Document:

KCL:  Amendment to Security Agreement  for

Exhibit

4.3

 

 

	

  

  	

  C#: 44097

  L#: 44098

  Ls#: 8800021447

  

 

Amendment No. 01

To Security Agreement

___________________________________________________________________________________________________________

 

THIS AMENDMENT dated as

of May 12, 2002 amends that certain Security Agreement dated as of January

   , 2002 (the “Agreement”) between Key Equipment Finance, a Division of Key

Corporate Capital  Inc., as lender, and AIRNET SYSTEMS, INC.,

as Borrower.  Unless otherwise specified herein, all capitalized terms shall

have the meanings ascribed to them in the Agreement.

 

BORROWER’S FINANCIAL COVENANTS.  Borrower hereby covenants with Lender as

follows:

 

1.                                       Minimum Net

Worth: permit or suffer the Consolidated Net Worth of the Company

and its subsidiaries at any time to be less than the sum of $73,338,000, plus

50% of the Consolidated net income of the Company and its subsidiaries,

commencing with the fiscal year end ending December 31, 2001, and to accumulate

on an on-going basis throughout the term of the Note, provided that, if such

income is negative in any fiscal year of the Company, the amount added for such

fiscal year shall be zero and such amount shall not reduce the amount added

pursuant to any other fiscal year.

 

2.                                       Funded Debt

Ratio: its Funded Debt Ratio shall not exceed 2.50 to1.00 at any

time.

 

3.                                       Cash Flow

Coverage Ratio: its Cash Flow Coverage Ratio shall not be less than

1.2 to 1.00, as measured on a quarterly basis.

 

4.

                Definitions:

 

a)                                     “Consolidated”

shall mean, when used in reference to any financial term in this Agreement, the

aggregate for two or more Persons of the amounts signified by such term for all

such Persons determined on a consolidated basis in accordance with generally

accepted accounting principles.

 

b)                                    “Cash Flow

Coverage Ratio” shall mean as of the last day of any fiscal quarter

of the Company and determined for the Company and its subsidiaries on a

Consolidated basis, the ratio of (a) EBITDA plus the amount of rent paid under

operating leases, and minus the amount of capital expenditures which are not

financed by long term debt, in each case for the four consecutive fiscal

quarter period then ending, to (b) Interest Expense, plus the amount of rent

paid under operating leases, in each case as calculated for the four fiscal

quarters then ending, and plus the current portion of Funded Debt as of the

last day of such fiscal quarter.  .

 

c)                                     

“EBITDA”

shall mean,, for any period, net income for such period plus all amounts

deducted in determining such net income on account of (a) Interest expense, (b)

income taxes , and (c) depreciation and amortization expense..

 

d)                                    “Funded Debt

Ratio” shall mean, as of any date, the ratio of (a) Funded Debt as

of such date to (b) EBITDA, as calculated for the four consecutive fiscal

quarters of the Company most recently ended.

 

e)                                     “Funded

Debt” as of any date, shall mean: (a) all debt for borrowed money and

similar monetary obligations evidenced by bonds, notes, debenutures, capital

leease obligations or otherwise,

 

 

including with out

limitation obligations in respect of deferred purchase price of properties or

assets, in each case whether direct or indirect; (b) all liabilities secured by

any lien existing on property owned or acquired subject thereto, whether or not

the liability secured thereby shall have been assumed; (c) all reimbursements

obligations under outstanding letters of credit in respect of drafts which (i)

may be presented or (ii) have been presented and have not yet been paid, and

(d) all contingent liabilities relating to any obligations or others similar in

character to those described in the foregoing clauses (a) through (c), all as

determined for the Company and its subsidiaries on a Consolidated basis.

 

f)                                       “Interest

Expense” shall mean for any period, total interest and related

expense (including , without limitation, that portion of any capitalized lease

obligation attributable to interest expense in conformity with GAAP,

amortization of debt discount, all capitalized interest, the interest portion

of any deferred payment obligations , all commissions, discounts and other fees

and charges owed with respect to letter of credit and bankers acceptance

financing, the net costs and net payments under any interest rate hedging, cap

or similar agreement or arrangement, prepayment charges, agency fees,

administrative fees, commitment fees and capitalized transaction costs

allocated to interest expense) paid, payable or accrued during such period,

without duplication of any period, with respect to all its subsidiaries on a

Consolidated basis.

