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MODIFICATION AND WAIVER AGREEMENT
THIS MODIFICATION AND WAIVER AGREEMENT (the "Agreement") is made and
entered into as of the ____ day of January, 1999 between AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED (the "Borrower") and NATIONSBANK, N.A. (the "Bank").
STATEMENT OF PURPOSE
The Borrower and the Bank are parties to a Loan Agreement (the "Loan
Agreement") dated July 13, 1998. The Bank has agreed to amend the Loan Agreement
and to provide for a limited waiver of the Borrowing Base Agreement as provided
herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, each to the other, the parties do hereby
agree as follows:
1. Amendment of Loan Agreement.
(a) Section 2.A. is amended to increase the Bank's commitment
to make Working Capital Loans from $10,000,000 to $15,000,000 and to
provide that the obligation of the Borrower to repay the Working
Capital Loans shall be evidenced by the promissory note of the Borrower
in the form attached hereto as Exhibit A (the "Working Capital Note")
payable to the order of the Bank.
(b) Section 6.B. of the Loan Agreement is hereby amended by
deleting the same in its entirety and inserting in lieu thereof the
following:
Lease Expenditures. Incur new obligations for the
lease or purchase of real or personal property requiring
payments in any fiscal year in excess of an aggregate of
$250,000.
2. Waiver. The aircraft engine (the "leased engine") which is the
subject of the lease between Xxxxxxxxx and Vasp Airlines (the "Xxxxxxxxx
Lease"), which leased engine and Xxxxxxxxx Lease is to be acquired by the
Borrower, will be included in the Borrowing Base and not financed under a
separate term note, subject to review and approval by Bank of the Xxxxxxxxx
Lease. If the Borrower has not sold the leased engine and Xxxxxxxxx Lease by not
later than March 18, 1999, the Borrower shall promptly grant to the Bank a
security interest in the leased engine and an assignment of the Xxxxxxxxx Lease
as additional collateral for the obligations of the Borrower to the Bank under
the Loan Agreement, and failure to do so shall constitute an event of default
under the Loan Agreement.
3. Limited Amendment. This Agreement shall not be deemed (i) to be a
waiver of, or consent to, or a modification or amendment of, any other term or
condition of the Loan Agreement or (ii) to prejudice any right or rights which
the Bank may now have or may have in
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the future under or in connection with the Loan Agreement or any other loan
document or any of the instruments or agreements referred to therein, as the
same may be amended or modified from time to time.
4. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Bank as follows:
(a) The Borrower has no defenses, offsets or counterclaims
against the Bank relating to the Loan Agreement, as modified by this
Agreement; and
(b) The Borrower has full power and lawful authority to
execute and perform this Agreement.
5. Conditions to Effectiveness. The effectiveness of this Agreement is
subject to receipt by the Bank of the following documents:
(a) The favorable opinion of counsel to the Borrower,
addressed to the Bank, as to such matters incident to the transaction
contemplated by this Agreement and in such form as the Bank shall
reasonably require.
(b) A certified copy of resolutions duly adopted by the Board
of Directors of the Borrower authorizing the execution, delivery and
performance of this Agreement and the Working Capital Note, in form and
substance satisfactory to the Bank.
(c) This Agreement and the Working Capital Note, each duly
executed.
6. Definitions. All capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed to them in the Loan
Agreement.
7. Conflict of Terms. In the event of a conflict between the terms of
this Agreement and the Loan Agreement, the terms of this Agreement shall govern.
8. Counterparts. This Agreement may be executed in separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument. An executed copy of this Agreement delivered by
telecopier shall be intended to have the same effect as an originally executed
copy of this Agreement.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed and delivered by their duly authorized officers on the day and year
first above written.
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
By: /s/ Xxxx Xxxxx
-----------------------------
Name: Xxxx Xxxxx
----------------------
Title: CEO
----------------------
NATIONSBANK, N.A.
By: /s/ Xxxx Xxxxxx
-----------------------------
Name: Xxxx Xxxxxx
----------------------
Title: Vice President
----------------------
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Promissory Note
(Acquisition Loan)
Date: December 4, 1998 [X] New Amount $4,300,000 Maturity Date: February 1, 2004
================================================================================
Bank: Borrower:
NationsBank, N.A.
