Exhibit 10.1
This Loan Agreement is subject to the terms of a Subordination
and Intercreditor Agreement in favor of The CIT Group/Commercial
Services, Inc., as agent for itself and for CIT Financial Ltd., which
Subordination and Intercreditor Agreement is incorporated herein by
reference. Notwithstanding any contrary statement contained in the
within Loan Agreement, no payment on account of principal or interest
thereof shall become due or be paid except in accordance with the terms
of such Subordination and Intercreditor Agreement.
LOAN AGREEMENT
This Loan Agreement (the "Agreement") is entered into by and between
EPIC Aviation, LLC, an Oregon limited liability company ("EPIC"), and Ronson
Aviation, Inc., a New Jersey corporation ("RONSON"), and is effective as of May
30, 2007.
RECITALS
A. RONSON desires to secure funds from EPIC to be used for
completing construction of a new 19,200 sq. ft. aircraft hangar at its business
location and agrees to extend the term of the Fuel Purchase Contract, by and
between EPIC and RONSON, dated March 7, 2002, as supplemented by the Addendum to
Fuel Purchase Agreement (the "Fuel Purchase Contract"), for an additional ten
(10) years (the period from the date hereof through the end of such additional
term, being the "Extended Term") and to repay EPIC all amounts advanced, with
interest, in accordance with the terms and conditions set forth below.
B. EPIC agrees to advance up to $500,000 to RONSON, for use in
completing the construction of the new 19,200 sq ft hangar at its business
location, subject to the terms and conditions set forth below.
AGREEMENT
In consideration of the mutual covenants contained herein, the parties
agree as follows:
1. EPIC agrees to advance up to a maximum of Five Hundred Thousand
Dollars ($500,000.00) (the "Loan Advance") to RONSON, for its use in completing
construction of its new aircraft hangar (the "New Hangar"), located at its
business operation at the Xxxxxxx Xxxxxx County Airport in Trenton, New Jersey
(the "Construction"). RONSON acknowledges and agrees that its commitment to
extend the term of the Fuel Purchase Contract for an additional ten (10) years
(the "Extended Term"), as agreed by the parties in that certain Amendment to the
Fuel Purchase Contract of an even date herewith, is a material inducement to
EPIC to enter into this Agreement, and that EPIC would not otherwise agree to
the terms hereof.
To obtain a Loan Advance "draw," RONSON shall deliver a draw request
to EPIC signed by an officer of RONSON in the form set forth in Exhibit A,
together with supporting invoices, bids and/or work orders for the goods,
services or equipment RONSON intends to acquire in completing the Construction
of the New Hangar. EPIC shall tender funds to RONSON upon receipt of the
foregoing.
In addition to other remedies provided by law, if RONSON: (a)
terminates the Fuel Purchase Contract (this and all further references to the
Fuel Purchase Contract shall be deemed to include the amendments incorporated
into that contract by the Amendment to the Fuel Purchase Contract, executed
contemporaneously herewith) for any reason (voluntarily or involuntarily); or
(b) breaches the Fuel Purchase Contract in any material respect (each a
"Triggering Event"), then EPIC shall have no further obligation to advance any
additional funds to RONSON and RONSON shall repay to EPIC the entire Loan
Advance balance of all funds advanced by EPIC to RONSON under this Agreement
that have not then been repaid according to the terms below, together with
accrued interest (the "Default Repayment Amount") within ten (10) days of EPIC's
written demand for payment thereof. In the event RONSON fails to make full
payment of the Default Repayment Amount within ten (10) days of EPIC's written
demand, the unpaid balance shall accrue interest at the rate of twelve (12)
percent per annum from the date of demand. Pursuing collection of the Default
Repayment Amount is not an exclusive remedy and may be enforced independently or
cumulatively without waiver of any other available remedy. Likewise, payment of
the entire Default Repayment Amount does not release RONSON from its other
obligations hereunder.
2. The term of this Agreement shall be ten (10) years from the date
this Agreement is first signed (the "Term").
3. Interest Rate. The interest rate on the Loan Advance shall be at the
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rate of 6% per annum. Interest is calculated on the basis of actual number of
days elapsed divided by 365.
