Document:

Exhibit 10.17

	
 

UTG Avalon, LLC

PO Box 5147

Springfield IL 62703

 

 

BORROWER'S NAME AND ADDRESS

"I" includes each borrower above, jointly and severally.

	
First National Bank of Tennessee

Livingston – West Main

1115 West Main Street

Livingston, Tennessee 38570

 

 

LENDER'S NAME AND ADDRESS

"You" means the lender, its successors and assigns.

	
 

Loan Number 203201857-00001

Date 12/29/2014____________

Maturity Date 04/01/2018_____

Loan Amount $ 4,400,000.00___

Renewal Of _________________

For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of _FOUR MILLION FOUR HUNDRED

THOUSAND DOLLARS AND ZERO CENTS________________________________ Dollars $ 4,400,000.00__________________________________

	
☒

	
Single Advance: I will receive all of this principal sum on 12/29/2014________.  No additional advances are contemplated under this note.

	
☐

	
Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note.  On _____________

________ I will receive the amount of $ ____________________ and future principal advances are contemplated.

	 	
Conditions: The conditions for future advances are _______________________________________________________________________

_________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________

☐ Open End Credit: You and I agree that I may borrow up to the maximum principal sum more than one time.  This feature is subject to all other conditions and expires on _____________________________________.

☐ Closed End Credit: You and I agree that I may borrow (subject to all other conditions) up to the maximum principal sum only one time.

	
INTEREST: I agree to pay interest on the outstanding principal balance from __12/29/2014________________ at the rate of __3.500000__ %

	 	
per year until _the rate changes as provided for in the note_______________.

	
☒

	
Variable Rate: This rate may then change as stated below.

	 	
☒ Index Rate: The future rate will be ___.000000___Equal________________ the following index rate:____________________________

the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal____________________________________

_________________________________________________________________________________________________________________

	 	
☐ No Index: The future rate will not be subject to any internal or external index.  It will be entirely in your control.

☒ Frequency and Timing: The rate on this note may change as often as __monthly_____________________________________________.

	 	
A change in the interest rate will take effect _1st day of month following rate change_____________________________________.

	 	
☒ Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________21.000000_ % or less than

	 	
_______3.500000 %.  The rate may not change more than ________________________ % each __________________________________.

	 	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	 	
☒ The amount of each scheduled payment will change.

	
☐ The amount of the final payment will change.

	 	
☐ _N/A__________________________________________________________________________________________________________.

	
ACCRUAL METHOD: Interest will be calculated on a _Actual/Actual____________ basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	 	
☐ on the same fixed or variable rate basis in effect before maturity (as indicated above).

☒ at a rate equal to _4% in excess of the interest rate stated above that applied before maturity_________________________________.

	
☒ LATE CHARGE: If a payment is made more than _15___ days after it is due, I agree to pay a late charge of __5% of the payment__________.

	 	 
	
☒ ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which ☐ are  ☒ are not included in the principal amount

	 	
above: _Loan Fee__________________________________________________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
☒

	
Interest: I agree to pay accrued interest _12 Quarterly Payment(s) varying from $37,972.61 to $77,632.88 beginning 07-01-2015________

_________________________________________________________________________________________________________________

	
☒

	
Principal: I agree to pay the principal __04-01-2018_______________________________________________________________________

_________________________________________________________________________________________________________________

	
☐

	
Installments: I agree to pay this note in ___________ payments.  The first payment will be in the amount of $ _______________________

and will be due __________________________________.  A payment of $ _____________________ will be due _____________________

______________________________________________________________________________ thereafter.  The final payment of the entire

unpaid balance of principal and interest will be due ____________________________________________________.

	
☐

	
Unpaid Interest: Any accrued interest not paid when due (whether due by reason of a schedule of payments or due because of Lender's demand) will become part of the principal thereafter, and will bear interest at the interest rate in effect from time to time as provided for in this agreement.

	
PURPOSE: The purpose of this loan is _to refinance existing debt_______________________________________________________________.

	
ADDITIONAL TERMS:

	 	
This loan has a demand feature, however, if no demand is made, the loan is payable according to the terms specified under "Payments" above.

	 	 
	 	
BANK RELIANCE ON PREVIOUS AND FUTURE FINANCIAL INFORMATION PROVIDED BY BORROWER(S) – Lender has relied on previous financial information (including, but not limited to, financial statements and tax returns) that Borrower(s) has provided to Lender in deciding to grant this credit.  Borrower(s) certifies to Lender that all future information provided to Lender by either Borrower(s) or Borrower(s)' representatives (such as accountants) is true, correct and without material omission and may be relied upon whether or not the information bears the original signature of Borrower(s).

SECURITY

	
SECURITY INTEREST:   I  give  you  a  security  interest  in  all  of  the   Property   described   below   that   I   own   or   have   sufficient   rights   in  which  to   transfer   an

	 	
interest, now or in the future, wherever the Property is or will be located, and all proceeds and products of the Property.  "Property" includes all parts, accessories, repairs, replacements, improvements, and accessions to the Property; any original evidence of title or ownership; and all obligations that support the payment or performance of the Property.  "Proceeds" includes anything acquired upon the sale, lease, license, exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property.

	 	
☐

	
Accounts and Other Rights to Payment: All rights to payment, whether or not earned by performance, including, but not limited to, payment for property or services sold, leased, rented, licensed, or assigned.  This includes any rights and interests (including all liens) which I have by law or agreement against any account debtor or obligor.

 

	 	
☐

	
Inventory: All inventory held for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, work in process, or materials used or consumed in my business.

 

	 	
☐

	
Equipment: All equipment including, but not limited to machinery, vehicles, furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop equipment, office and record keeping equipment, parts, and tools.  The Property includes any equipment described in a list or schedule I give to you, but such a list is not necessary to create a valid security interest in all of my equipment.

 

	 	
☐

	
Instruments and Chattel Paper: All instruments, including negotiable instruments and promissory notes and any other writings or records that evidence the right to payment of a monetary obligation, and tangible and electronic chattel paper.

 

	 	
☐

	
General Intangibles: All general intangibles including, but not limited to, tax refunds, patents and applications for patents, copyrights, trademarks, trade secrets, goodwill, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with a transaction relating to computer programs, and the right to use my name.

 

	 	
☐

	
Documents: All documents of title including, but not limited to, bills of lading, dock warrants and receipts, and warehouse receipts.

 

	 	
☐

	
Farm Products and Supplies: All farm products including, but not limited to, all poultry and livestock and their young, along with their produce, products, and replacements; all crops, annual or perennial, and all products of the crops; and all feed, seed, fertilizer, medicines, and other supplies used or produced in my farming operations.

 

	 	
☐

	
Government Payments and Programs: All payments, accounts, general intangibles, and benefits including, but not limited to, payments in kind, deficiency payments, letters of entitlement, warehouse receipts, storage payments, emergency assistance and diversion payments, production flexibility contracts, and conservation reserve payments under any preexisting, current, or future federal or state government program.

