Blueprint





 







FORBEARANCE AGREEMENT

 


THIS
FORBEARANCE AGREEMENT (this “Agreement”) dated as of
October 28, 2019, is entered into by and among AEROCENTURY CORP., a Delaware
corporation (“Borrower”), the
Guarantors (defined below), the Lenders (defined below) and
MUFG UNION BANK, N.A., a
national banking association, as administrative agent for the
Lender (in such capacity, “Agent”), with reference
to the following facts:

 



RECITALS

 


A.           Borrower,
the lending and other financial institutions from time to time
party thereto as lenders (collectively, the “Lenders”), and the
Administrative Agent are parties to the Third Amended and Restated
Credit Agreement dated as of February 19, 2019 (as amended,
extended, renewed, supplemented or otherwise modified from time to
time, the “Credit
Agreement”).

 


B.           Pursuant
to the Credit Agreement, the Lenders have made certain loans and
other extensions of credit to, or for the account of, the
Borrower.

 


C.           In
connection with the Credit Agreement, each of JetFleet Holding
Corp., a California corporation (“Holding Guarantor”), and
JetFleet Management Corp., a California corporation
(“Management
Guarantor” and together with Holding Guarantor,
collectively “Guarantors”), executed
and delivered to Agent a Subsidiary Guaranty dated as of October 1,
2018 and February 19, 2019, respectively. Borrower and Guarantor
are referred to herein collectively and individually as the context
may require as “Obligor.”

 


D.           As
of the date hereof, the aggregate outstanding principal amount of
the Revolving Loans is $83,200,000 (the “Principal
Amount”).

 


E.           The
Borrowing Base Certificate covering the calendar month ending
September 30, 2019. and delivered by Borrower to Agent on
October 15, 2019, discloses a Borrowing Base Deficiency
constituting a Default under the Credit Agreement (the
“Borrowing Base
Default”). The Borrowing Base Default continues as of
the date hereof. On October 15, 2019, Agent provided notice
(the “Reservation of
Rights Letter”) to Borrower and Guarantors of the
Borrowing Base Default and certain potential Defaults and/or Events
of Default that may occur under the Credit Agreement (defined
therein as the “Potential Events of
Default” and, collectively with the Borrowing Base
Default, the “Specified Defaults”). The
Specified Defaults are described on Exhibit A attached hereto.

 


F.           As
a result of the Specified Defaults, the interest rate applicable to
the Loans may be increased to the Default Rate and any obligation
of Lenders to make further Loans to Borrower may be terminated or
suspended. Further, should any Specified Default constitute or
mature into (after the expiration of any applicable grace period
under the Credit Agreement) an Event of Default, Agent and the
Lenders are entitled to exercise at any time their further rights
and remedies and to commence enforcement, litigation and collection
actions under the Credit Agreement, the other Loan Documents and
applicable law, including without limitation, to set off funds and
to declare to be immediately due and payable the principal amount
of the Revolving Loans now outstanding, all accrued interest, fees
and the other obligations of the Obligors accrued under the Credit
Agreement and the other Loan Documents (such further rights,
remedies and actions, other than as described in the last sentence
of Section 9.2.1 of the
Credit Agreement commencing with the word “provided”,
but including the right to apply the Default Rate to the Loans,
collectively, the “Enforcement
Actions”).

 


G.           As
noted in the Reservation of Rights Letter, in accordance with
Section 2.1.4(b) of the
Credit Agreement, Borrower is not permitted to reborrow any LIBOR
Loan as a new LIBOR Loan due to the Borrowing Base Default and/or
the Potential Events of Default.

 


H.           A
LIBOR Loan under the Credit Agreement in the principal amount of
$36,900,000 (the “Specified LIBOR Loan”)
will become due and payable on the Payment Date occurring on
October 29, 2019 (the “Specified Payment Date”).
As a result of the Specified Defaults, Borrower is not able to
reborrow the Specified LIBOR Loan as a LIBOR Loan.

