FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this “Agreement”) is made
and entered into as of May 5 , 2010 by and between Saker Aviation Services,
Inc., a Nevada
corporation (“Saker”) and Birch
Hill Capital, LLC, a Delaware limited liability company (“Lender”).
RECITALS:
WHEREAS, on March 3, 2009 Airborne,
Inc. and FirstFlight, Inc. (n/k/a Saker) entered into that certain line of
credit note (the “Note”) in favor of Five Star Bank (“Five Star”), in the
original principal amount of up to One Million ($1,000,000) Dollars (the
“Loan”);
WHEREAS, on December 28, 2009, Five
Star assigned to Lender, and Lender assumed from Five Star, the Note and all
other agreements and certificates delivered in connection therewith, including,
without limitation, that certain General Security Agreement and Debt
Subordination Agreement delivered by Saker in connection with the
Loan (collectively, the “Loan Documents”);
WHEREAS, the loan is payable upon
Lender’s demand thereof;
WHEREAS, the Lender and Saker have
agreed that Lender will forbear on exercising certain rights of Lender under the
Loan Documents with respect to Saker only (and not Airborne, Inc.) as set forth
herein.
NOW, THEREFORE, for good and valuable
consideration, the receipt of sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Lender
hereby agrees to forbear on demanding repayment of Five Hundred Thousand
($500,000) Dollars of the principal (the “Deferred Amount”) amount of the Loan
for a period of two (2) years from after the date hereof (the “Forbearance
Period”).
2. In
consideration of Lender’s agreement to forbear on collection of the Deferred
Amount during the Forbearance Period, Saker agrees to make twenty four (24)
equal monthly payments of interest and principal of $15,438.55 each, which
amount is based on a thirty-six (36) month authorization period and an interest
rate equal to seven (7%) percent per annum. All payments shall be
made on the first (1st) day of
each month. It is understood that upon the expiration of the
Forbearance Period, the terms and conditions of this Agreement shall expire and
the Loan shall be governed by the Loan Agreements, including, without
limitation, with respect to the interest payable thereon, the Lender’s right to
demand payment of all amounts due and owing thereunder and all other terms and
conditions set forth therein.
3. No Novation. The
execution of this Agreement constitutes Lender’s agreement to forbear from
exercising its rights and remedies and does not constitute a novation of the
liabilities, duties and obligations (the “Obligations”) of
Saker under the Loan Documents. Accordingly, Saker stipulates and
agrees that the liens and security interests granted under the Loan Documents
continue to secure payment of the Obligations in accordance with their original
priorities, and furthermore, acknowledges that Lender is only agreeing to
forbear from exercising its rights and remedies as described herein and does not
waive any of its rights and remedies.
4. Conditions to
Forbearance. Each of the following conditions shall constitute a
forbearance condition (each, a “Forbearance
Condition” and, collectively, the “Forbearance
Conditions”), the continuing satisfaction of each and everyone of which
shall be a continuing condition to the agreement of Lender to forbear as set
forth above:
(a) All Payments Current.
All payments due under the Note as modified by this Agreement must be timely
made;
(b) No Subsequent
Defaults. Saker shall duly observe and perform each obligation and
covenant to be performed under the Loan Documents and this
Agreement; and
(c) No Current Defaults.
There has not occurred an event of default under the Loan Documents, nor an
event with which the passage of time would constitute a default under the Loan
Documents (a “Default”).
5. Representations and
Warranties. Saker represents and warrants to Lender that it is not in
default under the Loan Documents, nor has an event occurred, with which the
passage of time would cause an event of default under the Loan
Documents.
6. Waiver and Termination of
Rights. Following any failure by Saker to satisfy any
Forbearance Condition, Saker understands, acknowledges and agrees that, at
Lender’s option, the Forbearance Period shall terminate, all Obligations shall
be immediately due and payable in full and Lender may immediately enforce any
and all rights and remedies available under the Loan Documents and applicable
law without notice.
7. Release of Claims and
Covenant Not to Xxx. As a material inducement to Lender to
enter into this Agreement and to grant the concessions to Saker reflected
herein, all in accordance with and subject to the terms and conditions of this
Agreement, and all of which are for the benefit of Saker, Saker (a) does hereby
remise, release, acquit, satisfy and forever discharge Lender, and all of the
past, present and future employees, agents, attorneys, representatives,
participants, successors and assigns of Lender, from any and all manner of
debts, accountings, bonds, warranties, representations, covenants, promises,
contracts, controversies, agreements, liabilities, obligations, expenses,
damages, judgments, executions, actions, claims, demands and causes of action of
any nature whatsoever, whether at law or in equity, either now accrued or
hereafter maturing and whether known or unknown, which Saker now has or
hereafter can, shall or may have by reason of any matter, cause or thing, from
the beginning of the world to and including the date of this Agreement,
including specifically, but without limitation, matters arising out of, in
connection with or relating to (i) the Obligations, (i) the Loan Documents or
the obligations evidenced thereby, including, the administration or funding
thereof, and (ii) any other relationship, agreement or transaction between Saker
and Lender or any of their respective subsidiaries or affiliates; and (b) does
hereby covenant and agree never to institute or cause to be instituted or
continue prosecution of any suit or other form of action or proceeding of any
kind or nature whatsoever against Lender or any affiliates of Lender, or any of
its past, present or future employees, agents, attorneys, representatives,
participants, successors or assigns, by reason of or in connection with any of
the foregoing matters, claims or causes of action, provided, however, that the
foregoing release and covenant not to xxx shall not apply to any claims arising
after the date of this Agreement with respect to acts, occurrences or events
after the date of this Agreement.
