EXHIBIT 10.1
 

FOURTH AMENDED AND RESTATED
 
LOAN AND SECURITY AGREEMENT
 
between
 
AEROCENTURY CORP.,
 
as Borrower
 
THE FINANCIAL INSTITUTIONS PARTIES HERETO
 
FROM TIME TO TIME,
 
as Lenders
 
and
 
MUFG UNION BANK, N.A.,
 
as Administrative Agent
 
 
 
May 1, 2020
 
 
 
 
 

 
AeroCentury – Fourth Amended and Restated Loan and Security Agreement
 
 

 

 
TABLE OF CONTENTS
 
Page
 
1. DEFINITIONS AND RULES OF CONSTRUCTION 
 
1.1 
Defined Terms 
1.2 
Accounting Terms 
1.3 
UCC 
1.4 
Construction 
1.5 
USA Patriot Act Notice 
1.6 
Rounding 
1.7 
Deliveries 
1.8 
Division 
 
2. TERM LOAN COMMITMENT 
 
2.1 
Term Loans 
2.2 
Payment of Interest; Interest Rate 
2.3 
Maximum Rate of Interest 
2.4 
Fees 
2.5 
Late Payments 
2.6 
Prepayment 
2.7 
Term; Repayment of Loans 
2.8 
[Reserved] 
2.9 
Evidence of Loans; Accounting 
2.10 
Manner of Payment 
2.11 
Application of Payments 
2.12 
Use of Proceeds 
2.13 
All Obligations to Constitute One Obligation 
2.14 
Authorization to Make Loans 
2.15 
Authorization to Debit Accounts 
2.16 
[Reserved] 
2.17 
Withholding of Taxes 
2.18 
Restricted Account 

3. SECURITY 
 
3.1 
Grant of Security Interest 
3.2 
Priority of Agent’s Security Interest 
3.3 
Agent’s Rights 
3.4 
Power of Attorney 
3.5 
Grant of License to Use Intellectual Property Collateral 
3.6 
Reinstatement 
3.7 
Release of Security Interest 
3.8 
Consent to Disposition of Aircraft 238 
 
4. CONDITIONS PRECEDENT 
 
4.1 
Conditions Precedent to Closing 
4.2 
Covenant To Deliver 
 
5. REPRESENTATIONS AND WARRANTIES 
 
5.1 
Corporate Existence; Compliance with Law 
5.2 
Executive Offices; Corporate or Other Names; Conduct of Business 
5.3 
Authority; Compliance with Other Agreements and Instruments and Government
Regulations 
5.4 
No Governmental Approvals Required 
5.5 
Subsidiaries 
5.6 
Financial Statements 
5.7 
No Other Liabilities; No Material Adverse Changes 
5.8 
Title To and Location of Property 
5.9 
Intellectual Property 
5.10 
Litigation 
5.11 
Binding Obligations 
5.12 
No Default 
5.13 
ERISA 
5.14 
Regulation U; Investment Company Act 
5.15 
Disclosure 
5.16 
Tax Liability 
5.17 
Hazardous Materials 
5.18 
Security Interests 
5.19 
Insurance 
5.20 
Leases and Equipment 
5.21 
Cape Town Convention 
5.22 
Depreciation Policies 
5.23 
Swap Contracts 
5.24 
Eligible Leases 
5.25 
Preservation of International Interests and Liens 
5.26 
Solvency 
5.27 
Anti-Corruption Laws; Sanctions 
5.28 
Deposit Accounts 
 
6. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS) 
 
6.1 
Payment of Taxes and Other Potential Liens 
6.2 
Preservation of Existence 
6.3 
Maintenance of Property 
6.4 
Maintenance of Insurance 
6.5 
Compliance with Applicable Law 
6.6 
Inspection Rights 
6.7 
Keeping of Records and Books of Account 
6.8 
Compliance with Agreements 
6.9 
Use of Proceeds 
6.10 
Hazardous Materials Laws 
6.11 
Future Subsidiaries 
6.12 
Payment of Obligations 
6.13 
Conduct of Business 
6.14 
Further Assurances; Schedule Supplements 
6.15 
Excess Cash 
6.16 
Subordination of Third Party Fees 
6.17 
Aviation Asset Disposition 
6.18 
Placards 
6.19 
Maintenance of Current Depreciation Policies 
6.20 
Preservation of International Interests and Liens 
6.21 
JMC Management Agreement 
6.22 
Strategic Alternative Milestone 
6.23 
Maintenance of Collateral; Compliance with the Aviation Assets Requirements 
6.24 
Maintenance of Records 
6.25 
Excluded Assets 
6.26 
PPP Loan 
 
7. NEGATIVE COVENANTS 
 
7.1 
Modification of Formation Documents 
7.2 
Failure to Act/Duty to Act 
7.3 
Modification of Debt 
7.4 
Transfers to Restricted Subsidiaries 
7.5 
Disposition of Property 
7.6 
Mergers 
7.7 
Acquisitions 
7.8 
Distributions 
7.9 
ERISA 
7.10 
Change in Nature of Business; Change in Control 
7.11 
Swap Contracts 
7.12 
Liens and Negative Pledges 
7.13 
Indebtedness and Guaranteed Indebtedness 
7.14 
Transactions with Affiliates 
7.15 
Subsidiary Indebtedness 
7.16 
Restricted Subsidiaries 
7.17 
New Shareholders 
7.18 
Redemptions; Dividends 
7.19 
Investments 
7.20 
Deposit Accounts 
7.21 
Leases 
 
8. INFORMATION AND REPORTING REQUIREMENTS 
 
8.1 
Reports and Notices 
8.2 
Cash Flow Budget 
8.3 
Maintenance Expense Report 
8.4 
Collateral Report 
8.5 
Maintenance Reserve Liability Report 
8.6 
Lender Update 
8.7 
Bank Account Report 
8.8 
Offers 
8.9 
Bid Summary Report 
8.10 
Other Reports 
 
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES 
 
9.1 
Events of Default 
9.2 
Remedies 
9.3 
Waivers by Borrower 
9.4 
Proceeds 
 
10. SUCCESSORS AND ASSIGNS 
 
 
11. DISPUTE RESOLUTION 
 
11.1 
Alternative Dispute Resolution Agreement 
11.2 
No Limitation on Remedies 
11.3 
Inconsistency 
 
12. MISCELLANEOUS 1
 
12.1 
Complete Agreement 
12.2 
Reimbursement and Expenses 
12.3 
Indemnity 
12.4 
No Waiver 
12.5 
Severability; Drafting 
12.6 
Conflict of Terms 
12.7 
Notices 
12.8 
Binding Effect; Assignment 
12.9 
Right of Setoff 
12.10 Sharing of Setoffs  
12.11 Section Titles  
12.12 Counterparts  
12.13 Time of the Essence  
12.14 GOVERNING LAW; VENUE  
12.15 WAIVER OF JURY TRIAL  
12.16 Amendments; Consents  
12.17 Foreign Lenders and Participants  
12.18Acknowledgement and Consent to Bail-In of Affected Financial Institutions  
12.19 Disclaimer of Fiduciary Obligations  
12.20 Electronic Transmissions.  
 
13. AGENT 1
 
13.1 
Appointment and Authorization and Delegation of Duties
13.2 
Lenders’ Credit Decisions 
13.3 
Agent and Affiliates 
13.4 
Proportionate Interest in any Collateral 
13.5 
Action by Agent 
13.6 
Liability of Agent 
13.7 
Indemnification 
13.8 
Successor Agent 
13.9 
Collateral Matters 
13.10 Agent May File Proofs of Claim  
13.11 No Obligations of Borrower  
 
14. COMMITMENT COSTS AND RELATED MATTERS. 1
 
14.1 
[Reserved] 
14.2 
Capital Adequacy 
14.3 
Federal Reserve System/Wire Transfers 
14.4 
Assignment of Commitments Under Certain Circumstances; Duty to Mitigate 
14.5 
Acknowledgement Regarding Any Supported QFCs 
 
15. AMENDMENT AND RESTATEMENT 
 
15.1 
Amendment and Restatement of Existing Credit Agreement 
15.2 
Continuing Obligations 
15.3 
Calculations 
 
16. FORBEARANCE; GENERAL RELEASE 
 
16.1 
Acknowledgement 
16.2 
Forbearance 
16.3 
General Release 
 

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AeroCentury – Fourth Amended and Restated
Loan and Security Agreement
 
 
0A22-152811

 

 
 
INDEX OF SCHEDULES AND EXHIBITS
 
Schedule A 
Term Loan Commitment – Pro Rata Share
Schedule 1.1a 
[Reserved]
Schedule 1.1b 
Eligible Leases as of the Closing Date
Schedule 1.1c 
Equipment
Schedule 1.1d 
Excluded Assets
Schedule 1.1e 
Material Contracts
Schedule 1.1f 
Permitted Indebtedness
Schedule 1.1g 
Permitted Liens/Liens of Record
Schedule 1.1h 
Schedule of Documents
Schedule 1.1i 
[Reserved]
Schedule 5.2 
Executive Offices; Corporate or Other Names; Conduct of Business
Schedule 5.7 
No Other Liabilities; No Material Adverse Changes
Schedule 5.9 
Trade Names
Schedule 5.10 
Litigation
Schedule 5.17 
Hazardous Materials
Schedule 5.19 
Insurance
Schedule 5.22 
Depreciation Policies
Schedule 5.28 
Deposit Accounts
Schedule 6.4 
Insurance as of the Closing Date
Schedule 7.13 
Indebtedness and Guaranteed Indebtedness existing on the Closing Date
Schedule 7.19 
Investments Existing as of the Closing Date
Schedule 8.3 
Form of Maintenance Expense Report
Schedule 8.9 
Form of Bid Summary Report
 
Exhibit A 
[Reserved]
Exhibit B 
[Reserved]
Exhibit C 
Form of Compliance Certificate
Exhibit D 
Form of Commitment Assignment and Acceptance
Exhibit E 
[Reserved]
Exhibit F 
[Reserved]
Exhibit G 
[Reserved]
Exhibit H 
[Reserved]
Exhibit I 
Form of Placard
 
 

-2-
AeroCentury – Fourth Amended and Restated
Loan and Security Agreement
 
 
0A22-152811

 

 
FOURTH AMENDED AND RESTATED
 
LOAN AND SECURITY AGREEMENT
 
THIS FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“Agreement”), is
entered into as of May 1, 2020, between AEROCENTURY CORP., a Delaware
corporation (“Borrower”), MUFG UNION BANK, N.A., together with any other Lender
hereunder from time to time (collectively, the “Lenders” and individually, a
“Lender”), the Lenders, and MUFG UNION BANK, N.A., as administrative agent (in
such capacity, “Agent”), effective as of the Closing Date, with reference to the
following facts:
 
RECITALS
 
Borrower is in the business of purchasing and leasing aircraft and aircraft
engines and equipment.
 
Pursuant to that certain Third Amended and Restated Loan and Security Agreement
dated as of February, 2019, (as amended from time to time, the “Existing Credit
Agreement”) by and among Borrower, the Lenders, and MUFG Union Bank, N.A., as
administrative agent for the Lenders, the Lenders agreed to make available to
Borrower a revolving credit facility (the “Existing Loan”), to be used for the
purpose of refinancing existing revolving debt, acquiring aircraft and aircraft
engines, and supporting Borrower’s working capital needs and general corporate
purposes.
 
The Existing Credit Agreement has been amended by that (i) Forbearance Agreement
dated as of October 28, 2019 (as amended, the “Prior Forbearance Agreement”),
(ii) First Amendment of Forbearance Agreement and First Amendment to Credit
Agreement dated as of November 13, 2019 (the “First Amendment”), (iii) Second
Amendment to Credit Agreement and Consent for Sale of Collateral dated as of
November 26, 2019 (the “Second Amendment”), (iv) Temporary Waiver and Consent
and Third Amendment to Credit Agreement dated as of December 4, 2019 (the “Third
Amendment”), (v) Second Amendment to Forbearance Agreement and Fourth Amendment
to Credit Agreement dated as of December 12, 2019 (the “Fourth Amendment”), and
(vi) Consent to Paycheck Protection Program dated as of April 16, 2020.
 
Defaults and Events of Default have occurred under the Existing Credit
Agreement, which Defaults and Events of Default (collectively, the “Noticed
Events of Default”) are specifically identified in the Notice of Default;
Reservation of Rights Letters dated as of October 15, 2019, December 3, 2019,
January 3, 2020, February 13, 2020, March 16, 2020 and April 7, 2020 and
delivered by Agent to Borrower and its Subsidiary guarantors (the “Reservation
of Rights Letters”) (such Noticed Events of Default other than that specified in
the January 3, 2020 Reservation of Right Letter (which was subsequently cured),
collectively, the “Specified Events of Default”).
 
A Forbearance Termination Event (as defined in the Prior Forbearance Agreement)
occurred on December 30, 2019, thereby causing a Forbearance Termination Date
(as defined in the Prior Forbearance Agreement) to occur on such date.
 
As of April 1, 2020, the aggregate principal amount outstanding of the Existing
Loan is $83,514,823.64 (which amount does not take into account the capitalized
interest for April 2020 to be added to the principal on May 1, 2020).
 
Additionally, Borrower and MUFG Bank, Ltd., as a Swap Contract Counterparty
(“MUFG Bank”), entered into that ISDA 2002 Master Agreement dated as of March
12, 2019 with respect to certain Swap Contracts (the “MUFG Bank Swap
Contracts”). Pursuant to the Existing Credit Agreement all of Borrower’s
liability and obligations under the MUFG Bank Swap Contracts constitute Lender
Hedging Obligations secured by the Collateral. On March 10, 2020, MUFG Bank
delivered to Borrower a Notice of Default and Declaration of Early Termination
Date of Swap Contracts (the “First ISDA Notice”), notifying Borrower of the
election of MUFG Bank (as the nondefaulting party) to designate an Early
Termination Date (as defined therein) as a result of an event of default under
the ISDA Agreement and close out the transactions outstanding thereunder. On
March 12, 2020, MUFG Bank provided Borrower Notice of Early Termination Amount
Due dated as of March 12, 2020 (the “Second ISDA Notice” and, together with the
First ISDA Notice, the “ISDA Notices”), notifying Borrower of Early Termination
Amount (as defined therein) due in the amount of $3,075,267.66 (the “MUFG Bank
Swap Termination Value”). Borrower’s obligations and liability to MUFG Bank as
described in the ISDA Notices, including the obligation to pay such Early
Termination Value, continue to be hereinafter secured by the Collateral.
 
Borrower has requested that Agent and Lenders amend and restate the Existing
Credit Agreement in its entirety (without novation) to grant Borrower a
temporary forbearance with respect to the Specified Events of Default referenced
in Recital D above and NordLB Specified Event of Default (hereinafter defined),
if any, and amend the Existing Credit Agreement pursuant to the terms hereof,
including to convert the Existing Loan to a term loan, and make other
amendments, all as set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
 
1. DEFINITIONS AND RULES OF CONSTRUCTION
 
1.1 Defined Terms
 
. As used in this Agreement, the following terms shall have the respective
meanings set forth below:
 
“Account Control Agreement(s)” means any agreement entered into, in a form
satisfactory to Agent, by and among Agent, Borrower or its Subsidiary and a
depository bank or other institution in which Borrower or such Subsidiary
maintains a deposit account, effective to grant “control” (as defined under the
UCC) over such account to Agent.
 
“Account Debtor” means any Person who is obligated under an Account.
 
“Accounts” means all “accounts,” as such term is defined in the UCC, now owned
or hereafter acquired by Borrower, including (a) all accounts receivable,
payments and pre-payments under Leases, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by chattel
paper, documents or instruments), whether arising out of goods sold or services
rendered by it or from any other transaction (including any such obligations
that may be characterized as an account or contract right under the UCC), (b)
all purchase orders or receipts for goods or services, (c) all rights to any
goods represented by any of the foregoing (including unpaid sellers’ rights of
rescission, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (d) all monies due or to become due to Borrower
under all purchase orders and contracts for the sale of goods or the performance
of services or both by Borrower or in connection with any other transaction
(whether or not yet earned by performance on the part of Borrower) now or
hereafter in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.
 
“Acquisition” means any transaction, or any series of related transactions,
consummated after the Closing Date, by which Borrower and/or any of its
Subsidiaries directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any Person engaged in any ongoing business,
whether through purchase of assets, merger or otherwise, (b) acquires control of
securities of a Person engaged in an ongoing business representing more than 50%
of the ordinary voting power for the election of directors or other governing
position if the business affairs of such Person are managed by a board of
directors or other governing body or (c) acquires control of more than 50% of
the ownership interest in any partnership, joint venture, limited liability
company, business trust or other Person engaged in an ongoing business that is
not managed by a board of directors or other governing body.
 
“ACY 15129” means ACY SN 15129 LLC, a Delaware limited liability company.
 
“Affected Financial Institution” means (a) any EEA Financial Institution or
(b) any UK Financial Institution.
 
“Affiliate” means, with respect to any Person, another Person that, directly or
indirectly, Controls, or is Controlled by or is under common Control with such
other Person. For the purpose of this definition, “Control” or “Controlled”
means the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.
 
“Agent” or “Administrative Agent” means MUFG Union Bank, N.A. when acting in its
capacity as Agent under any of the Loan Documents, or any successor Agent.
 
“Agreement” means this Fourth Amended and Restated Loan and Security Agreement,
as the same may, from time to time, be amended, supplemented, modified or
restated.
 
“Aircraft” means each aircraft purchased by Borrower described in a Mortgage,
together with any and all Parts (including Engines) which are either
incorporated or installed in or attached to such aircraft’s airframe or required
to be subject to the lien and security interest of such Mortgage.
 
“Aircraft 238” means the Bombardier Aircraft model Dash 8-311 bearing
manufacturer’s serial number 238, along with two Engines installed thereon
(currently identified as two (2) Pratt & Whitney Canada model PW123 aircraft
engines bearing manufacturer’s serial numbers PCE-AE0160 and AE-0164.
 
“Air Nostrum 1 Aircraft” has the meaning assigned thereto in Section 6.25(c).
 
“Air Nostrum 1 Borrower” has the meaning assigned thereto in Section 6.25(c).
 
“Air Nostrum 2 Aircraft” has the meaning assigned thereto in Section 6.25(c).
 
“Air Nostrum 2 Borrower” has the meaning assigned thereto in Section 6.25(c).
 
“Air Nostrum Aircraft” has the meaning assigned thereto in Section 6.25(c).
 
“Air Nostrum Borrower” has the meaning assigned thereto in Section 6.25(c).
 
“Alternative Dispute Resolution Agreement” means one or more Alternative Dispute
Resolution Agreement(s) executed by Agent, each Lender, Borrower and, if
applicable, Subsidiary, in connection with the Loans.
 
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.
 
“Applicable Base Rate” means the percentage as calculated in Section 2.2.1(a).
 
“Applicable Base Rate Cash Margin” means (a) with respect to the Initial Period,
zero percent (0.00%), and (b) with respect to any other period after the end of
the Initial Period, one percent (1.00%).
 
“Applicable Base Rate Margin” means, for any period, the sum of (a) the
Applicable Base Rate Cash Margin for such period and (b) the Applicable Base
Rate PIK Margin for such period.
 
“Applicable Base Rate PIK Margin” means (a) with respect to the Initial Period,
five and a quarter percent (5.25%), and (b) with respect to any other period
after the end of the Initial Period, four and a quarter percent (4.25%).
 
“Applicable Law” means, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in question
is a party or by which it or its properties are bound.
 
“Appraisal” means (i) a desktop appraisal providing appraisal for base values,
market values, maintenance adjusted base values, maintenance adjusted current
market values, 180-day orderly liquidation values (for Off-Lease aircraft only)
and lease-adjusted current market values, or (i) if a Default exists, such other
type of appraisal (e.g., extended desktop, visual inspection) as shall be
required by Agent, of an item of Equipment or Excluded Asset to determine the
appraised value thereof, performed by an Appraiser retained by Agent on behalf
of the Lenders.
 
“Appraiser” means ICF SH&E, Inc., AVITAS or any other independent appraiser
selected by Agent.
 
“APU” means, whether or not installed on an airframe, the auxiliary power unit
of the manufacture and model described in any Mortgage, together with any and
all modules and Parts which are either incorporated or installed from time to
time in or attached to such APU.
 
“Assets” means all of Borrower’s assets and property, whether now existing or
owned or hereafter created or acquired, and wherever located, including, but not
limited to:
 
all accounts, chattel paper (including tangible and electronic chattel paper),
contract rights, deposit accounts, documents (including negotiable documents),
equipment (including the Equipment and all accessions and additions thereto,
including at any time all Propellers, APUs and Landing Gear, and all parts,
components, equipment, instruments, appliances, avionics, radio and radar
devices, cargo handling systems and loose equipment that are at such time
incorporated or installed in or attached thereto or to an Aircraft or Engine),
general intangibles (including payment intangibles and software), goods
(including fixtures), instruments (including promissory notes), inventory
(including all goods held for sale or lease or to be furnished under a contract
of service, and including returns and repossessions), investment property
(including securities and securities entitlements), leases, letter of credit
rights, money, and all of Borrower’s Books and Records with respect to any of
the foregoing, and the computers and equipment containing said Books and
Records;
 
all common law and statutory copyrights and copyright registrations,
applications for registration, now existing or hereafter arising, in the United
States of America or in any foreign jurisdiction, obtained or to be obtained on
or in connection with any of the forgoing, or any parts thereof or any
underlying or component elements of any of the forgoing, together with the right
to copyright and all rights to renew or extend such copyrights and the right
(but not the obligation) of Agent to sue in its own name and/or in the name of
the Borrower for past, present and future infringements of copyright;
 
all trademarks, service marks, trade names and service names and the goodwill
associated therewith, together with the right to trademark and all rights to
renew or extend such trademarks and the right (but not the obligation) of Agent
to sue in its own name and/or in the name of the Borrower for past, present and
future infringements of trademark;
 
all (i) patents and patent applications filed in the United States Patent and
Trademark Office or any similar office of any foreign jurisdiction, and
interests under patent license agreements, including, without limitation, the
inventions and improvements described and claimed therein, (ii) licenses
pertaining to any patent whether Borrower is licensor or licensee, (iii) income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iv) right (but not the obligation) to sue in the name of Borrower
and/or in the name of Agent for past, present and future infringements thereof,
(v) rights corresponding thereto throughout the world in all jurisdictions in
which such patents have been issued or applied for, and (vi) reissues,
divisions, continuations, renewals, extensions and continuations-in-part with
respect to any of the foregoing; and
 
any and all cash proceeds and/or noncash proceeds of any of the foregoing,
including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to payment. All terms
above have the meanings given to them in the New York Uniform Commercial Code,
as amended or supplemented from time to time.
 
“Authorized Signatory” means (i) with respect to any Compliance Certificates
delivered to Agent hereunder, (a) the chief executive officer, (b) the
president, or (c) the chief financial officer or deputy financial officer, in
each case of Borrower, and (ii) with respect to all other documents required to
be executed by Borrower and delivered to Agent and/or Lenders hereunder, each of
the foregoing persons or such other senior personnel of Borrower as may be duly
authorized and designated in writing by Borrower to execute documents,
agreements, and instruments on behalf of Borrower and to pledge Borrower’s real
and personal property.
 
“Aviation Asset Disposition” has the meaning assigned thereto in Section 6.17. 
 
“Aviation Asset Requirements” means, at any time, an item of Equipment that
meets the following criteria:
 
the purchase price of which has been paid in full and it is not subject to any
other financing;
 
as to which an Equipment Owner or Lessor has good and marketable title, and on
which Agent has a fully perfected first priority Lien and which is not subject
to any other Lien other than Permitted Liens;
 
as to which, if owned by Owner Trustee, the Borrower shall have executed and
delivered to Agent a Beneficial Interest Pledge Agreement covering, among other
things, the Borrower’s Beneficial Interest in the owner trust which owns such
item(s) of Equipment and/or Lease, and as to which the Owner Trustee shall have
executed and delivered to Agent an (x) Owner Trustee Mortgage covering, among
other things, such items of Equipment and/or Lease, (y) a Trust Agreement and
(z) an Owner Trustee Guaranty;
 
as to which the Equipment Owner or Lessor shall have executed and delivered to
Agent and/or filed (i) a Mortgage covering, among other things, such items of
Equipment and/or Lease and (ii) the other documentation required in respect of
Equipment;
 
with respect to items of Equipment, it has not suffered an Event of Loss, it is
being used solely for lawful purposes and in the ordinary course of business of
the Equipment Owner;
 
in the case of Equipment subject to Lease, it is insured against loss by either
the Equipment Owner or the Lessee in accordance with this Agreement and industry
practice; and
 
the requirements set forth in Sections 4.1.2 and 4.1.3.
 
“Aviation Authority” means the FAA, the Joint Airworthiness Authorities of the
European Union /European Aviation Safety Agency and/or any other Governmental
Authority which, from time to time, has control or supervision of civil aviation
or has jurisdiction over the airworthiness, operation and/or maintenance of an
item of Equipment.
 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.
 
“Bail-In Legislation” means, (a) with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law, regulation rule or
requirement for such EEA Member Country from time to time which is described in
the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom,
Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and
any other law, regulation or rule applicable in the United Kingdom relating to
the resolution of unsound or failing banks, investment firms or other financial
institutions or their affiliates (other than through liquidation, administration
or other insolvency proceedings).
 
“Bank Account Report” has the meaning assigned thereto in Section 8.7.
 
“Bankruptcy Code” means the Bankruptcy Code (11 U.S.C. Sections 101 et seq.).
 
“Base Rate” means the highest of (i) the rate of interest most recently
announced by Agent as to its U.S. dollar “Reference Rate”, (ii) the Federal
Funds Rate plus one-half of one percent (0.50%); and (iii) three and a quarter
percent (3.25%).
 
“Base Rate Interest Payment Date” shall have the meaning assigned thereto in
Section 2.2.1(a)(i).
 
“Base Rate Loan” means a Term Loan made pursuant to this Agreement.
 
“Beneficial Interest” means a beneficial interest in a trust which owns one or
more items of Equipment.
 
“Beneficial Interest Pledge Agreement” means a Beneficial Interest Pledge
Agreement, to be entered into among Borrower, Owner Trustee, and Agent, whereby
Borrower pledges to Agent, as security for certain obligations under this
Agreement, all of the beneficial interest of Borrower, as beneficial owner under
a particular Trust Agreement.
 
“Beneficial Ownership Certification” means a certification regarding beneficial
ownership or control as required by the Beneficial Ownership Regulation.
 
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
 
“Books and Records” means all books, records, board minutes, contracts,
licenses, insurance policies, environmental audits, business plans, files,
accounting books and records, Financial Statements (actual and pro forma), and
filings with Governmental Authorities.
 
“Borrower” has the meaning assigned thereto in the introductory paragraph
hereto.
 
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of California are authorized or required to close.
 
“Cape Town Convention” means the official English language texts of the
“Convention on International Interests in Mobile Equipment” and the “Protocol to
the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment”, both of which were signed in Cape Town, South
Africa on November 16, 2001, and including the Regulations for the International
Registry and the Procedures for the International Registry, as promulgated
thereunder.
 
“Cape Town Eligible Lease” means those certain Leases which create International
Interests under the Cape Town Convention.
 
“Capital Lease Obligations” means all monetary obligations of a Person under any
leasing or similar arrangement which, in accordance with GAAP, is classified as
a capital lease.
 
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, H.R.
748.
 
“Cash” means, when used in connection with any Person, all monetary and
non-monetary items owned by that Person that are treated as cash in accordance
with GAAP, consistently applied.
 
“Cash Equivalents” means, when used in connection with any Person, that Person’s
Investments in:
 
Government Securities due within one year after the date of the making of the
Investment;
 
readily marketable direct obligations of any State of the United States of
America or any political subdivision of any such State or any public agency or
instrumentality thereof given on the date of such Investment a credit rating of
at least AA by Moody’s Investors Service, Inc. or AA by Standard & Poor’s Rating
Group (a division of McGraw Hill, Inc.), in each case due within one year from
the making of the Investment;
 
certificates of deposit issued by, bank deposits in, Eurodollar deposits
through, bankers’ acceptances of, and repurchase agreements covering Government
Securities executed by Lender or any bank incorporated under the Applicable Law
of the United States of America, any State thereof or the District of Columbia
and having on the date of such Investment combined capital, surplus and
undivided profits of at least $250,000,000, or total assets of at least
$5,000,000,000, in each case due within one year after the date of the making of
the Investment;
 
certificates of deposit issued by, bank deposits in, Eurodollar deposits
through, bankers’ acceptances of, and repurchase agreements covering Government
Securities executed by Lender or any branch or office located in the United
States of America of a bank incorporated under the Applicable Law of any
jurisdiction outside the United States of America having on the date of such
Investment combined capital, surplus and undivided profits of at least
$500,000,000, or total assets of at least $15,000,000,000, in each case due
within one year after the date of the making of the Investment;
 
repurchase agreements covering Government Securities executed by a broker or
dealer registered under Section 15(b) of the Securities Exchange Act of 1934, as
amended, having on the date of the Investment capital of at least $50,000,000,
due within ninety (90) days after the date of the making of the Investment;
provided that the maker of the Investment receives written confirmation of the
transfer to it of record ownership of the Government Securities on the books of
a “primary dealer” in such Government Securities or on the books of such
registered broker or dealer, as soon as practicable after the making of the
Investment;
 
readily marketable commercial paper or other debt securities issued by
corporations doing business in and incorporated under the Applicable Law of the
United States of America or any State thereof or of any corporation that is the
holding company for a bank described in clause (c) or (d) above given on the
date of such Investment a credit rating of at least P 1 by Moody’s Investors
Service, Inc. or A 1 by Standard & Poor’s Rating Group (a division of McGraw
Hill, Inc.), in each case due within one year after the date of the making of
the Investment;
 
“money market preferred stock” issued by a corporation incorporated under the
Applicable Law of the United States of America or any State thereof (i) given on
the date of such Investment a credit rating of at least AA by Moody’s Investors
Service, Inc. and AA by Standard & Poor’s Rating Group (a division of McGraw
Hill, Inc.), in each case having an investment period not exceeding fifty (50)
days or (ii) to the extent that investors therein have the benefit of a standby
letter of credit issued by Lender or a bank described in clauses (c) or (d)
above; provided that (y) the amount of all such Investments issued by the same
issuer does not exceed $5,000,000 and (z) the aggregate amount of all such
Investments does not exceed $15,000,000;
 
a readily redeemable “money market mutual fund” sponsored by a bank described in
clause (c) or (d) hereof, or a registered broker or dealer described in clause
(e) hereof, that has and maintains an investment policy limiting its investments
primarily to instruments of the types described in clauses (a) through (g)
hereof and given on the date of such Investment a credit rating of at least AA
by Moody’s Investors Service, Inc. and AA by Standard & Poor’s Rating Group (a
division of McGraw Hill, Inc.); and
 
corporate notes or bonds having an original term to maturity of not more than
one year issued by a corporation incorporated under the Applicable Law of the
United States of America, or a participation interest therein; provided that (i)
commercial paper issued by such corporation is given on the date of such
Investment a credit rating of at least AA by Moody’s Investors Service, Inc. and
AA by Standard & Poor’s Rating Group (a division of McGraw Hill, Inc.), (ii) the
amount of all such Investments issued by the same issuer does not exceed
$5,000,000 and (iii) the aggregate amount of all such Investments does not
exceed $15,000,000.
 
“Cash Interest” means the Cash portion of the interest that is due and payable
pursuant to the terms hereof.
 
“Cash Flow Budget” has the meaning assigned thereto in Section 8.2.
 
“Cash Flow Variance Report” has the meaning assigned thereto in Section 8.2.
 
“Change in Control” means (a) any transaction or series of related transactions
in which any Unrelated Person or two or more Unrelated Persons acting in concert
acquire beneficial ownership (within the meaning of Rule 13d 3(a)(1) under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of 20% or
more of the ownership interests in Borrower, (b) Borrower consolidates with or
merges into another Person or conveys, transfers or leases its properties and
assets substantially as an entirety to any Person or any Person consolidates
with or merges into Borrower, in either event pursuant to a transaction in which
the ownership interests in Borrower are changed into or exchanged for cash,
securities or other property, with the effect that any Unrelated Person becomes
the beneficial owner, directly or indirectly, of 20% or more of ownership
interests in Borrower or that the Persons who were the holders of ownership
interests in Borrower immediately prior to the transaction hold less than 80% of
the interests of the surviving entity after the transaction, (c) any change in
an executive officer of Borrower (provided no change in control shall occur upon
the death or incapacitation of an executive officer), or (d) a “change in
control” as defined in any document governing Indebtedness of Borrower which
gives the holders of such Indebtedness the right to accelerate or otherwise
require payment of such Indebtedness prior to the maturity date thereof. For
purposes of the foregoing, the term “Unrelated Person” means any Person other
than (i) any Affiliate of any thereof and members of the immediate family of any
thereof, (ii) a Subsidiary of Borrower or (iii) an employee stock ownership plan
or other employee benefit plan covering the employees of Borrower and its
Subsidiaries.
 
“Charges” means all Federal, state, county, city, municipal, local, foreign or
other governmental Taxes (including Taxes owed to PBGC at the time due and
payable), levies, assessments, charges, liens, and all additional charges,
interest, penalties, expenses, claims or encumbrances upon or relating to (a)
the Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of Borrower, (d) the ownership or use of any assets by Borrower, or (e)
any other aspect of Borrower’s business.
 
“Chattel Paper” means all “chattel paper,” as such term is defined in the UCC,
now owned or hereafter acquired by any Person, wherever located, but excluding
Leases.
 
“Claim” means any and all suits, actions, or proceedings in any court or forum,
at law, in equity or otherwise; costs, fines, deficiencies, or penalties;
asserted claims or demands by any Person; arbitration demands, proceedings or
awards; damages, losses, liabilities and expenses (including reasonable
attorneys’ fees and disbursements and other costs of collection, defense or
appeal); enforcement of rights and remedies; or criminal, civil or regulatory
investigations.
 
“Closing Date” means the time and Business Day on which the conditions set forth
in Section 4.1 are satisfied or waived.
 
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral” means all of the collateral covered by the Collateral Documents.
 