 


I.           Borrower
has requested that Agent and the Lenders (1) temporarily
forbear from exercising the Enforcement Actions as a result of the
occurrence and continuance of the Specified Defaults under the
Credit Agreement (2) grant a one-time waiver of the following
requirements solely with respect to the Specified LIBOR Loan:
(i) the requirement of Section 2.1.1 of the
Credit Agreement that Loans shall be made as Base Rate Loans if a
Default has occurred and is continuing and (ii) the
requirements of Section 2.1.4(b) of the
Credit Agreement that (a) no Default shall then exist and be
continuing on the Specified Payment Date so that Borrower may
reborrow the Specified LIBOR Loan as a LIBOR Loan and (b) that
Borrower provide two (2) Business Days’ notice prior to the
Specified Payment Date for the reborrowing of the Specified LIBOR
Loan (such requirements in the forgoing clauses (i) and (ii) 
are referred to collectively herein as the “Specified
Requirements”).

 


J.           The
indebtedness under Credit Agreement is a “Specified
Indebtedness” as defined under that certain ISDA 2002 Master
Agreement dated as of March 12, 2019 (the “ISDA”) which Borrower
entered into with MUFG Bank, LTD (“MUFG LTD”) with respect
to two swap contracts (the “Swap Contracts”) as swap
counterparty in compliance with Section 6.22 of the Credit
Agreement. Under Section 5(a)(vi)(1) of the
ISDA, the Specified Defaults may constitute grounds for exercise of
early termination rights by MUFG LTD under Section 6 of the ISDA
(“Termination
Rights”). Borrower has requested that MUFG LTD
temporarily forbear from exercising Termination Rights as a result
of the Specified Defaults.

 


K.           Agent
and the Lenders are willing to grant such forbearance and limited
waiver and MUFG LTD is willing to grant such forbearance with
respect to the Termination Rights, in each case, on the terms and
conditions set forth below.

 


NOW,
THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree
as follows:

 



AGREEMENT

 

1. Incorporation of Recitals. Each
of the above Recitals is incorporated herein as true and correct in
all material respects and is relied upon by Agent and the Lenders
in agreeing to the terms of this Agreement.

 

2. Defined Terms. Any and all
initially-capitalized terms used in this Agreement (including,
without limitation, in the Recitals to this Agreement), without
definition shall have the respective meanings specified in the
Credit Agreement.

 

3. Acknowledgments.

 

(a) Each Obligor hereby
acknowledges and agrees that, as of the date hereof, the
Obligations include the Principal Amount, together with accrued but
unpaid interest, fees and costs of enforcement, which constitutes a
valid and subsisting Obligation of Obligor owed to the Lenders is
not subject to any credits, offsets, defenses, claims,
counterclaims or adjustments of any kind. Each Obligor acknowledges
and confirms that, as a result of the Specified Defaults, neither
Agent nor any Lender has any obligation whatsoever to advance any
further Loans to Borrower pursuant to the terms of the Loan
Documents.

 

(b) Each Obligor hereby
acknowledges and agrees that (i)  a Borrowing Base Default
exists, and will continue to exist, after the Forbearance Effective
Date (defined below), and will constitute an Event of Default if
not cured by January 13, 2020, (ii) such Obligor received
proper and adequate notice of the Specified Defaults under the
Credit Agreement and the other Loan Documents pursuant to the
Reservation of Rights Letter, and (iii) other than the
Specified Defaults, no Default or Event of Default has occurred and
continues to exist as of the Forbearance Effective
Date.

 

(c) Each Obligor 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 such Obligor to Agent, for the benefit
of the Lenders, pursuant to the Collateral Documents to which such
Obligor is a party. Each Obligor acknowledges and agrees that all
such Liens granted by such Obligor continue to secure the
Obligations notwithstanding the occurrence of the Forbearance
Effective Date. Each such Obligor hereby represents and warrants to
Agent and the Lenders that, pursuant to the Collateral Documents to
which such Obligor is a party, the Obligations are secured by a
first priority (subject to certain Permitted Liens permitted under
Section 7.12.2 of
the Credit Agreement) Lien on all of such Obligor’s assets to
the extent required by the Collateral Documents.