 

	 	
☐

	
Investment Property: All investment property including, but not limited to, certificated securities, uncertificated securities, securities entitlements, securities accounts, commodity contracts, commodity accounts, and financial assets.

 

	 	
☐

	
Deposit Accounts: All deposit accounts including, but not limited to, demand, time, savings, passbook, and similar accounts.

 

	 	
☐

	
Specific Property Description: The Property includes, but is not limited by, the following:

	 
	
If this agreement covers timber to be cut, enter real estate description and record owner information:_____________________________________________

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

	
The Property will be used for a    ☐ personal    ☐ business    ☐ agricultural    ☐ ________________________________________________________purpose.

	
Borrower/Owner State of organization/registration (if applicabale)__________________________________________________________________________

ADDITIONAL TERMS OF THE SECURITY AGREEMENT

GENERALLY – This agreement secures this note and any other debt I have with you, now or later.  However, it will not secure other debts if you fail with respect to such other debts, to make any required disclosure about this security agreement or if you fail to give any required notice of the right of rescission.  If property described in this agreement is located in another state, this agreement may also, in some circumstances, be governed by the law of the state in which the Property is located.

NAME AND LOCATION – My name indicated on page 1 is my exact legal name.  If I am an individual, my address is my principal residence.  If I am not an individual, my address is the location of my chief executive offices or sole place of business.  If I am an entity organized and registered under state law, my address is located in the state in which I am registered, unless otherwise indicated on page 2.  I will provide verification of registration and location upon your request.    I will provide you with at least 30 days notice prior to any change in my name, address, or state of organization or registration

OWNERSHIP AND DUTIES TOWARD PROPERTY  –   I represent that I own all of the Property, or to the extent this is a purchase money security interest I will acquire ownership of the Property with the proceeds of the loan.  I will defend it against any other claim.  Your claim to the Property is ahead of the claims of any other creditor.  I agree to do whatever you require to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors.  I will not do anything to harm your position.  I will not use the Property for a purpose that will violate any laws or subject the Property to forfeiture or seizure.

   I will keep books, records and accounts about the Property and my business in general.  I will let you examine these records at any reasonable time.  I will prepare any report or accounting you request, which deals with the Property.

   I will keep the Property in my possession and will keep it in good repair and use it only for the purpose(s) described on page 1 of this agreement.  I will not change this specified use without your express written permission.  I represent that I am the original owner of the Property and, if I am not, that I have provided you with a list of prior owners of the Property.

   I will keep the Property at my address listed on page 1 of this agreement, unless we agree I may keep it at another location.  If the Property is to be used in another state, I will give you a list of those states.  I will not try to sell the Property unless it is inventory or I receive your written permission to do so.  If I sell the Property I will have the payment made payable to the order of you and me.

   You may demand immediate payment of the debt(s) if the debtor is not a natural person and without your prior written consent; (1) a beneficial interest in the debtor is sold or transferred, or (2) there is a change in either the identity or number of members of a partnership, or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation.

   I will pay all taxes and charges on the Property as they become due.  You have the right of reasonable access in order to inspect the property.  I will immediately inform you of any loss or damage to the Property.

   If I fail to perform any of my duties under this security agreement, or any mortgage, deed of trust, lien or other security interest, you may without notice to me perform the duties or cause them to be performed.  Your right to perform for me shall not create an obligation to perform and your failure to perform will not preclude you from exercising any of your other rights under the law or this security agreement.

PURCHASE MONEY SECURITY INTEREST – For the sole purpose of determining the extent of a purchase money security interest arising under this security agreement: (a) payments on any nonpurchase money loan also secured by this agreement will not be deemed to apply to the Purchase Money Loan, and (b) payments on the Purchase Money Loan will be deemed to apply first to the nonpurchase money portion of the loan, if any, and then to the purchase money obligations in the order in which the items of collateral were acquired or if acquired at the same time, in the order selected by you.  No security interest will be terminated by application of this formula.  "Purchase Money Loan" means any loan the proceeds of which, in whole or in part, are used to acquire any collateral securing the loan and all extensions, renewals, consolidations and refinancing of such loan.

PAYMENTS BY LENDER – You are authorized to pay, on my behalf, charges I am or may become obligated to pay to preserve or protect the secured property (such as property insurance premiums).  You may treat those payments as advances and add them to the unpaid principal under the note secured by this agreement or you may demand immediate payment of the amount advanced.

INSURANCE – I agree to buy insurance on the Property against the risks and for the amounts you require and to furnish you continuing proof of coverage.  I will have the insurance company name you as loss payee on any such policy.  You may require added security if you agree that insurance proceeds may be used to repair or replace the Property.  I will buy insurance from a firm licensed to do business in the state where you are located.  The firm will be reasonably acceptable to you.  The insurance will last until the Property is released from this agreement.  If I fail to buy or maintain the insurance (or fail to name you as loss payee) you may purchase it yourself.

WARRANTIES AND REPRESENTATIONS – If this agreement includes accounts, I will not settle any account for less than its full value without your written permission.  I will collect all accounts until you tell me otherwise.  I will keep the proceeds from all the accounts and any goods which are returned to me which I take back in trust for you.  I will not mix them with any other property of mine.  I will deliver them to you at your request.  If you ask me to pay you the full price on any returned items or items retaken by myself, I will do so.  You may exercise my rights with respect to obligations of any account debtors, or other persons obligated on the Property, to pay or perform, and you may enforce any security interest that secures such obligations.

   If this agreement covers inventory, I will not dispose of it except in my ordinary course of business at the fair market value for the Property, or at a minimum price established between you and me.

	
 

Any person who signs within this box does so to give you a security interest in the Property described on this page.  This person does not promise to pay the note.  "I" as used in this security agreement will include the borrower and any person who signs within this box.

Date ___________________________

 

Signed ______________________________________________________________

 

 

   If this agreement covers farm products I will provide you, at your request, a written list of the buyers, commission merchants or selling agents to or through whom I may sell my farm products.  In addition to those parties named on this written list, I authorize you to notify at your sole discretion any additional parties regarding your security interest in my farm products.  I remain subject to all applicable penalties for selling my farm products in violation of my agreement with you and the Food Security Act.  In this paragraph the terms farm products, buyers, commission merchants and selling agents have the meanings given to them in the Federal Food Security Act of 1985.

   If this agreement covers chattel paper or instruments, either as original collateral or proceeds of the Property, I will note your interest on the face of the chattel paper or instruments.

REMEDIES – I will be in default on this security agreement if I am in default on any note this agreement secures or if I fail to keep any promise contained in the terms of this agreement.  If I default, you have all of the rights and remedies provided in the note and under the Uniform Commercial Code.  You may require me to make the secured property available to you at a place which is reasonably convenient.  You may take possession of the secured property and sell it as provided by law.  The proceeds will be applied first to your expenses and then to the debt.  I agree that 10 days written notice sent to my last known address by first class mail will be reasonable notice under the Uniform Commercial Code.  My current address is on page 1.