Banking Center:
Metrolina Commercial Region American Aircarriers Support Incorporated
NationsBank Xxxxx X Xxxxxxxx Xxxxxxxxxxx
XX0 000-00-00, Xxxxxxxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxx Xxxx, Xxxx Xxxxxx, XX 00000
================================================================================
FOR VALUE RECEIVED, the undersigned Borrower unconditionally promises to pay to
the order of Bank, its successors and assigns, without setoff, at its offices
indicated at the beginning of this Note, or at such other place as may be
designated by Bank, the principal amount of Four Million Three Hundred Thousand
Dollars ($4,300,000.00), or so much thereof as may be advanced from time to time
in immediately available funds, together with interest computed daily on the
outstanding principal balance hereunder, at an annual interest rate, and in
accordance with the payment schedule, indicated below.
1. Rate. The Rate per annum shall be the 90-day LIBOR (London Interbank Offered
Rate), determined on a daily basis, plus the Applicable Margin. The Rate is
established by Bank as an index and may or may not at any time be the best or
lowest rate charged by Bank on any loan.
The initial Applicable Margin shall be 1.25% and shall be subject to adjustment
based on the ratio of Borrower's (x) Consolidated Senior Funded Debt plus
Subordinated Debt to (y) EBITDA (as defined and determined in accordance with
the Loan Agreement). The calculation and any change in the Applicable Margin
shall take place and be applicable as of the last day of the immediately
preceding fiscal quarter.
Consolidated Senior
Level Funded Debt to EBITDA Applicable Margin
----- --------------------- ------------------------
A >3.00 and =<3.50 250 Basis Points ("BPS")
B >2.50 and =<3.00 225 BPS
C >2.00 and =<2.50 200 BPS
D >1.50 and =<2.00 175 BPS
E >1.00 and =<1.50 150 BPS
F <1.00 125 BPS
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Notwithstanding any provision of this Note, Bank does not intend to charge and
Borrower shall not be required to pay any amount of interest or other charges in
excess of the maximum permitted by the applicable law of the State of North
Carolina; if any higher rate ceiling is lawful, then that higher rate ceiling
shall apply. Any payment in excess of such maximum shall be refunded to Borrower
or credited against principal, at the option of Bank.
2. Accrual Method. Unless otherwise indicated, interest at the Rate set forth
above will be calculated by the 365/360 day method (a daily amount of interest
is computed for a hypothetical year of 360 days; that amount is multiplied by
the actual number of days for which any principal is outstanding hereunder).
3. Rate Change Date. Any Rate based on a fluctuating index or base rate will
change, unless otherwise provided, each time and as of the date that the index
or base rate changes.
In the event any index is discontinued, Bank shall substitute an index
determined by Bank to be comparable, in its sole discretion.
4. Payment Schedule. All payments received hereunder shall be applied first to
the payment of any expense or charges payable hereunder or under any other loan
documents executed in connection with this Note, then to interest due and
payable, with the balance applied to principal, or in such other order as Bank
shall determine at its option.
5. Principal Plus Accrued Interest. For the first three months of the term of
the Note, Borrower shall pay accrued interest only payable on the first day of
each month commencing on December 1, 1998 and continuing through February 1,
1999. Thereafter, principal shall be paid in sixty consecutive equal monthly
installments of $145,000 each, plus accrued interest, commencing on March 1,
1999, and continuing on the same day of each successive month thereafter, with a
final payment of all unpaid principal and accrued interest due on February 1,
2004. If , on any payment date, accrued interest exceeds the installment amount
set forth above, Borrower will also pay such excess as and when billed.
6. Automatic Payment. Borrower has elected to authorize Bank to effect payment
of sums due under this Note by means of debiting Borrower's account number 00000
180 2800. This authorization shall not affect the obligation of Borrower to pay
such sums when due, without notice, if there are insufficient funds in such
account to make such payment in full on the due date thereof, or if Bank fails
to debit the account.