 

4. Forbearance; Limited
Waiver.

 

(a) Forbearance Period. Subject to
the terms and conditions of this Agreement (including the proviso
at the end of this clause (a)), (I) Agent and the Lenders
hereby agree to forbear from taking any Enforcement Actions and
(II) MUFG LTD hereby agrees to forbear from exercising
Termination Rights under the ISDA, in each case, as a result of the
occurrence of the Specified Defaults during the period from and
including the Forbearance Effective Date until the earliest to
occur of any of the following events (each such event, a
“Forbearance
Termination Event”; the date of such occurrence, the
“Forbearance
Termination Date”; and such period, the
“Forbearance
Period”):

 

(i) 11:59 p.m. (New
York City time) on November 13, 2019;

 

(ii) the
occurrence of a Default or Event of Default that is not a Specified
Default;

 

(iii) the
commencement against any borrower under the Term Loan Facility,
Obligor, Agent or any Lender of any litigation or other exercise of
any material rights or remedies based on a borrower default under
the Term Loan Facility by or on behalf of any lender or security
trustee under the Term Loan Facility (any such party is referred to
herein as the “Term
Loan Lender”) (for the avoidance of doubt, it being
understood that delivery of a notice of event of default or
reservation of rights by the Term Loan Lender shall not alone
constitute a Forbearance Termination Event under this clause
(iii));

 

(iv) any
representation or warranty made by any Obligor in this Agreement
proving to have been untrue, inaccurate or incomplete on or as of
the date made or deemed made, except where such representations and
warranties expressly relate to an earlier date in which case such
representations and warranties were true and correct in all
material respects as of such earlier date; and

 

(v) failure of any
Obligor to perform, as and when required, any of their respective
covenants or other obligations set forth in this Agreement (it
being understood that time is of the essence for each such covenant
and obligation).

 

(b) Limited Effect of Forbearance.
Notwithstanding the foregoing, each Obligor acknowledges and agrees
that the temporary forbearance granted by Agent and the Lenders
pursuant to this Agreement shall not constitute, and shall not be
deemed to constitute, a waiver of the Specified Defaults 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
4(a)).

 

(c) Termination of Forbearance. On
and after the Forbearance Termination Date, Agent's and the
Lenders' agreement hereunder to forbear shall terminate
automatically without the requirement of any demand, presentment,
protest, notice or further act or action by Agent or the Lenders.
Each Obligor 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 any
Obligor, all of which are expressly waived by each
Obligor.

 

(d) Limited Waiver. The provisions
of the Credit Agreement and the other Loan Documents to the
contrary notwithstanding, subject to the terms and conditions of
this Agreement and as long as a Forbearance Termination Event has
not then occurred, Agent and the Lenders hereby agree to a one-time
waiver of the Specified Requirements solely with respect to the
Specified LIBOR Loan due on the Specified Payment Date,
provided that
(i) the amount of the Specified LIBOR Loan to be reborrowed on
the Specified Payment Date as a LIBOR Loan shall equal the
Specified LIBOR Loan, (ii) the LIBOR Loan Period applicable
for such reborrowing shall be fixed at one (1) month, and
(iii) the Applicable LIBOR Margin therefor shall be equal to
6.00%.

 

(e) Limited Effect of Waiver. The
waiver set forth in Section 4(d) above shall
be limited precisely as written and shall not be deemed (a) to be a
waiver of any other term or condition of the Credit Agreement or
the other Loan Documents, (b) to be a waiver of any Default or
Event of Default (including, without limitation, the Specified
Defaults), (c) to prejudice any right or remedy which Agent or
the Lenders may now have or may have in the future under or in
connection with the Credit Agreement or the other Loan Documents,
nor shall the entering into this Agreement preclude agent or the
Lenders from refusing to enter into any further waivers or
amendments with respect to the Credit Agreement or any other Loan
Document, (d) to be a consent to any future waiver under the
Credit Agreement or the other Loan Documents, or (e) to
constitute a course of dealing or other basis for altering any
Obligations or any other contract or instrument.