“Collateral Documents” means, collectively, all of those documents set forth in
Section 3.1, including without limitation the following and any agreements,
documents, and instruments executed, filed or registered in connection
therewith: this Agreement, to the extent it constitutes a security agreement,
the Mortgage, the Owner Trustee Mortgage, any Security Agreement, UCC financing
statements, a Beneficial Interest Pledge Agreement (if any), an Owner Trustee
Guaranty (if any), and such other agreements, pledges and security instruments,
and all amendments thereto, instruments and documents as Agent may reasonably
require pursuant to this Agreement.
 
“Commitment Assignment and Acceptance” means a commitment assignment and
acceptance substantially in the form of Exhibit D.
 
“Compliance Certificate” means a Compliance Certificate in the form attached
hereto as Exhibit C signed by an Authorized Signatory.
 
“Contract” means, individually and collectively, all contracts, leases,
undertakings, and agreements (other than rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Person may now or hereafter have
any right, title or interest, including any agreement relating to the terms of
payment or the terms of performance of any Account.
 
“Contracting State” shall have the meaning given to such term under Article 4 of
the Cape Town Convention.
 
“Contractual Obligation” means, as to any Person, any provision of any
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its property is bound.
 
“Credit Facility” means the term loan provided hereunder in respect of the Term
Loans.
 
“Custodial Agreement” means an agreement pursuant to which a Person is acting as
custodian for Borrower with respect to original “chattel paper” or such other
documents as may be addressed under such agreement.
 
“Custodian” means any custodian under the Custodial Agreement.
 
“Debt Instrument” has the meaning assigned thereto in Section 9.1.14.
 
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect.
 
“Default” means any event which, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
 
“Defaulting Lender” means a Lender which (a) fails to fund any amounts due from
such Lender to Agent, another Lender or Borrower under this Agreement within one
(1) Business Day following written notice by the Agent of such failure to fund,
unless such Lender notifies the Agent and the Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, provided such Lender shall cease to be a “Defaulting Lender”
immediately upon the cure of such failure to fund, (b) has notified the Borrower
or the Agent in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), or (c) has, or has a direct
or indirect parent company that has, (i) become the subject of a proceeding
under the Bankruptcy Code or any other similar Debtor Relief Law, (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity or (iii) become the subject of a Bail-In Action;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such Lender with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by Agent that a Lender is
a Defaulting Lender under any one or more of clauses (a) through (c) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender upon delivery of written notice of such determination
to the Borrower and each Lender.
 
“Default Rate” means, for the Initial Period or any period thereafter, a per
annum default rate equal to the Applicable Base Rate for such period, plus two
percent (2.0%) (whereby the Applicable Base Rate Cash Margin is increased by
2.0%).
 
“Deferred Interest” has the meaning assigned thereto in Section 2.2.1(d).
 
“Disposition” has the meaning assigned thereto in Section 7.5.
 
“Dispute” has the meaning assigned thereto in Section 11.1.
 
“Distribution” means, with respect to any shares of capital stock or membership
interests or any warrant or option to purchase an equity security or other
equity security issued by a Person, (a) the retirement, redemption, purchase or
other acquisition for Cash or for Property by such Person of any such security,
(b) the declaration or (without duplication) payment by such Person of any
dividend in Cash or in Property on or with respect to any such security, (c) any
Investment by such Person in the holder of 5% or more of any such security if a
purpose of such Investment is to avoid characterization of the transaction as a
Distribution and (d) any other payment in Cash or Property by such Person
constituting a distribution under Applicable Law with respect to such security.
 
“Documents” means all “documents,” as such term is defined in the UCC, now owned
or hereafter acquired by any Person, wherever located, including all bills of
lading, dock warrants, dock receipts, warehouse receipts, and other documents of
title, whether negotiable or non-negotiable.
 
“Dollars” means lawful currency of the United States.
 
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.
 
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
 
“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
 
“Electronic Transmission” shall mean each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
 
“Eligible Assignee” means (a) another Lender (other than any Defaulting Lender),
(b) with respect to any Lender, any Affiliate of that Lender (other than any
Defaulting Lender), (c) any commercial bank having total assets of
$1,000,000,000 or more, (d) any (i) savings bank, savings and loan association
or similar financial institution or (ii) insurance company engaged in the
business of writing insurance which, in either case (A) has total assets of
$1,000,000,000 or more, (B) is engaged in the business of lending money and
extending credit under Credit Facility substantially similar to those extended
under this Agreement and (C) is operationally and procedurally able to meet the
obligations of a Lender hereunder to the same degree as a commercial bank and
(e) any other financial institution (including a mutual fund or other fund)
having total assets of $1,000,000,000 or more which meets the requirements set
forth in subclauses (B) and (C) of clause (d) above; provided that each Eligible
Assignee must either (aa) be organized under the laws of the United States of
America, any State thereof or the District of Columbia or (bb) be organized
under the laws of the Cayman Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a branch, agency or
funding office located in the United States of America and (ii) be exempt from
withholding of Tax on interest and deliver the documents related thereto
pursuant to Section 12.17.
 
“Eligible Lease” shall mean a lease for Equipment to an unaffiliated Person in
which:
 
(a)           Borrower is the lessor of the Equipment;
 
(b)           the lease arose in the ordinary course of business of Borrower;
 
(c)           the Equipment has been delivered to the Lessee (subject to the
last sentence of this definition) and is currently subject to the lease;
 
(d)           neither the lease nor the Equipment is subject to any currently
outstanding assignment, claim, lien, security interest or other limitation on
the absolute title of Borrower;
 
(e)           the lease payments and maintenance reserves are not more than ten
(10) days past due with respect to any payment required thereby (for clarity,
the requirement in this clause (n) does not apply to the Specified Leases);
 
(f)           the lease is freely assignable by the Lessor (with any notices or
consents required in connection therewith having been previously obtained, and
subject to any lease requirements concerning the net worth of the assignee or
restriction regarding assignment to a lessee’s competitor) and prohibits
assignment in whole or in part by the Lessee thereof without the prior written
consent of Lessor;
 
(g)           the lease and the Equipment being leased constitute Collateral;
 
(h)           the remaining lease term at the time of entry into the pool of the
Collateral is for a period of ten years or less;
 
(i)           it is a triple net contract and with respect to which the Lessee
thereunder is responsible for all payments in connection therewith, including,
but not limited to, payment of all Taxes (including sales and use Taxes),
insurance and maintenance expenses (or payment of maintenance reserves in lieu
thereof) and all other expenses pertaining to the assets subject thereto;
 
it is a non-cancelable lease and provides that the Lessee’s obligations
thereunder are absolute and unconditional and which obligations are not, either
pursuant to the terms of such Lease or otherwise, subject to contingencies,
defense, deduction, set-off, reduction, claim or counterclaim of any kind
whatsoever and as to which no defenses, deductions, set offs, reductions, claims
or counterclaims exist or have been asserted by the Lessee or anyone on its
behalf and the Borrower has no obligations thereunder, including, without
limitation, any service or maintenance of the related Equipment, other than the
obligation to sell, lease or finance the Equipment and grant a covenant of quiet
enjoyment to such Lessee; provided, however, that (i) in the case of leases with
terms of less than twelve months in which Borrower may be responsible for
maintenance and (ii) Borrower may assume the obligation to pay some or all of
the cost of engine overhaul, airworthiness directives or manufacturer or
government ordered modifications required during the term of the Lease, so long
as the Lease states that such obligation is solely that of Borrower and imposes
no obligation on the Lenders, in their capacity as lenders to Borrower, and
Lessee’s only remedy for breach of the obligation is an independent action
against Borrower as Lessor, and Lessee waives any and all right to offset such
obligation against lease payments owed Borrower;
 
the Lessee is not a resident of, and the Equipment will not be subject to the
laws of any, foreign jurisdiction in which, in the sole determination of Agent,
the ability of Agent to perfect a first priority security interest in the
Equipment is unsatisfactory or the ability of Agent to foreclose upon the
Equipment and receive possession to or sell said Equipment is unsatisfactory;
 
with respect to which the Borrower’s Books and Records are accurate, complete
and genuine;
 
it requires the Lessee to comply with all maintenance, return, alteration,
replacement, pooling and sublease conditions as typically found in leases for
similar types of aircraft, engines or equipment and as necessary to maintain at
all times the airworthiness certification and serviceability status of the
related Equipment pursuant to all applicable governmental and regulatory
requirements;
 
it requires the Lessee to provide liability insurance, all risk ground and
flight coverage for damage or loss of the related Equipment, and war risk
insurance (if applicable), and with respect to which Agent is named as loss
payee;
 
it requires the Lessee to provide confiscation and expropriation insurance, with
deductibles that are acceptable to Agent, for Equipment operated (x) on routes
with respect to which it is customary for air carriers flying comparable routes
to carry such insurance or (y) in any area designated by companies providing
such coverage as a recognized or threatened war zone or area of hostilities or
an area where there is a substantial risk of confiscation or expropriation,
unless Agent has confirmed in writing to the Borrower that, based on Agent’s
assessment of the credit quality of the Lessee and Lessee’s ability to
self-insure against such risk and Agent’s assessment of the magnitude of the
risk of such loss based on its conclusion regarding the government having
jurisdiction over the collateral, such insurance is not necessary;
 
the Lessee is not based in, and the Lease requires that the related Equipment
not be operated in, unless appropriate insurance as determined by Agent is
obtained, any country or any jurisdiction, that would not be covered by or would
void any insurance coverage required hereunder, or any country which is subject
to any United States, the European Union or United Nations sanctions or the
lease to which would violate United States law, rule or regulation or other
restrictions;
 
the sole original of which is in the possession of Agent or Custodian, or, with
respect to chattel paper, if there shall be more than one original, then the
sole counterpart which shall constitute “chattel paper” for purposes of
perfection by possession under the UCC shall be in the possession of Agent or
its designee; and
 
the Lessee under which is not a Subsidiary, employee, agent or other Affiliate
of the Borrower;
 
provided, that all of the leases set forth on Schedule 1.1b as of the Closing
Date are Eligible Leases except as otherwise provided on such Schedule.
 
“Enforcement Actions” means the exercise by Agent and the Lenders at any time of
their rights and remedies and to commence enforcement, litigation and collection
actions under the Existing Credit Agreement, this Agreement, the other Loan
Documents and applicable law, including to set off funds and to declare to be
immediately due and payable the principal amount of the Loans now outstanding,
all accrued interest, fees and the other obligations of Borrower accrued under
the Existing Credit Agreement, this Agreement and the other Loan Documents,
other than as described in the last sentence of Section 9.2.1 of the Existing
Credit Agreement and this Agreement commencing with the word “provided” (but,
for clarity, the right to apply the Default Rate to the Loans is excluded from
the definition of Enforcement Action).
 
“Environmental Laws” means any and all federal, state, local, and foreign
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions, including all common law, relating to pollution or the protection
of health, safety or the environment or the release of any materials into the
environment, including those related to Hazardous Materials, air emissions,
discharges to waste or public systems and health and safety matters
 
“Environmental Liabilities and Costs” means all liabilities, obligations,
responsibilities, remedial actions, removal costs, losses, damages, costs and
expenses that relate to any health or safety condition regulated under any
Environmental Law or in connection with any other environmental matter or
Release, threatened Release, or the presence of any Hazardous Material.
 
“Engine” means each engine described in any Mortgage (each of which has 550 or
more rated takeoff horsepower or the equivalent of such horsepower), together
with any and all Parts which are either incorporated or installed in or attached
to such engine or required to be subject to the lien and security interest of
such Mortgage.
 
“Equipment” means new and used regional Aircraft, including the attached Engines
thereto and new and used Leased Spare Engines, set forth in Schedule 1.1c except
as otherwise provided therein.
 
“Equipment Owner” means the Borrower or Owner Trustee.
 
“ERISA” means the Employee Retirement Income Security Act of 1974 and the
regulations thereunder.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
which is a member of a “controlled group of corporations,” a group of trades or
businesses under “common control,” or an “affiliated service group,” which
includes Borrower within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986.
 
“E-System” shall mean any electronic system and any other internet or
extranet-based site, whether such electronic system is owned, operated, hosted
or utilized by the Agent, any of its Affiliates or any other Person, providing
for access to data protected by passcodes or other security system.
 
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.
 
“Event of Default” means any of the events specified in Section 9.1 and, unless
otherwise specifically noted, shall include the Specified Events of Default.
 
“Event of Loss” means:
 
if an item of Equipment is not subject to a Lease, any of the following events:
 
the actual or constructive total loss of such item of Equipment or the agreed or
compromised total loss of such item of Equipment;
 
its destruction, damage beyond economic repair or being rendered permanently
unfit for normal use for any reason whatsoever; and
 
any capture, condemnation, confiscation, requisition, purchase, seizure or
forfeiture of, or any taking for use or of title to, such item of Equipment, in
each case, that shall have resulted in the loss of possession or title of such
item of Equipment by the Lessor (other than a requisition for use for not more
than one hundred eighty (180) days by the United States Government), or
 
if an item of Equipment is subject to a Lease, any events defined as an “Event
of Loss,” “Casualty Occurrence” or similar term in such Lease.
 
For purposes of this Agreement, the date that an Event of Loss is deemed to have
occurred shall be as follows:
 
if an item of Equipment is not subject to a Lease,
 
(x) in the event of an actual loss of such item of Equipment, on the date of
such loss;
 
(y) in the event of damage which results in a constructive or compromised or
arranged total loss of such item of Equipment, on the date of the event giving
rise to such damage;
 
(z) in the case of an Event of Loss referred to in clause (a)(ii) above, on the
date of the occurrence of such event, or
 
if an item of Equipment is subject to a Lease, at such times as are set forth in
such Lease of such item of Equipment for the foregoing events.
 
In no event will the Event of Loss date be later than the earlier to occur of
(i) the Borrower’s or Agent’s (as applicable) receipt of insurance proceeds in
respect of such Equipment or (ii) the date that is ninety (90) days after the
date of such loss, damage or destruction.
 
“Excess Cash” means, as the date of determination, if a positive number, the
amount of the Unrestricted Cash as of such date minus $1,000,000.00.
 
“Excess Proceeds” has the meaning set forth in Section 6.25.
 
“Excluded Assets” means the Aircraft and associated Engines set forth on
Schedule 1.1d while pledged as collateral for the Permitted Excluded Subsidiary
Financing.
 
“Excluded Subsidiaries” means, so long as each such Person’s debt under the
Excluded Subsidiary Facility is outstanding, ACY SN 19002 Limited, a company
organized under the laws of the United Kingdom, ACY SN 19003 Limited, a company
organized under the laws of the United Kingdom, and ACY E-175 LLC, a Delaware
limited liability company.
 
“Excluded Subsidiary Facility” means a term loan facility extended by NordLB to
one or more Excluded Subsidiaries in the aggregate current principal amount of
$30,033,489, secured by the Excluded Assets.
 
“Excluded Swap Obligation” means, with respect to any Guarantor, (x) as it
relates to all or a portion of any Swap Obligation if, and to the extent that,
such Swap Obligation (or any guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guaranty of such Guarantor becomes
effective with respect to such Swap Obligation or (y) as it relates to all or a
portion of the grant by such Guarantor of a security interest, any Swap
Obligation if, and to the extent that, such Swap Obligation (or such security
interest in respect thereof) is or becomes illegal under the Commodity Exchange
Act or any rule, regulation or order of the Commodity Futures Trading Commission
(or the application or official interpretation of any thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the security interest of such Guarantor becomes effective
with respect to such Swap Obligation. If a Swap Obligation arises under a Master
Agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guaranty or security interest is or becomes illegal.
 
"Excluded Taxes" means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Term Loan Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Term Loan Commitment or (ii) such Lender changes its
lending office, except in each case to the extent that, pursuant to
Section 2.17, amounts with respect to such Taxes were payable either to such
Lender's assignor immediately before such Lender acquired the applicable
interest in a Loan or Term Loan Commitment or to such Lender immediately before
it changed its lending office, (c) Taxes attributable to such Recipient's
failure to comply with Section 2.17(f), and (d) any U.S. Federal withholding
Taxes imposed under FATCA.
 
“Exclusivity Milestone” has the meaning assigned thereto in Section 6.22(b).
 
“Existing Credit Agreement” has the meaning assigned thereto in the Recitals.
 
“Existing Loan” has the meaning assigned thereto in Recital B.
 
“Existing Mortgage” means that certain Mortgage and Security Agreement dated as
of April 28, 2010, as amended and restated by that Amended and Restated Mortgage
and Security Agreement dated as of June 17, 2013, Second Amended and Restated
Mortgage and Security Agreement dated as of May 30, 2014, Third Amended and
Restated Mortgage and Security Agreement dated as of February 19, 2019, made by
Borrower in favor of Agent, and each mortgage supplement for each of the
foregoing.
 
“FAA” means the Federal Aviation Administration or any Governmental Authority
succeeding to the functions thereof.
 
"FATCA" means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing
such Sections of the Code.
 
“Federal Funds Rate” means, as of any date of determination, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such date opposite the caption “Federal Funds
(Effective)”. If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotation”) for such date under the caption “Federal Funds Effective Rate”. If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by
each of three leading brokers of Federal funds transactions in New York City
selected by Agent. For purposes of this Agreement, any change in the Base Rate
due to a change in the Federal Funds Rate shall be effective as of the opening
of business on the effective date of such change.
 
“Field Examination” means an inspection and/or audit of the Borrower, which
Field Examination may be conducted at Agent’s direction by Agent and any of its
officers, employees, and agents. The Field Examination may include, without
limitation, the review, audit, Appraisal, physical verification, and such other
reviews of the Equipment and Borrower’s Books and Records in connection
therewith as shall be deemed appropriate by Agent in its sole discretion.
 
“Financial Advisor/Consultant” has the meaning assigned thereto in
Section 4.1.11.
 
“Financial Statements” means the income statement, balance sheet and statement
of cash flows of Borrower and its Subsidiaries, internally prepared for each
Fiscal Quarter and audited for each Fiscal Year, in each case prepared in
accordance with GAAP including the notes and schedules thereto.
 
“First Amendment” has the meaning assigned thereto in Recital C.
 
“First ISDA Notice” has the meaning assigned thereto in Recital G.
 
“Fiscal Quarter” means any of the quarterly accounting periods of Borrower,
specifically ending March 31, June 30, September 30, and December 31 of each
year.
 
“Fiscal Year” means the twelve (12) month fiscal period of Borrower ending
December 31 of each year. Subsequent changes of the Fiscal Year of Borrower
shall not change the term “Fiscal Year” unless Agent shall consent in writing to
such change.
 
"Forbearance Period" has the meaning assigned thereto in Section 16.2.1.
 
"Forbearance Termination Date" has the meaning assigned thereto in
Section 16.2.1.
 
"Forbearance Termination Event" has the meaning assigned thereto in
Section 16.2.1.
 
"Foreign Lender" means a Lender that is resident or organized under the laws of
a jurisdiction other than the United States of America or any State thereof or
the District of Columbia.
 
“Fourth Amendment” has the meaning assigned thereto in Recital C.
 
“Funded Debt” shall mean, as of the last day of any Fiscal Quarter, all
indebtedness, liabilities, and obligations for which Borrower has recourse
liability, now existing or hereafter arising, for money borrowed by Borrower or
a Subsidiary whether or not evidenced by any note, indenture, or agreement
(including, without limitation, the Notes and any indebtedness for money
borrowed from an Affiliate), as determined in accordance with GAAP, consistently
applied.
 
“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.
 
“Governmental Authority” means (a) any international, foreign, federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, including any Aviation Authority, or
(c) any court or administrative tribunal of competent jurisdiction.
 
“Government Securities” means readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations guaranteed by
the full faith and credit of the United States of America and (b) obligations of
an agency or instrumentality of, or corporation owned, controlled or sponsored
by, the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.
 
“Guaranteed Indebtedness” means, with respect to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend, or other obligation
(“primary obligations”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person (a) to purchase
or repurchase any such primary obligation, (b) to advance or supply funds (1)
for the purchase or payment of any such primary obligation, or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any “Guaranteed Indebtedness” at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
made, and (y) the maximum amount for which such Person may be liable pursuant to
the terms of the instrument embodying such Guaranteed Indebtedness; or, if not
stated or determinable, the maximum reasonably anticipated liability (assuming
full performance) in respect thereof.
 
“Guarantor” means the obligor under a Guaranty.
 
"Guaranty" means a Subsidiary Guaranty, Owner Trustee Guaranty or any other any
other instrument of guaranty executed by any Person, in form and substance
satisfactory to Agent, with respect to the Obligations; in each case either as
originally executed or as it may from time to time be supplemented, modified,
amended, extended or supplanted.
 
“Hazardous Material” means any substance, material or waste, the generation,
handling, storage, treatment or disposal of which is regulated by any
Governmental Authority, or forms the bases of liability now or hereafter under,
any Environmental Law in any jurisdiction in which Borrower has owned, leased,
or operated real property or disposed of hazardous materials.
 
“Immaterial Subsidiary” means (i) JFC, (ii) ACY 15129, and (iii) any such other
Subsidiary as designated in writing by the Agent in its sole discretion, so long
as such Subsidiary in any of the forgoing clauses (i) through (iii) does not
(1) own any Assets; (2) have any liabilities or (3) generate any revenue, except
that JFC may have the JFC Obligations and generate or hold enough funds to pay
the JFC Obligations.
 
“Indebtedness” means: (a) with respect to Borrower, the Obligations; (b) all
indebtedness of Borrower for borrowed money or for the deferred purchase price
of property or services (including reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers’ acceptances, whether or
not matured); (c) all obligations evidenced by notes, bonds, debentures or
similar instruments; (d) all indebtedness created or arising under any
conditional sale or other title retention agreements with respect to property
acquired by Borrower (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property); (e) all Capital Lease Obligations; (f) all Guaranteed
Indebtedness; (g) all Indebtedness referred to in clauses (b), (c), (d), (e) or
(f) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; (h) all liabilities under Title IV of ERISA; (i) the net present
value of the non-cancelable payments owed by Borrower as lessee under any lease
which is qualified as an operating lease in accordance with GAAP for engines,
aircraft and engine parts, using a 10% discount rate; (j) all Swap Obligations,
and (k) all obligations with respect to deposits or maintenance reserves to the
extent not supported by cash reserved specifically therefor; provided, however,
that the term Indebtedness shall not include trade accounts payable within
ninety (90) days of the date the respective goods are delivered or the
respective services are rendered.
 
“Indemnified Person” means Agent and each Lender and each of the foregoing
parties’ respective Affiliates and their officers, directors, employees, agents
and advisors.
 
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of Borrower
under any Loan Document and (b) to the extent not otherwise described in (a),
Other Taxes.
 
“Initial Period” means the period from the Closing Date through June 30, 2020.
 
“Instruments” means all “instruments,” as such term is defined in the UCC, now
owned or hereafter acquired by Borrower, wherever located, including all
certificated securities and all notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
 
“Intellectual Property” means all of the following now owned or hereafter
acquired by Borrower: (a) patents, trademarks, trade dress, trade names, service
marks, copyrights, trade secrets and all other intellectual property or Licenses
thereof; and (b) all Proceeds of the foregoing.
 
“Interest Payment Date” means, as to any Base Rate Loan, the Base Rate Interest
Payment Date for such Base Rate Loan.
 
“International Interest” shall have the meaning given to such term in the Cape
Town Convention.
 
“International Registry” shall have the meaning given to such term in the Cape
Town Convention.
 
“Investment” means, when used in connection with any Person, any investment by
or of that Person, whether by means of purchase or other acquisition of stock or
other securities of any other Person or by means of a loan, advance creating a
debt, capital contribution, guaranty or other debt or equity participation or
interest in any other Person, including any partnership and joint venture
interests of such Person. The amount of any Investment shall be the amount
actually invested (minus any return of capital with respect to such Investment
which has actually been received in Cash or has been converted into Cash),
without adjustment for subsequent increases or decreases in the value of such
Investment.
 
“ISDA Notices” has the meaning assigned thereto in Recital G.
 
“JFC” means JetFleet Canada, a company organized under the laws of Canada, which
is a Subsidiary of JMC.
 
“JFC Bank Account” means the bank account in the name of JFC in Canada as long
as it does not, at any one time, hold funds in excess of the amount necessary to
pay the JFC Obligations.
 
“JFC Obligations” means ordinary course obligations of JFC for (i) one (1)
technical employee employed by it as of the Closing Date and while the
employment thereof continues thereafter, (ii) other minimal cost related to
maintaining the JFC Bank Account and tax filing and reporting obligations, and
(iii) such other de minimis expenses necessary to maintain its corporate
existence.
 
“JHC” means JetFleet Holding Corp., a California corporation.
 
“JMC” means JetFleet Management Corp., a California corporation.
 
“JMC Management Agreement” means that certain Second Amended and Restated
Management Agreement between Borrower and JMC entered into as of August 17,
2015, as amended, or any successor agreement thereto.
 
“JMC Subordination Agreement” means that certain Amended and Restated
Subordination Agreement (Management Agreement), dated as of December 20, 2017,
entered into by and among Borrower, JMC and Agent with respect to the JMC
Management Agreement, as such agreement may be amended or restated from time to
time.
 
“Landing Gear” means, whether or not installed on an airframe, each landing
gear, (nose gear and main gear), together with any and all modules and Parts
which are either incorporated or installed from time to time in or attached to
such Landing Gear.
 
“Late Payments” has the meaning assigned thereto in Section 2.5.
 
“Lease” means, with respect to an item of Equipment, any written lease
agreement, general terms agreement other similar arrangement, as may be in
effect between a Lessor, including an Equipment Owner, and a Lessee, as such
agreement or arrangement may be amended, modified, extended, supplemented,
assigned or novated from time to time in accordance with the terms thereof and
the Loan Documents.
 
“Lease Event of Default” means, for any Lease other than the Leases as of the
Closing Date with Silverstone Air Services, Skyward Express Limited and Croatia
Airlines of Aircraft bearing manufacturer’s serial numbers 406, 407, 4205 and
4211 (the “Specified Leases”), respectively, the occurrence of any of the
following:
 
(a)           The termination of such Lease prior to the date such Lease is
scheduled to expire in accordance with its terms;
 
(b)           A default by the Lessee under such Lease in the payment of any
installment of rent or a maintenance reserve amount that continues for ten (10)
days or more.
 
(b)           A default under such Lease other than that described in clause (b)
above which, through the passage of time or otherwise, has become an “event of
default” (however denominated) under such Lease that gives rise to the right to
terminate such Lease.
 
(d)           Any amendment of such Lease not in compliance with Section 7.21
hereof.
 
“Leased Spare Engine” means an Engine that is not attached to an airframe and
leased by Lessor to Lessee as a standalone engine for installation on an
airframe or as a spare.
 
“Lender” means each Lender named in Schedule A and each other party that may be
named a “Lender” under this Agreement.
 
“Lender Hedging Obligations” means all liability and obligations arising from
time to time pursuant to the Swap Contracts (including the Swap Termination
Value thereof) entered into between Borrower and a Swap Contract Counterparty in
connection with the Existing Loan and, if approved in writing by Agent in its
sole and absolute direction, the Term Loans; provided that, with respect to any
Swap Contract for the Term Loans, if such Swap Contract Counterparty ceases to
be the Agent, a Lender hereunder or an Affiliate of either of them, Lender
Hedging Obligations shall only include such obligations to the extent arising
from transactions entered into at the time such Swap Contract Counterparty was
the Agent, a Lender hereunder or an Affiliate of either of them pursuant to any
Swap Contract. For clarity, the Lender Hedging Obligations shall be deemed to
include MUFG Bank Lender Hedging Obligations.
 
“Lenders’ Consultant” the financial advisor or consultant retained by or on
behalf of Agent and/or the Lenders in connection with their respective rights
under the Loan Documents.
 
“Lessee” means the lessee of Equipment subject to a Lease.
 
“Lessee Letter” shall mean a letter in the form acceptable to Agent signed by
Borrower, as Lessor, directing the Lessee under the applicable Lease to make
payments under such Lease as directed by Agent upon the election of the
Requisite Lenders.
 
“Lessor” means any Equipment Owner party to a Lease as lessor.
 
“License” means any license under any written agreement now owned or hereafter
acquired by Borrower granting the right to use any Intellectual Property or
other license of rights or interests now held or hereafter acquired by Borrower.
 
“Lien” means, with respect to any property, any security deed, mortgage, deed to
secure debt, deed of trust, lien, pledge, assignment, charge, security interest,
title retention agreement, negative pledge, levy, execution, seizure,
attachment, garnishment, or other encumbrance of any kind in respect of such
property, whether or not choate, vested, or perfected.
 
“Loan Documents” means collectively, this Agreement, the Notes, any Guaranty,
the Collateral Documents, and any and all other agreements (including
subordination agreements), documents, or instruments (including financing
statements) entered into in connection with the transactions contemplated by
this Agreement, together with all alterations, amendments, changes, extensions,
modifications, refinancings, refundings, renewals, replacements, restatements,
or supplements, of or to any of the foregoing.
 
“Loans” means all loans and advances made by Lenders to or for the benefit of
Borrower under this Agreement or under any of the Loan Documents.
 
“LOI” has the meaning assigned thereto in Section 6.22(a).
 
“Maintenance Expense Report” has the meaning assigned thereto in Section 8.3.
 
“Maintenance Reserve Balance” has the meaning assigned thereto in Section 8.5.
 
“Maintenance Reserve Liability Report” has the meaning assigned thereto in
Section 8.5.
 
“Marketed Aircraft” shall mean the Aircraft bearing manufacturer serial numbers
15128, 15207 and 15215, respectively.
 
“Master Agreement” means Master Agreement as defined in the definition of “Swap
Contract.”
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
property, assets, operations or condition (financial or otherwise) of Borrower,
(b) the ability of Borrower to pay or perform in accordance with the terms of
any of the Loan Documents taken as a whole, or (c) the rights and remedies of
Agent or any Lender under any of the Loan Documents.
 
“Material Contracts” means those instruments, agreements and contracts set forth
on Schedule 1.1e hereto, as such schedule shall be updated by the Borrower from
time to time.
 
“Maturity Date” means March 31, 2021.
 
“Mortgage” means each Mortgage and Security Agreement (including the Existing
Mortgage) and any mortgage supplement thereto or each such other security
instrument required by Applicable Law, made by Borrower in favor of Agent as
security for certain obligations under this Agreement.
 
“MUFG Bank” has the meaning assigned thereto in Recital G.
 
“MUFG Bank Lender Hedging Obligations” means the Lender Hedging Obligations of
Borrower arising out of the MUFG Bank Swap Contracts, including the obligation
to pay the MUFG Bank Swap Termination Value and the interest amount thereon as
reflected in the Second ISDA Notice.
 
“MUFG Bank Swap Contracts” has the meaning assigned thereto in Recital G.
 
“MUFG Bank Swap Termination Value” has the meaning assigned thereto in Recital
G.
 
“Negative Pledge” means a Contractual Obligation which contains a covenant
binding on Borrower or any of its Subsidiaries that prohibits Liens on any of
its Property, other than (a) any such covenant contained in a Contractual
Obligation granting or relating to a particular Lien which affects only the
Property that is the subject of such Lien; (b) any such covenant that does not
apply to Liens securing the Obligations; and (c) customary permitted junior
Liens to be agreed upon by Borrower and Lender.
 
“Net Cash Proceeds” means, with respect to any Aviation Asset Disposition, the
gross cash proceeds received from such Aviation Asset Disposition, net of (i)
transaction costs (consisting of customary commissions, reasonable legal fees,
and expenses associated therewith) incurred in connection with such Aviation
Asset Disposition and (ii) maintenance reserve liability and security deposit
liability, in each case of Borrower, associated with such aircraft and due and
payable as part of the closing of such Aviation Asset Disposition.
 
“Non-Recourse Debt” shall mean Indebtedness for which the remedy for nonpayment
or non-performance of any obligation or any default in respect thereof is
limited to specified collateral securing such indebtedness and in respect of
which the Borrower is not subject to any personal liability except to the extent
agreed to by Agent in its sole discretion.
 
“NordLB” means, individually or collectively (as the context may require),
Norddeutsche Landesbank Girozentrale, New York Branch, any “participant” party
thereto and the security trustee under the Excluded Subsidiary Facility (and
such parties’ respective successors and assigns).
 
“NordLB Specified Event of Default” means any Event of Default arising from a
default or event of default under the Excluded Subsidiary Facility excluding,
however, (i) any such default or event of default if NordLB commences to
exercise remedies (or any such remedies are exercised on behalf of NordLB)
thereunder or (ii) an event of default arising from Section 4.02(g) of security
agreement under the Excluded Subsidiary Facility that states as follows:
 
[4.02] (g) at any time either (i) the commencement of an involuntary case or
other proceeding in respect of a Borrower Party under bankruptcy laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar law in England or the United States
seeking the appointment of a receiver, liquidator, assignee, Irish law examiner,
custodian, trustee, sequestrator (or similar official) of such Borrower Party or
for all or substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of 30 consecutive days; or (ii)
such commencement by such Borrower Party of a voluntary case or proceeding under
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable bankruptcy, insolvency or other similar law in the United States or
the consent by such Borrower Party to the appointment of or taking possession by
a receiver, liquidator, examiner, assignee, trustee, custodian, sequestrator (or
other similar official) of such Borrower Party for all or substantially all of
its property, or the making by such Borrower Party of any assignment for the
benefit of the creditors of such Borrower Party, or such Borrower Party shall
take any action to authorize any of the foregoing; or (iii) such Borrower Party
has or suffers to be appointed any examiner, administrator, administrative
receiver, receiver, liquidator, trustee or similar officer of all or a
substantial part of its assets and such appointment is not dismissed for a
period of 30 consecutive days;
 
“Note” means any note, including any Term Note, executed and delivered by
Borrower to any Lender, as applicable, under this Agreement, and “Notes” means
collectively all such notes executed and delivered by Borrower to each Lender
under this Agreement.
 
“Noticed Events of Default” has the meaning assigned thereto in Recital D.
 
“Obligations” means all (a)  loans, advances, debts, expenses reimbursements,
fees, liabilities and obligations, for the performance of covenants, tasks or
duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or amounts are liquidated or determinable) owing by
Borrower to any Lender or Agent of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under or in connection with this Agreement or any of the other Loan Documents,
and all covenants and duties regarding such amounts, and (b) the Lender Hedging
Obligations. The term “Obligations” includes all principal, interest (including
interest that accrues after the commencement of any case or proceeding under any
Debtor Relief Law by or against Borrower or any Affiliate thereof), fees,
Charges, expenses, reasonable attorneys’ fees and any other sum chargeable to
Borrower under this Agreement or any of the other Loan Documents, and all
principal and interest due in respect of the Loans; provided that Obligations of
a Guarantor shall exclude any Excluded Swap Obligation of such Guarantor.
 