PERFECTION OF SECURITY INTEREST – I authorize you to file a financing statement covering the Property.  I will comply with, facilitate, and otherwise assist you in connection with obtaining possession of or control over the Property for purposes of perfecting your security interest under the Uniform Commercial Code.

ADDITIONAL TERMS OF THE NOTE

DEFINITIONS – As used on pages 1 and 2, "☒" means the terms that apply to this loan.  "I," "me" or "my" means each Borrower who signs this note and each other person or legal entity (including guarantors, endorsers, and sureties) who agrees to pay this note (together referred to as "us").  "You" or "your" means the Lender and its successors and assigns.

APPLICABLE LAW – The law of the state of Tennessee will govern this agreement.  Any term of this agreement which is contrary to applicable law will not be effective, unless the law permits you and me to agree to such a variation.  If any provision of this agreement cannot be enforced according to its terms, this fact will not affect the enforceability of the remainder of this agreement.  No modification of this agreement may be made without your express written consent.  Time is of the essence in this agreement.

PAYMENTS – Each payment I make on this note will first reduce the amount I owe you for charges which are neither interest nor principal.  The remainder of each payment will then reduce accrued unpaid interest, and then unpaid principal.  If you and I agree to a different application of payments, we will describe our agreement on this note.  I may prepay a part of, or the entire balance of this loan without penalty, unless we specify to the contrary on this note.  Any partial prepayment will not excuse or reduce any later scheduled payment until this note is paid in full (unless, when I make the prepayment, you and I agree in writing to the contrary).

INTEREST – Interest accrues on the principal remaining unpaid from time to time, until paid in full.  If I receive the principal in more than one advance, each advance will start to earn interest only when I receive the advance.  The interest rate in effect on this note at any given time will apply to the entire principal sum outstanding at that time.  You and I may provide in this agreement for accrued interest not paid when due to be added to principal.  Notwithstanding anything to the contrary, I do not agree to pay and you do not intend to charge any rate of interest that is higher than the maximum rate of interest you could charge under applicable law for the extension of credit that is agreed to in this note (either before or after maturity).  If any notice of interest accrual is sent and is in error, we mutually agree to correct it, and if you actually collect more interest than allowed by law and this agreement, you agree to refund it to me.

INDEX RATE – The index will serve only as a device for setting the interest rate on this note.  You do not guarantee by selecting this index, or the margin, that the interest rate on this note will be the same rate you charge on any other loans or class of loans you make to me or other borrowers.

POST MATURITY RATE – For purposes of deciding when the "Post Maturity Rate" (shown on page 1) applies, the term "maturity" means the date of the last scheduled payment indicated on page 1 of this note or the date you accelerate payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS – If this is a single advance loan, you and I expect that you will make only one advance of principal.  However, you may add other amounts to the principal if you make any payments described in the "PAYMENTS BY LENDER" paragraph on page 2, or if we have agreed that accrued interest not paid when due may be added to principal.

MULTIPLE ADVANCE LOANS – If this is a multiple advance loan, you and I expect that you will make more than one advance of principal.  If this is closed end credit, repaying a part of the principal will not entitle me to additional credit.

SET-OFF – I agree that you may set off any amount due and payable under this note against any right I have to receive money from you.

	
"Right to receive money from you" means:

	
(1)

	
any deposit account balance I have with you;

	
(2)

	
any money owed to me on an item presented to you or in your possession for collection or exchange; and

	
(3)

	
any repurchase agreement or other nondeposit obligation

   "Any amount due and payable under this note" means the total amount of which you are entitled to demand payment under the terms of this note at the time you set off.  This total included any balance the due date for which you properly accelerate under this note.

   If my right to receive money from you is also owned by someone who has not agreed to pay this note, your right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement.  Your right of set-off does not apply to an account or other obligation where my rights are only as a representative.  It also does not apply to any Individual Retirement Account or other tax-deferred retirement account.

   You will not be liable for the dishonor of any check when the dishonor occurs because you set off this debt against any of my accounts.  I agree to hold you harmless from any such claims arising as a result of your exercise of your right to set-off.

DEFAULT – I will be in default if any one or more of the following occur: (1) I fail to make a payment on time or in the amount due; (2) I fail to keep the Property insured, if required; (3) I fail to pay, or keep any promise, on any debt or agreement I have with you; (4) any other creditor of mine attempts to collect any debt I owe him through court proceedings; (5) I die, am declared incompetent, make an assignment for the benefit of creditors, or become insolvent (either because my liabilities exceed my assets or I am unable to pay my debts as they become due); (6) I make any written statement or provide any financial information that is untrue or inaccurate at the time it was provided; (7) I do or fail to do something which causes you to believe you will have difficulty collecting the amount I owe you; (8) any collateral securing this note is used in a manner or for a purpose which threatens confiscation by a legal authority; (9) I change my name or assume an additional name without first notifying you before making such a change; (10) I fail to plant, cultivate and harvest crops in due season if I am a producer of crops; (11) any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES - If I am in default on this note you have, but are not limited to, the following remedies:

	
(1)

	
You may demand immediate payment of all I owe you under this note (principal, accrued unpaid interest and other accrued unpaid charges).

	
(2)

	
You may set off this debt against any right I have to the payment of money from you, subject to the terms of the "SET-OFF" paragraph herein.

	
(3)

	
You may demand security, additional security, or additional parties to be obligated to pay this note as a condition for not using any other remedy.

	
(4)

	
You may refuse to make advances to me or allow purchases on credit by me.

	
(5)

	
You may use any remedy you have under state or federal law.

	
(6)

	
You may make use of any remedy given to you in any agreement securing this note.

   By selecting any one or more of these remedies you do not give up your right to use later any other remedy.  By waiving your right to declare an event to be a default, you do not waive your right to consider later the event a default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY'S FEES – I agree to pay all costs of collection, replevin or any other or similar type of cost if I am in default.  In addition, if you hire an attorney to collect this note, I also agree to pay any fee you incur with such attorney plus court costs (except where prohibited by law).  To the extent permitted by the United States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and costs you incur to collect this debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

WAIVER – I give up my rights to require you to do certain things.  I will not require you to:

	
(1)

	
demand payment of amounts due (presentment);

	
(2)

	
obtain official certification of nonpayment (protest); or

	
(3)

	
give notice that amounts due have not been paid (notice of dishonor).

   I waive any defenses I have based on suretyship or impairment of collateral.