 

5. Reporting. To induce Agent and
the Lenders to enter into this Agreement, Borrower agrees as
follows:

 

(a) Cash Flow Budget. Not later
than November 13, 2019, and on a bi-weekly basis thereafter,
Borrower shall submit to Agent a 13-week cash flow model (a
“Cash Flow
Budget”), in form and substance acceptable to Agent.
With respect to each Cash Flow Budget submitted after the initial
Cash Flow Budget, Borrower shall submit a 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.

 

6. Conditions Precedent. This
Agreement shall become effective on the date (the
“Forbearance
Effective Date”) each of the following conditions
shall have been satisfied or waived by Agent in its sole
discretion:

 

(a) This Agreement. Agent shall
have received this Agreement, duly executed by Borrower, Guarantors
and the Lenders.

 

(b) Forbearance Fee. Borrower shall
have paid to Agent a forbearance fee equal to $181,250, which fee
shall be deemed fully earned and non-refundable for any reason
whatsoever and shall be payable concurrently with the execution of
this Agreement. Borrower hereby authorize Agent to deduct the
forbearance fee from the deposit account maintained with Agent
ending with the last four digits 0410.

 

(c) No Default. Upon giving effect
to this Agreement, there shall be no Default or Event of Default
(other than the Specified Defaults).

 

7. General Release. Each of
Borrower and Guarantors, 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.

 

8. Miscellaneous.

 

(a) Notices. All notices and
requests in connection with this Agreement or the Credit Agreement
(notwithstanding Section
12.7.1 thereof) to Borrower or Agent shall be sufficiently
given or made if given or made in writing via hand delivery,
overnight courier, U.S. Mail (postage prepaid) or email, and
addressed as follows:

 

(1) If to
Borrower:

 


AeroCentury
Corp.


1440
Chapin Avenue, Suite 310


Burlingame, CA
94010-4011


Email:
toni.perazzo@aerocentury.com


    chris.tigno@aerocentury.com

 

(2) If to
Agent:

 


MUFG
Union Bank, N.A.


Attn:
Susan Swerdloff, Managing Director


          Kevin
Sullivan, Director


  Maria
F. Maia, Director


445
South Figueroa Street 13th Floor


Los
Angeles, CA 90071


Email:
SSwerdloff@us.mufg.jp


    KSullivan@us.mufg.jp


    MMaia@us.mufg.jp

 


with a
copy to:

 


MUFG
Union Bank, N.A.


Special
Assets Division


Attn:
Christopher Petrocelli


 John
Lilly


1221
Avenue of Americas, 7th Floor


New
York, NY 10020


Email:
CPetrocelli@us.mufg.jp

 


   JLilly@us.mufg.jp

 


and:

 


Sheppard Mullin
Richter & Hampton LLP


Four
Embarcadero Center, 17th Floor


San
Francisco, CA 94111-4106


Attn:
Juliette M. Ebert


  Richard
Brunette


  Robert
Sahyan


Email:
JEbert@sheppardmullin.com


    RBrunette@sheppardmullin.com


    RSahyan@sheppardmullin.com

 

(b) Survival of Representations and
Warranties. All representations and warranties made in the
Credit Agreement or in any other document or documents relating
thereto, including, without limitation, any Loan Document furnished
in connection with this Agreement, shall survive the execution and
delivery of this Agreement and the other Loan Documents, and no
investigation by Agent or any Lender or any closing shall affect
the representations and warranties or the right of Agent and
Lenders to rely thereon.

 

(c) Agreement as Loan Document.
This Agreement shall constitute a Loan Document under the Credit
Agreement. Any provision of any Loan Document which applies to Loan
Documents generally shall apply to this Agreement. It shall be an
immediate Event of Default under the Credit Agreement if Obligor
breaches any covenant contained herein or if any representation or
warranty contained herein proves to be inaccurate or untrue in any
material respect.

