Exhibit 10.2
This Security Agreement is subject to the terms of a
Subordination and Intercreditor Agreement in favor of The CIT
Group/Commercial Services, Inc., as agent for itself and for CIT
Financial Ltd., which Subordination and Intercreditor Agreement is
incorporated herein by reference. Notwithstanding any contrary
statement contained in the within Security Agreement, no payment on
account of principal or interest thereof shall become due or be paid
except in accordance with the terms of such Subordination and
Intercreditor Agreement.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is made this 30th day of May,
2007, by and between Ronson Aviation, Inc. (the "Debtor"), and EPIC Aviation,
LLC dba Air BP Aviation Services, an Oregon limited liability company (the
"Secured Party").
AGREEMENT:
Grant of Security Interest
For value received, and to secure the obligations of Debtor as
described below (the "Obligations"), the Debtor grants the Secured Party a
security interest in the following collateral located at: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Airport
"Collateral"):
The collateral shall specifically be limited to any and all
right, title and interest of Debtor in and to: The New
19,200 sq ft aircraft hangar, together with all improvements
and fixtures thereon, located on the real property legally
described in the attached Exhibit H-A1, in each case subject
to the provisions of the Lease (as hereinafter defined), the
prior encumbrances disclosed in Section 2.1 and the
Additional Permitted Encumbrances (as hereinafter defined).
1. Obligations of Debtor
This Agreement has been duly executed to secure payment and performance
of certain obligations of Debtor under that Loan Agreement effective May 30,
2007, between Debtor and Secured Party (the "Loan Agreement").
2. Representations and Covenants of Debtor
The Debtor, hereby represents and covenants as follows:
2.1 Title to Collateral
The Debtor is the owner of said Collateral subject to the
provisions of the Agreement and Lease dated May 14, 1975, as amended
(collectively, the "Lease"), with the County of ▇▇▇▇▇▇ (a copy of which
has been delivered to Secured Party), including, without limitation,
Articles XIII and XIV thereof, encumbrances held by The CIT
Group/Commercial Services Inc., as agent for itself and for CIT
Financial Ltd. (collectively, "CIT") and the Additional Permitted
Encumbrances. The parties acknowledge and agree that Debtor makes no
representation or covenant, express or implied, regarding the
sufficiency or value of the Collateral.
2.2 Organization of Debtor
The Debtor is a corporation duly organized, validly existing
and in good standing under the laws of the state of New Jersey; and the
above name of Debtor accurately reflects the name of Debtor as
registered with the New Jersey Secretary of Treasury.
2.3 No Transfers of Collateral
The Debtor will not sell, assign, exchange, lease or otherwise
dispose of the Collateral, or any part thereof, or suffer or permit any
lien, levy or attachment thereon or security interest therein or
financing statement to be filed with reference thereto, other than that
of the Secured Party, the Lease, the prior encumbrances disclosed in
Section 2.1 above, and other than: (i) statutory liens of carriers,
warehousemen, bailees, mechanics, materialmen, landlords and other like
liens imposed by law; (ii) liens for taxes not yet due and payable or
contested in good faith; (iii) easements, encroachments, defects or
irregularities in title and other encumbrances which do not materially
interfere with the use of the Collateral or materially impair its
value; (iv) liens for judgment creditors that are bonded or insured; or
(v) purchase money liens (the matters described under clauses (i)
through (v), inclusive, being the "Additional Permitted Encumbrances").
2.4 Preservation of Collateral
Debtor will maintain the Collateral in good condition and
repair and preserve the same against waste, loss, damage or
depreciation in value other than by reasonable wear. As set forth in
Section 2.12, Secured Party may examine and inspect the Collateral at
any reasonable times, wherever located, and for that purpose hereby is
authorized by Debtor to enter any place or places where any part of the
Collateral may be upon reasonable prior notice.