OBLIGATIONS INDEPENDENT – I understand that I must pay this note even if someone else has also agreed to pay it (by, for example, signing this form or a separate guarantee or endorsement).  You may sue me alone, or anyone else who is obligated on this note, or any number of us together, to collect this note.  You may without notice release any party to this agreement without releasing any other party.  If you give up any of your rights, with or without notice, it will not affect my duty to pay this note.  Any extension of new credit to any of us, or renewal of this note by all or less than all of us will not release me from duty to pay it.  (Of course, you are entitled to only one payment in full.)  I agree that you may at your option extend this note or the debt represented by this note, or any portion of the note or debt, from time to time without limit or notice and for any term without affecting my liability for payment of the note.  I will not assign my obligation under this agreement without your prior written approval.

FINANCIAL INFORMATION – I agree to provide you, upon request, any financial statement or information you may deem necessary.  I warrant that the financial statements and information I provide to you are or will be accurate, correct and complete.

SIGNATURES: I AGREE TO THE TERMS OF THIS AGREEMENT (INCLUDING THOSE ON PAGES 1 AND 2).  I have received a copy on today's date.

	 	 	
/s/ James P. Rousey

	
UTG Avalon, LLC    ###-##-####

 

	 	
By:  James P. Rousey, Authorized Signer

	
/s/ Theodore C. Miller

	 	 
	
By:  Theodore C. Miller, Manager

 

	 	 
	
 

SIGNATURE FOR LENDER:Exhibit 10.18

JOINT OWNERSHIP AGREEMENT

Under Part 91.501(c)(3)

Dated as of the 11th day of August, 2014

by and among

BANDYCO, LLC,

FIRST SOUTHERN NATIONAL BANK,

and

UTG, INC.

concerning one (1) Cessna 560XL aircraft bearing

U.S. registration number N476JC,

and

manufacturer's serial number 560-6095

 

	 	
This JOINT OWNERSHIP AGREEMENT (this "Agreement") is made and entered

	
into as of the 11th day of August, 2014 (the "Effective Date"), by and among BANDYCO, LLC, FIRST SOUTHERN NATIONAL BANK, and UTG, INC., (each individually an "Owner", collectively, the "Owners") concerning one (1) Cessna 560XL aircraft serial number 560-6095 bearing U.S. registration number N476JC (the "Aircraft").  This Agreement replaces another Joint Ownership Agreement amongst the Owners dated as of September 28th, 2011.

W I T N E S S E T H:

	 	
WHEREAS,  BANDYCO,  LLC, FIRST SOUTHERN NATIONAL BANK and UTG, Inc. each own an undivided ownership interest in the Aircraft; and

	 
	 	
WHEREAS,  the purpose of this Agreement is to govern the rights and obligations

	
of the parties with respect to the Aircraft and its operation.

	 	
NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises,  the mutual

	
promises herein contained, and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

	
SECTION 1.

	 

DEFINITIONS

	
1.1

	
The following terms shall have the following meanings for all purposes of this

	 	
Agreement:

	
"Aircraft" means the Airframe, the Engines, the Parts, and the Aircraft Documents.  The Engines shall be deemed part of the "Aircraft" whether or not from time to time attached to the Airframe or removed from the Airframe.

 

	
"Aircraft Documents" means all flight records, maintenance records, historical records, modification records, overhaul records, manuals, logbooks, authorizations, drawings and data relating to the Airframe, any Engine, or any Part, that are required by Applicable Law to be created or maintained with respect to the maintenance and/or operation of the Aircraft, or are required from time to time by the FAA with respect to the Aircraft, including, without limitation, shop records detailing service checks, inspections, tests, repairs or overhauls.

 

	
"Airframe" means that certain Cessna 560XL aircraft, serial number 560-6095 bearing U.S. registration number N476JC, together with any and all Parts so long as the same shall be either incorporated or installed in or attached to the Airframe.

 

	
"Applicable Law" means, without limitation, all applicable laws, treaties, international agreements, decisions and orders of any court, arbitration or governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any governmental body, instrumentality, agency or authority, including, without limitation, the FAR and 49 U.S.C. § 41101, et seq., as amended.

 

	
"Contract Year" means a period on one (1) year commencing on the Effective Date of this Agreement or any anniversary thereof.

 

	
"DOT" means the United States Department of Transportation or any successor agency.

 

	
"Engines" means two (2) Pratt & Whitney 545C engines bearing manufacturer's serial numbers DF0193 & DF0194, together with any and all Parts so long as the same shall be either incorporated or installed in or attached to such engine.  Any engine which may be, from time to time, substituted for an Engine shall be deemed to be an Engine and subject to this Agreement for so long as it remains attached to the Airframe.

 

	
"FAA" means the Federal Aviation Administration or any successor agency.

 

	
"Fair Market Value" means the estimated total price at which the Aircraft would likely be sold to a third-party buyer following an arm's-length negotiation.

 

	
"FAR" means collectively the Aeronautics Regulations of the FAA and the DOT, as codified at Title 14, Parts 1 to 399 of the United States Code of Federal Regulations.

 

	
"Flight Hour" means one (1) hour, or fraction thereof calculated in tenths (1/10ths) of an hour, of use of the Aircraft in flight operations, measured from the time the Aircraft takes off at the beginning of a flight, to the time the Aircraft lands at the end of a flight.

 

	
"Lien" means any mortgage, security interest, lease or other charge or encumbrance or claim or right of others, including, without limitation, rights of others under any airframe or engine interchange or pooling agreement.

 

	
"Non-Selling Party" has the meaning ascribed to such term in Section 4.1.

 

	
"Operational Control" has the meaning ascribed to the term in Section 1.1 of the FAR.

 

	
"Option Price" has the meaning ascribed to such term in Section 4.3.

 

	
"Parts" means all appliances, components, parts, instruments, appurtenances, accessories, furnishings or other equipment of whatever nature (other than complete Engines or engines) which may from time to time be incorporated or installed in or attached to the Airframe or any Engine and includes replacement parts.

 

	
"Purchasing Party" has the meaning ascribed to such term in Section 4.3.

 

	
"Selling Party" has the meaning ascribed to such term in Section 4.1.

 

	
"Taxes" means all taxes of every kind (excluding any tax measured by or assessed against a taxpayer's income, including, without limitation, any income tax, gross income tax, net income tax, or capital gains tax) assessed or levied by any federal, state, county, local, airport, district, foreign, or other governmental authority, including, without limitation, sales taxes, use taxes, retailer taxes, duties, fees, excise taxes, and other similar taxes.

 

	
"Term" means the entire period from the Effective Date to the date this Agreement is terminated pursuant to Section 2.1.

	
SECTION 2.

	 

COMMENCEMENT AND TERM OF AGREEMENT

	
 

2.1

	
 

Term.  The Term shall commence on the Effective Date, and be effective for so long as at least two (2) of the parties hereto shall own undivided ownership interests in the Aircraft

	
2.2

	
Withdrawal of a Party.  Upon a transfer by a Selling Party to one or more Non-Selling Parties, as applicable, of all of the Selling Party's ownership interest in the Aircraft, in a transaction that does not cause a termination of this Agreement under Section 2.1 hereof, said Selling Party shall be deemed to have withdrawn from this Agreement and shall no longer be party to this Agreement, but this Agreement shall remain in full force and effect for the benefit of the Non-Selling Parties

 

 

	
SECTION 3.