7. Waivers, Consents and Covenants. Borrower, any indorser or guarantor hereof,
or any other party hereto (individually an "Obligor" and collectively
"Obligors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any indorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other note or other loan documents
now or hereafter executed in connection with any obligation of Borrower to Bank
(the "Loan Documents"); (b) consent to all delays, extensions, renewals or other
modifications of this Note or the Loan Documents, or waivers of any term hereof
or of the Loan Documents, or release or discharge by Bank of any of Obligors, or
release, substitution or exchange of any security for the
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payment hereof, or the failure to act on the part of Bank, or any indulgence
shown by Bank (without notice to or further assent from any of Obligors), and
agree that no such action, failure to act or failure to exercise any right or
remedy by Bank shall in any way affect or impair the obligations of any Obligors
or be construed as a waiver by Bank of, or otherwise affect, any of Bank's
rights under this Note, under any indorsement or guaranty of this Note or under
any of the Loan Documents; and (c) agree to pay, on demand, all costs and
expenses of collection or defense of this Note or of any indorsement or guaranty
hereof and/or the enforcement or defense of Bank's rights with respect to, or
the administration, supervision, preservation, or protection of, or realization
upon, any property securing payment hereof, including, without limitation,
reasonable attorney's fees, including fees related to any suit, mediation or
arbitration proceeding, out of court payment agreement, trial, appeal,
bankruptcy proceedings or other proceeding, in such amount as may be determined
reasonable by any arbitrator or court, whichever is applicable.
8. Delinquency Charge. To the extent permitted by law, a delinquency charge may
be imposed in an amount not to exceed four percent (4%) of the unpaid portion of
any payment that is more than fifteen days late. Unless the terms of this Note
call for repayment of the entire balance of this Note (both principal and
interest) in a single payment and not for installments of interest or principal
and interest, the 4% delinquency charge may be imposed not only with respect to
regular installments of principal or interest or principal and interest, but
also with respect to any other payment in default under this Note (other than a
previous delinquency charge), including without limitation, a single payment of
principal due at the maturity of this Note. In the event any installment, or
portion thereof, is not paid in a timely manner, subsequent payments will be
applied first to the past due balance (which shall not include any previous
delinquency charges), specifically to the oldest maturing installment, and a
separate delinquency charge will be imposed for each payment that becomes due
until the default is cured.
9. Events of Default. The following are events of default hereunder: (a) the
failure to pay or perform any obligation, liability or indebtedness of any
Obligor to Bank, or to any affiliate or subsidiary of NationsBank Corporation,
whether under this Note or any Loan Documents, as and when due (whether upon
demand, at maturity or by acceleration); (b) the death of any Obligor (if an
individual); (c) the resignation or withdrawal of any partner or a material
owner/guarantor of Borrower, as determined by Bank in its sole discretion; (d)
the commencement of a proceeding against any Obligor for dissolution or
liquidation, the voluntary or involuntary termination or dissolution of any
Obligor or the merger or consolidation of any Obligor with or into another
entity; (e) the insolvency of, the business failure of, the appointment of a
custodian, trustee, liquidator or receiver for or for any of the property of,
the assignment for the benefit of creditors by, or the filing of a petition
under bankruptcy, insolvency or debtor's relief law or the filing of a petition
for any adjustment of indebtedness, composition or extension by or against any
Obligor; (f) the determination by Bank that any representation or warranty made
to Bank by any Obligor in any Loan Documents or otherwise is or was, when it was
made, untrue or materially misleading; (g) the failure of any Obligor to timely
deliver such financial statements, including tax returns, other statements of
condition or other information, as Bank shall request from time to time; (h) the
entry of a judgment against any Obligor which Bank deems to be of a material
nature, in Bank's sole discretion; (i) the seizure or forfeiture of, or the
issuance of any writ of possession, garnishment or attachment, or any turnover
order for any property of any Obligor; (j) the determination by Bank that a
material adverse change has occurred in the financial condition of any Obligor;
or (k) the failure of Borrower's business to comply with any law or regulation
controlling its operation.