2.5 Insurance on Collateral
Debtor will keep the Collateral fully insured against loss or
damage by fire, theft (and collision if applicable), and such other
hazards as Secured Party may from time to time reasonably require, with
loss payable to Secured Party and Debtor, and in such company or
companies as the Secured Party may approve (which approval will not
unreasonably be withheld or delayed); Debtor immediately will deliver
certificates of insurance for all policies to the Secured Party. The
policy or policies shall provide that they may not be cancelled with
respect to Secured Party's interests without at least 30 days prior
written notice to Secured Party. All of Secured Party's rights under
this Section 2.5 are subordinate to the rights of CIT and its
successors and assigns with respect to selection of carriers and
payment of insurance proceeds upon a loss.
2.6 Loss or Damage to Collateral
Debtor shall promptly notify Secured Party of any loss or
damage to the Collateral or any portion thereof having a fair market
value in excess of $25,000. Debtor may make proof of loss if Secured
Party fails to do so within fifteen (15) days of the loss. If Debtor
and Secured Party agree to repair or replace the damaged or destroyed
Collateral, Debtor shall promptly repair or replace the damaged
Collateral. All of Secured Party's rights under this Section are
subordinate to any and all rights of CIT and its successors and assigns
with respect to payment of insurance proceeds upon a loss.
2.7 Legal Compliance
Debtor shall comply promptly in all material respects with all
laws, ordinances, and regulations of all governmental authorities
applicable to the use of the Collateral. Debtor may contest in good
faith any such law, ordinance, or regulation without compliance during
any proceedings, including appropriate appeals, so long as Secured
Party's interest in the Collateral is not jeopardized.
2.8 Payment of Taxes & Fees
Debtor will pay, when due, all taxes, license fees, and
assessments relative to the Collateral and its use and relative to the
Obligations secured hereby unless contested in good faith by
appropriate proceedings.
2.9 Changes as to Debtor
The Debtor shall notify the Secured Party in writing not less
than thirty (30) days prior to any form of merger, consolidation,
change of its business name or operating name, or change of its state
of organization.
2.10 Assignment by Secured Party
In the event of any assignment by the Secured Party of this
Agreement or its rights hereunder, Debtor will not assert as a defense,
counter-claim, set-off or otherwise against Secured Party's assignee
any claim, known or unknown, which Debtor now has or claims to have or
hereafter acquired against the Secured Party.
2.11 Perfection of Security Interest
The Debtor will join with the Secured Party in executing,
filing and doing whatever may be necessary under applicable law to
perfect and continue the Secured Party's security interest in the
Collateral, all at Debtor's expense. This includes, but is not limited
to the Debtor hereby expressly granting the Secured Party authority to
file any and all financing statements and fixtures filings necessary to
perfect the security interest granted pursuant to this Security
Agreement, without the signature of Debtor.
2.12 Inspection of Collateral
The Debtor will permit Secured Party and any of its agents
upon reasonable notice to enter into and upon the Debtor's place or
places of business or any other place where said Collateral or the
records pertaining thereto may be kept, at reasonable times during
reasonable business hours, to inspect the Collateral and inspect,
audit, and copy any books and records of the Debtor relating to the
Collateral or any other transactions with the Secured Party; in this
connection, the Debtor shall render any necessary assistance to the
Secured Party and its agents.
2.13 Financial Information
At the request of Secured Party, the Debtor shall furnish unto
the Secured Party current financial statements of Ronson Aviation, Inc.
on an annual basis.
3. Consideration
As additional consideration for the delivery and execution of this
Agreement, the Secured Party has extended the provision of fuel to Debtor
pursuant to the Fuel Purchase Contract between Secured Party and Debtor.
4. Duties With Respect to Collateral
The Secured Party shall have no duty to do any of the following:
4.1 To collect the Collateral or any proceeds;
4.2 To preserve rights of Debtor or others against prior or
other parties;
4.3 To realize on the Collateral in any particular matter or
seek reimbursement from any particular source; and
4.4 To preserve, protect, insure, or care for any of the
Collateral.
5. Waivers
The Debtor waives demand, presentment, and notice of dishonor and
protest of any instrument either of Debtor or others which may be included in
the Collateral or in the obligations secured hereby.
