Exhibit 10.4
TERM LOAN AGREEMENT
TERM LOAN AGREEMENT (this "Agreement") dated as of September 23, 2005
among FBO Air, Inc., a Nevada corporation (the "Borrower"), Airborne, Inc., a
New York corporation (the "Guarantor"), and Airport Capital, LLC, a New York
limited liability company (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Lender make a loan (the
"Loan") to the Borrower in a single advance on the Closing Date (as hereinafter
defined) in the aggregate principal amount of One Million Five Hundred Thousand
Dollars ($1,500,000), the proceeds of which will be used to finance the
acquisition of all of the capital stock of the Guarantor;
WHEREAS, in consideration for the Lender making the Loan to the Borrower,
the Guarantor has agreed to guarantee full and prompt payment of all obligations
of the Borrower to the Lender which are incurred by the Borrower pursuant to
this Agreement and the other Credit Documents (as hereinafter defined);
WHEREAS, in consideration for the Lender making the Loan to the Borrower,
the Guarantor has agreed to secure the payment and performance of all
obligations of the Borrower and the Guarantor under the Credit Documents (the
"Obligations") with the Collateral (as hereinafter defined); and
WHEREAS, the Lender is willing to make the Loan subject to the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the covenants and promises herein
contained, the parties agree as follows:
ARTICLE I: AGREEMENT FOR THE LOAN
Section 1.1 Loan. Subject to the terms and conditions of this Agreement,
the Lender agrees to make the Loan to the Borrower in a single advance on the
Closing Date (as hereinafter defined) in the principal amount of One Million
Five Hundred Thousand Dollars ($1,500,000), and the Borrower agrees to borrow
the same from the Lender.
ARTICLE II: FINANCING TERMS
Section 2.1 Term. The Loan shall be evidenced by a Promissory Note in the
form of Exhibit A hereto (the "Note") delivered by the Borrower to the Lender in
the aggregate principal amount of the Loan. The term of the Loan shall be from
the Closing Date to the date that is one hundred eighty (180) days from the
Closing Date (the "Initial Maturity Date"), at which time all Obligations shall
be due and payable in full; provided, however, that the Borrower may extend the
term of the Loan until the one (1)-year anniversary of the date hereof (the
"Final Maturity Date") by delivering, prior to the Initial Maturity Date,
written notice to the Lender of its election to extend the term of the Loan
until such date (the period from the Initial Maturity Date until the Final
Maturity Date is referred to herein as the "Extension Period"). The term
"Maturity Date" shall mean the Initial Maturity Date unless and until the term
of the Loans is extended as provided in this Section 2.1 whereupon such term
shall mean the "Final Maturity Date".
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Section 2.2 Borrowings. The Lender is hereby authorized and directed by
the Borrower to disburse the Loan to be made by it directly to such account as
the Borrower may direct by written notice delivered to the Lender by Borrower at
least one (1) business day before the Closing Date.
Section 2.3 Note. On the Closing Date, the Borrower shall execute and
deliver to the Lender the Note, dated as of the Closing Date, in the aggregate
principal amount of the Loan, which shall evidence such Loan.
Section 2.4 Interest; Rate and Payment. From the date hereof until the
Initial Maturity Date, the principal balance of the Loan outstanding at any time
shall bear interest at a rate per annum equal to 4.25% (the "Initial Loan
Rate"). From the Initial Maturity Date until the expiration of the Extension
Period, the principal balance of the Loan outstanding at any time shall bear
interest at a rate per annum equal to 9.25% (the "Extension Loan Rate"). All
computations of interest shall be made on the basis of year of 365 or 366 days,
as the case may be, and actual days elapsed. The term "Loan Rate" shall mean the
Initial Loan Rate unless and until the term of the Loan is extended as provided
in Section 2.1 whereupon such term shall mean the "Extension Loan Rate".
Section 2.5 Payments.
(a) Interest. Interest on the Loan shall be paid in arrears on the last
business day of each calendar month.
(b) Repayment. The Borrower shall repay the Lender in full on the Maturity
Date the aggregate principal amount of the Loan outstanding on such date,
together with all accrued and unpaid interest thereon.
(c) Prepayment. The Borrower may, upon at least one (1) business day's
prior written notice to the Lender, at any time or from time to time, (i) prepay
the Note in its entirety, together with any accrued but unpaid interest
outstanding or (ii) partially prepay the Note, together with any accrued but
unpaid interest outstanding on the amount of such principal paid, in each case,
without premium or penalty.
(c) Manner and Time of Payment. All payments by the Borrower of principal,
interest and fees hereunder shall be made without defense, set off or
counterclaim, and in same day funds and delivered to the Lender not later than
5:00 p.m. (New York City time) on the date due at the address indicated for the
Lender in Section 9.1 hereto for the account of the Lender. Funds received by
the Lender after that time shall be deemed to have been paid by the Borrower on
the next succeeding business day.
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(d) Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Loan shall be stated to be due on a day which is not a
business day, the payment shall be made on the next succeeding business day and
such extension of time shall be included in the computation of the payment of
interest hereunder.
Section 2.6 Interest Rate after Default. Notwithstanding any other
provision of this Agreement, upon the occurrence and during the continuance of
any Event of Default (as hereinafter defined), any amounts due and owing under
this Agreement shall bear interest at a rate equal to 2% per annum above the
Loan Rate.
Section 2.7 Net Payments. All payments of any kind due to the Lender from
the Borrower pursuant to this Agreement shall be made in the full face amount
thereof, without setoff, counterclaim, or other defense. All such payments will
be free and clear of, and without deduction or withholding for, any present or
future taxes.
Section 2.8 Evidence of Indebtedness. The Loan and the Borrower's
obligation to repay the Loan with interest in accordance with the terms of this
Agreement shall be evidenced by this Agreement, the records of the Lender and
the Note. The record of the Lender shall be prima facie evidence of the Loan and
accrued interest thereon and of all payments made in respect thereof.
