Exhibit 10.1
COMMERCIAL AIRCRAFT PROMISSORY NOTE
I promise to pay you, at your address listed above, the PRINCIPAL sum
of One Hundred Forty Three Thousand Nine Hundred and No/100 Dollars $ 143,900.00
. INTEREST: I agree to pay interest on the outstanding principal balance from
the date of this Note at the rate of 8.75% % per year until Paid in Full .
Variable Rate: This rate may then change as stated below.
Index Rate: The future rate will be N/A the following
index rate:
N/A
N/A
No Index: The future rate will not be subject to any internal
or external index.
It will be entirely in your control.
Frequency and Timing: The rate on this Note may change as
often as N/A
.
A change in the interest rate will take effect N/A .
Limitations: During the term of this loan, the applicable
annual interest rate will
not be more than N/A % or less than N/A %.
Effect of Variable Rate: A change in the interest rate will have the
following effect on
the payments:
The amount of each scheduled payment will change. The amount
of the final payment will change.
ACCRUAL METHOD: You will calculate interest on a 365 Day basis.
PAYMENTS: I agree to pay this Note on 084 payments. The first payment
will be $
2,297.00 and will be due December 05, 1998 . A payment of
$ 2,297.00 will be
dye monthly thereafter . The final payment of the entire unpaid
balance of principal and
interest will be due November 05,2005 .
ORIGINATION FEE: I have agreed to pay you an origination fee of $ 200.00
, which will either be paid in cash upon execution of this
Note, or be financed
as a portion of the Principal.
RETURNED CHECK CHARGE: To the extent not prohibited by law, I
agree to pay you $20.00 for each check presented for payment
and dishonored because of insufficient funds or no account.
EFFECT OF PREPAYMENT: I may prepay this Note in full. However, no partial
prepayment shall excuse or defer my subsequent payments of entitle me to a
release of any collateral. Interest will cease to accrue on the amounts prepaid
on the day actually credited by you. PAYMENTS APPLIED: All payments, including
but not limited to regular payments or prepayments, received by you shall be
applied first to costs, then to accrued interest and the balance, if any, to
Principal except as otherwise required by law.
LATE CHARGE: If any installment payment under this Note is not
paid within
10 days after the date of its scheduled due date, I
agree to pay you a late
charge of 5% of the late payment.
SECURITY: This Note is secured by the following type(s) (or items) of property
(Collateral): 1972 CESSNA 421B N3AJ SERIAL #421B-0230 ALONG WITH DUAL COLLINS
VHF20'S W/DUAL HEAD #1 COMS, DUAL COLLINS 51R-7A NAVS DUAL GS/VOR/LOC, KING KN
64 COUPLED BOTH NAVS DME, KING 800 ADF W/REMOTE HEAD RMI, TRIMBLE 2000 APPROACH
GPS PLUS IFR CERTIFIED COUPLED HSI, COLLINS PN 101 HSI FULLY COUPLED, WILCOX
1012A W/ENCODER XPNDR, RCA WEATHER SCOUT II DIGITAL RADAR, MONROY ATD-100 AIR
TRAFFIC DETECTOR TCAD, BENDIX M4C SYSTEM
<PAGE>
AUTOPILOT SLAVED HSI FULLY COUPLED, PS ENGINEERING INTERCOM PM 1000 SYSTEM
INTERCOM.