6. Consents
The Debtor consents to any extension, postponement of time of payment,
indulgence, and to any substitution, exchange, or release of Collateral, and to
the addition to or release of any party or person primarily or secondarily
liable, or acceptance of partial payments on any accounts or instruments and the
settlement, compromise, or adjustment thereof.
7. General Provisions
7.1 Separate Agreements
The obligations which this Agreement secures are separate
instruments and may be negotiated, extended or renewed by the Secured
Party without releasing the Debtor or the Collateral.
7.2 Oregon Law
All of the terms herein and the rights, duties and remedies of
the parties shall be governed by the laws of Oregon. Any part of this
Agreement contrary to the law of any state having jurisdiction shall
not invalidate other parts of this Agreement in that state. At Secured
Party's option, jurisdiction and venue of any proceeding relating to
this Agreement may be at ▇▇▇▇▇▇ County, Oregon.
7.3 Successors
All of the benefits of this Agreement shall inure to the
Secured Party, its successors in interest and assigns and the
obligations hereunder shall be binding upon the Debtor, its legal
representatives, successors and assigns.
7.4 Grammatical Changes
In construing this Security Agreement the masculine pronoun
shall include the feminine and the neuter and the singular shall
include the plural, as the circumstances may require.
8. Expenditures of Secured Party
If not discharged or paid by Debtor 30 days after the due date, Secured
Party may discharge taxes, liens, security interests, or other encumbrances at
any time levied or placed on the Collateral (other than those permitted under
Section 2.3), may pay for insurance on the Collateral if required under Section
2.5, and may pay for maintenance and preservation of the Collateral required
hereunder. All such payments shall become a part of Debtor's obligation secured
hereby, payable on demand, and with interest at the maximum rate permitted by
law from the date of expenditure until paid. Such rights shall be in addition to
any other rights or remedies to which the Secured Party may be entitled on
account of default.
9. Default
Time is of the essence hereof, and the Debtor shall be in default under
this Agreement upon the happening of any of the following events or conditions:
9.1 Non-Payment
Debtor's failure to pay, 30 days after the due date, the
principal of or interest on the Obligations, or any installment
thereof;
9.2 Misrepresentation
The discovery of any misrepresentation or material falsity of
any warranty, representation, or statement made or furnished by Debtor
to the Secured Party in connection with this Agreement;
9.3 Damage to Collateral
Loss, theft, or destruction of or substantial damage to any
material portion of the Collateral not corrected within 90 days of the
date of loss, theft, destruction or substantial damage (or such longer
period reasonably required, as long as Debtor is diligently correcting
same);
9.4 Business Termination
Dissolution or termination of Debtor's existence as a going
business, insolvency, appointment of receiver for any part of Debtor's
property, any assignment for the benefit of creditors, or the
commencement of any proceeding under any bankruptcy or insolvency laws
by or against the Debtor;
9.5 Foreclosure
Commencement of foreclosure, whether by judicial proceeding,
self-help, repossession, or any other method, by any creditor of Debtor
against any of the collateral, but this subsection should not apply in
the event of a good faith dispute by Debtor as to the validity or
reasonableness of the claim which is the basis of the foreclosure suit;
provided that Debtor provides Secured Party with written notice of such
claim and provides adequate reserves therefore.
10. Remedies of Secured Party
Upon default, and subject to any rights to cure and grace periods
provided Debtor herein, Secured Party may, during the continuation thereof,
exercise any one or more of the following rights and remedies in addition to any
other rights or remedies that may be available at law, in equity, or otherwise:
10.1 Acceleration
The Secured Party may declare the entire indebtedness owed by
or under the Obligations, including any prepayment penalty which Debtor
would be required to pay, immediately due and payable.
10.2 Delivery of Collateral
The Secured Party may require Debtor to deliver, within 30
days, to Secured Party all or any portion of the Collateral and any and
all certificates of title and other documents relating thereto. Secured
Party may require the Debtor to assemble the Collateral and make it
available, within 30 days, to Secured Party at a place to be designated
by Secured Party which is reasonably convenient to both parties.
Secured Party also shall have full power to, with 30 days notice, enter
upon the property of Debtor to take possession of and remove the
Collateral.