ARTICLE III: SECURITY FOR THE LOAN
Section 3.1 Security Interest. At all times during the term hereof and
until all sums owing pursuant hereto are paid in full, the Obligations shall be
secured as provided in the Guarantor Security Agreement dated as of the Closing
Date of the Guarantor in favor of the Lender in the form of Exhibit B hereto
(the "Security Agreement") with respect to the Collateral. The Security
Agreement, the Code financing statements in connection with the Security
Agreement and any and all other documents executed and delivered by the Borrower
or the Guarantor under which the Lender is granted a lien on assets of the
Guarantor are collectively referred to as "Security Documents". This Agreement,
the Notes, the Security Documents and all other documents executed in connection
herewith or therewith are collectively referred to herein as the "Credit
Documents." It is the express intention of the Borrower and the Guarantor that
the Lender be treated in all respects as a secured lender in any bankruptcy case
or similar insolvency proceeding of the Borrower or the Guarantor and that the
Lender be treated as a secured creditor for all purposes, including without
limitation, under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, 11 U.S.C.
Section 101 et seq. (the "Bankruptcy Code"), with a valid Lien (as hereinafter
defined) in all of the Collateral and the proceeds thereof.
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS
In order to induce the Lender to enter into this Agreement and to make the
Loan, each of the Borrower and the Guarantor makes the representations,
warranties, and indemnifications hereinafter set forth in this Article IV.
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Section 4.1 Indemnity. The Borrower and the Guarantor shall jointly and
severally indemnify the Lender and each of its Affiliates (as defined below) and
any of their respective officers, directors, mangers, employees and
representatives, and hold the Lender and each of its Affiliates and any of their
respective officers, directors, managers, employees and representatives harmless
from any loss, cost or expense whatsoever arising from the breach of any of the
Borrower's or the Guarantor's covenants or other obligations set forth in this
Agreement or any other Credit Document. The Borrower's and the Guarantor's
obligations under this Section 4.1 shall survive the repayment of the Loan and
the Note. "Affiliates" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person (a "Controlled
Entity") shall be deemed to be "controlled by" another Person (a "Controlling
Entity") if the Controlling Entity possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of the Controlled
Entity whether by contract or otherwise. "Person" shall mean any individual,
sole proprietorship, partnership, limited liability partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof), and shall
include such Person's successors and assigns.
Section 4.2 Status and Authority. Each of the Borrower and the Guarantor
is a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on the
financial condition, operations, business, properties, assets or prospects of
the Borrower and the Guarantor taken as a whole. Each of the Borrower and the
Guarantor has the power to execute, deliver and carry out the terms and
provisions of each of the Credit Documents to which the Borrower or the
Guarantor, respectively, is a party and has taken all necessary action to
authorize the execution of the Credit Documents to which the Borrower or such
Guarantor, respectively, is a party. The Credit Documents to which the Borrower
or the Guarantor is a party (a) have been duly executed and delivered by such
party and constitute the legal, valid, and binding obligations of the Borrower
and the Guarantor, enforceable in accordance with their respective terms, except
to the extent that enforcement may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject to the application or limitation of
equitable principles by a court of competent jurisdiction and (ii) do not (A)
contravene the charter or bylaws of either of the Borrower or the Guarantor, (B)
violate any law (including, without limitation, the Securities Exchange Act of
1934) or regulation (including, without limitation, Regulations T, U or X of the
Board of Governors of the Federal Reserve System), or any order or decree of any
court or Governmental Authority (as defined below), (C) conflict with or result
in a breach of, or constitute a default under, any material agreement or other
instrument binding on the Borrower or the Guarantor or any of its properties, or
(D) result in or require the creation or imposition of any Lien (as hereinafter
defined) upon any of the property of any of the Borrower or the Guarantor other
than the Liens granted pursuant to this Agreement or the other Credit Documents.
"Governmental Authority" means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
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Section 4.3 Receivables. All accounts receivable of the Guarantor
represent valid obligations arising from sales actually made, services actually
performed, or value actually given. Such accounts receivable are subject to no
contest, claim or right of setoff other than returns and credits in the ordinary
course of business consistent with past practice. All accounts receivable are
collectable in full without any set-off within 75-90 days after the Closing
Date.
Section 4.4 Solvency. On and as of the Closing Date, after giving effect
to the transactions contemplated hereby, (a) the assets of the Borrower will
exceed its debts and liabilities, subordinated, contingent or otherwise and (b)
the Borrower and the Guarantor will be able to pay their respective debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured.
ARTICLE V: CONDITIONS TO CLOSING
In addition to the terms and conditions otherwise contained herein, the
making of the Loan is subject to the satisfaction of the conditions contained in
this Article V. The date on which the conditions are satisfied and the initial
advance of the Loan is made is hereinafter referred to as the "Closing Date".
Section 5.1 No Default. The Borrower and the Guarantor shall not be in
default of: (a) any Credit Document or (b) any other agreement, loan or
otherwise, between the Borrower or the Guarantor, on the one hand, and the
Lender, on the other hand.
Section 5.2 Representations and Warranties. The representations and
warranties contained in the Credit Documents shall be true and correct.
Section 5.3 Delivery of Documents. The Borrower and the Guarantor shall
have delivered or caused to be delivered to the Lender the following documents:
(a) a duly executed copy of this Agreement;
(b) a duly executed copy of the Security Document;
(c) the Promissory Note to the Lender in the form of Exhibit A
attached hereto, duly executed by Borrower in the aggregate
principal amount of the Loan to the Borrower;
(d) UCC financing statements and such other items as shall be
required by the Lender to evidence the perfection of the
security interests created under the Security Documents; and
(e) all other documents or information as shall be reasonably
requested by the Lender.
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Section 5.4 Payment of Expenses. The Borrower shall have paid to the
Lender, in accordance with Section 9.7, all of the Lender's costs and expenses
(including fees and disbursements of legal counsel) as to which it shall have
received invoices.
ARTICLE VI: NEGATIVE COVENANTS
Until the principal of and interest on the Loans and all other Obligations
shall have been paid in full, each of the Borrower and the Guarantor covenants
and agrees with the Lender that:
Section 6.1 Indebtedness; Certain Equity Securities. The Borrower and the
Guarantor will not, without the Lender's consent, create, incur, assume or
permit to exist any Indebtedness, except:
(a) Senior Debt;
(b) Indebtedness permitted under the Senior Secured Notes;
(c) Indebtedness created under the Credit Documents; and
(d) Indebtedness existing on the date hereof, and extensions,
renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or accrued
interest thereon or result in an earlier maturity date or
decreased weighted average life thereof.
