AIRCRAFT SECURITY AGREEMENT
EXHIBIT 10.4
This
AIRCRAFT SECURITY AGREEMENT ("Agreement"), dated as of this _____ day
of __________,
2008, between Xxxx X. Xxxxxxxxxx, individually, and landpixx, LLC, a
limited
liability company organized and existing under the laws of the State of Colorado
("Debtor"), and Bank of the West ("Lender"). In consideration of the mutual
agreements contained herein, the parties hereto agree as
follows:
SECTION
1. DEFINITIONS
1.1 Defined Terms. As
used in this Agreement the following terms shall have the following meanings,
unless the context otherwise requires (such terms to be equally applicable to
both singular and plural forms of the terms defined):
"Agreement", "hereof,
"hereto" "hereunder". and words of similar import shall mean this Aircraft
Security Agreement, as the same may from time to time be amended, modified or
supplemented.
"Aircraft" shall mean (i) the Airframe,
(ii) the Engines, (iii) to the extent applicable, the Records and (iv) all
avionics and all other accessories, and all additions, accessions, alterations,
modifications, Parts, repairs and attachments now or hereafter affixed thereto
or used in connection therewith, and all replacements and substitutions for any
of the foregoing.
"Airframe" shall mean (i) the Aircraft
described on Exhibit
B hereto, and, unless the context requires otherwise, shall not include
the Engines from time to time installed thereon and (ii) any and all Parts from
time to time incorporated in, installed on or attached to such Aircraft and any
and all Parts removed therefrom so long as such Parts remain subject to the
security interest granted to Lender in accordance with the applicable terms of
this Agreement after removal from the Aircraft.
"Business Day" shall mean a day other
than a Saturday, Sunday or legal holiday under the laws of the State of
California.
"Closing Date" shall mean the date on
which the Loan is made pursuant hereto. "Collateral" shall mean the Aircraft and
any Proceeds thereof.
"Commitment" shall mean the obligation
of Lender to make the Loan in the aggregate amount specified in Section 2.1 of
this Agreement.
"Cost" shall mean, with respect to the
Aircraft (and all Parts thereof), the respective manufacturer's or supplier's
invoiced purchase price therefor (after giving effect to any discount or other
reduction) payable by Debtor, which amount shall be set forth in the Schedule
together with all costs of conversion of the Aircraft to a cargo carrying
configuration and Engine overhaul reasonably satisfactory to
Lender.
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"Debtor" as defined in the
introductory paragraph to this Agreement.
"Engine" shall mean (i) each of the
engines and propellers described and listed on Exhibit B hereto and
originally installed on the Airframe whether or not thereafter installed on such
Airframe or any other airframe from time to time, (ii) any engine or propeller
which may from time to time be substituted for an Engine; and (iii) in each case
set forth in clauses (i) and (ii) hereof, with any and all Parts incorporated in
or installed on or attached to such Engine, propeller or any and all Parts
removed therefrom so long as such Parts remain subject to the security interest
granted to Lender in accordance with the applicable terms of this Agreement
after removal from the Aircraft and/or Engine.
"Event of Default" as defined in
Section 7 of this Agreement.
"Event of Loss" with respect to the
Aircraft, the Airframe or any Engine shall mean any of the following events with
respect to such property (i) loss of such property or the use thereof due to
theft, disappearance, destruction, damage beyond repair or rendition of such
property permanently unfit for normal use for any reason whatsoever, (ii) any
damage to such property which results in an insurance settlement with respect to
such properly on the basis of a total loss or constructive total loss; (iii) the
condemnation, confiscation or seizure of, or requisition of title to or use of,
such property by the act of any government (foreign or domestic) or of any state
or local authority or any instrumentality or agency of the foregoing ("Requisition of Use") (iv) as a
result of any rule, regulation, order or other action by any government (foreign
or domestic) or governmental body (including, without limitation, the FAA or any
similar foreign governmental body) having jurisdiction, the use of such property
shall have been prohibited, or such property shall have been declared unfit for
use, for a period of six (6) consecutive months, unless Debtor, prior to the
expiration of such six-month period, shall have undertaken and, in the opinion
of the Lender, shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such property by Debtor or,
in any event, if use shall have been prohibited, or such property shall have
been declared unfit for use, for a period of twelve (12) consecutive months, (v)
with respect to an Engine, the removal (and non-replacement) thereof from the
Airframe for a period of six (6) months or longer, whether or not such Engine is
operational (provided that any replacement Engine shall be of comparable quality
and value to the replaced Engine and shall be subject to a first lien and
security interest in favor of the Lender pursuant to documentation satisfactory
to the Lender, at the sole cost and expense of the Debtor); or (vi) such
property shall be returned to the manufacturer, other than for modification in
the event of patent infringement or for repair or replacement (any such return
being herein referred to as a "Return to
Manufacturer"). The date of such Event of Loss shall be the date of such
theft, disappearance, destruction, damage, Requisition of Use, prohibition,
unfitness for use for the stated period, removal for the stated period or Return
to Manufacturer. An Event of Loss with respect to the Aircraft shall be deemed
to have occurred if an Event of Loss occurs with respect to the Airframe. An
Event of Loss with respect to any Engine shall not, without loss of the
Airframe, be deemed an Event of Loss with respect to the
Aircraft.
"FAA" shall mean the Federal
Aviation Administration.
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"Installment Payment
Date" shall mean each date set forth in the Note on which an installment
of principal and/or interest is due and payable under the
Note.
"Interest Rate" shall have the meaning
set forth therefore in the Note.
"Late Charge Rate"
shall mean a rate equal to the lower of five percent (5%) per month or the
highest rate permitted by applicable law.
"Lender" as defined in introductory
paragraph to this Agreement.
"Liens" shall mean liens, mortgages,
security interests, pledges, title retentions, charges, financing statements or
other encumbrances of any kind whatsoever.
"Loan" shall mean the loan made
by Lender pursuant to this Agreement.
"Note" shall mean the promissory note
of Debtor evidencing the Loan, as described in Section 2.2 of this Agreement in
substantially the form attached hereto as Exhibit
A.
"Obligations" shall mean (i) the
aggregate unpaid principal amount of, and accrued interest on, the Note; (ii)
all other obligations, indebtedness, duties and liabilities of Debtor, now
existing or hereafter incurred under, arising out of, or in connection with this
Agreement or the Note; and (iii) any and all other obligations, indebtedness,
duties and liabilities of any kind whatsoever of Debtor to Lender, whether now
existing or hereafter incurred or from time to time reduced and thereafter
increased.
"Parts" shall mean all appliances,
avionics, parts, instruments, appurtenances, accessories, furnishings and other
equipment of whatever nature (other than complete Engines), which may from time
to time be incorporated or installed in or attached to the Airframe or any
Engine or so long as such Parts remain subject to the security interest granted
to Lender in accordance with the applicable terms of this Agreement after
removal from the Aircraft and/or Engine.
"Person" shall mean any individual,
corporation, partnership, limited liability company, joint venture, joint stock
company, trust, trustee(s) of a trust, unincorporated organization, or
government or governmental authority, agency or political subdivision
thereof.
"Prepaid Principal
Amount" shall mean the unpaid principal amount of the Note together with
any fees, charges and/or expenses due in connection therewith other than
interest.
"Proceeds" shall have the meaning
assigned to it in the UCC, and in any event, shall include, but not be limited
to, any and all rents, payments and other amounts of any kind whatsoever due or
payable under or in connection with the Aircraft, including, without limitation,
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to Debtor from time to time with respect to the Aircraft, (b) any and
all payments (in any form whatsoever) made or due and payable to Debtor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of the Aircraft by any governmental body, authority,
bureau or agency or any other person (whether or not acting under color
of
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governmental
authority), and (c) any and all other rents or profits or other amounts from
time to time paid or payable under or in connection with the
Aircraft.
