EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") dated October 18, 1995
among Command Credit Corporation, a New York Corporation (the "Company"),
Jetlease/Finance Corporation, a Florida corporation ("Jetlease") and Fidelity
Holding Corp. ("Fidelity"), a Florida corporation .
WHEREAS, the Company desires to acquire 100% ownership of the common
stock of Fidelity Holding Corp. ("Fidelity"), a Florida corporation and a wholly
owned subsidiary of Jetlease.
WHEREAS, the Company wishes provide consideration to Jetlease for the
purchase of the common stock of Fidelity through the issuance of its Common
Stock
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intended to be legally bound, the parties hereby
agree as follows:
ARTICLE 1 THE CLOSING
Section 1.1 Date and Place of Closing
The closing date shall be October 18, 1995 at 1:00 P.M. at the offices of
Jetlease located at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Closing").
Section 1.2 Transfer of Fidelity Shares
At the Closing, Jetlease shall transfer one hundred percent (100%) of the
issued and outstanding shares of Fidelity. Jetlease shall issue and deliver to
the Company a stock certificate or certificates in definitive form, registered
in the name of the Company, evidencing the shares being acquired by it under
this Agreement
Section 1.3 Promissory Notes
At the Closing Jetlease shall deliver to the Company two promissory
notes, payable to the order of Fidelity, with Jetlease as Maker, each dated
October 18, 1995, in the amounts of Six Million Dollars ($6,000,000) and Four
Million Dollars ($4,000,000) bearing interest at Twelve Percent (12%) for a term
of two years. Each promissory shall state that interest is payable directly to
the Company.
Section 1.4 Security Agreements
The promissory notes delivered pursuant to Section 1.3 above, shall be
secured with a first chattel mortgage upon two aircraft (the "Aircraft") each
valued in excess of the promissory note which they shall secure. Such Security
Agreements shall be executed by Jetlease at the Closing.
Section 1.5 Aircraft Appraisal
Jetlease shall provide the Company at the Closing with appraisals for
each Aircraft securing the promissory notes referenced in Section 1.3. Such
appraisals shall show that the fair market value of said aircraft to be at least
equal to the value of the promissory note that it is securing. The appraiser
conducting such appraisal shall be independent and utilize those appraisal
methods commonly used within the aircraft financing and leasing industry.
Section 1.6 Aircraft Insurance
Jetlease shall provide the Company with a Certificate of Insurance
providing:
(a) Limits of insurance for damage or loss of aircraft shall be
no less than the amount of the promissory note which the aircraft is securing.
(b) The Company shall be named as a Loss Payee under the policy.
Section 1.7 Representations and Warranties
The representations and warranties of the Company, Jetlease and
Fidelity as specifically set forth in Articles 3 and 4 of this Agreement shall
be true and correct on and as of the Closing Date.
ARTICLE 2. THE EXCHANGE
Section 2.1 Reverse Split
The Company agrees to reverse split its Common Stock at the rate of One
Hundred Fifty to One (150 to 1) no later than ten (10) days following the
Closing Date of this Agreement.
2
Section 2.2 Audit
Jetlease shall provide the Company with audited financial statements of
Fidelity as of the Closing Date. Such audit shall meet those requirements as
provided in Regulation S-X (17 CFR Part 210) and Form 8-K under the Securities
Exchange Act of 1934. Such audit shall additionally confirm:
(a) that Fidelity is the holder of the promissory notes referenced in
Section 1.3 of the Agreement and such notes are secured with perfected security
interests as referenced in Section 1.4 of the Agreement.
(b) that the Aircraft referenced in Section 1.5 shall have been appraised
to equal a value of at least $10,000,000.
(c) the Fidelity shall have no other assets or liabilities other than the
promissory notes referenced above.
(d) the common stock of Fidelity has been issued in the name of Jetlease
who is the sole and 100% holder of all the issued and outstanding common stock
of Fidelity.
Section 2.3 The Exchange.
(a) Within three (3) days from the date of the Company's reverse stock
split referenced in Section 2.1, but not before completion, by Jetlease, of the
audit of Fidelity, as set forth in Section 2.2, and the compliance with the
additional conditions as set forth in Article 1 of this Agreement, Jetlease
shall receive Four Million (4,000,000) shares of the Company's Common Stock
(the "Shares"), which represents a twenty percent discount from the market
price of the Company's common stock, following the reverse split referenced in
Section 2.1 of this Agreement. The Company shall issue and deliver to Jetlease
a stock certificate or certificates in definitive form, in the name of Jetlease,
evidencing the shares being acquired by it under this Agreement.
(b) Jetlease acknowledges that these Shares are not registered under the
Securities Act of 1933 (the "Act") and will be issued under a transactional
exemption from registration, Section 4(2) of the Act.
(c) These Shares shall have a legend restricting transfer except upon
registration of the shares under the Act, or upon some exemption from
registration that may be available under the Act.
3
ARTICLE 3. REPRESENTATION AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Jetlease as of the date hereof and
as of the Closing Date as follows:
Section 3.1 Corporation Standing.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York. The Company has all requisite
corporate power and authority to own and lease its properties and assets and to
conduct its business as it is now conducted, and is qualified as a foreign
corporation in every jurisdiction in which the failure to so qualify would have
material adverse effect on its business.