The term "Collateral" further includes, but is not limited to, the following
property, whether now owned or hereafter acquired, ad whether or not held by a
bailee for the benefit of the Owner or owners, all: accessions, accessories,
additions, fittings, increases, insurance benefits and proceeds, parts,
products, profits, renewals, rents, replacements, special tools and
substitutions, together with all books and records pertaining to the Collateral
and access to the equipment containing such books and records including computer
stored information and all software relating thereto, plus all cash and non-cash
proceeds and all proceeds of proceeds arising from the type(s) (items) of
property listed above. A security interest in granted in the Collateral by the
security agreement dated the same date as this Note. EVENTS OF DEFAULT:I shall
be in default upon the occurrence of any of the following events, circumstances
or conditions (Events of Default):
A. Failure by any party obligated on this Note or any other
obligations I have with
you to make payment when due; or
B. A default or breach by me or any co-signer, endorser, surety,
or guarantor under any of the terms of this Note or other loan
agreement, any security agreement, mortgage, deed to secure
debt, deed of trust, trust deed, or any other document or
instrument evidencing, guarantying, securing or otherwise
relating to this Note or any other obligations I have with
you; or
C. The making or furnishing of any verbal or written
representation, statement or
warranty to you which is or becomes false or incorrect
in any material respect by
or on behalf of me, or any one of us, or any co-signer,
endorser, surety or
guarantor of this Note or any other obligations I have
with you; or
D. Failure to obtain or maintain the insurance coverages
required by you, or insurance
as is customary and proper for any collateral (as herein
defined); or
E. The death, dissolution or insolvency of, the appointment of a
receiver by or on behalf of, the voluntary or involuntary
termination of existence by, or the commencement of any
proceeding under any present or future federal or state
insolvency, bankruptcy, reorganization, composition or debtor
relief law by or against me, or any one of us, or any
co-signer, endorser, surety or guarantor of this Note or any
other obligations I have with you; or
F. A good faith belief by you at any time that you are insecure
with respect to me,
or any co-signer, endorser, surety or guarantor, that the
prospect of any payment
is impaired or that any collateral (as herein defined) is
impaired; or
G. Failure to pay or provide proof of payment of any tax,
assessment, rent, insurance
premium, escrow or escrow deficiency on or before its due
date; or
H. A material adverse change in my business, including
ownership, management, and
financial conditions, which in your opinion, impairs any
collateral or repayment
of the Obligations; or
I. A transfer of a substantial part of my money or property.
REMEDIES ON DEFAULT: On or after the occurrence of an Event of Default, at
the option
of you, all or any part of the Principal and accrued interest on this Note,
the Loan and all other
obligations which I woe you shall become immediately due and payable without
notice or
demand. You may exercise all rights and remedies provided by law, equity,
this Note, any
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security agreement, any mortgage, deed of trust or similar instrument and any
other security, loan, guaranty or surety agreements pertaining to this Note and
all other obligations of me to you. You are entitled to all rights and remedies
provided at law or equity whether or not expressly stated in this Note. By
choosing any remedy, you do not waive your right to an immediate use of any
other remedy if the event of default continues or occurs again. ATTORNEYS' FEES:
Upon default of this Note, you may recover from me reasonable attorneys' fees
incurred by you and the expenses to collect, enforce, and realize upon any
Collateral. Such reasonable attorneys' fees shall include, without limitation,
paralegal fees. Any such reasonable attorneys' fees shall be added to the
principal amount of this Note and shall accrue interest at the same rate as this
Note. Such recovery will be to the extent not prohibited by law. WAIVER AND
CONSENT BY BORROWER AND OTHER SIGNERS: Regarding this Note, to the extent not
prohibited by law, I and any other signers:
A. Waive protest, presentment for payment, demand, notice of
acceleration, notice of
intent to accelerate and notice of dishonor.
B. Consent to any renewals and extensions for payment on this
Note, regardless of
the number of such renewals or extensions.
C. Consent to your release of any borrower, endorser,
guarantor, surety,
accommodation maker or any other co-signer.
JOINT AND SEVERAL: I, and any one of us, or any other signers shall be jointly
and severally liable under this Note. ARBITRATION: All disputes, claims or
controversies arising from or relating to this Loan or the relationships which
result from this Loan or the validity of this arbitration clause or the entire
Loan shall be resolved by binding arbitration by one arbitrator selected by you
with my consent. This Arbitration agreement is made pursuant to a judgment upon
the award rendered may be entered in any court having jurisdiction. The parties
agree and understand that they choose arbitration instead of litigation to
resolve disputes. The parties understand that they have a right or opportunity
to litigate disputes through a court, but that they prefer to resolve their
disputes through arbitration, except as provided herein. THE PARTIES VOLUNTARILY
AND KNOWINGLY WAIVE ANY RIGHT THEY HAVE TO A JURY TRIAL, EITHER PURSUANT TO
ARBITRATION UNDER THIS CLAUSE OR PURSUANT TO A COURT ACTION BY YOU (AS PROVIDED
HEREIN). The parties agree and understand that all disputes arising under case
law, statutory law and all other laws including, but not limited to, all
contract, tort and property disputes will be subject to binding arbitration in
accord with this Arbitration agreement. The parties agree ad understand that the
arbitrator shall have all powers provided by the law and the agreement of the
parties. These powers shall include all legal an equitable remedies including,
but not limited to, money damages, declaratory relief and injunctive relief.
