AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE
THIS INSTRUMENT IS SUBJECT TO A DEBT SUBORDINATION AGREEMENT
IN FAVOR OF BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION DATED JANUARY 23, 1998.
$5,000,000 Orange County, California
February 3, 1998
FOR VALUE RECEIVED, the undersigned, Hawker Pacific Aerospace, a
California corporation ("Borrower"), promises to pay to Unique Investment
Corporation, a California corporation ("Lender"), or order, at such place as
Lender from time to time may designate, the principal sum of Five Million
Dollars ($5,000,000), together with interest on the unpaid principal balance as
set forth herein, with principal and interest payable at the times and in the
manner set forth in this Note. Reference is made to the Amended and Restated
Business Loan Agreement, dated January 23, 1998 (the "Loan Agreement"), between
Borrower and Bank of America National Trust and Savings Association ("Bank").
This Amended and Restated Subordinated Promissory Note is the Subordinated Note
referred to in the Loan Agreement.
1. MATURITY. The entire unpaid principal balance of this Note shall be
due and payable on the earlier of (i) 180 days after the termination of the Loan
Agreement or (ii) June 30, 2005 (the "Maturity Date").
2. INTEREST. Interest on the unpaid balance of this Note shall accrue at
the rate of 11.8% per annum from the date hereof through the Maturity Date, and
shall accrue on the basis of actual days based on a 365-day year. Interest
shall be payable monthly in arrears on the tenth day of each calendar month;
provided, however, the first such payment shall be for the period commencing as
of the date hereof and ending on February 28, 1998.
3. NO PREPAYMENT PENALTY.
At no time shall Borrower be charged a prepayment penalty or yield
maintenance fee of any kind.
4. BLOCKING RIGHTS.
During the period commencing on the date hereof and ending upon the
Maturity Date, should an Event of Default (as defined in the Loan Agreement)
occur under the Loan Agreement, Bank shall have the right by delivering written
notice thereof to Borrower and
Lender to (i) block all payments hereunder and (ii) to prevent Lender from
exercising any of its rights and remedies hereunder in the event of such
blockage of payments all as set forth in the Subordination Agreement, dated as
of the date hereof, between Borrower, Lender, Bank, Melanie L. Bastian, and
Hawker Pacific Aerospace Limited.
5. DEFAULT.
In the event of any default in the performance or observance of any
covenant or obligation of Borrower under this Note, Lender may elect, without
notice or demand to Borrower, to declare all principal and accrued and unpaid
interest under this Note immediately due and payable. Any failure of Lender to
make such election following a default or defaults shall not constitute a waiver
of Lender's right to make the election in the event of any subsequent default.
6. LATE PAYMENT CHARGE.
If any payment under this Note (whether of principal or interest or both,
and including the payment due on the Maturity Date or upon any acceleration of
this Note) is not paid within ten (10) days after the date on which it is due,
Borrower shall pay to Lender, in addition to the delinquent payment and without
any requirement of notice or demand by Lender, a late payment charge equal to
two percent (2%) of the amount of the delinquent payment. Borrower expressly
acknowledges and agrees that the foregoing late payment charge is reasonable
under the circumstances existing on the date of this Note, that it would be
extremely difficult and impractical to fix Lender's actual damages arising out
of any late payment and that the foregoing late payment charge shall be presumed
to be the actual amount of such damages incurred by Lender. No provision in
this Note (including without limitation the provisions for a late payment
charge) shall be construed as in any way excusing Borrower from its obligation
to make each payment under this Note promptly when due. All payments made
hereunder shall be applied first to late payment charges and accrued but unpaid
interest until all such charges and interest are paid, and then to principal.
7. COSTS OF COLLECTION.
Borrower agrees to pay all costs and expenses incurred by Lender, including
without limitation attorneys' fees and costs, in the event (i) this Note or any
portion of this Note is placed for collection; (ii) suit is instituted to
collect this Note or any portion of this Note; (iii) any bankruptcy, insolvency,
reorganization proceeding or receivership involving Borrower or any affiliate of
Borrower occurs in which Lender is required to appear, or from which Lender is
required to seek relief; and/or (iv) Lender
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is required to engage an attorney to cause Borrower to comply with any of the
provisions hereof.
8. CERTAIN WAIVERS.
Borrower and all endorsers jointly and severally waive diligence, grace,
demand, presentment for payment, exhibition of this Note, protest, notice of
protest, notice of dishonor, notice of demand, notice of nonpayment, and any and
all exemption rights against the indebtedness evidenced by this Note, and agree
to any and all extensions or renewals from time to time without notice and to
any partial payments of this Note made before or after maturity and that no such
extension, renewal or partial payment shall release any one or all of them from
the obligation of payment of this Note or any installment of this Note, and
consent to offsets of any sums owed to any one or all of them by Lender at any
time.
9. CONSTRUCTION OF NOTE.
Headings in this Note are solely for convenience and are not to be referred
to in construing this Note. All references to paragraphs are to paragraphs in
this Note. This Note shall be governed by, interpreted and enforced under and
according to the laws of the State of California. If a law which applies to
this Note and sets maximum interest rates and loan charges is finally
interpreted so that the interest or other loan charges collected or to be
collected in connection with this Note exceed the lawful limits, then (i) such
interest or loan charge shall thereafter be reduced to the permitted limit and
(ii) any sums already collected from Borrower which exceed the permitted limit
will be refunded to Borrower. Lender may choose to make this refund by reducing
the principal owed under this Note or by making a direct payment to Borrower.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF NOTE.
In the event of the loss, theft or destruction of this Note, upon
Borrower's receipt of a reasonably satisfactory indemnification agreement
executed in favor of Borrower by the party who held this Note immediately prior
to its loss, theft or destruction, or in the event of the mutilation of this
Note, upon surrender to the Borrower of the mutilated Note, Borrower shall
execute and deliver to the holder a new promissory note in form and content
identical to this Note in lieu of the lost, stolen, destroyed or mutilated Note.
11. NOTICES.
All notices and other communications pertaining hereto shall be in writing
and shall be deemed to have been duly given when delivered personally, or two
days after being sent via overnight
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courier, postage prepaid, to the following addresses or to such other address or
addresses as Borrower or Lender may from to time designate in writing:
To Borrower:
11240 Sherman Way
Sun Valley, California 91352
Attention: David L. Lokken
To Lender:
1831 South Ritchey Street
Santa Ana, California 92705
Attention: Daniel J. Lubeck
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
Borrower on and as of the date first above written.
BORROWER:
Hawker Pacific Aerospace,
a California corporation
By: /s/ David L. Lokken
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David L. Lokken,
President
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