Section 6.2 Liens. The Borrower and the Guarantor will not, without the
Lender's consent, create, incur, assume or permit to exist any Lien (as defined
below) on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:
(a) Liens securing the Senior Debt;
(b) Liens permitted under the Senior Secured Notes;
(c) Liens created under the Credit Documents; and
(d) Liens on property or assets of the Borrower and the Guarantor
existing on the date hereof, provided, however, that such
Liens shall secure only those obligations which they secure on
the date hereof;
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
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Section 6.3 Ratio. Anything contained in this Agreement to the contrary
notwithstanding, it is expressly understood and agreed that at all times the
outstanding principal amount of the Loan shall not be more than seventy five
percent (75%) (the "Maximum Percentage") of the amount (as determined by the
Lender in good faith) of the Guarantor's Eligible Accounts. The Borrower agrees
that, if for any reason, in the Lender's reasonable discretion, the outstanding
principal amount of the Loan exceeds the Maximum Percentage of the Eligible
Accounts, the Borrower will, within ten (10) days after written request by the
Lender, repay to the Lender the amount by which the outstanding principal amount
of the Loan exceeds the Maximum Percentage of the Eligible Accounts.
The Borrower shall deliver to the Lender as frequently as the Lender may
reasonably request and in any event on the last business day of each calendar
month a certificate (the "Certificate") that sets forth as of the last business
day of such month the amount of Eligible Accounts, certified as true and correct
by the President of the Borrower or such other officer as is acceptable to the
Lender.
Compliance by the Borrower with the Minimum Percentage shall be determined
by the Lender (including the eligibility of Accounts) based on the most recent
Certificate delivered to the Lender and such other information available to the
Lender.
"Account Debtor" shall mean any Person who is or may become obligated with
respect to, or on account of, an Account.
"Accounts" shall mean all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Person, including: (i) all accounts
receivable, other receivables, book debts and other forms of obligations,
whether arising out of goods sold or services rendered or from any other
transaction (including any such obligations which may be characterized as an
account or contract right under the Code); (ii) all of such Person's rights in,
to and under all purchase orders or receipts for goods or services; (iii) all of
such Person's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods); (iv) all moneys
due or to become due to such Person under all purchase orders and contracts for
the sale of goods or the performance of services or both by such Person or in
connection with any other transaction (whether or not yet earned by performance
on the part of such Person), including the right to receive the proceeds of said
purchase orders and contracts; and (v) all collateral security and guarantees of
any kind given by any other Person with respect to any of the foregoing.
"Code" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of New York.
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"Eligible Accounts" shall mean as at the date of determination with
respect to the Guarantor, all Accounts of the Guarantor, except any Account: (a)
that does not arise from the sale of goods or services by the Guarantor in the
ordinary course of the Guarantor's business; (b) upon which (i) the Guarantor's
right to receive payment is not absolute or is contingent upon the fulfillment
of any condition whatsoever or (ii) the Guarantor is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process; (c) against which any defense, counterclaim or setoff, whether
well-founded or otherwise, is asserted or which is a "contra" Account; (d) that
is not a true and correct statement of a bona fide indebtedness incurred in the
amount of the Account for merchandise sold or services performed and accepted by
the Account Debtor obligated upon such Account; (e) with respect to which an
invoice, acceptable to the Lender in form and substance, has not been sent; (f)
that is not owned by the Guarantor or is subject to any right, claim, or
interest of another Person, other than the Lien in favor of the Lender; (g) that
arises from a sale to, or performance of services for, an employee or Affiliate
of the Guarantor, or an entity which has common officers or directors with the
Guarantor; (h) that is the obligation of an Account Debtor that is the Federal
(or local) government or a political subdivision thereof, unless the Lender has
agreed to the contrary in writing and the Guarantor has complied with the
Federal Assignment of Claims Act of 1940 (or the state equivalent thereof, if
any) with respect to such obligation; (i) that is the obligation of an Account
Debtor located in a foreign country unless such Account is supported by a letter
of credit in which the Lender has a first priority perfected security interest
or credit insurance acceptable to the Lender (and naming the Lender as loss
payee); (j) that is the obligation of an Account Debtor to whom the Guarantor is
or may become liable for goods sold or services rendered by the Account Debtor
to the Guarantor, to the extent of the Guarantor's liability to such Account
Debtor; (k) that arises with respect to goods which are delivered on a
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms
by reason of which the payment by the Account Debtor may be conditional; (l)
that is not paid within 90 days from its invoice date; (m) is an obligation of
an Account Debtor that has suspended business, made a general assignment for the
benefit of creditors, is unable to pay its debts as they become due or as to
which a petition has been filed (voluntary or involuntary) under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors; (n)
that arises from any xxxx-and-hold or other sale of goods which remain in the
Guarantor's possession or under the Guarantor's control; (o) as to which
Lender's interest therein is not a first priority perfected security interest;
(p) to the extent that such Account exceeds any credit limit established by the
Lender in the Lender's sole discretion; (s) as to which any of the Guarantor's
representations or warranties pertaining to Accounts are untrue; (t) that
represents interest payments, late or finance charges, or service charges owing
to the Guarantor; (u) that are a poor credit; or (v) that is not otherwise
acceptable in the good faith discretion of the Lender, provided, that the Lender
shall have the right to create and adjust eligibility standards and related
reserves from time to time in its good faith credit judgment.