Notwithstanding anything hereunto the contrary, you retain an option to use
judicial or non-judicial relief to enforce a security agreement relating to any
collateral secured in a transaction underlying this Arbitration agreement to
enforce the monetary obligation secured by any collateral or to replevy any
Collateral. Such judicial relief would take the form of a lawsuit. The
institution and maintenance of an action for judicial relief in a court to
replevy any security or collateral, to obtain a monetary judgment or enforce the
security agreement shall not constitute a waiver of the right of any party to
compel arbitration regarding any other dispute or remedy subject to arbitration
in this agreement, including the filing of a counterclaim in a suit brought by
you pursuant to this provision.
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GENERAL PROVISIONS:
A. NO WAIVER BY LENDER. Your course of dealing, or your
forbearance from,
or delay in, the exercise of any of this Note, or other
loan documents, shall not be
construed as a waiver by you, unless any such waiver is
in writing and is signed
by you.
B. AMENDMENT. The provisions contained in this Note may not
be amended,
except through a written amendment which is signed by you
and me.
C. INTEGRATION CLAUSE. This written Note and all documents
executed
concurrently herewith, represent the entire understanding
between the parties as
to the Obligations and may not be contradicted by evidence
of prior,
contemporaneous, or subsequent oral agreements of the
parties.
D. FURTHER ASSURANCES. Upon your request I agree to execute,
acknowledge,
deliver and record or file such further instruments or
documents as may be
required by you to secure this Note or confirm any lien.
E. GOVERNING LAW. This Note shall be governed by the laws of
the State of
Minnesota, provided that such laws are not otherwise
preempted by federal laws
and regulations. This Note has been delivered to Lender
and accepted by Lender
in the State of Minnesota.
F. FORUM AND VENUE. In the event of litigation pertaining to
this Note, the
exclusive forum, venue and place of jurisdiction shall be
in the State of Minnesota,
unless otherwise designated in writing by you or otherwise
required by law.
G. NOTICE. All notices under this Note must be in writing. Any
notice given by you to me, hereunder will be effective upon
personal delivery or 24 hours after mailing by first class
United States mail, postage prepaid, addressed to me at the
address indicated below my name on page one of this Note. Any
notice given by me to you hereunder will be effective upon
receipt by you at the address indicated below your name on
page one of this Note. Such addresses may be changed by
written notice to the other party.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE OF
PAGES 1, 2 AND 3).
I have received a copy of today's date.
Date:
For:SVETLANA AVIATION
(Individual Borrower)
(Corporation, Partnership or Limited Liability Company Borrower - Legal Name)
By:
(Individual Borrower) JEHU HAND
Its:PRESIDENT
(Authorized Officer, General Partner or member)
<PAGE>
COMMERCIAL AIRCRAFT SECURITY AGREEMENT
OBLIGATIONS DEFINED: The term "Obligations" is defined as
and includes the following:
A. A Note, Loan No. , (Note) dated the same
date as this Security
Agreement and executed by Svetlana Aviation (Debtor) payable
in monthly payments to your order, which evidences a loan
(Loan) to me in the amount of $
143,900.00 , plus interest, and all extensions,
renewals, modifications or
substitutions thereof.
B. All future advances by you to me, to any one of us or to any
one of us and others (and all other obligations referred to in
the subparagraph(s) below, whether or not this Agreement is
specifically referred to in the evidence of indebtedness with
regard to such future and additional indebtedness).
C. All additional sums advanced, and expenses incurred, by you
for the purpose of insuring, preserving or otherwise
protecting the Collateral (as herein defined) and its value,
and any other sums advanced, and expenses incurred by you
pursuant to this Agreement, plus interest at the same rate
provided for in the Note computed on a simple interest method.