"Records" means any and all logs,
manuals, certificates, date and inspection, modification, maintenance,
engineering, technical and overhaul records (including all computerized data,
records and materials of any kind whatsoever) with respect to the Aircraft,
including, without limitation, all records required to be maintained by the FAA
or any other governmental agency or authority having jurisdiction with respect
to the Aircraft or any manufacturer or supplier of the Aircraft (or any part
thereof).
"Schedule" shall mean the Schedule to
be executed and delivered by Debtor in substantially the form of Exhibit B
attached hereto.
"UCC" shall mean the Uniform Commercial
Code as from time to time in effect in any applicable
jurisdiction.
1.2 Accounting Terms. All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles.
SECTION
2. AMOUNT AND TERMS OF
LOAN.
2.1 Commitment. Subject
to the terms and conditions of this Agreement, Lender agrees to
make a Loan to Debtor in a principal amount of
$1,352,612.00. The obligation of Lender to
make the Loan hereunder shall terminate on May 28, 2008. Debtor shall give
Lender at least
three Business Days' prior written notice of the date and amount of the proposed
Loan.
2.2 The Note. The Loan shall
be evidenced by a promissory note of Debtor substantially
in the form of Exhibit A hereto, with appropriate insertions therein as to
amounts and
dates. The Note shall (i) be dated the date on which the Loan evidenced thereby
is made; (ii) be for the term specified in the Note; (iii) be stated to
mature in sixty (60) consecutive monthly installments,
which installments will be payable on the dates and in the amounts set forth in
such Note; and
(iv) bear interest from the date thereof on the unpaid principal amount thereof
at the Interest
Rate until such amount shall become due and payable (whether at the stated
maturity thereof,
by acceleration or otherwise). In addition, Debtor shall pay interest on such
delinquent payment
from ten (10) days after the due date until paid in full at the Late Charge
Rate.
2.3 Prepayment.
(a) In
the event that the Aircraft shall suffer an Event of Loss, within thirty
(30) days
after the occurrence of such Event of Loss, the Debtor shall prepay the Note in
full. On the date
of prepayment, the Debtor shall pay to Lender a yield maintenance fee in an
amount computed
and/or calculated as follows:
(b) Upon
(i) payment in full of the foregoing prepayment amounts, as applicable,
or (ii) the payment of the Note in full in accordance with its terms and (iii)
so long as no Event
of Default has occurred and is continuing and if there are no other sums
outstanding
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pursuant
to this Agreement and (iv) Debtor has fully performed each and all of its
obligations and duties hereunder, the Aircraft shall be released from the
security interest of this Agreement.
(c) Except
as provided in this paragraph 2,3 or in the Note, the Note may not be prepaid in
whole or in part.
2.4 Use of Proceeds.
Debtor shall use the proceeds of the Loan to finance the acquisition or
continued possession of the Aircraft, conversion of the Aircraft to cargo
configuration and Engine overhaul.
SECTIONS.
CONDITIONS OF
BORROWING.
Lender
shall not be required to make the Loan unless on the Closing Date of such
Loan:
(a) Certificates of
Incumbency. Lender shall have received certificates
of incumbency
of Debtor signed by the respective Secretary or Assistant Secretary of the
Debtor, which
certificates shall certify the names of the officers of the Debtor, as the case
may be, authorized
to execute any documents hereunder or under any other related documents on
behalf of the
Debtor, as the case may be, together with specimen signatures of such officers
and Lender may
conclusively rely on such certificates until receipt of a further certificate of
the Secretary or Assistant
Secretary of Debtor as the case may be, canceling or amending the prior
certificate and submitting
the signatures of the officers named in such further
certificate.
(b) Resolutions. Lender
shall have received certified copies of all corporate proceedings
of Debtor evidencing that all action required to be taken in connection with the
authorization,
execution, delivery and performance of this Agreement and the Note and the
transactions
contemplated hereby, in the case of Debtor, has been taken.
(c) Opinion of Counsel.
Debtor shall engage special FAA counsel Xxxxxxx X. Boston
& Associates (or a similarly qualified firm acceptable to the Lender), who
shall provide to Lender
and Debtor a written opinion, in form and substance satisfactory to Lender and
its legal
counsel, stating that on the Closing Date, Lender shall have a legal, valid and
continuing first
priority mortgage on and security interest in the Aircraft, free and clear of
all other Liens of any
nature, and that all filings, recordings and other actions necessary or
desirable in order to establish,
protect and perfect such mortgage and security interest in favor of Lender as a
perfected
first priority mortgage on and security interest in the Aircraft, including,
without limitation
the filing of this Agreement with the FAA shall have been duly
effected.
(d) Schedule. Debtor
shall have executed and delivered to Lender a Schedule covering
the Aircraft.
(e) Note. The
Note evidencing the Loan shall have been duly executed and delivered
to Lender.
(f) Equipment
Delivery. The Aircraft shall have been duly delivered to and
accepted
by Debtor.
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(g) Invoice and Title. Lender
shall have received a copy of the invoice or invoices covering the Aircraft,
including its engines, and a copy of the FAA and Warranty Bills of Sale
conveying the Aircraft and avionics to Debtor.
(h) FAA Registration. Lender
shall have received evidence satisfactory to it and to special FAA counsel, that
the Aircraft is presently properly registered, and the Debtor has submitted an
Application for Registration in Debtor's name to the FAA, which application is
satisfactory to Lender and to its special FAA counsel.
(i) Payment of Aircraft
Cost. Lender shall be satisfied that the Cost of the Aircraft has been,
or concurrently with the making of the Loan will be, fully
paid.
(j) Airworthiness
Certificate. Lender shall have received a copy of the airworthiness
certificate for the Aircraft.
(k) Insurance. Lender
shall have received evidence satisfactory to it that the Aircraft is insured in
accordance with the provisions of this Agreement.
(1) Certification. Lender
shall have received evidence satisfactory to it that Debtor is duly certified to
operate as a Part 135 carrier.
(m) Security Interest.
All filings, recordings and other actions that are necessary or desirable in
order to establish, protect, preserve and perfect Lender's mortgage on and
security interest in the Collateral as a valid first and only perfected mortgage
and security interest shall have been duly effected, including, without
limitation, the filing of this Agreement with the FAA, and the filing of all
necessary and appropriate UCC financing statements, all in form and substance
satisfactory to Lender, and all fees, taxes and other charges relating to such
filings and recordings, shall have been paid by Debtor.
(n) Representations, (i)
The representations and warranties contained in this Agreement shall be true and
correct in all respects on and as of the Closing Date with the same effect as if
made on and as of such date; (ii) no Event of Default (which has not been cured
within any applicable cure period), shall be in existence on the date of the
making of the Loan or shall occur as a result of the Loan; and (iii) the
acceptance by Debtor of the Loan shall constitute a representation by Debtor
that the statements contained in clauses (i) and (ii) above are true and correct
as of the Closing Date.
(o) No Material Adverse Change. In the sole
judgment of Lender, no material adverse change shall have occurred in the
business, operations, or financial condition of Debtor from the date of the most
recent financial information furnished to Lender.
(p) Legal Matters. Al
legal matters with respect to the transactions contemplated by this Agreement
shall be satisfactory to counsel for Lender and to special FAA
counsel.
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(q) Other Documents.
Lender shall have received copies of such other documents, agreements, or
certificates related to the transaction contemplated hereby, as it may
reasonably request.
SECTION
4. REPRESENTATIONS AND
WARRANTIES.