ARTICLE VII: EVENTS OF DEFAULT; REMEDIES
Section 7.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement:
(a) default by the Borrower in the payment when due of any
principal under the Loan or under the Note;
(b) default by the Borrower in the payment when due of any
interest accrued under the Loan or under the Note;
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(c) default by the Borrower in the payment of any other amounts
payable under this Agreement or default by the Borrower or the
Guarantor of any other terms or provisions of this Agreement
or any other Credit Document not otherwise referred to in this
Section 7.1, and such default shall continue for a period of
thirty (30) days after the Borrower or such Guarantor have
been notified in writing of such default;
(d) any Security Document or any portion thereof granted to the
Lender shall cease to be in full force and effect or shall
cease to give to the Lender the rights and interests purported
to be created thereunder;
(e) the Borrower or the Guarantor fails or becomes unable
generally to pay its debts as they come due, makes a general
assignment of a material portion of its assets for the benefit
of creditors, has a compulsory winding up order made against
it or resolves to be wound up voluntarily, files a petition in
bankruptcy or for relief under any bankruptcy or insolvency
law, is adjudicated insolvent or bankrupt, petitions or
applies to any tribunal for any receiver of or any trustee for
such company or any substantial part of its property,
commences any proceeding relating to such company under any
reorganization, arrangement, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction whether now
or hereafter in effect, or if there is commenced against the
Borrower or the Guarantor any such proceeding by any act,
indicates its consent to, approval of, or acquiescence in any
such proceeding or the appointment of any such receivership or
trusteeship;
(f) any representation, warranty or statement made by the Borrower
or the Guarantor in this Agreement or any other Credit
Document or any notice or other document, certificate or
statement delivered by the Borrower pursuant or the Guarantor
hereto or in connection herewith is or proves to have been
incorrect or misleading when made and, in the reasonable
opinion of the Lender, the Borrower's or the Guarantor's
ability to perform its obligations under any Credit Document
is or will be materially and adversely affected as a result
thereof; or
(g) there shall occur in the reasonable opinion of the Lender any
Material Adverse Effect;
then, upon the happening of any of the foregoing Events of Default, the Note and
all amounts under this Agreement shall become and be immediately due and payable
and the Lender shall be entitled to all other remedies available at law. The
Borrower expressly waives any presentment, demand, protest or other notice of
any kind.
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ARTICLE VIII: GUARANTY
Section 8.1 Guaranty. The Guarantor unconditionally and irrevocably
guarantees to the Lender the due and punctual payment by, and performance of,
the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of the obligor whether or not post
filing interest is allowed in such proceeding). The Guarantor further agrees
that the Obligations may be increased, extended or renewed, in whole or in part,
without notice or further assent from it (except as may be otherwise required
herein), and it will remain bound upon this Guaranty notwithstanding any
extension or renewal of any Obligation.
Section 8.2 Waivers. The Guarantor waives presentation to, demand for
payment from and protest to, as the case may be, the Borrower or the Guarantor
and also waives notice of protest for nonpayment, notice of acceleration and
notice of intent to accelerate.
Section 8.3 No Impairment of Guaranty, etc. The Guarantor's obligations
under the guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Obligations, or any instrument evidencing
the Obligations, or by the existence, validity, enforceability, perfection, or
extent of any Lien on or security interest in any Collateral securing the
Obligations or by any other circumstance relating to the Obligations which might
otherwise constitute a defense to this Guaranty.
ARTICLE IX: MISCELLANEOUS PROVISIONS
Section 9.1 Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service against receipt, mailed by certified or registered mail, return receipt
requested, or sent by confirmed telecopy, as follows:
(a) if to the Borrower or the Guarantor:
FBO Air, Inc
000 Xxxxxx Xxxx
Xxxxxx Barre/Scranton International Airport
Xxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, President
With a copy to:
Xxxxxxx & Masyr, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.; and
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(b) if to the Lender, to
Airport Capital, LLC
c/o Wachtel & Masyr, LLP
000 Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx
00000 Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
With a copy to:
Xx. Xxxxx X. Xxxxx 000 Xxxx 00xx Xxxxxx Xxxxxxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000 Facsimile No.: (212)
Section 9.2 Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflict of law
principles which might indicate the applicability of the laws of any other
State.
Section 9.3 Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under any applicable law of any jurisdiction,
such provision shall, as to such jurisdiction, be inapplicable and deemed
omitted to the extent so contrary, prohibited, or invalid, without invalidating
the remainder hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 9.4 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
Section 9.5 Benefit of Agreement. Except as otherwise provided in Section
2.9, this Agreement shall be binding upon, and shall inure to the benefit of,
and be enforceable by the parties and their respective successors and permitted
assigns; provided, however, that the Borrower and the Guarantor shall not assign
or transfer any interest or delegate any duty hereunder without the prior
written consent of the Lender. The Lender shall have the absolute right to
assign or transfer any interest herein or in the other Credit Documents,
including, without limitation, the right to sell participation interests in the
Loan.
Section 9.6 Further Documentation. The parties hereto agree that, from
time to time after the Closing Date, the Borrower and the Guarantor shall
execute and deliver to the Lender such further document or documents as the
Lender may reasonably request and which is or are necessary or desirable in
order to confirm or further evidence the respective obligations of the Borrower
and the Guarantor and/or the rights and privileges of the Lender under this
Agreement or the other Credit Documents, or carry out the intent of the parties
under this Agreement or the other Credit Documents.
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Section 9.7 Expenses. The Borrower shall, on demand, pay or reimburse the
Lender for all of the Lender's costs and expenses (including fees and
disbursements of legal counsel) incurred, and all payments made, and indemnify
and hold the Lender harmless from and against all losses suffered by the Lender
in connection with, arising out of, or in any way related to (i) the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents, and protecting, preserving, exercising or enforcing any
of the rights of the Lender under this Agreement or the other Credit Documents,
including without limitation, in connection with any amendments hereto or
thereto and (ii) any claim (whether asserted by the Lender, the Borrower or the
Guarantor or any other Person) and the prosecution or defense thereof, in any
way arising under, related to, or connected with, this Agreement or the other
Credit Documents or the relationship established hereunder; provided, further,
in the event that any suit is brought by either party in connection with this
Section 9.7, the prevailing party shall be entitled to reimbursement for all
reasonable costs incurred, including reasonable attorneys' fees. The Borrower's
and Guarantor' obligations under this Section 9.7 shall survive the repayment of
the Loan and the Note.
Section 9.8 Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement or the other Credit Documents may be amended or
waived, and any departure therefrom may be consented to, if, but only if, such
amendment, waiver or consent is in writing and is signed by the Lender and, in
the case of an amendment, by the Borrower and the Guarantor. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given.
