EFTA00188153¶
39-18¶
FILED WITH FAA ART REGISTRATION ‘00 NOV 16 PM 2 35 OKLAHOMA CITY OKLAHOMA¶
EFTA00188154¶
0 0 0 0 0 0 5 8 3 7¶
39-17¶
SECOND: (1) The prompt and faithful discharge and performance of (a) each agreement of Debtor herein contained made with or for the benefit of Secured Party in connection with the Obligations secured hereby and (b) each of the other documents executed by Debtor in connection herewith or with the Note, and (2) the repayment of any sums expended or advanced by or on behalf of Secured Party or Debtor for the maintenance or preservation of the property mortgaged hereby or in enforcing Secured Party’s rights hereunder or thereunder.¶
2. DEBTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS¶
Section 2.01. Debtor hereby represents and hereby warrants to Secured Party that it is the absolute owner of all of the legal and equitable title to the Aircraft and in possession thereof and that the same is free and clear of all liens, encumbrances, and adverse claims whatsoever.¶
Section 2.02. Debtor hereby agrees to (a) maintain, at its expense and with reputable, licensed insurers, insurance naming it and Secured Party as named insureds in the following types and amounts: (i) hull insurance in amount not less than $21,000,000; (ii) liability insurance in amount not less that $300,000,000 per occurrence as respects ground risks; and, (iii) liability insurance in amount not less that $300,000,000 with respect to the Aircraft for all times during which the Aircraft is engaged in flight operations; (b) convey or suffer to exist no interest in the Aircraft without the express written consent of Secured Party; and (c) indemnify and save and hold harmless Secured Party for and against any and all claims, losses or expenses arising out of Debtor’s (i) possession, operation or use of the Aircraft or (ii) breach or failure to comply with any provision of the Note or this Security Agreement to be kept and performed by Debtor.¶
Section 2.03. Debtor will, at its own cost and expense, (a) record, re-record, register, re-register, file and refile this Security Agreement, financing and continuation statements with respect thereto, and such other instruments as may from time to time be requested by Secured Party in all such jurisdictions and offices as Secured Party may from time to time request in order that (i) the lien and security interest provided by this Security Agreement is at all times a valid first and prior lien on and perfected security interest in the Aircraft, and (ii) the security for the Obligations and the rights and remedies of Secured Party may be established, confirmed, maintained and protected; and (b) furnish to Secured Party evidence satisfactory to Secured Party of every such recording, registering, filing and other action.¶
Section 2.04. Debtor covenants, agrees and warrants that it will at all times defend and protect the lien and security interest created by this Security Agreement upon the Aircraft, and further covenants and agrees that it will hereafter from time to time, perform, execute, deliver and file or cause to be performed, executed, delivered and filed all such further and other acts, conveyances, transfers, instruments, financing statements, continuation statements and assurances as may be requested by Secured Party, for the better assuring, conveying, transferring, mortgaging, hypothecating and confirming unto Secured Party of all or any part of the Aircraft, whether now owned or hereafter acquired by Debtor, or for securing the rights and remedies of Secured Party.¶
2¶
EFTA00188155¶
39.14¶
EFTA00188156¶
0 0 0 0 0 0 5 8 3 8¶
39.15¶
Section 2.05. (a) Debtor will, at its own cost and expense, inspect, service, repair and maintain the Aircraft, or cause the Aircraft to be inspected, serviced, repaired and maintained, in good operating condition, and will cause the airworthiness certification of the Aircraft to be maintained in good standing at all times under the Federal Aviation Act.¶
(b) Debtor shall, at its own cost and expense, replace or cause to be replaced all equipment and replacements which may from time to time be a part of the Aircraft and which from time to time may become worn out, lost, destroyed, confiscated or rendered unfit for use. Such equipment and replacements (i) shall be in as good operating condition and shall have a value and utility equal to that which the equipment or replacement being replaced would have had if it were in usual condition and good repair, and (ii) shall be owned by Debtor free and clear of all liens and encumbrances. All such equipment and replacements shall be and become a part of the Aircraft and shall be subject to all the terms of this Security Agreement. Replacements involving an engine and replacements involving major items of equipment shall be reported by Debtor to Secured Party promptly after such replacements are made, and such reports shall describe in reasonable detail the items so used as replacements and the items replaced thereby.¶
