Document:

WELLS FARGO & COMPANY 8-K

 

Exhibit
4.3

 

[Face
of Note]

 

Unless
this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

 

	CUSIP NO.
    95001HDB4	FACE AMOUNT:
    $_________
	REGISTERED NO. __	 

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A 

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the S&P 500® Index 

due
December 10, 2024

 

WELLS
FARGO FINANCE LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (hereinafter
called the “Company,” which term includes any successor corporation under and as defined in the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the Maturity
Payment Amount (as defined below), in such coin or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity Date”
shall be December 10, 2024. If the Calculation Day (as defined below) is not postponed, the Initial Stated Maturity Date will
be the “Stated Maturity Date.” If the Calculation Day is postponed, the “Stated Maturity Date”
shall be the later of (i) the Initial Stated Maturity Date and (ii) three Business Days (as defined below) after the Calculation
Day as postponed. This Security shall not bear any interest.

 

Any
payments on this Security at Maturity will be made against presentation of this Security at the office or agency of the Company
maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company
for such purpose.

 

“Face
Amount” shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its
“Face Amount.”

 

     

     

    

Determination
of Maturity Payment Amount

 

The
“Maturity Payment Amount” of this Security will equal:

 

		●	if
                                         the Ending Level is greater than the Starting Level: the Face Amount plus:

  

 

  

		●	if
                                         the Ending Level is less than or equal to the Starting Level, but greater than or equal
                                         to the Threshold Level: the Face Amount; or

 

		●	if
                                         the Ending Level is less than the Threshold Level: the Face Amount minus:

 

 

 

All
calculations with respect to the Maturity Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths
rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent,
with one-half cent rounded upward.

 

“Index”
shall mean the S&P 500® Index.

 

The
“Pricing Date” shall mean December 5, 2019.

 

The
“Starting Level” is 3112.76, the Closing Level of the Index on December 4, 2019.

 

The
“Closing Level” of the Index on any Trading Day means the official closing level of the Index reported by the
Index Sponsor on such Trading Day, as obtained by the Calculation Agent on such Trading Day from the licensed third-party market
data vendor contracted by the Calculation Agent at such time; in particular, taking into account the decimal precision and/or
rounding convention employed by such licensed third-party market data vendor on such date, subject to the provisions set forth
below under “Adjustments to the Index,” “Discontinuance of the Index” and “Market Disruption Events.”

 

The
“Ending Level” will be the Closing Level of the Index on the Calculation Day.

 

The
“Threshold Level” is 2178.932, which is equal to 70% of the Starting Level.

 

The
“Participation Rate” is 142%.

 

“Index
Sponsor” shall mean S&P Dow Jones Indices LLC.

 

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

 

    2 

     

    

 

A
“Trading Day” means a day, as determined by the Calculation Agent, on which (i) the Relevant Stock Exchanges
with respect to each security underlying the Index are scheduled to be open for trading for their respective regular trading sessions
and (ii) each Related Futures or Options Exchange is scheduled to be open for trading for its regular trading session.

 

The
“Related Futures or Options Exchange” for the Index means an exchange or quotation system where trading has
a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to
the Index.

 

The
“Relevant Stock Exchange” for any security underlying the Index means the primary exchange or quotation system
on which such security is traded, as determined by the Calculation Agent.

 

The
“Calculation Day” shall be December 5, 2024. If such day is not a Trading Day, the Calculation Day will be
postponed to the next succeeding Trading Day. The Calculation Day is also subject to postponement due to the occurrence of a Market
Disruption Event (as defined below). If a Market Disruption Event occurs or is continuing with respect to the Index on the Calculation
Day, such Calculation Day will be postponed to the first succeeding Trading Day on which a Market Disruption Event has not occurred
and is not continuing; however, if such first succeeding Trading Day has not occurred as of the eighth Trading Day after the originally
scheduled Calculation Day, that eighth Trading Day shall be deemed to be the Calculation Day. If the Calculation Day has been
postponed eight Trading Days after the originally scheduled Calculation Day and a Market Disruption Event occurs or is continuing
on such eighth Trading Day, the Calculation Agent will determine the Closing Level of the Index on such eighth Trading Day in
accordance with the formula for and method of calculating the Closing Level of the Index last in effect prior to commencement
of the Market Disruption Event, using the closing price (or, with respect to any relevant security, if a Market Disruption Event
has occurred with respect to such security, its good faith estimate of the value of such security at the Scheduled Closing Time
of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular trading session of such
Relevant Stock Exchange) on such date of each security included in the Index. As used herein, “closing price”
means, with respect to any security on any date, the Relevant Stock Exchange traded or quoted price of such security as of the
Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular
trading session of such Relevant Stock Exchange.