COLLATERAL: To secure the Obligations and in consideration of the Loan, I hereby
grant, convey and transfer to you a continuing security interest to secure the
Obligations in the following type(s) (or items) of property (Collateral),
whether now owner or hereafter acquired:
1972 CESSNA 421B N3AJ SERIAL #421B-0230 ALONG WITH DUAL COLLINS VHF20'S W/DUAL
HEAD #1 COMS, DUAL COLLINS 51R-7A NAVS DUAL GS/VOR/LOC, KING KN 64 COUPLED BOTH
NAVS DME, KING 800 ADF W/REMOTE HEAD RMI, TRIMBLE 2000 APPROACH GPS PLUS IFR
CERTIFIED COUPLED HSI, COLLINS PN 101 HSI FULLY COUPLED, WILCOX 1012A W/ENCODER
XPNDR, RCA WEATHER SCOUT II DIGITAL RADAR, MONROY ATD-100 AIR TRAFFIC DETECTOR
TCAD, BENDIX M4C SYSTEM AUTOPILOT SLAVED HSI FULLY COUPLED, PS ENGINEERING
INTERCOM PM 1000 SYSTEM INTERCOM.
The term "Collateral" further includes, but is not limited to, the following
property, whether now owned or hereafter acquired, and whether or note held by a
bailee for my benefit, all" accessions, accessories, additions, fittings,
increases, insurance benefits and proceeds, parts, products, profits, renewals,
rents, replacements, special tools and substitutions, together with all books
and records pertaining to the Collateral and access to the equipment containing
such books and records including computer stored information and all software
relating thereto, plus all cash and non-cash proceeds and all proceeds of
proceeds arising from the type(s) (items) of property listed above.
Pertaining to the portion of the Collateral that is titled under federal or
state law, the term Collateral" shall further include, wherever located, the
original evidences of title or ownership, whether evidenced by a certificate of
title or ownership, registration, a manufacturer's statement of origin or
otherwise. I agree to surrender such evidences of title and to properly execute
all documents as necessary to reflect your security interest in such portion of
the Collateral.
LOCATION OF THE COLLATERAL: The location of the Collateral is given for the
purpose
of aiding in my identity and, only to the extent necessary, aiding in the
identification of the
Collateral. It does not in any way limit the scope of the security interest
granted to you. I shall
notify you in writing prior to any change in location of any of the Collateral.
Except as
otherwise provided in this Agreement, the Collateral will be located at :
JOHN WAYNE
<PAGE>
AIRPORT SANTA ANA, CA 92707 COUNTY - ORANGE . So long as I am not in default
under this Agreement, the aircraft portion of the Collateral may be moved as
necessary during ordinary use; however, it may not be removed or taken out of
state permanently or out of the United States of America without your prior
written consent.
USE OF THE COLLATERAL: I represent and warrant that the Collateral will be
used solely
(or primarily) for Business Use .
OTHER CLAIMS: Except for the security interest granted in this Agreement, I
represent, warrant and covenant that I am the exclusive owner of the Collateral
which now is and will continue to be free from any disclosed in writing to you,
prior to any advance on the Loan; and
A. I have the right and authority to make this Agreement.
B. I will defend the Collateral against all claims of all
persons claiming any interest
in it.
C. The execution and delivery of this Agreement will not
violate any agreement
governing me or to which I am a party.
TRANSFER OF COLLATERAL: I will not sell, offer to sell, lease, or otherwise
transfer or encumber the Collateral or any interest in the Collateral without
your prior written consent which I agree may be reasonably withheld without
regard to the creditworthiness of any buyer or transferee. I agree further that
I will not sell, offer to sell, lease, or otherwise encumber the Collateral or
any interest in the Collateral, to insiders, principals, competitors, and
dealers in the same line of goods or business, without your prior written
consent. I will not permit the Collateral to be the subject of any court order
affecting my rights to the Collateral in any action by any person other than
you. TAXES: I will pay when due all taxes and assessments which may be levied or
assessed against me or against the Collateral, including but not limited to
sales taxes, use taxes, personal property taxes, documentary stamp taxes,
franchise taxes, income taxes, withholding taxes, FICA taxes and unemployment
taxes. I covenant that I will provide timely proof of payment of such taxes and
assessments, at least quarterly and also upon your request. INSURANCE: I will
keep the insurable portion of the Collateral at all times insured against risk
of loss or damage by fire (including so-called extended coverage), theft and all
other casualties, all in such amounts, under such forms of policies, upon such
terms, for such periods, and written by such companies as you may approve. I
shall arrange for you to be named and endorsed as lender loss payee on any such
policy. Losses in all cases shall be payable to you, as Lender, and me as both
of our interests may appear on this policy. You may collect the proceeds (or
rebates of unearned premiums) on any insurance policy insuring the Collateral.