In order
to induce Lender to enter into this Agreement and to make the Loan herein
provided for, Debtor represents and warrants to Lender that:
4.1 Organization. Debtor
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, has the necessary authority
and power to own and
operate the Aircraft and its other assets and to transact the business in which
it is engaged,
and is duly qualified to do business in each jurisdiction in which the conduct
of its business
or the ownership or operation of its assets requires such qualification except
for those jurisdictions
where the lack of such qualification would not have a material adverse effect
(i) upon the
use, ownership or operation of the Aircraft or (ii) upon the business, financial
condition or
operations of the Debtor.
4.2 Citizenship. Debtor
is (or shall be, as the case may be) a citizen of the United States
within the meaning of Subtitle VII of Title 49 of the United States
Code.
4.3 Power and Authority.
Debtor has full power, authority and legal right to execute and
deliver this Agreement and all other instruments to be executed and delivered
hereunder and the Note,
to perform its obligations hereunder and thereunder, to borrow hereunder and to
grant the
assignment and/or security interest created by this
Agreement.
4.4 Consents and Permits.
No consent of any other party (including any stockholders, trustees
or holders of indebtedness), and no consent, license, approval or authorization
of, exemption
by, or registration or declaration with, any governmental body, authority,
bureau or agency is
required as of the Closing Date in connection with the execution, delivery or
performance
by Debtor of this Agreement or the Note, or the validity or enforceability of
this Agreement
or the Note, except recordation of this Agreement with the FAA and the filing of
UCC
financing statements in the appropriate recording offices, which shall have been
duly effected as of
the Closing Date. Notwithstanding anything herein to the contrary, the
representations
and warranties set forth in this paragraph with respect to any matter which may
be
affected by California law shall be based upon and made to the best of the
Debtor's knowledge,
information and belief.
4.5 No Legal Bar. The
execution, delivery and performance by Debtor of each of this Agreement
and all other instruments to be executed and delivered hereunder and the Note
does not and
shall not violate any provision of any applicable law or regulation or of any
judgment, award,
order, writ or decree of any court or governmental instrumentality, will not
violate any provision
of the charter or by-laws of Debtor and will not violate any provision of or
cause a default
under any mortgage, indenture, contract, agreement or other undertaking to which
Debtor is a
party or which purports to be binding upon Debtor or upon any of its assets, and
will not result in
the creation or imposition of any Lien on any of the assets of Debtor other than
the
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security
interests intended to be created hereby. Notwithstanding anything herein to the
contrary, the representations and warranties set forth in this paragraph with
respect to any matter which may be affected by California law shall be based
upon and made to the best of the Debtor's knowledge, information and
belief.
4.6 Enforceabiliry. This
Agreement has been duly authorized, executed and delivered by Debtor
and constitutes a legal, valid and binding obligation of Debtor enforceable
in accordance
with its terms. When executed and delivered, the Note
shall have been duly authorized,
executed and delivered by Debtor and shall constitute a legal, valid and
binding obligation
of Debtor enforceable in accordance with its terms.
4.7 No Litigation. There
is no action, suit or proceeding (whether or not purportedly on behalf
of Debtor) pending, or, to the best of the Debtor's knowledge, investigation
pending or threatened
against or affecting Debtor or any of its assets (a) which involves the Aircraft
or any of the
transactions contemplated by this Agreement; or (b) which, if adversely
determined, could have a
material adverse effect upon the transactions contemplated by this Agreement or
a material
adverse effect on the business, operations or financial condition of
Debtor.
4.8 Title to Equipment.
On the Closing Date, Debtor shall have good and marketable title to
the Aircraft subject to no Liens except the security interest created hereby in
favor of Lender.
4.9 Lender's Security
Interest. On the Closing Date, Lender shall have a legal, valid
and
continuing first and only priority security interest in the Collateral, free and
clear of all other Liens,
and all filings, recordings or other actions necessary or desirable in order to
establish, protect
and perfect such security interest in favor of Lender as a perfected first and
only priority security
interest in the Collateral will have been duly effected, and all taxes, fees and
other charges
in connection therewith shall have been duly paid.
4.10 No Defaults. Debtor
is not in default, and no event or condition exists which after the
giving of notice or lapse of time or both would constitute an event of default,
under any mortgage,
indenture, contract, agreement, judgment or other undertaking to which Debtor is
a party or
which purports to be binding upon Debtor or upon any of its assets, the
principal amount or
obligation of which exceeds $50,000.00, except for any such default, event or
condition which,
individually or in the aggregate, would not affect Debtor's ability to perform
its obligations
under the Agreement or any such mortgage, indenture, contract, agreement,
judgment or other
undertaking.
4.11 Financial
Condition. All financial statements of Debtor, copies of
which have been
heretofore delivered to Lender, are complete and correct, have been prepared in
accordance with
generally accepted accounting principles consistently applied, and present
fairly the financial
position of Debtor, as the case may be, as at the date thereof and the results
of their operations
for the period ended on said date and there has been no material adverse change
in the financial
condition, business or operations of Debtor since said date.
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4.12 Taxes. Debtor
has filed all Federal, state and local income tax returns that are required
to be filed, and has paid all taxes as shown on said returns and all assessments
received by it to
the extent that such taxes and assessments have become due, and Debtor does not
have any
knowledge of any actual or proposed deficiency or additional assessment in
connection therewith.
The charges, accruals and reserves on the books of Debtor in respect of Federal,
state and local
taxes for all open years, and for the current fiscal year, make adequate
provision for all unpaid
tax liabilities for such periods.
4.13 Name
Change. Within the previous six (6) years Debtor has not
changed its name,
done business under any other names, changed its chief place of business from
its present location
or merged or been the surviving entity of any merger.
4.14 Engines. Each of the
Engines is greater than 550 rated take-off horsepower or its equivalent
according to FAA records.
4.15 Security Interest.
The Debtor has the right to grant a security interest in, and has validly
granted a security interest in and to, the Collateral to the
Lender.
SECTION
5. COVENANTS.
Debtor
covenants and agrees that from and after the date hereof and so long as the
Commitment or the Note is outstanding:
5.1 Notices. Debtor will
Promptly give written notice to Lender of (i) the occurrence of any
Event of Default or any event which with notice, with lapse of time and/or with
any further
condition, event or act would constitute an Event of Default; (ii) the
occurrence of any Event of
Loss; (iii) the commencement or threat of any material litigation or proceedings
affecting
Debtor or any material litigation or proceedings affecting the Aircraft; and
(iv) any material
dispute between Debtor and any governmental regulatory body or other party that
involves
the Aircraft or any dispute between the Debtor and any governmental body or
other party
that might materially interfere with the normal business operations of Debtor in
a manner which may
reasonably be deemed to impair's Debtor's ability to perform the
Obligations.
5.2 Laws; Obligations:
Operations. Debtor will (i) duly observe and conform to all
requirements
of any governmental authorities relating to the Aircraft (provided that the
failure to comply
will not be a default hereunder so long as such failure to comply will not
jeopardize the Collateral
or impair the Lien of the Lender thereon), and all material requirements of
any governmental
authority relating to the conduct of its business and to its properties or
assets; (ii) maintain
its existence as a legal entity and obtain and keep in full force and effect all
rights, franchises,
licenses and permits which are necessary to the proper conduct of its business;
(iii) remain a
citizen of the United States within the meaning of Subtitle VII of Title 49 of
the United States
Code; (iv) obtain or cause to be obtained as promptly as possible any
governmental, administrative
or agency approval and make any filing or registration therewith which at the
time shall be
required with respect to the performance of its obligations under this Agreement
and the operation
of the Aircraft and its business; (v) cause the Aircraft to remain duly
registered, in its name,
under the Federal Aviation Act of 1958, as amended and recodified; (vi) maintain
all
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Records
to be maintained in respect of the Aircraft; and (vii) pay and perform all of
its obligations and liabilities when due, including, without limitation, all
fees, taxes- assessments and governmental charges or levies imposed upon it or
upon its income or profits or upon the Aircraft or any other property belonging
to it, provided, however, that Debtor shall have the right to challenge or
appeal the amount of any such fees, taxes, assessments and governmental charges
or levies provided that a good faith basis for such appeal or challenge exists,
such appeal or challenge does not subject the Aircraft to any risk of seizure or
forfeiture, that Debtor has properly and timely perfected its right to appeal or
challenge and has provided any bond or other security required to be posted in
connection with such appeal or challenge.