“Off-Lease” means when Equipment is either (i) not subject to a valid Lease or
(ii) is subject to a valid Lease but where a required rent or reserve payment
due from Lessee is ninety (90) days past due or the Lessee is otherwise in
default thereunder.
 
"Other Connection Taxes" means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).
 
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.
 
“Owner Trustee” means bank or trust company reasonably satisfactory to Agent
acting as trustee of an aircraft owner trust under a Trust Agreement with
Borrower as the beneficiary.
 
“Owner Trustee Guaranty” means an Owner Trustee Guaranty made by Owner Trustee
in favor of Agent, as security for certain obligations under this Agreement, and
guaranteeing Owner Trustee’s performance of the obligations under the respective
Owner Trustee Mortgage.
 
“Owner Trustee Mortgage” means a Mortgage and Security Agreement made by Owner
Trustee in favor of Agent with respect to a Trust Agreement (in connection with
certain Equipment), as security for certain obligations under this Agreement.
 
“Participant” has the meaning assigned thereto in Section 12.8.5.
 
“Participant Register” has the meaning assigned thereto in Section 12.8.5.
 
“Parts” means, at any time, all parts, components, equipment, instruments,
appliances, avionics, radio and radar devices, cargo handling systems and loose
equipment that are at such time incorporated or installed in or attached to an
airframe, Engine, Propeller, APU or Landing Gear.
 
“Patriot Act” has the meaning assigned thereto in Section 1.5.
 
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
 
“Permitted Excluded Subsidiary Financing” means the financing provided to the
Excluded Subsidiaries under the Excluded Subsidiary Facility, which is
Non-Recourse Debt with respect to Borrower or to any Subsidiary other than
Excluded Subsidiaries.
 
“Permitted Indebtedness” means, as applied to Borrower, (a) Indebtedness of
Borrower under this Agreement and the Notes, (b) Indebtedness incurred in the
ordinary course of Borrower’s business which is unsecured and does not
constitute Funded Debt, (c) Indebtedness existing as of the Closing Date and
included on Schedule 1.1f hereto, including the Permitted Excluded Subsidiary
Financing and (d) the PPP Loan so long as the PPP Loan remains an unsecured
Indebtedness, qualifies for loan forgiveness under the CARES Act pursuant to the
PPP Loan Forgiveness Requirements within the time prescribed thereunder, and
Borrower and Subsidiary Guarantors comply with Section 6.26.
 
“Permitted Liens” means, as applied to Borrower: (a) Liens securing Taxes
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, repairmen, warehousemen, or
landlords or other like Liens, but which (1) have been bonded, or (2) which are
being contested in good faith by appropriate proceedings and for which Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP; (b) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment of,
obligations under worker’s compensation, unemployment insurance, or similar
legislation; (c) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights of way or restrictions of record on use of
real property which, in the reasonable judgment of Agent, do not materially
detract from the value of such property or impair the use thereof in the
business of Borrower; (d) Liens of record set forth in Schedule 1.1g; (e) Liens
created under the Loan Documents; (f) the rights of any Lessee or sublessee
under any Lease to utilize an any Collateral pursuant to the terms of a Lease;
(g) Liens arising in connection with legal or equitable proceedings against
Borrower, which Borrower is contesting with diligence and good faith and which
Liens do not have a Material Adverse Effect; (h) liens in respect of personal
property leases other than Leases, which, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the Borrower
so as to cause a Material Adverse Effect; (i) [reserved]; (j) Liens securing
Indebtedness that has since been repaid in full, which filings Borrower cannot
independently terminate; (k) Liens arising out of judgments that do not
constitute an Event of Default under this Agreement; (l) any Lien arising by
virtue of any statutory or common law provision relating to banker’s liens,
rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution in the ordinary course
of business; (m) Liens securing Capital Lease Obligations on assets subject to
such leases provided that such capitalized leases are otherwise permitted under
this Agreement; and (n) Liens arising from the following types of liabilities of
a lessee or any other operator of an item of Equipment, so long as such
liabilities are either not yet due or are being contested in good faith through
appropriate proceedings that do not give rise to any reasonable likelihood of
the sale, forfeiture or other loss of such item of Equipment, title thereto or
Agent’s security interest therein or of criminal or unindemnified civil
liability on the part of the Borrower, any Lender or any Agent and with respect
to which the lessee maintains adequate reserves (in the reasonable judgment of
the Borrower): (A) fees or charges of any airport or air navigation authority,
(B) judgments, or (C) salvage or other rights of insurers; provided that none of
the foregoing Liens would have priority over the security interest in favor of
Agent under the Loan Documents.
 
“Permitted Rights of Others” means those Right of Others consisting of (a) an
interest (other than a legal or equitable co ownership interest, an option or
right to acquire a legal or equitable co ownership interest and any interest of
a ground lessor under a ground lease), that does not materially impair the fair
market value or use of Property for the purposes for which it is or may
reasonably be expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Lien, (c) the subordination of a lease or sublease in favor
of a financing entity and (d) a license, or similar right, of or to Intellectual
Property granted in the ordinary course of business.
 
“Person” means any individual or entity, including a trustee, sole
proprietorship, partnership, limited partnership, limited liability partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity or
government (whether Federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
“PIK Interest” means the payment-in-kind interest that is due and payable
pursuant to the terms hereof on account of the Applicable Base Rate PIK Margin.
 
“Plan” means, with respect to Borrower or any of its Affiliates, at any time, an
employee benefit plan, as defined in Section 3(3) of ERISA, which Borrower or
any of its Affiliates maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
 
“PPP Covered Period” means the period applicable under the CARES Act for the use
of the proceeds of the PPP Loan for the PPP Loan to qualify for loan
forgiveness.
 
“PPP Loan” unsecured Indebtedness in an aggregate principal amount not to exceed
at any time outstanding $276,352 extended by a bank or other financial
institution to JMC in the form of a Paycheck Protection Program loan under the
CARES Act, guaranteed by the SBA. For clarity, the PPP Loan is not part of the
Loans and is not extended under the Credit Facility and, to the extent the PPP
Loan lender is a Lender under the Credit Facility, such lender is not extending
the PPP Loan in its capacity as a Lender under the Credit Facility but in its
separate capacity as the lender holding the debt with respect to the PPP Loan.
 
“PPP Loan Forgiveness Requirements” means the requirements under the CARES Act,
as determined by the SBA pursuant to applicable regulations promulgated by the
SBA from time to time, for the PPP Loan to be forgiven within the time
prescribed thereunder.
 
“Pricing Debt” means, as of the date of determination, the aggregate principal
Indebtedness under the Credit Facility then outstanding on such date.
 
“Prior Forbearance Agreement” has the meaning assigned thereto in Recital C.
 
“Proceeds” means “proceeds,” as such term is defined in the UCC and, in any
event, shall include: (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower from time to time with respect to any
Collateral; (b) any and all payments (in any form whatsoever) made or due and
payable to Borrower from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of Governmental Authority); (c) any claim of Borrower against third parties for
past, present or future infringement or dilution of any Intellectual Property or
for injury to the goodwill associated with any Intellectual Property; (d) any
recoveries by Borrower against third parties with respect to any litigation or
dispute concerning any Collateral; and (e) any and all other amounts from time
to time paid or payable under or in connection with any Collateral, upon
disposition or otherwise.
 
“Propeller” means each propeller described in a Mortgage.
 
“Property” means any real property, personal property, or Intellectual Property
owned, leased or operated by Borrower, Owner Trustee or any Subsidiary.
 
“Pro Rata Share” means, with respect to each Lender, the percentage of the Term
Loan Commitment set forth opposite the name of that Lender on Schedule A, as
such percentage may be increased or decreased pursuant to a Commitment
Assignment and Acceptance executed in accordance with Section 12.7.2.
 
“Prospective International Interest” shall have the meaning given to such term
in the Cape Town Convention.
 
"Recipient" means (a) Agent and (b) any Lender, as applicable.
 
“Register” has the meaning assigned thereto in Section 12.8.4.
 
“Reference Rate” means the variable per annum rate of interest most recently
announced by Agent at its corporate headquarters as the “MUFG Union Bank, N.A.
Reference Rate,” with the understanding that the “MUFG Union Bank, N.A.
Reference Rate” is one of Agent’s index rates and merely serves as a basis upon
which effective rates of interest are calculated for loans making reference
thereto and may not be the lowest or best rate at which Agent calculates
interest or extends credit. The Reference Rate shall be adjusted on the last
Business Day of the calendar month of any change in the “MUFG Union Bank, N.A.
Reference Rate.” The Reference Rate, as adjusted, shall constitute the Reference
Rate on the date when such adjustment is made and shall continue as the
applicable Reference Rate until further adjustment.
 
“Release” means, as to Borrower, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Materials in the indoor or outdoor environment by
Borrower, including the movement of Hazardous Materials through or in the air,
soil, surface water, ground water or property.
 
“Released Matters” has the meaning assigned thereto in Section 16.3.
 
“Released Parties” has the meaning assigned thereto in Section 16.3.
 
“Releasing Parties” has the meaning assigned thereto in Section 16.3.
 
“Requisite Lenders” means, as of the date of any determination and except as
otherwise expressly set forth herein to be all the Lenders, the Lenders holding
Notes evidencing in the aggregate 50.1% or more of the aggregate Indebtedness
then evidenced by the Notes; provided that the Note held by any Defaulting
Lender shall be excluded for purposes of making a determination of Requisite
Lenders.
 
“Reservation of Rights Letters” has the meaning assigned thereto in Recital D.
 
“Resolution Authority” means an EEA Resolution Authority or, with respect to any
UK Financial Institution, a UK Resolution Authority
 
“Restricted Account” has the meaning assigned thereto in Section 2.18.
 
“Restricted Subsidiary” means (i) any Excluded Subsidiary and (ii) any
Immaterial Subsidiary.
 
“Revised Transaction Letter” has the meaning assigned thereto in
Section 6.22(b).
 
“Right of Others” means, as to any Property in which a Person has an interest,
any legal or equitable right, title or other interest (other than a Lien) held
by any other Person in that Property, and any option or right held by any other
Person to acquire any such right, title or other interest in that Property,
including any option or right to acquire a Lien; provided, however, that (a) no
covenant restricting the use or disposition of Property of such Person contained
in any Contractual Obligation of such Person and (b) no provision contained in a
contract creating a right of payment or performance in favor of a Person that
conditions, limits, restricts, diminishes, transfers or terminates such right
shall be deemed to constitute a Right of Others.
 
“Sanctions” means sanctions administered or enforced from time to time by the
U.S. government, including those administered by the U.S. Department of the
Treasury’s Office of Foreign Assets Control or any successor thereto (“OFAC”),
the U.S. Department of Commerce, the U.S. Department of State, the United
Nations Security Council, the European Union, Her Majesty’s Treasury or any
government having jurisdiction over Borrower or one of its Subsidiaries.
 
“SBA” means the U.S. Small Business Administration.
 
“Schedule of Documents” means the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with this Agreement and the other Loan Documents and the
transactions contemplated hereunder and thereunder, substantially in the form of
Schedule 1.1h.
 
“SEC” means the United States Securities Exchange Commission.
 
“Second Amendment” has the meaning assigned thereto in Recital C.
 
“Second ISDA Notice” has the meaning assigned thereto in Recital G.
 
“Security Agreement” means the Security Agreement dated as of October 1, 2018
executed by JHC in favor of Agent, the Security Agreement dated as of February
19, 2019 executed by JMC in favor of Agent, in each case on behalf of the
Lenders, and any other security agreement executed by a Subsidiary, in form and
substance satisfactory to Agent; in each case as originally executed or as it
may from time to time be supplemented, modified, amended, extended or
supplanted.
 
“Solvent” has the meaning assigned thereto in Section 5.26.
 
“Specified Events of Default” has the meaning assigned thereto in Recital D.
 
“Specified Leases” has the meaning assigned thereto in the definition of “Lease
Event of Default”.
 
“Strategic Alternative” has the meaning assigned thereto in Section 6.22(a).
 
“Strategic Alternative Closing Milestone” has the meaning assigned thereto in
Section 6.22(c).
 
“Strategic Alternative Event of Default” has the meaning assigned thereto in
Section 6.22(d).
 
“Strategic Alternative LOI Milestone” has the meaning assigned thereto in
Section 6.22(a).
 
“Stock” means all certificated and uncertificated shares, options, warrants,
general or limited partnership interests, participation or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock, or any other “equity security” (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
 
“Subsidiary” means, as of any date of determination and with respect to any
Person, any corporation, limited liability company or partnership (whether or
not, in any case, characterized as such or as a “joint venture”), whether now
existing or hereafter organized or acquired: (a) in the case of a corporation or
limited liability company, of which a majority of the securities having ordinary
voting power for the election of directors or other governing body (other than
securities having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person and/or one or more
Subsidiaries of such Person, or (b) in the case of a partnership, of which a
majority of the partnership or other ownership interests are at the time
beneficially owned by such Person and/or one or more of its Subsidiaries.
 
“Subsidiary Guarantor” means a Subsidiary of Borrower that has delivered to
Agent a Subsidiary Guaranty and security agreement in accordance with
Section 7.19.5.
 
“Subsidiary Guaranty” means a guaranty made by a Subsidiary in favor of Agent,
whereby such Subsidiary guaranties performance of the Obligations under the Loan
Documents, including that certain Subsidiary Guaranty dated as of October 1,
2018 by JHC, the Subsidiary Guaranty dated as of February 19, 2019 by JMC, each
executed in favor of Agent, on behalf of the Lenders, in each case either as
originally executed or as it may from time to time be supplemented, modified,
amended, extended or supplanted.
 
“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
 
“Swap Contract Counterparty” means any Person that is the Agent, a Lender or an
Affiliate of either of them at the time it enters into a Swap Contract, in its
capacity as a party to a Swap Contract, whether or not such Person subsequently
ceases to be the Agent, a Lender or an Affiliate of either of them. For clarity,
MUFG Bank is a Swap Contract Counterparty with respect to the MUFG Bank Lender
Hedging Obligations.
 
“Swap Obligation” means, with respect to Borrower or any Guarantor, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a "swap" within the meaning of Section 1a(47) of the Commodity
Exchange Act.
 
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the mark-to-
market value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Agent, a Lender or any
Affiliate of either of them).
 
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), value added taxes, or any other
goods and services, use or sales taxes, assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
“Term Loan Commitment” means, subject to Section 2.7 Eighty Three Million Five
Hundred Fourteen Thousand Eight Hundred Twenty Three and 64/100 Dollars
($83,514,823.64) (which amount does not take into account capitalized interest
for April 2020 to be added to the principal on May 1, 2020). The Term Loan
Commitment is subject to increase on account of the PIK Interest that is added
to the amount thereof pursuant to the terms herein. The respective Pro Rata
Shares of the Lenders with respect to the Term Loan Commitment are set forth in
Schedule A.
 
“Term Loan” means a loan(s) made by the Lenders to Borrower pursuant to Section
2.1.
 
“Term Note” means each and collectively those certain promissory notes executed
and delivered by Borrower to each Lender in accordance with its Pro Rata Share
of the Term Loan Commitment, dated as of the Closing Date, in the original
aggregate principal amount of the Term Loan Commitment, together with any other
notes executed and delivered by Borrower to any Lender evidencing at any time
any portion of the Loans.
 
“Termination Date” means the date on which the Loans and all other Obligations
under this Agreement and the other Loan Documents are indefeasibly paid in full,
in cash, and Borrower shall have no further right to borrow any moneys or obtain
other credit extensions or financial accommodations under this Agreement.
 
“Third Amendment” has the meaning assigned thereto in Recital C.
 
“Trust Agreement” means a Trust Agreement between Owner Trustee, as owner
trustee, and Borrower, as the sole beneficiary, as amended, supplemented or
otherwise modified from time to time, whereby the parties agreed, among other
things, that Owner Trustee shall act as trustee with respect to the “Equipment”
and “Lease Agreement” as defined therein.
 
“UCC” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that in the event by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “UCC” means the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
 
“UK Financial Institution” means any BRRD Undertaking (as such term is defined
under the PRA Rulebook (as amended form time to time) promulgated by the United
Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6
of the FCA Handbook (as amended from time to time) promulgated by the United
Kingdom Financial Conduct Authority, which includes certain credit institutions
and investment firms, and certain affiliates of such credit institutions or
investment firms
 
“UK Resolution Authority” means the Bank of England or any other public
administrative authority having responsibility for the resolution of any UK
Financial Institution.
 
“Unrestricted Cash” means the sum of Cash and Cash Equivalents of Borrower and
its Subsidiary Guarantors held in deposit accounts other than the Restricted
Account.
 
“Wholly-Owned Subsidiary” means a Subsidiary of Borrower, 100% of the capital
stock or other equity interest of which is owned, directly or indirectly, by
Borrower, except for director’s qualifying shares required by Applicable Law.
 
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule, and (b) with respect to the United Kingdom, any powers of
the applicable Resolution Authority under the Bail-In Legislation to cancel,
reduce, modify or change the form of a liability of any UK Financial Institution
or any contract or instrument under which that liability arises, to convert all
or part of that liability into shares, securities or obligations of that person
or any other person, to provide that any such contract or instrument is to have
effect as if a right had been exercised under it or to suspend any obligation in
respect of that liability or any of the powers under that Bail-In Legislation
that are related to or ancillary to any of those powers.
 
1.2 Accounting Terms
 
. All accounting terms used, but not specifically defined, in this Agreement
shall be construed and defined in accordance with GAAP.
 
1.3 UCC
 
. Any terms that are defined in the UCC and used, but not specifically defined,
in this Agreement shall be construed and defined in accordance with the UCC.
 
1.4 Construction
 
. For purposes of this Agreement and the other Loan Documents, the following
rules of construction shall apply, unless specifically indicated to the
contrary: (a) wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter; (b) the term “or” is not exclusive; (c)
the term “including” (or any form thereof) shall not be limiting or exclusive;
(d) all references to statutes and related regulations shall include any
amendments thereof and any successor statutes and regulations; (e) the words
“herein,” “hereof” and “hereunder” or other words of similar import refer to
this Agreement as a whole, including the exhibits and schedules hereto, as the
same may from time to time be amended, modified or supplemented, and not to any
particular section, subsection or clause contained in this Agreement; (f) all
references in this Agreement or in the schedules to this Agreement to sections,
schedules, disclosure schedules, exhibits, and attachments shall refer to the
corresponding sections, schedules, disclosure schedules, exhibits, and
attachments of or to this Agreement; and (g) all references to any instruments
or agreements, including references to any of the Loan Documents, shall include
any and all modifications or amendments thereto and any and all extensions or
renewals thereof. Any reference herein to a merger, transfer, consolidation,
amalgamation, consolidation, assignment, sale, disposition or transfer, or
similar term, shall be deemed to apply to a division of or by a limited
liability company, or an allocation of assets to a series of a limited liability
company (or the unwinding of such a division or allocation), as if it were a
merger, transfer, consolidation, amalgamation, consolidation, assignment, sale,
disposition or transfer, or similar term, as applicable, to, of or with a
separate Person.
 
1.5 USA Patriot Act Notice
 
. Each Lender is subject to the USA Patriot Act and hereby notifies Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (as amended and supplemented from
time to time, the “Patriot Act”), each Lender is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow each Lender to
identify Borrower in accordance with the Patriot Act.
 
1.6 Rounding
 
. Except as expressly otherwise provided herein, any financial ratios required
to be maintained by Borrower pursuant to this Agreement (or required to be
satisfied in order for a specific action to be permitted under this Agreement)
shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).
 
1.7 Deliveries
 
. Notwithstanding anything herein or any other Loan Document to the contrary,
whenever any document, agreement or other item is required by any Loan Document
to be delivered on a day that is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day.
 
1.8 Division
 
. For all purposes under the Loan Documents, in connection with any division or
plan of division under Delaware law (or any comparable event under a different
jurisdiction’s laws): (a) if any asset, right, obligation or liability of any
Person becomes the asset, right, obligation or liability of a different Person,
then it shall be deemed to have been transferred from the original Person to the
subsequent Person, and (b) if any new Person comes into existence, such new
Person shall be deemed to have been organized on the first date of its existence
by the holders of its Stock at such time.
 
2. TERM LOAN COMMITMENT
 
2.1 Term Loans
 
. Subject to the terms and conditions of this Agreement, each Lender severally
agrees to extend Term Loans to Borrower on the Closing Date in an aggregate
principal amount equal to such Lender’s Pro Rata Share of the Term Loan
Commitment, at which time the aggregate principal amount extended to Borrower
under the Credit Facility shall equal the Term Loan Commitment on the Closing
Date and shall include the amounts already funded and owing under the Existing
Loan. For the avoidance of doubt, the cashless exchange of Loans for the
Existing Loan shall be the only means by which the Lenders shall make the Loans
hereunder, and the Lenders shall have no obligations hereunder to make any funds
available to Borrower. The Term Loans are not revolving credit loans, and
amounts borrowed hereunder and repaid or prepaid may not be reborrowed. Borrower
shall repay the Term Loans in full, together with any other amounts then due and
owing Lender under this Agreement and the other Loan Documents, on the Maturity
Date. The Term Loans shall be repayable in accordance with the terms of this
Agreement and entries upon the books and records maintained by Agent.
 
2.1.1 Type
 
. The Term Loan shall be a Base Rate Loan and shall accrue interest as set forth
herein.
 
2.1.2 Request; Notification to Lenders
 
. Any notice in connection with a requested Term Loan under this Agreement that
is received by Agent after 11:00 a.m. (California time) on any Business Day, or
at any time on a day that is not a Business Day, shall be deemed received by
Agent on the next Business Day. Promptly following receipt of a request for a
Loan, Agent shall notify each Lender by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier) of the date of the Loan and that
Lender’s Pro Rata Share of the Loan. Not later than 10:00 a.m., California time,
on the date specified for any Loan (which must be a Business Day), each Lender
shall be deemed to have made its Pro Rata Share of the Loan in immediately
available funds available to Agent at Agent’s office and the requested Term Loan
shall be deemed made on such date, and the information regarding which may be
noted in Agent’s records (provided that, failure to update such records
accordingly shall not in any manner affect the obligation of Borrower to repay
the Loans). For clarity, (i) no disbursement of funds will be made to Borrower
in connection with such request and references in this Agreement to making,
funding, advancing Loans and like terms shall not be deemed to provide for the
making of any new Loans and (ii) the requirements under this Section 2.1.2 shall
be deemed satisfied upon the closing hereunder on the Closing Date.
 
2.2 Payment of Interest; Interest Rate
 
.
 
2.2.1 Loans
 
. Interest on Term Loans shall be payable as follows:
 
(a) Base Rate Loans
 
.
 
(i) Interest on each outstanding Base Rate Loan shall be computed for the actual
number of days elapsed on the basis of a year of 360 days and shall be payable
to Agent for the ratable benefit of Lenders, in arrears (i) on the first
Business Day of each month, (ii) on the Maturity Date, and (iii) if any interest
accrues or remains payable after the Maturity Date or during the continuance of
an Event of Default, upon demand by Agent (such date in the foregoing clauses
(i) through (iii), “Base Rate Interest Payment Date”).
 
(ii) Interest shall accrue and be payable on each Base Rate Loan at a per annum
interest rate (such interest rate, “Applicable Base Rate”) equal to:
 
(A) for the Initial Period, the Base Rate plus the sum of the Applicable Base
Rate Margin for the Initial Period consisting of the Applicable Base Rate Cash
Margin for the Initial Period and Applicable Base Rate PIK Margin for the
Initial Period.
 
(B) for any period after the Initial Period, the Base Rate plus the Applicable
Base Rate Margin for such period consisting of the Applicable Base Rate Cash
Margin for such Period and Applicable Base Rate PIK Margin for such period.
 
(iii) The portion of interest accruing on each Base Rate Loan on account of the
Applicable Base Rate Cash Margin shall be due and payable in arrears on each
Interest Payment Date for such Base Rate Loan and at such other times as may be
specified herein.
 
(iv) The portion of interest accruing on each Base Rate Loan on account of the
Applicable Base Rate PIK Margin shall be due and payable in kind by capitalizing
and adding to the outstanding principal balance of such Base Rate Loan on each
Interest Payment Date for such Base Rate Loan (after which time such capitalized
interest shall no longer be treated as accrued and unpaid interest but instead
shall be treated as a portion of the outstanding principal balance of such Base
Rate Loan and bear interest in accordance with this Agreement for all purposes);
provided that Borrower shall have the right, in its discretion, to pay such
amount, in full but not in part, in cash upon providing written notice to Agent
of its election to do so at least three (3) Business Days prior to the
applicable Interest Payment Date.
 
(b) [Reserved]
 
.
 
(c) Interest Payable
 
. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.
 
(d) Deferred Interest
 
. Notwithstanding anything herein to the contrary, the cash component of the
interest payments for the months of March (the “March Interest”) and April of
2020 (the “April Interest” and, together with the March Interest Payment, the
“Deferred Interest”) due on April 1, 2020 and May 1, 2020, respectively, will be
deferred and be due and payable on the earlier of (i) the date of receipt of net
proceeds into the Restricted Account from the sale of Aircraft 238 and (ii) July
1, 2020 (such earlier date, the “Deferred Interest Due Date”). Pending such
payment, (1) the amount on account of the PIK Interest component of the Late Fee
accruing on the April Interest from May 1, 2020 through the Closing Date shall
be capitalized and added to the principal balance of the Loans on the Closing
Date and, thereafter, the amount on account of the PIK Interest component of the
Late Fee accruing on the Deferred Interest for the period after the Closing Date
until the Deferred Interest Due Date shall be waived; and (2) the amount on
account of the Cash Interest component of the Late Fee accruing on the March
Interest and the April Interest from April 1, 2020 and May 1, 2020,
respectively, through the Deferred Interest Due Date shall be waived.
 
2.2.2 Default Rate
 
. Upon the occurrence and during the continuance of an Event of Default,
interest on all outstanding Obligations shall, upon the election of Agent or the
Requisite Lenders, confirmed by written notice from Agent to Borrower, accrue
and be payable at the Default Rate; provided that, the Default Rate shall not
apply as a result of solely a Strategic Alternative Event of Default unless the
Requisite Lenders require it. Interest accruing at the Default Rate shall be
payable to Agent, for the ratable benefit of Lenders, on demand and in any event
on the Maturity Date. Agent shall not be required to (1) accelerate the maturity
of the Loans or (2) exercise any other rights or remedies under the Loan
Documents, in order to charge the Default Rate. Upon the occurrence and during
the continuance of an Event of Default specified in Sections 9.1.5, 9.1.6,
or 9.1.7, the interest rate shall be increased automatically to the Default Rate
without the necessity of any action by Agent or the Requisite Lenders.
 
2.3 Maximum Rate of Interest
 
. In no event shall the aggregate of all interest on the Obligations charged or
collected pursuant to the terms of this Agreement or pursuant to the Notes (if
any) exceed the highest rate permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable. In the event that
such a court determines that a Lender has charged or received interest under
this Agreement or the Notes (if any) in excess of the highest applicable rate,
the rate in effect under this Agreement and the Notes (if any) shall
automatically be reduced to the maximum rate permitted by Applicable Law and
Lender shall promptly apply such excess to reduce the principal balance of the
Obligations, or if the principal balance of the Obligations owing have been paid
in full, Lender shall promptly apply such excess to reduce any other
Obligations, and if all Obligations have been paid in full, then Lender shall
refund to Borrower any interest received by Lender in excess of the maximum
lawful rate; provided, that if at any time thereafter the rate of interest
payable hereunder is less than the highest applicable rate, Borrower shall
continue to pay interest hereunder at the highest applicable rate, until such
time as the total interest received by Lender from the making of Loans hereunder
is equal to the total interest that Lender would have received had the interest
rate payable hereunder been (but for the operation of this Section 2.3) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. It is the intent of this Agreement that Borrower not pay or contract
to pay, and that Lender not receive or contract to receive, directly or
indirectly, interest in excess of that which may be paid by Borrower under
Applicable Law.
 
2.4 Fees
 
. Borrower shall pay to Agent:
 
2.4.1 Fees to Agent
 
. Annually on each future anniversary of the “Closing Date” as defined in the
Existing Credit Agreement (i.e., February 19, 2019), a fee for ongoing
administration of the Credit Facility equal to $50,000.00 plus $5,000 times the
number of discrete Lenders (not to include MUFG Union Bank, N.A.) subscribed to
the Credit Facility, which fee shall be solely for Agent’s own account and is
nonrefundable.  Borrower shall also reimburse Agent for charges to set up and
maintain the website for the Lenders in the Credit Facility.
 
2.5 Late Payments
 
. If any installment of principal or interest or any fee or cost or other amount
payable under any Loan Document to Agent or any Lender is not paid when due
(after giving effect to any applicable grace periods), it shall thereafter bear
interest at the fluctuating rate per annum at all times equal to the Default
Rate, to the fullest extent permitted by Applicable Law; provided, however, the
foregoing late payment charge (the “Late Fee”) shall not apply to a Strategic
Alternative Event of Default unless Requisite Lenders require it. The Late Fee
is imposed for the purpose of defraying the expenses of Agent and the Lenders
incident to handling such delinquent payment. This provision shall not, however,
be construed as extending the time for payment of any amount due under the Loan
Documents. The Late Fee shall be in addition to, and not in lieu of, any other
amount that Agent or the Lenders may be entitled to receive or action that Agent
or the Lenders may be authorized to take as a result of such late payment.
Accrued and unpaid interest on past due amounts (including, without limitation,
interest on past due interest) shall be compounded monthly, on the last day of
each calendar month, to the fullest extent permitted by Applicable Law.
 
2.6 Prepayment
 
.
 
2.6.1 Optional Prepayment
 
. The principal amount of any Base Rate Loan may be prepaid, in whole or in
part, prior to the Maturity Date, together with accrued interest to the date of
such prepayment on the aggregate principal amount prepaid, at any time upon a
written notice to Agent not later than 11:00 a.m. (California time) on the date
of the prepayment of such Base Rate Loan. Each notice of prepayment shall be
irrevocable. Any Loan repaid may not be reborrowed.
 
2.6.2 Mandatory Prepayment
 
.
 
(a) Event of Loss. Upon the receipt of proceeds in excess of $200,000.00 from
any recovery under any applicable insurance policies (or otherwise) in
connection with an Event of Loss, Borrower shall immediately pay down the
Obligations in an amount equal to 100% of the Net Cash Proceeds from such
recovery, unless all Lenders agree to waive all or a portion of such mandatory
prepayment.
 
(b) Excess Cash. In accordance with Section 6.15, Borrower shall cause the
Excess Cash to be remitted to Agent to be applied to the payment of the
Obligations.
 
(c) Aviation Asset Disposition. Upon the closing of any Disposition, including
an Aviation Asset Disposition, Borrower shall cause 100% of the Net Cash
Proceeds of such Disposition to be remitted to Agent to the payment of the
Obligations.
 
2.6.3 Mandatory Repayment – Change in Control
 
. Upon the occurrence of a Change in Control, the Term Loan Commitment shall be
terminated, and all outstanding Loans shall, together with all accrued interest
thereon, immediately be due and payable.
 
2.7 Term; Repayment of Loans
 
.
 
2.7.1 Term. The Credit Facility and all other Obligations related thereto shall
be automatically due and payable in full on the Maturity Date, unless earlier
due and payable as provided in this Agreement. Borrower hereby unconditionally
promises to pay to Agent for the account of each Lender the then unpaid
principal amount of each Loan of such Lender on the Maturity Date (or such
earlier date on which the Loans become due and payable pursuant the applicable
terms hereunder). Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth herein.
 
2.8 [Reserved]
 
.
 
2.9 Evidence of Loans; Accounting
 
.
 
2.9.1 If so requested by any Lender prior to the Closing Date, or at any time
thereafter, Borrower shall execute and deliver to such Lender (and/or, if
applicable and if so specified in such notice, to any Person who is an assignee
of such Lender) on the Closing Date (or, if such notice is delivered after the
Closing Date, promptly after Borrower’s receipt of such notice) a Note or Notes
to evidence such Lender’s Loan.
 
2.9.2 Each Lender shall maintain, in accordance with its usual practice,
electronic or written records evidencing the indebtedness and obligations to
such Lender resulting from each Loan made by such Lender, including, without
limitation, the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement (including, but not limited to,
any increases in principal of the Term Loans resulting from the capitalization
of PIK Interest).
 
2.9.3 Agent shall maintain electronic or written records in which it will record
(i) the amount of each Loan made hereunder, the type of each Loan made and any
applicable interest rate periods, (ii) the amount of any principal and/or
interest due and payable and/or to become due and payable from Borrower to each
Lender hereunder and (iii) all amounts received by Agent hereunder from Borrower
and each Lender’s share thereof.
 
2.9.4 The entries in the electronic or written records maintained pursuant to
Section 2.9.3 shall be prima facie evidence of the existence and amounts of the
obligations and indebtedness therein recorded; provided, however, that the
failure of Agent to maintain such records or any error therein shall not in any
manner affect the obligations of Borrower to repay the Loans or Obligations in
accordance with their terms.
 
2.9.5 Agent shall provide a quarterly accounting to Borrower of the Loans and
other transactions under this Agreement, including Agent’s calculation of
principal and interest. Each and every such accounting shall, absent manifest
error, be deemed final, binding and conclusive upon Borrower.
 
2.10 Manner of Payment
 
.
 
2.10.1 When Payments Due
 
.
 
(a) Except as expressly set forth in this Agreement, each payment (including any
prepayment) by Borrower on account of the principal of or interest on the Loans
and any other amount owed to Lenders on account of the Obligations shall be made
not later than 11:00 a.m. (California time) on the date specified for payment
under this Agreement to Agent in lawful money of the United States and in
immediately available funds. Any payment received by Agent on a day that is not
a Business Day or after 11:00 a.m. (California time) on a Business Day, shall be
deemed received on the next Business Day. The amount of all payments received by
Agent for the account of each Lender shall be disbursed by Agent to the
applicable Lender promptly upon receipt in like funds as received.
 
(b) If any payment on any Obligation is specified to be made upon a day that is
not a Business Day, it shall be deemed to be specified to be made on the next
succeeding day that is a Business Day, and such extension of time shall in such
case be included in computing interest and fees, if any, in connection with such
payment.
 