 

(d) Review And Construction Of
Documents. Each party hereto hereby acknowledges, and
represents and warrants to the other parties hereto,
that:

 

(i) it has had the
opportunity to consult with legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with legal
counsel;

 

(ii) it
has carefully reviewed this Agreement and fully understands all
terms and provisions of this Agreement;

 

(iii) it
has freely, voluntarily, knowingly, and intelligently entered into
this Agreement of its own free will and volition;

 

(iv) none
of the Lenders or Agent have a fiduciary relationship with any
Obligor and the Obligor does not have a fiduciary relationship with
Agent or the Lenders, and the relationship between the Lenders or
Agent, on the one hand, and Obligor, on the other hand, is solely
that of creditor and debtor; and

 

(v) no joint venture
exists among Obligor and the Lenders or Agent.

 

(e) Severability. Any provision of
this Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the
remainder of this Agreement, and the effect thereof shall be
confined to the provision so held to be invalid or
unenforceable.

 

(f) APPLICABLE LAW. THIS AGREEMENT,
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(g) WAIVER OF JURY TRIAL. EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

(h) Successors and Assigns. This
Agreement is binding upon and shall inure to the benefit of Agent,
Lenders and Obligor and their respective successors and assigns;
provided,
however, that
Obligor may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of Agent and Lenders.
The execution and delivery of this Agreement by any Lender prior to
the Forbearance Effective Date shall be binding upon its successors
and assigns and shall be effective as to any Loans or Revolving
Commitment assigned to it after such execution and
delivery.

 

(i) Counterparts. This Agreement
may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when
taken together shall constitute one and the same instrument. An
executed signature page of this Agreement may be delivered by
facsimile transmission or electronic PDF of the relevant signature
page hereof.

 

(j) Headings. The headings,
captions and arrangements used in this Agreement are for
convenience only and shall not affect the interpretation of this
Agreement.

 

(k) Expenses of Agent and Lenders.
Borrower shall promptly pay all fees, costs, charges, expenses, and
disbursements of Agent incurred in connection with the preparation,
execution, and delivery of this Agreement, and the other documents
contemplated by this Agreement, including all legal fees and
expenses.

 

(l) Further Assurances. Obligor
agrees to execute, acknowledge, deliver, file and record such
further certificates, instruments and documents, and to do all
other acts and things, as may be reasonably requested by Agent and
necessary or reasonably advisable to carry out the intents and
purposes of this Agreement.

 

(m) Amendments. The provisions of
this Agreement may be amended or waived by an instrument in writing
signed by Borrower, the Lenders and Agent, provided that an amendment
limited to extending the Forbearance Period and/or granting a
further waiver of the Specific Requirements on similar conditions
hereof shall be effective pursuant to a writing signed by Agent, at
the direction of the Requisite Lenders, and Borrower.

 

(n) NO ORAL AGREEMENTS. THIS
AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO REGARDING THE CREDIT PARTIES’ FORBEARANCE WITH RESPECT
TO THEIR RIGHTS AND REMEDIES WHICH MAY ARISE AS A RESULT OF THE
SPECIFIED EVENTS OF DEFAULT AND SUPERSEDES ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND
MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSION OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
HERETO.

 



 [signature pages follow]

 


 

 




	

SMRH:4845-9309-7642.4

	

-[Insert
Page Number]-

	
 


	
 

	
 

	
 







 








 






IN
WITNESS WHEREOF, the parties have entered into this Agreement by
their respective duly authorized officers as of the date first
above written.

 


BORROWER:


 


AEROCENTURY
CORP.,


a
Delaware corporation


 


 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 


 


 


GUARANTORS:


 


JETLEET
HOLDING CORP.,


a
California corporation


 


 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 


 


JETFLEET MANAGEMENT
CORP.,


a
California corporation


 


 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 






ADMINISTRATIVE
AGENT:


 

 


MUFG
UNION BANK, N.A.