	
NATURE OF OWNERSHIP INTERESTS AND RELATIONSHIP OF THE PARTIES

 

	
3.1

	
Nature of Ownership Interests. Each party's ownership interest in the Aircraft shall be an indivisible and undivided interest in the Aircraft, and shall be subject to the terms of this Agreement.   The parties will own and hold their respective ownership interests in the Aircraft as tenants-in-common.  It is not the purpose or intention of this Agreement to create, and this Agreement shall not be construed as creating, a joint venture, partnership, business organization, or other relationship through which any party may be held liable for the omissions or commissions of any other party.  This Agreement is intended as, constitutes, and should be construed as, a Joint Ownership agreement as that term is defined in Section 91.501(c)(3) of the FARs.

 

	
3.2

	
Waiver of Partition Rights.  Each party hereby irrevocably waives any right it may have to demand the partition or sale for partition of the Aircraft under any law of the State of Kentucky or any other jurisdiction.

 

	
3.3

	
Restriction on Alienation.  Each party agrees that the sole and adequate means by which it may divest its ownership interest in the Aircraft shall be the transfer of the interest in accordance with the terms and conditions of this Agreement.

 

	
3.4

	
Allocation of Tax Benefits and Obligations.  Each party shall be entitled to its pro rata share of all tax benefits, if any, arising from its respective interest in the Aircraft.  Each party shall be responsible for, and shall pay promptly when due, all Taxes which may be assessed or levied by any taxing jurisdictions as a result of the purchase, lease, use, storage, consumption, or other consumption by such party of such party's undivided ownership interest in the Aircraft; provided, however, that each party shall have the right to dispute or contest in good faith and at such party's sole expense the amount of any Taxes assessed or imposed directly against such party and/or its undivided interest in the Aircraft.  During the period that any such Taxes are being disputed or contested in good faith, payment of such Taxes in accordance with the terms of this Agreement may be delayed until a final determination of the amount due has been made so long as, and only so long as, the delay in payment does not create a risk of a tax forfeiture of the Aircraft.

 

 

	
SECTION 4.

	
SALE OF AN INTEREST IN THE AIRCRAFT

 

	
4.1

	
Notice of Intent to Sell.  If at any time any party desires or intends to sell or otherwise divest itself of its respective ownership interest in the Aircraft, such party (the "Selling Party") shall provide written notice of such desires and intentions to the other party or parties (the "Non-Selling Parties").

 

	
4.2

	
Determination of Fair Market Value.  As soon as reasonably practicable after the date of any notice under Section 4.1, the parties shall determine the Fair Market Value of the Aircraft by mutual negotiation and agreement.  In the event the parties cannot agree on the Fair Market Value of the Aircraft within ten (10) days after the date of any notice under Section 4.1, the parties shall, within twenty (20) days after the date of the notice under Section 4.1, jointly select an established, reputable, independent, and qualified appraiser to determine the Fair Market Value of the Aircraft.  In the event the parties cannot agree on a single appraiser, the Fair Market Value of the Aircraft shall be determined by averaging the fair market valuation appraisals of three (3) established, reputable, independent, and qualified appraisers, the first of whom shall be selected by the Selling Party, the second of whom shall be selected jointly by the Non-Selling Parties, and the third of whom shall be selected jointly by the first two appraisers.

 

	
4.3

	
Non-Selling Party's Option.  Each Non-Selling Party shall have the option, exercisable by written notice delivered to the Selling Party within the first ten (10) Business Days following the determination of the Fair Market Value of the Aircraft, to purchase all, but not less than all, of the Selling Party's ownership interest in the Aircraft (each Non-Selling Party that elects to purchase the Selling Party's ownership interest in the Aircraft under this Section 4.3 or under Section 5.3 is a "Purchasing Party").  In the event more than one (1) Purchasing Party elects to purchase the Selling Party's ownership interest in the Aircraft, each Purchasing Party shall be entitled to purchase a pro-rata portion of the Selling Party's undivided interest in the Aircraft that bears the same ratio as each respective Purchasing Party's then-existing percentage ownership interest in the Aircraft bears to the total percentage ownership interest in the Aircraft then held by all the Purchasing Parties combined.  The price at which the Purchasing Party or Parties may purchase the Selling Party's ownership interest in the Aircraft (the "Option Price") shall be an amount equal to 98% of the Fair Market Value, multiplied by the Selling Party's percentage ownership interest in the Aircraft (it being agreed that such Option Price shall be deemed to be equal to the net amount that Selling Party would have received for its undivided interest in the Aircraft had the entire Aircraft been sold to a third-party on the open market at the Fair Market Value through a reputable brokerage firm, and the net sales proceeds after deducting sales commissions and other sales expenses totaling 2% of the sales price were shared by the parties pro-rata according to their respective ownership percentages).  If one (1) or more Purchasing Parties exercise the option under this Section 4.3 to purchase the Selling Party's ownership interest in the Aircraft, the closing of such transaction shall occur not later than 3:00 p.m. Eastern Time on the 10th Business Day after the end of the ten (10) Business Day option period provided for in the first sentence of this Section 4.3, unless another closing date shall be established by mutual agreement of the parties

 

	
4.4

	
Procedures for Purchasing Party or Parties Purchase of Selling Party's Aircraft Interest.  On the date of the closing of any sale of Selling Party's interest in the Aircraft to Purchasing Party or Parties:

 

	
4.4.1.

	
The Purchasing Party or Parties shall deliver to Selling Party the Option Price by wire transfer of immediately available U.S. funds.

 

	
4.4.2.

	
Selling Party shall deliver all right, title, and interest in and to the Selling Party's ownership interest in the Aircraft, free and clear of all Liens, to the Purchasing Party or Parties in such location within the continental United States as the parties may mutually agree.

 

	
4.4.3.

	
Selling Party shall execute and deliver to the Purchasing Party or Parties an FAA Form 8050-2 Aircraft Bill of Sale for filing in the FAA Civil Aviation Registry, and a Warranty Bill of Sale in a form reasonably acceptable to Purchasing Party or Parties, transferring all of Selling Party's ownership interest in the Aircraft to the Purchasing Party or Parties.

 

 

	
4.4.4.

	
The Purchasing Party or Parties shall execute and deliver to Selling Party an Aircraft Delivery Receipt in a form reasonably acceptable to Selling Party.

 

	
4.4.5.

	
The Selling Party shall promptly execute and deliver to the Purchasing Party or Parties such other notices, statements, documents and instruments and perform such other acts the Purchasing Party or Parties deems necessary to protect, preserve and enforce its acquisition and ownership of Selling Party's ownership interest in the Aircraft.

 

 

	
SECTION 5.