4. Unless otherwise specified herein, RONSON shall repay the Loan
Advance, together with interest thereon, to EPIC by payment of a surcharge on
fuel purchased under the Fuel Purchase Agreement. Specifically, RONSON shall pay
a $.0725 (seven and one quarter cents) per gallon surcharge (the "Surcharge") on
all fuel (Av Gas, Jet Fuel with Additive and Jet Fuel) purchased during the
Extended Term of the Fuel Purchase Contract, from the first tender by EPIC of
the Loan Advance until the Loan Advance owed by RONSON to EPIC is paid in full.
The Surcharge shall be added to each invoice for fuel purchased by RONSON from
EPIC and shall be paid on the same terms and conditions as fuel purchase
reflected on said invoice. If the cumulative amount of Surcharge paid by RONSON
during the Extended Term should at any time fall below the amount RONSON would
then have been required to pay had the Loan Advance and attendant interest
hereunder been payable in equal monthly installments with an interest rate of 6%
per annum, amortized over 72 months (the "Minimum Payment"), EPIC may require
RONSON to make additional payment in an amount equal to the difference between
such cumulative Surcharge and the Minimum Payment amount (the "Deficiency
Payment") by giving RONSON written notice of such requirement (the "Deficiency
Notice"). Payment of any Deficiency Amount hereunder shall be due within fifteen
(15) days of RONSON's receipt of a Deficiency Notice. All Deficiency Payments
shall be deemed payment of the Surcharge for future calculations under the
preceding provisions of this Paragraph 4. No Surcharge shall be charged by EPIC
to RONSON for fuel purchases during any period of time during the Extended Term
when no sums are outstanding for Loan Advances or interest thereon.
RONSON acknowledges and agrees that it is solely responsible for any
and all taxes, levies, fines or fees associated with the Surcharge and/or the
Construction of the New Hangar and agrees to defend, indemnify and hold EPIC
harmless from any claims or liability whatsoever relating in any way to the
Construction of the New Hangar or to any potential tax, levy, fine or fee
associated with the Surcharge.
5. RONSON shall be solely and completely responsible for the selection,
installation and maintenance of the Construction and for all dealings and
communications with any manufacturer, vendor,
contractor, employee, governmental entity or any other person, party or entity
in any way related to the Construction. RONSON'S sole and exclusive
responsibilities shall include, but shall not limited to, selecting the vendor,
manufacturer, contractor, or other person or entity, negotiating all terms of
engagement, securing all necessary or required permits, licenses or approvals,
reviewing, evaluating and assessing specifications, proposals or plans,
supervising and/or inspecting work, goods or equipment, and making payment for
any relevant goods, services, equipment, permits, licenses, permits, approvals,
including payment of associated fines, taxes, fees or other costs that may be
imposed, levied, assessed in connection with the Construction. EPIC's only
relationship in connection with this Agreement and/or the Construction is that
of a lender to RONSON. RONSON and EPIC agree that EPIC is only responsible for
advancing funds to RONSON for it to procure and complete construction of the New
Hangar, and RONSON has and shall select and engage all goods, equipment,
vendors, manufacturers, contractors, and/or other based on its own investigation
with no representations or warranties of any kind whatsoever by EPIC.
6. Title to the New Hangar, all components thereof and all goods and
equipment procured to effect completing the Construction shall be held solely by
RONSON, subject to a security interest in favor of EPIC, as set forth in that
certain Security Agreement, by and between EPIC and RONSON, executed
contemporaneously herewith, and to the additional encumbrances set forth in said
Security Agreement and the provisions of the Lease (as defined therein). RONSON
shall maintain, at its sole cost and expense, at all times during the Extended
Term, a casualty insurance policy for the full replacement value of the
Construction, together with a policy or rider covering the spill, discharge and
slow or gradual leakage of contaminants from, or related to, the Construction.
Such policies shall be with companies reasonably satisfactory to EPIC and shall
name EPIC as an additional insured.
7. As a specifically bargained for inducement to enter into this
Agreement, RONSON agrees that it shall indemnify, defend and hold EPIC harmless
from any and all liability, damage, expense, attorney's fees and costs, causes
of action, suits, claims or judgments (collectively, "Claims"), relating in any
way to the Construction, goods or services relating to the Construction or
component parts of the Construction, or arising in any way from the breach of
any agreement with any third party, injury to person or damage to property
arising out of or connected in any way with the use, occupancy, management, or
control of any of the Construction or any of RONSON's operations or property,
including without limiting the generality of the foregoing, the design,
manufacture, delivery, installation, maintenance and use of the Construction. .
