Blueprint






 







FIRST AMENDMENT OF
FORBEARANCE AGREEMENT AND

 


FIRST
AMENDMENT TO CREDIT AGREEMENT

 


THIS
FIRST AMENDMENT OF FORBEARANCE AGREEMENT AND FIRST AMENDMENT TO
CREDIT AGREEMENT (this “Amendment”) dated as of
November 13,
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
Lenders (in such capacity, “Agent”), with reference
to the following facts:

 



RECITALS

 


A.           On
or about October 28, 2019, Borrower, JetFleet Holding Corp., a
California corporation (“Holding Guarantor”), and
JetFleet Management Corp., a California corporation
(“Management
Guarantor” and together with Holding Guarantor,
collectively the “Guarantors”), on the one
hand, and the Administrative Agent and the lenders (the
“Lenders”) parties to the
Third Amended and Restated Credit Agreement dated as of February
19, 2019 executed by and among Borrowers, Lenders and the
Administrative Agent (as amended, extended, renewed, supplemented
or otherwise modified from time to time, the “Credit Agreement”),
entered into that certain Forbearance Agreement dated as of
October 28, 2019 (the “Forbearance
Agreement”).

 


B.           Pursuant
to the Forbearance Agreement, (i) Agent and the Lenders agreed
to temporarily forbear from exercising the Enforcement Actions as a
result of the occurrence and continuance of the Specified Defaults
described therein and (ii) MUFG Bank, Ltd.
(“MUFG
LTD”) agreed to temporarily forbear from exercising
Termination Rights as a result of such Specified Defaults. The
Forbearance Period under the Forbearance Agreement expires at 11:59
p.m. (New York City time) on November 13, 2019.

 


C.           Additionally,
the Forbearance Agreement provided a one-time limited waiver of
certain provisions of the Credit Agreement (defined in the
Forbearance Agreement as “Specified Requirements”),
pursuant to which Borrower was permitted to reborrow on
October 29, 2019 a LIBOR Loan under the Credit Agreement in
the principal amount of $36,900,000, notwithstanding the Specified
Defaults.

 


D.           Additional
LIBOR Loans under the Credit Agreement will become due and payable
on Payment Dates occurring during the Forbearance Period. As a
result of the Specified Defaults, Borrower is not able to reborrow
such Loans as LIBOR Loans without a temporary waiver of the
Specified Requirements with respect to such Loans.

 


E.           Borrower
and Guarantors have requested that Agent, Lenders and MUFG LTD
amend the Forbearance Agreement to (i) extend the Forbearance
Period, and (ii) provide for a temporary limited waiver of the
Specified Requirements with respect to the LIBOR Loans reborrowed
during the Forbearance Period. Agent, the Lenders and MUFG LTD are
willing to do so on the terms and conditions set forth in this
Amendment. MUFG LTD is entering into this Amendment with respect to
Section 4(a)(i) of the
Forbearance Agreement as amended hereby.

 


F.           Lenders
have agreed to make certain modifications to the Credit Agreement
on the terms set forth herein.

 


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 Amendment.

 

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

 

3. Acknowledgments. Borrower and
Guarantors each restates and reaffirms the acknowledgments each
made in Section 3 of the
Forbearance Agreement as of the First Extension Effective Date as
such term is defined in Section 6 hereof. Except
as expressly set forth herein, all terms, conditions, covenants,
representations and warranties contained in the Forbearance
Agreement, the Credit Agreement, the other Loan Documents and all
rights of Agent and the Lenders and all obligations of Borrower and
the Guarantors thereunder, remain in full force and effect. Each of
Borrower and the Guarantors hereby confirm that the Forbearance
Agreement, the Credit Agreement, the other Loan Documents and the
Collateral Documents are in full force and effect.

 

4. Extension of Forbearance Period;
Limited Waiver.

 

(a) Extension. Section 4(a)(i) of the
Forbearance Agreement is hereby amended to read as
follows:

 



“(i)            

11:59 p.m. (New
York City time) on December 12, 2019;”





 

(b) Limited Waiver. The provisions
of the Credit Agreement and the other Loan Documents to the
contrary notwithstanding, subject to the terms and conditions of
the Forbearance Agreement (as amended hereby) and as long as a
Forbearance Termination Event has not then occurred, Agent and the
Lenders hereby agree to a temporary limited waiver of the Specified
Requirements solely with respect to the reborrowing of LIBOR Loans
that become due and payable on Payment Dates during the Forbearance
Period, provided
that (i) the amount reborrowed for each such LIBOR Loan shall
not exceed the amount of such LIBOR Loan immediately before such
reborrowing, (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%.

 

(c) Limited Effect of Waiver. The
waiver set forth in Section 4(b) 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 Amendment or the Forbearance
Agreement (as amended hereby) 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.

 

(d) Other Amendments. The title of
Section 5 of
the Forbearance Agreement currently reading “Reporting”
is hereby replaced with “Covenants” and the following
paragraphs are hereby added thereto immediately below paragraph (a)
thereof:

 



(b)            

Maintenance Report. Not later
than December 12, 2019, and on a monthly basis thereafter, Borrower
shall submit to Agent a six (6) 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 and otherwise be in form and substance satisfactory to
Agent. With respect to each Maintenance Expense Report submitted
after the initial Maintenance Expense Report, Borrower shall submit
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.





 



(c)            

No New Loans. Other than with
respect to the reborrowing of a LIBOR Loan, Borrower shall not make
a request for a Loan.





 

5. Amendments to Credit Agreement.
The Credit Agreement shall be amendment as follow:

 

(a) The definitions of
“Revolving Commitment” and “Maximum Amount”
shall each be amended by replacing “One Hundred Forty-Five
Million and 00/100 Dollars ($145,000,000.00)” in the first
sentence thereof with “One Hundred Fifteen Million and 00/100
Dollars ($115,000,000.00)”.

