
arising under any applicable Environmental Laws.
4.15 To the best knowledge of Borrower, each Credit Party has all
permits, licenses and approvals required under applicable Environmental Laws.
4.16 No Credit Party is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended. No Credit Party is engaged
principally, or as one of its important activities, directly or indirectly, in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and none of the proceeds of any of the loans hereunder will be
used, directly or indirectly, for any purpose which would violate the provisions
of Regulation U or X of the Board of Governors of the Federal Reserve System.
Terms for which meanings are provided in Regulation
U of the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
4.17 Each Credit Party has good and valid title to the property
pledged, mortgaged or otherwise encumbered or to be encumbered by it under the
Security Agreements.
5. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that it will and it will cause each of
its Subsidiaries, so long as Bank may make any advance under this Agreement and
thereafter so long as any indebtedness remains outstanding under this Agreement
to:
5.1 Furnish Bank:
(a) within one hundred twenty (120) days after and as of the end
of each fiscal year of Borrower, a Consolidated balance sheet
and statement of profit and loss and changes in cash flow of
the Borrower and its Consolidated Subsidiaries prepared on an
audited basis in accordance with the requirements of the SEC
by independent certified public accountants satisfactory to
Bank;
(b) within forty five (45) days after and as of the end of each
fiscal quarter, a consolidated and consolidating balance sheet
and consolidated and consolidating statement of profit and
loss and changes in cash flow of Borrower and its Consolidated
Subsidiaries prepared in accordance with the requirements of
the SEC certified by an authorized officer of Borrower as
being correct and accurate to the best of his knowledge (if
Bank in its sole discretion deems the consolidating financial
statements required by this subsection (b) to be not
sufficiently detailed, Bank reserves the right to require
separate financial statements for each Subsidiary, reviewed by
certified public accountants acceptable to Bank in form and
content acceptable to Bank);
(c) so long as Borrower or Parent shall be required to file
reports with the SEC, promptly upon transmission thereof,
copies of all such financial statements, proxy statements,
notices and reports as it shall send to its public
stockholders generally and copies of all registration
statements (without exhibits) and all reports which it files
with the SEC;
(d) within three (3) days after and as of the end of each week a
borrowing base report in form satisfactory to Bank;
(e) on or before August 1 of each year, a copy of any foreign
credit insurance policy then in effect with respect to which
Borrower or any Subsidiary is the beneficiary;
(f) promptly upon receipt thereof, copies of all management
letters prepared with respect to Borrower by any independent
certified public accountants;
(g) such information as required by the terms and conditions of
any security agreements referred to in this Agreement;
(h) promptly, and in form to be satisfactory to Bank, such other
information as Bank may reasonably request from time to time;
(i) on or before October 1 of each year an inventory appraisal in
form satisfactory to Bank prepared by an appraiser
satisfactory to Bank utilizing an appraisal method which is
acceptable to Bank.
5.2 Pay and discharge all taxes and other governmental charges and all
contractual obligations calling for the payment of money, before any interest or
penalties shall accrue, unless and to the extent only that such payment is being
contested in good faith.
5.3 Maintain insurance coverage on its physical assets and against
other business risks in such amounts and of such types as are customarily
carried by companies similar in size and nature, and in the event of acquisition
of additional property, real or personal, or of incurrence of additional risks
of any nature, increase such insurance coverage in such manner and to such
extent as prudent business judgment and present practice would dictate; and in
the case of all policies covering property mortgaged or pledged to Bank or
property in which Bank shall have a security interest of any kind whatsoever,
other than those policies protecting against casualty liabilities to strangers,
all such insurance policies shall provide that the loss payable thereunder shall
be payable to Borrower or a Subsidiary as the case may be, and Bank as their
respective interests may appear; copies of all said policies, including all
endorsements thereon and those required hereunder, to be deposited with Bank.
5.4 Permit Bank, through its authorized attorneys, accountants, and
representatives, to examine each Credit Party's books, accounts, records,
ledgers and assets of every kind and description during regular business hours,
including, without limitation, collateral audits at Borrower's cost and expense.
Prior to the occurrence of an Event of Default under this Agreement, collateral
audits shall be conducted not more frequently than four times a year; provided,
however, following the occurrence of an Event of Default, the limitation on the
frequency of audits shall no longer apply.
5.5 Promptly notify Bank of any condition or event which constitutes or
with the running of time and/or the giving of notice would constitute a default
under this Agreement, and promptly inform Bank of any material adverse change in
any Credit Party's financial condition.
5.6 Maintain in good standing and cause each Subsidiary to maintain in
good standing, all licenses and certifications required by the State of Florida,
or any agency thereof, or the FAA or any other governmental authority that maybe
necessary or required for Borrower and its Subsidiaries
to carry on their general business objects and purposes. FAA licenses and
certifications maybe held by the employees of Borrower and/or its Subsidiaries
so long as Borrower and its Subsidiaries may legally avail themselves of all
rights and privileges associated therewith and all such licenses and
certifications remain in good standing.
5.7 Furnish Bank, upon Bank's request, in form satisfactory to Bank
with pledges, assignments, mortgages, lien instruments or other security
instruments covering any or all of the Credit Parties' real or personal
property, of every nature and description, whether now owned or hereafter
acquired, to the extent that Bank may in its sole and reasonable discretion
require. Borrower shall notify Bank of the acquisition of any aircraft engines
or aircraft in which a security interest must be perfected by filing with the
FAA within five days of the acquisition thereof and shall provide Bank a copy of
the applicable purchase agreement related thereto.
5.7A Promptly, and in any event not later than three (3) business days
thereafter, notify Bank of the creation of any Subsidiary and cause each
Domestic Subsidiary, including any Person which becomes a Domestic Subsidiary
after the date of this Agreement, to execute and deliver to Bank a Guaranty and
Security Agreement and such other documents and materials as Bank may require in
order to perfect its liens and security interests in the assets of such Domestic
Subsidiary on the date the Person is created, acquired or otherwise becomes a
Domestic Subsidiary (whichever first occurs).
5.8 Comply and cause each Subsidiary to comply with all requirements
imposed by ERISA as presently in effect or hereafter promulgated including, but
not limited to, the minimum funding requirements of the Pension Plans.
5.9 Promptly notify Bank after the occurrence thereof in writing of
any of the following events:
(a) the termination of any Credit Party's Pension Plan pursuant to
Subtitle C of Title IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States District Court
to administer the Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation,
or any successor thereto of any proceeding to terminate any
Credit Party's Pension Plan;
(d) the failure of any Credit Party's Pension Plan to satisfy the
minimum funding requirements for any plan year as established
in Section 412 of the Internal Revenue Code of 1954, as
amended;
(e) the withdrawal of any Credit Party from a Pension Plan; or
(f) a reportable event, within the meaning of Title IV of ERISA.
5.10 Maintain all cash collection and general disbursement accounts
with Bank or another financial institution which is acceptable to Bank.
5.11 Maintain as of the end of each fiscal quarter of Borrower, a
Consolidated Tangible Net Worth of not less than $4,250,000.
5.12 Maintain as of the end of each fiscal year of Borrower a ratio of
Debt of Borrower and its Subsidiaries as determined on a Consolidated basis in
accordance with GAAP to Tangible Net Worth of not more than 1.7 to 1.0.
5.13 Maintain as of the end of each fiscal quarter of Borrower (other
that the fourth quarter of each fiscal year) a ratio of Debt of the Borrower and
its Subsidiaries as determined on a Consolidated basis in accordance with GAAP
to Tangible Net Worth of not more than 2.25 to 1.0.
5.14 Use its best efforts to maintain Consolidated net income of
Borrower and its Consolidated Subsidiaries of not less than $425,000 for fiscal
year 1999.
6. NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as Bank may make any
advances under this Agreement and thereafter so long as any Indebtedness remains
outstanding under this Agreement, it will not and it will not permit any
Subsidiary to, without the prior written consent of Bank:
6.1 Purchase, acquire or redeem any of its capital stock or make any
material change in its capital structure, except purchases and redemptions of
stock so long as no Event of Default exists or would result therefrom.
6.2 Enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any part of its assets, except in the
ordinary course of its business.
