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Hawker Aircraft Sale Agreement

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Sectors: Services
Governing Law: North Carolina, View North Carolina State Laws
Effective Date: January 09, 1997
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ASSIGNMENT AND ASSUMPTION AGREEMENT


ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as of January 9, 1997, among STEVEN MYERS & ASSOCIATES, INC., a California corporation (the "Assignor"), SUMMIT AVIATION, INC., a California corporation (the "Assignee"), and NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation ("Secured Party").


Reference is made to (a) the Aircraft Security Agreement (the "Security Agreement") dated as of April 25, 1996, among the Assignor, as Debtor, and Secured Party, as Secured Party as more particularly described on Annex I attached hereto, (b) the Secured Promissory Note (the "Note") dated April 25, 1996, from the Assignor to the Secured Party, (c) the Guarantees (the "Guarantees") dated April 25, 1996, from Mr. Steven Myers and Mrs. Paula Myers (each a "Guarantor" collectively, the "Guarantors") to the Secured Party and (d) the Aircraft (the "Aircraft") described in the Security Agreement. Loans made to the Assignor by the Secured Party under the Security Agreement in the aggregate principal amount of $4,962,248.28 are outstanding as of the date hereof.


The Assignor and the Assignee are proposing that Assignor sell the Aircraft to Assignee (the "Transaction"), and in connection therewith, the Assignee will assume the due and punctual payment of all amounts payable by the Assignor under, and the due and punctual performance and observance of all the terms, covenants, agreements and conditions of, the Security Agreement and the Note to the same extent as if the Assignee had been the original party to the Security Agreement and the Note. As a condition to the Transaction, the Secured Party has required that such assumption be separately evidenced by this Agreement and that the Guarantors each enter into a new guarantee (a "New Guarantee") in substantially the form of the Guarantees.


Accordingly, the Assignor and the Assignee, intending to be legally bound, hereby agree with the Secured Party as follows:


SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Security Agreement.


SECTION 2. Assignment and Assumption. The Assignor hereby assigns, transfers and conveys to the Assignee, as the new owner of the Aircraft, all of the Assignor's rights, interests, duties, obligations and liabilities in, to and arising under the Security Agreement and the Note. The Assignee hereby accepts and acknowledges its assumption of the Security Agreement and the Note and assumes all of the obligations of the Assignor under the Security Agreement and the Note, including the due and punctual payment of the principal of and interest on the Loan, when and as due, and the due and punctual performance and observance of all the terms, covenants, agreements and conditions of the Security Agreement and the Note to be performed or observed by the Assignor, to the same extent as if the Assignee had been the original party the Security Agreement and the Note (collectively, the "Assigned Obligations"). Upon the execution and delivery hereof by the Assignor, the Assignee and the Secured Party and upon the


2 satisfaction of all the conditions set forth in Exhibit "A" hereto, the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the Assigned Obligations. The filing of this Agreement with the FAA shall be deemed evidence of the satisfaction of the conditions set forth in Exhibit "A" hereto.


SECTION 3. Release. Upon the assignment to, and assumption by, Assignee of all of the rights and Assigned Obligations, Assignor shall be released of its duties, obligations and liabilities under the Security Agreement and the Note.


SECTION 4. Representations and Warranties. Each of the Assignor and the Assignee represents and warrants with respect to itself to the Secured Party that (a) all representations and warranties made by it in the Security Agreement, before the Transaction with respect to Assignor, and after the Transaction with respect to Assignee, are and will be true and correct in all material respects, except to the extent such representations and warranties expressly relate to an earlier date, in which case they will be true and correct as of such specific date, and (b) all conditions set forth in Exhibit "A" hereto have been satisfied.


SECTION 5. Indemnification. Each of the Assignor and the Assignee agrees to indemnify the Secured Party, its affiliates and its directors, officers, agents and employees (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee by reason of any breach of or inaccuracy in the representations, warranties and covenants made by the Assignor or Assignee in this Agreement on and as of the date hereof.


SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina.


SECTION 7. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.


SECTION 8. Consent of the Secured Party. Secured Party hereby consents to the transfer of the Aircraft to the Assignee, the charter of the Aircraft by the Assignee to the Assignor and the assignment and assumption of the Security Agreement and the Note pursuant to the terms hereof. Secured Party hereby waives the requirements of Section 4.3(a) of the Security Agreement solely for this transfer but not for any other transfers.