Section 3.2 Authorization.
(a) The Company has the corporate power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Company have been duly authorized and
approved by all necessary corporate action. This Agreement constitutes a legal,
valid and binding agreement of the Company enforcement against it in accordance
with its terms except that (i) the enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affection the enforcement of the rights and remedies of creditors:
and (ii) the availability of equitable remedies may be limited by equitable
principles.
(b) Neither the execution, delivery or performance of this Agreement by
the Company nor, the consummation of the transactions contemplated hereby (i)
constitutes a violation of or default under (either immediately upon notice,
lapse of time, or both) (A) the Articles of Incorporation or Bylaws of the
Company, (B) and provision of any contract, agreement or other document to which
the Company or its asset may be bound, or (C) any provision of law, judgment or
order applicable to the Company; or (ii) will or could result in the creation or
imposition of any lien, encumbrance or security interest upon the assets of the
Company.
(c) Other than as may be required pursuant to the Securities Act of 1933,
as amended, and the rules and regulations thereunder (the "Act"), the securities
or blue sky laws of the various states, no notice to, filing with,
4
authorization of, exemption by, or consent or approval of, any public body or
authority or any other person is necessary for the consummation of the
transactions by the Company contemplated by this Agreement.
Section 3.3 Registration Statement.
The Company shall use its best efforts to file a shelf registration
statement under Section 230.415 of the regulations promulgated under the Act for
the maximum number of shares available for registration under this section of
the Act
As of the date of the filing of a registration statement and as of the
date such registration statement is declared effective by the SEC, such
registration statement will not contain any untrue statement of material fact
or omitted or will omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading.
Section 3.4 The Shares.
The Shares, when acquired in accordance with the terms of this Agreement,
will be duly issued, fully paid and nonassessable.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF JETLEASE AND FIDELITY HOLDING CORP.
Jetlease and Fidelity represent and warrant to the Company as of the date
hereof and as of the Closing Date as follows:
Section 4.1 Corporate Standing.
Jetlease and Fidelity, are corporations duly organized, validly existing
and in good standing under the laws of the State of Florida. Jetlease and
Fidelity have all requisite corporate power and authority to own and lease their
properties and assets to conduct on its business as it is now conducted, and are
qualified as a foreign corporation in every jurisdiction in which the failure to
so qualify would have a material adverse effect on its business.
Section 4.2 Authorization.
(a) Jetlease and Fidelity have the corporate power and authority to
enter into and perform their obligations under this Agreement. This shall
include the obligation to transfer ownership of Fidelity by transferring One
Hundred
5
percent (100%) of Fidelity's Common Stock to the Company as stated in this
Agreement. The execution, delivery and performance of this Agreement by
Jetlease and Fidelity have been duly authorized and approved by all necessary
corporate action. This Agreement constitutes a legal, valid and binding
agreement of Jetlease and Fidelity, enforceable against it in accordance with
its terms except that (i) the enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affection the enforcement of the rights and remedies of creditors:
and (ii) the availability of equitable remedies may be limited by equitable
principles.
(b) Neither the execution, delivery or performance of this Agreement
by Jetlease and Fidelity, nor the consummation of the transactions contemplated
hereby (i) constitutes a violation of or default under (either immediately upon
notice, lapse of time, or both) (A) the Articles of Incorporation or Bylaws of
either corporation, (B) and provision of any contract, agreement or other
document to which either corporation or its assets may be bound, or (C) any
provision of law, judgment or order applicable to either corporation; or (ii)
will or could result in the creation or imposition of any lien, encumbrance or
security interest upon the assets of Jetlease or Fidelity.
Section 4.3 Title to Aircraft.
Jetlease is the sole and unconditional owner of the Aircraft. There are
no restrictions on the transfer or use of any Aircraft utilized or listed under
the terms of this Agreement. Each of the Aircraft under this Agreement are in
good working order, and are free of any defects which might impair their
usefulness. There are no material dangerous conditions with respect to any of
the Aircraft utilized or listed under the terms of this Agreement. The
Aircraft comply with all FAA regulations and meet all governmental standards
regarding noise and fuel pollution, and all other government regulations and
standards regarding said Aircraft. In the event the Aircraft fail to comply
with any governmental regulations and or standards, Jetlease warrants that it
shall take whatever steps are necessary to bring the Aircraft into compliance.
Section 4.4 Aircraft Value
(a) Jetlease shall guarantee the value of the Aircraft for a period of
one (1) year from the date of this Agreement. Should the Aircraft, for any
reason, fall below the audited value listed as collateral for this Agreement,
Jetlease
6
shall, upon approval of the Company, substitute the Aircraft with one
of value equal to the collateral intended in this Agreement, or supplement the
property with additional collateral equaling the amount to be secured pursuant
to the Security Agreements.
(b) The Aircraft have been duly registered with the FAA in the Oklahoma
City, Oklahoma under the serial number and registration number as is set forth
the Promissory Notes and Security Agreement that are attached to this Agreement.
Section 4.5 Validity of Contracts.