(c) Any part or item of property may be removed from the Aircraft in order that the same may be replaced, inspected, repaired, reconditioned or otherwise serviced without affecting or impairing the lien and security interest of Secured Party with respect to such part or item of property. However, no replacement or equipment subject to the lien imposed by this Security Agreement or other item of property useful in connection with the operation of the Aircraft shall be removed therefrom or replaced except in accordance with this Section 2.05 and for the purposes of such replacement, inspection, repair, reconditioning or other service operation.¶
Section 2.06. (a) Immediately after any engine which becomes a part of the Aircraft is replaced in accordance with the provisions of Section 2.05, Debtor will execute and deliver a supplement to this Security Agreement in form and substance satisfactory to Secured Party (the “Supplement”), which Supplement, among other things, shall cause the property described therein to be subject to the lien and security interest created under this Security Agreement.¶
Section 2.07. Debtor covenants and agrees that it will comply with all applicable federal, state, municipal, territorial and foreign laws, ordinances, regulations and rules applicable to any of the Aircraft, and that it will not cause or permit the Aircraft to be used or operated in any manner contrary to any such law, ordinance, regulation or rule. Debtor also agrees not to fly the Aircraft, or suffer the Aircraft to be flown or located, in any area excluded from coverage by any insurance policy in effect with respect to the Aircraft or required by the terms hereof. Debtor also agrees, without limiting the generality of the foregoing, (a) not to fly or suffer the Aircraft to be flown or located in any of the former so-called “Iron-Curtain” countries or areas, including without limitation Russia, Ukraine, Georgia, Hungary, the Czech Republic, the Slovak Republic, Croatia, Bosnia-Herzegovina, Bulgaria, Albania, Poland, Rumania, Latvia, Estonia, Lithuania, Viet Nam, China, Cuba and North Korea, or in any satellite country of, or any territory occupied by, or under control of, Russia or China, or in Iraq, Iran or Afghanistan; and (b) not to use, fly or locate any of the Aircraft, or suffer any of the Aircraft to be used, flown or located, in or near any recognized or threatened area of hostilities unless fully covered to Secured Party’s satisfaction by¶
3¶
EFTA00188157¶
39.14¶
EFTA00188158¶
0 0 0 0 0 0 0 5 8 3 9¶
39-13¶
war risk insurance or unless the Aircraft is operated or used under contract with the government of the United States of America under which contract such government assumes liability for any damage, loss, destruction or failure to return possession of the Aircraft at the end of the term of such contract.¶
(c) Debtor will not take any action, or suffer any omission, that would cause the Aircraft to be ineligible to be maintained under Part 91, subpart F, of the Federal Aviation Regulations.¶
Section 2.08. If Debtor shall default in the observance or performance of any of its agreements contained in this Security Agreement, Secured Party may do all acts and make all expenditures necessary to remedy each such default including, without limitation, entering upon or obtaining access to the Aircraft to make repairs upon the Aircraft and to purchase and discharge any lien or security interest, and Debtor shall give, or take all necessary steps to give, Secured Party access to the Aircraft for such purposes. Debtor shall promptly reimburse Secured Party, together with interest at a rate equal to two percent per annum in excess of the Prime Rate for any and all expenditures so made or incurred and such expenditures shall constitute part of the Obligations; provided, however, that Secured Party, though privileged so to do, shall be under no obligation to Debtor to make any such expenditures nor shall the making thereof relieve Debtor of any default in that respect.¶
Section 2.09. Debtor will permit and/or arrange for inspection by Secured Party, its officers, employees and agents, of the Aircraft and all maintenance and operational records on the Aircraft at any reasonable time and from time to time upon the request of Secured Party.¶
Section 2.10. (a) Debtor shall maintain such log books and other records pertaining to the Aircraft required by the rules and regulations of the Federal Aviation Administration. Debtor shall keep accurate and complete books and records regarding the Aircraft in accordance with generally accepted accounting principles. For the purpose of establishing the location and value of the Aircraft, Debtor shall furnish to Secured Party information adequate to identify the Aircraft at such times and in such form and substance as may be requested by Secured Party. Debtor shall permit and arrange for Secured Party to review such log books, books and records upon written request and shall furnish Secured Party with such additional information relating to the Aircraft as Secured Party shall reasonably request.¶