You will apply such proceeds toward what is owed on the Obligations. In the
event of any loss, you may require additional security or assurance of payment
of the secured obligation as a condition of permitting any insurance benefits to
be used for repair or replacement of the Collateral. I shall maintain the
insurance required hereunder until the Obligations are paid in full. All such
policies of insurance shall provide for at least thirty (30) days prior written
notice to you of amendment or cancellation and shall contain a standard breach
of warranty endorsement in your favor. I shall furnish you with certifications
of such insurance or other evidence satisfactory to you as to compliance with
the provisions of this section. I hereby authorize you to act, at your option,
as attorney-in-fact for me in acquiring, making, adjusting, or settling claims
under or canceling such insurance and endorsing my name on any drafts, checks or
other instruments drawn by insurers of the Collateral.
<PAGE>
AIRCRAFT INSURANCE: In addition to the above insurance requirements and
provisions, I will procure and maintain hull and liability insurance on the
aircraft portion of the Collateral in amounts and with insurers acceptable to
you. All such insurance shall be written under the standard "all risks, ground
and flight" form, shall provide for at least thirty (30) days prior written
notice to you of any amendment of cancellation and shall contain a standard
breach of warranty endorsement in your favor. CONDITION OF THE COLLATERAL: I
represent, warrant and covenant that the Collateral is in good condition. I
agree that I will immediately notify you of any loss or damage to the
Collateral. I will not cause or permit waste or destruction of the Collateral. I
hereby authorize you to examine the Collateral wherever located at any time
during ordinary business hours, upon reasonable notice or at any other
reasonable time. Pertaining to the aircraft portion of the Collateral, I shall
maintain the aircraft in good repaid and airworthy maintenance, overhauls,
condition, use and operation of the aircraft. Pertaining to the tangible
property portions of the Collateral, I, at my expense, will keep it in good
condition and replace and repair, in a timely manner, all parts of the
Collateral as may be worn out or damaged without allowing any lien to be created
upon the Collateral. LENDER'S DUTY TO ACT: Your duty, with reference to the
Collateral and any books and records pertaining to the Collateral, shall be
solely to use reasonable care in the custody and preservation of the Collateral
and such books and records in your possession, which shall not include any steps
necessary to preserve rights against prior parties nor the duty to send notices,
perform services or take any action in connection with the management of the
Collateral nor the duty to protect, preserve or maintain any security interest
given to others by me or other parties. You shall be under no duty to exercise
or to withhold the exercise or to withhold the exercise of any of the rights,
remedies, powers, privileges and options expressly or impliedly granted to you
in this Agreement, and you shall not be responsible or liable for any delay or
failure to exercise such rights. POSSESSION: Until default, I may have
possession of any Collateral not delivered or to be delivered to you and use it
in any lawful manner not inconsistent with this Agreement or any policy of
insurance. Upon default you shall have immediate right to possession of such
Collateral. VIOLATIONS OF LAW: I shall not use the Collateral in violation of
any municipal, state or federal law or regulation nor in violation of any order
of any governmental regulatory agency. CORPORATE WARRANTIES AND REPRESENTATIONS:
If I am a corporation, I make to you the following warranties and
representations which shall continue so long as the Obligations remain
outstanding:
A. I am a corporation which is duly organized and validly
existing in the state of
incorporation as represented in the Debtor's box on page one.
I am in good
standing under the laws of all states in which I transact
business. I have corporate
power and authority to own the Collateral and to carry
on my business as now
being conducted. I am qualified to do business in every
jurisdiction in which the
nature of my business or my property make such
qualification necessary. I am in
compliance with all laws, regulations, ordinances and orders
of public authorities
applicable to me.