6.3 Guarantee, endorse, or otherwise become secondarily liable for or
upon the obligations of others, except by endorsement for deposit in the
ordinary course of business and guaranties in favor of Bank.
6.4 Purchase or otherwise acquire or become obligated for the purchase
of all or substantially all of the assets or business interests of any person,
firm or corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate or attempt to effectuate an
expansion of present business by acquisition.
6.5 Become or remain obligated for any indebtedness for borrowed money,
or for any indebtedness incurred in connection with the acquisition of any
property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade payables and accrued liabilities
anising in the ordinary course of Borrower's or a Subsidiary's
business;
(c) purchase money indebtedness to acquire fixed assets in an
amount not exceeding $100,000 in the aggregate for Borrower
and its Subsidiaries during any fiscal year of Borrower.
6.6 Affirmatively pledge or mortgage any of its assets, whether now
owned or hereafter acquired, or create, suffer or permit to exist any lien,
security interest in, or encumbrance thereon, except:
(a) to Bank;
(b) the Permitted Liens;
(c) liens described in attached Schedule 6.6; and
(d) liens and security interests upon fixed assets acquired by
Borrower or a Subsidiary after the date of this Agreement
(including by virtue of a Capital Lease) provided that (i) any
such lien or security interest is created solely for the
purpose of securing indebtedness representing, or incurred to
finance, the cost of the item of property subject thereto;
(ii) the principal amount of the indebtedness secured by such
lien does not exceed 100% of the fair value of the property at
the time it was acquired, and (iii) the lien or security
interest does not cover any other property other than such
item of property.
6.7 Sell, assign, transfer or confer a security interest in any
account, contract, note, trade acceptance or other receivable, except to Bank.
6.8 Materially alter the character of its businesses from that
conducted as of the date of this Agreement.
6.9 Enter into any transaction or series of transactions with any
Affiliate other than on terms and conditions as favorable to Borrower or its
Subsidiary, as the case may be, as would be obtainable in a comparable
arms-length transaction with a Person other than an Affiliate.
6.10 Make or allow to remain outstanding any investment (whether such
investment shall be or the character of investment in shares of stock, evidence
of indebtedness or other securities or otherwise) in, or any loans or advances
or extensions of credit to, any person, firm, corporation or other entity or
association, except
(a) advances made for expenses or purchases in the ordinary course
of business within the United States; and
(b) loans or advances made to officers, directors, or employees of
Borrower or its Subsidiaries within the United States, not to
exceed in the aggregate One Hundred Thousand Dollars
($100,000) for the Borrower and its Subsidiaries at any one
time outstanding.
6.11 Enter into or become subject to any agreement (other than this
Agreement) (i) prohibiting the creation or assumption of any lien or encumbrance
upon the properties or assets of Borrower or any Subsidiary or (ii) requiring an
obligation to become secured (or further secured) if another obligation is
secured or further secured.
6.12 Declare of pay any dividends or make any other distributions with
respect to its stock except for dividends payable in the capital stock of
Borrower and dividends by a Subsidiary of Borrower to Borrower.
6.13 Modify or amend the Employment Agreement dated October 31, 1996
and subsequently extended on August 1, 1998 (effective November 1, 1998) between
Borrower and Xxxxxx Xxxxxx if the effect of such amendment is to shorten the
term thereof or materially change the scope of Xx. Xxxxxx'x duties.
6.14 Provide any special credit arrangement with respect to uninsured
Foreign Accounts. All past-due Foreign Accounts must be declared in default,
claimed via insurance, or enforced for collection. Contra-accounts of any kind
are expressly forbidden.
7. ENVIRONMENTAL PROVISIONS
7.1 Borrower shall comply and shall cause each Credit Party to comply
in all material respects with all applicable Environmental Laws.
7.2 Borrower shall provide to Bank, immediately upon receipt, copies of
any correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a circumstance
or condition which requires or may require a financial contribution by any
Credit Party or a cleanup, removal, remedial action, or other response by or on
the part of any Credit Party under applicable Environmental Laws or which seeks
damages or civil, criminal or punitive penalties from any Credit Party for an
alleged violation of Environmental Laws.
7.3 Borrower shall promptly notify Bank in writing as soon as Borrower
becomes aware of any condition or circumstance which makes the environmental
warranties contained in this Agreement incomplete or inaccurate in any material
respect as of any date.
7.4 In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date, Borrower shall, at the reasonable
request of Bank, at Borrower's sole expense, retain an environmental
professional consultant, reasonably acceptable to Bank, to conduct a thorough
and
complete environmental audit regarding the changed condition and/or circumstance
and any environmental concerns arising from that changed condition and/or
circumstance. A copy of the environmental consultant's report will be promptly
delivered to Bank upon completion.
7.5 At any time any Credit Party, directly or indirectly through any
professional consultant or other representative, determines to undertake an
environmental audit, assessment or investigation, Borrower shall promptly
provide Bank with written notice of the initiation of the environmental audit,
fully describing the purpose and intended scope of the environmental audit. Upon
receipt, Borrower will promptly provide to Bank copies of all final findings and
conclusions of any such environmental investigation. Preliminary findings and
conclusions shall be provided if final reports have not been completed and
delivered to Bank within 60 days following completion of the preliminary
findings and conclusions.
7.6 Borrower hereby indemnifies, saves and holds Bank and any of its
past, present and future officers, directors, shareholders, employees,
representatives and consultants harmless from any and all loss, damages, suits,
penalties, costs, liabilities and expenses (including but not limited to
reasonable investigation, environmental audit(s), and legal expenses) arising
out of any claim, loss or damage of any property, injuries to or death of
persons, contamination of or adverse affects on the environment, or any
violation of any applicable Environmental Laws, caused by or in any way related
to property owned by any Credit Party, or due to any acts of any Credit Party or
their respective officers, directors, shareholders, employees, consultants
and/or representatives; provided, however, that the foregoing indemnification
shall not be applicable when arising from events or conditions occurring while
the Bank is in sole possession (subject to the rights of any creditors of
Borrower) of the property. In no event shall Borrower be liable hereunder for
any loss, damages, suits, penalties, costs, liabilities or expenses arising from
any act of gross negligence or wilfful misconduct of Bank, or its agents or
employees.
7.7 Borrower shall and shall cause each Subsidiary to maintain all
permits, licenses and approvals required under applicable Environmental Laws.
8. EVENTS OF DEFAULT
8.1 Upon occurrence of any of the following Events of Default:
(a) non-payment of any installment of the principal or interest on
the Revolving Credit Note when due in accordance with the
terms thereof, or upon non-payment of any other outstanding
Indebtedness when due in accordance with the terms thereof;
(b) default in the observance or performance of any of the
conditions, covenants or agreements of Borrower set forth in
Section 5 or Section 6.
(c) default in the observance or performance of any of the other
conditions, covenants or agreements of Borrower set forth in
this Agreement and continuance thereof for thirty (30) days
after notice to Borrower by Bank;
(d) any material representation or warranty made by Borrower
herein or by any Credit Party in any instrument or agreement
submitted pursuant hereto proves untrue in any material
respect when made or deemed made;
(e) default in the observance or performance of any of the
conditions, covenants or agreements of any Credit Party set
forth in any collateral document of security which may be
given to secure the indebtedness hereunder or in any other
document related to or connected with this Agreement or the
indebtedness hereunder, including without limitation any
Security Agreement or Guaranty;
(f) default in the payment of any other obligation of any Credit
Party for borrowed money in an aggregate amount in excess of
Ten Thousand Dollars ($10,000), or in the observance or
performance of any conditions, covenants or agreements related
or given with respect to any obligations for borrowed money in
an aggregate amount in excess of Ten Thousand Dollars
($10,000) sufficient to permit the holder thereof to
accelerate the maturity of such obligation;
(g) judgments for the payment of money in excess of the sum of Ten
Thousand Dollars ($10,000) in the aggregate shall be rendered
against any Credit Party and such judgments shall remain
unpaid, unvacated, unbonded or unstayed by appeal or otherwise
for a period of thirty (30) consecutive days from the date of
its entry and such judgment is not covered by insurance from a
solvent insurer who is defending such action without
reservation of rights;
(h) the occurrence of any "reportable event", as defined in the
Employee Retirement Income Security Act of 1974 and any
amendments thereto, which is determined to constitute grounds
for termination by the Pension Benefit Guaranty Corporation of
any employee pension benefit plan maintained by or on behalf
of any Credit Party for the benefit of any of its employees or
for the appointment by the appropriate United States District
Court of a trustee to administer such plan and is reasonably
likely that the occurrence of such event would result in a
Material Adverse Effect, and such reportable event is not
corrected and such determination is not revoked within thirty
(30) days after notice thereof has been given to the plan
administrator or the applicable Credit Party; or the
institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate any such employee benefit pension
plan or to appoint a trustee to administer such plan; or the
appointment of a trustee by the appropriate United States
District Court to administer any such employee benefit pension
plan;
(i) if there shall be any change for any reason in the management
or control of Borrower which in the sole judgment of Bank
adversely affects Borrower, including, without limitation, if
Xxxxxx Xxxxxx no longer is actively involved in the day to day
management of Borrower;
(j) the revocation of any Guaranty;
(k) if there shall occur an event which has a Material Adverse
Effect or if the Bank shall deem itself to be insecure;
then, or at any time thereafter, unless such default is remedied, Bank may give
notice to Borrower declaring all outstanding indebtedness hereunder and under
the Revolving Credit Note to be due and payable, whereupon all indebtedness then
outstanding hereunder and under the Revolving Credit Note shall immediately
become due and payable without further notice and demand.