2.10.2 No Deductions
 
. Borrower shall pay principal, interest, fees, and all other amounts due on the
Obligations without condition or deduction for any set-off, recoupment, defense
or counterclaim or any other deduction whatsoever.
 
2.11 Application of Payments
 
.
 
2.11.1 Waiver. Borrower irrevocably waives the right to direct the application
of any and all payments received at any time by Agent or any Lender from or on
behalf of Borrower and specifically waives the provisions of California Civil
Code Sections 1479 and 2822 or similar provisions under any other Applicable Law
giving Borrower the right to designate application of payments. The allocations
set forth in this Section are solely to determine the rights and priorities of
Agent and the Lenders as among themselves, and may be changed by agreement among
all of the Lenders without the consent of Borrower. This Section is not for the
benefit of or enforceable by Borrower.
 
2.11.2 Allocation. Notwithstanding anything herein to the contrary, if at any
time amounts are received by or available to Agent for application to the
Obligations, such amounts shall be applied in the following order of priority:
 
(a) first, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees and disbursements owed
to Agent and charges of counsel payable under Section 12.2) payable to Agent in
its capacity as such;
 
(b) second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders arising under the Loan Documents, ratably among them in proportion to
the respective amounts described in this clause (b) payable to them;
 
(c) third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and on the Lender Hedging Obligations, ratably
among the Lenders and the Swap Contract Counterparty(ies) in proportion to the
respective amounts described in this clause (c) payable to them;
 
(d) fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and Obligations constituting Lender Hedging Obligations
ratably among the Lenders and the Swap Contract Counterparty(ies) in proportion
to the respective amounts described in this clause (d) payable to them (for
clarity, the repayment of the principal of the Loans rank pari passu with the
repayment of the Lender Hedging Obligations);
 
(e) fifth, to the payment in full of all other Obligations, in each case ratably
among Agent and the Lenders based upon the respective aggregate amounts of all
such Obligations owing to them in accordance with the respective amounts thereof
then due and payable; and
 
(f) finally, the balance, if any, after all Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Applicable Law.
 
2.11.3 Erroneous Application. Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been made shall be to recover the amount
from the Person that actually received it (and, if such amount was received by
any Lender, such Lender hereby agrees to return it).
 
2.12 Use of Proceeds
 
. The proceeds of the Loans shall be used by Borrower to convert the existing
revolving debt to a term loan and to support Borrower’s working capital needs
and general corporate purposes. Borrower will not, directly or indirectly, use
any part of any Loan proceeds for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which violates,
or is inconsistent with, Regulation X of such Board of Governors.
 
2.13 All Obligations to Constitute One Obligation
 
. All Obligations related to the Credit Facility constitute one general
obligation of Borrower and shall be secured by Agent’s Liens upon all of the
Collateral, and by all other Liens previously, now or at any time in the future
granted by Borrower to Agent or any Lender to the extent provided in the
Collateral Documents and permitted by this Agreement.
 
2.14 Authorization to Make Loans
 
. Agent is authorized to make the Loans based on telephonic or other oral or
written instructions received from any Person that Agent believes in good faith
to be an authorized representative of Borrower, or at the discretion of Agent,
if such Loans are necessary to satisfy any of the Obligations. Borrower consents
to the recordation of any telephonic or other communications between Agent and
Borrower for the purpose of maintaining such party’s business records of such
transactions.
 
2.15 Authorization to Debit Accounts
 
. Borrower authorizes Agent, upon prior notice to Borrower, to debit any of
Borrower’s deposit account(s) with Agent (including the Restricted Account) for
the purpose of Borrower’s payment of principal, interest, fees and other costs
and expenses due and payable by Borrower under this Agreement.
 
2.16 [Reserved]
 
.
 
2.17 Withholding of Taxes
 
.
 
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of Borrower under any Loan Document shall be made without deduction
or withholding for any Taxes, except as required by Applicable Law. If any
Applicable Law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by a withholding agent, then the applicable withholding agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable
by Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.17) the applicable Recipient
receives an amount equal to the sum it would have received had no such deduction
or withholding been made.
 
(b) Payment of Other Taxes by Borrower. Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of Agent timely reimburse it for, Other Taxes.
 
(c) Evidence of Payments. As soon as practicable after any payment of Taxes by
Borrower to a Governmental Authority pursuant to this Section 2.17, Borrower
shall deliver to Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to Agent.
 
(d) Indemnification by Borrower. Borrower shall indemnify each Recipient, within
ten (10) days after demand therefor, for the full amount of any Indemnified
Taxes (including Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable or paid by such Recipient or required to be withheld
or deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to
Borrower by a Lender (with a copy to Agent), or by Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
 
(e) Indemnification by the Lenders. Each Lender shall severally indemnify Agent,
within ten (10) days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that Borrower has not
already indemnified Agent for such Indemnified Taxes and without limiting the
obligation of Borrower to do so), (ii) any Taxes attributable to such Lender's
failure to comply with the provisions of Section 12.8.5 relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such Lender, in each case, that are payable or paid by Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes Agent to set off
and apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by Agent to the Lender from any other source
against any amount due to Agent under this paragraph (e).
 
(f) Status of Lenders.
 
(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to
Borrower and Agent, at the time or times reasonably requested by Borrower or
Agent, such properly completed and executed documentation reasonably requested
by Borrower or Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by Borrower or Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by Borrower or Agent as
will enable Borrower or Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(f)(ii)(A), 2.17(f)(ii)(B) and  2.17(f)(ii)(D) below)
shall not be required if in the Lender's reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.
 
(ii) Without limiting the generality of the foregoing, in the event that
Borrower is a U.S. Person,
 
(A) any Lender that is a U.S. Person shall deliver to Borrower and Agent on or
prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of Borrower or
Agent), an executed copy of IRS Form W-9 certifying that such Lender is exempt
from U.S. federal backup withholding tax;
 
(B) any Foreign Lender shall comply with Section 12.17.
 
(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrower and Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower or Agent), executed copies of any other form
prescribed by Applicable Law as a basis for claiming exemption from or a
reduction in U.S. Federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by Applicable Law to permit
Borrower or Agent to determine the withholding or deduction required to be made;
and
 
(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to Borrower and Agent at the time or times prescribed by law and
at such time or times reasonably requested by Borrower or Agent such
documentation prescribed by Applicable Law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by Borrower or Agent as may be necessary for Borrower and Agent to
comply with their obligations under FATCA and to determine that such Lender has
complied with such Lender's obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), "FATCA" shall include any amendments made to FATCA after the date of this
Agreement.
 
Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify Borrower and Agent in writing of its
legal inability to do so.
 
(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
 
(h) Survival; Defined Terms. Each party's obligations under this
Section 2.17 shall survive the resignation or replacement of the Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Term Loan Commitments and the repayment, satisfaction or discharge of all
obligations under any Loan Document. For purposes of this Section 2.17, the term
"Applicable Law" includes FATCA.
 
2.18 Restricted Account
 
1. 
.
 
(a) Account Established. Borrower has established with Agent the depository
account, bearing account number XXXXX00046 (“Restricted Account”). As an
additional security for the Obligations, Borrower hereby grants to Agent, for
the benefit of the Lenders, a first priority perfected security interest in the
Restricted Account, all sums deposited therein and all replacements,
substitutions or proceeds thereof. Borrower shall pay all costs and expenses in
connection with establishing and administering the Restricted Account. The
Restricted Account is a “blocked” account, and Borrower shall not be entitled to
make any withdrawals of any funds thereof, and Agent shall have the sole right
to make such withdrawals in accordance with the terms hereof. Borrower hereby
waives all right to withdraw any funds from the Restricted Account, except upon
full satisfaction of all the Obligations.
 
(b) Disbursements. Agent shall be entitled to disburse all or part of the funds
in the Restricted Account as follows (for clarity, the forgoing consent shall be
deemed to have been provided for the period before and after the occurrence of a
Forbearance Termination Date, without any further notice to or consent from
Borrower or Lenders):
 
(i) Agent shall be entitled to disburse funds from the Restricted Account to pay
the monthly accrued interest portion (or any portion thereof to the extent funds
are available in the Restricted Account) payable on the Obligations (subject to
Section 2.2.1(d) with respect to the Deferred Interest) and the Lender Hedging
Obligations.
 
(ii) Agent shall be entitled to disburse funds from the Restricted Account to
pay the ongoing fees and expenses of Agent and of its counsel and other
professionals of Agent.
 
(iii) Agent shall be entitled to disburse from the Restricted Account on or
shortly after the Closing Date an amount estimated at $1,585,379.93 for the
payment of accrued professional fees and expenses of Agent’s counsel and
financial advisor and $543,750.00 for the accrued professional fee of Borrower’s
financial advisor (B. Riley).
 
(c) Upon the occurrence and during the continuation of a Default or Event of
Default (other than the Specified Events of Default during the Forbearance
Period), Agent may (and, if directed by the Requisite Lenders, shall), in
addition to any and all other rights and remedies available to Agent, apply any
amounts then on deposit in the Restricted Account to the payment of the
Obligations in accordance with Section 2.11.  No such use or application of
funds in the Restricted Account shall be deemed to cure any Default or Event of
Default. No further notice to or direction or authorization from Borrower shall
be necessary to warrant such direct disbursement by Agent.
 
3. SECURITY
 
3.1 Grant of Security Interest
 
. To secure the prompt payment and performance of all Obligations,
 
3.1.1 Borrower has granted and pledged, and hereby reaffirms such grant and
pledge, to Agent a continuing security interest in all presently existing and
hereafter acquired or arising Assets, including all Assets that immediately
prior to the Closing Date constituted Collateral securing any part of the
Existing Loan, in order to secure prompt repayment of any and all Obligations
and in order to secure prompt performance by Borrower of each of its covenants
and duties under the Loan Documents. Such security interest constitutes a valid,
first priority security interest in the presently existing Assets, and will
constitute a valid first priority security interest in Assets acquired after the
date hereof. Notwithstanding the foregoing, Agent shall not be granted any
security interest in the Excluded Assets or the equity interests in the Excluded
Subsidiaries except as provided under Section 3.1.2, below;
 
3.1.2 Borrower shall cause each Subsidiary (other than an Immaterial Subsidiary)
to (i) grant to Agent a perfected security interest and Lien on and (ii) assign
to Agent, all right, title and interest of it in and to all of its Assets (other
than the Excluded Assets), whether now existing or owned or hereafter acquired;
provided, however, that Borrower (or the Excluded Subsidiary which is the owner
thereof) shall only be required to grant a perfected security interest and Lien
in Excluded Assets and the equity interests in the Excluded Subsidiaries upon
repayment of the applicable Permitted Excluded Subsidiary Financing and release
by the Permitted Excluded Subsidiary Financing lender;
 
3.1.3 Borrower has granted to Agent a first priority perfected, secured Lien on,
and has assigned to Agent, all right, title and interest of the Borrower in and
to all “Collateral” (as such term is defined in the Mortgage (including the
Existing Mortgage)), whether now existing or owned or hereafter acquired, and
hereby reaffirms such grant and shall confirm such grant by delivery to Agent of
a fully executed Fourth Amended and Restated Mortgage and Security Agreement in
the form acceptable to Agent;
 
3.1.4 Borrower shall cause the Owner Trustee, if any, to pledge to Agent all of
the Borrower’s right, title and interest in a Beneficial Interest under a Trust
Agreement by the delivery to Agent a fully executed Beneficial Interest Pledge
Agreement, each in the form acceptable to Agent;
 
3.1.5 Borrower shall cause the Owner Trustee, if any, to execute and deliver to
Agent an Owner Trustee Mortgage in favor of Agent in the form acceptable to
Agent;
 
3.1.6 Borrower shall cause the Owner Trustee, if any, to execute and deliver to
Agent an Owner Trustee Guaranty in the form acceptable to Agent, guarantying the
performance of the Obligations; and
 
3.1.7 Borrower shall make or cause any Person to make such filings,
registrations, or otherwise with the FAA, International Registry, the U.S.
Patents and Trademarks Office and otherwise under the UCC and all other
Applicable Law as shall be required to perfect the Lien of Agent with respect to
all Collateral under the Collateral Documents or any other Loan Documents,
including but not limited to the following :
 
(a) UCC financing statements, naming Agent as secured party and Agent for the
benefit of Lenders in order to perfect and preserve Agent’s first priority Lien
on the Collateral shall have been filed in such states in the United States of
America as required, in the judgment of Agent, to perfect the Lien of Agent in
all UCC Collateral;
 
(b) the Lien and International Interest (or Prospective International Interest),
and any and all assignments and prospective assignments, as applicable, thereof,
of the Mortgage and an Owner Trustee Mortgage, if any, with respect to the
Equipment and Cape Town Eligible Leases with respect thereto owned by the
Borrower and each Subsidiary as of the date of this Agreement shall have been
registered with the International Registry and, with respect to all Engines and
U.S. registered aircraft, the FAA; provided that if the International Registry
does not then provide as a “drop down” registration category the serial number
of any item of Equipment to be registered, then the Borrower shall register the
same by “free text” notation in the International Registry and shall
subsequently register such item of Equipment in its serial number category as
soon as such registration category is available on the International Registry;
 
(c) without limiting the generality of the foregoing, all filings with the
United States Patent and Trademark Office necessary or desirable to perfect
Agent’s Lien on all patents and trademarks of the Borrower; and
 
(d) the Lien as applicable, of the Mortgage and Owner Trustee Mortgage, if any,
with respect to the Equipment and Leases owned by the Borrower and each
Subsidiary as of the date of this Agreement and not located in a Contracting
State shall have been registered with the appropriate authorities pursuant to
Applicable Law.
 
3.1.8 Except with respect to the JFC Bank Account as long as Borrower remains in
compliance with Section 7.4, Borrower and each of its Subsidiaries (other than
Excluded Subsidiaries) that maintains a deposit account shall grant to Agent a
first priority perfected, secured Lien on, and assign to Agent, all right, title
and interest of the Borrower in and to all, in such deposit account and the
funds deposited therein and shall enter into an Account Control Agreement with
respect to such accounts acceptable to Agent.
 
3.2 Priority of Agent’s Security Interest
 
. Borrower represents, warrants and agrees as follows: (1) upon the execution of
this Agreement by the parties hereto and all other documents contemplated hereby
(as referenced in Section 3.1 above) and as a result of the filing by Agent of
appropriate financing statements in the appropriate jurisdictions and
appropriate documentation with the FAA, Agent’s Liens in the Collateral are and
will be fully perfected Liens on all Collateral, which Liens are and will, until
the Termination Date, be enforceable as first priority, fully perfected Liens as
against all other creditors of, and purchasers from, Borrower; (2) all actions
necessary or desirable to protect and perfect such Liens in favor of Agent in
all of the Collateral has been duly taken; (3) Borrower or Owner Trustee, as
applicable, are and will be the sole owner of each such item of the Collateral,
and have and will have good and marketable title to such Collateral free and
clear of any and all Liens except for Permitted Liens; and (4) no effective
security agreement, mortgage, deed of trust, financing statement, equivalent
security or Lien instrument or continuation statement covering all or any part
of the Collateral is or will be on file or of record in any public office,
except those filed by Borrower in favor of Agent pursuant to the Loan Documents,
and those relating to other Permitted Liens. Borrower shall defend the right,
title and interest of Agent in and to the Collateral against the claims and
demands of all Persons whomsoever, and shall take such actions, including (i)
the prompt delivery of all original Instruments, Chattel Paper and certificated
Stock owned by Borrower to Agent, (ii) notification of Agent’s interest in
Collateral at Agent’s request, and (iii) the institution of litigation against
third parties as shall be prudent in order to protect and preserve Borrower’s
and Agent’s respective and several interests in the Collateral. All Chattel
Paper shall be marked with the following legend:
 
“THIS WRITING AND THE OBLIGATIONS EVIDENCED OR SECURED HEREBY ARE SUBJECT TO THE
LIEN OF MUFG UNION BANK, N.A., AS ADMINISTRATIVE AGENT”
 
3.3 Agent’s Rights
 
.
 
3.3.1 In addition to any and all rights under the Collateral Documents, at any
time after the occurrence and continuance of an Event of Default (other than
Specified Events of Default during the Forbearance Period), Agent may, at any
time in Agent’s own name or in the name of Borrower, (1) communicate with
Account Debtors, parties to Contracts and Leases, and obligors in respect of
Instruments, Chattel Paper or other Collateral to verify to Agent’s satisfaction
the existence, amount and terms of any such Accounts, Contracts, Instruments,
Chattel Paper, Leases or other Collateral, and (2) without prior notice to
Borrower, notify Account Debtors, parties to Contracts, parties to Leases, and
obligors in respect of Chattel Paper, Instruments, or other Collateral that such
Collateral has been assigned to Agent and that payments shall be made directly
to Agent. Upon the request of Agent, Borrower shall so notify such Account
Debtors, parties to Contracts, parties to Leases, and obligors in respect of
Instruments, Chattel Paper, Leases or other Collateral.
 
3.3.2 It is expressly agreed by Borrower and Owner Trustee that Borrower and
Owner Trustee, as applicable, shall remain liable under each Contract, License
and Lease to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, and Agent shall have no obligation or
liability whatsoever to any Person under any Contract, License or Lease (between
Borrower, Owner Trustee and any Person other than Agent) by reason of or arising
out of the execution, delivery or performance of this Agreement, and Agent shall
not be required or obligated in any manner (1) to perform or fulfill any of the
obligations of Borrower thereunder, (2) to make any payment or inquiry, or (3)
to take any action of any kind to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times under or pursuant to any Contract, License or
Lease.
 
3.3.3 For the purposes of allowing Agent to conduct a Field Examination,
Borrower shall, with respect to each owned, leased, or controlled property or
facility, during normal business hours: (1) provide access to such facility or
property to Agent and any of its officers, employees and Agent, as frequently as
Agent determines to be appropriate; (2) permit Agent and any of its officers,
employees and Agent to inspect, audit and make extracts from all of Borrower’s
Books and Records; and (3) subject to the Lessee’s rights under any Lease,
permit Agent to inspect, review, evaluate and make physical verifications and
appraisals of any Equipment and other Collateral in any manner and through any
medium that Agent considers advisable, and Borrower shall provide to Agent, at
Borrower’s cost and expense, such clerical and other assistance as may be
requested with regard thereto.  Borrower shall make available to Agent and its
counsel, as quickly as practicable under the circumstances, originals or copies
of all of Borrower’s Books and Records and any other instruments and documents
which Agent may request. Borrower shall deliver any document or instrument
necessary for Agent, as it may from time to time request, to obtain records from
any service bureau or other Person that maintains records for Borrower.  Agent
shall be entitled to cause a Field Examination to be completed at times and as
often as it deems necessary in its sole discretion.  Borrower shall reimburse
Agent upon demand for the expense of such Field Examinations whether the
examination is performed by Agent or a third party approved by Agent.
 Borrower’s obligation to reimburse Agent for the costs of such Field
Examinations shall not exceed $20,000 per year.  At all times, it is understood
and agreed by Borrower that all expenses in connection with any such Field
Examination which may be incurred by Borrower, any officers and employees
thereof and the attorneys and independent certified public accountants therefor
shall be expenses payable by Borrower and shall not be expenses of Agent
or the Lenders nor part of the foregoing cap.
 
3.3.4 Upon the occurrence and during the continuance of an Event of Default,
Borrower, at its own expense, shall cause its independent certified public
accountants to prepare and deliver to Agent at any time and from time to time,
promptly upon Agent’s request: (1) a reconciliation of all Accounts; (2) an
aging of all Accounts; (3) trial balances; and (4) test verifications of such
Accounts as Agent may request. Borrower, at its own expense, shall cause its
independent certified public accountants to deliver to Agent the results of (i)
any physical verifications of all or any portion of the Collateral made or
observed by such accountants, and (ii) any verifications of Borrower’s Accounts,
in each case when and if any such verifications are conducted. Agent shall be
permitted to observe and consult with Borrower and Borrower’s certified public
accountants in the performance of these tasks.
 
3.3.5 In addition to any and all rights under the Collateral Documents, at any
time after the occurrence and continuance of an Event of Default (other than the
Specified Events of Default during the Forbearance Period), Agent may, and at
the direction of the Requisite Lender shall, seek to apply any funds in the
deposit accounts of Borrower or any Subsidiary (other than the Restricted
Account, which shall be governed by the terms of Section 2.18) to the repayment
of the Obligations. Borrower hereby authorizes and directs each bank or other
depository to deliver to Agent, upon request, all balances in any deposit
account maintained by such Person, without inquiry into the authority or right
of Agent to make such request.
 
3.4 Power of Attorney
 
. To the extent permitted by Applicable Law, Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent’s officers, employees or Agent
designated by Agent) as Borrower’s true and lawful attorney-in-fact, with power
to: (a) sign the name of Borrower on any document to be executed, recorded or
filed in order to perfect or continue perfected Agent’s Lien upon the Collateral
if Borrower fails to do so promptly after request therefor by Agent, including
filing any financing or continuation statement without the signature of Borrower
to the extent permitted by Applicable Law; (b) at any time after the occurrence
and continuance of an Event of Default (other than the Specified Events of
Default during the Forbearance Period), sign Borrower’s name on any invoice or
bill of lading relating to any Account, drafts against Account Debtors,
schedules and assignments of Accounts, verifications of Accounts and notices to
Account Debtors; (c) at any time after the occurrence and continuance of an
Event of Default (other than the Specified Events of Default during the
Forbearance Period), send requests for verification of Accounts; (d) at any time
after the occurrence and continuance of an Event of Default (other than the
Specified Events of Default during the Forbearance Period), endorse Borrower’s
name on any checks, notices, acceptances, money orders, drafts, or other forms
of payment or security that may come into Agent’s possession; and (e) at any
time that a Default or Event of Default (other than Specified Events of Default
during the Forbearance Period) has occurred and is continuing, (1) notify the
post office authorities to change the address for delivery of Borrower’s mail to
an address designated by Agent, to receive and open all mail addressed to
Borrower, and to retain all mail relating to the Collateral and forward all
other mail to Borrower, (2) make, settle, and adjust all claims under Borrower’s
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (3) settle and adjust disputes and claims
respecting the Accounts directly with Account Debtors, for amounts and upon
terms which Agent determines to be reasonable, and Agent may cause to be
executed and delivered any documents and releases which Agent determines to be
necessary. The appointment of Agent as Borrower’s attorney-in-fact, and each and
every one of Agent’s rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid and performed
and Agent’s obligation to provide Loans hereunder is terminated. NEITHER LENDERS
NOR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, LENDERS OR REPRESENTATIVES
SHALL BE RESPONSIBLE TO BORROWER FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE
POWERS GRANTED UNDER THE POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS
OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.
 
3.5 Grant of License to Use Intellectual Property Collateral
 
. For the purpose of enabling Agent to exercise its rights and remedies under
the Loan Documents, Borrower hereby grants to Agent an irrevocable,
non-exclusive license (exercisable only upon the occurrence and continuance of
an Event of Default and without payment of royalty or other compensation to
Borrower) to use, transfer, license or sublicense any Intellectual Property now
owned, licensed to, or hereafter acquired by Borrower, and wherever the same may
be located, and including in such license access to all media in which any of
the licensed items may be recorded or stored and to all computer and automatic
machinery software and programs used for the compilation or printout thereof,
and Borrower represents, warrants and agrees that any such license or sublicense
is not and will not be in conflict with the contractual or commercial rights of
any other Person; provided, that such license will terminate on the Termination
Date.
 
3.6 Reinstatement
 
. The provisions of this Section 3 shall to the extent permitted by Applicable
Law remain in full force and effect and continue to be effective even if: (a)
any petition is filed by or against Borrower or Owner Trustee for liquidation or
reorganization; (b) Borrower or Owner Trustee becomes insolvent or makes an
assignment for the benefit of creditors; (c) a receiver or trustee is appointed
for all or any significant part of Borrower’s or Owner Trustee’s assets; or (d)
at any time payment and performance of the Obligations, or any part thereof, is,
pursuant to Applicable Law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable
preference,” “fraudulent transfer” or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations and
Agent’s Liens in the Collateral shall be reinstated and deemed reduced only by
any amount paid and not so rescinded, reduced, restored or returned.
 
3.7 Release of Security Interest
 
. Subject to Requisite Lenders’ approval (in their sole and absolute
discretion), Agent is authorized to, from time to time, execute partial releases
of Collateral sold by Borrower in accordance with this Agreement (including in
connection with an Aviation Asset Disposition) from the security interests under
the Loan Documents which partial releases shall be in form reasonably
satisfactory to Agent.
 
3.8 Consent to Disposition of Aircraft 238
 
. Notwithstanding anything herein to the contrary, the Lenders hereby provide
their consent to the sale of the Aircraft 238 and the release of the security
interests and liens granted under the Collateral Documents with respect to the
Aircraft 238, provided that funds representing the purchase price paid for the
Aircraft 238 of approximately $2,350,000 less the down payment already in
Agent’s possession and the transaction costs described in clause (i) of the
definition of Net Cash Proceeds are deposited in the Restricted Account upon
closing of such sale. Agent is authorized to enter into and deliver in
connection with such Disposition appropriate lien releases, filings and related
instruments necessary to effectuate the terms of this provision and the
discharge of the liens granted to Agent under the Collateral Documents with
respect to Aircraft 238, including this Agreement and the Mortgage, and no
further consent of or notice to the Lenders is required in connection therewith
 
4. CONDITIONS PRECEDENT
 
4.1 Conditions Precedent to Closing
 
. Lenders shall not be obligated to make any Loan, or to take, fulfill, or
perform any other action under this Agreement, until the following conditions
have been satisfied to Agent’s reasonable satisfaction or waived in writing by
Agent:
 
4.1.1 Agent shall have received:
 
(a) originals of the documents set forth on Schedule 1.1h (Schedule of
Documents), each duly executed by the appropriate parties, together with such
other assurances, certificates, documents or consents related to the foregoing
as Agent and/or Lenders reasonably may require, all in form and substance
satisfactory to Agent and Lenders;
 
(b) such documentation as Agent may reasonably require to establish the due
organization, valid existence and good standing of Borrower, its qualification
to engage in business in each material jurisdiction in which it is engaged in
business or required to be so qualified, its authority to execute, deliver and
perform the Loan Documents to which it is a party, the identity, authority and
capacity of each Authorized Signatory thereof authorized to act on its behalf,
including certified copies of articles of organization and amendments thereto,
bylaws and operating agreements and amendments thereto, certificates of good
standing and/or qualification to engage in business, tax clearance certificates,
certificates of corporate resolutions, incumbency certificates, certificates of
Authorized Signatory, and the like;
 
(c) a list of all of Borrower’s Material Contracts and a copy of such Material
Contracts requested by Agent;
 
(d) a copy of all insurance certificates or other evidence of insurance for the
Collateral;
 
(e) originals of favorable written opinions, dated as of the date hereof, of
independent and internal counsel to the Borrower, addressed to Agent and Lenders
(and their respective participants and assigns) and otherwise in form and
substance satisfactory to Agent as to such matters as Agent shall determine;
 
(f) copies of all consents and authorizations of, permits from or filings with,
any Governmental Authority or other Person required in connection with the
execution, delivery, performance or enforceability of the Loan Documents or any
provision thereof and no material changes in governmental regulations affecting
the Borrower, Agent or the Lenders shall have occurred;
 
(g) (i) a certified lien search for the State of Delaware and the State of
California with respect to the Borrower and each of its Subsidiaries, (ii) an
International Registry search with respect to each applicable item of Equipment;
(iii) an FAA search with respect to each applicable item of Equipment, (iv) a
Federal tax lien search with respect to the Borrower and each of its
Subsidiaries, and any other searches as may be required by Agent; and
 
(h) the “chattel paper” original of each Lease, which thereafter until the
Termination Date shall be held by Agent or McAfee & Taft as Agent’s designee or
such other party as Agent may designate; provided Agent shall not be liable in
the event of any damage, loss or destruction of any of such documents or
instruments.
 
4.1.2 All of the financing statements and other documentation described in
Section 3.1.7 shall have been filed with the appropriate Governmental
Authorities, and Agent shall hold a first priority perfected Lien in the
Collateral, for the ratable benefit of Lenders, subject only to Permitted Liens.
 
4.1.3 With respect to all Equipment, and subject to Section 6.23, the following
statements shall be true, and Agent shall have received evidence reasonably
satisfactory to it (including, with respect to each item of Equipment which is
eligible for registration with the International Registry, a printout of the
“priority search certificate” from the International Registry showing the
Equipment Owner’s ownership interest with respect to such Equipment under a
contract of sale) with respect to each item of Equipment and any related Lease
to the effect that:
 
(a) the Borrower is in compliance with the applicable requirements of the
Mortgage and Applicable Law;
 
(b) the applicable Equipment Owner has good title under Applicable Law to such
item of Equipment, free and clear of Liens other than (i) Permitted Liens and
(ii) the Lien of Agent;
 
(c) the Borrower has completed all registrations and filings required by any
Aviation Authority in such jurisdiction and Agent shall hold a first priority
Lien on each item of Equipment under Applicable Law (or with respect to Assets
for which a pre-filing has been made, Agent shall be the beneficiary of a second
priority Lien on such Equipment, and documentation sufficient to terminate any
first priority lien on such Equipment shall have been delivered to Agent or to
an escrow with such documentation to be filed promptly thereafter) and has
provided, or is in a position to provide, all opinions of independent counsel as
required by Agent;
 
(d) Agent shall have received evidence reasonably satisfactory to it (including,
with respect to each Cape Town Eligible Lease, a printout of the “priority
search certificate” (as defined in the Regulations for the International
Registry) from the International Registry relating to the Lessor’s interest in
and International Interest with respect to such item of Equipment under such
Lease and including, with respect to all Leases that are not Cape Town Eligible,
an original, favorable written opinion of independent counsel addressed to Agent
and Lenders (and their respective participants and assigns) with respect to
Agent’s Lien on such item of Equipment;
 
(e) with respect to each item of Equipment which is eligible for registration
with the International Registry, Agent shall have received a printout of the
“priority search certificate” from the International Registry showing the
Equipment Owner’s ownership interest with respect to such Equipment under a
contract of sale; and
 
(f) with respect to an item of Equipment that is owned by an Owner Trustee, if
any, or with respect to each Lease to a Lessee domiciled or whose chief
executive office is located in a non-U.S. jurisdiction, Agent shall have
received the documentation set forth in the definition of “Aviation Asset
Requirements” (including, without limitation, the Owner Trustee Guaranty(ies),
Owner Trustee Mortgage(s), Trust Agreement(s), and Beneficial Interest Pledge
Agreement(s)).
 
4.1.4 No action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any court, Governmental Authority
or legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of, this Agreement or any other
Loan Document or the consummation of the transactions contemplated hereby or
thereby and which, in any Lender’s sole judgment, would make it inadvisable to
consummate the transactions contemplated by this Agreement or any other Loan
Document;
 
4.1.5 No circumstance or event shall have occurred, including but not limited to
any litigation, actions, suits, proceedings or investigations pending as to
Borrower, that constitutes a Material Adverse Effect as of the Closing Date;
 
4.1.6 All of the representations and warranties of Borrower under this Agreement
shall be true and correct as of the Closing Date;
 
4.1.7 Borrower shall be in compliance with all the terms and provisions of the
Loan Documents, and no Default or Event of Default (other than the Specified
Events of Default) shall have occurred and be continuing;
 
4.1.8 (a) Agent shall have completed its independent business and legal due
diligence, including but not limited to financial, legal and insurance reviews,
with results satisfactory to Agent, and (b) if Borrower qualifies as a “legal
entity customer” under the Beneficial Ownership Regulation, it shall have
provided a Beneficial Ownership Certification to Agent if so requested;
 
4.1.9 Each Lender and Agent each shall have obtained satisfactory credit or
other required internal approval(s) in connection with the transactions
contemplated by this Agreement and the Loan Documents;
 
4.1.10 Receipt of a fully-executed amended engagement letter for B. Riley’s
engagement by Borrower, satisfactory to all Lenders.
 
4.1.11 Borrower’s board of directors, at Borrower’s costs, shall have engaged a
consultant (“Financial Advisor/Consultant”) for Borrower to report to Borrower’s
board of directors, which Financial Advisor/Consultant to be selected from
candidates submitted by Lenders and the terms of whose engagement and scope of
work and responsibilities set forth in the engagement letter approved by
Lenders.
 
4.1.12 All legal matters relating to the Loan Documents shall be satisfactory to
Sheppard, Mullin, Richter & Hampton LLP, legal counsel to MUFG Union Bank, N.A.,
in all of its capacities hereunder; and
 
4.1.13 Agent shall have received Account Control Agreements, in form and
substance satisfactory to Agent, for the deposit accounts maintained by Borrower
(other than the Restricted Account) and Guarantor Subsidiaries.
 
If any other term of any Loan Document should conflict, or appear to conflict,
with this Section 4.1, the terms of this Section 4.1 shall control, and Borrower
shall have no rights under this Agreement or any other Loan Document until each
of the conditions of this Section 4.1 has been complied with to Agent’s and
Lenders’ satisfaction or specifically waived in a writing by Lenders.
 
4.2 Covenant To Deliver
 
. Except as otherwise provided in this Section 4.2, Borrower agrees to deliver
to Agent each item required to be delivered to Agent under this Agreement as a
condition precedent to the Closing Date. Borrower agrees to deliver to Agent the
following items:
 
4.2.1 Within thirty (30) days of the Closing Date, evidence reasonably
satisfactory to Agent of completion of all registrations and filings required by
any Aviation Authority in each applicable foreign jurisdiction and necessary for
Agent to hold a first priority Lien on each item of Equipment subject to the
Applicable Law of such foreign jurisdiction (including the Marketed Aircraft),
along with a favorable written opinion of independent counsel addressed to Agent
and Lenders (and their respective participants and assigns) with respect to
Agent’s Lien on such item of Equipment under such Applicable Law or, to the
extent such registrations and filings under such Applicable Law are not required
to maintain Agent’s first priority Lien on such item of Equipment, a written
opinion to such effect from independent counsel addressed to Agent and Lenders
(and their respective participants and assigns); and
 
4.2.2 Within thirty (30) days of the Closing Date (as such period may be
extended by Agent in its sole and absolute discretion), the Lessee Letters for
the Leases in effect on the Closing Date to the extent such Lessee Letters are
not delivered by the Closing Date.
 
