Aviation Sales, LLC v. People Express Airlines, Inc. et al
Filing
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MOTION by Plaintiff Aviation Sales, LLC for judgment Ex Parte Judgment by Confession (Lynch, Daniel)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
AVIATION SALES, LLC,
Plaintiff,
v.
PEOPLE EXPRESS AIRLINES, INC.,
TEM ENTERPRISES d/b/a XTRA
AIRWAYS, and MICHAEL MORISI
Defendants.
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Case No. 13-cv-6791
Hon. Milton I. Shadur
MOTION FOR ENTRY OF EX PARTE JUDGMENT BY CONFESSION
Aviation Sales, LLC (“Aviation Sales”), by its undersigned counsel, submits this Motion
for Entry of an Ex Parte Judgment by Confession against defendants People Express Airlines,
Inc. (“People Express”) and TEM Enterprises d/b/a XTRA Airways (“TEM”), and states as
follows:.
1.
The above-captioned cause was filed on September 19, 2013 and is presently
pending before this Court.
2.
Plaintiff asserts in its Complaint (i) a claim against defendants People Express and
TEM for breach of contract arising out of a promissory note executed by the defendant Morisi, as
President and CEO of People Express and TEM, in favor of Plaintiff dated September 3, 2013 in
the original principal amount of $171,000.00 (the “Note”) (a true and correct copy of the Note is
attached hereto as Exhibit A, pp. 1-4) (Count I) and (ii) a claim against the defendant Michael
Morisi for breach of contract arising out of a Commercial Guaranty executed by Morisi in favor
of Plaintiff dated September 3, 2013 (the “Morisi Guaranty”) (a true and correct coy of the
Morisi Guaranty is attached as Exhibit A, pp. 5-12) (Count II).
3.
735 ILCS 5/2-1301(c) provides, in pertinent part:
(c)...any person for a debt bona fide due may confess judgment by himself or
herself or attorney duly authorized, without process. The application to confess
judgment shall be made in the county in which the note or obligation was
executed...[a] judgment entered by any court in any county other than those
specified herein has no force or validity, anything in the power to confess to the
contrary notwithstanding.
735 ILCS 5/2-1301(c) (West 2009).
4.
The Note expressly provides at page 3 thereof as follows:
Confession of Judgment. MAKERS HEREBY IRREVOCABLY AUTHORIZE
AND EMPOWER ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT
OF RECORD AND TO CONFESS JUDGMENT AGAINST MAKERS FOR
THE UNPAID AMOUNT OF THIS NOTE AS EVIDENCED BY AN
AFFIDAVIT SIGNED BY AN OFFICER OF PAYEE SETTING FORTH THE
AMOUNT THEN DUE, ATTORNEYS' FEES PLUS COSTS OF SUIT, AND
TO RELEASE ALL ERRORS, AND WAIVE ALL RIGHTS OF APPEAL. IF A
COPY OF THIS NOTE, VERIFIED BY AN AFFIDAVIT, SHALL HAVE
BEEN FILED IN THE PROCEEDING, IT WILL NOT BE NECESSARY TO
FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. MAKERS WAIVE
THE RIGHT TO ANY STAY OF EXECUTION AND THE BENEFIT OF ALL
EXEMPTION LAWS NOW OR HEREAFTER IN EFFECT. NO SINGLE
EXERCISE OF THE FOREGOING WARRANT AND POWER TO CONFESS
JUDGMENT WILL BE DEEMED TO EXHAUST THE POWER, WHETHER
OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
INVALID, VOIDABLE, OR VOID; BUT THE POWER WILL CONTINUE
UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME AS
PAYEE MAY ELECT UNTIL ALL AMOUNTS OWING ON THIS NOTE
HAVE BEEN PAID IN FULL. MAKERS HEREBY WAIVE AND RELEASE
ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAKERS
MIGHT HAVE AGAINST ANY ATTORNEY ACTING UNDER THE TERMS
OF AUTHORITY WHICH MAKERS HAVE GRANTED HEREIN ARISING
OUT OF OR CONNECTED WITH THE CONFESSION OF JUDGMENT
HEREUNDER.
Exhibit A, p. 2.
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5.
Plaintiff submits herewith as Exhibit B the Affidavit of Victoria Ricks, sole
Member and Manager of Aviation Sales, verifying the Note and setting forth the amounts from
People Express and TEM due under the Note.
6.
