SECURED PROMISSORY NOTE
U.S. $10,152,950.00 Phoenix, Arizona
No. 1 July 31, 1997
FOR VALUE RECEIVED, the undersigned (hereinafter the "Maker") promises to
pay to the order of FINOVA CAPITAL CORPORATION (the "Lender"), or registered
assigns, the principal sum of TEN MILLION ONE HUNDRED FIFTY TWO THOUSAND NINE
HUNDRED FIFTY DOLLARS ($10,152,950.00), together with interest thereon from the
Closing Date in accordance with the terms of that certain Secured Loan Agreement
dated as of July 31, 1997 between Maker, as borrower, and the Lender, as the
same may from time to time be amended (the "Loan Agreement"). Capitalized terms
used herein and not otherwise defined shall have the same meaning as is ascribed
to said terms in the Loan Agreement.
Each payment required to be made hereunder shall be made via wire transfer
of immediately available funds, delivered prior to 12:00 noon, New York time on
the date due, to:
Citibank
New York, New York
ABA No.: 021000089
In Favor of: FINOVA Capital Corporation
Account No.: 4072-7239
Reference: CEF/ Mercy Air Service
Attention: P. Marchant
or to such other account as the holder hereof may designate by written notice
delivered at the Closing Date or thereafter sent pursuant to Paragraph 15 of the
Loan Agreement.
All payments made hereunder shall be applied in accordance with the terms
of the the Loan Agreement. If any sum required to be paid hereunder shall not be
paid when due, whether by acceleration or otherwise, Maker shall pay post
maturity interest at the Interest Rate plus 2%.
Notwithstanding any provisions to the contrary herein contained, the Lender
shall not collect a rate of interest on any obligation owing by the Maker to the
Lender in excess of the maximum rate of interest permitted by applicable law.
The Maker understands and believes that the obligations evidenced by this Note
comply with all applicable usury laws; however, if any interest or other charges
in connection with the obligations evidenced by this Note are ever determined to
exceed the maximum amount permitted by law, then the Maker agrees that (a) the
amount of interest or charges payable pursuant to this Note shall be reduced to
the maximum amount permitted by law and (b) any excess amount previously
collected from the Maker in connection with this Note that exceeded the maximum
amount permitted by law, shall be credited against the principal balance of this
Note then outstanding. If the outstanding principal balance hereunder has been
paid in full, the excess amount shall be refunded to the Maker.
The contracted for rate of interest with respect to the obligations
evidenced by this Note shall include, without limitation, the following:
(i) the Interest Rate calculated and applied to the principal balance
of this Note in accordance with the provisions hereof;
(ii) post-maturity interest, calculated and applied to the principal
balance of this Note in accordance with the provisions hereof;
(iii) the amounts referred to in Paragraph 14 of the Loan Agreement;
and (iv) all fees, charges, goods, things in action or any sum or things of
value ("Additional Sums") paid or payable by the Maker in accordance with
the provisions of the Loan Agreement or this Note or any other Loan
Document, howsoever described. If any such Additional Sums may, under
applicable law, be deemed to be interest with respect to the lending
transaction which is the subject of this Note and the Loan Agreement, then,
for the purpose of any applicable law that may limit the maximum amount of
interest to be charged with respect to the lending transaction which is the
subject of this Note and Loan Agreement, such Additional Sums shall be
payable by Maker as, and shall be deemed to be, Additional Interest, and,
for such purposes only, the agreed upon and "contracted for rate of
interest" of this transaction shall be deemed to be increased by the rate
of interest resulting from the Additional Sums.
The books and records of the Lender reflecting all amounts payable from
time to time pursuant to this Note and other Loan Documents shall be conclusive
and
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binding upon the Maker except in the case of manifest error in calculation. The
Lender shall, at the request of Maker, deliver to Maker a statement reflecting
how the Lender calculated the amount owed under this Note.
This Note is the Note referred to in, and the registered holder is entitled
to the rights and benefits of, the Loan Agreement, which Loan Agreement, among
other things, contains provisions for late payment charges, acceleration of the
maturity hereof upon the happening of certain Events of Default specified
therein, and for repayments and prepayments of principal prior to the maturity
hereof upon the terms and conditions therein specified. This Note is secured by,
among other things the Security Agreement and the holder hereof is entitled to
the rights and benefits of the Security Agreement and the collateral referred to
therein. All of the terms and conditions of the Loan Agreement and the Security
Agreement are hereby incorporated by reference herein to the extent necessary
for the enforcement hereof. The Maker will keep at its principal corporate
offices a register (the "Note Register"), in which, subject to such reasonable
regulations as it may prescribe, it will provide for the registration and
transfer of the Note consistent with the transfer and assignment provisions
contained in the Loan Agreement. The Maker and any agent of the Maker or
guarantor may treat the person in whose name this Note is registered as the
owner of this Note for the purpose of receiving payment of the principal of and
interest and any other amounts, if any, on this Note for all other purposes
whatsoever, whether or not this Note be overdue.