5. REPRESENTATIONS AND WARRANTIES
 
Borrower represents, warrants and agrees that from and after the Closing Date
and until the Termination Date:
 
5.1 Corporate Existence; Compliance with Law
 
. Borrower is a corporation duly formed, validly existing and in good standing
under the Applicable Law of Delaware. Borrower is duly qualified or registered
to transact business and is in good standing in Delaware and California and in
each other jurisdiction in which the conduct of its business or the ownership or
leasing of its Property makes such qualification or registration necessary and
in which the failure to be so qualified or registered could have a Material
Adverse Effect. Borrower has all requisite power and authority to conduct its
business, to own, pledge, mortgage or otherwise encumber and operate its
Property, to lease the Property it operates under lease, to conduct its business
as now or proposed to be conducted, to execute and deliver each Loan Document to
which it is a party and to perform its Obligations. Borrower is in compliance
with all Applicable Law and other legal requirements applicable to its business,
has obtained all authorizations, consents, approvals, orders, licenses and
permits from, and has accomplished all filings, registrations and qualifications
with, or obtained exemptions from any of the foregoing from, any Governmental
Authority that are necessary for the transaction of its business.
 
5.2 Executive Offices; Corporate or Other Names; Conduct of Business
 
. The locations of Borrower’s executive offices, principal place of business,
corporate offices, warehouses, other locations of Collateral and locations where
all of Borrower’s records with respect to Collateral are kept are as set forth
in Schedule 5.2 and, except as set forth in such schedule, such locations have
not changed during the preceding twelve (12) months. Borrower shall not change
its (a) name, (b) chief executive office, (c) principal place of business or
jurisdiction of formation, or (d) location of its records concerning the
Collateral, without, in each instance, giving thirty (30) days’ prior written
notice thereof to Agent and taking all actions deemed necessary or appropriate
by Agent to protect and perfect Agent’s Liens continuously upon the Collateral.
 
5.3 Authority; Compliance with Other Agreements and Instruments and Government
Regulations
 
. The execution, delivery and performance by Borrower, any Owner Trustee, and
any Subsidiary of the Loan Documents to which each is a party have been duly
authorized by all necessary corporate action, and do not and will not:
 
5.3.1 Require any consent or approval not heretofore obtained of any member,
partner, director, stockholder, security holder or creditor of such party;
 
5.3.2 Violate or conflict with any provision of such party’s operating
agreement, charter, articles of incorporation or bylaws, as applicable;
 
5.3.3 Result in or require the creation or imposition of any Lien (other than
pursuant to the Loan Documents) or Right of Others upon or with respect to any
Property now owned or leased or hereafter acquired or leased by such party;
 
5.3.4 Violate any Applicable Law applicable to such party; or
 
5.3.5 Result in a breach of or constitute a default under, or cause or permit
the acceleration of any obligation owed under, any indenture or loan or credit
agreement or any other Contractual Obligation to which such party is a party or
by which such party or any of its property is bound or affected; and such party
is not in violation of, or default under, any Applicable Law or Contractual
Obligation, or any indenture, loan or credit agreement, in any respect.
 
5.4 No Governmental Approvals Required
 
. Except as previously obtained or made, no authorization, consent, approval,
order, license or permit from, or filing, registration or qualification with,
any Governmental Authority is or will be required to authorize or permit under
Applicable Law the execution, delivery and performance by Borrower, Owner
Trustee and any Subsidiary of the Loan Documents to which it is a party.
 
5.5 Subsidiaries
 
. Borrower has no Subsidiaries as of the Closing Date other than JHC, JMC, JFC,
and ACY 15129 and the Excluded Subsidiaries consisting of ACY SN 19002 Limited,
ACY SN 19003 Limited, and ACY E-175 LLC.
 
5.6 Financial Statements
 
. Borrower has furnished to Lender the audited Financial Statements of Borrower
as of the Fiscal Year ending December 31, 2019 (including balance sheets and
income statements). The financial information contained therein fairly presents
in all material respects the financial condition, results of operations and
changes in financial position of Borrower as of such date and for such period.
 
5.7 No Other Liabilities; No Material Adverse Changes
 
. Borrower and its Subsidiaries do not have any material liability or material
contingent liability required under GAAP to be reflected or disclosed, and not
reflected or disclosed, in the balance sheets described in Section 5.6 other
than liabilities and contingent liabilities arising in the ordinary course of
business since the date of such Financial Statements. Except as set forth on
Schedule 5.7, as of the Closing Date, no circumstance or event has occurred that
constitutes a Material Adverse Effect.
 
5.8 Title To and Location of Property
 
. Borrower and its Subsidiaries have valid title to the Property, including all
Equipment, as reflected in the balance sheet described in Section 5.6, other
than items of Property or exceptions to title which are in each case immaterial
and Property subsequently sold or disposed of in the ordinary course of
business. Such Property is free and clear of all Liens and Rights of Others,
other than those described in Schedule 5.7 and Permitted Liens and Permitted
Rights of Others.
 
5.9 Intellectual Property
 
. Borrower and its Subsidiaries own, or possess, the right to use to the extent
necessary in their respective businesses, all Intellectual Property, and no such
Intellectual Property conflicts with the valid Intellectual Property of any
other Person. Except as set forth in Schedule 5.9, Borrower has not used any
trade name, trade style or “dba” during the five year period ending on the
Closing Date.
 
5.10 Litigation
 
. Except for matters set forth in Schedule 5.10, there are no actions, suits,
proceedings or investigations pending as to which Borrower or any of its
Subsidiaries have been served or have received notice or, to the best knowledge
of Borrower, threatened against or affecting Borrower or any of its Subsidiaries
or any Property of any of them, the Collateral, or any other transactions
contemplated by this Agreement.
 
5.11 Binding Obligations
 
. Each of the Loan Documents to which Borrower, Owner Trustee, and any
Subsidiary is a party will, when executed and delivered by such party,
constitute the legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms.
 
5.12 No Default
 
. No event has occurred and is continuing that is a Default or Event of Default
other than the Specified Events of Default.
 
5.13 ERISA
 
. Neither Borrower nor any of its Subsidiaries has any Pension Plans. Neither
Borrower nor any of its Subsidiaries has incurred or expects to incur any
withdrawal liability to any Multiemployer Plan (as defined herein). As used
herein, “Pension Plan” means any “employee pension benefit plan” (as such term
is defined in Section 3(2) of ERISA) and “Multiemployer Plan” means any employee
benefit plan of the type described in Section 001(a)(3) of ERISA to which
Borrower or any of its ERISA affiliates contributes or is obligated to
contribute.
 
5.14 Regulation U; Investment Company Act
 
. No part of the proceeds of any Loan hereunder will be used to purchase or
carry, or to extend credit to others for the purpose of purchasing or carrying,
any margin stock in violation of Regulation U. Neither Borrower nor any of its
Subsidiaries is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.
 
5.15 Disclosure
 
. No written statement made by an Authorized Signatory to Lender in connection
with this Agreement, or in connection with any Loan, as of the date thereof
contained any untrue statement of a material fact or omitted a material fact
necessary to make the statement made not misleading in light of all the
circumstances existing at the date the statement was made.
 
5.16 Tax Liability
 
. Borrower and its Subsidiaries have filed all Tax returns which are required to
be filed, and have paid, or made provision for the payment of, all Taxes with
respect to the periods, Property or transactions covered by said returns, or
pursuant to any assessment received by Borrower or any of its Subsidiaries,
except such Taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established and
maintained.
 
5.17 Hazardous Materials
 
. Except as described in Schedule 5.17, as of the Closing Date (a) neither
Borrower nor any of its Subsidiaries at any time has disposed of, discharged,
released or threatened the release of any Hazardous Materials in violation of
any Environmental Laws, (b) to the best knowledge of Borrower, no condition
exists that violates any Environmental Law affecting any real property owned by
Borrower or any of its Subsidiaries, (c) no real property or any portion thereof
is or has been utilized by Borrower or any of its Subsidiaries as a site for the
manufacture of any Hazardous Materials and (d) to the extent that any Hazardous
Materials are used, generated or stored by Borrower or any of its Subsidiaries
on any real property, or transported to or from such real property by Borrower
or any of its Subsidiaries, such use, generation, storage and transportation are
in compliance with all Environmental Laws.
 
5.18 Security Interests
 
. Upon the execution and delivery of all of this Agreement and the Collateral
Documents and the completion of all actions to perfect the security interests so
created, as set forth in Section 3.1.7, Agent will hold a valid first priority
security interest in the Collateral described therein securing the Obligations.
 
5.19 Insurance
 
. Schedule 5.19 lists all current insurance of any nature maintained by
Borrower, as well as a summary of the terms of such insurance provided Schedule
5.19 shall list insurance for Equipment leased pursuant to an Eligible Lease.
Borrower shall deliver to Agent endorsements to all of its (a) “All Risk” and
business interruption insurance policies naming Agent as loss payee, and (b)
general liability and other liability policies naming Agent as an additional
insured. All policies of insurance on real and personal property will include an
endorsement, in form and substance acceptable to Agent, showing loss payable to
Agent (Form 438 BFU or equivalent) and extra expense and business interruption
endorsements. Such endorsement, or an independent instrument furnished to Agent,
will provide that the insurer will endeavor to give at least thirty (30) days’
prior written notice to Agent before any such policy or policies of insurance
shall be canceled. Upon the occurrence and continuation of a Default or Event of
Default, Borrower hereby directs all present and future insurers under its and
its Subsidiaries’ “All Risk” policies of insurance to pay all proceeds payable
thereunder directly to Agent for the ratable benefit of Lenders. Agent reserves
the right at any time, upon review of Borrower’s risk profile, to require
additional forms and limits of insurance to adequately protect Lenders’
interests in accordance with Agent’s normal practices for similarly situated
borrowers, and if the circumstances are unusual, in Agent’s sole opinion.
 
5.20 Leases and Equipment
 
. Each of the following is true and correct with respect to each Lease for an
item of Equipment:
 
5.20.1 The amounts of rent and other amounts due under each Lease, as shown on
the Borrower’s Books and Records and on any statement or schedule delivered to
Agent in connection therewith, are the true and correct amounts actually owed to
the Borrower and the other Lessors;
 
5.20.2 The Borrower has not and will not enter into any agreement with a Lessee
of any Equipment which provides, directly or indirectly, for the crediting of
any obligation or liability of the Borrower to such Lessee against future
rentals accruing under the Lease, other than as provided therein;
 
5.20.3 The Lessor delivered to Agent or its designee an original counterpart of
such Lease;
 
5.20.4 The documents and information delivered to Agent pursuant to Section 4
with respect to such Equipment and Leases have been so delivered; and
 
5.20.5 All rentals, fees, costs, expenses and charges paid or payable by the
Lessee under any Lease, including without limitation, any brokerage and other
fees paid to the Borrower do not violate any Applicable Law relating to the
maximum fees, costs, expenses or charges that can be charged in any jurisdiction
in which any Equipment is located or in which the corresponding Lessee is
located, or in which a transaction was consummated, or in any other jurisdiction
which may have jurisdiction with respect to any such Equipment, Lease or Lessee.
 
5.21 Cape Town Convention
 
.
 
5.21.1 The Borrower is (a) a “Transactional User Entity” (as such term is
defined in the Regulations for the International Registry); (b) “situated”, for
the purposes of the Cape Town Convention, in the United States; and (c) has the
“power to dispose” (as such term is used in the Cape Town Convention) of the
Equipment;
 
5.21.2 The Equipment are “aircraft objects” (as such term is defined in the Cape
Town Convention);
 
5.21.3 The Borrower has identified any and all Cape Town Eligible Leases, and
has notified Agent of such Leases, in writing;
 
5.21.4 The payment of principal of and interest on the Notes, and the
performance by the Borrower of the Obligations, are “associated rights” (as such
term is defined in the Cape Town Convention) with respect to the Equipment.
 
5.22 Depreciation Policies
 
. The Borrower’s depreciation policies with respect to the Equipment are as set
forth on Schedule 5.22. These policies have been in effect substantially without
change since January 1, 1998.
 
5.23 Swap Contracts
 
. As of the Closing Date, Borrower is not a party to a Swap Contract, except
that Borrower was a party to MUFG Bank Swap Contracts and the transactions
thereunder have been closed out, giving rise to the MUFG Bank Swap Termination
Value.
 
5.24 Eligible Leases
 
. A list of all items of Equipment subject to a Lease in effect as of the
Closing Date is set forth in Schedule 1.1b.
 
5.25 Preservation of International Interests and Liens
 
. Borrower shall or shall cause any other Person, as applicable, to (i) register
with the FAA and/or International Registry and/or create a Lien in favor of
Agent under Applicable Law, and thereafter maintain, such Lien and, as
applicable, the International Interest of each Mortgage and Owner Trustee
Mortgage, if any, and the International Interest of each Lease with a Lessee
domiciled or with its chief executive office in a Contracting State; and (ii)
maintain the rights and International Interests of the Equipment Owner in the
Equipment, as against any third parties under Applicable Law and as against all
third parties, whether in any Contracting State under the Cape Town Convention
or otherwise.
 
5.26 Solvency
 
. Borrower is, and after giving effect to the transactions contemplated hereby,
will be, Solvent. “Solvent” for purposes of this Agreement means, with respect
to any Person, that the aggregate present fair saleable value of such Person’s
assets is in excess of the total amount of its probable liabilities on its
existing debts as they become absolute and matured, such Person has not incurred
debts beyond its foreseeable ability to pay such debts as they mature, and such
Person has capital adequate to conduct the business it is presently engaged in
or is about to engage in.
 
5.27 Anti-Corruption Laws; Sanctions
 
. Borrower, its Subsidiaries and their respective officers and employees and to
the knowledge of Borrower its directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. Borrower
has implemented and maintains in effect for itself and its Subsidiaries policies
and procedures to ensure compliance by Borrower, its Subsidiaries, and their
respective officers, employees, directors, and agents with Anti-Corruption Laws
and applicable Sanctions. None of Borrower, any of its Subsidiaries or, to the
knowledge of Borrower, any director or officer of Borrower or any of its
Subsidiaries is an individual or entity that is, or is 50% or more owned
(individually or in the aggregate, directly or indirectly) or controlled by
individuals or entities (including any agency, political subdivision or
instrumentality of any government) that are (i) the target of any Sanctions or
(ii) located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions, currently Crimea, Cuba, Iran, North
Korea and Syria.
 
5.28 Deposit Accounts
 
. Schedule 5.28 is a true, correct and complete list of all banks and other
financial institutions at which Borrower or any Subsidiary maintains deposit
accounts, and such schedule correctly identifies the name, address and telephone
number of each bank or other institution, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
 
6. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)
 
So long as any portion of the Loan remains in force and/or any Obligation
remains unpaid, Borrower shall, and shall cause its Subsidiaries to:
 
6.1 Payment of Taxes and Other Potential Liens
 
. Pay and discharge promptly all Taxes, assessments and governmental charges or
levies imposed upon any of them, upon its respective Property or any part
thereof and upon its respective income or profits or any part thereof, except
that Borrower and its Subsidiaries shall not be required to pay or cause to be
paid any Tax that is not yet past due, or is being contested in good faith by
appropriate proceedings so long as the relevant entity has established and
maintains adequate reserves for the payment of the same.
 
6.2 Preservation of Existence
 
. Preserve and maintain its respective existences in the jurisdiction of its
formation and all material authorizations, rights, franchises, privileges,
consents, approvals, orders, licenses, permits, or registrations from any
Governmental Authority that are necessary for the transaction of its respective
business and qualify and remain qualified to transact business in each
jurisdiction in which such qualification is necessary in view of its respective
business or the ownership or leasing of its respective Property.
 
6.3 Maintenance of Property
 
. Maintain, or, with respect to Property subject to Leases, require the Lessees
to maintain, in good working order and condition, consistent with industry
practice and standards (taking into consideration normal wear and tear), all of
its Property and not permit any waste thereof, and, in the ordinary course of
business, make all needful and proper repairs, replacements, additions and
improvements thereto as are necessary for the conduct of its business, except
that the failure to maintain, preserve and protect a particular item of Property
that is at the end of its useful life or that is not of significant value,
either intrinsically or to the operations of Borrower, shall not constitute a
violation of this covenant.
 
6.4 Maintenance of Insurance
 
. Maintain or cause Lessee(s), as applicable, liability, casualty and other
insurance (subject to customary deductibles and retentions) on all Property with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate and shall furnish to Lenders statements of its insurance coverage and
shall promptly, upon Agent’s request, furnish other or additional insurance
deemed necessary by Agent to the extent that such insurance may be available.
Borrower shall take all actions required to maintain the foregoing insurance
and/or to comply with all requirements of such insurance coverage. Agent shall
be named as additional insureds on all liability insurance, all risk ground and
flight coverage for damage or loss of the related Equipment, and war risk
insurance (if applicable) and Agent shall be named as a loss payee under all
hull insurance policies insuring the Collateral. Borrower shall deliver to Agent
endorsements to all of its (a) “All Risk” and business interruption insurance
policies naming Agent as loss payee, and (b) general liability and other
liability policies naming Agent as an additional insured. All policies of
insurance on real and personal property will include an endorsement, in form and
substance acceptable to Agent, showing loss payable to Agent (Form 438 BFU or
equivalent) and extra expense and business interruption endorsements. Such
endorsement, or an independent instrument furnished to Agent, will provide that
the insurer will give at least thirty (30) days’ prior written notice to Agent
before any such policy or policies of insurance shall be canceled. Upon the
occurrence and continuation of a Default or Event of Default, Borrower hereby
directs all present and future insurers under its and its Subsidiaries’ “All
Risk” policies of insurance to pay all proceeds payable thereunder directly to
Agent for the ratable benefit of Lenders. Agent reserves the right at any time,
upon review of Borrower’s risk profile, to require additional forms and limits
of insurance to adequately protect Lenders’ interests in accordance with Agent’s
normal practices for similarly situated borrowers, and if the circumstances are
unusual, in Agent’s sole opinion.
 
6.5 Compliance with Applicable Law
 
. Comply with all Applicable Law, except that Borrower and its Subsidiaries need
not comply with an Applicable Law then being contested by any of them in good
faith by appropriate proceedings. The Borrower will maintain in effect and
enforce policies and procedures designed to ensure compliance by Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.
 
6.6 Inspection Rights
 
. At any time during regular business hours and as often as requested, permit
Agent, or any authorized employee or representative thereof, to examine, audit
and make copies and abstracts from the records and books of account of, and to
visit and inspect the Property of, Borrower and its Subsidiaries and to discuss
the affairs, finances and accounts of Borrower and its Subsidiaries with any of
its officers, key employees or accountants.  In addition, Agent shall have the
right to cause a Field Examination to be completed as described in
Section 3.3.3. In addition, Borrower shall provide Lenders’ Consultant
reasonable access during normal business hours to the offices, properties,
officers, employees, accountants, auditors, counsel and other representatives,
books and records of Borrower and its Subsidiaries, and furnish to Lenders’
Consultant such financial, operating and property related data and other
information as Lenders’ Consultant reasonably requests. Borrower hereby (1)
agrees and acknowledges that all of Lenders’ Consultant's analyses, conclusions,
reports and other work product are confidential and covered by the attorney-work
product privilege and the common interest privilege and, consequently, are
exempt from disclosure to Borrower, any Subsidiary or any other Person,
(2) acknowledges and agrees that Agent, the Lenders and Lenders’ Consultant may
use and share, without liability, among themselves and their respective
advisors, attorneys, consultants, accounts, and agents information regarding
Borrower and any Subsidiary, the Collateral, the Credit Facility and the Loan
Documents, including, without limitation, personally identifiable information
and data, financial information, projections, lessee information, and (3) waives
any rights or claims with respect to such use or sharing, including regarding
financial privacy and data protection laws and regulations.
 
6.7 Keeping of Records and Books of Account
 
. Keep adequate records and books of account reflecting all financial
transactions in conformity with GAAP, consistently applied, and in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over Borrower and its Subsidiaries.
 
6.8 Compliance with Agreements
 
. Promptly and fully comply with all Contractual Obligations to which any one or
more of them is a party, except for any such Contractual Obligations (a) the
performance of which would cause a Default or (b) then being contested by any of
them in good faith by appropriate proceedings.
 
6.9 Use of Proceeds
 
. Use the proceeds of the Loans only for the purposes set forth in this
Agreement. Borrower will not request any Loan, and will not use, and Borrower
will ensure that its Subsidiaries and its or their respective directors,
officers, employees and agents shall not use, the proceeds of any Loan in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws. Borrower will not, directly or
indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
Person, (i) to fund any activities or business of or with any Person, or in any
country or territory, that, at the time of such funding, is, or whose government
is, the subject of Sanctions, or (ii) in any other manner that would result in a
violation of Sanctions by any Person (including any Person participating in the
Loans, whether as underwriter, advisor, investor, or otherwise).
 
6.10 Hazardous Materials Laws
 
. Keep and maintain all real property used and/or owned by Borrower and any of
its Subsidiaries and each portion thereof in compliance in all material respects
with all applicable Environmental Laws and promptly notify Lender in writing
(attaching a copy of any pertinent written material) of (a) any and all material
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing by a Governmental Authority
pursuant to any applicable Hazardous Materials Laws, (b) any and all material
claims made or threatened in writing by any Person against Borrower relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
any Hazardous Materials and (c) discovery by any senior officer of any of
Borrower of any material occurrence or condition on any real property adjoining
or in the vicinity of such real property that could reasonably be expected to
cause such real property or any part thereof to be subject to any restrictions
on the ownership, occupancy, transferability or use of such real property under
any applicable Hazardous Materials Laws.
 
6.11 Future Subsidiaries
 
. Other than (i) JHC, (ii) JMC, (iii) JFC, (iv) ACY 15129 and (v) the Excluded
Subsidiaries consisting of ACY SN 19002 Limited, ACY SN 19003 Limited, and ACY
E-175 LLC, Borrower shall not create nor allow to exist any Subsidiary.
 
6.12 Payment of Obligations
 
. (a) Pay and discharge or cause to be paid and discharged all Obligations in a
timely manner; (b) pay and discharge, or cause to be paid and discharged, its
Indebtedness in the ordinary course of business prior to an Event of Default;
(c) pay and discharge, or cause to be paid and discharged promptly, all Charges;
and (d) pay all lawful claims for labor, materials, supplies and services or
otherwise, before any thereof shall become in default.
 
6.13 Conduct of Business
 
. (a) Conduct its business substantially as now conducted or as otherwise
permitted hereunder; and (b) at all times maintain, preserve and protect all of
the Collateral and keep the same in good repair, working order and condition
consistent with industry practices and standards (taking into consideration
ordinary wear and tear and excluding inventory and parts which by their nature
may not be in good repair, working order or condition) and from time to time
make, or cause to be made, all necessary or appropriate repairs, replacements
and improvements thereto consistent with industry practices and standards.
 
6.14 Further Assurances; Schedule Supplements
 
. At any time and from time to time, upon the written request of Agent and at
the sole expense of Borrower, promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as such
Agent may reasonably request to obtain the full benefits of this Agreement and
to protect, preserve and maintain all respective parties’ rights in the
Collateral and under this Agreement. Upon the occurrence and continuation of a
Default or Event of Default and as often as Agent may thereafter require,
Borrower will supplement each Schedule to this Agreement with respect to any
matter hereafter arising that, if existing or occurring as of the Closing Date,
would have been required to be set forth or described in such Schedule;
provided, that such supplement shall not be deemed to be an amendment thereof
unless expressly consented to in writing by Agent.
 
6.15 Excess Cash
 
. Transfer or cause to be transferred to Agent the Excess Cash as of the end of
each Fiscal Quarter (as demonstrated by a Compliance Certificate delivered to
Agent pursuant to Section 8.1.2 hereof) to pay down the Obligations in an amount
equal to 100% of such Excess Cash. The transfer of such Excess Cash in
accordance with the foregoing shall be done not later than the date of delivery
to Agent of the Compliance Certificate. Agent is hereby authorized to make such
transfer.
 
6.16 Subordination of Third Party Fees
 
. Provide a subordination, on terms satisfactory to Agent, of any fees paid to
any Subsidiaries or Affiliates of Borrower pursuant to ongoing contractual
arrangements for services provided to Borrower, including without limitation,
licensing, management and marketing fees.
 
6.17 Aviation Asset Disposition
 
. Borrower shall cause the Disposition of Equipment owned by it or any
Subsidiary and the Excluded Assets (such a sale, an “Aviation Asset
Disposition”) and use the Net Cash Proceeds from the Aviation Asset Disposition
to pay down the Obligations. Each individual Aviation Asset Disposition shall be
subject to Agent’s and Requisite Lenders’ consent in their respective sole and
absolute discretion.
 
6.18 Placards
 
. Affix and maintain or use its best efforts to cause each Lessee under a Lease
to affix to and maintain on all item(s) of Equipment a placard bearing an
inscription substantially in the form attached hereto as Exhibit I or such other
inscription as Agent from time to time may reasonably request. The Borrower
shall, on a quarterly basis, provide to Agent a list of all Equipment subject to
a Lease indicating, to the best knowledge of the Borrower, which items of
Equipment have placards affixed and on which no such placard is affixed.
 
6.19 Maintenance of Current Depreciation Policies
 
. Maintain its method of depreciating its assets substantially consistent with
past practices as set forth in Schedule 5.22 and promptly notify Agent of any
deviation from such practices.
 
6.20 Preservation of International Interests and Liens
 
. At its expense, cause (i) the registration with the International Registry of
the International Interests with respect to the Mortgage and each Lease with a
Lessee domiciled or with its chief executive office in a Contracting State or
otherwise create a Lien in favor of Agent under Applicable Law, and
(ii) maintain the rights and International Interests of the Equipment Owner in
the Equipment or otherwise maintain such Lien, as against any third parties
under Applicable Law and as against all third parties, whether in any
Contracting State under the Cape Town Convention or otherwise. The Borrower
agrees to furnish Agent with copies of all documents relating to the foregoing
and with recording and registration data as promptly as practicable following
the issuance of the same by the FAA, the International Registry, or such other
Person under Applicable Law.
 
6.21 JMC Management Agreement
 
. Provide prompt notice to Agent of any amendment or termination of the JMC
Management Agreement.
 
6.22 Strategic Alternative Milestone
 
. Comply with the following requirements by the following deadlines:
 
(a) 5:00 p.m. Eastern Time on May 6, 2020 deadline for Borrower to present to
Lenders a letter of intent by a prospective interested party on such party’s
letterhead dated not earlier than April 8, 2020 (“LOI”) that provides for a
transaction that would, if executed, repay the Obligations under the Loan
Documents owed to Agent and the Lenders and the due and payable Lender Hedging
Obligations in an amount and transaction structure satisfactory to all Lenders
by the Strategic Alternative Closing Milestone (defined below) (such a
transaction, the “Strategic Alternative”). The requirement to deliver such LOI
in accordance with this Section is referred to herein as the “Strategic
Alternative LOI Milestone”. For clarity, (i) multiple LOIs for multiple
transactions (e.g., an LOI for refinancing a portion of the Obligations and
another LOI for the sale of certain aircraft) would be acceptable as long as
(1) the aggregate Net Cash Proceeds generated from such transactions, if
executed, would be sufficient to repay the Obligations by the Strategic
Alternative Closing Milestone in an amount satisfactory to all Lenders and (2)
the requirements to close the transaction under each such LOI are consistent
with those of the transaction under each other LOI part of the group of LOIs for
the multiple transactions such that no such transaction under any LOI is
effectively not feasible as a result of the terms of the LOI for another
transaction. The Lenders shall have forty-eight (48) hours to provide their
consent or rejection to the Agent of the LOI satisfying the Strategic
Alternative LOI Milestone. To the extent no consent or rejection is provided by
such deadline by a Lender, such Lender will be considered to have consented that
such LOI satisfies the Strategic Alternative LOI Milestone.
 
(b) 5:00 p.m. Eastern Time on June 29, 2020 deadline for Borrower to receive and
present to Lenders a fully-executed (tentative or generally non-binding)
agreement on the terms and conditions of a purchase agreement for a transaction
that would, if executed, repay the Obligations by the Strategic Alternative
Closing Milestone in an amount and transaction structure satisfactory to all
Lenders with the terms and conditions reflected in a revised document among the
Company and buyer (the “Revised Transaction Letter”), which Revised Transaction
Letter provides for an exclusivity period with respect to the assets covered
thereby and a good faith deposit that is deposited in the Restricted Account
within ten (10) Business Days of the execution such Revised Transaction Letter
(the “Exclusivity Milestone”). For clarity, (i) Revised Transaction Letters for
multiple transactions (e.g., for refinancing a portion of the Obligations and
another for the sale of certain aircraft) would be acceptable as long as (1) the
aggregate net cash proceeds generated from such transactions, if executed, would
be sufficient to repay the Obligations by the Strategic Alternative Closing
Milestone in an amount satisfactory to all Lenders and (2) the requirements to
close each transaction under each such Revised Transaction Letter is consistent
with those of the other transactions contemplated under the other Revised
Transaction Letters such that no such transaction is effectively not feasible as
a result of the terms of any of the other Revised Transaction Letters. The
Lenders shall have forty-eight (48) hours to provide their consent or rejection
to the Agent of the Revised Transaction Letter satisfying the Exclusivity
Milestone. To the extent no consent or rejection is provided by such deadline by
a Lender, such Lender will be considered to have consented that such Revised
Transaction Letter satisfies the Exclusivity Milestone.
 
(c) 5:00 p.m. Eastern Time on August 15, 2020 deadline for Borrower to close the
Strategic Alternative, at which time Borrower shall cause the Net Cash Proceeds
of the Strategic Alternative to be used to pay the Obligations in an amount
satisfactory to all Lenders (the “Strategic Alternative Closing Milestone”).
 
(d) Failing to meet any of (i) the Strategic Alternative LOI Milestone, (ii) the
Exclusivity Milestone or (iii) the Strategic Alternative Closing Milestone shall
result in an immediate Event of Default (a “Strategic Alternative Event of
Default”), which Strategic Alternative Event of Default may not be waived
without consent of all Lenders.
 
6.23 Maintenance of Collateral; Compliance with the Aviation Assets Requirements
 
. Agent shall possess a first priority security interest in any Equipment
included in the Collateral which shall be (i) electronically recorded on the
International Registry (Cape Town Convention), (ii) filed with the FAA in the
case of (A) any Aircraft that are registered with the FAA and (B) all Engines,
whether or not attached to an Aircraft or a Leased Spare Engine, and (iii)
promptly, to the satisfaction of Agent, and as soon as practical and in any
event within thirty (30) days following registration with the International
Registry, perfected through all additional required local foreign jurisdiction
security conventions (if any) to secure the payment, promptly when due. Borrower
shall execute a Lessee Letter for each Lease.
 
6.24 Maintenance of Records
 
. Cause all Lessees of Equipment to maintain adequate maintenance and usage
records in English in accordance with applicable aviation regulations.
 
6.25 Excluded Assets
 
. Comply with the following:
 
(a) If an Excluded Asset is no longer pledged as collateral for any Permitted
Excluded Subsidiary Financing and such Asset remains owned by the Excluded
Subsidiary, Borrower shall promptly notify the Agent thereof and, at sole option
of Agent, either (i) cause such Excluded Subsidiary to become a Subsidiary
Guarantor hereunder by causing its assets to be subjected to a Lien securing the
Obligations, including its execution of a Subsidiary Guaranty and Security
Agreement, and will take such actions as shall be necessary or shall be
requested by the Lenders to grant and perfect such Liens, or (ii) cause such
Excluded Subsidiary to sell its assets (including its Excluded Assets) and to
make a distribution of the proceeds thereof to Borrower, and cause such proceeds
upon receipt by Borrower to be used to satisfy the Obligations.
 
(b) Except as provided in subsection (c) below, if the sale or disposition of an
Excluded Asset generates funds in excess of the amount sufficient to prepay or
repay the Permitted Excluded Subsidiary Financing secured by such Excluded Asset
and pay the third-party costs associated with such prepayment or repayment and
sale (the “Excess Proceeds”), Borrower shall immediately cause the Excluded
Subsidiary holding such Excess Proceeds to make a distribution of such amount to
Borrower and then cause such amount upon receipt by Borrower to be used to
satisfy the Obligations.
 
(c) So long as the loan tranche under the Excluded Subsidiary Facility owing by
any of the Excluded Subsidiaries which owns the Aircraft described on
Schedule 1.1d and bearing serial numbers, respectively, 19002 (the “Air Nostrum
1 Aircraft”) and 19003 (the “Air Nostrum 2 Aircraft ” and, together with Air
Nostrum 1 Aircraft, the “Air Nostrum Aircraft”) (with such Excluded Subsidiaries
referred to herein, respectively, as the “Air Nostrum 1 Borrower” and the “Air
Nostrum 2 Borrower”, with the Air Nostrum 1 Borrower and Air Nostrum 2 Borrower
referred to herein together as the “Air Nostrum Borrower”) remains outstanding,
then the following shall apply:
 
(1) With respect to Excess Proceeds from Aircraft that is an Excluded Asset
other than Air Nostrum Aircraft, such Excess Proceeds may be applied as provided
in the Excluded Subsidiary Facility (as documented on February 7, 2019), which
provides for the application of such Excess Proceeds, promptly following
availability, to be used, to prepay (in full or in part) the indebtedness under
the Excluded Subsidiary Facility by such Excluded Subsidiary that owns such
Aircraft or any other Excluded Subsidiary.
 
(2) With respect to Excess Proceeds from either Air Nostrum Aircraft, such
Excess Proceeds shall, promptly following availability, be used to satisfy the
loan tranche under the Excluded Subsidiary Facility owing by the other Air
Nostrum Borrower (and owing by either Air Nostrum 1 Borrower or Air Nostrum 2
Borrower) to the extent such loan tranche is then outstanding.
 
(d) Once the applicable loan tranches of the Excluded Subsidiary Facility
secured by an Excluded Asset are repaid, the Excluded Subsidiary that owned such
Excluded Asset shall be dissolved promptly following the sale of such Excluded
Asset (subject to requirements set forth in Applicable Law, including United
Kingdom revenue and commercial law if such Excluded Subsidiary is organized in
the United Kingdom) unless Agent requests that it become a Subsidiary Guarantor
in accordance with clause (a)(i) of this Section or designates it as an
Immaterial Subsidiary (subject to the satisfaction of the factors in the
definition of “Immaterial Subsidiary”).
 