5.3 Inspection. Lender or
its authorized representative may, upon three (3) Business Day's
notice, at any reasonable time or times inspect the Aircraft, the Records
maintained with respect
thereto and, upon the occurrence of an Event of Default, the books and records
of the Debtor.
5.4 Books. Debtor
will keep proper books of record and account in which full, true and
correct entries in accordance with generally accepted accounting principles will
be made of all
dealings or transactions in relation to its business and
activities.
5.5 Financial
Information. Debtor will furnish to Lender (a) as soon as available,
but in any
event not later than 120 days after the end of each fiscal quarter of Debtor,
the balance sheet of
Debtor as at the end of such fiscal quarters, and statements of income of Debtor
for such fiscal quarters,
all in reasonable detail, prepared in
accordance with generally accepted accounting
principles applied on a basis consistently maintained throughout the period
involved and
certified by Debtor's chief financial officer or Vice President, Controller; and
(b) promptly, such
additional financial and other information as Lender may from time to time
reasonably request.
5.6 Further Assurances.
Debtor will promptly, at any time and from time to time, at its sole
expense, execute and deliver to Lender such further instruments and documents,
and take such
further action, as Lender may from time to time reasonably request in order to
further carry out the
intent and purpose of this Agreement and to establish and protect the rights,
interests and remedies
created, or intended to be created, in favor of Lender hereby, including,
without limitation, the execution, delivery, recordation and filing of
financing statements and continuation
statements. Debtor hereby authorizes Lender, in such jurisdictions where the
Debtor is
domiciled and/or the Aircraft is operated or domiciled and such action is
reasonable and authorized
by law, to effect any such recordation or filing with the signature of Debtor
thereto or without
the Debtor's signature after (i) the occurrence of an Event of Default or (ii)
the failure of the
Debtor to execute the same upon the reasonable request of the Lender. Debtor
will pay, or reimburse
Lender (if Debtor has failed to pay the same after a reasonable request for
payment has been
made) for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred
in connection with the creation, preservation and protection of Lender's
security interest in the
Aircraft, including, without limitation, all fees and taxes in connection with
the recording or filing
of instruments and documents in public offices, payments or discharges of any
taxes or Liens
upon or in respect of the Aircraft, premiums for insurance with respect to the
Aircraft and all other
reasonable fees, costs and expenses in connection with protecting, maintaining
or
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preserving
the Aircraft and Lender's interest therein, whether through judicial proceedings
or otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or related to the Aircraft, and all such amounts that are paid by
Lender shall, until reimbursed by Debtor, constitute Obligations of Debtor
secured by the Aircraft.
5.7 No Disposition of
Collateral. Provided no Event of Default or event, which with
the
passage of time or giving of notice would constitute an Event of Default, has
occurred and is continuing,
and further provided that any Obligations with respect to this Agreement or the
Note remain
outstanding, Debtor will not sell, convey,
transfer, exchange, lease or otherwise relinquish
possession or dispose of any Collateral or attempt or offer to do any of the
foregoing.
5.8 No Liens. Debtor will
not create, assume or suffer to exist any Lien of any kind upon the
Collateral, except for the security interest created hereby.
5.9 Debtor's Title: Lender's
Security Interest. Debtor will warrant and defend
its good and
marketable title to the Aircraft and Lender's first perfected security interest
in the Collateral,
against all claims and demands whatsoever. If at any time any person not a party
to this
Agreement shall claim any right or interest in the Collateral (other than solely
and directly as a result
of the actions of the Lender), Debtor shall, at its expense, cause such claim to
be waived in
writing or otherwise eliminated to Lender's satisfaction within thirty (30) days
after such claim
shall have first become known to Debtor.
5.10 No Changes. The
Debtor will not (a) liquidate or dissolve or cease to do business as a
going concern; or (b) sell or otherwise dispose of all or any substantial
portion of its assets;or (c)
change its name or the form of organization of its business; or (d) without
thirty (30) days prior
written notice to Lender, change its chief place of business or its jurisdiction
of organization.
5.11 Use of Aircraft:
Maintenance; Identification.
(a)
Debtor will not change the principal base of the Aircraft from that specified on
the Schedule relating thereto without giving the Lender written notice not more
than 5 days after such change in the principal base of the Aircraft has been
made. After any such change, the Aircraft shall continue to be principally based
in the United States of America and Debtor shall have taken all reasonable and
necessary steps to insure the continued perfection of Lender's interest in the
Collateral. Debtor shall not and shall not permit the Aircraft to be operated or
located in or flown over any jurisdiction other than the United States of
America, Puerto Rico or any United States territory; provided, however, that the
Aircraft may, as a part of a continuous round trip, be operated or located in or
flown over Canada and Mexico. Notwithstanding the foregoing, in no event may the
Aircraft temporarily fly, be operated, used or located in, to or over any such
country or area (1) which is excluded from coverage by any insurance policy in
effect with respect to such Aircraft or by any insurance policy required by the
terms of Section 5.12 hereof or any country or area not specifically and fully
covered by such insurance; (2) in a recognized or threatened area of hostility
unless fully covered to Lender's satisfaction by hull, political, expropriation,
hijacking and war risk insurance; or (3) with which the United States of America
does not maintain favorable diplomatic relations.
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11 -
(b) Debtor
will operate or cause the Aircraft to be operated in a careful and proper
manner, will comply with and conform to all governmental laws, rules and
regulations relating
thereto (provided that the failure to comply will not be a default hereunder so
long as such
failure to comply will not jeopardize the Collateral or impair the lien of the
Lender thereon),
and will cause the Aircraft to be operated in compliance with the requirements
of the insurance
policies required by subsection 5.12 hereof, and in accordance with the
manufacturer's or
supplier's instructions or manuals and only by competent, duly qualified and
certified personnel.
(c) Debtor
will operate the aircraft for cargo transportation and, at its own expense, maintain, service, repair, overhaul and
test
the Aircraft, and furnish all parts,
replacements,
mechanisms, devices and servicing required therefor so that the value, condition
and
operating efficiency thereof for transport of cargo will at all times be
maintained and preserved
at a level which is the higher of, (x) its value, condition and operating
efficiency when delivered
to Debtor, ordinary wear and tear excepted, or (y) the level required by any
governmental
authority having jurisdiction with respect thereto, and, in any case, the level
necessary
to enable the airworthiness certification of the Aircraft to be maintained in
good standing
at all times under Subtitle VII of Title 49 of the United States Code or as
shall be required
by any and all applicable FAA Airworthiness Directives, Operators Letters and
Service
Bulletins.
All such repairs, parts, mechanisms, devices and replacements shall
immediately,without
further act, become part of the Aircraft and subject to the security interest
created by thisAgreement.
Debtor will not make or authorize any improvement, change, addition or
alterationto the
Aircraft if such improvement, change, addition or alteration will impair the
originally intended
function or use of the Aircraft, impair the value of the Aircraft as it existed
immediatelyprior to
such improvement, change, addition or alterations, or violate any applicable
material industry
standard or violate any applicable governmental law, rule, regulation or
standard. AnyPart, mechanism, device or
replacement added to the Aircraft in connection with any
improvement,
change, addition or alteration shall immediately, without further act become
part of the
Aircraft and subject to the security interest created by this
Agreement.