Section 9.9 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
Section 9.10 Set-Off. Upon and after the occurrence of any Event of
Default, each of the Lender and its Affiliates is hereby authorized by the
Borrower and the Guarantor, at any time and from time to time, without notice,
(a) to set off against, and to appropriate and apply to the payment of, the
obligations and liabilities of the Borrower and the Guarantor under this
Agreement and the other Credit Documents (whether matured or unmatured, fixed or
contingent or liquidated or unliquidated) any and all amounts owing by the
Lender or any such Affiliate to the Borrower or the Guarantor (whether payable
in United States Dollars or any other currency, whether matured or unmatured,
and, in the case of deposits, whether general or special, time or demand and
however evidenced) and (b) pending any such action, to the extent necessary, to
hold such amounts as collateral to secure such obligations and liabilities.
Section 9.11 Limitation of Liability. No claim may be made by the Borrower
or the Guarantor against the Lender or its Affiliates, directors, managers,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any breach or wrongful conduct
(whether the claim therefor is based on contract, tort or duty imposed by law)
in connection with, arising out of, or in any way related to, the transactions
contemplated and relationships established by this Agreement or the other Credit
Documents, or any act, omission or event occurring in connection therewith
(unless such claims result from the gross negligence or willful misconduct of
the Lender); and the Borrower and the Guarantor hereby waives, releases and
agrees not to xxx upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
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Section 9.12 Entire Agreement. This Agreement and the other Credit
Documents embody the entire agreement among Borrower, the Guarantor and the
Lender and supersede all prior agreements, representations and understandings,
if any, relating to the subject matter hereof.
Section 9.13 Currency. The payment obligations of the Borrower and the
Guarantor under this Agreement and the other Credit Documents shall not be
discharged by an amount paid in currency other than United States Dollars,
whether pursuant to a judgment or otherwise. To the extent that the amount so
paid on prompt conversion to United States Dollars and transfer to the specified
place of payment under normal banking procedures does not yield the amount of
United States Dollars in such place due under this Agreement and the other
Credit Documents, the Borrower and the Guarantor shall jointly and severally
indemnify the Lender and each of its Affiliates and any of their respective
officers, directors, managers, employees and representatives and any obligee
against any such shortfall. In the event that any payment, whether pursuant to a
judgment or otherwise, upon conversion and transfer does not result in the
payment of such amount of United States Dollars in the specified place of
payment, the obligee of such payment shall have a claim against the Borrower and
the Guarantor for the additional amount necessary to yield the amount due and
owing under this Agreement and the other Credit Documents and is a separate
cause of action.
(Signature Page Follows)
E-108
IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this agreement as of the date first written above.
BORROWER:
---------
FBO AIR, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
GUARANTOR:
----------
AIRBORNE, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
LENDER:
-------
AIRPORT CAPITAL, LLC
By:/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Manager
E-109
EXHIBIT A
PROMISSORY NOTE
$1,500,000 (U.S.) New York, New York
September 23, 2005
The undersigned, FBO AIR, INC., a Nevada corporation, having its
headquarters at 000 Xxxxxx Xxxx, Xxxxxx-Xxxxx/Xxxxxxxx International Airport,
Xxxxx, Xxxxxxxxxxxx 00000 ("Maker") for value received hereby promises to pay to
the order of Airport Capital, LLC, a New York limited liability company
("Payee"), the principal sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
(US$1,500,000) pursuant to the Term Loan Agreement dated as of September 23,
2005 (the "Loan Agreement") among Maker, the Guarantor and Payee, together with
interest thereon, as hereinafter set forth. All payments hereunder shall be made
in currency of the United States of America.
The principal balance outstanding at any time shall bear interest at the
Loan Rate (as defined in the Loan Agreement). The Loan Rate shall be computed on
a daily basis and interest shall be calculated based on a year of 365 or 366
days, as the case may be, and actual days elapsed.
The aggregate principal amount hereof, together with all accrued and
unpaid interest hereon, shall be payable in full on the Maturity Date. Borrower
may (i) prepay the Note in its entirety, together with any accrued but unpaid
interest outstanding or (ii) partially prepay the Note, together with any
accrued but unpaid interest outstanding on the amount of such principal paid.
Interest on this Notes shall be paid in arrears on the last business day of each
calendar month.
This Note is the Note referred to in the Loan Agreement and is entitled to
the benefits of and is secured by the security interest in the Collateral (as
defined in the Loan Agreement).
Maker shall pay all costs of collection, including, without limitation,
legal expenses and attorneys' fees, paid or incurred by Payee in collecting and
enforcing this Note after the occurrence of a default hereunder.
If default is made in the punctual payment of principal or interest, or
the transaction fees specified in the Loan Agreement, or if Maker breaches any
provision of the Loan Agreement, and fails to cure such default or breach within
any applicable grace period, this Note shall, at Payee's option, become
immediately due and payable upon Payee having given Maker notice of such
acceleration, and, so long as such default is continuing, shall bear interest at
the rate specified in Section 2.6 of the Loan Agreement.
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Except for the notice described in the immediately preceding paragraph,
Maker and every endorser of this Note expressly waive presentment, protest,
demand, notice of dishonor or default, and notice of any kind with respect to
this Note or the performance of the obligations under this Note or any guaranty
of this Note. No renewal or extension of this Note, no release or surrender of
any security for this Note or any guaranty of this Note, no release of any
person primarily or secondarily liable on this Note, including Maker and any
endorser or guarantor, no delay in the enforcement of payment of this Note, and
no delay or omission in exercising any right or power under this Note shall
affect the liability of Maker or any endorser of this Note.
At any time, any deposit credited by Payee for the account of Maker, and
any indebtedness due from Payee to Maker, may be set off against and applied in
payment of any obligations of Maker hereunder, if due, and such deposits or
other indebtedness may at all times be held and treated as collateral security
for payment of such obligations.
No delay or omission by Payee in exercising any power or right hereunder
shall impair such right or power or be construed to be a waiver of any default,
nor shall any single or partial exercise of any power or right hereunder
preclude the full exercise thereof or the exercise of any other power or right.
The provisions of this Note may be waived or amended only in a writing signed by
Maker and Payee.
Every legal holder of this Note shall have and may exercise all of the
rights and powers given to Payee in this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the date
set forth above.