Jetlease nor Fidelity are not in default under any contract or security
agreement, nor has nay event occurred which, through the passage of time, or the
giving of notice of both, would constitute a default hereunder or would cause
the acceleration of any obligation of Jetlease or Fidelity.
Section 4.6 Insurance.
The Aircraft utilized and listed under the terms of this Agreement are
insured under various policies of general liability and other forms of
insurance, all of which are listed on Schedule 4.6 attached hereto. All such
policies are in full force and effect in accordance with their terms, no notice
of cancellation has been received, and there is no existing default or event
which, with the giving of notice or lapse of time, or both, would constitute a
default thereunder. All premiums to date have been paid in full. Jetlease and
Fidelity have not been refused any insurance, nor has its coverage been limited,
beyond the normal scope of policy limitations, by any insurance carrier to which
it has applied for insurance or with which it has carried insurance during the
past five (5) years. All Aircraft under the terms of this Agreement are insured
for their value and all insurance premiums have been paid. At any time upon
request from the Company, Jetlease shall furnish proof of insurance within ten
(10) days demonstrating compliance with this section.
Section 4.7 Disclosure of Information
Jetlease acknowledges that it has received, read, understands and is
familiar with:
(a) the Company's Annual Report (Form 10-K) filed with the Securities and
Exchange Commission for the fiscal year ended June 30, 1995;
(b) Quarterly Reports (Form 10-Q) filed with the Securities and Exchange
Commission for the quarters ended September 30, 1994, December
7
31, 1994, March 31, 1995, and September 30, 1995 and;
(c) Jetlease further acknowledges that, except as set forth in such reports
made available to the undersigned by the Company, no representations or
warranties have been made to the undersigned, or to the undersigned's advisors
by the Company, or by any person acting on behalf of the Company, with respect
to the offer or sale of the Shares and/or the economic, tax or any other aspects
or consequences of a purchase of the Shares and/or the investment made thereby.
Further, the undersigned has not relied upon any information concerning the
Company, written or oral, other than that contained in the aforementioned
reports.
(d) Jetlease hereby acknowledges that Jetlease has had an opportunity to
ask questions of, and receive answers from persons acting on behalf of the
Company to verify the accuracy and completeness of the information set forth in
such reports prior to sale and Jetlease hereby acknowledges that Jetlease has
not requested the Company to provide any additional information which the
Company possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy and completeness of the information made
available.
(e) Jetlease must bear the economic risk of its investment in the Company
for an indefinite period of time since the Shares have not been registered for
sale under the Act and, therefore, cannot be sold or otherwise transferred
unless either it is subsequently registered under the Act or an exemption from
such registration is available, and the Shares cannot be sold or otherwise
transferred unless they are registered under applicable state securities or blue
sky laws or an exemption from such registration is available.
(f)Jetlease has not been furnished any offering literature other than the
documents attached as appendices thereto and other materials that the Company
may have provided as contemplated in this Agreement or at the request of
Jetlease; and the Jetlease has relied only on the information contained in this
Agreement and such exhibits and the information furnished or made available to
Jetlease by the Company as described in Section 4.7 above.
(g) The undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of investment in the Company and of making an informed investment
decision.
(h) Except as otherwise indicated herein, the undersigned is the sole party
in interest as to its investment in the Company, and it is acquiring the
8
Common Stock solely for investment for Jetlease's own account and has no present
agreement, understanding or arrangement to subdivide, sell, assign, transfer or
otherwise dispose of all or any part of the Shares subscribed for to any other
person.
ARTICLE 5 VOTING TRUST and STOCK PRICE GUARANTEE
Section 5.1 Establishment of Voting Trust
The Shares issued pursuant to Section 2.3 shall be subject to a Voting
Trust Agreement (the "Trust") wherein ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall be appointed the
sole trustee who shall hold complete voting control over the Shares until such
Voting Trust shall be terminated. Such Trust shall be attached to this
Agreement as Exhibit 5.1.
Section 5.2 Price Guarantee
(a) During the one year period following the Closing Date (the "Guarantee
Period"), should the per share price of the Common Stock of the Company, (as
quoted on the OTC Bulletin Board, the Nasdaq SmallCap Market or such other
market on which the Company's Common Stock is traded ), as calculated by taking
the average closing bid price for any consecutive thirty (30) period, during the
Guarantee Period(hereinafter called the "Market Price"), be less than $3.50 per
share (hereinafter called the "Guaranteed Price"), then upon written demand
from Jetlease (the "Demand"), the Company shall issue additional shares to
Jetlease upon the following calculation:
(i) Calculate the difference between the Guarantee Price and the
Market Price (hereinafter called the "Guarantee Differential")
(ii) Calculate the product of multiplying the Guarantee Differential
by the number of Shares held by Jetlease on the date of Demand (the "Guarantee
Value")
(iii) The Company shall thereafter, within twenty (20) days of the
Demand, issue to Jetlease an additional number of shares calculated by dividing
the Guarantee Value by the Market Price (hereinafter called the "Guarantee
Shares").
(b) The Demand referenced above shall be served upon the Company in writing
providing the specific thirty (30) period that Jetlease is referencing in
calculating a Market Price that falls below the Guarantee Price.