Plaintiff also submits herewith as Exhibit C a Confession executed by Mónica M.
Millán, a licensed Illinois attorney, on behalf of Defendants People Express and TEM confessing
judgment against Defendants pursuant to the express provision of the Note.
7.
Finally, Plaintiff submits herewith as Exhibit D the affidavit of Daniel Lynch
setting forth the attorneys’ fees and costs incurred in prosecuting this matter.
WHEREFORE, Plaintiff, Aviation Sales, respectfully requests that this Court, pursuant to
the express confession of judgment provisions of the Note, along with the Confession submitted
herewith, (a) enter judgment by confession in favor of Plaintiff and against the Defendants
People Express and TEM on Count I of the Complaint and (b) grant such further and additional
relief as this Court may deem just and proper.
Dated: October 16, 2013
Respectfully submitted,
AVIATION SALES, LLC
By: /s/ Daniel Lynch
One of Its Attorneys
Daniel Lynch (ARDC No. 6202499)
Daniel P. Kelly (ARDC No. 6296906)
Lynch & Stern LLP
150 S. Wacker Drive, Suite 2600
Chicago, IL 60606
Telephone: (312) 346-1600
Facsimile: (312) 896-5883
Email: dan@lynchandstern.com
dkelly@lynchandstern.com
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CERTIFICATE OF SERVICE
The undersigned, an attorney, certifies that on October 16, 2013, he caused to be
electronically filed the foregoing Motion for Ex Parte Judgment by Confession by using the
CM/ECF system, copies of which were sent to the parties on the attached service list in the
manner indicated.
/s/ Daniel Lynch
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SERVICE LIST
Case No. 13-cv-06791
VIA FIRST CLASS MAIL
Michael Morisi
902 Bland Ave.
Newport News, VA 23602
TEM Enterprises d/b/a XTRA Airways
c/o CSC Services of Nevada, Inc.
2215-B Renaissance Drive
Las Vegas, NV 89199
People Express Airlines, Inc.
c/o The Company Corporation
2711 Centerville Rd.
Wilmington, DE 19801
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Exhibit A
PROMISSORY NOTE
Makers:
Note Date: September 3, 2013
TEM Enterprises
d/b/a XTRA Airways
805 W. Idaho Street, Suite 400
Boise, ID 83702
Principal Amount: $171,000
Maturity Date: October 3, 2013
People Express Airlines, Inc.
902 Bland Boulevard
Newport News, VA 23602
Payee:
Aviation Sales, LLC
2720 N. Bosworth Ave
Chicago, IL 60614
Promise to Pay. TEM Enterprises d/b/a XTRA Airways and People Express Airlines,
Inc. (“Makers”) hereby promise to pay to the order of Payee, at Payee’s address set forth above
or such other address as Payee may from time to time designate, the principal sum of One
Hundred Seventy-One Thousand Dollars ($171,000.00).
Payment. The Payee of this Promissory Note (the “Note”), in accordance with the
provisions of the June 21, 2013 Preliminary Terms Agreement (“Terms Agreement”) between TEM
Enterprises and Payee, made an advance of $250,000.00 (the “Initial Funding”). Payee
acknowledges that Makers have repaid $100,000.00 of the Initial Funding and a rent payment of
$21,000.00, in accordance with the provisions of the July 19, 2013 Letter Agreement (“Letter
Agreement”). The amount outstanding on the Note shall bear interest thereon from the date hereof
to and including the date this Note is paid in full, at the following fixed rate: from the date of this
Note until the Maturity Date (as defined above), eighteen percent (18%) per annum. Interest
shall be collected based upon a 360-day year multiplied by the actual number of days for which
interest has accrued. Payments shall be made by Makers to Payee in accordance with the
following:
(a)
If Makers make a payment of $150,000.00 on or before September 18, 2013,
Payee shall deem the Note to be satisfied in full;
(b)
If Makers fail to pay $150,000.00 on or before September 18, 2013, Makers
promise to pay to the order of Payee, a monthly rent payment of $21,000.00, in accordance with
the terms of the Letter Agreement, by no later than September 18, 2013;
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(c)
Makers expressly acknowledge that the payment of $21,000.00 due on
Wednesday, September 18, 2013 does not constitute interest on the Note, but rather rent due
under the Letter Agreement; and
(d)
In the event that the $21,000.00 rent payment is timely made on September 18,
2013, Makers promise to pay the order of Payee, a repayment in the amount of $150,000.00 by
Thursday, October 3, 2013.