8.2 If a creditors' committee shall have been appointed for the
business of any Credit Party in connection with any bankruptcy or insolvency; or
if any Credit Party shall have made a general assignment for the benefit of
creditors or shall have been adjudicated bankrupt, or shall have filed a
voluntary petition in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors; or shall file an answer to a creditor's petition or
other petition filed against it, admitting the matenial allegations thereof for
an adjudication in bankruptcy or for reorganization; or shall have applied for
or permitted the appointment of a receiver, or trustee or custodian for any of
its property or assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon application or
consent of the Credit Party), and such receiver, trustee or custodian so
appointed shall not have been discharged within sixty (60) days after the date
of his appointment or if an order shall be entered and shall not be dismissed or
stayed within sixty (60) days from its entry, approving any petition for
reorganization of any Credit Party then the Revolving Credit Note and all
indebtedness then outstanding hereunder and under any Letters of Credit shall
automatically become immediately due and payable.
8.3 Upon the occurrence and during the continuance of an Event of
Default, unless all of the Indebtedness is then immediately fully paid, Bank
shall have and may exercise any one or more of the rights and remedies for which
provision is made for a secured party under the UCC, under the Security
Agreements or under any other document contemplated hereby or for which
provision is provided by law or in equity, including, without limitation, the
right to take possession and sell, lease or otherwise dispose of any or all of
the collateral and to set off against the Indebtedness any amount owing by Bank
to Borrower and/or any property of Borrower in possession of Bank. Borrower
agrees, upon request of Bank, to assemble the collateral and make it available
to Bank at any place designated by Bank which is reasonably convenient to Bank
and Borrower.
8.4 All of the Indebtedness shall constitute one loan secured by Bank's
security interest in the collateral and by all other security interests,
mortgages, liens, claims, and encumbrances now and from time to time hereafter
granted from the Credit Parties to Bank. Upon the occurrence and during the
continuance of an Event of Default which is not cured within the cure period, if
any, provided hereunder, Bank may in its sote discretion apply the collateral to
any portion of the Indebtedness. The proceeds of any sate or other disposition
of the collateral authorized by this Agreement shall be applied by Bank, first
upon all expenses authorized by the Michigan Uniform Commercial Code (or other
applicable law) or otherwise in connection with the sale and all reasonable
attorneys' fees and legal expenses incurred by Bank; the balance of the proceeds
of such
sale or other disposition shall be applied in the payment of the Indebtedness,
first to interest, then to principal, then to other Indebtedness and the
surplus, if any, shall be paid over to Borrower or to such other Person or
Persons as maybe entitled thereto under applicable law. Borrower shall remain
liable for any deficiency, which Borrower shall pay to Bank immediately upon
demand.
8.5 The remedies provided for herein are cumulative to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security agreement or other document contemplated hereby. Nothing herein
contained is intended, nor shalt it be construed, to preclude Bank from pursuing
any other remedy for the recovery of any other sum to which Bank may be or
become entitled for the breach of this Agreement by Borrower.
9. MISCELLANEOUS
9.1 This Agreement shall be binding upon and shall inure to the benefit
of Borrower and Bank and their respective successors and assigns, except that
the credit provided for under this Agreement and no part thereof and no
obligation of Bank hereunder shall be assignable or otherwise transferable by
Borrower.
9.2 Borrower shall pay all closing costs and expenses, including, by
way of description and not limitation, reasonable outside attorney fees and lien
search fees, incurred by Bank in connection with the commitment, consummation
and closing of this Agreement. All of said amounts required to be paid by
Borrower may, at Bank's option, be charged by Bank as an advance against the
proceeds of the Revolving Credit Note. All costs, including reasonable attorney
fees incurred by Bank in protecting or enforcing any of its or any of the Bank's
rights against any Credit Party or any collateral or in defending Bank from any
claims or liabilities by any party or other-wise incurred by Bank in connection
with an event of default or the enforcement of this Agreement or the related
documents, including by way of description and not limitation, such charges in
any court or bankruptcy proceedings or arising out of any claim or action by any
person against Bank which would not have been asserted were it not for Bank's
relationship with Borrower hereunder, shall also be paid by Borrower.
9.3 Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP.
9.4 No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any night or remedies which Bank
would otherwise have.
9.5 All notices with respect to this Agreement shall be deemed to be
completed upon mailing by certified mail to the following:
To Borrower:
00000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
To Bank:
000 XX Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
9.6 This Agreement and the Revolving Credit Note have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan. 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 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 provision or the remaining provisions of this
Agreement.
9.7 No amendments or waiver of any provisions of this Agreement nor
consent to any departure by Borrower therefrom shall in any event be effective
unless the same shall be in writing and signed by the Bank, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, waiver or consent
with respect to any provision of this Agreement shall affect any other provision
of this Agreement.
9.8 All sums payable by Borrower to Bank under this Agreement or the
other documents contemplated hereby shall be paid directly to Bank at its
principal office set forth in Section 9.5 hereof in immediately available United
States funds, without set off, deduction or counterclaim. In its sole
discretion, Bank may charge any and all deposit or other accounts (including
without limit an account evidenced by a certificate of deposit) of Borrower with
Bank for all or a part of any Indebtedness then due; provided, however, that
this authorization shall not affect Borrower's obligation to pay, when due, any
Indebtedness whether or not account balances are sufficient to pay amounts due.
9.9 Any payment of the Indebtedness made by mail will be deemed
tendered and received only upon actual receipt by Bank at the address designated
for such payment, whether or not Bank has authorized payment by mail or any
other manner, and shall not be deemed to have been made in a timely manner
unless received on the date due for such payment, time being of the essence.
Borrower authorizes Bank to charge its accounts maintained with Bank for the
payment of any of the Indebtedness. Borrower expressly assumes all risks of loss
or liability resulting from nondelivery or delay of delivery of any item of
payment transmitted by mail or in any other manner. Acceptance by Bank of any
payment in an amount less than the amount then due shall be deemed an acceptance
on account only, and the failure to pay the entire amount then due shall be and
continue to be an Event of Default, and at any time thereafter and until the
entire amount then due has been paid, Bank shall be entitled to exercise any and
all rights conferred upon it herein upon the occurrence of an
Event of Default. Upon the occurrence and during the continuance of an Event of
Default, Borrower waives the right to direct the application of any and all
payments at any time or times hereafter received by Bank from or on behalf of
Borrower. Upon the occurrence and during the continuance of an Event of Default,
Borrower agrees that Bank shall have the continuing exclusive right to apply and
to reapply any and all payments received at any time or times hereafter against
the Indebtedness in such manner as Bank may deem advisable, notwithstanding any
entry by Bank upon any of its books and records. Borrower expressly agrees that
to the extent that Bank receives any payment or benefit and such payment or
benefit, or any part thereof, is subsequently invalidated, declared to be
fraudulent or preferential, set aside or is required to be repaid to a trustee,
receiver, or any other party under any bankruptcy act, state or federal law,
common law or equitable cause, then to the extent of such payment or benefit,
the Indebtedness or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or benefit had not been
made and, further, any such repayment by Bank, to the extent that Bank did not
directly receive a corresponding cash payment, shall be added to and be
additional Indebtedness payable upon demand by Bank.