 

g)                                    “Net Worth”

of any Person shall mean, as of any date, the amount of capital stock, paid in

capital and similar equity accounts plus (or minus in the case of a deficit)

the capital surplus and retained earnings of such Person and the amount of any

foreign currency translation adjustment account shown as a capital account of

such Person.

 

h)                                    “Person”

shall include an individual, a corporation, an association, a partnership, a

trust or estate, a joint stock company, an unincorporated organization, a joint

venture, a trade or business (whether or not incorporated), a government

(foreign or domestic) and any agency or political subdivision thereof, or any

other entity.

 

5.                                       Compliance. Borrower shall, within ninety (90) days of the end of each fiscal year

end, and within forty five (45) of each quarter end of Borrower, provide Lender

with a certificate (a “Compliance Certificate”) representing that Borrower is

in full compliance with the foregoing financial covenants and setting forth the

calculations used by Borrower to reach its conclusion. The Compliance

Certificate shall be signed by Borrower’s chief financial officer or, if

Borrower does not have a chief financial officer, such other officer or

employee of Borrower who performs the duties typically undertaken by a chief

financial officer.

 

EXCEPT AS EXPRESSLY MODIFIED HEREBY,

ALL OF THE TERMS, COVENANTS AND CONDITIONS OF THE AGREEMENT SHALL REMAIN IN

FULL FORCE AND EFFECT AND ARE IN ALL RESPECTS HEREBY RATIFIED AND AFFIRMED.

 

 

 

IN WITNESS WHEREOF, Lender and

Borrower have executed this Amendment as of the date first written above.

 

2

 

	

  Lender:

  	

  Borrower:

  
	

   

  	

   

  
	

  Key

  Equipment Finance, a Division of Key Corporate 

  Capital Inc.

  	

  AIRNET

  SYSTEMS, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  X

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  Name:

  
	

  Name:

  	

  Title:

  
	

  Title:

  	

   

  
						

 

3KCL:  Promissory Note (Bond Paper)  for

Exhibit 4.4

 

 

	

  

  	

  C#: 44097

  L#: 44098

  Ls#: 8800021447

  

 

Promissory Note

___________________________________________________________________________________________________________

 

	

  $1,720,000.00

  	

   

  	

  Funding

  Date:                                         (Year)

  

 

FOR VALUE RECEIVED, AIRNET SYSTEMS, INC.,

an Ohio corporation (“Maker”), promises to pay to the order of Key

Equipment Finance, a Division of Key Corporate Capital Inc.,

(“Holder”), the sum of $1,720,000.00 in lawful money of the United States of

America (the “Principal”), with interest thereon as hereafter provided

(“Interest”), to be paid in the manner set forth herein. This Note is executed

pursuant to that certain security agreement (the “Security Agreement”) dated as

of January    , 2002 between Maker and Holder. Capitalized terms

used herein without definition shall have the meaning given them in the

Security Agreement.

 

1.             Interest Rate; Place of Payment.  Interest on the balance of the Principal

outstanding on this Note shall accrue from the Funding Date of this Note and

shall be due and payable at a fixed rate of five and seventy seven hundredths

percent (5.77%) per annum (the “Interest Rate”).  Interest shall be calculated on the basis of a 360-day year consisting

of twelve 30-day months.  Payment of the

Principal and Interest hereunder shall be made to Holder at 66 South Pearl

Street, Post Office Box 1865, Albany, NY 12207-1865, or at such other place as

Holder may designate from time to time in writing. Holder reserves the right to

require payment on this Note to be made by wired federal funds or other

immediately available funds.

 

2.             Repayment Terms.

The Principal and Interest shall be due and payable in sixty (60) consecutive

monthly installments payable in arrears, each in an amount equal to $33,068.78

commencing and payable on the same date which is one month after the Funding

Date and on the same day of each month thereafter. In addition, Maker will pay

a late payment charge of five percent (5%) of any payment due hereunder that is

not paid on or before the date due hereunder.

 

3.             Security.

Payment of the Principal and Interest hereunder, and the performance and

observance by Maker of all agreements, covenants and provisions contained

herein, is secured by a first priority security interest in the Collateral.