Collateral. This Note shall be collateralized by the personal guarantee of Michael Morisi
(attached as Exhibit 1 to this Note). Upon the occurrence of an Event of Default (as defined in the
Terms Agreement), both Payee and Makers shall have all the rights and remedies described in the
Terms Agreement.
Prepayment. This Note may be paid in full or part by the Makers at any time prior to the
Maturity Date without premium or penalty.
Attorneys’ Fees; Expenses. Makers will pay and the Payee of this Note shall be
awarded as a part of any judgment upon this Note all reasonable costs of collection paid or
incurred by the Payee in enforcing this Note upon default, including but not limited to attorney
fees and costs related to the preparation, prosecution and appeal of any enforcement action.
Jury Waiver. Makers and Payee hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Makers or Payee against the other.
Confidentiality. This Note and the terms, conditions and information contained herein
are confidential and are between Maker and Payee only and will not be disclosed by a party to
third parties except (a) with the written authority of the other party hereto, (b) so far as may be
necessary for the proper performance of its obligations hereunder, (c) as required by law or as
ordered by a court of competent jurisdiction or by the relevant governmental entity responsible
for taxation or any other applicable regulatory authority, and (d) to such party’s auditors,
attorneys or other professional advisers, lenders, potential lenders, equity participants or potential
equity participants.
Representations and Warranties. Makers represent and warrant to Payee that Makers’
execution, delivery, and performance of this Note does not conflict with, result in a violation of,
or constitute a default under any agreement or other instrument binding upon Makers or any law,
governmental regulation, court decree, or order applicable to Makers or to Makers’ properties.
Michael Morisi has the full authority to execute this Note on behalf of Makers. This Note
constitutes legal, valid, and binding obligations of Makers enforceable against Makers in
accordance with its respective terms.
Governing Law. This Note will be governed by the laws of the State of Illinois, without
regard to its conflict of law provisions. This Note has been accepted by Payee in the State of
Illinois.
Choice of Venue. If there is a lawsuit, Makers submit to the jurisdiction of the courts of
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Cook County, State of Illinois and the Federal courts located in Cook County, State of Illinois.
At the option of the Payee, all lawsuits whether brought by Payee or Makers arising out of or
relating to this Note shall be heard by the courts of Cook County, State of Illinois or the Federal
courts located in Cook County, State of Illinois.
Confession of Judgment. MAKERS HEREBY IRREVOCABLY AUTHORIZE AND
EMPOWER ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF RECORD AND
TO CONFESS JUDGMENT AGAINST MAKERS FOR THE UNPAID AMOUNT OF THIS
NOTE AS EVIDENCED BY AN AFFIDAVIT SIGNED BY AN OFFICER OF PAYEE
SETTING FORTH THE AMOUNT THEN DUE, ATTORNEYS' FEES PLUS COSTS OF
SUIT, AND TO RELEASE ALL ERRORS, AND WAIVE ALL RIGHTS OF APPEAL. IF A
COPY OF THIS NOTE, VERIFIED BY AN AFFIDAVIT, SHALL HAVE BEEN FILED IN
THE PROCEEDING, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL AS A
WARRANT OF ATTORNEY. MAKERS WAIVE THE RIGHT TO ANY STAY OF
EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OR HEREAFTER
IN EFFECT. NO SINGLE EXERCISE OF THE FOREGOING WARRANT AND POWER TO
CONFESS JUDGMENT WILL BE DEEMED TO EXHAUST THE POWER, WHETHER OR
NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID,
VOIDABLE, OR VOID; BUT THE POWER WILL CONTINUE UNDIMINISHED AND MAY
BE EXERCISED FROM TIME TO TIME AS PAYEE MAY ELECT UNTIL ALL AMOUNTS
OWING ON THIS NOTE HAVE BEEN PAID IN FULL. MAKERS HEREBY WAIVE AND
RELEASE ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAKERS MIGHT
HAVE AGAINST ANY ATTORNEY ACTING UNDER THE TERMS OF AUTHORITY
WHICH MAKERS HAVE GRANTED HEREIN ARISING OUT OF OR CONNECTED WITH
THE CONFESSION OF JUDGMENT HEREUNDER.
Successor Interests. The terms of this Note shall be binding upon Makers, and upon
Makers’ heirs, personal representatives, successors, and assigns, and shall inure to the benefit of
Payee and its successors and assigns.