9.10 In the event Borrower's obligation to pay interest on the
principal balance of the Revolving Credit Note is or becomes in excess of the
maximum interest rate which Borrower is permitted by law to contract or agree to
pay, giving due consideration to the execution date of this Agreement, then, in
that event, the rate of interest applicable shall be deemed to be immediately
reduced to such maximum rate and all previous payments in excess of such maximum
rate shall be deemed to have been payments in reduction of principal and not of
interest.
9.11 THE UNDERSIGNED AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE REVOLVING CREDIT
NOTE.
9.12 In the event of any express inconsistency between the provisions
of this Agreement and the provisions of any of the other Loan Documents, the
provisions of this Agreement shall control.
9.13 Borrower submits, in any legal proceeding related to this
Agreement or the Revolving Credit Note, to the nonexclusive in personam
jurisdiction of any court of competent jurisdiction sitting in the State of
Florida and agrees to a suit being brought in any such court; waives any
objection that it may now have or hereafter have to the venue of such proceeding
in any such court or that such proceeding was brought in an inconvenient court;
agrees that service of process and any such legal proceeding may be made, and
shall be conclusively deemed sufficient and adequate, by mailing of copies
thereof (by registered or certified mail, if practicable) postage prepaid to
Borrower at its address set forth herein or such other address of which the Bank
shall be notified in writing, in which event, service shall be deemed complete
upon the filing with the court of a copy of the
process mailed and an affidavit attesting the mailing. Borrower agrees that
nothing herein shall affect the Bank's right to affect service or process in any
other manner permitted by law.
9.14 This Agreement shall become effective upon the execution hereof by
Bank and Borrower.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK AVIATION HOLDINGS INT'L, INC.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------- ---------------------------------
Its: Vice President Its: President
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Its: Chief Financial Officer
EXHIBIT "A"
REQUEST FOR ADVANCE
Pursuant to the Amended and Restated Credit Agreement dated as of
September _, 1999, (herein called "Agreement"), the undersigned hereby requests
COMERICA BANK to make Advance to the undersigned on _____________________,
_________, in the amount of __________________________ DOLLARS, ($_________)
under the Revolving Credit Note dated September ____, 1999, issued by the
undersigned to said Bank (herein called "Note").
The undersigned certifies that no event has occurred or condition
exists which constitutes, or with the passage of time and/or giving of notice
would constitute, a default under the Agreement or the Note, and none will exist
upon the making of the Advance requested hereunder. The undersigned further
certifies that upon advancing the sum requested hereunder, the aggregate
principal amount outstanding under the Note will not exceed the face amount
thereof or any advance formula applicable to advances under such Note. If the
amount advanced to the undersigned under the Note shall at any time exceed the
face amount thereof or any advance formula applicable to advances under such
Note, the undersigned will pay such excess amount on demand.
The undersigned hereby authorizes said Bank to disburse the proceeds of
this Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned may otherwise
direct, unless this Request for Advance is being submitted for a conversion or
refunding, in which case it shall refund or convert that portion stated above of
the existing outstandings under the Note.
Dated this ____ day of _____________, _______.
AVIATION HOLDINGS INT'L, INC.
By:___________________________
Its:__________________________
By:___________________________
Its:__________________________
EXHIBIT B
Comeric A Master Revolving Note
Variable Rate-Demand Op ional Advances (Business and
Commercial Loans Only)
AMOUNT NOTE DATE MATURITY DATE TAX IDENTIFICATION NUMBER
$3,500,000 September 1 , 1999 ON DEMAND 00-0000000
For Value Received, the undersigned promise(s) to pay ON DEMAND to the order of
Comerica Bank ("Bank"), at any office of the Bank in the State of Michigan,
Three Million Five Hundred Thousand Dollars (U.S.) (orthat portion of it
advanced bythe Bank and not repaid as later provided) with interest until demand
or until Default, as later defined, at a per annum rate equal to the Bank's
prime rate from time to time in effect plus 1 % per annum and after that at a
rate equal to the rate of interest otherwise prevailing underthis Note plus 3%
per annum (but in no event in excess of the maximum rate permitted by law). The
Bank's "prime rate" is that annual rate of interest so designated by the Bank
and which is changed by the Bank from time to time. Interest rate changes will
be effective for interest computation purposes as and when the Bank's prime rate
changes. Interest shall be calculated on the basis of a 360-day year for the
actual number of days the principal is outstanding. Unless sooner demanded,
accrued interest on this Note shall be payable on the first day of each month
commencing October 1, 1999. If the frequency of interest payments is not
otherwise specified, accrued interest on this Note shall be payable monthly on
the first day of each month, unless sooner demanded. If any payment of principal
or interest under this Note shall be payable on a day other than a day on which
the Bank is open for business, this payment shall be extended to the next
succeeding business day and interest shall be payable at the rate specified in
this Note during this extension. A late payment charge equal to 5% of each late
payment may be charged on any payment not received by the Bank within 10
calendar days after the payment due date, but acceptance of payment of this
charge shall not waive any Default under this Note.
The principal amount payable under this Note shall be the sum of all advances
made by the Bank to or at the request of the undersigned, less principal
payments actually received in cash by the Bank. The books and records of the
Bank shall be the best evidence of the principal amount and the unpaid interest
amount owing at any time under this Note and shall be conclusive absent manifest
error. No interest shall accrue under this Note until the date of the first
advance made by the Bank; after that interest on all advances shall accrue and
be computed on the principal balance outstanding from time to time under this
Note until the same is paid in full. At no time shall the Bank be under any
obligation to make any advances to the undersigned pursuant to this Note
(notwithstanding anything expressed or implied in this Note or elsewhere to the
contrary, including without limit if the Bank supplies the undersigned with a
borrowing formula) and the Bank, at any time and from time to time, without
notice, and in its sole discretion, may refuse to make advances to the
undersigned without incurring any liability due to this refusal and without
affecting the undersigned's liability under this Note for any and all amounts
advanced.
This Note and any other indebtedness and liabilities of any kind of the
undersigned (or any of them) to the Bank, and any and all modifications,
-enewals or extensions of it, whetherjointor several, contingent or absolute,
now existing or later arising, and however evidenced (collectively ,
indebtedness") are secured by and the Bank is granted a security interest in all
items deposited in any account of any of the undersigned with the Bank and by
all proceeds of these items (cash or otherwise), all account balances of any of
the undersigned from time to time with the Bank, by all property of any of the
undersigned from time to time in the possession of the Bank and by any other
collateral, rights and properties described in each and every deed of trust,
mortgage, security agreement, pledge, assignment and other security or
collateral agreement which has been, or will at any time(s) later be, executed
by any (or all) of the undersigned to or for the benefit of the Bank
(collectively "Collateral"). Notwithstanding the above, (I) to the extent that
any portion of the Indebtedness is a consumer loan, that portion shall not be
secured by any deed of trust or mortgage on or other security interest in any of
the undersigned's principal dwelling or in any of the undersigned's real
property which is not a purchase money security interest as to that portion,
unless expressly provided to the contrary in another place, or (ii) if the
undersigned (or any of them) has(have) given or give(s) Bank a deed of trust or
mortgage covering California real property, that deed of trust or mortgage shall
not secure this Note or any other indebtedness of the undersigned (or any of
them), unless expressly provided to the contrary in another place.