B. The execution, delivery and performance of this Agreement
by me and the
borrowing evidenced by the Note: (1) are within my corporate
powers; (2) have
been duly authorized by all requisite corporation action;
(3) have received all
<PAGE>
necessary governmental approval; (4) will not violate any
provision of law, any order of any court or other agency of
government or my Articles of Incorporation or Bylaws; and (5)
will not violate any provision of any indenture, agreement or
other instrument to which I am a party or to which I am or any
of my property is subject, including but not limited to any
provision prohibiting the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of my
property or assets. The Note and this Agreement when executed
and delivered by me will constitute my legal, valid and
binding obligations, and the legal, valid and binding
obligations of the other obligors named therein, if any, in
accordance with their respective terms.
C. All other information, reports, papers and data given to you
with respect to me or to others obligated under the terms of
this Agreement are accurate and correct in all material
respects and complete insofar as completeness may be necessary
to give you a true and accurate knowledge of the subject
matter.
D. I have not changed my name within the last six years, unless
otherwise disclosed in writing; other than the trade names or
fictitious names actually disclosed to you prior to execution
of this Agreement, I use no other names; and until the
Obligations shall have been paid in full, I hereby covenant
and agree to preserve and keep in full force and effect my
existing name, corporate existence, rights, franchises and
trade names, and to continue the operation of my business in
the ordinary course.
CHANGE OF NAME OR ADDRESS: I shall notify you in writing prior to any
change in my
name or, if any organization, any change in identity or structure. I
also will notify you in writing
prior to any change in my address.
EVENTS OF DEFAULT: I shall be in default upon the occurrence of any of the
following
events, circumstances or conditions (Events of Default):
A. Failure by any party obligated on the Obligations to make
payment when due; or
B. A default or breach by me or any co-signer, endorser, surety,
or guarantor under
any of the terms of this Agreement, the Note, or the loan
agreement, any security agreement, mortgage, deed to secure
debt, deed of trust, trust deed, or any other document or
instrument evidencing, guarantying, securing or otherwise
relating to the Obligations; or
C. The making or furnishing or any verbal or written
representation, statement or
warranty to you which is or becomes false or incorrect
in any material respect by
or on behalf of me, any one of us, or any co-signer,
endorser, surety or guarantor
of the Obligations; or
D. Failure to obtain or maintain the insurance coverages required
by you or on behalf of, the assignment for the benefit of
creditors by or on behalf of, the voluntary or involuntary
termination of existence by, or the commencement of any
proceeding under any present or future federal or state
insolvency, bankruptcy, reorganization, composition or debtor
relief law by or against me, any one of us, or any co-signer,
endorser, surety or guarantor of the Obligations; or
F. A good faith belief by you at any time that you are insecure
with respect to me,
or any co-signer, endorser, surety or guarantor, that the
prospect of any payment
is impaired or that the Collateral (as herein defined) is
impaired; or
G. Failure to pay or provide proof of payment of any tax,
assessment, rent, insurance
<PAGE>
premium, escrow or escrow deficiency on or before its due
date; or
H. A material adverse change in my business, including
ownership, management, and
financial conditions, which in your opinion, impairs the
Collateral or repayment
of the Obligations; or
I. A transfer of a substantial part of my money or property. REMEDIES
ON DEFAULT: At your option, all or any part of the principal and accrued
interest on the Note and the Obligations shall become immediately due and
payable without notice or demand, upon the occurrence of an Event of Default or
at any time thereafter. In addition, upon the occurrence of any Event of
Default, you shall be entitled to all of the remedies provided by law, the Note
and any related loan documents. You are entitled to all rights and remedies
provided at law or equity whether or not expressly stated in this Agreement. By
choosing any remedy, you do not waive your right to an immediate use of any
other remedy if the event of default continues or occurs again. You shall have
all the remedies of a secured party under Article 9 of the Minnesota Uniform
Commercial Code; all other Minnesota laws; this Agreement; any instrument
evidencing the Obligations; and any other applicable security, loan, guaranty or
surety agreements pertaining to the Obligations. You may require me to assemble
all or any portion of the Collateral and make it available to you at a place to
be designated by you which is reasonably convenient to both parties. You shall
have the right to enter and/or remain upon my premises, or any other place where
any of the Collateral is located and kept to:
A. Remove Collateral therefrom to the premises chosen by
you or any agent of yours
for such time as you may desire in order to maintain,
sell the Collateral and/or
liquidate the Collateral; or
B. Use such premises together with my materials, supplies, books,
and records to maintain possession and/or the condition of the
Collateral and to prepare the Collateral for selling,
liquidating, or collecting and to conduct the selling,
liquidating or collecting.