(d) If
requested by Lender in writing, Debtor shall, at its expense, attach to
the Aircraft
a notice satisfactory to Lender disclosing Lender's security interest in the
Aircraft
5.12 Insurance.
(a) Aircraft Liability and
Property Damage Insurance. Debtor represents and warrants that it will
maintain at all times, at its own cost and expense, with insurers of recognized
responsibility reasonably satisfactory to Lender, (i) comprehensive aircraft and
general public liability insurance against bodily injury and property damage
claims including, without limitation, contractual liability, premises damage,
public liability, personal property liability, personal injury liability, death
and property damage liability, public and passenger legal liability coverage in
an amount not less than the greater of $10,000,000.00 or $1,000,000.00 per seat
(including crew) for each single occurrence with a Mexican coverage endorsement
and (ii) such other property damage insurance (exclusive of manufacturer's
product liability insurance) with respect to the Aircraft as is of the type and
in the amounts usually carried by companies engaged in the same or a similar
business as Debtor, similarly situated with Debtor, and
owning
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12 -
or
operating similar aircraft and engines, and which covers risks of the kind
customarily insured against by such companies. Debtor shall also provide at its
own cost and expense applicable worker's compensation insurance with coverage
for the Aircraft's crew and maintenance personnel for all jurisdictions where
such coverage is applicable and/or required.
(b) Insurance Against Loss or
Damage to the Aircraft. Debtor represents and warrants
that it will maintain in effect at all times, at its own cost and expense, with
insurers of recognized
responsibility reasonably satisfactory to Lender, all-risk ground and flight
aircraft hull
insurance covering the Aircraft, including F.O.D. (foreign
object damage), fire and explosion
coverage, cargo, ingestion and lightning and electrical damage, and
comparable insurance
with respect to any Engines or Parts while removed from the Aircraft, and with
respect to any
engines, parts while temporarily installed on the Aircraft, provided that such
insurance shall at
all times be not less than the greater of (i) the aggregate unpaid principal
amount of the Note or
(ii) the amount which would be paid pursuant to Section 2.3 hereof upon the
occurrence of an
Event of Loss (each such amount determined as of each anniversary of the Closing
Date for the next
succeeding year throughout the term of this Agreement). Debtor shall,
at its own cost and
expense, additionally maintain in effect with an insurer of recognized
responsibility reasonably
satisfactory to Lender, hijacking (air piracy) insurance with respect to the
Aircraft in a face
amount of not less than the greater of (i) the aggregate unpaid principal amount
of the Note or
(ii) the amount which would be paid pursuant to Section 2.3 hereof upon the
occurrence of an
Event of Loss (each such amount determined as of each anniversary of the Closing
Date for the next
succeeding year throughout the term of this Agreement), which shall be in full
force and effect
throughout any geographical areas at any time traversed by the Aircraft. Such
insurance shall
also include war risk, governmental confiscation and expropriation and related
insurance, if and to
the extent the same is maintained by Debtor with respect to other aircraft owned
or operated
by Debtor on the same routes as the Aircraft and Engines or where the custom in
the United
States airline industry is to carry such insurance with respect to aircraft and
engines operated
on the same routes as the Aircraft and Engines.
(c) Lender as Additional
Insured; Notice. Any policies of insurance carried in accordance
with this Section and any policies taken out in substitution or replacement of
any such
policies (i) shall be amended to name Lender as the additional insured as its
interest may appear,
(ii) with respect to insurance carried in accordance with paragraph (b) of this
Section 5.12
covering the Aircraft, shall provide that any amount(s) payable thereunder which
exceed $50,000.00
in the aggregate shall be paid directly to Lender and Debtor jointly (and, so
long as no Event
of Default has occurred, such amounts shall be disbursed by Lender and Debtor
or other
appropriate persons in payment of the costs actually incurred with respect to
repairs made to the
Aircraft so as to restore it to the operating condition required hereunder, or
shall be disbursed
by Lender as otherwise required by the Agreement), and that any amount(s) of
less than
$50,000.00 in the aggregate shall be paid to Debtor (and such amounts shall be
applied by Debtor to
pay the costs of such repairs), (iii) shall provide that if any insurer cancels
such insurance
for any reason whatever, or any substantial change is made in any of the
coverage required
hereunder, or the same it allowed to lapse for nonpayment of premium or
such insurance
coverage is reduced, such cancellation, change, lapse or reduction shall not
be effective
as to Lender for thirty (30) days following receipt by Lender of written notice
by such insurer
of such cancellation, change or reduction, and (iv) shall provide that in
respect of the
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13 -
interests
of Lender in such policies, the insurance shall not be invalidated by any action
or inaction of Debtor or any other person (other than Lender) and shall insure
Lender's interests, as they appear, regardless of any breach or violation of any
warranties, declarations or conditions contained in such policies by or binding
upon Debtor or any other person (other than Lender). Each insurance policy and
its respective cover amount(s) obtained in accordance with the requirements set
forth in paragraphs (a) and (b) of this Section 5.12 shall (i) be primary
insurance, not subject to any co-insurance clause and shall be without right of
contribution from any other insurance, and (ii) expressly provide that all of
the provisions thereof, except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each insured or loss
payee, and shall waive any right of such insurer to any setoff, counterclaim or
other deduction, by attachment or otherwise, in respect of Lender or Debtor.
Debtor shall arrange for appropriate certification as to the satisfaction of the
requirements set forth above in this Section 5.12 to be delivered to Lender not
later than the Closing Date by each such insurer or underwriter therefor, which
certification shall specifically acknowledge that the insurance is in conformity
with this Section 5.12. Notwithstanding the foregoing, Debtor shall promptly
provide Lender with a copy of each policy of insurance required hereunder if it
so requests.
(d) Reports,
etc. On the Closing Date, Debtor shall furnish (or
cause its insurance
company to furnish) to Lender a certificate of insurance along with a summary
of policy
endorsements related to the Aircraft. The Debtor or the insurance company will
notify the Lender in
writing of any changes in the coverage or the policy endorsements. If the Lender
shall so
request, the Debtor shall provide the Lender with a copy of the applicable
policy. Debtor will advise
(or cause the applicable insurance company to advise) Lender in writing promptly
of any default
in the payment of any premium and of any other act or omission on the part of
Debtor which
might invalidate or render unenforceable by Lender or Debtor, in whole or in
part, any insurance
on or with respect to the Aircraft Debtor will also advise Lender in writing at
least thirty
(30) days prior to the expiration or termination date of any insurance carried
and maintained
on or with respect to the Aircraft pursuant to this Section. In the event Debtor
shall fail to
maintain insurance as herein provided, Lender may, at its option, provide such
insurance, and
Debtor shall, upon demand, reimburse Lender for the cost thereof, together with
interest at the Late
Charge Rate from the date of payment through the date of
reimbursement.
(e) Agreed
Value. Anything herein to the contrary notwithstanding,
at all times
while the Aircraft is subject to this Agreement, the insurance required by
Section 5.12 of this
Agreement shall be for an amount on an "agreed value" basis not less than the
greater of (i) the
aggregate unpaid principal amount of the Note or (ii) the amount which would be
paid pursuant
to Section 2.3 hereof upon the occurrence of an Event of Loss (each such
amount determined
as of each anniversary of the Closing Date for the next succeeding year
throughout the term
of this Agreement).
(f) No Right to
Self-Insure. Debtor shall not self-insure (by
deductible, premium
adjustment, or risk retention arrangement of any kind) the insurance required to
be maintained
hereunder, except to the extent of deductibles usually and customarily
maintained by companies
engaged in the same or similar business as Lessee and operating the same or
similar aircraft,
but in no event shall any deductible exceed $50,000.00 per
occurrence.
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14 -
SECTION
6. SECURITY
INTEREST.