If the undersigned (or any of them) or any guarantor under a guaranty of all or
part of the indebtedness ("guarantor") (i) fail(s) to pay any of the
Indebtedness when due, by maturity, acceleration or otherwise, or fail(s) to pay
any Indebtedness owing on a demand basis upon demand; or (ii) fail(s) to comply
with any of the terms or provisions of any agreement between the undersigned (or
any of them) or any such guarantor and the Bank; or (III) become(s) insolvent or
the subject of a voluntary or involuntary proceeding in bankruptcy, or a
reorganization, arrangement or creditor composition proceeding, (if a business
entity) cease(s) doing business as a going concern, (if a natural person) die(s)
or become(s) incompetent, (if a partnership) dissolve(s) or any general partner
of it dies, becomes incompetent or becomes the subject of a bankruptcy
proceeding or (if a corporation or a limited liability company) is the subject
of a dissolution, merger or consolidation; or (a) if any warranty or
representation made by any of the undersigned or any guarantor in connection
with this Note or any of the Indebtedness shall be discovered to be untrue or
incomplete; or (b) if there is any termination, notice of termination, or breach
of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the Indebtedness; or (c) if there is any failure
by any of the undersigned or any guarantor to pay when due any of its
indebtedness (otherthan to the Bank) or in the observance or performance of any
term, covenant or condition in any document evidencing, securing or relating to
such indebtedness; or (d) if the Bank deems itself insecure believing that the
prospect of payment of this Note or any of the Indebtedness is impaired or shall
fear deterioration, removal or waste of any of the Collateral; or (e) if there
is filed or issued a levy orwrit of attachment or garnishment or other like
judicial process upon the undersigned (or any of them) or any guarantor or any
of the Collateral, including without limit, any accounts of the undersigned (or
any of them) or any guarantor with the Bank, then the Bank, upon the occurrence
of any of these events (each a "Default"), may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
Indebtedness to be immediately due and payable (notwithstanding any provisions
,mntained in the evidence of it to the contrary), sell or liquidate all or any
portion of the Collateral, set off against the Indebtedness any amounts ivving
by the Bank to the undersigned (or any of them), charge interest at the default
rate provided in the document evidencing the relevant Indebtedness and exercise
any one or more of the rights and remedies granted to the Bank by any agreement
with the undersigned (or any of them) or given to it under applicable law.
The undersigned acknowledge(s) that this Note matures upon issuance, and that
the Bank, at any time, without notice, and without reason, may demand that this
Note be immediately paid in full. The demand nature of this Note shall not be
deemed modified by reference to a Default in this Note or in any agreement to a
default by the undersigned or to the occurrence of an event of default
(collectively an "Event of Default"). For purposes of this Note, to the extent
there is reference to an Event of Default this reference is for the purpose of
permitting the Bank to accelerate Indebtedness not on a demand basis and to
receive interest at the default rate provided in the document evidencing the
relevant ndebtedness. It is expressly agreed that the Bank may exercise its
demand rights under this Note whether or not an Event of Default has occurred.
The Bank, with or without reason and without notice, may from time to time ma '
ke demand for partial payments underthis Note and these demands shall not
preclude the Bank from demanding at any time that this Note be immediately paid
in full. All payments under this Note shall be in immediately available United
States funds, without setoff or counterclaim.
If this Note is signed by two or more parties (whether by all as makers or by
one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Note shall bind the undersigned, and the
undersigned's respective heirs, personal representatives, successors and
assigns. The undersigned waive(s) presentment, demand, protest, notice of
dishonor, notice of demand or intent to demand, notice of acceleration or intent
to accelerate, and all other notices and agree(s) that no extension or
indulgence to the undersigned (or any of them) or release, substitution or
nonenforcement of any security, or release or substitution of any of the
undersigned, any guarantor or any other party, whether with or without notice,
shall affect the obligations of any of the undersigned. The undersigned waive(s)
all defenses or right to discharge available under Section 3-605 of the Michigan
Uniform Commercial Code and waive(s) all other suretyship defenses or right to
discharge. The undersigned agree(s) that the Bank has the right to sell, assign,
or grant participations or any interest in, any or all of the Indebtedness, and
that, in connection with this right, but without limiting its ability to make
other disclosures to the full extent allowable, the Bank may disclose all
documents and information which the Bank now or later has relating to the
undersigned or the Indebtedness. The undersigned agree(s) that the Bank may
provide information relating to this Note or relating to the undersigned to the
Bank's parent, affiliates, subsidiaries and service providers.
The undersigned agree(s) to reimburse the holder or owner of this Note upon
demand for any and all costs and expenses (including without limit, court costs,
legal expenses and reasonable attorney fees, whether inside or outside counsel
is used, whether or not suit is instituted and, if suit is instituted, whether
at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or attempting to
collect this Note or incurred in any other matter or proceeding relating to this
Note.
This Note replaces and renews the Master Revolving Note dated August 12, 1998
from Borrower to Bank in the principal amount of $3,500,000.
The undersigned acknowledge(s) and agree(s) that there are no contrary
agreements, oral or written, establishing a term of this Note and agree(s) that
the terms and conditions of this Note may not be amended, waived or modified
except in a writing signed by an officer of the Bank expressly stating that the
writing constitutes an amendment, waiver or modification of the terms of this
Note. As used in this Note, the word "undersigned" means, individually and
collectively, each maker, accommodation party, indorser and other party signing
this Note in a 'imilar capacity. If any provision of this Note is unenforceable
in whole or part for any reason, the remaining provisions shall continue to be
~ffective. THIS NOTE IS MADE IN THE STATE OF MICHIGAN AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
THE MAXIMUM INTEREST RATE SHALL NOT EXCEED 25% PER ANNUM, OR THE HIGHEST
APPLICABLE USURY CEILING, WHICHEVER IS LESS.
THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BYJURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.
AVIATION HOLDINGS INT'L INC., formerly known as By: Its: President
JET AVIATION TRADING, INC. ------------------- ------------------------
SIGNATURE OF TITLE (if applicable)
OBLIGOR NAME TYPED/PRINTED
By: Its: Chief Financial Officer
------------------- ------------------------
SIGNATURE OF TITLE (it appiicable)
By: Its:
------------------- ------------------------
SIGNATURE OF TITLE (it applicable)
By: Its:
------------------- ------------------------
SIGNATURE OF TITLE (it applicable)
00000 X.X. 00' Xxxxxx Xxxxx Xxxxxxx 00000
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XXXXXX XXXXXXX XXXX XXXXX ZIP CODE
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For Bank Use Only CCAR#
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LOAN OFFICER INITIALS LOAN GROUP NAME OBLIGOR NAME
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LOAN OFFICER ID. NO. LOAN GROUP NO. OBLIGOR NO. NOTE NO. AMOUNT
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EXHIBIT C
ComericA Security Agreement
(All Assets)
-------------------------------------------------------------------------------
As of September __, 1999, for value received, the undersigned ("Debtor") grants
to Comerica Bank ("Bank"), a Michigan banking corporation, a continuing security
interest in the Collateral (as defined below) to secure payment when due,
whether by stated maturity, demand, acceleration or otherwise, of all existing
and future indebtedness ("Indebtedness") to the Bank of Aviation Holdings
Int'l., Inc., a Florida corporation formerly known as Jet Aviation Trading, Inc.
("Borrower") and/or Debtor. Indebtedness includes without limit any and all
obligations or liabilities of the Borrower and/or Debtor to the Bank, whether
absolute or contingent, direct or indirect, voluntary or involuntary, liquidated
or unliquidated, joint or several, known or unknown; any and all obligations or
liabilities for which the Borrower and/or Debtor would otherwise be liable to
the Bank were it not for the invalidity or unenforceability of them by reason of
any bankruptcy, insolvency or other law, or for any other reason; any and all
amendments, modifications, renewals and/or extensions of any of the above; all
costs incurred by Bank in establishing, determining, continuing, or defending
the validity or priority of its security interest, or in pursuing its rights and
remedies under this Agreement or under any other agreement between Bank and
Borrower and/or Debtor or in connection with any proceeding involving Bank as a
result of any financial accommodation to Borrower and/or Debtor; and all other
costs of collecting Indebtedness, including without limit attorney fees. Debtor
agrees to pay Bank all such costs incurred by the Bank, immediately upon demand,
and until paid all costs shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Agreement to attorney fees shall be
deemed a reference to reasonable fees, costs, and expenses of both in-house and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorney fees
or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise.