6.26 PPP Loan
 
. Comply with the following:
 
(a) use the proceeds of the PPP Loan during the PPP Covered Period to pay for
only the allowable purposes under the CARES Act for the PPP Loan to qualify for
loan forgiveness under the PPP Loan Forgiveness Requirements;
 
(b) maintain such documentation and take such actions as shall be required to
evidence compliance with the PPP Loan Forgiveness Requirements;
 
(c) promptly after the end of the PPP Covered Period, but in no event more than
ten (10) Business Days thereafter, submit an application to the holder of the
debt in respect of the PPP Loan (or the party servicing the PPP Loan on behalf
of the holder of such debt), and any other party required to receive such
application, for loan forgiveness with respect to the PPP Loan, in accordance
with PPP Loan Forgiveness Requirements, and deliver written notice to Agent that
such application has been submitted to such parties;
 
(d) promptly, but not later than ten (10) days after forgiveness of the PPP Loan
is obtained, deliver to Agent evidence of such forgiveness;
 
(e) promptly (but in any event within two (2) Business Days), deliver to Agent
notice of (i) any default, breach or event of default under any PPP Loan
documentation, setting forth the details of such default, breach or event of
default, and (ii) copies of all material notices and other documents and
materials received or delivered pursuant to any PPP Loan documentation; and
 
(f) promptly upon request, take such other actions as Agent or the Lenders may
request in connection with the foregoing.
 
An immediate Event of Default shall occur if the PPP Loan ceases to be eligible
for forgiveness.
 
7. NEGATIVE COVENANTS
 
Borrower covenants and agrees that, from the Closing Date until the Termination
Date, Borrower and its Subsidiaries shall not, directly or indirectly, by
operation of law or otherwise:
 
7.1 Modification of Formation Documents
 
. Amend its certificate of incorporation or formation documents that could have
or reasonably be expected to have a Material Adverse Effect.
 
7.2 Failure to Act/Duty to Act
 
. Take any action or omit to take any action, which act or omission would
constitute a material default or a material event of default pursuant to, or
noncompliance with, any contract, lease (including any Leases), mortgage, deed
of trust or instrument to which it is a party or by which it or any of its
property is bound, or any document creating a Lien and which would have a
Material Adverse Effect on Borrower’s business.
 
7.3 Modification of Debt
 
. Cancel or modify any debt owing to it, except for reasonable consideration in
the ordinary course of its business or which would not have a Material Adverse
Effect on Borrower’s financial condition.
 
7.4 Transfers to Restricted Subsidiaries
 
. Allow Cash or any other Collateral to be directly or indirectly transferred to
any Restricted Subsidiary; provided that, so long as no Default or Event of
Default (other than the Specified Events of Default during the Forbearance
Period) then exists, Borrower may transfer to the JFC Bank Account at any one
time funds sufficient to satisfy the JFC Obligations projected to be due and
payable in the next thirty (30) days.
 
7.5 Disposition of Property
 
. Make any sale, transfer or other disposition in any single transaction or
series of related transactions of any asset or group of related assets of
Borrower or any of its Subsidiaries, whether now owned or hereafter acquired
(“Disposition”), except (i) a Disposition (other than an Aviation Asset
Disposition) by Borrower to a Wholly-Owned Subsidiary that is not a Restricted
Subsidiary and (ii) Aviation Asset Disposition in accordance with Section 6.17.
 
7.6 Mergers
 
. Merge or consolidate with or into any Person.
 
7.7 Acquisitions
 
. Directly or indirectly use the proceeds of any Loan or Collateral in
connection with the Acquisition of part or all of a voting interest in any
corporation or other business entity.
 
7.8 Distributions
 
. Make any Distribution, whether from capital, income or otherwise, whether in
Cash or other Property.
 
7.9 ERISA
 
. Create or maintain any Pension Plans or incur any withdrawal liability to any
Multiemployer Plan (as defined herein).
 
7.10 Change in Nature of Business; Change in Control
 
. Make any material change in the nature of the business of Borrower and its
Subsidiaries, taken as a whole, or at any time, permit any Change in Control to
occur.
 
7.11 Swap Contracts
 
. Not enter into any Swap Contract, unless (i) such Swap Contract was entered
into by such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments, investments,
assets, or property held or reasonably anticipated by such Person, or changes in
the value of securities issued by such Person, and not for purposes of
speculation, (ii) such Swap Contract does not contain any provision exonerating
the non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party other than normal setoff or netting rights,
and (iii) Borrower obtains Agent’s prior written approval (which may be
withheld, delayed or conditioned in Agent’s sole and absolute discretion).
 
7.12 Liens and Negative Pledges
 
. Create, incur, assume or suffer to exist any Lien or Negative Pledge of any
nature upon or with respect to any of its respective Property or any Collateral
or engage in any sale and leaseback transaction with respect to any of its
respective Property or any Collateral, whether now owned or hereafter acquired,
except:
 
7.12.1 Liens and Negative Pledges under the Loan Documents;
 
7.12.2 Permitted Liens;
 
7.12.3 [Reserved];
 
7.12.4 Liens securing purchase money Indebtedness permitted by Section 7.13.3 on
and limited to the capital assets acquired, constructed or financed with the
proceeds of such Indebtedness or with the proceeds of any Indebtedness directly
or indirectly refinanced by such Indebtedness; provided that such Liens do not
at any time encumber assets other than the Property financed by such
Indebtedness and the Indebtedness secured thereby does not exceed the cost or
fair market value, whichever is lower, of the Property being acquired on the
date of acquisition;
 
7.12.5 Liens securing Lender Hedging Obligations; or
 
7.12.6 Liens on the Excluded Assets and the equity interests in the Excluded
Subsidiaries, securing the Permitted Excluded Subsidiary Financing.
 
7.13 Indebtedness and Guaranteed Indebtedness
 
. Create, incur or assume any Indebtedness or guaranty obligation except:
 
7.13.1 Indebtedness and Guaranteed Indebtedness under the Loan Documents;
 
7.13.2 Indebtedness and Guaranteed Indebtedness owed to Borrower or any of its
Subsidiaries (other than a Restricted Subsidiary);
 
7.13.3 Indebtedness consisting of Capital Lease Obligations, or otherwise
incurred to finance the purchase or construction of capital assets (which shall
be deemed to exist if the Indebtedness is incurred at or within ninety (90) days
before or after the purchase or construction of the capital asset), or to
refinance any such Indebtedness; provided that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $25,000;
 
7.13.4 Indebtedness related to Lender Hedging Obligations;
 
7.13.5 Guaranteed Indebtedness in support of the obligations of a Wholly-Owned
Subsidiary (other than a Restricted Subsidiary), provided that such obligations
are not prohibited by this Agreement; and
 
7.13.6 Permitted Indebtedness.
 
7.14 Transactions with Affiliates
 
. Make, or suffer to exist, any loan or advance or extend any credit to any
Person, including, without limitation, any Affiliate of the Borrower other than,
but to the extent not otherwise prohibited hereunder:
 
7.14.1 advances to Affiliates (other than Restricted Subsidiaries) in the
ordinary course of business not to exceed $25,000.00 in the aggregate
outstanding at any time;
 
7.14.2 trade credit with Affiliates (other than Restricted Subsidiaries)
advanced in the ordinary course of business on overall terms at least as
favorable to Borrower or its Subsidiaries as would be the case in an arm’s
length transaction between unrelated parties of equal bargaining power; and
 
7.14.3 transactions between or among Borrower and its Subsidiaries to the extent
they do not give rise to any Indebtedness or Guaranteed Indebtedness.
 
7.15 Subsidiary Indebtedness
 
. Permit (whether or not otherwise permitted under Section 7.13) any Subsidiary
to create, incur, assume or suffer to exist any Indebtedness or guaranty
obligation, except (a) Indebtedness and Guaranteed Indebtedness (i) under the
Loan Documents or (ii) in existence on the Closing Date and described on
Schedule 1.1f, (b) Indebtedness owed (other than from a Restricted Subsidiary)
to Borrower or another Subsidiary (other than a Restricted Subsidiary) of
Borrower (to the extent not otherwise prohibited hereunder), (c) Capital Lease
Obligations and purchase money obligations of a Subsidiary in respect of
Property used or leased by that Subsidiary (subject to the limitations in
Sections 7.12.4 and 7.13.3; and (d) with respect to the Excluded Subsidiaries,
the Permitted Excluded Subsidiary Financing.
 
7.16 Restricted Subsidiaries
 
. Notwithstanding anything to the contrary in this Agreement or any other Loan
Document:
 
7.16.1 permit any Restricted Subsidiary (i) to possess any Assets; provided
however, that the Excluded Subsidiaries may possess the Excluded Assets or any
Cash, Cash Equivalents or other proceeds other than proceeds from the ownership
and operation of the Excluded Assets; provided further, that JFC may possess at
any one time Cash sufficient to pay the JFC Obligations in an amount not greater
than the amount forecasted to be due and payable in the next thirty (30) days
thereafter; (ii) incur any Indebtedness or Liens other than those permitted in
accordance with the Permitted Excluded Subsidiary Financing; (iii) to conduct
any business other than, with respect to the Excluded Subsidiaries, owning and
operating the Excluded Assets (and activities incidental thereto); or (iv)
except as otherwise permitted under Section 7.1, to amend its organizational
documents;
 
7.16.2 create, assume, incur or suffer to exist any Lien on or in respect of any
of its Assets for the benefit of any Restricted Subsidiary;
 
7.16.3 transfer, cause to be transferred, to any Restricted Subsidiary, any
Assets constituting Collateral or of the type of Asset constituting Collateral
(including, but not limited to, Cash) (except to the extent permitted under
Section 7.4); or
 
7.16.4 make any Investment in any Restricted Subsidiary other than ownership of
the Stock thereof.
 
7.17 New Shareholders
 
. Issue or otherwise grant shares of stock to any new shareholders unless (i)
Agent has confirmed that such transaction would not cause a violation of the
Patriot Act and (ii) such new shareholder(s) has executed a stock pledge
agreement and stock power in favor of Agent for the ratable benefit of Lenders,
in form and substance satisfactory to Agent.
 
7.18 Redemptions; Dividends
 
. Purchase, redeem, retire or otherwise acquire, directly or indirectly, or make
any sinking fund payments or declare or pay any dividends with respect to, any
shares of its Stock now or hereafter outstanding or set apart any sum for any
such purpose; nor agree (or cause or permit any Subsidiary to agree) with any
third party to prohibit, condition or restrict the payment of dividends and
distributions by such Subsidiary to Borrower or to another Subsidiary.
 
7.19 Investments
 
. Make or suffer to exist any Investment, other than:
 
7.19.1 Investments in existence on the Closing Date and disclosed on
Schedule 7.19;
 
7.19.2 Investments consisting of Cash Equivalents;
 
7.19.3 [reserved];
 
7.19.4 Investments consisting of reasonable and customary business-related
advances to officers, directors and employees of Borrower and its Subsidiaries
for travel, entertainment, relocation and analogous ordinary business purposes
not to exceed $25,000 in the aggregate at any time outstanding;
 
7.19.5 Investments in a Subsidiary that is a Wholly-Owned Subsidiary (to the
extent not otherwise prohibited hereunder); provided that Borrower shall not
(a) create or allow to exist any Subsidiary unless such Subsidiary (excluding
any Immaterial Subsidiary and, subject to Section 6.25, any Excluded Subsidiary)
shall have executed and delivered to the Agent a guaranty and a security
agreement each in form acceptable to the Agent creating in favor of the Agent a
first priority perfected Lien on its assets, and, if Agent so requests in its
discretion, Borrower shall have delivered to Agent a pledge of 100% of the stock
of such Subsidiary in form and substance satisfactory to Agent) or (b) acquire
(including, without limitation, by way of share exchange) any part or amount of
the Stock or assets of, or make any Investments in, any other Person except
Investments otherwise expressly permitted under this Agreement;
 
7.19.6 Investments consisting of the extension of credit to customers or
suppliers of Borrower and its Subsidiaries in the ordinary course of business
not otherwise prohibited hereunder and any Investments received in satisfaction
or partial satisfaction thereof;
 
7.19.7 Investments received in connection with the settlement of a bona fide
dispute with another Person; or
 
7.19.8 Investments representing all or a portion of the sales price of Property
sold or services provided to another Person.
 
7.20 Deposit Accounts
 
. Directly or indirectly, open, maintain or otherwise have deposit accounts,
except (i) the Restricted Account, (ii) any other deposit account with respect
to which Agent has an Account Control Agreement, and (iii) as long as Borrower
remains in compliance with Section 7.4, the JFC Bank Account. Borrower shall,
and shall cause each Subsidiary (other than an Excluded Subsidiary) to, not
hereafter establish and maintain any deposit account unless (1) Borrower shall
have given the Agent thirty (30) days’ prior written notice (or such lesser
notice period as the Agent may agree to) of its intention to establish such new
deposit account with a depository bank, (2) such depository bank shall be
acceptable to the Agent and, (3) such depository bank and Borrower (or any such
Subsidiary) shall have duly executed and delivered to the Agent, within twenty
(20) Business Days of the date of establishing such deposit account, an Account
Control Agreement with respect to such deposit account.
 
7.21 Leases
 
.
 
7.21.1 New Leases. Borrower shall not enter into a Lease with respect to any
Equipment except a Lease that constitutes an Eligible Lease.
 
7.21.2 Lease Amendments. Borrower shall not enter into any amendment of any
Lease (other than the Specified Leases) involving a modification of lease
payments, residual value guaranty, the term of such Lease or the return
conditions of the Equipment subject thereto, except with the prior written
approval of Requisite Lenders (in their sole discretion).
 
8. INFORMATION AND REPORTING REQUIREMENTS
 
8.1 Reports and Notices
 
. Borrower represents, warrants and agrees that, from and after the Closing Date
until the Termination Date, Borrower shall deliver, or cause to be delivered, to
Agent:
 
8.1.1 within sixty (60) days following the end of each of the first three (3)
Fiscal Quarters for each Fiscal Year, (unless an extension is approved by the
SEC), SEC Form 10-Q of Borrower for such Fiscal Quarter; provided that the
timely EDGAR SEC filing of such Form 10-Q, along with delivery of a hard or .pdf
copy to Agent of such Form 10-Q, shall satisfy this requirement; provided
further that if any such Form 10-Q is not filed with the SEC within such sixty
(60) day time period, then Borrower shall instead deliver, or cause to be
delivered, to Agent internally prepared consolidated Financial Statements of
Borrower and its Subsidiaries (including income statement, balance sheet, and
statement of cash flows) on or before the end of the sixty (60) day period;
 
8.1.2 within five (5) Business Days following the end of each Fiscal Quarter, a
certification from Borrower, in the form of a Compliance Certificate;
 
8.1.3 within ninety (90) days following the end of each Fiscal Year, (unless an
extension is approved by the SEC) or, in any event, within fifteen (15) days of
a timely filing with the SEC, (a) the consolidated Financial Statements of
Borrower for such Fiscal Year; (b) an unqualified report and opinion by an
independent certified public accounting firm acceptable to Agent with respect to
such Financial Statements, (c) any management letters of such public accounting
firm addressed to Borrower, and (d) internally prepared consolidating unaudited
balance sheets of Borrower and its consolidated Subsidiaries (for clarity,
including Excluded Subsidiaries), as of the end of such Fiscal Year and the
related consolidating unaudited statements of income and cash flow of Borrower
and its consolidated Subsidiaries (for clarity, including Excluded Subsidiaries)
for such Fiscal Year setting forth in each case in comparative form the figures
for the corresponding previous year, and certified by an Authorized Signatory of
Borrower as being prepared in accordance with GAAP and fairly stated in all
material respects; provided that the timely EDGAR SEC filing of a Form 10-K,
along with delivery of a hard or .pdf copy to Agent of such Form 10-K, shall
satisfy the requirements of subsections 8.1.3(a) and (b); provided further, that
if such Form 10-K is not filed with the SEC within such ninety (90) day time
period, then the Borrower shall instead deliver, or cause to be delivered, to
Agent internally prepared consolidated Financial Statements of Borrower and its
Subsidiaries for such Fiscal Year (including income statement, balance sheet,
and statement of cash flows) on or before the end of the period ending one
hundred five (105) days after the end of the Fiscal Year;
 
8.1.4 Within (30) days following the end of each calendar month, internally
prepared consolidating unaudited balance sheets of Borrower and its consolidated
Subsidiaries (for clarity, including Excluded Subsidiaries), as of the end of
such month, and the related consolidating unaudited statements of income, and
cash flows of Borrower and its consolidated Subsidiaries (for clarity, including
Excluded Subsidiaries) for such fiscal month, setting forth in each case in
comparative form the figures for the corresponding periods in the previous year,
and certified by an Authorized Signatory of Borrower as being prepared in
accordance with GAAP and fairly stated in all material respects;
 
8.1.5 as soon as practicable and in any event within fifteen (15) days after the
end of each calendar month, (i) a report listing all Leases of Equipment; and
(ii) and a lease receivables aging report, which covers both Leases under which
the Lessees are current and Leases under which the Lessees are delinquent (all
of the foregoing in form and substances reasonably satisfactory to Agent and
certified by an Authorized Signatory);
 
8.1.6 [Reserved];
 
8.1.7 as soon as available, but in any event within fifteen (15) days after the
end of June 30 and December 31 of each Fiscal Year, two substantially concurrent
Appraisals, each performed by a different Appraiser acceptable to Agent and at
Borrower’s expense, with respect to all Equipment and Excluded Assets. In
addition, upon the request of any Lender, Borrower shall permit Agent to retain
an Appraiser to conduct additional Appraisals, which shall be performed at
Borrower’s expense once per Fiscal Year with subsequent additional Appraisals at
the requesting Lender’s expense;
 
8.1.8 [Reserved];
 
8.1.9 concurrently with the submission to the lender under the Excluded
Subsidiary Facility, unaudited Financial Statements of the Excluded Subsidiaries
that are borrowers thereunder (required to be delivered under the Excluded
Subsidiary Facility within one hundred eighty (180) days after the end of each
Fiscal Year of the Excluded Subsidiaries);
 
8.1.10 promptly upon their becoming available, copies of any (a) correspondence
or notices received by the Borrower or any Subsidiary from any Governmental
Authority which regulates the operations of the Borrower or any Subsidiary,
including as to environmental matters and Hazardous Material, relating to an
actual or threatened change or development which would have, or would reasonably
be expected to have, a Material Adverse Effect on the Borrower or any
Subsidiary; (b) written reports submitted to the Borrower by its independent
accountants in connection with any annual or interim audit of the books of the
Borrower made by such accountants; and (c) any appraisals received by the
Borrower or any Subsidiary with respect to its Assets;
 
8.1.11 promptly, notice in writing of (i) any litigation, legal proceeding or
dispute, other than disputes in the ordinary course of business or, whether or
not in the ordinary course of business, involving amounts, individually or in
the aggregate, in excess of $200,000.00, affecting the Borrower or any
Subsidiary as a defendant, whether or not fully covered by insurance, and
regardless of the subject matter thereof, or, if no monetary amounts are claimed
in connection therewith, which proceeding or dispute, if determined or resolved
against the Borrower or any Subsidiary is reasonably likely to have a Material
Adverse Effect on the Borrower or any Subsidiary, (ii) any cancellation or
threatened cancellation by any insurance carrier of any insurance policy or
policies carried by the Borrower or by any of its Subsidiaries on the assets and
properties of the Borrower or any Subsidiary or (iii) any resignation or
termination of any director or executive or senior officer of the Borrower;
 
8.1.12 promptly, and in any event within five (5) Business Days, notify in
writing the Agent of any material damage to or other Event of Loss with respect
to any Eligible Assets;
 
8.1.13 promptly upon the earlier of the date on which the Borrower becomes aware
or, in the exercise of reasonable due diligence should have become aware of the
same, notify the Agent by telephone (to be confirmed within one (1) day in
writing from the Borrower to Agent and each Lender) of the occurrence of any of
the following:
 
(a) any Default;
 
(b) with respect to the Excluded Subsidiary Facility, (i) any default or event
of default thereunder, (ii) the commencement of exercise of remedies by or on
behalf of NordLB, (iii) any lessee of the collateral thereunder becoming
delinquent or is otherwise in default under its lease;
 
(c) any default or event of default any other contract or contracts and the
default or event of default involves payments by the Borrower in an aggregate
amount equal to or in excess of $200,000.00;
 
(d) a default or event of default under or as defined in any evidence of or
agreements for any Indebtedness for borrowed money under which the Borrower’s
liability is equal to or in excess of $200,000.00, individually or in the
aggregate, whether or not an event of default thereunder has been declared by
any party to such agreement or any event which, upon the lapse of time or the
giving of notice or both, would become an event of default under any such
agreement or instrument or would permit any party to any such instrument or
agreement to terminate or suspend any commitment to lend to the Borrower or to
declare or to cause any such indebtedness to be accelerated or payable before it
would otherwise be due;
 
(e) any change in any Applicable Law, including, without limitation, changes in
Tax laws and regulations, which would have a Material Adverse Effect on the
Borrower or any Subsidiary;
 
(f) any litigation, administrative proceeding, investigation, business
development, or change in financial condition which could reasonably have a
Material Adverse Effect on the Borrower or any Subsidiary;
 
(g) any instance in which Equipment are operated (x) on routes with respect to
which it is customary for air carriers flying comparable routes to carry
confiscation or expropriation insurance or (y) in any area designated by
companies providing such coverage as a recognized or threatened war zone or area
of hostilities or an area where there is a substantial risk of confiscation or
expropriation;
 
8.1.14 promptly upon receipt thereof or concurrently with delivery thereof by
the Borrower, as the case may be, copies of any correspondence, requests,
reports, statements, claims, consents, notices or other documents of any kind
received or sent by the Borrower under or with respect to any Material Contract
which evidence or relate to an event or circumstance which would have, or would
reasonably be expected to have, a Material Adverse Effect on the Borrower or any
Subsidiary;
 
8.1.15 promptly upon the filing thereof with the SEC one copy of each Financial
Statement, report, notice or proxy statement sent by the Borrower to
stockholders generally, and, a copy of each regular or periodic report, and any
registration statement, or prospectus in respect thereof, filed by the Borrower
with any securities exchange or with federal or state securities and exchange
commissions or any successor agency; and
 
8.1.16 subject to the prohibitions set forth in Section 7.1 hereof, promptly
deliver to the Agent copies of any material amendments, modifications or
supplements to (i) certificate of incorporation or by-laws and (ii) any Material
Contract, certified, with respect to the certificate of incorporation, by the
appropriate state officials, and, with respect to the other foregoing documents,
by the secretary or assistant secretary of the Borrower.
 
8.2 Cash Flow Budget
 
. Continue on a bi-weekly basis, based on the timeline in place prior to Closing
Date, to deliver to Agent a 13-week cash flow model (a “Cash Flow Budget”), in
form and substance acceptable to Agent, along with a variance report (“Cash Flow
Variance Report”) on both a week by week basis and a cumulative, weekly
roll-forward basis through the end of the immediately preceding week, a
comparison of the actual cash disbursements to the projected cash disbursements
and the actual cash receipts to the projected cash receipts, each as set forth
in the Cash Flow Budget for such period.
 
8.3 Maintenance Expense Report
 
. Continue on a monthly basis, based on the timeline in place prior to Closing
Date, to deliver to Agent (i) a twelve (12) month rolling cash-basis forecast of
the maintenance cash disbursements related to the Collateral and Excluded Assets
(“Maintenance Expense Report”). Each such Maintenance Expense Report shall
provide a breakdown forecast with respect to each item of such assets, be
consistent with the form attached hereto as Schedule 8.3 and as otherwise in
form and substance satisfactory to Agent, and (ii) a variance report, on both a
month-by-month basis and a cumulative, monthly roll-forward basis through the
end of the immediately preceding month, comparing the actual cash disbursements
to the projected cash disbursements for such period.
 
8.4 Collateral Report
 
. Continue on a bi-weekly basis, based on the timeline in place prior to Closing
Date, to deliver to Agent a detailed report containing the following
information, satisfactory to the Lenders, regarding all aircraft and engines
that are part of the Collateral (the “Collateral Report”): (i) the base location
of the Collateral covered thereby and the country in which each aircraft is
registered and the countries to which it is flown by its Lessee, (ii) whether
such Collateral is on Lease, (iii) if it is on Lease, whether there is a default
under such Lease and, if there is such a default, a description of the default
and Borrower’s intended action with respect thereto, and (iv) with respect to
Marketed Aircraft, an accounting of the ongoing expenses for storage, insurance
and similar expenses for such Collateral, the date and time of any visits by or
on behalf of Borrower to monitor such Collateral and the name of the person(s)
undertaking such visits (beginning with the most recent visit made as of the
date hereof and continuing for any visits made thereafter). The Collateral
Report shall be consistent with the form provided by Borrower to Agent prior to
the Closing Date and as otherwise in form and substance satisfactory to Agent.
 
8.5 Maintenance Reserve Liability Report
 
. Continue to deliver, within twenty (20) days after each calendar month, to
Agent a report (the “Maintenance Reserve Liability Report”), in form and
substance satisfactory to Agent, for the latest period for which the Lessee has
provided utilization information detailing the following information for each
Aircraft constituting part of the Collateral:
 
8.5.1 the amount of all maintenance reserves collected from the applicable
Lessee on account of such maintenance expenses less the total of all prior
contributions to maintenance paid out by Borrower pursuant to such Lease (the
“Maintenance Reserves Balance”) as of the last report;
 
8.5.2 the amount of maintenance reserves collected since the previous report;
 
8.5.3 the amount of any Lessee maintenance reserves claims paid out by Borrower
since the last report;
 
8.5.4 the current ending Maintenance Reserves Balance as of the date of the
report;
 
8.5.5 the amount of any maintenance reserves claims submitted from the Lessee
since the last report that are in the process of being verified by Borrower but
not yet paid out; and
 
8.5.6 whether under the terms of the applicable Lease, (1) the Maintenance
Reserves Balance remaining at lease end, after lessee has complied with its
rental and return obligations, is refundable to Lessee, or may be retained by
Borrower and (2) whether such Lessee can offset any future rent or residual
payments under its applicable Lease against the amount of such Maintenance
Reserves Balance.
 
8.6 Lender Update
 
. Make available on as frequently as a weekly basis, (i) senior management of
Borrower and, at Borrower’s option or upon request of Agent, Borrower’s
financial advisor, Financial Advisor/Consultant or other advisors for meetings
or conference calls with Agent and the Lenders (and their representatives and
consultants), and (ii) senior management of Borrower, Financial
Advisor/Consultant and B. Riley for conference calls with Agent and Lenders’
advisors, in either case at such dates and times to be provided by Agent upon
reasonable notice. The purpose of such meetings will be to discuss the status of
the financial, collateral, and operational condition, businesses, liabilities,
assets, and prospects of Borrower and the Collateral, any sale, refinance or
other strategic transaction efforts.  Borrower and its Subsidiaries shall
promptly provide copies of all non-privileged non-confidential written materials
provided to, or produced by, Borrower or Subsidiaries in connection with any
sale, refinance, other strategic transaction efforts (including, without
limitation, any letters of intent, confidentiality agreements, draft purchase
documents, commitment letters, and correspondence to or from any Governmental
Authority) and material third party reports relating to the financial,
collateral, or operational performance of Borrower and the Collateral or any
other non-privileged non-confidential written material as Agent may reasonably
request from time to time. Without limiting the foregoing, Borrower agrees to
notify Agent immediately upon either Borrower becoming aware of any material
change or development relating to any sale or refinance efforts or to the
financial, collateral, or operational condition, businesses, assets,
liabilities, or prospects of Borrower or the Collateral. Borrower agrees to
cause, and hereby irrevocably authorizes, its Financial Advisor/Consultant to
deliver to Agent and the Lenders such information as Agent and the Lenders may
request concerning the Collateral, sale or refinance efforts related thereto,
and the financial or operational condition of the businesses, assets,
liabilities, or prospects of Borrower, and, in the event of termination of the
services of the Financial Advisor/Consultant, the reasons for such termination.
 
8.7 Bank Account Report
 
. In connection with the submission of each Cash Flow Variance Report submitted
for the Cash Flow Budget on a bi-weekly basis, deliver to Agent a report (the
“Bank Account Report”) setting forth the following information for each bank
account held by Borrower and its Subsidiaries: (i) the name of the Person on the
account, (ii) the institution where the account is held, (iii) the type of the
account, (iv) the account number redacted except for the last 4 digits, and (v)
the balance of such account as of the last week covered by the Cash Flow
Variance Report.
 
8.8 Offers
 
. Provide to Lenders’ Consultant on a weekly basis all offers received regarding
the Collateral and Excluded Assets, any refinancing offers and any related
transactional documents.
 
8.9 Bid Summary Report
 
. Provide to Agent and Lenders on a weekly basis a report, in the form attached
hereto as Schedule 8.9 (the “Bid Summary Report”) and as otherwise approved by
Agent, containing a list of all bids on assets / refinancing offers received to
date, list of aircraft involved in each bid, and economic return of each bid for
the Lenders (with the bidder name may be redacted).
 
8.10 Other Reports
 
. Borrower shall, upon the request of any Lender or Agent, furnish to Agent such
other reports in connection with the affairs, business, financial condition,
operations, prospects or management of Borrower or the Collateral, all in
reasonable detail, and Borrower shall advise Agent promptly, in reasonable
detail, of: (a) any Lien, other than Permitted Liens, attaching to or asserted
against any of the Collateral; (b) any material change in the composition of the
Collateral; and (c) the occurrence of any other event which could reasonably be
expected to have a Material Adverse Effect.
 
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
 
9.1 Events of Default
 
. The occurrence of any one or more of the following events (regardless of the
reason therefor) shall constitute an “Event of Default” under this Agreement:
 
9.1.1 Borrower shall fail to make any regularly scheduled payment of principal
or interest in respect of any Obligations within three (3) Business Days after
the same shall become due and payable or is declared due and payable (provided
that no grace period shall apply to nonpayment of the Obligations on the
Maturity Date); or
 
9.1.2 Borrower or Owner Trustee, as applicable, shall fail or neglect to
perform, keep or observe any of the covenants, promises, agreements,
requirements, conditions or other terms, Obligations (other than under
Section 9.1.1) or provisions contained in this Agreement or any of the other
Loan Documents and such default shall have continued for a period of thirty (30)
days after Agent’s or any Lender’s notice to Borrower and/or Owner Trustee, as
applicable, of such default hereunder; provided, there shall be no grace period
for Borrower’s failure to perform, keep or observe any of the covenants,
promises, agreements, requirements, conditions or other terms or provisions
contained in Section 4.2, Sections 6.9, 6.15, 6.17, and 6.22 and Section 7
(except for Section 7.12); or
 
9.1.3 an event of default shall occur under any Indebtedness to which Borrower
or a Subsidiary is a party, or by which any such Person or its property is
bound, and such event of default (1) involves the failure to make any payment,
whether of principal, interest or otherwise, and whether due by scheduled
maturity, required prepayment, acceleration, demand or otherwise, in respect of
any Indebtedness (other than the Obligations) of such Person in an aggregate
amount exceeding $200,000, or (2) causes (or permits any holder of such
Indebtedness or a trustee to cause) such Indebtedness, or a portion thereof, in
an aggregate amount exceeding $200,000 to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment; or
 
9.1.4 any representation or warranty in this Agreement or any other Loan
Document, or in any written statement, report or certificate pursuant hereto or
thereto, shall be untrue or incorrect in any material respect as of the date
when made or deemed to be made by the Borrower or any Subsidiaries; or
 
9.1.5 any of the assets of Borrower or any Subsidiary having a value of
$1,000,000 or more shall be attached, seized, levied upon or subjected to a writ
or distress warrant or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of such Person, and any of
the foregoing shall remain unstayed or undismissed for sixty (60) consecutive
days; or any Person other than Borrower or any Subsidiary shall apply for the
appointment of a receiver, trustee or custodian for the assets of Borrower or
any Subsidiary and the order appointing such receiver, trustee or custodian
shall remain unstayed or undismissed for sixty (60) consecutive days; or
Borrower or any Subsidiary shall have concealed, removed or permitted to be
concealed or removed, any part of its Property with intent to hinder, delay or
defraud its creditors or any of them or made or suffered a transfer of any of
its property or the incurring of an obligation which may be fraudulent under any
bankruptcy, fraudulent transfer or other similar law; or
 
9.1.6 a case or proceeding shall have been commenced involuntarily against
Borrower or any Subsidiary in a court having competent jurisdiction seeking a
decree or order: (1) under the Bankruptcy Code or any other applicable Federal,
state or foreign Debtor Relief Law, and seeking either (i) the appointment of a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of such Person or of any substantial part of its properties, or (ii)
the reorganization or winding up or liquidation of the affairs of any such
Person and such case or proceeding shall remain undismissed or unstayed for
sixty (60) consecutive days or such court shall enter a decree or order granting
the relief sought in such case or proceeding; or (2) invalidating or denying (i)
any Person’s right, power, or competence to enter into or perform any of its
obligations under any Loan Document, or (ii) the validity or enforceability of
this Agreement or any other Loan Document or any action taken hereunder or
thereunder; or
 
9.1.7 Borrower or any Subsidiary shall (1) file a petition under the Bankruptcy
Code or any other applicable Federal, state or foreign bankruptcy or other
similar law, (2) consent to the institution of proceedings thereunder or to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of any such Person or of any substantial part of its properties, (3)
fail generally to pay (or admit in writing its inability to pay) its debts as
such debts become due, or (4) take any corporate action in furtherance of any
such action; or
 
9.1.8 final judgment or judgments (after the expiration of all times to appeal
therefrom) for the payment of money in excess of $1,000,000 in the aggregate
shall be rendered against Borrower or any Subsidiary, unless the same shall be
(i) fully covered by insurance (subject to any contractual deductibles) and the
issuer(s) of the applicable policies shall have acknowledged substantial
coverage in writing within fifteen (15) days of judgment, or (ii) vacated,
stayed, bonded, paid or discharged within a period of fifteen (15) days from the
date of such judgment; or
 
9.1.9 Borrower or any Subsidiary voluntarily or involuntarily dissolves or is
dissolved, terminates or is terminated; or
 
9.1.10 Borrower or any Subsidiary is enjoined, restrained, or in any way
prevented by the order of any court or other Governmental Authority, the effect
of which order restricts such Person from conducting all or any material part of
its business; or
 
9.1.11 the loss, suspension, revocation or failure to renew any License or
permit now held or hereafter acquired by Borrower or any Subsidiary, which loss,
suspension, revocation or failure to renew could reasonably be expected to have
a Material Adverse Effect; or
 
9.1.12 any Lien or any provision of any Loan Document shall for any reason cease
to be valid, binding and enforceable in accordance with its terms, or any Lien
granted, or intended by the Loan Documents to be granted, to Agent shall cease
to be a valid and perfected Lien having the first priority (or a lesser priority
if expressly permitted in the Loan Documents) in any of the Collateral covered
or purported to be covered thereby; or
 
9.1.13 any Change in Control of Borrower shall have occurred; or
 
9.1.14 The occurrence of any event of default or the equivalent thereof under
any other Debt Instrument (as defined below), in each case following any
applicable grace period, under any term, condition or covenant of any bond,
note, debenture, guaranty, trust agreement, mortgage or similar instrument to
which the Borrower or any Subsidiary is a party or by which it is bound, or by
which any of its properties or assets may be affected (a “Debt Instrument”) if
the outstanding Indebtedness or obligations of the Borrower or such Subsidiary
under such Debt Instrument exceeds $1,000,000.00 in aggregate principal amount
and (x) may be declared to be due and payable by reason of such default or event
of default prior to the date on which such indebtedness or obligations would
otherwise become due and payable, with or without the giving of notice or the
passage of time or both, or to terminate or suspend any commitment to make
advances or lend monies or to accelerate the rate of payment of unpaid
Indebtedness or to terminate the Borrower or such Subsidiary as a servicer or
manager of such Indebtedness or the assets secured thereby, and (y) is due and
payable and unpaid; or
 
9.1.15 A circumstance or event has occurred that constitutes a Material Adverse
Effect; or
 
9.1.16 [Reserved];
 
9.1.17 There occurs an event of default (or similar term or phrase) under any
Permitted Excluded Subsidiary Financing; or
 
9.1.18 There occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which any Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which any Borrower or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by such Borrower or such Subsidiary as a result thereof is greater
than $250,000 (for clarity, the occurrence of an Early Termination Date under
the MUFG Bank Swap Contracts is an Event of Default hereunder that is a
Specified Event of Default subject to Section 16.2); or
 
9.1.19 A Lease Event of Default; or
 
9.1.20 The PPP Loan ceases to be eligible for forgiveness.
 
9.2 Remedies
 
.
 