6.1 Grant of Security
Interest. As collateral security for the prompt and
complete payment
and performance when due of all of the Obligations and in order to induce Lender
to enter
into this Agreement and make the Loan to Debtor in accordance with the terms
hereof and to extend
other credit from time to time to Debtor, whether under this Agreement or
otherwise, Debtor
hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to
Lender, and hereby
grants to Lender a first security interest in all Debtor's right, title and
interest in, to and under the
Collateral; but none of Debtor's (and/or any other party's of any kind
whatsoever) obligations,
liabilities and/or duties of any kind whatsoever under, or with respect to the
collateral.
Notwithstanding anything to the contrary- contained herewith or otherwise, the
Lender does
not by virtue of this Agreement or otherwise assume any obligations, liabilities
and/or
duties of any kind whatsoever of the Debtor (and/or of any other
party of any kind whatsoever)
under, or with respect to, the Collateral and the Lender shall not
be responsible in any way
whatsoever for the performance by the Debtor (and/or by any other
party of any kind
whatsoever) in connection with, relating to, or arising under, the
Collateral.
Notwithstanding
the foregoing, provided no Event of Default or event, which with the passage of
time or giving of notice or both would constitute an Event of Default, has
occurred (and is continuing), in the event that any replacement or substitution
for any Part or Engine is furnished by Debtor and such substitution or
replacement Part or Engine is deemed acceptable by Lender, Lender agrees that
the Part or Engine which was replaced or substituted for shall be deemed
released from the security interest granted hereunder. Lender agrees to accept
any such substitute or replacement Part or Engine which, in its reasonable
judgment, meets or exceeds the maintenance standards set forth for Parts and
Engines set forth in this Agreement and which has a greater or equal value,
utility and useful life as the Part or Engine for which it is being substituted
or serving as a replacement.
The
security interest granted herein shall attach to each item of Collateral at the
time that Lender advances any funds to or on behalf of Debtor in complete or
partial payment for such Collateral.
6.2 Lender Appointed as
Attorney-in-Fact.
(a) After
an Event of Default has occurred and is continuing, Debtor hereby irrevocably
constitutes and appoints Lender and any other officer of agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Debtor and in the name
of Debtor or in its own name, from time to time in Lender's discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement.
Debtor hereby ratifies all that said attorney shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable. Without limiting the generality of the
foregoing, pursuant to such appointment, the Lender shall have authority to
endorse Debtor's name on any checks, notes, drafts or any other payments or
instrument relating to the Collateral which came into the Lender's possession or
control.
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15 -
(b) The
powers conferred on Lender hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Lender shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to Debtor for any act or
failure act.
SECTION
7. EVENTS OF
DEFAULT.
The term
"Event of
Default", wherever used herein, shall mean any of the following events or
circumstances (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary, or come about or be effected by operation of
law, or be pursuant to or in compliance with any judgment, decree or order of
any court or any order, rule or regulation or any administrative or governmental
body):
(a) Debtor
shall fail to make any payment of principal, interest or any amount due hereunder or under the Note within
ten (10) days after Lender has notified Debtor that such payment is due and
payable (whether at the stated maturity, by acceleration or otherwise);
or
(b) Debtor
shall fail to keep in full force and effect any of the insurance required under this Agreement (unless
Debtor obtains replacement coverage that meets the requirements of this Agreement within
three (3) Business Days of the cancellation of the applicable insurance policy and so long
as the failure to maintain such insurance is not due to failure to pay premiums and so long as
the Aircraft is not operated while such required insurance coverage is not in effect, or shall
operate the Aircraft at a time when, or at a place in which, such insurance shall not be in effect;
or
(c) the
Aircraft shall be abused, substantially damaged or destroyed or
Lender shall reasonably deem the Aircraft
unsafe or at risk or Debtor shall fall to maintain the Aircraft in accordance and in compliance with
Section 5.11(c) hereof and Debtor does not commence and diligently pursue to eventual
completion, a cure of such failure to maintain the Aircraft within three days of being notified of such
default by Lender; or
(d) Debtor
shall default (which default shall remain uncured for a period of 10 days after receipt of written notice
from the Lender) in the payment of any indebtedness to Lender (other than the Obligations),
any parent, affiliate or subsidiary of Lender under any note, security agreement, equipment lease,
title retention, aircraft lease or conditional sales agreement or any other instrument or agreement
evidencing such indebtedness with Lender, any parent, affiliate or subsidiary of
Lender; Debtor shall default in the performance of, or compliance
with, any term contained in any agreement or
instrument evidencing or relating to such indebtedness, if the effect of such default is to
cause or permit such indebtedness to become due prior to its stated maturity, or if any such
indebtedness is not paid at maturity; or Debtor shall otherwise be in default of any of the Obligations;
or
(e) Debtor
shall or shall attempt to (except as expressly permitted by the provisions of this Agreement) remove,
sell, transfer, convey, pledge, mortgage, encumber,
part
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16 -
with
possession of, assign or sublet any Aircraft or any part thereof, use any
Aircraft for an illegal purpose, or permit the same to occur;
or
(f) Debtor
shall fail to perform or observe any covenant, condition or agreement,
(other than those specifically referred to in this Section 7) required to be
performed or
observed by it under this Agreement or any agreement, document or certificate
delivered by Debtor in
connection herewith, and such failure shall continue for thirty (30) days after
written notice
thereof from Lender to Debtor; or
(g) any
representation or warranty made by Debtor in this Agreement or any agreement,
document or certificate delivered by Debtor in connection herewith or
pursuant hereto
shall prove to have been incorrect, misleading, or inaccurate in any material
respect when such
representation or warranty was made or given (or, if a continuing representation
or warranty,
at any material time); or
(h)
Debtor shall fail to pay its debts (with respect to obligations for borrowed
money in excess of $1,000,000) as they became due and such failure shall
continue beyond the applicable grace period, admit its inability to pay its
debts or obligations generally as they fall due, or shall file a voluntary
petition in bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now or hereafter in
effect) or an answer admitting the material allegations of such a petition filed
against Debtor, as the case may be, in any such proceeding; or Debtor shall, by
voluntary petition, answer or consent, seek relief under the provisions of any
other now existing or future bankruptcy or other insolvency or similar law
(other than a law which does not provide for or permit the readjustment or
alteration of Debtor's obligations hereunder, as the case may be) providing for
the reorganization or liquidation of corporations, or providing for an
assignment for the benefit of creditors, or providing for an agreement,
composition, extension or adjustment with its creditors;
or
(i) a
petition against Debtor in a proceeding under applicable bankruptcy 'laws or
other insolvency laws (other than any law which does not provide for or permit
any readjustment or alteration of Debtor's obligations hereunder as the case may
be), as now or hereafter in effect, shall be filed and shall not be withdrawn or
dismissed within ninety (90) days thereafter, or if, under the provisions of any
law (other than any law which does not provide for or permit the readjustment or
alteration of Debtor's obligations hereunder or) providing for reorganization or
liquidation of corporations which may apply to Debtor, any court of competent
jurisdiction shall assume jurisdiction, custody or control of Debtor, or of any
substantial part of their respective property and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or unterminated for a
period of ninety (90) days; or
(j)
Debtor sells, transfers, or disposes of all or substantially all of its stock,
assets or property, or merges or consolidates with or into any other
non-affiliated entity, with a net worth not less than investment grade (as
determined by Standard & Poors or Xxxxx'x) becomes the subject of, or
engages in, a leveraged buy-out, or the Debtor shall terminate its existence by
merger or consolidation unless it is the surviving entity and, after giving
effect to such merger or consolidation, its net worth is at least investment
grade (as determined by
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17 -
Standard
& Poors or Xxxxx'x), or Debtor shall terminate its existence by the sale of
substantially-all of its assets or otherwise; or
SECTIONS. REMEDIES.