1. Collateral shall mean all of the following property Debtor now or later owns
or has an interest in, wherever located:
(a) all Accounts Receivable (for purposes of this Agreement,
"Accounts Receivable" consists of all accounts, general
intangibles, chattel paper, contract rights, deposit accounts,
documents and instruments),
(b) all Inventory,
(c) all Equipment and Fixtures,
(d) specific items listed below and/or on attached Schedule A, if
any, is/are also included in Collateral:
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(e) all goods, instruments, documents, policies and certificates
of insurance, deposits, money, investment property or other
property (except real property which is not a fixture) which
are now or later in possession or control of Bank, or as to
which Bank now or later controls possession by documents or
otherwise, and
(f) all additions, attachments, accessions, parts, replacements,
substitutions, renewals, interest, dividends, distributions,
rights of any kind (including but not limited to stock splits,
stock rights, voting and preferential rights), products, and
proceeds of or pertaining to the above including, without
limit, cash or other property which were proceeds and are
recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and agrees
as follows:
2.1 Debtor shall furnish to Bank, in form and at intervals as Bank
may request, any information Bank may reasonably request and
allow Bank to examine, inspect, and copy any of Debtor's books
and records. Debtor shall, at the request of Bank, xxxx its
records and the Collateral to clearly indicate the security
interest of Bank under this Agreement.
2.2 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall
be deemed to have warranted that (a) Debtor is the lawful
owner of the Collateral and has the right and authority to
subject it to a security interest granted to Bank; (b) none of
the Collateral is subject to any security interest other than
that in favor of Bank and there are no financing statements on
file, other than in favor of Bank; and (c) Debtor acquired its
rights in the Collateral in the ordinary course of its
business.
2.3 Debtor will keep the Collateral free at all times from all
claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit to
be sold, transferred or leased, any or all of the Collateral,
except for Inventory in the ordinary course of its business
and will not return any Inventory to its supplier. Bank or its
representatives may at all reasonable times inspect the
Collateral and may enter upon all premises where the
Collateral is kept or might be located.
2.4 Debtor will do all acts and will execute or cause to be
executed all writings requested by Bank to establish, maintain
and continue a perfected and first security interest of Bank
in the Collateral. Debtor agrees that Bank has no obligation
to acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of
the Indebtedness, and Debtor is not relying upon assets in
which the Bank may have a lien or security interest for
payment of the Indebtedness.
2.5 Debtor will pay within the time that they can be paid without
interest or penalty all taxes, assessments and similar charges
which at any time are or may become a lien, charge, or
encumbrance upon any Collateral, except to the extent
contested in good faith and bonded in a manner satisfactory to
Bank. If Debtor fails to pay any of these taxes, assessments,
or other charges in the time provided above, Bank has the
option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest lawful default rate
which could be charged by Bank on any Indebtedness.
2.6 Debtor will keep the Collateral in good condition and will
protect it from loss, damage, or deterioration from any cause.
Debtor has and will maintain at all times (a) with respect to
the Collateral, insurance under an "all risk" policy against
fire and other risks customarily insured against, and (b)
public liability insurance and other insurance as may be
required by law or reasonably required by Bank, all of which
insurance shall be in amount, form and content, and written by
companies as may be satisfactory to Bank, containing a
lender's loss payable endorsement acceptable to Bank. Debtor
will deliver to Bank immediately upon demand evidence
satisfactory to Bank that the required insurance has been
procured. If Debtor fails to maintain satisfactory insurance,
Bank has the option (but not the obligation) to do so and
Debtor agrees to repay all amounts so expended by Bank
immediately upon demand, together with interest at the highest
lawful default rate which could be charged by Bank on any
Indebtedness.
2.7 On each occasion on which Debtor evidences to Bank the account
balances on and the nature and extent of the Accounts
Receivable, Debtor shall be deemed to have warranted that
except as otherwise indicated (a) each of those Accounts
Receivable is valid and enforceable without performance by
Debtor of any act; (b) each of those account balances are in
fact owing, (c) there are no setoffs, recoupments, credits,
contra accounts, counter claims or defenses against any of
those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other
instrument or by any chattel paper or document, the same have
been endorsed and/or delivered by Debtor to Bank, (e) Debtor
has not received with respect to any Account Receivable, any
notice of the death of the related account debtor, nor of the
dissolution, liquidation, termination of existence,
insolvency, business failure, appointment of a receiver for,
assignment for the benefit of creditors by, or filing of a
petition in bankruptcy by or against, the account debtor, and
(f) as to each Account Receivable, the account debtor is not
an affiliate of Debtor, the United States of America or any
department, agency or instrumentality of it, or a citizen or
resident of any jurisdiction outside of the United States.
Debtor will do all acts and will execute all writings
requested by Bank to perform, enforce performance of, and
collect all Accounts Receivable. Debtor shall neither make nor
permit any modification, compromise or substitution for any
Account Receivable without the prior written consent of Bank.
Debtor shall, at Bank's request, arrange for verification of
Accounts Receivable directly with account debtors or by other
methods acceptable to Bank.
2.8 Debtor at all times shall be in strict compliance with all
applicable laws, including without limit any laws, ordinances,
directives, orders, statutes, or regulations an object of
which is to regulate or improve health, safety, or the
environment ("Environmental Laws").
2.9 If Bank, acting in its sole discretion, redelivers Collateral
to Debtor or Debtor's designee for the purpose of (a) the
ultimate sale or exchange thereof; or (b) presentation,
collection, renewal, or registration of transfer thereof; or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with it
preliminary to sale or exchange; such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest in it or in the proceeds
or products of it unless Bank specifically so agrees in
writing. If Debtor requests any such redelivery, Debtor will
deliver with such request a duly executed financing statement
in form and substance satisfactory to Bank. Any proceeds of
Collateral coming into Debtor's possession as a result of any
such redelivery shall be held in trust for Bank and
immediately delivered to Bank for application on the
Indebtedness. Bank may (in its sofe discretion) deliver any or
all of the Collateral to Debtor, and such delivery by Bank
shall discharge Bank from all liability or responsibility for
such Collateral. Bank, at its option, may require delivery of
any Collateral to Bank at any time with such endorsements or
assignments of the Collateral as Bank may request.
2.10 At any time and without notice, Bank may (a) cause any or all
of the Collateral to be transferred to its name or to the name
of its nominees; (b) receive or collect by legal proceedings
or otherwise all dividends, interest, principal payments and
other sums and all other distributions at any time payable or
receivable on account of the Collateral, and hold the same as
Collateral, or apply the same to the Indebtedness, the manner
and distribution of the application to be in the sole
discretion of Bank; (c) enter into any extension,
subordination, reorganization, deposit, merger or
consolidation agreement or any other agreement relating to or
affecting the Collateral, and deposit or surrender control of
the Collateral, and accept other property in exchange for the
Collateral and hold or apply the property or money so received
pursuant to this Agreement.
2.11 Bank may assign any of the Indebtedness and deliver any or all
of the Collateral to its assignee, who then shall have with
respect to Collateral so delivered all the rights and powers
of Bank under this Agreement, and after that Bank shall be
fully discharged from all liability and responsibility with
respect to Collateral so delivered.
2.12 Debtor delivers this Agreement based solely on Debtor's
independent investigation of (or decision not to investigate)
the financial condition of Borrower and is not relying on any
information furnished by Bank. Debtor assumes full
responsibility for obtaining any further information
concerning the Borrower's financial condition, the status of
the Indebtedness or any other matter which the undersigned may
deem necessary or appropriate now or later. Debtor waives any
duty on the part of Bank, and agrees that Debtor is not
relying upon nor expecting Bank to disclose to Debtor any fact
now or later known by Bank, whether relating to the operations
or condition of Borrower, the existence, liabilities or
financial condition of any guarantor of the Indebtedness, the
occurrence of any default with respect to the Indebtedness, or
otherwise, notwithstanding any effect such fact may have upon
Debtor's risk or Debtor's rights against Borrower. Debtor
knowingly accepts the full range of risk encompassed in this
Agreement, which risk includes without limit the possibility
that Borrower may incur Indebtedness to Bank after the
financial condition of Borrower, or Borrower's ability to pay
debts as they mature, has deteriorated.