8. Expenses. Saker
shall, upon demand by Lender, pay or reimburse Lender for all costs and expenses
incurred by Lender in connection with the execution of this Agreement, including
without limitation all attorneys’ fees. Notwithstanding any other
provisions contained in the Loan Documents, if Lender retains an attorney in
order to enforce, defend or protect Lender’s rights and/or remedies under the
Loan Documents or if Lender retains an attorney in connection with any default
of any stated or accelerated maturity of Saker obligations to Lender in order to
collect any debt due Lender or if Lender retains an attorney in connection with
any lawsuits, reorganization, bankruptcy or other proceeding involving the Loan
Documents or if Saker sues Lender, then in any such instance Saker agrees to pay
Lender in addition to all principal, interest, including periodic payments and
fees and other amounts payable by Saker, all of Lender’s costs and expenses
including reasonable attorneys’ fees incurred by Lender.
9. Miscellaneous.
(a) Cumulative Rights. No
right, power or remedy conferred upon or reserved to Lender in the Loan
Documents is exclusive of any other right, power or remedy conferred upon Lender
thereunder or at law or in equity. Each remedy shall be cumulative and may be
exercised by Lender concurrently or consecutively in its
discretion.
(b) No Waiver. Lender
may, in its discretion, from time to time waive or forbear from enforcing any
provision contained in the Loan Documents, and no such waiver or forbearance
shall be deemed a waiver by Lender of any other right or remedy provided herein
or by law or be deemed a waiver of the right at any later time to enforce
strictly all provisions contained in the Loan Documents and to exercise any and
all remedies provided herein and by law.
(c) Headings. The
headings of the articles, sections and subsections of this Agreement are for the
convenience of reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof or thereof.
(d) Admissions. Saker
expressly acknowledges and agrees that the waivers, estoppels and releases
contained in this Agreement shall not be construed as an admission of
wrongdoing, liability or culpability on the part of Lender or an admission by
Lender of the existence of any claims of Saker against Lender.
(e) Construction of
Agreement. Each party acknowledges that it has participated in the
negotiation of this Agreement, and no provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured, dictated or drafted such provision. Saker
acknowledge that at all times they have been represented by an attorney in the
negotiation of the terms of and in the preparation and execution of this
Agreement, or have voluntarily decided not to be represented by an attorney, and
have had the opportunity to review and analyze this Agreement for a sufficient
period of time prior to the execution and delivery thereof. No representations
or warranties have been made by or on behalf of Lender, or relied upon by Saker,
pertaining to the subject matter of this Agreement, other than those set forth
in this Agreement. This Agreement and the Loan Documents embody the entire
agreement and understanding among the parties to the subject matter thereof and
hereof and supersede all prior proposals, negotiations, agreements and
understanding relating to such subject matter.
(f) Notices. Any notice
required or permitted to be given under this Agreement shall be in writing and
shall be deemed given on the third day following the date deposited in the
United States mail, postage prepaid, sent by first class mail and,
alternatively, shall be deemed given on the next day following the date such
notice is delivered to a nationally recognized overnight delivery service such
as Federal Express and addressed as follows:
|
If
to Lender, to:
|
Birch
Hill Capital LLC
|
c/o Wachtel & Masyr,
LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx,
Esq.
|
If
to Saker, to:
|
000
Xxxxxx Xxxx
Xxxxx, XX
00000
Attention:
President
Either
party may, from time to time, designate a different notice address by notice
given as herein provided.
(g) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York
(h) No Assignment by
Saker. The rights and obligations of Saker hereunder may not be assigned
or transferred to any person or entity without the express written consent of
Lender.
(i) No Modifications. The
terms of the Loan Documents may not be changed, modified, waived, discharged or
terminated orally, but only by an instrument or instruments in writing, signed
by the party against whom the enforcement of the change, modification, waiver,
discharge or termination is asserted.
(j) Invalid Provision to Affect
No Others. If any provisions of this Agreement shall be held invalid,
then such provision only shall be deemed invalid, and the remainder of this
Agreement shall remain operative and in full force and effect.
(k) Time of
Essence. Time is of the essence in respect of this
Agreement.
(l) Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all counterparts together shall constitute one and the
same instrument.
(m) Effect of Agreement.
To the extent any provision contained in this Agreement is inconsistent with any
provision contained in any of the Loan Documents, the provisions contained in
this Agreement shall control. The Loan Documents shall continue in
full force and effect except as expressly modified by this
Agreement.
[SIGNATURES
TO THIS AGREEMENT APPEAR ON
THE
FOLLOWING PAGES]
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement under
seal, pursuant to authority duly given as of the day and year first above
written.
BIRCH
HILL CAPITAL, LLC
By:
________________________________
Name:
Title:
By:
_____________________________
Name: Xxxxxx
Xxxxxxxxx
Title: President
and CEO
The
undersigned guarantors of the Loan hereby consent to the forbearance set forth
herein and to the actions contemplated hereby.
______________________
Xxxxxxx
X. Xxxxxxx
______________________
Xxxxx X.
Xxxxx