(c) Jetlease acknowledges that the Guarantee Shares shall be issued with
9
the same restrictions to transfer as set forth in Section 2.3(b) and (c) of this
Agreement.
ARTICLE 6 TERMINATION, WAIVER, AMENDMENT
Section 6.1 Termination or Abandonment.
Notwithstanding anything to the contrary contained in this Agreement, this
Agreement may be terminated and abandoned by the Company at any time up to the
time of closing, if, by that date, any of the conditions set forth in Article 1
shall not have been satisfied or waived.
In the event of termination of this Agreement by the Company pursuant to
this section of the Agreement, there shall be no other liability on the part of
the Company or Jetlease to any other party hereto; provided, however, that
nothing herein shall affect the right of any party to seek and obtain damages
and/or equitable remedies (including, without limitation, specific performance)
for any intentional misrepresentation or breach of warranty or covenant by any
other party hereto.
ARTICLE 7 MISCELLANEOUS
Section 7.1 Expenses.
Each party hereto shall pay its own expenses in connection with the
transactions contemplated hereby, whether or not such actions shall be
consummated. The Company shall pay a consulting fee under separate agreement to
Euro-American Corporation Consulting, Inc., following the consummation of this
transaction.
Section 7.2 Entire Agreement.
This Agreement sets forth all of the promises, covenants, agreements,
conditions and understandings between the parties and this Agreement supersedes
all prior and contemporaneous agreements, expressed or implied, oral or written,
except as herein contained. This Agreement and any amendments hereto may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together will constitute one and the same instrument.
Section 7.3 Governing Law.
This Agreement shall be construed in accordance with the laws of the
10
State of Florida and any proceeding arising between the parties in any manner
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in the State of Florida and in the County of Broward, as proper venue.
Section 7.4 Notice.
All notices, requests, demands or other communications hereunder shall be
deemed to have been fully given if the same shall be in writing and shall be
delivered personally or sent by registered or certified mail, postage prepaid,
and addressed as set forth:
Company: Command Credit Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Jetlease: Jetlease/Finance Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 7.5 Further Assurances.
The parties hereto will execute and deliver such further instruments and do
such further acts and things as may be reasonably required to carry our the
intent and purposes of this Agreement.
Section 7.6 Successors and Assigns.
This Agreement shall be binding upon the parties hereto, their heirs,
successors, assigns and administrators.
Section 7.7 Prevailing Party
Any party hereto is required to engage in litigation against any other
party hereto, in order to enforce or defend any rights under this Agreement and
such litigation results in a final judgement in favor of such party (the
"Prevailing Party"), then the party or parties against whom said final judgement
is obtained shall reimburse the Prevailing Party for all costs and expenses
incurred in the litigation to include attorney's fees, paralegal fees, court
costs
11
and other expenses to include trials, re-trials and appeals.
Section 7.8 Bulk Sales.
The parties to this Agreement shall comply with all laws, local ordinances
and provisions of the Uniform Commercial Code as they pertain to bulk sales.
IN WITNESS WHEREOF, the Company and Jetlease have executed this Agreement
as of the date appearing below.
Command Credit Corporation
Date: October 18, 1995 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and
Chief Executive Officer
Jetlease/Finance Corporation
Date: October 18, 1995 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
President
Fidelity Holding Corp.
Date: October 18, 1995 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
President
12
SECURITY AGREEMENT
(Chattel Mortgage)
THIS AGREEMENT, made the 18th day of October, 1995, under the laws of the State
of Florida between JETLEASE/FINANCE CORP., (hereinafter called the "Debtor"),
whose business address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Fidelity Holding Corp., (hereinafter called the
"Secured Party").
WITNESSETH:
To secure the payment of an indebtedness in the amount of Six Million Dollars
($6,000,000.00), with interest, payable as follows:
A Promissory Note in the amount of $6,000,000.00 payable as follows:
(A) Interest only of One percent (1%) of the principal amount payable
per month for a term of twenty-four (24) months and due ninety (90) days from
the date of this Promissory Note. Thereafter, interest payments shall be due
and payable monthly.
(B) The principal amount of $6,00,000.00 payable in full in twenty-four
(24) months from the date of this Promissory Note as evidenced by the Note.
Debtor hereby grants and conveys to the Secured Party as a security interest in
and mortgages to the Secured Party:
(a) The property described in the schedule herein (hereinafter called the
collateral), which collateral the Debtor represents, will be used primarily in
business.
DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
To pay and perform all of the obligations secured by this Agreement according to
their terms.
To defend the title of the collateral against all persons and against claims and
demands, whatsoever, which collateral, except for the security interest granted
hereby, is lawfully owned by the Debtor and is now free and clear of any and all
liens, security interest, claims, charges, encumbrances, taxes and assessments
except as may be set forth in the schedule.
On demand of the Secured Party to do the following: furnish further assurances
of title, execute any written agreement or do any other acts necessary to
effectuate the purposes and provisions of this Agreement, execute any instrument
or statement required by law or otherwise in order to perfect, continue or
terminate the security interest of the Secured Party in the collateral and pay
all costs of filing in connection therewith. In addition, see attached
Agreement as to Records and Financial Inspection.
To retain title and ownership of the collateral during the existence of this
Agreement, not to sell, exchange, assign, loan, deliver, lease, mortgage or
otherwise dispose of same without the written consent of the Secured Party.