MAKER:
FBO AIR, INC.
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
E-111
[Last Page of Note]
Unpaid Name of
Payments Principal Person
-------- Balance Making
Date Amount of Loan Principal Interest of Note Notation
---- -------------- --------- -------- ------- --------
E-112
EXHIBIT B
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of September 23, 2005 (as amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Security Agreement") between AIRBORNE, INC., a New York corporation (the
"Grantor"), and Airport Capital LLC, a New York limited liability company (the
"Secured Party").
Introductory Statement
Reference is hereby made to the Term Loan Agreement dated as of September
23, 2005 among FBO Air, Inc., as Borrower (the "Borrower"), the Grantor and the
Secured Party, as Lender (as the same may be amended, supplemented or otherwise
modified, renewed or replaced from time to time, the "Loan Agreement"). All
terms used but not otherwise defined herein have the meanings assigned to them
in the Loan Agreement.
To provide security to the Secured Party for the obligations of the
Grantor under the Loan Agreement, the Grantor desires to grant to the Secured
Party a security interest in the Collateral pursuant to the terms hereof.
Accordingly, the parties hereto agree as follows:
SECTION 1. Definitions. When used in this Security Agreement:
"Account Debtor" means any Person who is obligated or indebted to the
Grantor with respect to any Account.
"Accounts" means all accounts, as defined in the UCC, now owned or
hereafter acquired by the Grantor, including, without limitation, all of the
Grantor' rights to payment for goods sold or leased or services performed by the
Grantor, whether now in existence or arising from time to time hereafter,
including without limitation, rights evidenced by an account, note, contract,
security agreement, chattel paper, or other evidence of indebtedness or
security, together with (i) all security pledged, assigned, hypothecated or
granted to or held by the Grantor to secure the forgoing, (ii) all guarantees,
endorsements, and indemnifications on, or of, any of the foregoing, (iii) all
powers of attorney for the execution of any indebtedness or security or other
writing in connection therewith, (iv) all books, records, ledger cards and
invoices relating thereto, (v) all evidences of filing of financing statements
and other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (vi) all credit
information, reports and memoranda relating thereto and (vii) all other writings
in any way related to the foregoing.
"Applicable Law" shall mean all provisions of statutes, rules, regulations
and orders of the United States, any state thereof or municipality therein or of
any foreign governmental body or of any regulatory agency applicable to the
Person in question, and all orders and decrees of all courts and arbitrators in
proceedings or actions in which the Person in question is a party.
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"Borrower" has the meaning given to such term in the Introductory
Statement to this Security Agreement.
"Collateral" means each of the following types or items of personal
property of the Grantor, whether now owned or hereafter acquired, wherever
located: (i) all Accounts, (ii) all Deposit Accounts, (iii) all monies now or at
any time or times hereafter in the possession or under the control of the
Grantor or the Secured Party, and (iv) all products and Proceeds of the property
described in clauses (i) through (iii) above.
"Credit Documents" has the meaning given to such term in the Loan
Agreement.
"Deposit Account" has the meaning given to such term under Article 9 of
the UCC.
"Event of Default" means the occurrence of an Event of Default (as defined
in the Loan Agreement).
"Governmental Authority" has the meaning given to such term in the Loan
Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature of security,
and the filing of, or agreement to give, any financing statement under the UCC
or the Uniform Commercial Code or other Applicable Law of any jurisdiction).
"Loan" has the meaning given to such term in the Introductory Statement to
this Security Agreement.
"Loan Agreement" has the meaning given to such term in the Introductory
Statement to this Security Agreement.
"Obligations" means all indebtedness, liabilities and other obligations of
the Borrower and the Grantor under the Loan Agreement and the other Credit
Documents, each whether now existing or hereafter arising, direct or indirect,
secured or unsecured, joint or several, absolute or contingent, due or to become
due, acquired outright, conditionally or as collateral security from another,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, and of all agreements, documents and instruments evidencing any of
the foregoing or under which any of the foregoing may have been issued, created,
assumed or guaranteed. The term "Obligations" includes, without limitation, the
obligations to pay principal, breakage costs, interest (including, without
limitation, interest accruing after the commencement of any bankruptcy,
insolvency, reorganization, or similar proceedings with regard to the Borrower
or the Grantor, whether or not determined to be an allowed claim in any such
proceeding), charges, costs, expenses and fees including, without limitation,
the disbursements and reasonable fees of counsel to the Secured Party and all
renewals extensions, restructurings, refinancings or refundings thereof in a
nature of a "workout" or otherwise.
E-114
"Person" means any natural person, corporation, division of a corporation,
limited liability company, partnership, trust, joint venture, association,
company, estate, unincorporated organization or government or any agency or
political subdivision thereof.
"Proceeds" has the meaning given to such term under Article 9 of the UCC
and shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Collateral, (ii)
any or all payments made or due and payable to the Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral and (iii) any and all other
amounts paid or payable from time to time under or in connection with the
Collateral.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
Terms not otherwise defined herein or in the Loan Agreement shall have,
where appropriate, their respective definitions as set forth in the UCC.
SECTION 2. Grant of Security Interest. As security for the payment and
performance when due of the Obligations, the Grantor hereby grants to the
Secured Party a security interest in, and Lien on, all of its right, title and
interest in and to all of the Collateral.
SECTION 3. The Secured Party's Rights Exclusive of an Event of Default.
The Grantor hereby agrees to permit representatives of the Secured Party, upon
reasonable notice to such Grantor and during normal business hours, to access
its records in connection with the Collateral at such reasonable times and as
often as may be reasonably requested by the Secured Party. The Secured Party,
from time to time and at its option, may take any other action which the Secured
Party reasonably deems necessary for the maintenance or preservation of any of
the Collateral or its interests therein. The Secured Party shall have the right
to designate any officer, employee or attorney to execute, sign, endorse,
assign, transfer or deliver in the name of the Grantor, or in its name, any
documents or certificates necessary to evidence, perfect and realize upon the
security interest granted herein.
SECTION 4. The Secured Party's Rights and Remedies Upon an Event of
Default.