8.1 Termination of
Commitment. If an Event of Default specified in subsections 7 (h)
or
(i) above shall occur, then, and in any such event, the Commitment shall
immediately terminate
and the principal amount of the Note, together with accrued interest thereon and
all other
amounts owing under or with respect to this Agreement shall become immediately
due and payable
without any notice or other action by Lender, and if any other Event of Default
shall occur and
be continuing, then, and in any such event, Lender may (a) terminate forthwith
the Commitment
and/or (b) declare the Note to be forthwith due and payable, whereupon
the principal
amount of the Note, together with accrued interest thereon, shall become
immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are
hereby expressly waived, anything contained herein or in the Note to
the contrary notwithstanding.
During the continuance of any Event of Default hereunder, Lender shall
have the right
to pursue and enforce any of its rights and remedies under Section 8,
Subsections 8.2 through
8.4, inclusive, hereof.
8.2 Additional
Remedies. If an Event of Default shall occur and be
continuing, Lender
may exercise in addition to all other rights and remedies granted to it in this
Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights
and remedies of secured parties under the UCC or under any other applicable law.
Without limiting
the generality of the foregoing, Debtor agrees that in any such event, Lender,
without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified
below of time and place of public or private sale) to or upon Debtor or any
other person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), may
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or
may forthwith sell, lease, assign, give option or options to purchase or
otherwise dispose of and
deliver the Collateral (or contract to do so), or any part thereof, in one or
more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Lender's
offices or elsewhere
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption
of any credit risk. Lender shall have the right upon any such public sale or
sales, and, to the
extent permitted by law, upon any such private sale or sales to purchase the
whole or any part of
the Collateral so sold, free of any right or equity of redemption in Debtor,
which right or equity is
hereby expressly released. Debtor further agrees, at Lender's request, to
assemble the Collateral,
make it available to Lender at places which Lender shall reasonably select,
whether at Debtor's
premises or elsewhere. Any such sale or sales shall be conducted in a
commercially reasonable
manner. Lender shall apply the net proceeds of any such collection, recovery,
receipt, appropriation,
realization or sale (after deducting all reasonable costs and expenses of every
kind incurred
therein or incidental to the care, safekeeping or otherwise of any or all of the
Collateral or in any
way relating to the rights of Lender hereunder, including attorney's fees and
legal expenses)
to the payment in whole or in part of the Obligations, in such order as Lender
may elect and
only after so applying such net proceeds and after the payment by Lender of any
other amount
required by any provision of law, need Lender account for the surplus, if any,
to Debtor. To the
extent permitted by applicable law, Debtor waives all claims, damages, and
demands
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18 -
against
Lender arising out of the repossession (in accordance with applicable laws),
retention or sale of the Collateral. Debtor agrees that Lender need not give
more than ten (10) days' notice (which notification shall be deemed given when
mailed, postage prepaid, addressed to Debtor at its address set forth in Section
9.2. hereof) of the time and place of any public sale or of the time after which
a private sale may take place and that such notice is reasonable notification of
such matters. Debtor shall be liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all amounts to
which Lender is entitled.
8.3 Costs of
Collection. Debtor also agrees to pay all costs of
Lender, including reasonable
attorneys' fees, incurred with respect to the collection of any of the
Obligations and the
enforcement of any of its respective rights hereunder.
8.4 Waivers. Debtor
hereby waives presentment, demand, protest or any notice, except as
expressly provided herein, (to the extent permitted by applicable law) of any
kind in connection
with this Agreement or any Collateral.
SECTION
9. MISCELLANEOUS.
9.1 No Waiver. Cumulative
Remedies. No failure or delay on the part of Lender in exercising
any right, power or privilege hereunder or under the Note shall operate as a
waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or
privilege. No right or remedy in this Agreement is intended to be exclusive but
each shall be cumulative
and in addition any other remedy referred to herein or otherwise available to
Lender at law or
in equity; and the exercise by Lender of any one or more of such remedies shall
not preclude
the simultaneous or later exercise by Lender of any or all such other remedies.
No express
or implied waiver by Lender of an Event of Default shall in any way be, or be
construed to be, a
waiver of any future or subsequent Event of Default. After the occurrence of any
Event of
Default that is continuing and remains uncured, the acceptance by Lender of any
installment of
principal and interest or of any other sum owing hereunder shall not constitute
a waiver of such
Event of Default, regardless of Lender's knowledge or lack of knowledge thereof
at the time of
acceptance of any such payment, and shall not constitute a reinstatement of
the Agreement
if Lender has sent Debtor a notice of default, unless the Event of default has
been otherwise
been cured or unless Lender shall have agreed in writing to reinstate the
Agreement and waive
the Event of Default.
9.2 Notices. All
notices, requests and demands to or upon any party hereto shall be deemed to
have been duly given or made when delivered or when deposited in the United
States mail,
return receipt requested first class postage prepaid, addressed to such party as
follows, or to such
other address as may be hereafter designated in writing by such party to the
other party hereto:
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19 -
|
DEBTOR:
|
Landpixx,
LLC and Xxxx X. Xxxxxxxxxx
|
|
00000
Xxxx 00xx
Xxxxxx
|
|
|
Xxxxxx,
XX 00000
|
|
|
Attention:
Xxxx Xxxxxxxxx Telephone: 000-000-0000
|
|
|
with
a copy to:
|
|
|
LENDER:
|
Bank
of the West
|
|
000
Xxxxx Xxxxx Xx. Xxxxx. 000X Xxxxxx
Xxxxx,
XX. 94596
Attention:Vice
President,
Portfolio
Manager Telephone: 00-000-0000
Telecopy:
000-000-0000
|
9.3 Payment
of Expenses and Taxes; Performance by Lender of Debtor's
Obligations.
(a) Debtor
agrees, whether or not the transactions contemplated by this Agreement shall be
consummated, to pay (i) actual costs and expenses of Lender in connection with
the negotiation, preparation, execution and delivery of this Agreement, and
other documents relating hereto, including, without limitation, the cost of
recording any financing statements covering the Collateral, FAA filing fees and
the reasonable fees and disbursements of counsel to Lender, (ii) any taxes which
may be due in connection with the ownership, possession, use, or operation of
the Aircraft; and (iii) all costs and expenses of Lender in connection with the
enforcement of
this Agreement and the Note, including all
reasonable legal fees and disbursements arising in
connection therewith. Debtor also agrees to pay, and to indemnify and save
Lender harmless from any delay in paying, all taxes, including without
limitation, sales, use, stamp and personal property taxes (other than any
corporate income, capital, franchise or similar taxes payable by Lender with
respect to the payments made to Lender hereunder or thereunder) and all license,
filing, and registration fees and assessments and other charges, if any, which
may be payable or determined to be payable in connection with the execution,
delivery and performance of this Agreement or the Note or any modification
thereof.
(b) Debtor
hereby further agrees, whether or not the transactions contemplated by this
Agreement shall be consummated, to pay, indemnify, and hold Lender harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, out of pocket costs, expenses or
disbursements of any kind or nature whatsoever arising with respect to or in
connection with the ownership, lease, possession, use, sale or other disposition
of the Aircraft or the execution, delivery, enforcement, performance or
administration of this Agreement and the Note (the foregoing being referred to
as the "indemnified liabilities"), provided, that Debtor shall have no
obligations thereunder with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of Lender.
(c) If
Debtor falls to perform or comply with any of its agreements contained herein
(after the expiration of any applicable grace periods) and Lender shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the actual expenses of Lender incurred in connection with such
performance or compliance, together with
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interest
thereon at the rate provided for in the Note shall be payable by Debtor to
Lender on demand and until such payment shall constitute Obligations secured
hereby.