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10. Remedies upon Default. Whenever there is a default under this Note (a) the
entire balance outstanding hereunder and all other obligations of any Obligor to
Bank (however acquired or evidenced) shall, at the option of Bank, become
immediately due and payable and any obligation of Bank to permit further
borrowing under this Note shall immediately cease and terminate, and/or (b) to
the extent permitted by law, the Rate of interest on the unpaid principal shall
be increased at Bank's discretion up to the maximum rate allowed by law, or if
none, Bank's Prime Rate plus 3% per annum (the "Default Rate"). The provisions
herein for a Default Rate and a delinquency charge shall not be deemed to extend
the time for any payment hereunder or to constitute a "grace period" giving
Obligors a right to cure any default. At Bank's option, any accrued and unpaid
interest, fees or charges may, for purposes of computing and accruing interest
on a daily basis after the due date of this Note or any installment thereof, be
deemed to be a part of the principal balance, and interest shall accrue on a
daily compounded basis after such date at the Default Rate provided in this Note
until the entire outstanding balance of principal and interest is paid in full.
Upon a default under this Note, Bank is hereby authorized at any time, at its
option and without notice or demand, to set off and charge against any deposit
accounts of any Obligor (as well as any money, instruments, securities,
documents, chattel paper, credits, claims, demands, income and any other
property, rights and interests of any Obligor), which at any time shall come
into the possession or custody or under the control of Bank or any of its
agents, affiliates or correspondents, any and all obligations due hereunder.
Additionally, Bank shall have all rights and remedies available under each of
the Loan Documents, as well as all rights and remedies available at law or in
equity.
11. Non-Waiver. The failure at any time of Bank to exercise any of its options
or any other rights hereunder shall not constitute a waiver thereof, nor shall
it be a bar to the exercise of any of its options or rights at a later date. All
rights and remedies of Bank shall be cumulative and may be pursued singly,
successively or together, at the option of Bank. The acceptance by Bank of any
partial payment shall not constitute a waiver of any default or of any of Bank's
rights under this Note. No waiver of any of its rights hereunder, and no
modification or amendment of this Note, shall be deemed to be made by Bank
unless the same shall be in writing, duly signed on behalf of Bank; each such
waiver shall apply only with respect to the specific instance involved, and
shall in no way impair the rights of Bank or the obligations of Obligors to Bank
in any other respect at any other time.
12. Applicable Law, Venue and Jurisdiction. This Note and the rights and
obligations of Borrower and Bank shall be governed by and interpreted in
accordance with the law of the State of North Carolina. In any litigation in
connection with or to enforce this Note or any indorsement or guaranty of this
Note or any Loan Documents, Obligors, and each of them, irrevocably consent to
and confer personal jurisdiction on the courts of the State of North Carolina or
the United States located within the State of North Carolina and expressly waive
any objections as to venue in any such courts. Nothing contained herein shall,
however, prevent Bank from bringing any action or exercising any rights within
any other state or jurisdiction or from obtaining personal jurisdiction by any
other means available under applicable law.
13. Partial Invalidity. The unenforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
14. Binding Effect. This Note shall be binding upon and inure to the benefit of
Borrower, Obligors and Bank and their respective successors, assigns, heirs and
personal representatives, provided, however, that no obligations of Borrower or
Obligors hereunder can be assigned without prior written consent of Bank.
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15. Controlling Document. To the extent that this Note conflicts with or is in
any way incompatible with any other document related specifically to the loan
evidenced by this Note, this Note shall control over any other such document,
and if this Note does not address an issue, then each other such document shall
control to the extent that it deals most specifically with an issue.
16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF
ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT, OR IF THERE IS REAL OR PERSONAL PROPERTY COLLATERAL, IN
THE COUNTY WHERE SUCH REAL OR PERSONAL PROPERTY IS LOCATED, AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP
TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH
AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP
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REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
Borrower represents to Bank that the proceeds of this loan are to be used
primarily for business, commercial or agricultural purposes. Borrower
acknowledges having read and understood, and agrees to be bound by, all terms
and conditions of this Note and hereby executes this Note under seal as of the
date here above written.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES.
American Aircarriers Support Incorporated
By: Xxxx Xxxxx
------------------------------
Name:
-------------------------
Title: CEO
-------------------------
-------------------------------------------
Attest
[Corporate Seal]
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This Note amends and restates but does not extinguish the obligations under
the Promissory Note Dated as of July 13, 1998 from American Aircarriers
Support Incorporated to NationsBank, N.A.
Promissory Note
Date: January __, 1999 [ ] New [X] Renewal Amount $ 15,000,000.00 Maturity Date: June 30, 2000
================================================================================
Bank: Borrower:
NationsBank, N.A.