To keep the collateral free and clear of all liens, charges, encumbrances, taxes
and assessments, except those that are subordinate to the secured interest
granted herein.
To keep the collateral in good repair and condition in accordance with industry
standards and FAA regulations.
To keep the collateral fully insured against loss by fire, theft and other
casualties, Debtor shall give immediate written notice to the Secured Party and
to insurers of loss of damage to the collateral and shall promptly file proofs
of loss with insurers and shall list secured party as such on the policy which
covers the collateral and name secured party as loss payee, and to provide
proof of said insurance to the Company within ten (10) days of such request.
THE PARTIES FURTHER AGREE:
Waiver of or acquiescence in any default by the Debtor, or failure of the
Secured Party to insist upon strict performance by the Debtor or any warranties
or agreements in this Security Agreement, shall not constitute a waiver of any
subsequent or other default or failure.
Notices to either party shall be in writing and shall be delivered via certified
mail return receipt requested and addressed to the party at the address set
forth in this Agreement or as otherwise directed in writing.
The Uniform Commercial Code shall govern the rights, duties and remedies of the
parties and any provisions herein declared invalid under any law shall not
invalidate any other provisions of this Agreement. The following shall
constitute a default by Debtor: Failure to pay the principal or any installment
of principal or of interest on the indebtedness or any notes prior to the
respective default dates. Failure by Debtor to comply with or perform any
provision of this Agreement or secured by the Agreement. False or misleading
representations or warranties made or given by Debtor in connection with this
Agreement. Subjection of the collateral to levy of execution or other judicial
process. Commencement of any insolvency proceeding by or against the Debtor.
Any material reduction in the value of the collateral other than in the ordinary
course of business or any act of the Debtor which imperils the prospect of full
performance or satisfaction of the Debtor's obligation herein.
Upon any default of the Debtor and at the option of the Secured Party, subject
to the grace period or curative periods and notice requirements set forth in
the Promissory Note or related documents, the obligations secured by this
Agreement shall immediately become due and payable in full without notice or
demand and the Secured party shall have all rights, remedies and privileges with
respect to repossession, retention or sale of the collateral and disposition of
the proceeds as are accorded by the applicable sections of the Uniform
Commercial Code respecting Default.
Upon any default and upon reasonable demand, Debtor shall assemble the
collateral and make it available to the Secured Party at the place and at the
time designated in the demand in Florida.
Upon any default, the Secured Party's reasonable attorneys' fees and the legal
and other expenses for pursuing, searching for receiving, taking, keeping,
storing, advertising, and/or selling the collateral shall be chargeable to the
Debtor.
The Debtor shall remain liable for any deficiency that may result from a sale of
the collateral and shall pay any such deficiency forthwith on demand.
If the Debtor shall default in the performance of any of the provisions of this
Agreement on the Debtor's part to be performed, Secured Party may perform same
for the Debtor's account and any moneys expended in so doing shall be chargeable
to the Debtor and added to the indebtedness secured hereby.
The Secured Party agrees to execute such documents as are required to
substantiate its secured interest pursuant to paragraph (B) above and further
agrees to execute such appropriate document releasing such collateral and Debtor
from such indebtedness immediately upon repayment in full as described herein.
The Secured Party hereby grants the Debtor the right to sell the collateral
listed on Schedule A, so long as the Debtor substitutes collateral of similar
type, specifically a jet aircraft, and of equal value. The Debtor shall provide
the Secured Party with an independent aircraft appraisal as evidence of the new
collateral's value. The Debtor represents and warrants that those warranties
and covenants provided upon the initial collateral shall be reaffirmed upon the
new and substituted collateral.
The terms, warranties and agreements herein contained shall bind and inure to
the benefit of the respective parties hereto, and their respective legal
representatives, successors and assigns.
The gender and number used in this Agreement are used as a reference term only
and shall apply with the same effect whether the parties are of the masculine or
feminine gender, corporate or other form and the singular shall likewise include
the plural.
This Agreement may not be changed orally.
IN WITNESS WHEREOF, the Parties have respectively signed and sealed these
presents the day and year first above written.
DEBTOR
JETLEASE/FINANCE CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SECURED PARTY:
Fidelity Holding Corp.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Schedule
Describe Items of Collateral
Items Location
1974 Boeing 727-200F S/N ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
SECURITY AGREEMENT
(Chattel Mortgage)
THIS AGREEMENT, made the 18th day of October, 1995, under the laws of the State
of Florida between JETLEASE/FINANCE CORP., (hereinafter called the "Debtor"),
whose business address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Fidelity Holding Corp., (hereinafter called the
"Secured Party").
WITNESSETH:
To secure the payment of an indebtedness in the amount of Four Million Dollars
($4,000,000.00), with interest, payable as follows:
A Promissory Note in the amount of $4,000,000.00 payable as follows:
(A) Interest only of One percent (1%) of the principal amount payable per
month for a term of twenty-four (24) months and due ninety (90) days from the
date of this Promissory Note. Thereafter, interest payments shall be due and
payable monthly.
(B) The principal amount of $4,00,000.00 payable in full in twenty-four
(24) months from the date of this Promissory Note as evidenced by the Note.