RONSON shall, at its own cost and expense, defend any and all suits which may be
brought against EPIC either alone or in conjunction with others, upon any of the
above mentioned Claims, and shall satisfy, pay and discharge any and all
judgments that may be recovered against EPIC in any such action or actions in
which EPIC may be a party defendant.
8. EPIC MAKES NO (AND SHALL NOT BE DEEMED TO HAVE MADE ANY) WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING MATERIAL, EQUIPMENT
OR WORKMANSHIP IN THE CONSTRUCTION OR ANY COMPONENT PART THEREOF OR SERVICES
ASSOCIATED THEREWITH, INCLUDING BUT NOT LIMITED TO ITS MERCHANTABILITY OR ITS
FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE THERETO OR ANY COMPONENT
THERETO, THE ABSENSE OF LATENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE);
IT BEING UNDERSTOOD THAT THE RELATIONSHIP AS BETWEEN EPIC AND RONSON IS THAT OF
LENDER AND BORROWER ONLY AND ALL SUCH RISKS, IF ANY, ARE TO BE BORNE SOLELY BY
RONSON. NO DEFECT IN, OR UNFITNESS OF, THE CONSTRUCTION, MATERIAL, EQUIPMENT OR
WORKMANSHIP IN THE CONSTRUCTION OR ANY COMPONENT PART THEREOF, OR ANY SERVICES
ASSOCIATED THEREWITH, OR ANY OF THE OTHER FOREGOING MATTERS, SHALL RELIEVE
RONSON OF THE OBLIGATION TO REPAY EPIC FOR ANY AMOUNTS ADVANCED TO RONSON OR
ADVANCED FOR RONSON'S BENEFIT OR OF ANY OTHER OBLIGATION OF RONSON TO EPIC.
RONSON HAS MADE THE SELECTION OF THE CONSTRUCTION, MATERIAL, EQUIPMENT OR
WORKMANSHIP IN THE CONSTRUCTION OR ANY
COMPONENT PART THEREOF, OR SERVICES ASSOCIATED THEREWITH, BASED UPON ITS OWN
JUDGMENT AND EXPRESSLY DISCLAIMS ANY RELIANCE UPON ANY STATEMENTS OR
REPRESENTATIONS MADE BY EPIC. EXCEPT AS EXPRESSLY STATED HEREIN, EPIC IS NOT
RESPONSIBLE FOR ANY REPAIRS, SERVICE, MAINTENANCE, OR DEFECT IN THE CONSTRUCTION
OR THE OPERATION THEREOF. IN NO EVENT SHALL EPIC BE LIABLE FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER UNDER THE UCC OR OTHERWISE), INCLUDING
WITHOUT LIMITATION, ANY LOSS, COST OR DAMAGE TO RONSON OR OTHERS ARISING FROM
ANY OF THE FOREGOING MATTERS, INCLUDING WITHOUT LIMITATION, DEFECTS, NEGLIGENCE,
DELAYS, FAILURE OF DELIVERY OR NON-PERFORMANCE OF THE CONSTRUCTION. THE TERMS OF
THIS AGREEMENT, INCLUDING THE AGREEMENT TO REPAY FUNDS ADVANCED BY EPIC ARE
ABSOLUTE, IRREVOCABLE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY RIGHT OF
SET OFF, COUNTERCLAIM, DEDUCTION, DEFENSE OR OTHER RIGHT WHICH RONSON MAY HAVE
AGAINST ANY VENDOR, MANUFACTURER, CONTRACTOR, SUPPLIER, EPIC OR ANY OTHER PARTY.
9. Notwithstanding any other provision to the contrary herein, all
payments under this Agreement (including, without limitation, the Surcharge)
shall be paid to the order of EPIC at 0000 00xx Xxxxxx XX in Xxxxx, Xxxxxx
00000, or at such other place as the EPIC may designate in writing. Payments
received by EPIC shall be applied and credited to the amounts due to EPIC in the
following order.
a. To reasonable attorneys' fees and collection costs
incurred by EPIC and chargeable to RONSON pursuant to
the terms of this Agreement;
b. To interest to the date of payment;
c. To the principal balance due under this Agreement.