(a) Collections, etc. Upon the occurrence and during the
continuance of an Event of Default, the Secured Party may, in its sole
discretion, in its name, in the name of the Grantor or otherwise, demand,
xxx for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for, or make any compromise or
settlement deemed desirable with respect to the Collateral, but shall be
under no obligation so to do, or the Secured Party may extend the time of
payment, arrange for payment in installments, or otherwise modify the
terms of, or release any of the Collateral, without thereby incurring
responsibility to, or discharging or otherwise affecting any liability of
the Grantor. The Secured Party will not be required to take any steps to
preserve any rights against prior parties with rights in or to the
Collateral. If the Grantor fails to make any payment or to take any action
required hereunder with respect to the Collateral, the Secured Party may
make such payments and take all such actions as the Secured Party
reasonably deems necessary to protect the security interests of the
Secured Party in the Collateral and/or the value thereof, and the Secured
Party is hereby authorized (without limiting the general nature of the
authority hereinabove conferred) to pay, purchase, contest or compromise
any Liens which in the judgment of the Secured Party appears to be equal
to, prior to or superior to the security interests of the Secured Party in
the Collateral and any Liens not expressly permitted by the Loan Agreement
or this Security Agreement.
E-115
(b) Possession, Sale of Collateral, etc. Upon the occurrence
and during the continuance of an Event of Default, in addition to any
rights and remedies the Secured Party may have under Applicable Law, the
Secured Party shall have all the rights and remedies available to it under
the UCC, whether or not the UCC applies to the Collateral. The Secured
Party may take such measures as it may deem necessary or proper for the
care or protection of the Secured Party's rights and remedies hereunder,
including the right to sell or cause to be sold, whenever the Secured
Party shall decide, in one or more sales or parcels, at such prices as the
Secured Party may deem best, and for cash or on credit or for future
delivery, without assumption of any credit risk, all or any portion of the
Collateral, at any broker's board or at a public or private sale, without
any demand of performance or notice of intention to sell or of the time or
place of sale (except 10 days' written notice to the Grantor of the time
and place of any such sale or sales and such other notices as may be
required by Applicable Law and cannot be waived), and any Person may be
the purchaser of all or any portion of the Collateral so sold and
thereafter hold the same absolutely, free (to the fullest extent permitted
by Applicable Law) from any claim or right of whatever kind, including any
equity of redemption, of the Grantor, any such demand, notice, claim,
right or equity being hereby expressly waived and released to the fullest
extent permitted by Applicable Law. At any sale or sales made pursuant to
this Section 5(b), the Secured Party may bid for or purchase, free (to the
fullest extent permitted by Applicable Law) from any claim or right of
whatever kind, including any equity of redemption, of the Grantor, any
such demand, notice, claim, right or equity being hereby expressly waived
and released, any part of or all of the Collateral offered for sale, and
may make any payment on account thereof by using any claim for moneys then
due and payable to the Secured Party by the Grantor hereunder as a credit
against the purchase price. The Secured Party shall in any such sale make
no representations or warranties with respect to the Collateral or any
part thereof, and the Secured Party shall not be chargeable with any of
the obligations or liabilities of the Grantor. The Grantor hereby agrees
(i) that it will indemnify and hold the Secured Party harmless from and
against any and all claims with respect to the Collateral asserted before
the taking control of the relevant Collateral by the Secured Party
pursuant to this Section 4(b), or arising out of any act of, or omission
to act on the part of, any Person (other than the Secured Party) prior to
such taking of actual possession or control by the Secured Party, or
arising out of any act on the part of the Grantor or their respective
agents before or after the commencement of such actual possession or
control by the Secured Party; and (ii) the Secured Party shall have no
liability or obligation to the Grantor arising out of any such claim
except for acts of willful misconduct or gross negligence or not taken in
good faith. In any action hereunder, the Secured Party shall be entitled
to the appointment of a receiver, without notice, to take possession of
all or any portion of the Collateral and to exercise such powers as the
court shall confer upon the receiver. Notwithstanding the foregoing, upon
the occurrence and during the continuation of an Event of Default, the
Secured Party shall be entitled to apply, without prior notice to the
Grantor, except as may be required by Applicable Law, any cash or cash
items constituting Collateral in the possession of the Secured Party to
payment of the Obligations then due and payable.
E-116
(c) Notification to Account Debtors. Upon the occurrence and
during the continuance of an Event of Default, the Secured Party may
notify any Persons in any way liable on any Accounts to make remittances
to the Secured Party of all sums due or to become due thereon and to
collect and enforce payment of all Accounts directly from the Persons
liable thereon, by legal proceedings or otherwise, and generally exercise
all of the Grantor' rights and remedies with respect to collection
thereof.
(d) Application of Proceeds. The Grantor further agrees that
the Secured Party may apply any proceeds from the disposition of any of
the Collateral first towards payment of any costs, fees and expenses
accrued but unpaid of the Secured Party included within the Obligations,
second towards payment of interest on the Loan, and third towards payment
of principal.
(e) Power of Attorney. Upon the occurrence and during the
continuance of an Event of Default (i) the Grantor does hereby irrevocably
make, constitute and appoint the Secured Party or any of its officers or
designees its true and lawful attorney-in-fact with full power in the name
of the Secured Party or such other Person to endorse any notes, checks,
drafts, money orders or other evidences of payment relating to the
Collateral that may come into the possession of the Secured Party, and to
do any and all other acts necessary or proper to carry out the intent of
this Security Agreement and the grant of the security interests hereunder,
and the Grantor hereby ratifies and confirms all acts that the Secured
Party or its substitute shall properly do by virtue hereof and (ii) the
Grantor hereby further irrevocably makes, constitutes and appoints the
Secured Party or any of its officers or designees its true and lawful
attorney-in-fact in the name of the Secured Party or its name (A) to
enforce all of its rights under and pursuant to all agreements with
respect to the Collateral, all for the sole benefit of the Secured Party,
(B) to enter into and perform such agreements as may be necessary in order
to carry out the terms, covenants and conditions of this Security
Agreement that are required to be observed or performed by it, (C) to
execute such other and further mortgages, pledges and assignments of the
Collateral, and related instruments or agreements, as the Secured Party
may reasonably require for the purpose of perfecting, protecting,
maintaining or enforcing the security interests granted to the Secured
Party and (D) to do any and all other things necessary or proper to carry
out the intention of this Security Agreement and the grant of the security
interests hereunder and the Grantor hereby ratifies and confirms in
advance all that the Secured Party as such attorney-in-fact or its
substitute shall properly do by virtue of this power of attorney.