2.13 Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, affiliates, officers, and
directors from and against any and all claims, damages, fines,
expenses, liabilities or causes of action of whatever kind,
including without limit consultant fees, legal expenses, and
attorney fees, suffered by any of them as a direct or indirect
result of any actual or asserted violation of any law,
including, without limit, Environmental Laws, or of any
remediation relating to any property required by any law,
including without limit Environmental Laws.
3. Collection of Proceeds.
3.1 Debtor agrees to collect and enforce payment of all Collateral
until Bank shall direct Debtor to the contrary. Immediately
upon notice to Debtor by Bank and at all times after that,
Debtor agrees to fully and promptly cooperate and assist Bank
in the collection and enforcement of all Collateral and to
hold in trust for Bank all payments received in connection
with Collateral and from the sale, lease or other disposition
of any Collateral, all rights by way of suretyship or guaranty
and all rights in the nature of a lien or security interest
which Debtor now or later has regarding Collateral.
Immediately upon and after such notice, Debtor agrees to (a)
endorse to Bank and immediately deliver to Bank all payments
received on Collateral or from the sale, lease or other
disposition of any Collateral or arising from any other rights
or interests of Debtor in the Collateral, in the form received
by Debtor without commingling with any other funds, and (b)
immediately deliver to Bank all property in Debtor's
possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests in the Collateral.
Debtor irrevocably authorizes Bank or any Bank employee or
agent to endorse the name of Debtor upon any checks or other
items which are received in payment for any Collateral, and to
do any and all things necessary in order to reduce these items
to money. Bank shall have no duty as to the collection or
protection of Collateral or the proceeds of it, nor as to the
preservation of any related rights, beyond the use of
reasonable care in the custody and preservation of Collateral
in the possession of Bank. Debtor agrees to take all steps
necessary to preserve rights against prior parties with
respect to the Collateral. Nothing in this Section 3.1 shall
be deemed a consent by Bank to any sale, lease or other
disposition of any Collateral.
3.2 Debtor agrees that immediately upon Bank's request (whether or
not any Event of Default exists) the Indebtedness shall be on
a "remittance basis" as follows: Debtor shall at its sole
expense establish and maintain (and Bank, at Bank's option may
establish and maintain at Debtor's expense): (a) an United
States Post Office lock box (the "Lock Box"), to which Bank
shall have exclusive access and control. Debtor expressly
authorizes Bank, from time to time, to remove contents from
the Lock Box, for disposition in accordance with this
Agreement. Debtor agrees to notify all account debtors and
other parties obligated to Debtor that all payments made to
Debtor (other than payments by electronic funds transfer)
shall be remitted, for the credit of Debtor, to the Lock Box,
and Debtor shall include a like statement on all invoices; and
(b) a non-interest bearing deposit account with Bank which
shall be titled as designated by Bank (the "Cash Collateral
Account") to which Bank shall have exclusive access and
control. Debtor agrees to notify all account debtors and other
parties obligated to Debtor that all payments made to Debtor
by electronic funds transfer shall be remitted to the Cash
Collateral Account, and Debtor, at Bank's request, shall
include a like statement on all invoices. Debtor shall execute
all documents and authorizations as required by Bank to
establish and maintain the Lock Box and the Cash Collateral
Account.
3.3 All items or amounts which are remitted to the Lock Box, to
the Cash Collateral Account, or otherwise delivered by or for
the benefit of Debtor to Bank on account of partial or full
payment of, or with respect to, any Collateral shall, at
Bank's option, M be applied to the payment of the
Indebtedness, whether then due or not, in such order or at
such time of application as Bank may determine in its sole
discretion, or, (ii) be deposited to the Cash Collateral
Account. Debtor agrees that Bank shall not be liable for any
loss or damage which Debtor may suffer as a result of Bank's
processing of items or its exercise of any other rights or
remedies under this Agreement, including without limitation
indirect, special or consequential damages, loss of revenues
or profits, or any claim, demand or action by any third party
arising out of or in connection with the processing of items
or the exercise of any other rights or remedies under this
Agreement. Debtor agrees to indemnify and hold Bank harmless
from and against all such third party claims, demands or
actions, and all related expenses or liabilities, including,
without limitation, attorney fees.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events xxxxx an
"Event of Default"), Debtor shall be in default under this
Agreement:
(a) Any failure to pay the Indebtedness or any other indebtedness
when due, or such portion of it as may be due, by acceleration
or otherwise; or
(b) Any failure or neglect to comply with, or breach of or default
under, any term of this Agreement, or any other agreement or
commitment between Borrower, Debtor, or any guarantor of any
of the Indebtedness ("Guarantor") and Bank; or
(c) Any warranty, representation, financial statement, or other
information made, given or furnished to Bank by or on behalf
of Borrower, Debtor, or any Guarantor shall be, or shall prove
to have been, false or materially misleading when made, given,
or furnished; or
(d) Any loss, theft, substantial damage or destruction to or of
any Collateral, or the issuance or filing of any attachment,
levy, garnishment or the commencement of any proceeding in
connection with any Collateral or of any other judicial
process of, upon or in respect of Borrower, Debtor, any
Guarantor, or any Collateral; or
(e) Sale or other disposition by Borrower, Debtor, or any
Guarantor of any substantial portion of its assets or property
or voluntary suspension of the transaction of business by
Borrower, Debtor, or any Guarantor, or death, dissolution,
termination of existence, merger, consolidation, insolvency,
business failure, or assignment for the benefit of creditors
of or by Borrower, Debtor, or any Guarantor; or commencement
of any proceedings under any state or federal bankruptcy or
insolvency laws or laws for the relief of debtors by or
against Borrower, Debtor, or any Guarantor; or the appointment
of a receiver, trustee, court appointee, sequestrator or
otherwise, for all or any part of the property of Borrower,
Debtor, or any Guarantor; or
(f) Bank deems the margin of Collateral insufficient or itself
insecure, in good faith believing that the prospect of payment
of the Indebtedness or performance of this Agreement is
impaired or shall fear deterioration, removal, or waste of
Collateral.
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or
all of the Indebtedness to be immediately due and payable, and
shall have and may exercise any one or more of the following
rights and remedies:
(a) Exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties under
the provisions of the Uniform Commercial Code and other
applicable law;
(b) Institute legal proceedings to foreclose upon the lien and
security interest granted by this Agreement, to recover
judgment for all amounts then due and owing as Indebtedness,
and to collect the same out of any Collateral or the proceeds
of any sale of it;
(c) Institute legal proceedings for the sale, under the judgment
or decree of any court of competent jurisdiction, of any or
all Collateral; and/or
(d) Personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where Collateral may then be
located, and take possession of all or any of it and/or render
it unusable; and without being responsible for loss or damage
to such Collateral, hold, operate, sell, lease, or dispose of
all or any Collateral at one or more public or private sales,
leasings or other disposition, at places and times and on
terms and conditions as Bank may deem fit, without any
previous demand or advertisement; and except as provided in
this Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or demand,
any right or equity of redemption, and any obligation of a
prospective purchaser or lessee to inquire as to the power and
authority of Bank to sell, lease, or otherwise dispose of the
Collateral or as to the application by Bank of the proceeds of
sale or otherwise, which would otherwise be required by, or
available to Debtor under, applicable law are expressly waived
by Debtor to the fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under the
power of sale, by virtue of judicial proceedings or otherwise,
it shall not be necessary for Bank or a public officer under
order of a court to have present physical or constructive
possession of Collateral to be sold. The recitals contained in
any conveyances and receipts made and given by Bank or the
public officer to any purchaser at any sale made pursuant to
this Agreement shall, to the extent permitted by applicable
law, conclusively establish the truth and accuracy of the
matters stated (including, without limit, as to the amounts of
the principal of and interest on the Indebtedness, the accrual
and nonpayment of it and advertisement and conduct of the
sale); and all prerequisites to the sale shall be presumed to
have been satisfied and performed. Upon any sale of any
Collateral, the receipt of the officer making the sale under
judicial proceedings or of Bank shall be sufficient discharge
to the purchaser for the purchase money, and the purchaser
shall not be obligated to see to the application of the money.
Any sale of any Collateral under this Agreement shall be a
perpetual bar against Debtor with respect to that Collateral.