Debtor hereby grants and conveys to the Secured Party as a security interest in
and mortgages to the Secured Party:
(a) The property described in the schedule herein (hereinafter called
the collateral), which collateral the Debtor represents, will be used primarily
in business.
DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
To pay and perform all of the obligations secured by this Agreement according to
their terms.
To defend the title of the collateral against all persons and against claims and
demands, whatsoever, which collateral, except for the security interest granted
hereby, is lawfully owned by the Debtor and is now free and clear of any and all
liens, security interest, claims, charges, encumbrances, taxes and assessments
except as may be set forth in the schedule.
On demand of the Secured Party to do the following: furnish further assurances
of title, execute any written agreement or do any other acts necessary to
effectuate the purposes and provisions of this Agreement, execute any instrument
or statement required by law or otherwise in order to perfect, continue or
terminate the security interest of the Secured Party in the collateral and pay
all costs of filing in connection therewith. In addition, see attached
Agreement as to Records and Financial Inspection.
To retain title and ownership of the collateral during the existence of this
Agreement, not to sell, exchange, assign, loan, deliver, lease, mortgage or
otherwise dispose of same without the written consent of the Secured Party.
To keep the collateral free and clear of all liens, charges, encumbrances, taxes
and assessments, except those that are subordinate to the secured interest
granted herein.
To keep the collateral in good repair and condition in accordance with industry
standards and FAA regulations.
To keep the collateral fully insured against loss by fire, theft and other
casualties, Debtor shall give immediate written notice to the Secured Party and
to insurers of loss of damage to the collateral and shall promptly file proofs
of loss with insurers and shall list secured party as such on the policy which
covers the collateral and name secured party as loss payee, and to provide proof
of said insurance to the Company within ten (10) days of such request.
THE PARTIES FURTHER AGREE:
Waiver of or acquiescence in any default by the Debtor, or failure of the
Secured Party to insist upon strict performance by the Debtor or any warranties
or agreements in this Security Agreement, shall not constitute a waiver of any
subsequent or other default or failure.
Notices to either party shall be in writing and shall be delivered via certified
mail return receipt requested and addressed to the party at the address set
forth in this Agreement or as otherwise directed in writing.
The Uniform Commercial Code shall govern the rights, duties and remedies of the
parties and any provisions herein declared invalid under any law shall not
invalidate any other provisions of this Agreement. The following shall
constitute a default by Debtor: Failure to pay the principal or any installment
of principal or of interest on the indebtedness or any notes prior to the
respective default dates. Failure by Debtor to comply with or perform any
provision of this Agreement or secured by the Agreement. False or misleading
representations or warranties made or given by Debtor in connection with this
Agreement. Subjection of the collateral to levy of execution or other judicial
process. Commencement of any insolvency proceeding by or against the Debtor.
Any material reduction in the value of the collateral other than in the ordinary
course of business or any act of the Debtor which imperils the prospect of full
performance or satisfaction of the Debtor's obligation herein.
Upon any default of the Debtor and at the option of the Secured Party, subject
to the grace period or curative periods and notice requirements set forth in the
Promissory Note or related documents, the obligations secured by this Agreement
shall immediately become due and payable in full without notice or demand and
the Secured party shall have all rights, remedies and privileges with respect to
repossession, retention or sale of the collateral and disposition of the
proceeds as are accorded by the applicable sections of the Uniform Commercial
Code respecting Default.
Upon any default and upon reasonable demand, Debtor shall assemble the
collateral and make it available to the Secured Party at the place and at the
time designated in the demand in Florida.
Upon any default, the Secured Party's reasonable attorneys' fees and the legal
and other expenses for pursuing, searching for receiving, taking, keeping,
storing, advertising, and/or selling the collateral shall be chargeable to the
Debtor.
The Debtor shall remain liable for any deficiency that may result from a sale of
the collateral and shall pay any such deficiency forthwith on demand.
If the Debtor shall default in the performance of any of the provisions of this
Agreement on the Debtor's part to be performed, Secured Party may perform same
for the Debtor's account and any moneys expended in so doing shall be chargeable
to the Debtor and added to the indebtedness secured hereby.
The Secured Party agrees to execute such documents as are required to
substantiate its secured interest pursuant to paragraph (B) above and further
agrees to execute such appropriate document releasing such collateral and Debtor
from such indebtedness immediately upon repayment in full as described herein.
The Secured Party hereby grants the Debtor the right to sell the collateral
listed on Schedule A, so long as the Debtor substitutes collateral of similar
type, specifically a jet aircraft, and of equal value. The Debtor shall provide
the Secured Party with an independent aircraft appraisal as evidence of the new
collateral's value. The Debtor represents and warrants that those warranties
and covenants provided upon the initial collateral shall be reaffirmed upon the
new and substituted collateral.
The terms, warranties and agreements herein contained shall bind and inure to
the benefit of the respective parties hereto, and their respective legal
representatives, successors and assigns.
The gender and number used in this Agreement are used as a reference term only
and shall apply with the same effect whether the parties are of the masculine or
feminine gender, corporate or other form and the singular shall likewise include
the plural.
This Agreement may not be changed orally.