But in doing so you may not breach the peace or unlawfully enter onto my
premises. EXPENSES ARISING FROM DEFAULT: The following reasonable expenses
relating to default and collection shall be secured by this Agreement and added
to the Obligations:
A. Expenses for taking, holding, preparing for sale, or selling
the Collateral, or
similar expenses:
B. Advances made for the above purposes and advances relating
to the Collateral
made on my behalf as permitted herein; and
C. Reasonable attorneys' fees, paralegal fees and other legal
expenses to the extent not prohibited by law, including, but
not limited to, any such fees, costs, and expenses incurred in
or related to the collecting, protecting and enforcing of
liabilities, any negotiations or legal proceedings, including,
but not limited to, any bankruptcy proceedings, or any actions
in or related to any bankruptcy proceedings.
RESTRICTIONS ON SALE OR DISPOSITION: I acknowledge that a state or federal law
or regulation may restrict your sale or disposition of certain portions of the
Collateral. As a result, such restriction may cause the Collateral to have less
value than it otherwise would have had. In all cases, however, any such sale or
disposition will be held in accordance with applicable Minnesota and federal
laws and regulations. PROTECTION OF COLLATERAL: You are hereby appointed as the
attorney-in-fact for me
<PAGE>
to do anything, at your option, you deem reasonably necessary to perfect your
security interest in the Collateral and to protect the Collateral and to
continue your security interest in the Collateral, including, but not limited
to, the following:
A. Pay and discharge taxes, liens, security interests or other
encumbrances at any time
levied or placed on the Collateral;
B. Pay any rents or other charged under any lease affecting the
Collateral;
C. Place and pay for insurance on the Collateral (which
insurance may be limited to
single interest insurance at your sole discretion);
D. Order and pay for the repair, maintenance and preservation
of the Collateral; or
E. To sign, when permitted by law, and file any financing
statements on my behalf
and to pay for filing, registration and recording fees
at my expense, pertaining to
the Collateral.
DURATION OF SECURITY INTEREST: This Agreement shall continue in full force and
effect and the security interest granted herein and all of my representations,
warranties, covenants and agreements and all of the terms, conditions and
provisions relating thereto shall continue to be fully operative until (a) I
shall have paid or caused to be paid, or otherwise discharged, all of the
Obligations to you and (b) there shall be no remaining obligation of you to
advance funds to me under any loan agreement or credit agreement or otherwise.
RELEASES BY LENDER: I agree that you may, without notice and without releasing
any of the obligations of any of the remaining parties:
A. Release any security interest for the Obligations; or
B. Release and of the Collateral; or
C. Release any party to the Obligations, any guaranty or this
Agreement.
GENERAL WAIVER BY OWNER: I hereby waive and release you from all claims for loss
or damage caused by any act or omission of you, your officers, directors,
employees or agents.
GENERAL PROVISIONS:
A. NO WAIVER BY LENDER. Your course of dealing, or your
foreberance from,
or delay in, the exercise of any of your rights, remedies,
privileges or right to
insist upon my strict performance of any provisions
contained in this Agreement,
or other loan documents, shall not be construed as a waiver
by you, unless any
such waiver is in writing and is signed by you.
The execution of this Agreement
shall not impair any other security you may have or acquire
in the future for the
Obligations. The taking of any other security or the
releasing of any security for
the Obligations shall not impair this Agreement. You
may resort to any security
you may have for the Obligations in any order you may deem
proper.
B. AMENDMENT. The provisions contained in this Agreement may
not be
amended, except through a written amendment which is signed
by me and you.
C. INTEGRATION CLAUSE. This written Agreement and all
documents executed
concurrently herewith, represent the entire understanding
between the parties as
to the Obligations and may not be contradicted represent
the entire understanding
between the parties as to the Obligations and may not be
contradicted by evidence
of prior, contemporaneous, or subsequent oral agreements
of the parties.