Banking Center:
Metrolina Commercial Region American Aircarriers Support, Incorporated
NationsBank Xxxxx X Xxxxxxxx Xxxxxxxxxxx
XX0 000-00-00, Xxxxxxxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxx Xxxx, Xxxx Xxxxxx, XX 00000
================================================================================
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and jointly and
severally, if more than one) promises to pay to the order of Bank, its
successors and assigns, without setoff, at its offices indicated at the
beginning of this Note, or at such other place as may be designated by Bank, the
principal amount of Fifteen Million Dollars ($15,000,000.00), or so much thereof
as may be advanced from time to time in immediately available funds, together
with interest computed daily on the outstanding principal balance hereunder, at
an annual interest rate, and in accordance with the payment schedule, indicated
below.
1. Rate. The Rate shall be the 90-day LIBOR (London Interbank Offered Rate),
plus 2 percent ("Applicable Margin"), per annum. The "Rate" is the fluctuating
rate of interest established by Bank from time to time, at its discretion,
whether or not such rate shall be otherwise published. The Rate is established
by Bank as an index and may or may not at any time be the best or lowest rate
charged by Bank on any loan.
The Rate of the Loan shall also be subject to adjustment based on the Borrower's
Leverage ratio as defined under the Financial Covenants in the Loan Agreement.
The calculation and any change in the Applicable Margin shall take place and be
applicable as of the last day of the immediately preceding fiscal quarter.
Level Senior Funded Debt to EBITDA Applicable Margin
----------- ---------------------------- ------------------------
A >3.00 and =<3.50 250 Basis Points ("BPS")
B >2.50 and =<3.00 225 BPS
C >2.00 and =<2.50 200 BPS
D >1.50 and =<2.00 175 BPS
E >1.00 and =<1.50 150 BPS
F <1.00 125 BPS
Notwithstanding any provision of this Note, Bank does not intend to charge and
Borrower shall not be required to pay any amount of interest or other charges in
excess of the maximum permitted by the applicable law of the State of North
Carolina; if any higher rate ceiling is lawful, then that higher rate ceiling
shall apply. Any payment in excess of such maximum shall be refunded to Borrower
or credited against principal, at the option of Bank.
2. Accrual Method. Unless otherwise indicated, interest at the Rate set forth
above will be calculated by the 365/360 day method (a daily amount of interest
is computed for a hypothetical year of 360 days; that amount is multiplied by
the actual number of days for which any principal is outstanding hereunder).
3. Rate Change Date. Any Rate based on a fluctuating index or base rate will
change, unless otherwise provided, each time and as of the date that the index
or base rate changes.
In the event any index is discontinued, Bank shall substitute an index
determined by Bank to be comparable, in its sole discretion.
4. Payment Schedule. All payments received hereunder shall be applied first to
the payment of any expense or charges payable hereunder or under any other loan
documents executed in connection with this Note, then to interest due and
payable, with the balance applied to principal, or in such other order as Bank
shall determine at its option.
Single Principal Payment. Principal shall be paid in full in a single
payment on June 30, 2000. Interest thereon shall be paid monthly, commencing on
February 1, 1999, and continuing on the same day of each successive month
thereafter, with a final payment of all unpaid interest at the stated maturity
of this Note.
5. Revolving Feature. Borrower may borrow, repay and reborrow hereunder at any
time, up to a maximum aggregate amount outstanding at any one time equal to the
principal amount of this Note, provided that Borrower is not in default under
any provision of this Note, any other documents executed in connection with this
Note, or any other note or other loan documents now or hereafter executed in
connection with any other obligation of
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Borrower to Bank, and provided that the borrowings hereunder do not exceed any
borrowing base or other limitation on borrowings by Borrower. Bank shall incur
no liability for its refusal to advance funds based upon its determination that
any conditions of such further advances have not been met. Bank records of the
amounts borrowed from time to time shall be conclusive proof thereof.
Uncommitted Facility. Borrower acknowledges and agrees that,
notwithstanding any provisions of this Note or any other documents executed in
connection with this Note, Bank has no obligation to make any advance, and that
all advances are at the sole discretion of Bank.