10.3 Sale of Collateral
The Secured Party shall have, with 30 days notice, full power
to sell, lease, transfer, or otherwise deal with the Collateral or
proceeds thereof in its own name or that of Debtor, subject to the
provisions of the Lease, the prior encumbrances disclosed in Section
2.1 and the Additional Permitted Encumbrances. The Secured Party may
sell the Collateral as aforesaid at public auction, unless the
Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party will give Debtor
reasonable notice of the time after which any private sale or any other
intended disposition thereof is to be made. The requirements of
reasonable notice shall be met if such notice is mailed by registered
or certified mail, postage prepaid, to the address of Debtor stated in
the Security Agreement, at least thirty (30) days before the time of
the sale or disposition. The Debtor shall be liable for expenses of
retaking, holding, and preparing for sale, selling, and the like.
10.4 Deficiency Judgment
Secured Party may obtain a judgment for any deficiency
remaining on the obligations due to Secured Party after application of
all amounts received from the exercise of the rights provided in this
Agreement. Debtor shall be liable for a deficiency even if the
underlying transaction is the sale of collateral.
10.5 All Other Rights
Secured Party shall have and may exercise any or all of the
rights and remedies of a secured creditor under the provisions of the
Uniform Commercial Code, at law, in equity, and otherwise.
11. Remedies Cumulative
All of the Secured Party's rights and remedies, whether evidenced
hereby or any other writing, shall be cumulative and may be exercised singularly
or concurrently. Election by Secured Party to pursue any remedies shall not
preclude pursuit of any other remedy, and an election to make expenditures or
take action to perform an obligation of Debtor under this Agreement after
Debtor's failure to perform shall not effect Secured Party's right to declare
default and exercise its remedies as provided by the terms of this Agreement.
12. Attorney Fees and Costs
In the event of a default under this Agreement, the defaulting party
shall reimburse the non defaulting party for all costs and expenses reasonably
incurred by the non defaulting party in connection with the default, including
without limitation attorney fees, and whether or not a suit is filed. If any
arbitration, suit or action is instituted to interpret or enforce the provisions
of this Agreement, to rescind this Agreement, or otherwise with respect to the
subject matter of this Agreement, the party prevailing on an issue shall be
entitled to recover with respect to such issue, in addition to costs, reasonable
attorney fees incurred in preparation or in prosecution or defense of such
arbitration, suit, or action as determined by the arbitrator or trial court, and
if any appeal is taken from such decision, reasonable attorney fees as
determined on appeal.
13. Notices
All notices and other communications under this Agreement must be in
writing and shall be deemed to have been given if delivered personally, sent by
facsimile (with confirmation), mailed by certified mail, or delivered by an
overnight delivery service (with confirmation) to the parties to the following
addresses or facsimile numbers (or at such other address or facsimile number as
a party may designate by like notice to the other parties):
SECURED PARTY: EPIC Aviation, LLC
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
DEBTOR: Ronson Aviation, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ City Airport.
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Ronson Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Corporate Park III, ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any notice or other communication shall be deemed to be given (a) on
the date of personal delivery, (b) at the expiration of forty-eight (48) hours
after the date of deposit in the United States mail, or (c) on the date of
confirmed delivery by facsimile or overnight delivery service.
14. Subordination
Notwithstanding any other provision to the contrary herein, any and all
rights of Secured Party hereunder, including, without limitation, to repayment
of the Obligations, is and shall be subordinated to the prior payment and
satisfaction of any and all loans, advances and extensions of credit made by
Secured Party to Debtor, and to Ronson Corporation, Ronson Consumer Products
Corporation and Ronson Corporation of Canada Ltd. (together with Debtor, the
"RONSON Group"), and to all other indebtedness, obligations and liabilities of
the RONSON Group to CIT; and, if requested by CIT, the Secured Party hereby
agrees to enter into a subordination agreement prescribed by CIT in evidence of
the foregoing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
DEBTOR: SECURED PARTY:
Ronson Aviation, Inc. EPIC Aviation, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its: President & Chief Executive Officer ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
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Date: 5/30/07 Date: 6/13/07
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