(b) Debtor represents and warrants that the site at which the Aircraft will be permanently hangared or located (its “Permanent Site”) is accurately and completely set forth on Exhibit A attached to this Security Agreement and that an exhibit to each Supplement will accurately and completely set forth the Permanent Site of any additional engines which become part of the Aircraft. Debtor shall not change, or permit to be changed, the Permanent Site of Aircraft, except to such new location as it may establish in accordance with paragraph (d) of this Section 2.10. In the event that the Aircraft is to be removed from its Permanent Site to a location within the United States of America for more than 180 days (or more than 60 days with respect to any such engine of less than 750 horsepower which is removed to the State of Louisiana), Debtor shall give Secured Party written notice of this fact, including information concerning proposed temporary locations, the length of time it is expected to be removed from its Permanent¶
4¶
EFTA00188159¶
39-12¶
EFTA00188160¶
0 0 0 0 0 0 5 8 4 0¶
39.11¶
Site and such other information in connection therewith as Secured Party may reasonably request. The Aircraft shall not be removed from its Permanent Site to a location outside of the United States of America for any period of time without first notifying Secured Party in writing at least 30 days in advance of such removal; provided, however, that this prohibition shall not apply to routine flights from or to the United States of America in the ordinary course of business.¶
(c) Debtor represents and warrants that Debtor has its principal business office at, and all of the original books of account and records of Debtor relating to the Aircraft are kept at, the address set forth for Debtor at the beginning of this Security Agreement. Neither the location of Debtor’s principal office nor the location where such books of account and records are kept will be changed except in accordance with paragraph (d) of this Section 2.10.¶
(d) Debtor will not establish any different location for the Permanent Site of the Aircraft, or for the place where the books of account and records on the Aircraft are kept, until (i) it shall have given to Secured Party written notice, at least 10 days before doing so, of its intention to establish such new location, clearly describing each such new location and providing such other information in connection therewith as Secured Party may reasonably request, and (ii) with respect to each such new location, it shall have taken such action, satisfactory to Secured Party, as may be necessary to maintain the security interest of Secured Party in the Aircraft granted hereunder at all times fully perfected and in full force and effect.¶
Section 2.11. Debtor will immediately notify Secured Party of any change, of which Debtor has knowledge, which materially and adversely affects or may materially and adversely affect either Secured Party’s or Debtor’s right, title or interest in or to, or the value of, the Aircraft.¶
Section 2.12. Debtor will pay when due any and all taxes, charges and assessments which are levied upon or with respect to the Aircraft and the operation thereof.¶
Section 2.13. Debtor will furnish to Secured Party or make available to Secured Party for review as and when requested by Secured Party any information or documentation or records reasonably requested by Secured Party.¶
3. DEFAULT; REMEDIES¶
Section 3.01. Time is of the essence of this Security Agreement. It is hereby agreed that, if default be made in the payment of any part of the principal or interest of the Note secured hereby at the time and in the manner therein specified, or if any breach be made of any of the other Obligations, or if any or all of the property covered hereby be hereafter sold, leased, transferred, mortgaged, or otherwise encumbered without the written consent of Secured Party first had and obtained, or in the event of attachment or seizure of the Aircraft under execution or other legal process, or if for any other reason Secured Party may deem itself insecure (each an “Event of Default”), then the whole principal sum unpaid upon the Note, with the interest accrued thereon, or advanced under the terms of this Security Agreement, or secured thereby, and¶
5¶
EFTA00188161¶
39-10¶
EFTA00188162¶
0 0 0 0 0 0 5 8 4 1¶
39-9¶
the interest thereon, shall immediately become due and payable at the sole option of Secured Party.¶
Section 3.02. Upon the occurrence of any Event of Default, but subject always to any mandatory requirement of applicable law, Secured Party may, by notice to Debtor:¶
(a) Take possession of all or any part of the Aircraft then subject to this Security Agreement and all of the rights of Debtor therein shall forthwith be surrendered to Secured Party, and Secured Party may by its agents, or otherwise, take possession of the Aircraft wherever found, with or without notice or process of law and without being responsible for any loss or damage, and for that purpose may enter upon any premises of Debtor without liability for suit, action or other proceeding by Debtor and remove the same. Secured Party, without being responsible for loss or damage, may hold, store and/or use, operate, manage and control the Aircraft, and may collect and receive all tolls, rents, revenues, issues and profits of the Aircraft and every part thereof, until:¶