6. Automatic Payment. Borrower has elected to authorize Bank to effect payment
of sums due under this Note by means of debiting Borrower's account number
_______________________________. This authorization shall not affect the
obligation of Borrower to pay such sums when due, without notice, if there are
insufficient funds in such account to make such payment in full on the due date
thereof, or if Bank fails to debit the account.
7. Waivers, Consents and Covenants. Borrower, any indorser or guarantor hereof,
or any other party hereto (individually an "Obligor" and collectively
"Obligors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any indorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other note or other loan documents
now or hereafter executed in connection with any obligation of Borrower to Bank
(the "Loan Documents"); (b) consent to all delays, extensions, renewals or other
modifications of this Note or the Loan Documents, or waivers of any term hereof
or of the Loan Documents, or release or discharge by Bank of any of Obligors, or
release, substitution or exchange of any security for the payment hereof, or the
failure to act on the part of Bank, or any indulgence shown by Bank (without
notice to or further assent from any of Obligors), and agree that no such
action, failure to act or failure to exercise any right or remedy by Bank shall
in any way affect or impair the obligations of any Obligors or be construed as a
waiver by Bank of, or otherwise affect, any of Bank's rights under this Note,
under any indorsement or guaranty of this Note or under any of the Loan
Documents; and (c) agree to pay, on demand, all costs and expenses of collection
or defense of this Note or of any indorsement or guaranty hereof and/or the
enforcement or defense of Bank's rights with respect to, or the administration,
supervision, preservation, or protection of, or realization upon, any property
securing payment hereof, including, without limitation, reasonable attorney's
fees, including fees related to any suit, mediation or arbitration proceeding,
out of court payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any arbitrator or
court, whichever is applicable.
8. Delinquency Charge. To the extent permitted by law, a delinquency charge may
be imposed in an amount not to exceed four percent (4%) of the unpaid portion of
any payment that is more than fifteen days late. Unless the terms of this Note
call for repayment of the entire balance of this Note (both principal and
interest) in a single payment and not for installments of interest or principal
and interest, the 4% delinquency charge may be imposed not only with respect to
regular installments of principal or interest or principal and interest, but
also with respect to any other payment in default under this Note (other than a
previous delinquency charge), including without limitation, a single payment of
principal due at the maturity of this Note. In the event any installment, or
portion thereof, is not paid in a timely manner, subsequent payments will be
applied first to the past due balance (which shall not include any previous
delinquency charges), specifically to the oldest maturing installment, and a
separate delinquency charge will be imposed for each payment that becomes due
until the default is cured.
9. Events of Default. The following are events of default hereunder: (a) the
failure to pay or perform any obligation, liability or indebtedness of any
Obligor to Bank, or to any affiliate or subsidiary of NationsBank Corporation,
whether under this Note or any Loan Documents, as and when due (whether upon
demand, at maturity or by acceleration); (b) the death of any Obligor (if an
individual); (c) the resignation or withdrawal of any partner or a material
owner/guarantor of Borrower, as determined by Bank in its sole discretion; (d)
the commencement of a proceeding against any Obligor for dissolution or
liquidation, the voluntary or involuntary termination or dissolution of any
Obligor or the merger or consolidation of any Obligor with or into another
entity; (e) the insolvency of, the business failure of, the appointment of a
custodian, trustee, liquidator or receiver for or for any of the property of,
the assignment for the benefit of creditors by, or the filing of a petition
under bankruptcy, insolvency or debtor's relief law or the filing of a petition
for any adjustment of indebtedness, composition or extension by or against any
Obligor; (f) the determination by Bank that any representation or warranty made
to Bank by any Obligor in any Loan Documents or otherwise is or was, when it was
made, untrue or materially misleading; (g) the failure of any Obligor to timely
deliver such financial statements, including tax returns, other statements of
condition or other information, as Bank shall request from time to time; (h) the
entry of a judgment against any Obligor which Bank deems to be of a material
nature, in Bank's sole discretion; (i) the seizure or forfeiture of, or the
issuance of any writ of possession, garnishment or attachment, or any turnover
order for any property of any Obligor; (j) the determination by Bank that a
material adverse change has occurred in the financial condition of any Obligor;
or (k) the failure of Borrower's business to comply with any law or regulation
controlling its operation.