	
THIRD PARTY SOLICITATION AND SALE OF ENTIRE AIRCRAFT

 

	
5.1

	
Solicitation of Third-Party Offers and Sale of Aircraft.  In the event no Non-Selling Party exercises its option under Section 4.3, the Selling Party shall be free to offer its ownership interest in the Aircraft to third parties for purchase at its own expense, subject to approval from the Non-Selling Parties, such approval not to be unreasonably withheld.

 

	
5.2

	
Comprehensive Aircraft Purchase Agreement.  Any acceptance of a bona-fide offer from a third-party for the purchase of an ownership interest or the entire Aircraft will be subject to the condition that such offer is contingent upon negotiation and execution of a comprehensive Aircraft Sale Agreement.  The parties shall jointly negotiate any such Aircraft Sale Agreement in good faith.   Each Party shall each pay a pro-rata portion of all expenses of any sale of the entire Aircraft pursuant to this Section 5, and shall each be entitled to a pro-rata share of the proceeds of any such sale, according to their respective percentage ownership interests in the Aircraft.

 

 

	
SECTION 6.

	
AIRCRAFT OPERATIONS

 

	
6.1

	
Operation and Use.  Each Owner shall operate the Aircraft in accordance with the provisions of Part 91 of the FAR and shall not operate the Aircraft in commercial service, as a common carrier, or otherwise provide transportation for compensation or hire except to the extent permitted under Sections 91.321 and 91.501 of the FAR, if applicable.  Each Owner shall exercise Operational Control of the Aircraft during all flight operations while the Aircraft is in the possession of such Owner.  Further, at all times while the Aircraft is in the possession of an Owner, such Owner shall have exclusive possession, command, and control of the Aircraft, and the pilots of any flight by such Owner shall be under the exclusive command of that Owner.  Each Owner agrees not to operate, or permit the operation of, the Aircraft in any area excluded from coverage by any insurance policy in effect or required to be maintained hereunder with respect to the Airframe or Engines, or in any war zone.  Each Owner agrees not to operate, or permit the operation of, the Aircraft for a purpose for which the Aircraft is not designed or reasonably suitable.  Each Owner will not permit the Aircraft to be maintained, used or operated during the Term in violation of any applicable law, regulation, or contrary to any manufacturer's operating manuals or instructions.  Each Owner shall not knowingly permit the Aircraft to be used for the carriage of any persons or property prohibited by applicable law, nor shall they permit the Aircraft to be used during the existence of any known defect except in accordance with the FARs.  Each Owner shall abide by and conform to, be responsible for causing and cause others to abide by and conform to, all applicable laws and regulations now existing or hereafter enacted, that control or in any way affect the operation, use, maintenance, or occupancy of the Aircraft, or the use of any airport by the Aircraft.

 

	
6.2

	
Authority of Pilot in Command. Notwithstanding that an Owner shall have Operational Control of the Aircraft during any flight conducted by that Owner, the parties acknowledge that pursuant to Section 91.3 of the FAR, the Pilot in Command of such flight is responsible for, and is obligated and entitled to exercise final authority over, the safe operation of the flight, and the parties agree that the Pilot in Command may, in the exercise of such authority, refuse to commence such flight, terminate such flight, or take any other flight-related action that, in the judgment of the Pilot in Command, is required to ensure the safety of the Aircraft, the flight crew, the passengers, and any other persons and/or property.

 

	
6.3

	
Aircraft Maintenance and Operation. The parties hereto jointly retain Bandyco, LLC for the provision of flight crew, maintenance, regulatory and other aircraft operational services for the Aircraft and such other matters that may involve the ownership, use, storage, maintenance, insurance or other such matters regarding the Aircraft ("Management Services") and hereby appoint Don Bandy as their agent for the purpose of administering such Management Services.

 

	
6.3.1

	
Initial Capital. As mutually agreed upon at the time, the Owners will initially fund their share interest in the Aircraft, of capital needed to provide the Management Services, and establish mutually satisfactory arrangements to provide each other with the comfort reasonably necessary to conduct transactions.  Bandyco, LLC shall provide each Owner, and each Owner agrees that it will provide the other Owners, with a full accounting (including reasonable back‐up documentation if requested) covering charges to the Owners for the Management Services.  An annual account reconciliation of hours and individual charges for the Management Services shall be provided for the preparation of the Owner's annual tax returns, if any. The Owners shall share equally in the cost of such accounting.

 

	
6.3.2

	
Aircraft Operating Expenses.  As mutually agreed upon, the Owners shall pay their share of monthly fixed operating expenses of the Aircraft.   Bandyco, LLC shall notify each Owner on a quarterly basis or otherwise when additional capital is needed to ensure adequate funding for the obligations of the Owners for the expenses of the Aircraft ("Capital Call").

 

	
6.3.2.1

	
Upon receipt of a Capital Call, the Owners shall forward payment by wire transfer within ten days of receipt of invoice.

 

	
6.3.2.2

	
Payments for Owners are delinquent after thirty (30) days and are subject to a 15% per annum late charge.  In the event an Owner is more than thirty (30) days late in satisfying a Capital Call, that Owner shall be precluded from use of the Aircraft until such time as that Owner's capital account is brought current.

 

	
6.4

	
Scheduling and Payment for Aircraft Use. Each Owner shall notify Bandyco, LLC of its desire to schedule a Scheduled Use Period, and/or any cancellation or modification of its scheduled use of the Aircraft, as far in advance as reasonably possible.   As used herein, the term "Scheduled Use Period" means a period of time during which a party has scheduled continuous and exclusive use of the Aircraft.  Each request by an Owner to schedule a Scheduled Use Period shall comply with the scheduling rules set forth below, and shall identify the departure airport, the destination airport, the date and time of departure, and the number of anticipated passengers for each leg of each flight to be performed during the Scheduled Use Period.

	
6.4.1

	
Subject to the scheduling rules set forth below, each Owner shall have equal, "first come, first served", rights to schedule use of the Aircraft.

 

	
6.4.2

	
No Owner(s) may have more than three (3) Scheduled Use Periods pending on the Aircraft's schedule at any one time, or two (2) Scheduled Use Periods in any one month, or one (1) Scheduled Use Period that includes a federal holiday.  The foregoing notwithstanding, any Scheduled Use Period that will commence and terminate within twenty-four (24) hours of the time the Scheduled Use Period is first placed on the Aircraft's schedule, and that will not exceed seventy-two (72) hours in duration, will not be counted for purposes of the above limitations.

 

	
6.4.3

	
No Owner(s) may schedule a Scheduled Use Period more than six (6) months in advance.

 

	
6.4.4

	
No Owner(s) may schedule a Scheduled Use Period exceeding seven (7) calendar days in duration without first getting approval from each of the other Owners.