General Provisions. If any part of this Note cannot be enforced, this fact will not affect
the rest of the Note. Payee may delay or forgo enforcing any of its rights or remedies under this
Note without losing them. Makers and any other person who signs, guarantees, or endorses this
Note, to the extent allowed by law, waive presentment, notice of dishonor and protest, and assent
to any extension of time with respect to any payment due under this Note, to any substitution or
release of collateral and to the addition or release of any party. No waiver of any payment or
other right under this Note will operate as a waiver of any other payment or right. The
obligations under this Note are joint and several. All capitalized terms first appearing above will
have the meanings ascribed wherever they appear in this Note.
[Remainder of this Page Intentionally Left Blank.]
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PRIOR TO SIGNING THEIS NOTE, MAKERS READ AND UNDERSTOOD ALL
THE PROVISIONS OF THIS NOTE. MAKERS AGREE TO THE TERMS OF THE
NOTE.
MAKERS ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THIS
PROMISSORY NOTE.
MAKERS:
TEM ENTERPRISES
PEOPLE EXPRESS AIRLINES, INC.
By:
By:
Michael
si, President & CEO
Michael Morisi, President & CEO
AS TO THE REPRESENTATIONS AND WARRANTIES:
MICHAEL MORISI
By:
Michael Mon. nd idual y
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EXHIBIT 1
COMMERCIAL GUARANTY
Borrower:
TEM Enterprises
d/b/a XTRA Airways
805 W. Idaho Street
Suite 400
Boise, ID 83702
Lender:
Aviation Sales, LLC
2720 N. Bosworth Ave
Chicago, IL 60614
People Express, Inc.
902 Bland Boulevard
Newport News, VA 23602
Guarantor:
Michael Morisi
902 Bland Ave.
Newport News, VA 23602
MAXIMUM GUARANTY LIABILITY: $171,000.00
CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and
valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual
payment and satisfaction of Guarantor’s Share of the Indebtedness of Borrower to Lender, and
the performance and discharge of all Borrower's obligations under that certain Promissory Note
to Borrower in the original amount of $171,000.00, including but not limited to any and all
renewals and/or extensions thereof, the Preliminary Terms Agreement and the other Related
Documents. This is a guaranty of payment and performance and not of collection, so Lender can
enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies
against anyone else obligated to pay the Indebtedness or against any collateral securing the
Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any
payments to Lender or its order, on demand, in legal tender of the United States of America, in
same-day funds, without set-off or deduction or counterclaim, and will otherwise perform
Borrower's obligations under the Note, the Preliminary Terms Agreement and Related
Documents.
INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty means all of the principal
amount outstanding from time to time and at any one or more times, accrued unpaid interest
thereon and all collection costs and legal expenses related thereto permitted by law, attorneys'
fees, arising from any and all debts, liabilities and obligations of every nature or form, now
existing or hereafter arising or acquired, that Borrower individually or collectively or
interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without
limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, liabilities and obligations under any interest rate protection agreements or foreign
currency exchange agreements or commodity price protection agreements, other obligations, and
liabilities of Borrower, and any present or future judgments against Borrower, future advances,
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loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts,
liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by
their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or
undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or
surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or
non-negotiable instrument or writing; originated by Lender or another or others; barred or
unenforceable against Borrower for any reason whatsoever; for any transactions that may be
voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then
reduced or extinguished and then afterwards increased or reinstated.
If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from
Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not
(unless specifically provided below to the contrary) affect or invalidate any such other
guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this
Guaranty.
GUARANTOR’S SHARE OF THE INDEBTEDNESS. The words “Guarantor’s Share of the
Indebtedness” as used in this guaranty means an amount not to exceed One Hundred and
Seventy-One Thousand and no/100 Dollars ($171,000.00) of the amount of Indebtedness that is
outstanding from time to time and at any one or more times. Guarantor’s Share of the
Indebtedness will only be reduced by sums actually paid by Guarantor to Lender under this
Guaranty, but will not be reduced by sums paid to Lender from any other source.
CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH
GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT,
PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO
LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN
AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE
INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S
OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING
AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE
OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower,
and will continue in full force until all the Indebtedness incurred or contracted before receipt by
Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of
Guarantor's other obligations under this Guaranty shall have been performed in full. If
Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's
written notice of revocation must be mailed to Lender, by certified mail, at Lender's address
listed above or such other place as Lender may designate in writing. Written revocation of this
Guaranty will apply only to new Indebtedness created after actual receipt by Lender of
Guarantor's written revocation. For this purpose and without limitation, the term "new
Indebtedness" does not include the Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated,
determined or due. For this purpose and without limitation, "new Indebtedness" does not include
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all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a
commitment that became binding before revocation; any renewals, extensions, substitutions, and
modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the
Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's
actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the same manner in
which Guarantor might have terminated it and with the same effect. Release of any other
guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of
Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated
that fluctuations may occur in the aggregate amount of the Indebtedness covered by this
Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of
the Indebtedness, even to zero dollars ($0.00), shall not constitute a termination of this Guaranty.
This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long
as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to
time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set
forth above, to make one or more additional secured or unsecured loans to Borrower, to lease
equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B)
to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time
for payment or other terms of the Indebtedness or any part of the Indebtedness, including
increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated
and may be for longer than the original loan term; (C) to take and hold security for the payment
of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide
not to perfect, and release any such security, with or without the substitution of new collateral;
(D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties,
endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to
determine how, when and what application of payments and credits shall be made on the
Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell,
transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or
transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this
Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has
full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty
do not conflict with or result in a default under any agreement or other instrument binding upon
Guarantor and do not result in a violation of any law, regulation, court decree or order applicable
to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender,
sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all
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of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide
to Lender financial and credit information in form acceptable to Lender, and all such financial
information which currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material respects and fairly present
Guarantor's financial condition as of the dates the financial information is provided; (G) no
material adverse change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred which may
materially adversely affect Guarantor's financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action (including those for unpaid taxes)
against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor
as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of
obtaining from Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any facts, events,
or circumstances which might in any way affect Guarantor's risks under this Guaranty, and
Guarantor further agrees that, absent a request for information, Lender shall have no obligation
to disclose to Guarantor any information or documents acquired by Lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any
right to require Lender (A) to continue lending money or to extend other credit to Borrower;
(B) to make any presentment, protest, demand, or notice of any kind, including notice of any
nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any
action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or additional loans or
obligations; (C) to resort for payment or to proceed directly or at once against any person,
including Borrower or any other guarantor; (D) to proceed directly against or exhaust any
collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal property security
held by Lender from Borrower or to comply with any other applicable provisions of the Uniform
Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit
any act or omission of any kind, or at any time, with respect to any matter whatsoever.
Guarantor further waives and agrees not to assert or claim at any time any deductions to the
amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand,
recoupment or similar right, whether such claim, demand or right may be asserted by the
Borrower, the Guarantor, or both. The undersigned, as a further inducement to the Lender to
extend credit to the Borrower hereby waives any and all defenses otherwise available under
Section 1 of the Illinois Sureties Act.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the circumstances, the waivers
are reasonable and not contrary to public policy or law. If any such waiver is determined to be
contrary to any applicable law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that
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the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower
becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have
against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter
have against Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both
Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the
Indebtedness. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to file financing statements and continuation statements and to execute
documents and to take such other actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.
CONFESSION OF JUDGMENT.
GUARANTOR HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS ANY ATTORNEY-AT-LAW TO APPEAR IN ANY
COURT OF RECORD AND TO CONFESS JUDGMENT AGAINST GUARANTOR FOR
THE UNPAID AMOUNT OF THIS GUARANTY AS EVIDENCED BY AN AFFIDAVIT
SIGNED BY AN OFFICER OF LENDER SETTING FORTH THE AMOUNT THEN DUE,
ATTORNEYS' FEES PLUS COSTS OF SUIT, AND TO RELEASE ALL ERRORS, AND
WAIVE ALL RIGHTS OF APPEAL. IF A COPY OF THIS GUARANTY, VERIFIED BY AN
AFFIDAVIT, SHALL HAVE BEEN FILED IN THE PROCEEDING, IT WILL NOT BE
NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY.