 



By:            

_________________________





 


Name:
_________________________

 



Title:                       

_________________________





 


 

 


 

 


LENDER:


 

 


MUFG
UNION BANK, N.A.

 



By:            

_________________________





 


Name:
_________________________

 



Title:                       

_________________________





 


 

 


 

 


MUFG LTD with respect to
Section 4(a)(II):


 

 


MUFG
BANK, LTD

 



By:            

_________________________





 


Name:
_________________________

 



Title:                       

_________________________





 


 

 


 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 






LENDER:

 


UMPQUA
BANK

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________






 


 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 






LENDER:

 


ZIONS
BANCORPORATION, N.A. (fka ZB, N.A.) dba CALIFORNIA BANK AND
TRUST

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 

 


 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 






LENDER:

 


U.S.
BANK NATIONAL ASSOCIATION

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 


 


 


 


 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 






LENDER:

 


COLUMBIA STATE
BANK

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 


 

 




	

SMRH:4845-9309-7642

	

S-6

	
 


	
 

	
 

	
 







 








 







EXHIBIT A

 



Specified Defaults

 



Existing Default

 

9. A
Default has occurred and is continuing under Section 6.17 of the Credit
Agreement (Maintenance of Borrowing Base) as a result of
Borrower’s failure to “maintain the value of the
Borrowing Base at all times such that no Borrowing Base Deficiency
occurs.” The Borrowing Base Certificate for the month ending
September 30, 2019 delivered to Agent on October 15, 2019
discloses a Borrowing Base Deficiency in the amount of
$7,312,458.

 



Potential Events of Default

 

10. Based on
Borrower’s projections submitted to Agent on October 1,
2019 (“Projections”), an Event
of Default may have occurred or may occur under Section 6.15.4 of the
Credit Agreement (Minimum Recourse Interest Coverage Ratio) with
respect to the Fiscal Quarter ending September 30, 2019 and each
Fiscal Quarter thereafter through the period ending December 31,
2020.

 

11. Based on the
Projections, an Event of Default may have occurred or may occur
under Section 6.15.5 of the
Credit Agreement (Minimum Recourse Debt Service Coverage Ratio)
with respect to the Fiscal Quarter ending September 30, 2019 and
each Fiscal Quarter thereafter through the period ending December
31, 2020.

 

12. Based on the
Projections, an Event of Default may have occurred or may occur
under Section 6.15.7 of the
Credit Agreement (No Net Loss) with respect to the Fiscal Quarter
ending September 30, 2019 and each Fiscal Quarter thereafter
through the period ending December 31, 2020.

 

13. Based on the
Projections, an Event of Default may occur under Section 6.15.2 of the
Credit Agreement (Interest Coverage Ratio) with respect to the
Fiscal Quarter ending December 31, 2019 and each Fiscal
Quarter thereafter through the period ending December 31,
2020.

 

14. Based on the
Projections, an Event of Default may occur under Section 6.15.3 of the
Credit Agreement (Debt Service Coverage Ratio) with respect to the
Fiscal Quarter ending December 31, 2019 and each Fiscal
Quarter thereafter through the period ending December 31,
2020.

 

15. Based on the
Projections, an Event of Default may occur under Section 6.15.6 of the Credit
Agreement (Minimum Tangible Net Worth) with respect to the Fiscal
Quarter ending December 31, 2020.

 

16. An Event of Default
may have occurred under Section 9.1.15 of the Credit
Agreement to the extent the Lessee default under and/or the
termination of the Leases for the Aircraft bearing manufacturer's
serial number 15128, 15207 and 15215 cause a Material Adverse
Effect with respect to Borrower.

 

17. An Event of Default
may have occurred under Section 9.1.17 of the
Credit Agreement to the extent the lessee default under and/or the
termination of the lease by Borrower’s Subsidiary, ACY SN
15129 LLC, a Delaware limited liability company, for the aircraft
bearing manufacturer's serial number 15129 causes an event of
default under the terms of the Permitted Excluded Subsidiary
Financing.

 


 




	

SMRH:4845-9309-7642.4

	

Exhibit
A-1