 

	
6.4.5

	
If an Owner (the "First Party") schedules a Scheduled Use Period that will cause the Aircraft to layover at a location away from the operating base for any period of time, another Owner (the "Second Party") may subsequently schedule one or more flights that will occur prior to the First Party's return to the operating base provided such flight(s) by the Second Party will not unreasonably delay or interfere with any scheduled flight of the First Party, and all expenses and Flight Hours charges to ferry the Aircraft from the First Party's location to the operating base or other location where the Second Party will embark, and all expenses to ferry the Aircraft back to the First Party's location, shall be charged to the Second Party.

 

	
6.4.6

	
Each Owner shall be responsible for flight expenses as outlined on the attached Exhibit A.

 

	 	 
	
6.5

	
Fines, Penalties, and Forfeitures.  Owner shall be solely responsible for any fines, penalties, or forfeitures relating in any manner to the operation, maintenance, or use of the Aircraft by Owner during Owner's possession and/or operation of the Aircraft under this Agreement.

 

	
6.6

	
Indemnification. Each Owner hereby releases, and shall defend, indemnify and hold harmless the other parties hereto and their shareholders, members, directors, officers, managers, employees, successors and assigns, from and against, any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, civil and criminal legal proceedings, penalties, fines, and other sanctions, and any attorneys' fees and other reasonable costs and expenses, directly or indirectly arising from this Agreement, and/or such Owner's operation or other use of the Aircraft.

 

 

	
SECTION 7.

	
AIRCRAFT MODIFICATIONS AND UPGRADES

 

	
7.1

	
Performance of Modifications and Upgrades.  Any and all modifications and/or upgrades to the Aircraft that are required by any airworthiness directive, manufacturer's mandatory service bulletin, or Applicable Law shall be performed when and as required.  Any and all modifications and/or upgrades to the Aircraft that are not required by any airworthiness directive, manufacturer's mandatory service bulletin, or Applicable Law shall be performed only if all parties mutually agree.

 

	
7.2

	
Allocation of Costs of Modifications and Upgrades.  The costs of all modifications and/or upgrades shall be paid by the parties as mutually agreed upon.

 

 

	
SECTION 8.

	
INSURANCE

 

	
8.1

	
Liability.  Owners shall maintain bodily injury and property damage liability insurance in such amounts as Owners' deem appropriate.  Said policy shall be an occurrence policy naming each Owner as Named Insureds.

 

	
8.2

	
Hull.  Owners shall maintain all risks aircraft hull insurance in the amount not less than the Fair Market Value of the Aircraft, and such insurance shall name each Owner as Named Insureds and as loss payees as their interests may appear.

 

	
8.3

	
Insurance Certificates.  Owners will provide each other with a Certificate of Insurance upon execution of this Agreement and at any time thereafter as each may reasonably request.

 

	
8.4

	
Conditions of Insurance.  Each insurance policy required under this Section 8 shall insure the interests of the Owners regardless of any breach or violation by an individual Owner of any warranties, declarations or conditions contained in such policies.  Each such policy shall be primary without any right of contribution from any insurance maintained by the Owners.  Each such policy shall insure the Owners' contractual liability to each other contained in this Agreement (with a Breach of Warranty endorsement).  The geographic limits, if any, contained in each and every such policy of insurance shall include at the minimum all territories over which the Aircraft will operate.  Each policy shall contain an agreement by the insurer that notwithstanding the lapse of any such policy for any reason or any right of cancellation by the insurer or the Owners, whether voluntary or involuntary, such policy shall continue in force for the benefit of the Owners for at least thirty (30) days (or such lesser time as may be permitted in the case of War Risk Insurance, if such War Risk Insurance so requires) after written notice of such lapse or cancellation shall have been given to the Owners.  Each policy shall contain an agreement by the Insurer to provide the Owners with thirty (30) days' advance written notice of any deletion, cancellation or material change in coverage.

 

 

	
SECTION 9.

	
REPRESENTATIONS AND WARRANTIES

 

	
9.1

	
Representations and Warranties of Owners.  The Owners individually hereby represent and warrant as follows:

 

	
9.1.1

	
Owner is, and throughout the Term hereof shall continue to be duly incorporated or organized, validly existing, and in good standing under the laws of the state of Owner's formation, possessing perpetual existence as a legal entity, having the capacity to sue and be sued in its own name, having full power, legal right and authority to carry on its business as currently conducted, and to execute, deliver and perform the provisions of this Agreement.

 

	
9.1.2

	
The execution, delivery, and performance of this Agreement by Owner has been duly authorized by all necessary company action and does not conflict with or result in any breach of any of the terms or constitute a default under any document, instrument, or agreement to which it is a party.

 

	
9.1.3

	
This Agreement constitutes a legal, valid and binding obligation of Owner, and is enforceable against Owner in accordance with the terms herein contained

	
9.1.4

	
Owner owns, as of the Effective Date hereof, exclusive, marketable, legal and equitable title to the undivided ownership interest in the Aircraft detailed in the recitals hereof.

 

	
9.1.5

	
Owner shall not create or place any Lien against the Aircraft other than a purchase money interest, limited to Owner's pro-rata share of the Aircraft, shall ensure that no Liens are created or placed against the Aircraft by third-parties as a result of it's actions, and shall take all actions as may be necessary to discharge and satisfy in full any such Lien promptly after the same becomes known to it.

	
9.1.6

	
Owner shall not divest itself of its undivided ownership interest in the Aircraft except in accordance with the terms and conditions specified in this Agreement.

 

	
9.1.7

	
Owner is, and throughout the Term hereof shall continue to be, either a citizen of the United States as defined in 49 U.S.C. § 40102(a)(15), as amended, or otherwise eligible to register the Aircraft in the United States.

 

 

	
SECTION 10.

	
DEFAULTS AND REMEDIES

 

	
10.1

	
Events of Default.  Without limiting in any way what may constitute a default by a party to this Agreement, the occurrence and continuation of any of the following shall constitute a default:

 

	
10.1.1

	
The failure of an Owner to timely pay when due any amount required to be paid by such Owner under this Agreement or any other Agreement related to the Aircraft or the use of the Aircraft.

 

	
10.1.2

	
The breach by an Owner of any representation or warranty or other provision of this Agreement or any other Agreement related to the Aircraft or the use of the Aircraft.

 

	
10.1.3

	
An Owner shall admit in writing its inability to pay, or fail to pay, debts generally as they become due, file a petition in bankruptcy or a petition under any insolvency act or file an answer admitting or filing to deny the material allegation of such petition, make an assignment for the benefit of its creditors, consent to the appointment of, or possession by, a custodian for itself or for the whole or substantially all of its property, on a petition in bankruptcy filed against it, be adjudicated, or have an order for relief granted as, a bankrupt, or file a petition or answer seeking reorganization or arrangement or other aid or relief under any bankruptcy or insolvency laws or any other law for the relief of debtors or file an answer admitting, or failing to deny, the material allegations of a petition filed against it for any such relief.

 

	
10.1.4

	
A court of competent jurisdiction shall enter an order, judgment, or decree appointing, without the consent of the Owner, a custodian for an Owner, or the whole or substantially all of its property, or approving a petition filed against it seeking reorganization or arrangement of the party under any bankruptcy or insolvency laws or any other law for the relief of debtors, and such order, judgment, or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof.