 

4.             Prepayment.

Except as contemplated by clause (3) of section 10 of the Security

Agreement, Maker may not prepay, in whole or in part, the principal outstanding

hereunder; provided, however, that commencing on the date following the twelve

month anniversary of the Funding Date, Maker may prepay, in whole but not in

part, the principal outstanding hereunder by paying to Holder such outstanding

principal, together with all accrued and unpaid interest thereon, plus a

prepayment premium (“Prepayment Premium”) equal to a percentage of the

outstanding principal calculated as follows:

 

	

  Months

  	

   

  	

  Prepayment Premium

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  1-12

  	

   

  	

  No prepayment permitted

  	

   

  
	

  13-24

  	

   

  	

  3

  	

  %

  
	

  25-36

  	

   

  	

  2

  	

  %

  
	

  37-48

  	

   

  	

  1

  	

  %

  
	

  49-60

  	

   

  	

  1

  	

  %

  

 

 

5.             Transfer or Assignment.  Holder may at any time assign or otherwise

transfer or negotiate this Note in whole or in part, without any notice to

Maker.  The rights and obligations of

Maker may not be assigned or delegated.

 

6.             Application of Payments.  Prior to an Event of Default, each payment

received on this Note shall be applied first to all costs of collection, then

to unpaid late payment charges (if any) and Prepayment Premium (if any)

hereunder, then to Interest as of the payment due date and the balance, if any,

to the outstanding Principal as of the date received.  Upon the occurrence, and during the continuance, of an Event of

Default, any payments in respect of the Secured Obligations and any proceeds of

the Collateral when received by Holder in cash or its equivalent, will be

applied first to costs of collection and, thereafter, in reduction of the

Secured Obligations in such order and manner as Holder may direct in its sole

discretion, and Maker irrevocably waives the right to direct the application of

such payments and proceeds and acknowledges and agrees that Holder shall have

the continuing and exclusive right to apply any and all such payments and

proceeds in the Holder’s sole discretion, notwithstanding any entry to the

contrary upon any of its books and records.

 

7.             Events of Default.  (a) 

Maker shall be in default if any of the following happens  (an “Event of Default”): (1) Maker fails to

make any installment of the Principal or Interest, or any other payment due and

owing, under this Note within ten (10) days after the same becomes due and

payable; or (2) Maker fails to perform any other obligation required to be

performed by Maker under this  Note, the

Security Agreement or any of the other Loan Documents for thirty (30) days

after written notice from Holder of such failure; or (3) any representation,

warranty or other statement by or on behalf of Maker in connection with

this  Note is false or misleading in any

material respect; or (4) an Event of Default has occurred and is continuing

under the Security Agreement.

(b) Notwithstanding anything to the contrary contained

herein, upon the occurrence of an Event of Default, Holder may declare the

entire outstanding balance of the Principal, together with all accrued and

unpaid Interest thereon, immediately due and payable without notice or demand

which amounts shall, together with all other sums due hereunder, accrue

interest from such acceleration until the date of actual payment at the Default

Rate (provided, however, that should there occur an Event of Default, and if a

voluntary or involuntary petition under the United States Bankruptcy Code is

filed by or against Maker while such default remains uncured, the entire

outstanding balance of the Principal automatically shall be accelerated and due

and payable with interest thereon at the Default Rate), and Holder may exercise

any and all of its remedies hereunder, under the other Loan Documents and under

Applicable Law. The remedies of Holder provided herein, in the Security

Agreement and under Applicable Law shall be cumulative and concurrent and may

be pursued singly, successively or concurrently at the sole discretion of

Holder and may be exercised as often as occasion therefor shall occur.  The failure to exercise, or any delay in the

exercise of, any right or remedy shall in no event be construed as a waiver,

release or exhaustion of any such remedies.

 

8.             Collection Costs.  In addition to the Principal, Interest,

Prepayment Premium (if any), and late payment charges (if any), Maker shall pay

Holder on demand, and Holder shall be entitled to collect all costs and

expenses of collection, including, without limitation, reasonable attorneys’

fees, incurred in connection with enforcement of its rights and remedies

hereunder and under the other Loan Documents, the protection or realization of

the Collateral or in connection with Holder’s collection efforts, or in

connection with any bankruptcy or other judicial proceeding, whether or not

suit on this Note or any foreclosure proceeding is filed.  All such costs and expenses shall be payable

on demand and, until paid, shall be Secured Obligations secured by the security

interest granted under the Security Agreement and all other collateral, if any,

held by Holder as security for Maker’s obligations under this Note.