 

(b) Section 2.18 of the Credit
Agreement shall be amended by replacing “One Hundred Sixty
Million and 00/100 Dollars ($160,000,000.00)” in the first
sentence thereof with “One Hundred Thirty Million and 00/100
Dollars ($130,000,000.00)”.

 

(c) All references to
“Revolving Commitment”, the “Maximum
Amount”, the “Revolving Loans” or such similar
terms describing the amount of the Credit Facility in the Credit
Agreement and the other Loan Documents shall be amended to be
references to such respective terms in the amount of
$115,000,000.

 

(d) Schedule A to the Credit
Agreement shall be amended and replaced with Schedule A attached
hereto.

 

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

 

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

 

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

 

7. Forbearance Extension Fee. In
consideration of the limited agreement of the Lenders to extend the
Forbearance Period as provided herein, Borrowing shall pay to Agent
for the account of the Lenders a forbearance extension fee in the
amount of $225,000, which fee shall be deemed fully earned and
non-refundable for any reason whatsoever and shall be due and
payable not later than December 12, 2019. Borrower hereby
authorizes Agent to deduct the forbearance extension fee from the
deposit account maintained with Agent ending with the last four
digits 0410.

 

8. 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 Amendment, 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 Amendment, the Forbearance 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 Amendment, 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.

 

9. Miscellaneous.

 

(a) Notices. All notices and
requests in connection with this Amendment, the Forbearance
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.


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 Amendment, shall survive the execution and
delivery of this Amendment 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 Amendment and the Forbearance Agreement (as amended hereby)
shall each constitute a Loan Document under the Credit Agreement.
Any provision of any Loan Document which applies to Loan Documents
generally shall apply to this Amendment and the Forbearance
Agreement (as amended hereby). It shall be an immediate Event of
Default under the Credit Agreement if Obligor breaches any covenant
contained herein or in the Forbearance Agreement (as amended
hereby) or if any representation or warranty contained herein or in
the Forbearance Agreement (as amended hereby) proves to be
inaccurate or untrue in any material respect. Except as expressly
provided herein, the Credit Agreement and the other Loan Documents
shall be unmodified and shall continue to be in full force and
effect in accordance with their terms and are hereby in all
respects ratified and confirmed.

 

(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 Amendment and the
Forbearance Agreement (as amended by this Amendment) with legal
counsel;

 

(ii) it
has carefully reviewed this Amendment and the Forbearance Agreement
(as amended by this Amendment) and fully understands all terms and
provisions of this Amendment and the Forbearance Agreement (as
amended by this Amendment);

 

(iii) it
has freely, voluntarily, knowingly, and intelligently entered into
this Amendment and the Forbearance Agreement (as amended by this
Amendment) 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 Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the
remainder of this Amendment, and the effect thereof shall be
confined to the provision so held to be invalid or
unenforceable.

 

(f) APPLICABLE LAW. THIS AMENDMENT,
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 AMENDMENT,
THE FORBEARANCE AGREEMENT (AS AMENDED BY THIS AMENDMENT) OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

(h) Successors and Assigns. This
Amendment 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 Amendment by any Lender prior to
the First Extension Effective Date shall be binding upon its
successors and assigns and shall be effective as to any Loans or
Revolving Commitment assigned to such Lender after such execution
and delivery.

 

(i) Counterparts. This Amendment
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 Amendment 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 Amendment are for
convenience only and shall not affect the interpretation of this
Amendment.

 

(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 Amendment, and the other documents
contemplated by this Amendment, 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 Amendment.

 

(m) Amendments. The provisions of
the Forbearance Agreement (as amended by this Amendment) may be
further 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
AMENDMENT AND THE FORBEARANCE 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:4835-8340-7020.5

	

-[Insert
Page Number]-

	
 


	
 

	
 

	
 







 








 






IN
WITNESS WHEREOF, the parties have entered into this Amendment 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:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 






ADMINISTRATIVE
AGENT:


 

 


MUFG
UNION BANK, N.A.

 



By:            

_________________________





 


Name:
_________________________

 



Title:                       

_________________________





 


 

 


 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 






MUFG LTD:

 


MUFG
BANK, LTD.

 



By:            

_________________________





 


Name:
_________________________

 



Title:                       

_________________________





 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 







LENDER:

 


UMPQUA
BANK

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________






 


 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 






LENDER:

 


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

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 

 


 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 






LENDER:

 


U.S.
BANK NATIONAL ASSOCIATION

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 


 


 


 


 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 






LENDER:

 


COLUMBIA STATE
BANK

 



By:            

_________________________






Name:
_________________________



Title:                       

_________________________





 


 




	

SMRH:4835-8340-7020

	

S-7

	
 


	
 

	
 

	
 







 








 







Schedule A

 



Revolving Commitment

 


	


Lender


 

	


Commitment


 

	


Pro Rata Share


 


	

MUFG
Union Bank, N.A.


 

	

$29,344,827.59

	

25.5172413793%


	

Umpqua
Bank

	

$27,758,620.69

	

24.1379310345%


	

Zions
Bancorporation, N.A. (fka ZB, N.A.) dba California Bank &
Trust

	

$23,793,103.45

	

20.6896551724%


	

U.S.
Bank National Association

	

$22,206,896.55

	

19.3103448276%


	

Columbia
State Bank

	

$11,896,551.72

	

10.3448275862%


	

TOTAL:

	

$115,000,000.00

	

100.0000000000%







 

 


 

 


 

 




	

SMRH:4835-8340-7020.5

	

Schedule
A