9.4 Entire
Agreement. This Agreement, together with all
attachments, exhibits, schedules and the Note, constitutes the entire
understanding and agreement of the parties hereto with respect to the matters
contained herein.
9.5 Survival
of Representations and Warranties. All representations
and warranties made in this Agreement and any certificates delivered pursuant
hereto or thereto shall survive the execution and delivery of this Agreement and
the making of the Loan hereunder, and the agreements contained in Section 9.3
hereof shall survive payment of the Note.
9.6 Amendments. Neither
this Agreement, nor any terms hereof, may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of a change, waiver, discharge or termination is
sought.
9.7 Counterparts. This
Agreement may be executed by the parties hereto on any number of separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
9.8 Headings.
The headings of the Sections and paragraphs are for convenience only, are not
part of this Agreement and shall not be deemed to effect the meaning or
construction of any of the provisions hereof.
9.9 Successors
or Assigns. This Agreement shall be binding upon and
inure to the benefit of Debtor and Lender and their respective heirs, executors,
administrators, successors and assigns, except that Debtor may not assign,
sublet or transfer its rights hereunder or any interest herein without the prior
written consent of Lender.
9.10 Authorization. Upon
receipt of authorization from the Debtor (which may be by facsimile)
Lender, its agents, representatives and employees are
hereby irrevocably and unconditionally authorized to amend and/or otherwise fill
in any and all blank spaces contained herein or in the Schedules or other
documents executed by the Debtor relative to the transactions set forth
herein.
9.11 Construction.
This Agreement and the Note shall be governed by, and construed and interpreted
in accordance with the substantive laws, but not the choice of law rules, of the
State of California. This Agreement shall be delivered for
closing purposes in the Lender's California Office at Walnut Creek,
California.
9.12 Jurisdiction.
Debtor hereby irrevocably consents and agrees that any legal action, suit, or
proceeding arising out of or in any way in connection with this Agreement may be
instituted or brought in the courts of the State of California or the United
States Courts for the Central District of California, or in any other state or
Federal Court for any jurisdiction in which all or any part of the Collateral
may be located as Lender shall deem appropriate, and by execution and delivery
of this Agreement, Debtor hereby irrevocably accepts and submits to, for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction
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21 -
of any such court, and to all proceedings in such
courts. Debtor irrevocably consents to service of any summons and/or legal
process by registered or certified United States air mail, postage prepaid, to
Debtor at the address set forth in Section 9.2 hereof, such method of service to
constitute, in every respect, sufficient and effective service of process in any
such legal action or proceeding. Nothing in this Agreement shall affect the
right to service of process in any other manner permitted by law or limit the
right of Lender to bring actions, suits or proceedings in the courts of any
other jurisdiction, except as set forth in this paragraph 9.12. Debtor further
agrees that final judgment, (after expiration of any applicable appeal period or
waiver of any such right of appeal either expressly or by passage of time,)
against it in any such legal action, suit or proceeding shall be conclusive and
may be enforced in any other jurisdiction, within or outside the United States
of America, by suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the fact and the amount of the
liability.
9.13 Jury
Waiver. THE LENDER AND DEBTOR HEREBY KNOWINGLY AND FREELY WAIVE THEIR
RIGHTS TO A JURY TRIAL IN ANY ACTION, SUIT OR PROCEEDING RELATING TO, ARISING
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OTHER AGREEMENT OR
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered personally or by their proper and duly authorized officers as of the
day and year first above written.
BANK OF THE
WEST
By:
Title:
DEBTOR
Xxxx X. Xxxxxxxxxx
By: /s/
Xxxx X. Xxxxxxxxxx
Landpixx,
LLC
By: /s/
Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, Manager
By: /s/ Xxxx
Xxxxxx
Xxxx Xxxxxx, Manager
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SCHEDULE
A EQUIPMENT
Schedule A
Equipment description attached to and made a part of Aircraft Security
Agreement, Schedule 000-0000000-000:
1980 Cessna
402C Businessliner Aircraft which consists of the following
components:
(a) Aircraft
bearing FAA Registration Xxxx N246MP and Manufacturer's Serial
No. 402C0272
(b) Two
(2) TCM engine Model TSI0520VB engine bearing Manufacturer Serial
No. 509583 and 521042-H having over 550 rated takeoff horsepower or the
equivalent
of such horsepower, Two (2) XxXxxxxx Propeller Model 3AF32C515-G bearing
Manufacturer Serial No. 060757 and 060755.
(c) Sensor
Head with Tetrachroik, Inertial Measurement Unit, CU40 Control Unit for
SH51/SH52, Gyro-Stabilized Camera Mounts, all cabling, antennas,
interfaces, guidance
indicators, software and hardware.
(d) All equipment, avionics, accessories, substitutions, replacements,
improvements,
additions, modifications, spare parts, appurtenances and appliances upon
or
within the Aircraft or attached thereto, whether now owned or hereafter
acquired, whether
or not furnished by the manufacturer or vendor of the Aircraft including,
without limitation,
all logs, manuals and records pertaining to the construction,
modification, inspection,
repair and operation of the Airframe, or any engine or part together
with all accessories, attachments, substitutions, replacements, and accessions
therefor and thereto, all logbooks, manuals, and records, all proceeds
therefrom, including insurance proceeds.
Initials
Debtor: _/s/
HHW______________
Initials
Debtor: _/s/CK
________________
Initials
Debtor: /s/ NH____
_________
EXHIBIT
B TO AIRCRAFT SECURITY AGREEMENT
SCHEDULE
- 000-0000000-000
This
Schedule is executed and delivered by Xxxx X. Xxxxxxxxxx and Landpixx, LLC
("Debtor") pursuant to the terms of Aircraft Security Agreement ("Agreement")
(to which this Exhibit B is attached) between Debtor and Bank of the West
("Lender"). Terms defined in the Agreement shall have the respective meanings
given to them in the Agreement unless otherwise defined herein or unless the
context otherwise requires.
1. Debtor
hereby confirms that the proceeds of the Loan made this date shall be
used to
refinance the acquisition of the property (collectively the "Aircraft")
described below:
One (1)
used 1980 Cessna 402C Businessliner and together will all avionics as set forth
below and all other accessories, and all additions, modifications and
attachments to, and all replacements and substitutions for any of the foregoing
all as more fully described on Schedule A
hereto.
2. Debtor
hereby represents and warrants that the above described Aircraft has
been delivered
to it, duly assembled and in good working order and is located at 0000 Xxxxx
Xxxxxx Xxxxxx,
Xxxxxxxxx XX 00000. Debtor hereby acknowledges, agrees and certifies that the
above described
Aircraft has been inspected by Debtor to its complete satisfaction, has been
found to be in good
working order, repair and condition and fully equipped to operate as required
under applicable
law for its purpose, is of a size, design, capacity and manufacture selected by
Debtor and
suitable for Debtor's purposes (other modification to a cargo configuration, if
applicable, and is, as of
the date set forth below, unconditionally, irrevocably and fully accepted by
Debtor under the
Agreement.
3. Debtor
hereby affirms that Lender has made a Loan to it for the financing of the
acquisition
of the above described Aircraft, which Loan is evidenced by a Note, in the
principal amount of
US $1,352,612.00.
4. Debtor
hereby affirms that the following avionics are on board the Aircraft and
are
in proper working condition:
All of
the avionics are more particularly described on Schedule A which is
attached hereto and made a part hereof.
5. Debtor
hereby affirm that Lender has a first and only perfected priority
security interest
in the Aircraft described above and as set forth in Section 6.1 of the
Agreement.
DEBTOR:
Xxxx X. Xxxxxxxxxx
By: /s/ Xxxx X. Xxxxxxxxxx
Landpixx,
LLC
By: /s/ Xxxxxxx
Xxxxxxxx
Xxxxxxx Xxxxxxxx, Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Manager