10. Remedies upon Default. Whenever there is a default under this Note (a) the
entire balance outstanding hereunder and all other obligations of any Obligor to
Bank (however acquired or evidenced) shall, at the option of Bank, become
immediately due and payable and any obligation of Bank to permit further
borrowing under this Note shall immediately cease and terminate, and/or (b) to
the extent permitted by law, the Rate of interest on the unpaid principal shall
be increased at Bank's discretion up to the maximum rate allowed by law, or if
none, Prime plus 3% per annum (the "Default Rate"). The provisions herein for a
Default Rate and a delinquency charge shall not be deemed to extend the time for
any payment hereunder or to constitute a "grace period" giving Obligors a right
to cure any default. At Bank's option, any accrued and unpaid interest, fees or
charges may, for purposes of computing and accruing interest on a daily basis
after the due date of this Note or any installment thereof, be deemed to be a
part of the principal balance, and interest shall accrue on a daily compounded
basis after such date at the Default Rate provided in this Note until the entire
outstanding balance of principal and interest is paid in full. Upon a default
under this Note, Bank is hereby authorized at any time, at its option and
without notice or demand, to set off and charge against any deposit accounts of
any Obligor (as well as any money, instruments, securities, documents, chattel
paper, credits, claims, demands, income and any other property, rights and
interests of any Obligor), which at any time shall come into the possession or
custody or under the control of Bank or any of its agents, affiliates or
correspondents, any and all obligations due hereunder. Additionally, Bank shall
have all rights and remedies available under each of the Loan Documents, as well
as all rights and remedies available at law or in equity.
11. Non-Waiver. The failure at any time of Bank to exercise any of its options
or any other rights hereunder shall not constitute a waiver thereof, nor shall
it be a bar to the exercise of any of its options or rights at a later date. All
rights and remedies of Bank shall be cumulative and may be pursued singly,
successively or together, at the option of Bank. The acceptance by Bank of any
partial payment shall not constitute a waiver of any default or of any of Bank's
rights under this Note. No waiver of any of its rights hereunder, and no
modification or amendment of this Note, shall be deemed to be made by
11
Bank unless the same shall be in writing, duly signed on behalf of Bank; each
such waiver shall apply only with respect to the specific instance involved, and
shall in no way impair the rights of Bank or the obligations of Obligors to Bank
in any other respect at any other time.
12. Applicable Law, Venue and Jurisdiction. This Note and the rights and
obligations of Borrower and Bank shall be governed by and interpreted in
accordance with the law of the State of North Carolina. In any litigation in
connection with or to enforce this Note or any indorsement or guaranty of this
Note or any Loan Documents, Obligors, and each of them, irrevocably consent to
and confer personal jurisdiction on the courts of the State of North Carolina or
the United States located within the State of North Carolina and expressly waive
any objections as to venue in any such courts. Nothing contained herein shall,
however, prevent Bank from bringing any action or exercising any rights within
any other state or jurisdiction or from obtaining personal jurisdiction by any
other means available under applicable law.
13. Partial Invalidity. The unenforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
14. Binding Effect. This Note shall be binding upon and inure to the benefit of
Borrower, Obligors and Bank and their respective successors, assigns, heirs and
personal representatives, provided, however, that no obligations of Borrower or
Obligors hereunder can be assigned without prior written consent of Bank.
15. Controlling Document. To the extent that this Note conflicts with or is in
any way incompatible with any other document related specifically to the loan
evidenced by this Note, this Note shall control over any other such document,
and if this Note does not address an issue, then each other such document shall
control to the extent that it deals most specifically with an issue.
16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF
ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT, OR IF THERE IS REAL OR PERSONAL PROPERTY COLLATERAL, IN
THE COUNTY WHERE SUCH REAL OR PERSONAL PROPERTY IS LOCATED, AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP
TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH
AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES
NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL
OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
Borrower represents to Bank that the proceeds of this loan are to be used
primarily for business, commercial or agricultural purposes. Borrower
acknowledges having read and understood, and agrees to be bound by, all terms
and conditions of this Note and hereby executes this Note under seal as of the
date here above written.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES.
Corporate Borrower
American Aircarriers Support, Incorporated
By: Xxxx Xxxxx
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Name:
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Title: CEO
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Attest
[Corporate Seal]