GUARANTOR WAIVES THE RIGHT TO ANY STAY OF EXECUTION AND THE
BENEFIT OF ALL EXEMPTION LAWS NOW OR HEREAFTER IN EFFECT. NO SINGLE
EXERCISE OF THE FOREGOING WARRANT AND POWER TO CONFESS JUDGMENT
WILL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH
EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID;
BUT THE POWER WILL CONTINUE UNDIMINISHED AND MAY BE EXERCISED
FROM TIME TO TIME AS LENDER MAY ELECT UNTIL ALL AMOUNTS OWING ON
THIS GUARANTY HAVE BEEN PAID IN FULL. GUARANTOR HEREBY WAIVES AND
RELEASES ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH GUARANTOR
MIGHT HAVE AGAINST ANY ATTORNEY ACTING UNDER THE TERMS OF
AUTHORITY WHICH GUARANTOR HAS GRANTED HEREIN ARISING OUT OF OR
CONNECTED WITH THE CONFESSION OF JUDGMENT HEREUNDER.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this
Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in this
Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given
in writing and signed by the party or parties sought to be charged or bound by the
alteration or amendment.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs
and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in
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connection with the enforcement of this Guaranty.
Caption Headings. Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions of this Guaranty.
Governing Law. THIS GUARANTY WILL BE GOVERNED THE LAWS OF THE
STATE OF ILLINOIS, WITHOUT REGARD TO ITS CONFLICT OF LAWS
PROVISIONS. THIS GUARANTY HAS BEEN ACCEPTED BY LENDER IN THE
STATE OF ILLINOIS.
Choice of Venue. If there is a lawsuit, Guarantor submits to the jurisdiction of the courts
of Cook County, State of Illinois and the Federal courts located in Cook County, State of
Illinois. At the option of the Lender, all lawsuits whether brought by Lender or
Guarantor arising out of or relating to this Guaranty or the Related Documents shall be
heard by the courts of Cook County, State of Illinois or the Federal courts located in
Cook County, State of Illinois.
Integration. Guarantor further agrees that Guarantor has read and fully understands the
terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's
attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions
and parol evidence is not required to interpret the terms of this Guaranty. Guarantor
hereby indemnifies and holds Lender harmless from all losses, claims, damages, and
costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any
breach by Guarantor of the warranties, representations and agreements of this paragraph.
Interpretation. In all cases where there is more than one Borrower or Guarantor, then
all words used in this Guaranty in the singular shall be deemed to have been used in the
plural where the context and construction so require; and where there is more than one
Borrower named in this Guaranty or when this Guaranty is executed by more than one
Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any
one or more of them. The words "Guarantor," "Borrower," and "Lender" include the
heirs, successors, assigns, and transferees of each of them. If a court finds that any
provision of this Guaranty is not valid or should not be enforced, that fact by itself will
not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court
will enforce the rest of the provisions of this Guaranty even if a provision of this
Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower
or Guarantor are corporations, partnerships, limited liability companies, or similar
entities, it is not necessary for Lender to inquire into the powers of Borrower or
Guarantor or of the officers, directors, partners, managers, or other agents acting or
purporting to act on their behalf, and any indebtedness made or created in reliance upon
the professed exercise of such powers shall be guaranteed under this Guaranty.
Notices. Any notice required to be given under this Guaranty shall be given in writing,
and, except for revocation notices by Guarantor, shall be effective when actually
delivered, when actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if mailed, when
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deposited in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Guaranty. All
revocation notices by Guarantor shall be in writing and shall be effective upon delivery to
Lender as provided in the section of this Guaranty entitled "DURATION OF
GUARANTY." Any party may change its address for notices under this Guaranty by
giving formal written notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address. Unless otherwise provided or
required by law, if there is more than one Guarantor, any notice given by Lender to any
Guarantor is deemed to be notice given to all Guarantors.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No delay or
omission on the part of Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of this Guaranty shall not
prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance
with that provision or any other provision of this Guaranty. No prior waiver by Lender,
nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any
of Lender's rights or of any of Guarantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Guaranty, the granting of such
consent by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of
Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the
parties, their successors and assigns.
Waive Jury. LENDER AND GUARANTOR HEREBY WAIVE THE RIGHT TO ANY
JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT
BY EITHER LENDER OR GUARANTOR AGAINST THE OTHER.
DEFINITIONS. Words and terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require. Words and terms not otherwise defined in
this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code.
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EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,
EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE
UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO
LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN
THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF
GUARANTY”. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO
MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED SEPTEMBER 4, 2013, EFFECTIVE AS OF SEPTEMBER
3, 2013.
GUARANTOR:
Michael Morisi, Individually
Exhibit B
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
AVIATION SALES, LLC,
Plaintiff,
v.