SECTION 5. Financing Statements, etc. The Grantor hereby authorizes the
Secured Party to file financing statements and any amendments thereto or
continuations thereof and any other appropriate security documents or
instruments, and to give any notices reasonably necessary or desirable to
perfect the Lien and security interests of the Secured Party in the Collateral.
E-117
SECTION 6. Further Assurances.
(a) The Grantor agrees that it will from time to time, on
request of the Secured Party and at its own cost and expense: (i) duly and
promptly execute and deliver, or cause to be duly executed and delivered,
any and all further instruments as may be appropriate in the reasonable
judgment of the Secured Party to carry out the provisions and purposes of
this Security Agreement, including, without limitation, a copyright
security agreement, a patent and trademark security agreement and account
control agreements; (ii) duly and promptly execute and deliver, or cause
to be executed and delivered, such further instruments as may be
appropriate in the reasonable judgment of the Secured Party, to provide
the Secured Party with a perfected Lien in the Collateral and any and all
documents (including, without limitation, the execution, amendment or
supplementation of any financing statement and continuation statement or
other statement) for filing under the provisions of the Uniform Commercial
Code of any jurisdiction and the rules and regulations thereunder, or any
Applicable Law of the United States or any other jurisdiction which the
Secured Party may deem reasonably necessary or advisable, and perform or
cause to be performed such other ministerial acts which are necessary or
advisable, from time to time, in order to grant and maintain in favor of
the Secured Party the Lien and security interest in the Collateral
contemplated hereunder; and (iii) promptly undertake to deliver or cause
to be delivered to the Secured Party from time to time, such other
documentation, consents, authorizations and approvals in form and
substance reasonably satisfactory to the Secured Party, as the Secured
Party shall deem reasonably necessary or advisable to perfect or maintain
the Liens of the Secured Party.
(b) The Grantor hereby agrees to pay any and all stamp,
registration, recordation and similar taxes, fees or charges, reasonable
fees and expenses of the Secured Party's counsel and of any agents
therefor and to indemnify the Secured Party and its agents against any and
all liabilities with respect to or resulting from any delay in the payment
or omission to pay any such taxes, fees or charges, which may be payable
or determined to be payable in connection with the execution, delivery,
performance or enforcement of this Security Agreement and any other
document or instrument executed in connection herewith or the perfection
of any rights or security interests hereunder.
SECTION 7. Notices. If any notification of intended disposition of any of
the Collateral or of any other act by the Secured Party is required by law and a
specific time period is not stated therein or herein, such notification given at
least ten (10) days before such disposition or act shall be deemed reasonably
and properly given. Notices and other communications provided for herein shall
be in the manner and at the addresses set forth in, and otherwise in accordance
with, Section 9.1 of the Loan Agreement.
SECTION 8. Non-Waiver of Rights and Remedies. No delay or failure on the
part of the Secured Party in the exercise of any right or remedy shall operate
as a waiver thereof, no single or partial exercise by the Secured Party of any
right or remedy shall preclude other or further exercises thereof or the
exercise of any other right or remedy and no course of dealing between the
parties shall operate as a waiver of any right or remedy of the Secured Party.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
E-118
SECTION 9. Termination. The security interests granted hereunder shall
terminate when all the Obligations have been fully and indefeasibly paid and
performed. At such time and upon request by the Grantor, and at the sole expense
of the Grantor, the Secured Party shall take all reasonable action and do all
things reasonably necessary, including executing UCC termination statements, to
terminate the security interest granted to it hereunder (without representation
or warranty by the Secured Party of any nature whatsoever and wholly without
recourse to the Secured Parties).
SECTION 10. Governing Law. This Security Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New York
applicable to contracts to be fully performed within the State of New York.
SECTION 11. Severability. This Security Agreement shall be interpreted in
such manner as to be effective and valid under Applicable Law, but if any
provision of this Security Agreement shall be prohibited by or invalidated under
Applicable Law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Security Agreement and the parties hereto
agree to negotiate in good faith a provision to replace the ineffective
provision, such provision to be as similar in effect and intent to the
ineffective provision as permissible.
SECTION 12. Continuation and Reinstatement. This Security Agreement shall
remain in full force and effect and continue to be effective in the event any
petition is filed by or against any of the Grantor for liquidation or
reorganization, or in the event any of the Grantor becomes insolvent or makes an
assignment for the benefit of creditors or in the event a receiver or trustee is
appointed for all or any significant part of the Grantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
Applicable Law, rescinded or reduced in amount, or must otherwise be restored or
returned by the Secured Party, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.
SECTION 13. Amendment. No amendment, modification or waiver of any
provision of this Security Agreement or consent to any departure herefrom shall
be effective, irrespective of any course of dealing, unless the same shall be in
writing and signed by the Secured Party. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 14. Successors and Assigns. All references herein to any of the
parties to this Security Agreement shall be deemed to include the successors and
assigns of such party; provided, however, that the Grantor may not assign any of
its rights or obligations hereunder without the prior written consent of the
Secured Party, and all covenants, promises and agreements by or on behalf of the
Grantor which are contained herein shall inure to the benefit of the successors
and assigns of the Secured Party.
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SECTION 15. Remedies Not Exclusive. The remedies conferred upon or
reserved to the Secured Party in this Security Agreement are intended to be in
addition to, and not in limitation of, any other remedy or remedies available to
the Secured Party. Without limiting the generality of the foregoing, the Secured
Party shall have all rights and remedies of a secured party under Article 9 of
the UCC, the Uniform Commercial Code in effect in any jurisdiction or any other
Applicable Law.
SECTION 16. Counterparts. This Security Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute the same instrument.
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IN WITNESS WHEREOF, each of the Grantor and the Secured Party have caused
this Security Agreement to be duly executed as of the day and year first above
written.
GRANTOR:
--------
AIRBORNE, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
SECURED PARTY:
--------------
AIRPORT CAPITAL, LLC
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Manager
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