4.3 Debtor shall at the request of Bank, notify the account
debtors or obligors of Bank's security interest in the
Collateral and direct payment of it to Bank. Bank may, itself,
upon the occurrence of any Event of Default so notify and
direct any account debtor or obligor.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first
upon all expenses authorized by the Uniform Commercial Code
and all reasonable attorney fees and legal expenses incurred
by Bank; the balance of the proceeds of the sale or other
disposition shall be applied in the payment of the
Indebtedness, first to interest, then to principal, then to
remaining Indebtedness and the surplus, if any, shall be paid
over to Debtor or to such other person(s) as may be entitled
to it under applicable law. Debtor shall remain liable for any
deficiency, which it shall pay to Bank immediately upon
demand.
4.5 Nothing in this Agreement is intended, nor shall it be
construed, to preclude Bank from pursuing any other remedy
provided by law for the collection of the Indebtedness or for
the recovery of any other sum to which Bank may be entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Borrower, Debtor, or any Guarantor and Bank.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized
officer of Bank. No waiver of any default or forbearance on
the part of Bank in enforcing any of its rights under this
Agreement shall operate as a waiver of any other default or of
the same default on a future occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any agent of Bank (which
appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) in the
name, place and stead of, and at the expense of, Debtor:
(a) to demand, receive, xxx for, and give receipts or acquittances
for any moneys due or to become due on any Collateral and to
endorse any item representing any payment on or proceeds of
the Collateral;
(b) to execute and file in the name of and on behalf of Debtor all
financing statements or other filings deemed necessary or
desirable by Bank to evidence, perfect, or continue the
security interests granted in this Agreement; and
(c) to do and perform any act on behalf of Debtor permitted or
required under this Agreement.
4.8 Upon the occurrence of an Event of Default, Debtor also
agrees, upon request of Bank, to assemble the Collateral and
make it available to Bank at any place designated by Bank
which is reasonably convenient to Bank and Debtor.
5. Miscellaneous.
5.1 Until Bank is advised in writing by Debtor to the contrary,
all notices, requests and demands required under this
Agreement or by law shall be given to, or made upon, Debtor at
the first address indicated in Section 5.15 below.
5.2 Debtor will give Bank not less than 90 days prior written
notice of all contemplated changes in Debtor's name, chief
executive office location, and/or location of any Collateral,
but the giving of this notice shall not cure any Event of
Default caused by this change.
5.3 Bank assumes no duty of performance or other responsibility
under any contracts contained within the Collateral.
5.4 Bank has the right to sell, assign, transfer, negotiate or
grant participations or any interest in, any or all of the
Indebtedness and any related obligations, including without
limit this Agreement. In connection with the above, but
without limiting its ability to make other disclosures to the
full extent allowable, Bank may disclose all documents and
information which Bank now or later has relating to Debtor,
the Indebtedness or this Agreement, however obtained. Debtor
further agrees that Bank may provide information relating to
this Agreement or relating to Debtor to the Bank's parent,
affiliates, subsidiaries, and service providers.
5.5 In addition to Bank's other rights, any indebtedness owing
from Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone.
5.6 Debtor waives any right to require the Bank to: (a) proceed
against any person or property; (b) give notice of the terms,
time and place of any public or private sale of personal
property security held from Borrower or any other person, or
otherwise comply with the provisions of Section 9-504 of the
Uniform Commercial Code; or (c) pursue any other remedy in the
Bank's power. Debtor waives notice of acceptance of this
Agreement and presentment, demand, protest, notice of protest,
dishonor, notice of dishonor, notice of default, notice of
intent to accelerate or demand payment of any Indebtedness,
any and all other notices to which the undersigned might
otherwise be entitled, and diligence in collecting any
Indebtedness, and agree(s) that the Bank may, once or any
number of times, modify the terms of any Indebtedness,
compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all Indebtedness, or permit Borrower
to incur additional Indebtedness, all without notice to Debtor
and without affecting in any manner the unconditional
obligation of Debtor under this Agreement. Debtor
unconditionally and irrevocably waives each and every defense
and setoff of any nature which, under principles of guaranty
or otherwise, would operate to impair or diminish in any way
the obligation of Debtor under this Agreement, and
acknowledges that such waiver is by this reference
incorporated into each security agreement, collateral
assignment, pledge and/or other document from Debtor now or
later securing the Indebtedness, and acknowledges that as of
the date of this Agreement no such defense or setoff exists.
5.7 Debtor waives any and all rights (whether by subrogation,
indemnity, reimbursement, or otherwise) to recover from
Borrower any amounts paid or the value of any Collateral given
by Debtor pursuant to this Agreement.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to Debtor
at least five days before the date of the act shall be
reasonable notice of the act and, specifically, reasonable
notification of the time and place of any public sale or of
the time after which any private sale, lease, or other
disposition is to be made, unless a shorter notice period is
reasonable under the circumstances. A notice shall be deemed
to be given under this Agreement when delivered to Debtor or
when placed in an envelope addressed to Debtor and deposited,
with postage prepaid, in a post office or official depository
under the exclusive care and custody of the United States
Postal Service or delivered to an overnight courier. The
mailing shall be by overnight courier, certified, or first
class mail.
5.9 Notwithstanding any prior revocation, termination, surrender,
or discharge of this Agreement in whole or in part, the
effectiveness of this Agreement shall automatically continue
or be reinstated in the event that any payment received or
dredit given by Bank in respect of the Indebtedness is
returned, disgorged, or rescinded under any applicable law,
including, without limitation, bankruptcy or insolvency laws,
in which case this Agreement, shall be enforceable against
Debtor as if the returned, disgorged, or rescinded payment or
credit had not been received or given by Bank, and whether or
not Bank relied upon this payment or credit or changed its
position as a consequence of it. In the event of continuation
or reinstatement of this Agreement, Debtor agrees upon demand
by Bank to execute and deliver to Bank those documents which
Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or
reinstatement, although the failure of Debtor to do so shall
not affect in any way the reinstatement or continuation.
5.10 This Agreement and all the rights and remedies of Bank under
this Agreement shall inure to the benefit of Bank's successors
and assigns and to any other holder who derives from Bank
title to or an interest in the Indebtedness or any portion of
it, and shall bind Debtor and the heirs, legal
representatives, successors, and assigns of Debtor. Nothing in
this Section 5.10 is deemed a consent by Bank to any
assignment by Debtor.
5.11 If there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.12 Except as otherwise provided in this Agreement, all terms in
this Agreement have the meanings assigned to them in Article 9
(or, absent definition in Article 9 in any other Article) of
the Uniform Commercial Code. "Uniform Commercial Code" means
Act No. 174 of & Michigan Public Acts of 1962, as amended.
5.13 No single or partial exercise, or delay in the exercise, of
any right or power under this Agreement, shall preclude other
or further exercise of the rights and powers under this
Agreement. The unenforceability of any provision of this
Agreement shall not affect the enforceability of the remainder
of this Agreement. This Agreement constitutes the entire
agreement of Debtor and Bank with respect to the subject
matter of this Agreement. No amendment or modification of this
Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of
Bank. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Michigan,
without regard to conflict of laws principles.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate
payment of any or all of that Indebtedness at any time(s),
whether or not an Event of Default has occurred.
5.15 Debtor's chief executive office is located and shall be
maintained at ____________________
STREET ADDRESS
----------------------------------------------------------------------------------------------
CITY STATE ZIP CODE COUNTY
If Collateral is located at other than the chief executive office, such
Collateral is located and shall be maintained at
----------------------------------------------------------------------------------------------
STREET ADDRESS
----------------------------------------------------------------------------------------------
CITY STATE ZIP CODE COUNTY
Collateral shall be maintained only at the locations identified in this
Section 5.15.
5.16 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.17 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable
provisions of the Uniform Commercial Code, but the obligations
contained in Section 2.13 of this Agreement shall survive
termination.
6. DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT
WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
AGREEMENT OR THE INDEBTEDNESS.
Special Provisions Applicable to this Agreement. (*None, if left blank)
Debtor:
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DEBTOR NAME TYPED/PRINTED
By:
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SIGNATURE OF
Its:
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TITLE (if applicable)
BY:
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SIGNATURE OF
Its:
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TITLE (If applicable)