9.2.1 If any Default or Event of Default has occurred and is continuing, then
Agent may, with the prior written approval of Requisite Lenders, upon notice to
Borrower from Agent, increase the rate of interest applicable to the Loans to
the Default Rate effective as of the date of the initial Default. In addition,
subject to Section 16.2, if any Event of Default shall have occurred and be
continuing, Agent may (and upon prior written approval of Requisite Lenders
shall), without notice, take any one or more of the following actions: (i)
declare all or any portion of the Obligations to be forthwith due and payable,
whereupon such Obligations shall become and be due and payable; or (ii) exercise
any rights and remedies provided to Agent under the Loan Documents or at law or
equity, including all remedies provided under the UCC; provided, that upon the
occurrence of an Event of Default specified in Sections 9.1.5, 9.1.6 or 9.1.7,
the Obligations shall become immediately due and payable (and any obligation of
Lenders to make further Loans, if not previously terminated, shall immediately
be terminated) without declaration, notice or demand by Agent.
 
9.2.2 In addition to all other rights and remedies of Agent or Lenders under
this Agreement (except to the extent any such Collateral is subject to a lease
(including any Lease) which provides for the quiet use and enjoyment of such
Collateral by the Lessee thereunder), Borrower expressly agrees that, subject to
Section 16.2, upon the occurrence of any Event of Default, Agent may collect,
receive, assemble, process, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, lease, assign, give an option or options
to purchase or otherwise dispose of and deliver said Collateral (or contract to
do so), or any part thereof, in one or more parcels at public or private sale or
sales, at any exchange at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. Agent shall have
the right upon any such public sale or sales and, to the extent permitted by
law, upon any such private sale or sales, to purchase for the benefit of such
Agent by credit bid the whole or any part of said Collateral so sold, free of
any right or equity of redemption, which equity of redemption Borrower hereby
releases. Such sales may be adjourned, or continued from time to time with or
without notice.
 
9.2.3 Borrower further agrees, upon the occurrence of an Event of Default
(subject to Section 16.2) and at Agent’s request (except to the extent any such
Collateral is subject to a Lease which provides for the quiet use and enjoyment
of such Collateral by the Lessee thereunder), to assemble the Collateral and
make it available to Agent at places which Agent shall reasonably select. Until
Agent is able to effect a sale, lease, or other disposition of the Collateral
and except to the extent any such Collateral is subject to a Lease which
provides for the quiet use and enjoyment of such Collateral by the Lessee
thereunder, Agent shall have the right to complete, assemble, use or operate the
Collateral or any part thereof, to the extent that Agent deems appropriate, for
the purpose of preserving such Collateral or its value or for any other purpose.
Agent shall have no obligation to Borrower to maintain or preserve the rights of
Borrower as against third parties with respect to any Collateral while such
Collateral is in the possession of Agent. Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of any Collateral and to
enforce any of Agent’s remedies with respect to such appointment without prior
notice or hearing. To the maximum extent permitted by Applicable Law, Borrower
waives all claims, damages, and demands against Agent, its Affiliates, Agent,
and the officers and employees of any of them arising out of the repossession,
retention or sale of any Collateral except such as are determined in a final
judgment by a court of competent jurisdiction to have arisen out of the gross
negligence or willful misconduct of such Person. Borrower agrees that ten (10)
days’ prior notice by Agent to Borrower of the time and place of any public sale
or of the time after which a private sale may take place is reasonable
notification of such matters. Borrower shall remain liable for any deficiency if
the proceeds of any sale or disposition of the Collateral are insufficient to
pay all amounts to which Agent is entitled.
 
9.2.4 Each of Agent’s and Lender’s rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies which
Agent and Lenders may have under any Loan Document or at law or in equity.
Recourse to the Collateral shall not be required. All rights, remedies and
powers provided in this Agreement may be exercised only to the extent that the
exercise thereof does not violate any Applicable Law, and all provisions of this
Agreement are intended to be subject to any Applicable Law that may be
controlling and to be limited, to the extent necessary, so that they do not
render this Agreement invalid, unenforceable, in whole or in part.
 
9.3 Waivers by Borrower
 
. Except as otherwise provided for in this Agreement and to the fullest extent
permitted by Applicable Law, Borrower waives: (a) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Loan Documents, the Notes or any
other notes, commercial paper, Accounts, Contracts, Documents, Instruments,
Chattel Paper and guaranties at any time held by Lender on which Borrower may in
any way be liable, and hereby ratifies and confirms whatever Lender may do in
this regard; (b) all rights to notice and a hearing prior to Lender’s taking
possession or control of, or to Lender’s replevin, attachment or levy upon, any
Collateral or any bond or security which might be required by any court prior to
allowing Lender to exercise any of its remedies; and (c) the benefit of all
valuation, appraisal and exemption laws. Borrower acknowledges that it has been
advised by counsel with respect to this Agreement, the other Loan Documents and
the transactions evidenced hereby and thereby.
 
9.4 Proceeds
 
. The Proceeds of any sale, disposition or other realization upon any Collateral
pursuant to the exercise of the remedies hereunder shall be applied by upon
receipt as set forth in Section 2.11.
 
10. SUCCESSORS AND ASSIGNS
 
Each Loan Document shall be binding on and shall inure to the benefit of
Borrower, Lenders, Agent and their respective successors and assigns, except as
otherwise provided herein or therein. Borrower shall not assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
under any Loan Document without the prior written consent of all of the Lenders,
and any such purported assignment, transfer, hypothecation or other conveyance
by Borrower without the prior express written consent of the all Lenders shall
be void. The terms and provisions of this Agreement and the other Loan Documents
are for the purpose of defining the relative rights and obligations of Borrower
and Lenders with respect to the transactions contemplated hereby and thereby,
and there shall be no third party beneficiaries of any of the terms and
provisions of any of the Loan Documents. Subject to Section 12.8.5 of this
Agreement, each Lender reserves the right at any time to create and sell a
participation in any portion of the Loans and the Loan Documents and to sell,
transfer or assign any or all of its rights in the Loans and under the Loan
Documents.
 
11. DISPUTE RESOLUTION
 
11.1 Alternative Dispute Resolution Agreement
 
. If and to the extent that Section 12.15 is determined by a court of competent
jurisdiction to be unenforceable or is otherwise not applied by any such court
and that, notwithstanding parties’ intent to have New York law govern all such
matters, California law applies to any controversy or claim between or among the
parties, their agents and employees, arising under or in connection with (1)
this Agreement or any of the other Loan Documents, (2) any negotiations,
correspondence or communications relating to this Agreement or any of the other
Loan Documents, whether or not incorporated herein or therein, or any
indebtedness evidenced hereby or thereby, (3) the administration or management
of this Agreement or any of the other Loan Documents or any indebtedness
evidenced hereby or thereby, or (4) any alleged agreements, promises,
representations or transactions in connection herewith or therewith, including
any claim or controversy which arises out of or is based upon an alleged tort
(“Dispute”), then such Dispute shall be subject to and resolved in accordance
with the Alternative Dispute Resolution Agreement.
 
11.2 No Limitation on Remedies
 
. No provision of, or the exercise of any rights under, Section 11.1 shall limit
the right of any party to the Alternative Dispute Resolution Agreement to
exercise self-help remedies such as set-off, to foreclose against any
Collateral, or to obtain provisional or ancillary remedies such as injunctive
relief or the appointment of a receiver from a court having jurisdiction before,
during or after the pendency of any mediation or arbitration.
 
11.3 Inconsistency
 
. In the event the Dispute becomes subject to the Alternative Dispute Resolution
Agreement in accordance with Section 11.1 above, then to the extent any
provision of the Alternative Dispute Resolution Agreement is inconsistent with
the other terms of this Agreement, the terms of the Alternative Dispute
Resolution Agreement shall prevail.
 
12. MISCELLANEOUS
 
 
 
12.1 Complete Agreement
 
. This Agreement and the other Loan Documents constitute the complete agreement
among the parties with respect to the subject matter hereof and thereof,
supersede all prior agreements, commitments, understandings or inducements (oral
or written, expressed or implied).
 
12.2 Reimbursement and Expenses
 
. Borrower will promptly pay:
 
12.2.1 without regard for whether any Loans are made, all reasonable
out-of-pocket expenses of Agent in connection with the preparation, negotiation,
execution, and delivery of this Agreement, the Notes and the other Loan
Documents, including all due diligence, all post-closing matters, syndication,
and the transactions contemplated hereunder and thereunder and the making of the
Loans, including, recording and filing fees, and the reasonable attorneys’ fees
and disbursements of counsel for Agent;
 
12.2.2 all reasonable out-of-pocket expenses of Agent in connection with the
administration or monitoring of the Loans, the Collateral, this Agreement and
the other Loan Documents in accordance with the provisions thereof, the
restructuring and refinancing of the transaction herein contemplated, and in
connection with the preparation, negotiation, execution, and delivery of any
waiver, amendment, or consent by Agent relating to this Agreement or the other
Loan Documents, including, auditing costs and expenses with respect to the
Collateral, the reasonable attorneys’ fees and expenses of counsel and the
reasonable fees and expenses of Agent’s other professionals (including financial
advisor);
 
12.2.3 all of Agent’s and Lender’s out-of-pocket costs and expenses of
enforcement of and obtaining performance under this Agreement or the other Loan
Documents, and of collection of the Obligations, in any arbitration, mediation,
legal action or proceeding (including any case under the Bankruptcy Code or
similar laws), which, in each case, shall include reasonable fees and expenses
of counsel for Agent and each Lender;
 
12.2.4 all Charges levied on, or assessed, placed or made against any
Collateral, the Notes or the other Loan Documents or the Obligations; and
 
12.2.5 [Reserved].
 
12.3 Indemnity
 
.
 
12.3.1 Borrower shall indemnify and hold each Indemnified Person harmless from
and against any Claim which may be instituted or asserted against or incurred by
any such Indemnified Person as the result of credit having been extended or not
extended under this Agreement and the other Loan Documents or otherwise in
connection with or arising out of the transactions contemplated hereunder or
thereunder, including any Claim for Environmental Liabilities and Costs and
legal costs and expenses of disputes between the parties to this Agreement;
provided, that Borrower shall not be liable for indemnification of an
Indemnified Person to the extent that (a) such Claim is brought by any
Indemnified Person against Borrower and Borrower is the prevailing party
thereunder or (b) any such Claim is finally determined by a court of competent
jurisdiction to have resulted from such Indemnified Person’s gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED OR NOT EXTENDED UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
 
12.3.2 In any suit, proceeding or action brought by Agent or any Lender relating
to any item of Collateral or any amount owing hereunder, or to enforce any
provision of any item of Collateral, Borrower shall save, indemnify and keep
Agent and each Lender harmless from and against all expense, loss or damage
suffered by reason of such action or any defense, setoff, or counterclaim
asserted for any reason by the other party or parties to such litigation and
however arising unless (a) such suit, proceeding or action is brought by Agent
or any Lender against Borrower and Borrower is the prevailing party thereunder,
or (b) any such suit, proceeding or action is finally determined by a court of
competent jurisdiction to have resulted from Agent’s or any Lender’s gross
negligence or willful misconduct. All obligations of Borrower with respect to
any item of Collateral shall be and remain enforceable against, and only
against, Borrower and shall not be enforceable against Agent or any Lender. This
Section 12.3.2 shall survive the Termination Date.
 
12.4 No Waiver
 
. Neither Agent’s nor any Lender’s failure, at any time or times, to require
strict performance by Borrower of any provision of any Loan Document, nor
Agent’s or any Lender’s failure to exercise, nor any delay in exercising, any
right, power or privilege under this Agreement, (a) shall waive, affect or
diminish any right of such Agent or any Lender thereafter to demand strict
compliance and performance therewith, or (b) shall operate as a waiver thereof.
Any suspension or waiver of a Default, Event of Default, or other provision
under the Loan Documents must be in writing signed by an authorized employee of
Agent or any Lender to be effective and shall not suspend, waive or affect any
other Default or Event of Default, whether the same is prior or subsequent
thereto and whether of the same or of a different type, and shall not be
construed as a bar to any right or remedy which Agent or any Lender would
otherwise have had on any future occasion.
 
12.5 Severability; Drafting
 
. Wherever possible, each provision of the Loan Documents shall be interpreted
in such manner as to be effective and valid under Applicable Law, but if any
provision of any Loan Document shall be prohibited by or invalid under
Applicable Law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of such Loan Document. Except as otherwise expressly
provided herein or in any other Loan Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon Borrower and all
rights of Agent and Lender, all as contained in the Loan Documents, shall not
terminate or expire, but rather shall survive such termination or cancellation
and shall continue in full force and effect until the Termination Date;
provided, that the reimbursement and expense provisions of Section 12.2, the
indemnity provisions of Section 12.2.5, the governing law and venue provisions
of Section 12.14 and the Alternative Dispute Resolution Agreement referred in
Sections 11 and 12.15 shall all survive the Termination Date. In the event of a
dispute between any of the parties hereto over the meaning of this Agreement,
all parties shall be deemed to have been the drafter hereof, and any Applicable
Law that states that contracts are construed against the drafter shall not
apply.
 
12.6 Conflict of Terms
 
. Except as otherwise provided in any Loan Document by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any other
Loan Document, the provision contained in this Agreement shall govern and
control.
 
12.7 Notices
 
.
 
12.7.1 All notices and other communications under this Agreement and the other
Loan Documents shall be in writing and shall be deemed to have been given three
(3) days after deposit in the mail, first class mail, postage prepaid, or one
(1) day after being entrusted to a reputable commercial overnight delivery
service, or when sent out by facsimile or email transmission addressed to the
party to which such notice is directed at its address determined as provided in
this Section 12.7.1. All notices and other communications under this Agreement
shall be given to the parties hereto at the following addresses:
 
(a) If to Borrower:
 
AeroCentury Corp.
Attn: Harold M. Lyons
           Christopher B. Tigno
1440 Chapin Avenue, Suite 310
Burlingame, CA 94010-4011
Telephone No.: (650) 340-XXXX
Facsimile No.: (650) 696-XXXX
Email: XXXX@aerocentury.com
           XXXX@aerocentury.com
 
(b) If to Agent:
 
MUFG Union Bank, N.A.
Special Assets Division
Attn: Christopher Petrocelli
          John Lilly
1221 Avenue of Americas, 7th Floor
New York, NY 10020
 
Email: XXXX@us.mufg.jp
 
       XXXX@us.mufg.jp
 
and:
 
Sheppard Mullin Richter & Hampton LLP
Four Embarcadero Center, 17th Floor
San Francisco, CA 94111-4106
Attn: Juliette M. Ebert, Esq.
Telephone No.: (415) 434-XXXX
Facsimile No.: (415) 434-XXXX
Email: XXXX@sheppardmullin.com
            XXXX@sheppardmullin.com
 
12.7.2 Any party to this Agreement may change the address to which notices shall
be directed under this Section 12.7.2 by giving two (2) Business Days’ written
notice of such change to the other parties.
 
12.8 Binding Effect; Assignment
 
.
 
12.8.1 Subject to Section 10, this Agreement and the other Loan Documents to
which Borrower is a party will be binding upon and inure to the benefit of
Borrower, Agent, each of Lenders, and their respective successors and assigns.
Each Lender represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be within
the control of such Lender). Any Lender may at any time pledge its Note or any
other instrument evidencing its rights as a lender under this Agreement to a
Federal Reserve Bank, but no such pledge shall release that lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.
 
12.8.2 From time to time following the Closing Date, each Lender may assign to
one or more Eligible Assignees all or any portion of its Pro Rata Share of the
Term Loan Commitment; provided that (i) such Eligible Assignee, if not then a
Lender or an Affiliate of the assigning Lender, shall be approved by Agent,
which approval shall not be unreasonably withheld, conditioned or delayed; (ii)
such assignment shall be evidenced by a Commitment Assignment and Acceptance, a
copy of which shall be furnished to Agent as provided below; (iii) except in the
case of an assignment (a) to an Affiliate of the assigning Lender or to another
Lender or (b) of the entire remaining Term Loan Commitment of the assigning
Lender, the assignment shall not assign a Pro Rata Share of the Term Loan
Commitment that is equivalent to less than $5,000,000.00; (iv) the effective
date of any such assignment shall be as specified in the Commitment Assignment
and Acceptance, but not earlier than the date which is five (5) Business Days
after the date Agent has received the Commitment Assignment and Acceptance; and
(v) such Eligible Assignee shall execute an Alternative Dispute Resolution
Agreement, in form and substance satisfactory to Agent. Upon the effective date
of such Commitment Assignment and Acceptance, the Eligible Assignee named
therein shall be a Lender for all purposes of this Agreement, with the Pro Rata
Share of the Term Loan Commitment therein set forth and, to the extent of such
Pro Rata Share, the assigning Lender shall be released from its further
obligations under this Agreement. Borrower agrees that it shall execute and
deliver (against delivery by the assigning Lender to Borrower of its Note(s)) to
such assignee Lender, Note(s) evidencing that assignee Lender’s Pro Rata Share
of the Term Loan Commitment, and to the assigning Lender, Note(s) evidencing the
Pro Rata Share retained by the assigning Lender.
 
12.8.3 By executing and delivering a Commitment Assignment and Acceptance, the
Eligible Assignee thereunder acknowledges and agrees that: (i) other than the
representation and warranty that it is the legal and beneficial owner of the Pro
Rata Share of the Term Loan Commitment being assigned thereby free and clear of
any adverse claim, the assigning Lender has made no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness or sufficiency of this Agreement
or any other Loan Document; (ii) the assigning Lender has made no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of the Obligations; (iii)
it has received a copy of this Agreement, together with copies of the most
recent Financial Statements delivered pursuant to Section 8 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Commitment Assignment and Acceptance;
(iv) it will, independently and without reliance upon Agent or any Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) it appoints and authorizes Agent to take such action
and to exercise such powers under this Agreement as are delegated to Agent by
this Agreement; and (vi) it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
 
12.8.4 Agent shall maintain at Agent’s Office a copy of each Commitment
Assignment and Acceptance delivered to it and a register (the “Register”) of the
names and address of each of the Lenders and the Pro Rata Share of the
Commitments held by each Lender, giving effect to each Commitment Assignment and
Acceptance. The Register shall be available during normal business hours for
inspection by Borrower or any Lender upon reasonable prior notice to Agent.
After receipt of a completed Commitment Assignment and Acceptance executed by
any Lender and an Eligible Assignee, and receipt of a non-refundable assignment
fee of Three Thousand Five Hundred Dollars ($3,500.00) from such Lender or
Eligible Assignee, Agent shall, promptly following the effective date thereof,
provide to Borrower and the Lenders a revised Schedule A giving effect thereto.
Borrower, Agent and the Lenders shall deem and treat the Persons listed as
Lenders in the Register as the holders and owners of the Pro Rata Share of the
Term Loan Commitment listed therein for all purposes hereof, and no assignment
or transfer of any such Pro Rata Share of the Term Loan Commitment shall be
effective, in each case unless and until a Commitment Assignment and Acceptance
effecting the assignment or transfer thereof shall have been accepted by Agent
and recorded in the Register as provided above. Prior to such recordation, all
amounts owed with respect to the applicable Pro Rata Share of the Term Loan
Commitment shall be owed to the Lender listed in the Register as the owner
thereof, and any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Pro Rata Share of the Term Loan
Commitment.
 
12.8.5 Each Lender may from time to time grant participations to one or more
banks or other financial institutions (a “Participant”) in a portion of its Pro
Rata Share of the Term Loan Commitment; provided, however, that (i) such
Lender’s obligations under this Agreement shall remain unchanged; (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations; (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose except,
if the participation agreement so provides, (A) for the purposes of Section
12.2.5 but only to the extent that the cost of such benefits to Borrower does
not exceed the cost which Borrower would have incurred in respect of such Lender
absent the participation and (B) for the purposes of Sections 2.17,  14.1 and
14.2 (subject to the requirements and limitations therein, including the
requirements under Section 2.17(e) (it being understood that the documentation
required under Section 2.17(e) shall be delivered to the Lender who sells the
participation)) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.8.2; provided, that, such
participating bank (1) agrees to be subject to the provisions of Section
12.10 as if it were an assignee under Section 12.8.2, and (2) shall not be
entitled to receive any greater payment under Sections 2.17, 14.1, and 14.2,
with respect to any participation, than the Lender from whom it acquired the
applicable participation would have been entitled to receive; (iv) Borrower,
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement; (v) the participation interest shall be expressed as a percentage of
the granting Lender’s Pro Rata Share of the Term Loan Commitment as it then
exists or in the granting Lender’s Pro Rata Share of the Term Loan Commitment,
so long as the amount of the participation interest is not affected thereby; and
(vi) the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents other
than those which (A) extend the Maturity Date or any other date upon which any
payment of money is due to the Lenders, (B) reduce the rate of interest on the
Notes, any fee or any other monetary amount payable to the Lenders (in each case
other than as specifically provided herein), (C) reduce the amount of any
installment of principal due under the Notes, or (D) release any material
Collateral from the Lien of the Collateral Documents (other than as specifically
provided herein). Each Lender that sells a participation shall, acting solely
for this purpose as a non-fiduciary agent of Borrower, maintain a register on
which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each Participant's interest in the Loans or
other obligations under any Loan Document (the "Participant Register"); provided
that no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant's interest in any Term Loan Commitments,
Loans, or its other obligations under any Loan Document) to any Person except to
the extent that such disclosure is necessary to establish that such Term Loan
Commitment, Loan, or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations.
 
12.9 Right of Setoff
 
. If an Event of Default has occurred and is continuing (subject to
Section 16.2), Agent or any Lender (but in each case only with the consent of
the Requisite Lenders) may exercise its rights under Article 9 of the Uniform
Commercial Code and other Applicable Law and, to the extent permitted by
Applicable Law, apply any funds in any deposit account maintained with it by
Borrower and/or any Property of Borrower in its possession against the
Obligations. Each Lender agrees to notify the Borrower and Agent promptly after
any such setoff and application; provided that the failure to give such notice
shall not affect the validity of such setoff and application.
 
12.10 Sharing of Setoffs
 
. Each Lender severally agrees that if it, through the exercise of any right of
setoff, banker’s lien or counterclaim against Borrower, or otherwise, receives
payment of the Obligations held by it that is ratably more than any other
Lender, through any means, receives in payment of the Obligations held by that
Lender, then, subject to Applicable Law: (a) the Lender exercising the right of
setoff, banker’s lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from each of the
other Lenders a participation in the Obligations held by the other Lenders and
shall pay to the other Lenders a purchase price in an amount so that the share
of the Obligations held by each Lender after the exercise of the right of
setoff, banker’s lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker’s
lien or counterclaim or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all of the Lenders share any payment obtained in
respect of the Obligations ratably in accordance with each Lender’s share of the
Obligations immediately prior to, and without taking into account, the payment;
provided that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the right of setoff, banker’s lien, counterclaim or
otherwise is thereafter recovered from the purchasing Lender by Borrower or any
Person claiming through or succeeding to the rights of Borrower, the purchase of
a participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Lender that
purchases a participation in the Obligations pursuant to this
Section 12.10 shall from and after the purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased. Borrower expressly consents to the foregoing arrangements
and agrees that any Lender holding a participation in an Obligation so purchased
pursuant to this Section 12.10 may exercise any and all rights of setoff,
banker’s lien or counterclaim with respect to the participation as fully as if
the Lender were the original owner of the Obligation purchased.
 
12.11 Section Titles
 
. The Section titles and Table of Contents contained in this Agreement and any
other Loan Document are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
 
12.12 Counterparts
 
. This Agreement and each other Loan Document may be executed in any number of
identical counterparts, which shall constitute an original and collectively and
separately constitute a single instrument or agreement. The facsimile signature,
e-signature or email (PDF) signature of any party executing such Loan Document
shall be binding upon such party and may be relied upon by all other parties
thereto. The parties hereto agree that this Agreement and any other Loan
Document, any amendment or supplement thereto may be accepted, executed or
agreed to through the use of an electronic signature in accordance with the
Electronic Signatures in Global and National Commerce Act, Title 15, United
States Code, Sections 7001 et seq., the Uniform Electronic Transaction Act and
any applicable state law. Any party delivering an executed counterpart by
electronic means shall thereafter also deliver to Agent a manually executed
counterpart of such Loan Document, but failure to do so shall in no way affect
the validity, enforceability, or binding effect of such Loan Document.
 
12.13 Time of the Essence
 
. Time is of the essence for payment and performance of the Obligations.
 
12.14 GOVERNING LAW; VENUE
 
. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. BORROWER HEREBY CONSENTS AND
AGREES, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THAT
THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, NEW YORK SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND ANY CREDIT FACILITY LENDER PERTAINING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT CREDIT FACILITY LENDERS AND
BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK; AND FURTHER PROVIDED, THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT OR ANY
CREDIT FACILITY LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SUCH AGENT OR CREDIT FACILITY LENDER. BORROWER EXPRESSLY
SUBMITS AND CONSENTS TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
SECTION 12.7.1 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
BORROWER’S ACTUAL RECEIPT THEREOF. TO THE EXTENT THE CHOICE OF LAW AND VENUE
PROVISIONS IN ANY LOAN DOCUMENT ENTERED INTO AS OF THE CLOSING DATE IS
INCONSISTENT WITH THIS PROVISION, SUCH LOAN DOCUMENT IS HEREBY MODIFIED TO THE
EXTENT APPLICABLE BY INCORPORATING THIS PROVISION THEREIN.
 
12.15 WAIVER OF JURY TRIAL
 
. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY
WAIVE TRIAL BY JURY FOR ANY ACTION, SUIT, JUDICIAL REFERENCE, OR OTHER
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND/OR THE RELATIONSHIP ESTABLISHED AMONG
THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
 
12.16 Amendments; Consents
 
. No amendment, modification, supplement, extension, termination or waiver of
any provision of this Agreement or any other Loan Document, no approval or
consent thereunder, and no consent to any departure by Borrower or any other
party therefrom, may in any event be effective unless in writing signed by Agent
with the written approval of the Requisite Lenders (and, in the case of any
amendment, modification or supplement of or to any Loan Document to which
Borrower is a party, signed by Borrower, and, in the case of any amendment,
modification or supplement to Section 13, signed by Agent, respectively), and
then only in the specific instance and for the specific purpose given; and no
amendment, modification, supplement, termination, waiver or consent may be
effective:
 
12.16.1 to amend or modify the principal of, or the amount of principal (other
than in accordance with Section 2.7 or on account of capitalizing the PIK
Interest (which does not require Lender consent)), principal prepayments or the
rate of interest payable on, any Note, or the amount of the Term Loan Commitment
or the Pro Rata Share of any Lender or the amount of any commitment fee payable
to any Lender, or any other fee or amount payable to any Lender under the Loan
Documents or to waive an Event of Default consisting of the failure of Borrower
to pay when due principal, interest or any fee, without the approval in writing
of all the Lenders affected thereby (provided, however, that (i) only the
consent of Requisite Lenders shall be necessary to (x) impose the Default Rate
or to waive any obligation of Borrower to pay interest at such rate, (y) impose
or waive the Late Fee in connection with a Strategic Alternative Event of
Default and (z) extend the Forbearance Period);
 
12.16.2 to postpone any date fixed for any payment of principal of, prepayment
of principal of or any installment of interest on, any Note or any installment
of any fee, or to extend the term of the Term Loan Commitment, without the
approval in writing of all the Lenders affected thereby;
 
12.16.3 to amend the provisions of the definition of “Maturity Date” and
“Requisite Lenders”, without the approval in writing of all the Lenders;
 
12.16.4 to release any material Collateral (other than with respect to
Aircraft 238 in accordance with Section 3.8) from the Lien of the Collateral
Documents without the written approval of the Requisite Lenders in accordance
with Section 3.7;
 
12.16.5 to release a Guarantor under any Guaranty (except with respect to a
Subsidiary Guarantor that is subject to a merger or consolidation not prohibited
under Section 7.6), without the written approval of all Lenders;
 
12.16.6 change Section 2.11.2 in a manner that would alter the pro rata sharing
of payments or order of application required thereby without the written consent
of each Lender directly and adversely affected thereby;
 
12.16.7 to amend or waive this Section 12.16 or any part thereof, without the
approval of all the Lenders; or
 
12.16.8 to amend any provision of this Agreement that expressly requires the
consent or approval of all or a specified portion of the Lenders, without the
consent of all the Lenders.
 
Notwithstanding anything herein to the contrary, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent that by its terms requires the consent of
all the Lenders or each affected Lender may be effected with the consent of the
applicable Lenders other than Defaulting Lenders, except that (x) the Term Loan
Commitment of any Defaulting Lender may not be increased or extended, or the
maturity of any of its Loan may not be extended, the rate of interest on any of
its Loans may not be reduced and the principal amount of any of its Loans may
not be forgiven, in each case without the consent of such Defaulting Lender and
(y) any amendment, waiver or consent requiring the consent of all the Lenders or
each affected Lender that by its terms affects any Defaulting Lender more
adversely than the other affected Lenders shall require the consent of such
Defaulting Lender.
 
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 12.16 shall apply equally to, and shall be binding upon, all the
Lenders and Agent. Notwithstanding the foregoing, the Agent and Borrower may
amend any Loan Document to correct any errors, mistakes, omissions, defects or
inconsistencies, or to affect administrative changes that are not adverse to any
Lender, and such amendment shall become effective without further consent of any
other party to such Loan Document other than the Agent and Borrower.
 
12.17 Foreign Lenders and Participants
 
. Each Foreign Lender shall deliver to Borrower (with a copy to Agent), on or
before the Closing Date (or on or before accepting an assignment or receiving a
participation interest herein pursuant to Section 12.8.2, if applicable) two
duly completed copies, signed by an authorized officer, of either Form 1001
(relating to such Lender and entitling it to a complete exemption from
withholding on all payments to be made to such Lender by Borrower pursuant to
this Agreement) or Form W-8BEN (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrower and Agent that no withholding
under the federal income Tax laws is required with respect to such Foreign
Lender. Thereafter and from time to time, each such Foreign Lender shall (a)
promptly submit to Borrower (with a copy to Agent), such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and Agent
of any available exemption from, United States withholding Taxes in respect of
all payments to be made to such Foreign Lender by Borrower pursuant to this
Agreement and (b) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of such Foreign Lender, and as may be reasonably
necessary (including the re designation of its LIBOR lending office, if any) to
avoid any requirement of Applicable Law that Borrower make any deduction or
withholding for Taxes from amounts payable to such Foreign Lender. In the event
that Borrower or Agent become aware that a participation has been granted
pursuant to Section 12.8.5 to a financial institution that is a Foreign Lender,
then, upon request made by Borrower or Agent to the Lender which granted such
participation, such Lender shall cause such participant financial institution to
deliver the same documents and information to Borrower and Agent as would be
required under this Section if such financial institution were a Lender.
 
12.18 Acknowledgement and Consent to Bail-In of Affected Financial Institutions
 
. Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Affected Financial Institution
arising under any Loan Document, to the extent such liability is unsecured, may
be subject to the write-down and conversion powers of the applicable Resolution
Authority and agrees and consents to, and acknowledges and agrees to be bound
by:
 
(a) the application of any Write-Down and Conversion Powers by the applicable
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and
 
(b) the effects of any Bail-in Action on any such liability, including, if
applicable:
 
(i) a reduction in full or in part or cancellation of any such liability;
 
(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such Affected Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or
 
(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of the applicable Resolution
Authority.
 
12.19 Disclaimer of Fiduciary Obligations
 
. In connection with all aspects of the transactions contemplated hereby
(including in connections with any amendment, or waiver or other modification
hereof or of any other Loan Document), the Borrower acknowledges and agrees, and
acknowledges its understanding, that: (i) the services regarding this Agreement
provided by the Lenders are arm's length commercial transactions between the
Borrower, on the one hand, and the Lenders, on the other hand, and (ii) each
Lender is and has been acting solely as a principal and, except expressly agreed
in writing by the relevant parties, has not been, is not, and will not be acting
as a fiduciary for the Borrower.
 
12.20 Electronic Transmissions.
 
(a) Each of Borrower, the Agent, the Lenders, and each of their Affiliates is
authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein. The Borrower hereby
acknowledges and agrees that the use of Electronic Transmissions is not
necessarily secure and that there are risks associated with such use, including
risks of interception, disclosure and abuse and each indicates it assumes and
accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.
 