IN WITNESS WHEREOF, the Parties have respectively signed and sealed these
presents the day and year first above written.
DEBTOR
JETLEASE/FINANCE CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SECURED PARTY:
Fidelity Holding Corp.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Schedule
Describe Items of Collateral
Items Location
1971 Boeing 727-100 S/N ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
PROMISSORY NOTE
$6,000,000.00 Broward County, Florida
October 18, 1995
FOR VALUE RECEIVED JETLEASE/FINANCE CORP. (the "Maker"), promises to pay to the
order of Fidelity Holding Corp. the principal sum of Six Million Dollars
($6,000,000.00) plus interest at the rate of 12% per annum payable in lawful
money of the United States of America as follows:
(A) Interest only of 1% of the principal amount payable monthly for a term
of twenty-four (24) months with first payment due ninety (90) days from the date
of this Promissory Note. Thereafter, interest payments shall be due and payable
monthly.
(B) The Principal amount of $6,000,000.00 payable in full in twenty-four
(24) months from the date of this Promissory Note.
The Makers hereof shall have the right to repay this Note in whole or in part at
any time without penalty.
This Note shall not be assumable without the prior written consent of Payee,
consent of which shall not be unreasonably withheld.
This Note shall be secured by collateral as provided by the Security Agreement
dated October 18, 1995 (the "Security Agreement"). The Maker may substitute
collateral under the terms and conditions set forth in the Security Agreement.
All payments apply first to accrued interest, if any, and the remainder, if any,
to reduction of principal.
All payments shall be made to: Command Credit Corp. located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Upon the transfer of stock to the Maker under the terms of the Exchange
Agreement dated October 18, 1995, the obligations of the Maker under this Note
shall be unconditional and absolute, and the Maker waives any and all defenses
and any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
Payer is hereby granted a fifteen (15) day grace period. Following said grace
period, the Payee shall provide the Maker written notice via certified mail,
return receipt requested, that should the late payment of principal and/or
interest on this Note not be cured within fifteen (15) days following the
expiration of the grace period, then the Maker shall be deemed to have committed
an "Event of Default".
Following an Event of Default, this Note shall continue to accrue interest at
the rate of 12% per annum. Upon an Event of Default, the holder may, at its
option, declare that the balance of any principal and all accrued interest owed
and unpaid, shall be payable upon demand.
Each maker and endorser severally waives demand, protest and notice of maturity,
nonpayment or protest and all requirements necessary to hold each of them liable
as makers and endorsers. Each Maker and endorser further agrees, jointly and
severely, to pay all costs of collection, including reasonable attorney's fees
in case the principal of this Note or any payment on the principal or any
interest thereon is not paid at the respective maturity thereof or in case it
becomes necessary to protect the security hereof, whether suit be brought or
not.
JETLEASE/FINANCE CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
PROMISSORY NOTE
$4,000,000.00 Broward County, Florida
October 18, 1995
FOR VALUE RECEIVED JETLEASE/FINANCE CORP. (the "Maker"), promises to pay to the
order of Fidelity Holding Corp. the principal sum of Six Million Dollars
($4,000,000.00) plus interest at the rate of 12% per annum payable in lawful
money of the United States of America as follows:
(A) Interest only of 1% of the principal amount payable monthly for a term
of twenty-four (24) months with first payment due ninety (90) days from the date
of this Promissory Note. Thereafter, interest payments shall be due and payable
monthly.
(B) The Principal amount of $4,000,000.00 payable in full in twenty-four
(24) months from the date of this Promissory Note.
The Makers hereof shall have the right to repay this Note in whole or in part at
any time without penalty.
This Note shall not be assumable without the prior written consent of Payee,
consent of which shall not be unreasonably withheld.
This Note shall be secured by collateral as provided by the Security Agreement
dated October 18, 1995 (the "Security Agreement"). The Maker may substitute
collateral under the terms and conditions set forth in the Security Agreement.
All payments apply first to accrued interest, if any, and the remainder, if any,
to reduction of principal.
All payments shall be made to: Command Credit Corp. located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Upon the transfer of stock to the Maker under the terms of the Exchange
Agreement dated October 18, 1995, the obligations of the Maker under this Note
shall be unconditional and absolute, and the Maker waives any and all defenses
and any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
Payer is hereby granted a fifteen (15) day grace period. Following said grace
period, the Payee shall provide the Maker written notice via certified mail,
return receipt requested, that should the late payment of principal and/or
interest on this Note not be cured within fifteen (15) days following the
expiration of the grace period, then the Maker shall be deemed to have committed
an "Event of Default".
Following an Event of Default, this Note shall continue to accrue interest at
the rate of 12% per annum. Upon an Event of Default, the holder may, at its
option, declare that the balance of any principal and all accrued interest owed
and unpaid, shall be payable upon demand.
Each maker and endorser severally waives demand, protest and notice of maturity,
nonpayment or protest and all requirements necessary to hold each of them liable
as makers and endorsers. Each Maker and endorser further agrees, jointly and
severely, to pay all costs of collection, including reasonable attorney's fees
in case the principal of this Note or any payment on the principal or any
interest thereon is not paid at the respective maturity thereof or in case it
becomes necessary to protect the security hereof, whether suit be brought or
not.