PEOPLE EXPRESS AIRLINES, INC.,
TEM ENTERPRISES d/b/a XTRA
AIRWAYS, and MICHAEL MORISI
Defendants.
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Case No. 13-cv-6791
Hon. Milton I. Shadur
DECLARATION OF VICTORIA RICKS
I, Victoria Ricks, being first duly sworn, depose and upon my oath state that if called to
testify in these proceedings, I would testify as follows:
1.
I am the sole Member and Manager of Aviation Sales, LLC (“Aviation Sales”) the
plaintiff in the above-captioned cause, and I am duly authorized to make this affidavit on behalf
of Plaintiff.
2.
Pursuant to my duties as Manager of Aviation Sales, I have personal knowledge
of the matters related to the transaction between Plaintiff and the defendants, People Express
Airlines, Inc. (“People Express”), TEM Enterprises d/b/a XTRA Airways (“TEM”), and Michael
Morisi (“Morisi”) and the documents maintained in the ordinary course of business of Plaintiff
relative to the transaction as further set forth in this Affidavit. I have reviewed the allegations of
the Complaint for Confession filed on behalf of Plaintiff in the above-captioned cause and they
are true.
3.
Aviation Sales, LLC is a Delaware limited liability company. I am the sole
member of Aviation Sales.
Aviation Sales’ business includes purchasing and leasing
commercial aircraft.
4.
A true and correct copy of the Promissory Note dated September 3, 2013 in the
original principal amount of $171,000.00 executed by Michael Morisi, as the President and CEO
of People Express and TEM, in favor of Plaintiff is attached to the Complaint as Exhibit A, pp.
1-4, and incorporated herein by reference (the “Note”).
5.
People Express and TEM have been in default under the terms and conditions of
the Note as a result of their failure to make payments required by the Note in a timely manner, on
or before September 18, 2013.
6.
As a result of the aforesaid breach by People Express and TEM of their
obligations to Plaintiff under the Note, as of October 9, 2013, there is due and owing to Aviation
Sales from People Express and TEM, the following amounts:
Principal:
Accrued Interest:
TOTAL:
$171,000.00
$3,078.00
$174,078.00
Per the terms of the promissory note, the interest rate is $85.50 per day.
7.
In addition to the foregoing, People Express and TEM agreed to reimburse
Plaintiff for attorneys’ fees and related costs incurred by Plaintiff in enforcing its rights arising
out of the Note. As of the filing of this Affidavit, Plaintiff has incurred attorneys’ fees in
connection with this matter in the amount of $3,662.50 and expenses of $1,068.60.
Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true
and correct.
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Exec
cuted this 16th day of Oc
6
ctober, 2013
3.
Vict
toria Ricks
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Exhibit C
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
AVIATION SALES, LLC,
Plaintiff,
v.
PEOPLE EXPRESS AIRLINES, INC.,
TEM ENTERPRISES d/b/a XTRA
AIRWAYS, and MICHAEL MORISI
Defendants.
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Case No. 13-cv-6791
Hon. Milton I. Shadur
CONFESSION
Defendants, People Express Airlines, Inc. (“People Express”) and TEM Enterprises d/b/a
XTRA Airways (“TEM”), individually and jointly and severally, by their attorney, Mónica M.
Millán, waive service of process and confess that there is due to plaintiff, Aviation Sales, LLC,
under the Promissory Note at issue in the above-captioned cause, the following amounts as of
October 9, 2013:
Principal:
Accrued Interest:
TOTAL:
Attorneys’ Fees:
Costs & Expenses:
TOTAL:
$171,000.00
$3,078.00
$174,078.00
$3,662.50
$1,068.60
$178,809.10
Defendants, People Express and TEM agree that judgment may be entered against them,
individually and jointly and severally, for the total set forth above and for costs and attorneys
fees and hereby release and waive all rights as authorized in the warrant of attorney set forth in
the Promissory Note.
Dated: October 16, 2013
Respectfully submitted,
PEOPLE EXPRESS AIRLINES, INC. and
TEM
ENTERPRISES
d/b/a
XTRA
AIRWAYS
By: Mónica M. Millán
One of Their Attorneys
Mónica M. Millán (ARDC No. 6288420)
Lynch & Stern LLP
150 S. Wacker Drive, Suite 2600
Chicago, IL 60606
Telephone: (312) 346-1600
Facsimile: (312) 896-5883
Email: mmillan@lynchandstern.com
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Exhibit D
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