(b) All uses of an E-System shall be governed by and subject to and this Section
12.20, separate terms and conditions posted or referenced in such E-System and
related contractual obligations executed by the Borrower, the Agent and the
Lenders in connection with the use of such E-System.
 
(c) All E-Systems and Electronic Transmissions shall be provided “as is” and “as
available.” None of the Agent or any of its Affiliates, nor the Borrower or any
of its respective Affiliates warrants the accuracy, adequacy or completeness of
any E-Systems or Electronic Transmission, and each disclaims all liability for
errors or omissions therein. No warranty of any kind is made by the Agent or any
of its Affiliates, or the Borrower or any of its respective Affiliates in
connection with any E-Systems or Electronic Transmission, including any warranty
of merchantability, fitness for a particular purpose, non-infringement of
third-party rights or freedom from viruses or other code defects. The Agent, the
Borrower and its Subsidiaries, and the Lenders agree that the Agent has no
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System. The Agent and the Lenders agree that the Borrower has
no responsibility for maintaining or providing any equipment, software, services
or any testing required in connection with any Electronic Transmission or
otherwise required for any E-System.
 
13. AGENT
 
13.1 Appointment and Authorization and Delegation of Duties
 
. Subject to Section 12.8.2, each of the Lenders and Swap Contract
Counterparty(ies) with respect to Lender Hedging Obligations hereby irrevocably
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to Agent by the
terms thereof or are reasonably incidental, as determined by Agent, thereto.
This appointment and authorization is intended solely for the purpose of
facilitating the servicing of the Loans and does not constitute appointment of
Agent as trustee for any Lender or as representative of any Lender for any other
purpose. Notwithstanding any provision to the contrary contained elsewhere
herein or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender or
participant or any Swap Contract Counterparty with respect to Lender Hedging
Obligations, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "Agent" or “Administrative Agent”
herein and in the other Loan Documents with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any Applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. The
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through its agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
 
13.2 Lenders’ Credit Decisions
 
. Each Lender agrees that it has, independently and without reliance upon Agent,
any other Lender or the directors, officers, Agent, employees or attorneys of
the foregoing parties, and instead in reliance upon information supplied to it
by or on behalf of Borrower and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Lender also agrees that it shall, independently and without
reliance upon Agent, any other Lender or the directors, officers, Agent,
employees or attorneys of the foregoing parties, continue to make its own
independent credit analyses and decisions in acting or not acting under the Loan
Documents.
 
13.3 Agent and Affiliates
 
. MUFG Union Bank, N.A. (and each successor Agent) has the same rights and
powers under the Loan Documents as any other Lender and may exercise the same as
though it were not Agent, and the term “Lender” or “Lenders” includes MUFG Union
Bank, N.A. in its individual capacity. MUFG Union Bank, N.A. (and each successor
Agent) and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Borrower or any
Affiliate of Borrower, as if it were not Agent and without any duty to account
therefor to Lenders. MUFG Union Bank, N.A. (and each successor Agent) need not
account to any other Lender for any monies received by it in its capacity as a
Lender hereunder. Agent shall not be deemed to hold a fiduciary relationship
with any Lender and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against Agent.
 
13.4 Proportionate Interest in any Collateral
 
. Agent, on behalf of Lenders (and Swap Contract Counterparties with respect to
Lender Hedging Obligations), shall hold in accordance with the Loan Documents
all items of any Collateral or interests therein to be received or held by
Agent. Subject to Agent’s and Lenders’ rights to reimbursement for their costs
and expenses hereunder (including reasonable attorneys’ fees and disbursements
and other professional services and the reasonably allocated costs of attorneys
employed by Agent or a Lender) and subject to the application of payments in
accordance with Section 9.4, each Lender (and Swap Contract Counterparty with
respect to Lender Hedging Obligations) shall have an interest in such collateral
or interests therein in the same proportion that the aggregate obligations owed
such Lender (and such Swap Contract Counterparty with respect to Lender Hedging
Obligations), under the Loan Documents and/or Lender Hedging Obligations, as
applicable, bears to the aggregate obligations owed under the Loan Documents and
all Lender Hedging Obligations, without priority or preference among Lenders
(and Swap Contract Counterparties with respect to Lender Hedging Obligations).
 
13.5 Action by Agent
 
.
 
13.5.1 Agent shall be deemed not to have knowledge of any Default or Event of
Default unless and until such notice describing the same is given to Agent in
writing by Borrower or a Lender.
 
13.5.2 Agent has only those obligations under the Loan Documents as are
expressly set forth herein and therein, and its duties hereunder and thereunder
shall be administrative in nature.
 
13.5.3 Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Agent is
required to exercise, as directed in written instructions by the Requisite
Lenders (or all the Lenders, to the extent required by Section 12.16); and those
instructions shall be binding upon Agent and all Lenders, provided that Agent
shall not be required to act or not act if to do so would be contrary to any
Loan Document or to Applicable Law (including for the avoidance of doubt any
action that may be in violation of the automatic stay under any Debtor Relief
Law or that may affect a forfeiture, modification or termination of property of
a Defaulting Lender in violation of any Debtor Relief Law) or would result, in
the reasonable judgment of Agent, in substantial risk of liability to Agent.
 
13.5.4 If Agent has received a notice specified in Section 13.5.1, Agent shall
promptly give notice thereof to Lenders and shall, subject to Section 13.5.3,
act or not act upon the instructions of the Requisite Lenders (or of all the
Lenders, to the extent required by Section 12.16), except that if the Requisite
Lenders fail, for five (5) Business Days after the receipt of notice from Agent,
to instruct Agent, then Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of Lenders.
 
13.5.5 Agent shall have no liability to any Lender for acting, or not acting, as
instructed by the Requisite Lenders, notwithstanding any other provision hereof.
 
13.6 Liability of Agent
 
. Neither Agent nor any of its directors, officers, Agent, employees or
attorneys shall be liable for any action taken or not taken by them under or in
connection with the Loan Documents, except for their own gross negligence or
willful misconduct. Without limitation on the foregoing, Agent and its
directors, officers, Agent, employees and attorneys:
 
13.6.1 May treat the payee of any Note as the holder thereof until Agent
receives notice of the assignment or transfer thereof, signed by the payee, and
may treat each Lender as the owner of that Lender’s interest in the Obligations
for all purposes of this Agreement until Agent receives notice of the assignment
or transfer thereof, signed by that Lender;
 
13.6.2 May consult with legal counsel (including in-house legal counsel),
accountants (including in-house accountants) and other professionals or experts
selected by it, or with legal counsel, accountants or other professionals or
experts for Borrower or Lenders, and shall not be liable for any action taken or
not taken by it in good faith in accordance with any advice of such legal
counsel, accountants or other professionals or experts selected by it with
reasonable care;
 
13.6.3 Shall not be responsible to any Lender for any statement, warranty or
representation made in any of the Loan Documents or in any notice, certificate,
report, request or other statement (written or oral) given or made in connection
with any of the Loan Documents except for those expressly made by it;
 
13.6.4 Except to the extent expressly set forth in the Loan Documents, shall
have no duty to ask or inquire as to the performance or observance by Borrower
of any of the terms, conditions or covenants of any of the Loan Documents or to
inspect any collateral or any Property, books or records of Borrower;
 
13.6.5 Will not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, effectiveness, sufficiency or value of
any Loan Document, any other instrument or writing furnished pursuant thereto or
in connection therewith, or any collateral;
 
13.6.6 Will not incur any liability by acting or not acting in reliance upon any
Loan Document, notice, consent, certificate, statement, request or other
instrument or writing reasonably believed by it to be genuine and signed or sent
by the proper party or parties; and
 
13.6.7 Will not incur any liability for any arithmetical error in computing any
amount paid or payable by the Borrower or paid or payable to or received or
receivable from any Lender under any Loan Document, including, without
limitation, principal, interest, commitment fees, Loans and other amounts;
provided that, promptly upon discovery of such an error in computation, the
Agent, the Lenders and (to the extent applicable) and the Borrower shall make
such adjustments as are necessary to correct such error and to restore the
parties to the position that they would have occupied had the error not
occurred.
 
13.7 Indemnification
 
. Each Lender shall, ratably in accordance with its Pro Rata Share of the Term
Loan Commitment (if the Term Loan Commitment is then in effect) or in accordance
with its proportion of the aggregate Indebtedness then evidenced by the Notes
(if the Term Loan Commitment has then been terminated), indemnify and hold Agent
and its directors, officers, Agent, employees and attorneys harmless against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including reasonable attorneys’ fees and disbursements and allocated
costs of attorneys employed by Agent) that may be imposed on, incurred by or
asserted against it or them in any way relating to or arising out of the Loan
Documents (other than losses incurred by reason of the failure of Borrower to
pay the Indebtedness represented by the Notes) or any action taken or not taken
by it as Agent thereunder, except such as result from its own gross negligence
or willful misconduct. Without limitation on the foregoing, each Lender shall
reimburse Agent upon demand for that Lender’s Pro Rata Share of any out of
pocket cost or expense incurred by Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (including a bankruptcy reorganization), enforcement or attempted
enforcement of the Loan Documents, to the extent that Borrower or any other
party is required by Section 12.2 to pay that cost or expense but fails to do so
upon demand. Nothing in this Section 13.7 shall entitle Agent or any indemnitee
referred to above to recover any amount from Lenders if and to the extent that
such amount has theretofore been recovered from Borrower. To the extent that
Agent or any indemnitee referred to above is later reimbursed such amount by
Borrower, it shall return the amounts paid to it by Lenders in respect of such
amount.
 
13.8 Successor Agent
 
. Agent may, and at the request of the Requisite Lenders shall, resign as Agent
upon reasonable notice to Lenders and Borrower effective upon acceptance of
appointment by a successor Agent. If Agent shall resign as Agent under this
Agreement, the Requisite Lenders shall appoint from among Lenders a successor
Agent for Lenders, which successor Agent shall be approved by Borrower (and such
approval shall not be unreasonably withheld or delayed); provided that in no
event shall any successor Agent be a Defaulting Lender. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with Lenders and Borrower, a successor Agent from
among Lenders. Upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term “Agent” shall mean such successor
Agent and the retiring Agent’s appointment, powers and duties as Agent shall be
terminated. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 13, and Section 12.2.5, shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent under this
Agreement. Notwithstanding the foregoing, if (a) Agent has not been paid those
fees referenced in Section 2.4.1 or has not been reimbursed for any expense
reimbursable to it under Sections 12.2 or 12.2.5, in either case for a period of
at least one (1) year and (b) no successor Agent has accepted appointment as
Agent by the date which is thirty (30) days following a retiring Agent’s notice
of resignation, the retiring Agent’s resignation shall nevertheless thereupon
become effective and Lenders shall perform all of the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided for above.
 
13.9 Collateral Matters
 
. (a) Each Lender hereby irrevocably authorizes and directs the Agent to enter
into the Loan Documents for the benefit of such Lender. The Agent is hereby
authorized on behalf of all of Lenders, without the necessity of any notice to
or further consent from any Lender from time to time prior to, an Event of
Default, to take any action with respect to any Collateral or Loan Documents
which may be necessary to perfect and maintain perfected the Liens upon the
Collateral granted pursuant to the Loan Documents. Each Lender (and Swap
Contract Counterparty with respect to Lender Hedging Obligations) hereby
irrevocably authorizes the Agent, at its option and in its discretion:
 
(i) to release any Lien on any property granted to or held by the Agent under
any Loan Document (i) upon termination of the Term Loan Commitment and payment
in full of all Obligations (other than contingent indemnification obligations),
(ii) that is sold or to be sold as part of or in connection with any sale
permitted or provided for hereunder (including under Section 3.7) or under any
other Loan Document, (iii) subject to Section 12.16, if approved, authorized or
ratified in writing by the Requisite Lenders, (iv) in connection with any
foreclosure sale or other disposition of Collateral after the occurrence of an
Event of Default or (v) to the extent such property constitutes Excluded Asset;
and
 
(ii) to subordinate any Lien on any property granted to or held by the Agent
under any Loan Document to the holder of any Lien on such property that is
permitted by this Agreement or any other Loan Document.
 
Upon request by the Agent at any time, each Lender will confirm in writing the
Agent's authority to release or subordinate its interest in particular types or
items of Collateral pursuant to this Section 13.9.
 
(a) Subject to (ii) above, the Agent shall (and is hereby irrevocably authorized
by each Lender), to execute such documents as may be necessary to evidence the
release or subordination of the Liens granted to the Agent for the benefit of
the Agent and Lenders herein or pursuant hereto upon the applicable Collateral;
provided that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to or create any
liability or entail any consequence other than the release or subordination of
such Liens without recourse or warranty and (ii) such release or subordination
shall not in any manner discharge, affect or impair the Obligations or any Liens
upon (or obligations of the Borrower in respect of) all interests retained by
the Borrower, including the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any sale or transfer of
Collateral, or any foreclosure with respect to any of the Collateral, the Agent
shall be authorized to deduct all expenses reasonably incurred by the Agent from
the proceeds of any such sale, transfer or foreclosure.
 
(b) The Agent shall have no obligation whatsoever to any Lender or any other
Person to assure that the Collateral exists or is owned by the Borrower any
other Person or is cared for, protected or insured or that the Liens granted to
the Agent herein or in any of the Loan Documents or pursuant hereto or thereto
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Agent in this Section 13.9 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to the Lenders.
 
(c) Each Lender hereby appoints each other Lender as the Agent for the purpose
of perfecting Lenders' security interest in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
(other than the Agent) obtain possession of any such Collateral, such Lender
shall notify the Agent thereof, and, promptly upon the Agent's request therefor
shall deliver such Collateral to the Agent or in accordance with the Agent's
instructions.
 
13.10 Agent May File Proofs of Claim
 
. In the case of the pendency of any proceeding under any Debtor Relief Law or
any other judicial proceeding relating to Borrower or any Subsidiary, Agent
(irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
Agent shall have made any demand on Borrower) shall be entitled and empowered
(but not obligated) by intervention in such proceeding or otherwise:
 
(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and Agent (including any
claim for compensation, expenses, disbursements and advances of the Lender and
Agent and their respective agents and counsel and all other amounts due the
Lender and Agent under Section 12.2) allowed in such judicial proceeding; and
 
(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to the Lenders, to pay to Agent
any amount due for compensation, expenses, disbursements and advances of Agent
and its agents and counsel and any other amounts due the Administrative Agent
under Section 12.2.
 
13.11 No Obligations of Borrower
 
. Nothing contained in this Section 13 shall be deemed to impose upon Borrower
any obligation in respect of the due and punctual performance by Agent of its
obligations to Lenders under any provision of this Agreement, and Borrower shall
have no liability to Agent or any of Lenders in respect of any failure by Agent
or any Lender to perform any of its obligations to Agent or Lenders under this
Agreement.
 
14. COMMITMENT COSTS AND RELATED MATTERS.
 
14.1 [Reserved]
 
.
 
14.2 Capital Adequacy
 
. If, after the date hereof, any Lender (or any Affiliate of any Lender) shall
have reasonably determined that the adoption of any Applicable Law, governmental
rule, regulation or order regarding the capital adequacy or liquidity
requirements of banks or bank holding companies, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any Affiliate of any
Lender) with any request or directive regarding capital adequacy or liquidity
requirements (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital of Lender (or any Affiliate of
Lender) as a consequence of any of such Lender’s obligations hereunder to a
level below that which it could have achieved but for such adoption, change or
compliance (taking into consideration the policies of any Lender (or Affiliate
of any Lender) with respect to capital or liquidity adequacy immediately before
such adoption, change or compliance and assuming that the capital of such Lender
(or Affiliate of such Lender) was fully utilized prior to such adoption, change
or compliance), then, upon demand by such Lender, Borrower shall immediately pay
to such lender such additional amounts as shall be sufficient to compensate such
lender for any such reduction actually suffered; provided, that there shall be
no duplication of amounts paid to any Lender pursuant to this sentence and
Section 14.1. For purposes of this Section 14.2, a change in Applicable Law,
governmental rule, regulation or order shall include, without limitation, (x)
any change made or which becomes effective on the basis of a law, treaty, rule,
regulation, interpretation administration or implementation then in force, the
effective date of which change is delayed by the terms of such law, treaty,
rule, regulation, interpretation, administration or implementation, (y) the
Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R.
4173) and all requests, rules, regulations, guidelines, interpretations or
directives promulgated thereunder or issued in connection therewith, regardless
of the date enacted, adopted, issued or promulgated, whether before or after the
Closing Date and (z) all requests, rules, guidelines or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III. Such Lender’s
determination of the amount to be paid to such lender by Borrower as a result of
any event referred to in this Section 14.2 shall, absent manifest error, be
deemed final, binding and conclusive upon Borrower.
 
14.3 Federal Reserve System/Wire Transfers
 
. The obligation of any Lender to make any loan by wire transfer to Borrower or
any other Person shall be subject to all Applicable Law, including the policy of
the Board of Governors of the Federal Reserve System on Reduction of Payments
System Risk as in effect from time to time. Borrower acknowledges that such
laws, regulations and policy may delay the transmission of any funds to
Borrower.
 
14.4 Assignment of Commitments Under Certain Circumstances; Duty to Mitigate
 
. In the event (i) any Lender requests compensation pursuant to Section 14.1 or
14.2, above, (ii) any Lender delivers a notice described in Section 14.1 or
14.2, above, (iii) any Lender refuses to consent to any amendment, waiver or
other modification of any Loan Document requested by any Borrower and which
amendment, waiver or other modification is required under this Agreement for
such amendment, waiver or other modification, or (iv) any Lender defaults in its
obligations to make Loans or other extensions of credit hereunder, Borrower may,
at its sole expense and effort (including with respect to the assignment fee
referred to in Section 12.8.2), upon notice to such Lender and Agent, require
such Lender to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 12.8.2), all of its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall
assume such assigned obligations (which Eligible Assignee may be another Lender,
if a Lender accepts such assignment); provided that (x) such assignment shall
not conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) Borrower shall have received the
prior written consent of Agent, which consent shall not unreasonably be withheld
or delayed, and (z) the Borrower or such assignee shall have paid to the
affected Lender in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the outstanding
Loans of such Lender, respectively, affected by such assignment plus all fees
and other amounts accrued for the account of such Lender hereunder; provided
further that, if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender’s claim for compensation or notice, as
referred to above in (i) and (ii) of this Section 14.4, as the case may be,
cease to cause such Lender to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 14.1 or 14.2, above, or cease to result in
amounts being payable under Section 14.1 or 14.2, as the case may be, or if such
Lender shall waive its right to claim or notice under Section 14.1 or 14.2, as
applicable in respect of such circumstances or event or shall consent to the
proposed amendment, waiver, consent or other modification, as the case may be,
then such Lender shall not thereafter be required to make any such transfer and
assignment hereunder. Each Lender hereby grants to Agent an irrevocable power of
attorney (which power is coupled with an interest) to execute and deliver, on
behalf of such Lender as assignor, any Commitment Assignment and Acceptance
necessary to effectuate any assignment of such Lender’s interests hereunder in
the circumstances contemplated by this paragraph. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such filing or assignment, delegation and transfer.
 
14.5 Acknowledgement Regarding Any Supported QFCs
 
. To the extent that the Loan Documents provide support, through a guarantee or
otherwise, for Swap Contract or any other agreement or instrument that is a QFC
(such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the
parties acknowledge and agree as follows with respect to the resolution power of
the Federal Deposit Insurance Corporation under the Federal Deposit Insurance
Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (together with the regulations promulgated thereunder, the “U.S. Special
Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support
(with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the
State of New York and/or of the United States or any other state of the United
States):
 
14.5.1 In the event a Covered Entity that is party to a Supported QFC (each, a
“Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. In the event a Covered Party or a BHC
Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Loan Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if the Supported QFC and the Loan Documents were governed by
the laws of the United States or a state of the United States. Without
limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.
 
14.5.2 As used in this Section 14.5, the following terms have the following
meanings:
 
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
 
“Covered Entity” means any of the following:
 
(i) a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);
 
(ii) a “covered bank” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 47.3(b); or
 
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 382.2(b).
 
“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
 
“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
 
15. AMENDMENT AND RESTATEMENT
 
15.1 Amendment and Restatement of Existing Credit Agreement
 
. On and as of the Closing Date, the Existing Credit Agreement shall be amended,
restated and superseded in its entirety by this Agreement. The parties hereto
acknowledge and agree that (i) this Agreement and the other Loan Documents,
whether executed and delivered in connection herewith or otherwise, do not
constitute a novation, payment or reborrowing, or termination of the
“Obligations” (as defined in the Existing Credit Agreement) as in effect prior
to the Closing Date and (ii) such “Obligations” are in all respects continuing
(as amended and restated hereby) with only the terms thereof being modified as
provided in this Agreement. Each reference to the “Credit Agreement” or “Loan
Agreement” in any Loan Document shall be deemed to be a reference to the
Existing Credit Agreement as amended and restated hereby.
 
15.2 Continuing Obligations
 
. All of the “Obligations” (as defined in the Existing Credit Agreement, the
“Existing Obligations”) outstanding under the Existing Credit Agreement and
other “Loan Documents” (as defined in the Existing Credit Agreement, the
“Existing Loan Documents”) shall continue as Obligations hereunder to the extent
not repaid on the Closing Date, and each of this Agreement and any other Loan
Document (as defined herein) that is amended and restated in connection with
this Agreement is given as a substitution of and modification of, and not as a
payment of or novation of, the indebtedness, liabilities and Existing
Obligations of Borrower under the Existing Credit Agreement or any Existing Loan
Document, and neither the execution and delivery of such documents nor the
consummation of any other transaction contemplated hereunder is intended to
constitute a novation of the Existing Credit Agreement or of any of the other
Existing Loan Documents or any obligations thereunder. All security interests,
pledges, assignments and other Liens and Guaranties previously granted pursuant
to the Existing Loan Documents are hereby renewed and continued (except to the
extent otherwise set forth in this Agreement and the other Loan Documents (as
defined herein), and all such security interests, pledges, assignments and other
Liens and Guaranties shall remain in full force and effect as security for the
Obligations in the manner set forth in this Agreement and the other Loan
Documents.
 
15.3 Calculations
 
. Amounts in respect of interest, fees and other amounts payable to or for the
account of Agent and the Lenders shall be calculated (i) in accordance with the
provisions of the Existing Credit Agreement with respect to any period (or a
portion of any period) ending prior to the Closing Date, and (ii) in accordance
with the provisions of this Agreement with respect to any period (or a portion
of any period) commencing on or after the Closing Date. .
 
16. FORBEARANCE; GENERAL RELEASE
 
16.1 Acknowledgement
 
.
 
16.1.1 Borrower hereby acknowledges and agrees that, (i) as of the date hereof,
the Obligations include the amounts described in Recital F, which constitute
valid and subsisting Obligations of Borrower owed to Agent and the Lenders not
subject to any credits, offsets, defenses, claims, counterclaims or adjustments
of any kind; (ii) as a result of the Specified Events of Default, neither Agent
nor any Lender has any obligation whatsoever to make any financial accommodation
to Borrower, including entering into this Agreement; (iii) Borrower received
proper and adequate notice of the Specified Events of Default under the Existing
Credit Agreement and the other Loan Documents pursuant to the Reservation of
Rights Letters; and (iv) other than the Specified Events of Default, no Default
or Event of Default has occurred and continues to exist as of the Closing Date.
 
16.1.2 Borrower hereby ratifies and reaffirms the validity and enforceability
(without defense, counterclaim or offset of any kind) of the Liens granted to
secure the Obligations by Borrower to Agent, for the benefit of the Lenders,
pursuant to the Collateral Documents to Borrower is a party. Borrower
acknowledges and agrees that all such Liens granted by Borrower continue to
secure the Obligations notwithstanding the occurrence of the Closing Date.
 
16.2 Forbearance
 
.
 
16.2.1 Forbearance Period. Subject to the terms and conditions of this
Section 16, Agent and the Lenders hereby agree to forbear from taking any
Enforcement Actions as a result of the occurrence of the Specified Events of
Default during the period from and including the Closing Date until the earliest
to occur of any of the following events (each such event, a “Forbearance
Termination Event”; the date of such occurrence (with such date under clause (a)
of this Section 16.2.1 as may be extended as provided in Section 16.2.3, the
“Forbearance Termination Date”; and such period, the “Forbearance Period”):
 
(a) 11:59 p.m. (Eastern Time) on May 10, 2020;
 
(b) the occurrence of a Default or Event of Default that is not a Specified
Event of Default;
 
(c) the occurrence of an event of default (or similar term or phrase) under any
Permitted Excluded Subsidiary Financing that is not a NordLB Specified Event of
Default; and
 
(d) the commencement against Borrower, any Subsidiary of Borrower (including a
Restricted Subsidiary), Agent or any Lender of any litigation or other exercise
of any rights or remedies based on an event of default (or similar term) under
the Excluded Subsidiary Facility by or on behalf of NordLB.
 
16.2.2 Limited Effect of Forbearance. Notwithstanding the foregoing, Borrower
acknowledges and agrees that the temporary forbearance granted by Agent and the
Lenders pursuant to Section 16.2 shall not constitute, and shall not be deemed
to constitute, a waiver of the Specified Events of Default or of any other
Default or Event of Default under the Loan Documents or a waiver of any of the
rights and remedies provided thereunder, under law, at equity or otherwise
(except as otherwise expressly provided in Section 16.2.1).
 
16.2.3 Extension of Forbearance. If a Forbearance Termination Event has not
occurred prior to 11:59 p.m. (Eastern Time) on May 10, 2020, the Forbearance
Period shall initially extend without further Lender consent or documentation to
the earlier of (i) 11:59 p.m. (Eastern Time) on July 1, 2020 and (ii) the
occurrence of a Forbearance Termination Event. If a Forbearance Termination
Event has not occurred prior to 11:59 p.m. (Eastern Time) on July 1, 2020, the
Forbearance Period shall further extend without further Lender consent or
documentation to the earlier of (i) 11:59 p.m. (Eastern Time) on August 15, 2020
and (ii) the occurrence of a Forbearance Termination Event.
 
16.2.4 Termination of Forbearance. On and after the Forbearance Termination
Date, Agent's and the Lenders' agreement under Section 16.2 to forbear shall
terminate automatically without the requirement of any demand, presentment,
protest, notice or further act or action by Agent or the Lenders. Borrower
expressly acknowledges and agrees that the effect of such termination will be to
permit Agent and the Lenders to demand that the Obligations be paid in full and
to exercise any and all other rights and remedies available to them under the
Loan Documents and this Agreement, at law, in equity, or otherwise without any
further lapse of time, expiration of applicable grace periods, or (except as
otherwise required under provisions of applicable law that cannot be waived)
requirements of notice to Borrower, all of which are expressly waived by
Borrower.
 
16.3 General Release
 
. Borrower, on behalf of itself and on behalf of its Subsidiaries, successors,
assigns, legal representatives and financial advisors (collectively, the
“Releasing Parties”), hereby releases, acquits and forever discharges Agent, the
Lenders and each of their respective past and present directors, officers,
employees, agents, attorneys, affiliates, predecessors, successors,
administrators and assigns (the “Released Parties”) of and from any and all
claims, actions, causes of action, demands, rights, damages, costs, loss of
service, expenses and compensation whatsoever heretofore or hereafter arising
from any events or occurrences, or anything done, omitted to be done, or allowed
to be done by any of the Released Parties, on or before the date of execution of
this Agreement, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, including,
without limitation, any of the same arising from or related to anything done,
omitted to be done, or allowed to be done by any of the Released Parties and in
any way connected with this Agreement or any of the Loan Documents, any other
credit facilities provided or not provided, any advances made or not made, or
any past or present deposit or other accounts of any Releasing Party with any
Released Party and the handling of the same by any Released Party, including,
without limitation, the manner and timing in which items were deposited or
credited thereto or funds transferred therefrom or made available to any of the
Releasing Parties, the honoring or returning of any checks drawn on any account,
and any other dealings between the Releasing Parties and the Released Parties
(the “Released Matters”). Releasing Parties each further agree never to
commence, aid or participate in (except to the extent required by order or legal
process issued by a court or governmental agency of competent jurisdiction) any
legal action or other proceeding based in whole or in part upon the Released
Matters. In furtherance of this general release, Releasing Parties each
acknowledge and waive the benefits of California Civil Code Section 1542 (and
all similar ordinances and statutory, regulatory, or judicially created laws or
rules of any other jurisdiction), which provides:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, AND THAT IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
 
Releasing Parties each agree that this waiver and release is an essential and
material of this Agreement, and that the agreements in this paragraph are
intended to be in full satisfaction of any alleged injuries or damages to or of
any Releasing Parties in connection with the Released Matters. Each Releasing
Party represents and warrants that it has not purported to convey, transfer or
assign any right, title or interest in any Released Matter to any other person
or entity and that the foregoing constitutes a full and complete release of the
Released Matters. Releasing Parties each also understand that this release shall
apply to all unknown or unanticipated results of the transactions and
occurrences described above, as well as those known and anticipated. Releasing
Parties each have consulted with legal counsel prior to signing this release, or
had an opportunity to obtain such counsel and knowingly chose not to do so, and
each Releasing Party executes such release voluntarily, with the intention of
fully and finally extinguishing all Released Matters.
 
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
 
BORROWER:
 
AEROCENTURY CORP.,
a Delaware corporation
 
By:              
/s/ Frank Pegueros         
Name:                       
Frank Pegueros
Title:              
Senior Vice President - Operations
 
 
 
 
 
 
 
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ADMINISTRATIVE AGENT, SOLE LEAD ARRANGER AND LENDER:
 
MUFG UNION BANK, N.A.
 
By:                
/s/ John Lilly

Name:                         
John Lilly
Title:                
Director
 
 
 
 
 
 
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SYNDICATION AGENT AND LENDER:
 
UMPQUA BANK
 
By:                
/s/Stephen Barkley_____________
Name:                         
Stephen Barkley
Title:                
SVP and Regional Credit Director
 
 
 
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CO-DOCUMENTATION AGENT AND LENDER:
 
ZIONS BANCORPORATION, N.A. (fka ZB, N.A.) dba CALIFORNIA BANK AND TRUST
 
By:                
/s/ Grant Hill

Name:                         
Grant Hill
Title:                
Vice President
 
 
 
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CO-DOCUMENTATION AGENT AND LENDER:
 
U.S. BANK NATIONAL ASSOCIATION
 
By:                
/s/ Mike Warren

Name:                         
Mike Warren
Title:                
Senior Vice President
 
 
 
 
 
 
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 LENDER:
 
COLUMBIA STATE BANK
 
By:                
/s/  Katriana Samiljan
Name:                         
Katriana Samiljan
Title:                
VP, Special Credits Officer
 
 
 
 
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Schedule A
 
Term Loan Commitment
 
Lender
 
Commitment as of April 1, 20201
 
Pro Rata Share
 
MUFG Union Bank, N.A.
 
$21,310,679.11
 
25.5172413793%
Umpqua Bank
$20,158,750.56
 
24.1379310345%
Zions Bancorporation, N.A. (fka ZB, N.A.) dba California Bank & Trust
$17,278,929.05
20.6896551724%
U.S. Bank National Association
$16,127,000.43
19.3103448276%
Columbia State Bank
$8,639,464.49
10.3448275862% 
TOTAL:
$83,514,823.64
100.0000000000% 

 
 
 
 
 
 
 
 
1 The amounts do not include capitalized interest for April 2020 to be added to
the principal on May 1, 2020.

Schedule A — Page 1
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Schedule 1.1a
 
[Reserved]
 
 
 
 
 

Schedule 1.1a — Page 1
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Schedule 1.1b
 
Eligible Leases
 
 
 
 

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Schedule 1.1c
 
Equipment
 
 

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Schedule 1.1d
 
Excluded Assets
 

 
 
 

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Schedule 1.1e
 
Material Contracts
 

 
 
 
 
 

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Schedule 1.1f
 
Permitted Indebtedness
 
See Schedule 7.13
 
 
 

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Schedule 1.1g
 
Liens of Record
 
 
 
 
 
 

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Schedule 1.1h
 
Schedule of Documents
 

 

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Schedule 1.1i
 
[Reserved]
 
 

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Schedule 5.2
 
Executive Offices; Corporate or Other Names; Conduct of Business
 

 
 

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Schedule 5.7
 
No Other Liabilities; No Material Adverse Changes
 

 
 

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Schedule 5.9
 
Trade Names
 

 
 
 

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Schedule 5.10
 
Litigation
 

 
 

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Schedule 5.17
 
Hazardous Materials
 

 
 

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Schedule 5.19
 
Insurances
 
 
 

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Schedule 5.22
 
Depreciation Policies
 

 
 

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Schedule 5.28
 
Deposit Accounts

 
 
 

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Schedule 6.4
 
Insurance as of the Closing Date
 
See Schedule 5.19
 
 

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Schedule 7.13
 
Indebtedness and Guaranteed Indebtedness Existing on the Closing Date
 

 
 
 

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Schedule 7.19
 
Investments Existing as of the Closing Date
 

 

Schedule 7.19 — Page 1
 
 
 
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Schedule 8.3
 
Form of Maintenance Expense Report
 

 

Schedule 8.3 — Page 1
 
 
 
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Schedule 8.9
 
Form of Bid Summary Report
 

Schedule 8.9 — Page 1
 
 
 
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EXHIBIT A
 
 
 

A-1
 
 
 
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EXHIBIT B
 
 
 
[Reserved]
 
 
 
 
 

B-1
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EXHIBIT C
 
Form of Compliance Certificate
 
 
 

C-2
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EXHIBIT C
 
COMPLIANCE CERTIFICATE
 

C-2
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EXHIBIT D
 
Form of Commitment Assignment and Acceptance
 
 

D-2
Form of Commitment Acceptance & Assignment
 
 
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EXHIBIT D
 
Form of Commitment Assignment and Acceptance
 
COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT
 

D-2
Form of Commitment Acceptance & Assignment
 
 
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EXHIBIT E
 
 
 
[Reserved]
 

E-1
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EXHIBIT F
 
 
 
[Reserved]
 
 
 

F-1
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EXHIBIT G
 
 
 
[Reserved]

G-1
AeroCentury – Fourth Amended and Restated Loan and Security Agreement
 
 
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EXHIBIT H
 
 
 
[Reserved]
 
 
 

H-1
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EXHIBIT I
 
Form of Placard
 
 
 

 
 
 
 

I-1
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