10. RONSON shall be in default if:
a. Any payment is not made to EPIC within 15 days of the
due date;
b. Any obligation under this Agreement or any other
agreement between RONSON and EPIC is breached in any
material respect or is not performed in any material
respect, unless such breach is corrected within 30
days of written notice of such breach to RONSON;
11. Upon default, and during the continuation thereof, EPIC shall be
entitled to exercise one or more of the following remedies without notice or
demand (except as required by law):
a. To collect the outstanding obligations hereunder with
or without resorting to judicial process;
b. To elect and/or exercise any remedy or collection of
remedies as EPIC may have under the Fuel Purchase
Contract or the Business Application for Credit and
Agreement;
c. EPIC's rights are cumulative and may be exercised
together, separately and in any order.
12. Failure to exercise any right EPIC may have or be entitled to in
the event of any default hereunder shall not constitute a waiver of such right
or any other right in the event of a subsequent default.
13. RONSON waives demand, presentment, and notice of dishonor and
protest of any instrument either of RONSON or others which may be related to its
obligations under this Agreement.
14. RONSON hereby irrevocably submits to the jurisdiction of the State
of Oregon and consents to venue in Xxxxxx County Circuit Court, Xxxxxx County,
Oregon. RONSON agrees that it will not claim that such forum is an inconvenient
forum and hereby specifically waives any and all objection to having any dispute
relating to this Agreement resolved in Xxxxxx County Circuit Court in Salem,
Oregon. The laws of the State of Oregon shall govern this Agreement, without
regard to local conflict of law rules.
15. Nothing herein shall be construed or deemed to create any
relationship of joint venture, partnership master-servant or principal-agent
between EPIC and RONSON. It is not the intention of the parties hereto to create
any such relationship, and the parties intend that the relationship of the
parties is solely that of borrower and lender.
16. Upon demand, RONSON shall immediately reimburse EPIC for all
amounts (including reasonable attorneys' fees and legal expenses) expended by
EPIC, to the extent permitted by applicable law, in the enforcement or defense
of any obligation or the exercise of any right or remedy described in this
Agreement or in the enforcement or defense of any obligation or the exercise of
any right or remedy relating to the Fuel Purchase Contract between EPIC and
RONSON. Reimbursement shall include costs incurred in any legal action,
arbitration, mediation, or other proceeding, both at trial and on any appeal
there from or petition for review thereof. If a court construes this provision
to award attorneys' fees and costs to the prevailing party then the term
"prevailing party" shall mean the party prevailing on issues related to this
Agreement and the Fuel Purchase Contract only. All reasonable costs shall bear
interest at the rate described in this Agreement.
17. RONSON warrants and represents that all funds advanced and
represented by this Agreement are solely for business and commercial purposes.
18. This Agreement, and the Amendment to the Fuel Purchase Contract and
the Security Agreement have been prepared by counsel for EPIC. RONSON expressly
acknowledges that it has had the opportunity to be independently advised with
regard to this transaction, including the Amendment to the Fuel Purchase
Contract, the Security Agreement and this Agreement. The parties agree that the
rule of construction which establishes that a written agreement shall be
construed against the party preparing or drafting such agreement shall not apply
to the interpretation or construction of this Agreement, the Security Agreement
and the Amendment to the Fuel Purchase Contract.
19. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is prohibited by or invalid under
applicable law, such provision will be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
20. Notwithstanding any other provision to the contrary herein, any and
all rights of EPIC hereunder, including, without limitation, to repayment of the
Loan Advance, is and shall be subordinated to the prior payment and satisfaction
of any and all loans, advances and extensions of credit made by The CIT
Group/Commercial Services, Inc., as agent for itself and CIT Financial Ltd.
(collectively "CIT"), to RONSON, and to Ronson Corporation, Ronson Consumer
Products Corporation and Ronson Corporation of Canada Ltd. (together with
RONSON, the "RONSON Group"), and to all other indebtedness, obligations and
liabilities of the RONSON Group to CIT; and, if requested by CIT, EPIC hereby
agrees to enter into a subordination agreement prescribed by CIT in evidence of
the foregoing.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A LENDER
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS, WHICH ARE
NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
LENDER TO BE ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first written above.
EPIC AVIATION, LLC. dba Air BP Ronson Aviation, Inc.
Aviation Services
By /s/ Xxxxxxx X. Xxxx By /s/ Xxxxx X. Xxxxxxx XX
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Its President Its President & CEO
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Date: 6/13/07 Date: 5/30/07
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