D. FURTHER ASSURANCES. I, upon your request, agree to
execute, acknowledge,
deliver and record or file such further instruments or
documents as may be
required by you to secure the Note or confirm any lien.
E. GOVERNING LAW. This Agreement shall be governed by the laws
of the State
<PAGE>
of Minnesota, provided that such laws are not otherwise
preempted by federal laws and regulations. This Agreement has
been delivered to Lender and accepted by Lender in the State
of Minnesota.
F. FORUM AND VENUE. In the event of litigation pertaining to
this Agreement,
the exclusive forum, venue and place of jurisdiction shall
be in the State of
Minnesota, unless otherwise designated in writing by you or
otherwise required
by law.
G. NOTICE. All notices under this Agreement must be in writing.
Any notice given by you to me hereunder will be effective upon
personal delivery or 24 hours after mailing by first class
United States mail, postage prepaid, addressed to me at the
address indicated below my name on page one of this Agreement.
Any notice given by me to you hereunder will be effective upon
receipt by you at the address indicated below your name on
page one of this Agreement. Such addresses may be changed by
written notice to the other party.
SIGNATURES: I AGREE TO THE TERMS OF THIS SECURITY AGREEMENT. I have
received a copy on today's date.
Date:October 23, 1998
For:SVETLANA AVIATION
(Individual Borrower)
(Corporation, Partnership or Limited Liability Company Borrower - Legal Name)
By:
(Individual Borrower) JEHU HAND
Its:PRESIDENT
(Authorized Officer, General Partner or member)
<PAGE>
INDIVIDUAL GUARANTY
TO: GREEN TREE FINANCIAL SERVICING CORPORATION or its subsidiary
(hereinafter "Green Tree")
RE: SVETLANA AVIATION (hereinafter "Buyer")
3336 Harrison Avenue, Suite 121
Butte, MT 59101
To induce Green Tree to provide financing as set forth in the
Commercial Aircraft Promissory Note and Commercial Aircraft Security Agreement
("Contract") dated OCTOBER 23, 1998 (the "Contract"), between MISSISSIPPI
EXECUTIVE AIRCRAFT COMPANY as Seller, and SVETLANA AVIATION as Buyer, I the
undersigned Guarantor, hereby guarantee to Green Tree performance of all debts
or obligations of which the Buyer owe Green Tree under the Contract.
Each Guarantor agrees that should the Buyer breach any or all terms and
conditions contained in the Contract, all duties and obligations of the Buyer
for said breach shall apply to the Guarantor.
The liability of each Guarantor hereunder is direct and unconditional
in the case of a breach by the Buyer and may be enforced without requiring Green
Tree first to resort to any right, remedy or security. Nothing shall discharge
or satisfy the liability of the Guarantor hereunder except the full payment and
performance of all of the Buyer's debts and obligations to Green Tree.
Each Guarantor agrees that none of the Guarantor can avail
himself/herself of any defense whatsoever which Buyer may have against Green
Tree other than the payment of the debts or obligations. Each Guarantor hereby
for himself/herself, his/her heirs, guarantors at law or in equity other than
the payment of said Contract.
Notice of acceptance of this Guaranty, of any adverse change in Buyer's
financial condition or of any other fact which might materially increase the
Guarantor's risk is hereby waived. The extension of time of payment, performance
of agreements or obligations or any other indulgence may be granted to Buyer
without notice to Guarantor, and all settlements and compromises made in good
faith with Buyer shall be binding upon each Guarantor. Each Guarantor hereby
waived any and all right to a trial by jury in any action or proceeding arising
out of or based upon this Guaranty.
In the event of default in the performance of this Guaranty, the
Guarantor agree to pay all reasonable court costs, attorneys' fees and other
expenses paid or incurred by Green Tree in the enforcement hereof.
<PAGE>
This Guaranty constitutes the entire agreement and no waivers or
modification shall be valid unless in writing and signed by Green Tree and the
Guarantor.
This Guaranty shall be binding upon the heirs, executors,
administrators, successors and assigns of each of the undersigned and shall
inure to the benefit of Green Tree's successors and assigns.
Dated: OCTOBER 23, 1998
JEHU HAND
(Guarantor's Signature)
<PAGE>