JETLEASE/FINANCE CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
VOTING TRUST AGREEMENT
AGREEMENT dated October 18, 1995 among Jetlease/Finance Corporation, a
Florida corporation (the "Shareholder"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Voting Trustee
(the "Trustee") and Command Credit Corporation, a New York Corporation (the
"Corporation").
WITNESSETH;
WHEREAS, the Shareholder owns an aggregate of 4,000,000 shares (the
"Shares") of Common Stock of the Corporation and deems it in its interest and in
the interest of the Corporation to transfer its shares to the Trustee for the
purpose of conferring the right to vote thereon, as hereinafter provided; and
WHEREAS, the Trustee have consented to act under this Agreement for the
purposes herein declared;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. The Shareholder hereby assigns and transfers to the Trustee all right,
title and interest in and to its 4,000,000 Shares only for the purpose of
conferring the right to vote thereon.
2. A duplicate of this Agreement shall be filed in the principal office
of the Corporation, and this Agreement shall be subject to any rights of
inspection authorized by the New York business corporation laws.
3. The Voting Trustee shall not receive any compensation for their
services as Voting Trustee.
4. Nothing herein contained shall limit or restrict the Voting Trustee
from acting, and receiving compensation, as a director, officer, agent, employee
or member of any committee of the Corporation or of any enterprise controlled by
or affiliated with the Corporation. The Voting Trustee may contract and
otherwise deal with the Company or with any enterprise controlled by or
affiliated with the Corporation, or may be or become pecuniarily interested in
any matter or transaction to which the Corporation or any enterprise controlled
by or affiliated with the Corporation may be directly or indirectly concerned,
without liability in any way or under any circumstances, as fully as though they
were not a party hereto.
5. The Trustee throughout the term of this Agreement shall have the
exclusive right to vote (or to give their written consent in lieu of voting to
the extent permitted by law), all the Shares under this Agreement, and are
hereby authorized to cast such votes or give such written consent in person or
by proxy at or in any and all regular and special meetings, or actions in lieu
of meetings, or at or in any and all proceedings, of the Shareholder of the
Corporation for whatever purpose called or held. The right of the Trustee to
exercise all voting
rights of the Shareholder shall include, but not be limited to, the right to
vote for the election of directors, and in favor of or against any resolution or
proposed action of any character whatsoever, including, without limitation, the
mortgaging and pledging of all or substantially all of the property of the
Corporation, the transfer or sale of all or substantially all of its property
for cash, securities or other property, and the liquidation, dissolution, or
merger of the Corporation, or its split-up, reorganization, recapitalization or
any other change of corporate structure.
6. Throughout the term of this Agreement, the Trustee will pay or cause
to be paid to or upon the written order of the Shareholder their proportionate
amounts of any dividends.
7. No Trustee shall be required to give any bond or other security for
the faithful discharge of his duties, and no Trustee shall incur any liability
hereunder, except for his wilful misfeasance.
8. (a) The term "Trustee" shall apply to the original Trustee named
herein and to their respective successors appointed as hereinafter provided.
(b) The Trustee may at any time resign upon 15 days written notice to
the Shareholder, and thereby become relieved of all obligations hereunder, by
mailing by registered or certified mail his resignation in writing to the
Shareholder and then to the Corporation.
(c) In the event of the death, resignation or inability to act of the
Trustee hereunder, any vacancy so occurring shall be filled by the appointment
of a successor Trustee by the Corporation. All such appointments shall be made
by written instrument mailed by registered or certified mail to the Shareholder
(d) Every successor Trustee so appointed shall deliver to the
Corporation a written instrument stating that he accepts such appointment, and
from the time of delivery of such instrument, such successor or Trustee shall be
deemed to be a Trustee hereunder and to have all the rights and duties of a
Trustee hereunder. In the event that a person so appointed shall fail to
deliver such an instrument of acceptance within thirty (30) days after receipt
by him of written notice of his appointment, he shall be deemed to have refused
to act as successor Trustee and the vacancy shall be deemed to continue until
filled in accordance with the foregoing provisions.
9. This Agreement shall remain in effect until the two promissory notes
dated October 18, 1995, payable to the order of Fidelity Holding Corp., a
Florida corporation ("Fidelity"), in the amounts of $6,000,000 and $4,000,000
respectively, shall be paid in full, including the amount of principal (and
2
accrued interest) owed to Fidelity by the Shareholder under the promissory notes
being issued on the date hereof in connection with the Exchange Agreement dated
on the date hereof.
10. This Agreement constitutes the entire agreement of the parties hereto
and cannot be changed, amended or terminated orally. If any provision or term
of this Agreement shall be deemed to be invalid or unenforceable, the remaining
provisions and terms hereof shall not be affected thereby but shall be in full
force and effect. This Agreement shall be governed by the laws of the State of
New York.
11. This Agreement shall bind and inure to the benefit of the of the
parties hereto and their respective legal representatives, heirs, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have made and subscribed this
agreement as of the day and year first above written.
Jetlease/Finance Corporation
Dated: October 18, 1995 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustee
Dated: October 18, 1995 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Command Credit Corporation
Dated: October 18, 1995 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President