Exhibit 10.60
THIS SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT
TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS
PROMISSORY NOTE MAY NOT BE SOLD, UNLESS EITHER REGISTERED
UNDER SUCH ACT AND SUCH APPLICABLE STATE LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
SUBORDINATED PROMISSORY NOTE
Aircraft N377SK
$ 440,000 February 20, 2002
FOR VALUE RECEIVED, Chautauqua Airlines, Inc., a New York corporation
(the "Company and "Borrower"), hereby jointly and severally unconditionally
promises to pay on demand to the order of Solitair Corp., a Delaware corporation
("Lender"), at c/o Wexford Capital LLC, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000 or at such other place as the holder of this Note may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the principal amount of four hundred
and forty thousand dollars ($440,000.00) or such lesser amount as may be
outstanding hereunder on or before March 31, 2003, together with interest
(computed on the basis of a 360-day year of twelve 30-day months and compounded
semiannually) (a) on the unpaid balance thereof at the rate of 9% per annum from
the date hereof, (b) to the extent permitted by law, on any overdue payment
(including any overdue prepayment) of principal and any overdue payment of
interest, payable as aforesaid (or, at the option of the holder hereof, on
demand), at a rate per annum equal to 12%.
Payments of principal of and interest on this Note are to be made in
lawful money of the United States of America at the office of the Company or at
such other place as the Company shall have designated by written notice to the
holder of this Note.
The Company agrees, and the holder agrees, that the indebtedness
evidenced by this Note is subordinate in right of payment, to the extent and in
the manner provided in this paragraph, to the prior payment in full of all
Senior Debt, and that the subordination is for the benefit of the holders of
Senior Debt. "Senior Debt" means any indebtedness to Fleet Capital Corporation
under the terms of the Loan and Security Agreement dated December 9, 1998 as
amended by Amendment No. 1 to Loan and Security Agreement dated July 27, 1999,
Amendment No. 2 to Loan and Security Agreement dated August 28, 1999, and
Amendment No. 3 to Loan and Security Agreement dated October 29, 2001or as
further amended pursuant to any subsequent amendment. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, (1) holders of Senior Debt shall be
entitled to receive payment
in full in cash of the principal of and interest (including interest accruing
after the commencement of any such proceeding) to the date of payment on the
Senior Debt before the holder shall be entitled to receive any payment of
principal of or interest on this Note; and (2) until the Senior Debt is paid in
full in cash, any distribution to which the holder would be entitled but for
this paragraph shall be made to holders of Senior Debt as their interests may
appear. The Company may not pay principal of or interest on this Note and may
not acquire this Note for cash or property other than capital stock of the
Company if a default on Senior Debt occurs and is continuing that permits
holders of such Senior Debt to accelerate its maturity, and if a distribution is
made to the holder that because of this paragraph should not have been made to
it, the holder who receives the distribution shall hold it in trust for holders
of Senior Debt and pay it over to them as their interests may appear. After all
Senior Debt is paid in full and until this Note is paid in full, the holder
shall be subrogated to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the holders have been applied to the payment of Senior
Debt. Nothing in this paragraph shall impair, as between the Company and the
holder, the obligation of the Company, which is absolute and unconditional, to
pay principal of and interest on this Note in accordance with its terms.
The Company may prepay this Note, in whole or in part, at any time
together with interest accrued to the date of such prepayment. Upon any sale,
assignment, transfer or other disposition of any stock of Chautauqua Airlines,
Inc., or upon any issuance or sale by the Company or the Company's parent
company of any capital stock, the Company shall prepay principal and interest on
this Note in an amount equal to the cash proceeds of any such disposition,
issuance or sale, net of reasonable costs and expenses and net of any repayments
of indebtedness secured by a lien on any such stock of Chautauqua Airlines, Inc.
Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by Xxxxxxxxx.
This Note shall be interpreted, governed by, and construed in
accordance with, the laws of the State of New York.
In Witness Whereof, Xxxxxxxx has caused this Note to be duly executed
and delivered on the date first above written.
CHAUTAUQUA AIRLINES, INC.
By: XXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President & CFO
NOTE TO EXHIBIT 10.60
The additional Subordinated Promissory Notes are substantially identical in all
material respects to the filed Subordinated Promissory Note except as follows:
Date of Promissory Note Aircraft Related to Loan Amount Maturity Date
----------------------- ------------------- ----------- -------------
March 27, 2002 N376SK $440,000 March 31, 2003
March 27, 2002 N377SK $440,000 March 31, 2003
May 24, 2002 N378SK $440,000 March 31, 2003
June 20, 2002 N379SK $440,000 March 31, 2003
July 12, 2002 N381SK $440,000 March 31, 2003
July 18, 2002 N380SK $440,000 March 31, 2003