(i) the Aircraft is sold pursuant to this Section 3.02; or¶
(ii) the Obligations are satisfied and paid in full, at which time Secured Party shall deliver to the person or persons entitled thereto all of the Aircraft then held by Secured Party under this paragraph (a) of this Section 3.02.¶
(b) Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of such of the Aircraft as may be in Secured Party’s possession if Secured Party takes such action for that purpose as Debtor shall request in writing, provided that Secured Party shall not be required to take any such requested action if, in the judgment of Secured Party, such action would impair Secured Party’s security interest in the Aircraft or its rights in, or the value of, the Aircraft, and provided further that such written request is received by Secured Party in sufficient time to permit Secured Party to take the requested action. Debtor acknowledges that failure of Secured Party to comply with any such request shall not of itself be deemed a failure to exercise reasonable care, and no failure of Secured Party to preserve or protect any rights with respect to the Aircraft against prior parties, or to do any act with respect to the preservation of the Aircraft not so requested by Debtor, shall be deemed to be a failure to exercise reasonable care in the custody or preservation of the Aircraft.¶
(c) Secured Party may, by its agent or otherwise, sell at public auction the Aircraft, or any part thereof, upon such conditions as to price, terms of payment and such other terms of sale as Secured Party may fix.¶
(d) Notice of any sale pursuant to this Section 3.02 shall state the time when, and the place where, such sale is to be made, shall contain a brief description of the property to be sold and shall be deemed reasonable if it is mailed to Debtor at least 10 days before the date of such sale. Such sale may be held at any place where sales or public auctions are customarily held in the City of Columbus, State of Ohio, or in any city or county in a state where the Aircraft to be sold is located.¶
6¶
EFTA00188163¶
39-8¶
EFTA00188164¶
0 0 0 0 0 0 0 5 8 4 2¶
39-7¶
(e) Secured Party, with or without taking possession of the Aircraft, may take legal proceedings for:¶
(i) the specific performance of any covenant or agreement herein contained or in aid of the execution of any right or power herein granted;¶
(ii) foreclosure hereunder;¶
(iii) the sale, under the judgment or decree of any court of competent jurisdiction, of the Aircraft or any part thereof;¶
(iv) the appointment of a receiver or receivers pending any foreclosure hereunder or the sale of the Aircraft under an order of a court of competent jurisdiction or under executory or other legal process;¶
the recovery of judgment for the outstanding balance of the Obligations and the collection of the same out of any properties of Debtor; or¶
(vi) the enforcement of any other appropriate remedy, and Secured Party shall be entitled, as a matter of right, to the appointment of a receiver of all or any part of the Aircraft.¶
Section 3.03. Debtor hereby irrevocably appoints Secured Party, its agents and attorneys, successors and assigns, and each of them, the true and lawful attorneys of Debtor, in its name and stead, to make all necessary transfers of any part or all of the Aircraft in connection with any sale or other disposal thereof made pursuant to Section 3.02, and for that purpose they may execute all necessary instruments of assignment and transfer, Debtor hereby ratifying and confirming all that its said attorneys shall lawfully do by virtue hereof. Nevertheless, Debtor shall, if so requested by Secured Party, ratify and confirm any such sale or other Aircraft disposal by executing and delivering to the transferee of any part or all of the Aircraft such proper bill of sale, conveyance, instrument of transfer, release or other document as may be designated in such request.¶
4. MISCELLANEOUS¶
Section 4.01. Any notices hereunder shall be given to the parties at their respective addresses set forth herein.¶
Section 4.02. This Security Agreement is to be interpreted under the local laws of the State of Ohio, except only to the extent of United States federal laws of mandatory application.¶
7¶
EFTA00188165¶
39.10¶
EFTA00188166¶
0 0 0 0 0 0 5 8 4 3¶
3G-5¶
IN WITNESS WHEREOF, the parties hereto have executed and sealed this Agreement on the day and year first above written.¶
ACKNOWLEDGMENT:¶
ACKNOWLEDGMENT:¶
By: ___¶
DEBTOR:¶
Print Name: ___¶
REAL ESTATE EXCHANGE, INC.¶
Dan L Jaffe¶
Its: ___¶
SECURED PARTY:¶
LIMITED SERVICE CORPORATION¶
By: Twitty Bleyan¶
Print Name: Timothy B. Lyons¶
Title: V.P.¶
8¶
EFTA00188167¶
39.4¶
EFTA00188168¶
0 0 0 0 0 0 0 5 8 4 4¶
39-3¶
IN WITNESS WHEREOF, the parties hereto have executed and sealed this Agreement on the day and year first above written.¶
ACKNOWLEDGMENT:¶
Juju J. Bentley¶
ACKNOWLEDGMENT:¶
DEBTOR:¶
REAL ESTATE EXCHANGE, INC.¶
By: Daniel K. Bra¶
Print Name: Vanda K. Hasa¶
Its: Secretary¶
SECURED PARTY:¶
LIMITED SERVICE CORPORATION¶
By: ___¶
Print Name: ___¶
Title: ___¶
8¶
EFTA00188169¶
39:0¶
EFTA00188170¶