 

9.             Governing Law; Binding Agreement.

The provisions of this Note shall be binding upon, and shall inure to the

benefit of, the parties hereto and their respective successors and assigns. THIS NOTE IS BEING

 

2

 

DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY,

AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING

ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE WITHOUT GIVING EFFECT TO

ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISION OR RULE (WHETHER OF THE STATE

OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE

LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

10.          More than One Signer.  If more than one person or entity signs this

Note as a Maker, the obligations contained herein shall be deemed joint and

several and all references to “Maker” shall apply both jointly and severally.

 

11.          General.  Maker represents and warrants that this Note

evidences a loan for business or commercial purposes.  Prior to signing this Note, Maker read and understood the

provisions hereof, and agrees to all terms and conditions contained herein.

 

12.          Waiver.  MAKER AND ALL ENDORSERS, SURETIES, AND GUARANTORS

HEREOF HEREBY JOINTLY AND SEVERALLY WAIVE PRESENTMENT FOR PAYMENT, DEMAND,

NOTICE OF NON-PAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE THE

MATURITY, NOTICE OF PROTEST AND PROTEST OF THIS NOTE. HOLDER AND MAKER HEREBY EACH WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY

JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO

THIS NOTE, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR

THEREBY, IN ANY ACTION OR PROCEEDING TO WHICH HOLDER OR MAKER MAY BE PARTIES,

WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE, INCLUDING

WITHOUT LIMITATION ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN

WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY, OF THIS NOTE OR

THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND

VOLUNTARILY BY HOLDER AND THE MAKER WHO EACH ACKNOWLEDGE THAT NO

REPRESENTATIONS HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL

BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT

AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE AND THE OTHER

LOAN DOCUMENTS.

 

13.          Usury; Partial Invalidity.  (a) 

At no time shall the Interest Rate (or the Default Rate or other amounts

paid or collected hereunder) exceed the highest rate allowed by applicable law

for this type of loan.  Should Holder

ever collect interest at a rate that exceeds such applicable legal limit, such

excess will be credited to the Principal.

(b) Whenever possible,

each provision of this Note shall be interpreted in such manner as to be

effective and valid under applicable law, but if any provision of this Note

shall be prohibited by or invalid under the laws of any applicable

jurisdiction, such provision, as to such jurisdiction, shall be ineffective to

the extent of such prohibition or invalidity, without invalidating the

remainder of such provision or the remaining provisions of this Note in any

other juris­diction.

 

14.          Notices.  All notices and other communications under

this Note shall be in writing and shall be addressed: (a) if to Maker, 3939

INTERNATIONAL GATEWAY, COLUMBUS, OH 43219; and (b) if to Holder, Key Equipment

Finance, a Division of Key Corporate Capital Inc., 66 South Pearl Street, Post

Office Box 1865, Albany, NY 12207-1865, Attention: Account Manager, or such

other address as either party hereto shall communicate to the other party at

its address specified above.  All such

notices and other communications shall be deemed to have been duly given if

delivered by hand, overnight courier or if sent by certified mail, return

receipt requested, to the party to whom such notice is intended to be given,

and shall be effective upon receipt.

 

15.          Funding Date.       The Funding Date for this Note shall be

the date on which Holder disburses funds hereunder. TO THE EXTENT THE FUNDING DATE IS LEFT

BLANK ABOVE, OR DOES NOT REFLECT

 

3

 

THE

ACTUAL DATE THAT HOLDER DISBURSES FUNDS HEREUNDER, MAKER HEREBY AUTHORIZES

HOLDER TO WRITE IN THE CORRECT DATE AT THE TIME OF DISBURSEMENT.

 

IN WITNESS WHEREOF,

Maker, intending to be legally bound, has caused this Note to be duly executed

on the day and year first above written.

 

MAKER:

 

AIRNET SYSTEMS, INC.

 

	

  X

  	

   

  	

   

  
	

  Name:

  
	

  Title:

  
	

   

  

 

	

  STATE OF

  	

  )

  
	

   

  	

  ) ss.:

  
	

  COUNTY OF

  	

  )

  

 

On this           (Day)

day of

                                              

(Month),

                      

(Year), before me the subscriber personally appeared

                                                                  ,

who being by me duly sworn, did depose and say; that (s)he resides at

                           County,

State of                                       :

that (s)he is a                                                                  

of

                                                              ,

the corporation described in and which executed the foregoing instrument; and

that (s)he signed his/her name thereto by order of the Board of Directors of

said corporation.

 

	

   

  	

   

  
	

  NOTARY PUBLIC

  

 

My Commission Expires:

 

4

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