The Maker hereby waives all defenses arising from the Lender's failure to
diligently enforce its rights hereunder, presentment, demand, protest and notice
of any kind.
THE MAKER HEREBY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY ACTION ARISING
DIRECTLY OR INDIRECTLY OUT OF THIS NOTE AND THE ENFORCEMENT THEREOF.
The Lender may extend the time of payment of this Note, postpone the
enforcement hereof, release any collateral, or grant any other indulgences
whatsoever, without affecting or diminishing the Lender's right of recourse
against the Maker, as provided herein and in the Loan Agreement and in the other
Loan Documents, which right is hereby expressly reserved. The failure to assert
any right by the Lender shall not be deemed a waiver thereof.
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This Note may not be changed or modified orally, nor may any of the
provisions hereof be waived orally, and any such change, modification or waiver
shall be effective only if set forth in a writing duly executed by the party to
be charged therewith.
In the event that this Note is placed in the hands of an attorney for
collection, for protection, preservation or enforcement of the rights of the
holder, for suit or to compromise or to take any other action with regard
thereto or concerning any collateral provided pursuant to the Security
Agreements or, the Maker agrees to pay the reasonable fees and disbursements of
said attorney.
The Maker shall be in default hereunder if the Maker shall fail to pay any
principal or interest required to be paid hereunder on the due date for the
payment thereof or if there shall occur and be continuing any other Event of
Default under the Loan Agreement.
THIS NOTE SHALL BE DEEMED TO HAVE BEEN MADE IN AND SHALL BE GOVERNED AND
INTERPRETED BY THE LAWS OF THE STATE OF ARIZONA AND THE RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT
TO THE EXTENT THAT THE LAW OF SOME OTHER JURISDICTION MAY BE MANDATORILY
APPLICABLE TO PROCEEDINGS TAKEN FOR THE ENFORCEMENT OF THE RIGHTS HEREUNDER OF
THE REGISTERED HOLDER HEREOF; PROVIDED, HOWEVER, THAT ANY REMEDIES HEREIN
PROVIDED WHICH SHALL BE VALID UNDER THE LAWS OF THE JURISDICTION WHERE
PROCEEDINGS FOR THE ENFORCEMENT THEREOF SHALL BE TAKEN SHALL NOT BE AFFECTED BY
THE INVALIDITY OF SUCH RIGHTS AND REMEDIES UNDER THE LAWS OF THE STATE OF
ARIZONA.
The Maker hereby agrees that all actions or proceedings initiated by the
Maker and arising directly or indirectly out of this Note shall be litigated
exclusively in the Superior Court of Arizona, Maricopa County, or the United
States District Court for the District of Arizona (the "Arizona Courts") and
that all actions initiated by the Lender and arising directly or indirectly out
of this Note may be litigated in any jurisdiction, at the Lender's discretion.
The Maker and the Lender hereby: (a) expressly submit and consent in advance to
the jurisdiction and venue of the Arizona Courts in any action or proceeding
commenced by the Maker or the Lender in any of the Arizona Courts, and (b) agree
that jurisdiction and venue is proper in such courts. The Maker waives any claim
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that Phoenix, Arizona or the District of Arizona is an inconvenient forum or an
improper forum based on lack of venue. Should either of the Maker or the Lender,
as the case may be, after being properly served, fail to appear or answer any
summons, complaint, process or paper properly served within 30 days after
service thereof, the Maker and the Lender acknowledge that as a result thereof,
an order and/or judgment may be entered by the Lender or the Maker against the
other as demanded or pleaded for in such summons, complaint, process or papers.
The choice of forum set forth herein shall not be deemed to preclude the
enforcement by the Lender or the Maker, as the case may be, of any judgment in
any other appropriate jurisdiction.
If any provision of this Note shall be held invalid or inapplicable to any
circumstance or in any jurisdiction, such invalidity or inapplicability shall
not affect any other provision hereof which can be given effect without regard
to the invalid provision, nor to the same provision to the extent valid or
enforceable in any other applicable jurisdiction, nor shall any such
inapplicability to any circumstance affect the applicability of such terms to
any other or different or subsequent circumstances, all of such terms,
conditions or provisions are deemed severable.
This Note will be binding upon the respective successors and permitted
assigns of the Maker.
[signatures on following page]
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MAKER:
MERCY AIR SERVICE, INC.
By: /s/ David L. Dolstein
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Name: David L. Dolstein
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Title: President
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WITNESS:
/s/ Aaron D. Todd
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