 

	
10.1.5

	
Under the provision of any law for the relief of debtors, any court of competent jurisdiction or custodian shall assume custody or control of the whole or any substantial part of an Owner's property without the consent the Owner, and such custody or control shall not be terminated or stayed within sixty (60) days from the date of assumption of such custody or control.

 

	
10.2

	
Remedies for Default.

 

	
10.2.1

	
In addition to any other remedies provided for in this Agreement or otherwise available to a non-defaulting party at law or in equity (including, without limitation, reasonable attorneys' fees, costs, and expenses), upon the occurrence of a default by an Owner, the rights of such Owner to use of the Aircraft shall be suspended until the default is cured.  Notwithstanding the foregoing, the defaulting party shall remain liable and responsible during the continuation of any default for payment of all amounts for which such party is liable under this Agreement, and/or all amounts for which such party is liable under any other agreement related to the Aircraft or the use or charter of the Aircraft.

 

	
10.2.2

	
In the event any default by a party shall continue uncured for thirty (30) days, the defaulting party shall be deemed to have given a notice of intent under Section 4.1 to sell all of its undivided ownership interests in the Aircraft, and the parties shall proceed in the manner specified in Section 4, except that (i) the option granted to the Non-Selling Parties under Section 4.3 shall be exercisable by written notice delivered to the Selling Party at any time until the later of the 10th Business Day following the determination of the Fair Market Value of the Aircraft, or the date the default that gave rise to the option shall have been cured.

 

 

	
SECTION 11.

	
NOTICES

 

	
11.1

	
All communications, declarations, demands, consents, directions, approvals, instructions, requests and notices required or permitted by this Agreement shall be in writing and shall be deemed to have been duly given or made when delivered personally or transmitted electronically by e-mail or facsimile, receipt acknowledged, or in the case of documented overnight delivery service or registered or certified mail, return receipt requested, delivery charge or postage prepaid, on the date shown on the receipt therefor, in each case at the address set forth below:

 

	 	
If to BANDYCO, LLC:

 

	 	
Address:

 

Tel:

Fax:

Attn:

	
P.O. Box 328

Stanford, KY 40484

(606) 365-3555

(606) 365-7557

Cynthia Bourne

 

	 	
If to FIRST SOUTHERN NATIONAL BANK:

 

	 	
Address:

 

Tel:

Fax:

Attn:

	
P.O. Box 328

Stanford, KY 40484

(606) 365-3555

(606) 365-7557

Jill Martin

 

	 	
If to UTG, INC.:

 

	 	
Address:

 

Tel:

Fax:

Attn:

	
P.O. Box 5147

Springfield, IL 62705

(217) 241-6363

(217) 241-6578

Ted Miller

 

 

	
SECTION 12.

	
MISCELLANEOUS

 

	
12.1

	
Entire Agreement.  This Agreement, and all terms, conditions, warranties, and representations herein, are for the sole and exclusive benefit of the signatories hereto.  This Agreement constitutes the entire agreement of the parties as of its Effective Date and supersedes all prior or independent, oral or written agreements, understandings, statements, representations, commitments, promises, and warranties made with respect to the subject matter of this Agreement.

 

	
12.2

	
Other Transactions.  Except as specifically provided in this Agreement, none of the provisions of this Agreement, nor any oral or written statements, representations, commitments, promises, or warranties made with respect to the subject matter of this Agreement shall be construed or relied upon by any party as the basis of, consideration for, or inducement to engage in, any separate agreement, transaction or commitment for any purpose whatsoever.

 

	
12.3

	
Prohibited and Unenforceable Provisions.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibitions or unenforceability in any jurisdiction.  To the extent permitted by applicable law, each party hereby waives any provision of Applicable Law that renders any provision hereof prohibited or unenforceable in any respect.

 

	
12.4

	
Enforcement. This Agreement, including all agreements, covenants, representations and warranties, shall be binding upon and inure to the benefit of, and may be enforced by each of the parties hereto, and each of their agents, servants and personal representatives.

 

	
12.5

	
Headings.  The section and subsection headings in this Agreement are for convenience of reference only and shall not modify, define, expand, or limit any of the terms or provisions hereof.

 

	
12.6

	
Counterparts.  This Agreement may be executed by the parties hereto in two (2) or more separate counterparts, each of which when so executed and delivered shall be an original, and all of which together shall constitute but one and the same instrument.

 

	
12.7

	
Amendments.  No term or provision of this Agreement may be amended, changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge, or termination is sought.

 

	
12.8

	
No Waiver.  No delay or omission in the exercise or enforcement of any right or remedy hereunder by either party shall be construed as a waiver of such right or remedy.  All remedies, rights, undertakings, obligations, and agreements contained herein shall be cumulative and not mutually exclusive, and in addition to all other rights and remedies which either party possesses at law or in equity.

 

	
12.9

	
No Assignments.  No party may assign its rights or obligations under this Agreement without the prior written permission of the other parties.

 

	
12.10

	
Governing Law.  This agreement has been negotiated and delivered in the State of Kentucky and shall in all respects be governed by, and construed in accordance with, the laws of the State of Kentucky, including all matters of construction, validity and performance, without giving effect to its conflict of laws provisions.

	 	
IN WITNESS WHEREOF, the parties hereto have each caused this JOINT

	
OWNERSHIP AGREEMENT to be duly executed as of the Effective Date

	 	
BANDYCO, LLC

 

	 	
By:

	
/s/ Jill M. Martin

	 	
Print:

	
Jill M. Martin

	 	
Title:

	
Operating Manager

	 	 	 
	 	
FIRST SOUTHERN NATIONAL BANK

 

	 	
By:

	
/s/ Jill M. Martin

	 	
Print:

	
Jill M. Martin

	 	
Title:

	
Secretary

	 	 	 
	 	
UTG, INC.

 

	 	
By:

	
/s/ James P. Rousey

	 	
Print:

	
James P. Rousey

	 	
Title:

	
President

 

 

Joint Ownership Agreement

Exhibit A

In reference to Section  6.4.6:

	
Each Owner shall be individually responsible for flight expenses due to the individual Owner's flights.  These expenses will be paid to Bandyco, LLC and include:

 

	
●

	
A charge equal to $2,500 per hour (the "Flight Hourly Rate"), which will be reviewed at least annually and amended from time to time, multiplied by the number of Flight Hours used by the Owner.

 

	
●

	
All landing, ramp, handling, hangar and service fees, de-icing and containment recovery costs, ground transportation, catering, customs, landing permits, charts, manuals and other publications obtained for a specific flight, over-night lodging and meal expenses for pilots, and other such charges directly related to Owner's use of aircraft.

In reference to Section 6.3.2:

	
Amount of monthly fixed operating expenses paid by the Owners:  None Scheduled

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