SECTION 9. Amendment of Security Agreement. Section 4.3(a) of the Security Agreement is hereby amended in its entirety to read as follows:


"(a) Conveyance of Interest in Collateral. Sell, lease, assign,
transfer, convey, Grant an interest in, exchange or otherwise dispose of
any of the Collateral, any part thereof or any interest therein or
otherwise cause or permit any of the foregoing to occur; provided, that
Debtor may enter into an aircraft charter agreement with a carrier
appropriately certified under Part 135 of FAR so long as such charter
agreement is subject and subordinate to the Security


-2- 3
Agreement; provided further, that the Aircraft and Debtor are at all
times in compliance with all statutes, laws, ordinances, regulations
and standards or directives relating to the Aircraft and the use or
operation thereof issued by any governmental agency with jurisdiction
over Debtor or the Aircraft, the non-compliance with which would have
a material adverse effect on the Aircraft, the Secured Party or the
Secured Party's security interest in the Aircraft."


-3- 4
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.


STEVEN MYERS & ASSOCIATES, INC.,
as Assignor


By /s/ STEVEN S. MYERS
-----------------------------------
Name: Steven S. Myers
Title: President


SUMMIT AVIATION, INC.,
as Assignee


By /s/ STEVEN S. MYERS
-----------------------------------
Name: Steven S. Myers
Title: President


NATIONSBANC LEASING CORPORATION OF
NORTH CAROLINA,
as Secured Party


By /s/ HERBERT T. THURAU
-----------------------------------
Name: Herbert T. Thurau
Title: Senior Vice President


-4- 5
EXHIBIT "A"


CONDITIONS TO ASSIGNMENT AND ASSUMPTION


In order to be entitled to the rights and be obligated to perform the Assumed Obligations, Assignee must provide, at Assignee's sole cost and expense, to the Secured Party, the following documentation:


1. Assignment and Assumption Agreement executed by the parties thereto;


2. Federal Aviation Administration ("FAA") Bill of Sale from Assignor to
Assignee;


3. the New Guarantees;


4. Uniform Commercial Code filings as deemed appropriate by the Secured
Party's counsel duly executed by Assignee;


5. the FAA Aircraft Registration Application in the name of the Assignee
regarding the Aircraft;


6. evidence of payment of any and all sales, transfer, use, documentation
or similar taxes due in connection with the acquisition of the
Aircraft by Assignee;


7. certificates of insurance required under Section 5.1 of the Security
Agreement amended to reflect the change in ownership of the Aircraft;


8. Opinion of FAA counsel;

9. Opinion of counsel to Assignee;


10. good standing certificates from the Secretary of State of Assignee's
state of incorporation and for the state where the home airport for
the Aircraft is located; and


11. an officer's certificate from Assignee (A) certifying as to
Assignee's articles of incorporation, by-laws and resolutions (B)
containing an incumbency certificate of Assignee including the
name(s), title(s) and specimen signature(s) of the person(s)
authorized on behalf of Assignee to execute the Assignment and
Assumption Agreement, (C) stating that no material adverse change has
occurred in the condition of the Assignee (financial or otherwise)
since the most recent financial statements of Assignee were delivered
to Secured Party that would impair the ability of Assignee to pay or
perform its obligations hereunder and (D) stating that no Default or
Event of Default shall have occurred and be continuing as of the date
hereof.


6
ANNEX I


DESCRIPTION OF SECURITY AGREEMENT


Aircraft Loan and Security Agreement dated as of April 25, 1996 between Steven Myers & Associates, Inc., as debtor, and NationsBanc Leasing Corporation of North Carolina, as secured party, which was recorded by the Federal Aviation Administration on May 1, 1996 and assigned Conveyance No. P06580.


7
GUARANTEE


FOR VALUE RECEIVED and in consideration of any financial accommodations now or hereafter made to Summit Aviation, Inc. (together with its successors and assigns, "Obligor"), which accommodations will be to the direct interest and advantage of the undersigned, by NationsBanc Leasing Corporation of North Carolina ("NationsBanc"), and to induce NationsBanc from time to time to make any such accommodations to Obligor and/or enter into any loan or lease agreement with Obligor with regard to any such accommodations, the undersigned and Nat
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