 

“Calculation
Agent Agreement” shall mean the Calculation Agent Agreement dated as of May 18, 2018 between the Company and the Calculation
Agent, as amended from time to time.

 

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of the Ending Level and the Maturity Payment Amount, which term shall, unless the context otherwise
requires, include its successors under such Calculation Agent Agreement. The initial Calculation Agent shall be Wells Fargo Securities,
LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from time to time after
the initial issuance

 

    3 

     

    

 

of this Security without the consent of the Holder of this Security and without notifying the Holder of this
Security.

 

Adjustments
to the Index

 

If
at any time the method of calculating the Index or a Successor Equity Index, or the closing level thereof, is changed in a material
respect, or if the Index or a Successor Equity Index is in any other way modified so that such index does not, in the opinion
of the Calculation Agent, fairly represent the level of such index had those changes or modifications not been made, then the
Calculation Agent will, at the close of business in New York, New York, on each date that the closing level of such index is to
be calculated, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary
in order to arrive at a level of an index comparable to the Index or Successor Equity Index as if those changes or modifications
had not been made, and the Calculation Agent will calculate the closing level of the Index or Successor Equity Index with reference
to such index, as so adjusted. Accordingly, if the method of calculating the Index or Successor Equity Index is modified so that
the level of such index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to
a split or reverse split in such equity index), then the Calculation Agent will adjust the Index or Successor Equity Index in
order to arrive at a level of such index as if it had not been modified (e.g., as if the split or reverse split had not
occurred).

 

Discontinuance
of the Index

 

If
the Index Sponsor discontinues publication of the Index, and the Index Sponsor or another entity publishes a successor or substitute
equity index that the Calculation Agent determines, in its sole discretion, to be comparable to the Index (a “Successor
Equity Index”), then, upon the Calculation Agent’s notification of that determination to the Trustee and the Company,
the Calculation Agent will substitute the Successor Equity Index as calculated by the Index Sponsor or any other entity and calculate
the Ending Level as described above. Upon any selection by the Calculation Agent of a Successor Equity Index, the Company will
cause notice to be given to the Holder of this Security.

 

In
the event that the Index Sponsor discontinues publication of the Index prior to, and the discontinuance is continuing on, the
Calculation Day and the Calculation Agent determines that no Successor Equity Index is available at such time, the Calculation
Agent will calculate a substitute Closing Level for the Index in accordance with the formula for and method of calculating the
Index last in effect prior to the discontinuance, but using only those securities that comprised the Index immediately prior to
that discontinuance. If a Successor Equity Index is selected or the Calculation Agent calculates a level as a substitute for the
Index, the Successor Equity Index or level will be used as a substitute for the Index for all purposes, including the purpose
of determining whether a Market Disruption Event exists.

 

If
on the Calculation Day the Index Sponsor fails to calculate and announce the level of the Index, the Calculation Agent will calculate
a substitute Closing Level of the Index in accordance with the formula for and method of calculating the Index last in effect
prior to the failure, but using only those securities that comprised the Index immediately prior to that failure; provided
that, if a Market Disruption Event occurs or is continuing on such day, then the

 

    4 

     

    

 

provisions set forth above under the definition
of “Calculation Day” shall apply in lieu of the foregoing.

 

Market
Disruption Events 

 

A
“Market Disruption Event” means any of the following events as determined by the Calculation Agent in its sole
discretion:

 

		(A)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by the Relevant Stock Exchanges or otherwise relating to securities which then comprise
                                         20% or more of the level of the Index or any Successor Equity Index at any time during
                                         the one-hour period that ends at the Close of Trading on that day, whether by reason
                                         of movements in price exceeding limits permitted by those Relevant Stock Exchanges or
                                         otherwise.

 

		(B)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by any Related Futures or Options Exchange or otherwise in futures or options contracts
                                         relating to the Index or any Successor Equity Index on any Related Futures or Options
                                         Exchange at any time during the one-hour period that ends at the Close of Trading on
                                         that day, whether by reason of movements in price exceeding limits permitted by the Related
                                         Futures or Options Exchange or otherwise.

 

		(C)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, securities that then comprise 20% or more of the level of the
                                         Index or any Successor Equity Index on their Relevant Stock Exchanges at any time during
                                         the one-hour period that ends at the Close of Trading on that day.

 

		(D)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, futures or options contracts relating to the Index or any Successor
                                         Equity Index on any Related Futures or Options Exchange at any time during the one-hour
                                         period that ends at the Close of Trading on that day.

 

		(E)	The
                                         closure on any Exchange Business Day of the Relevant Stock Exchanges on which securities
                                         that then comprise 20% or more of the level of the Index or any Successor Equity Index
                                         are traded or any Related Futures or Options Exchange prior to its Scheduled Closing
                                         Time unless the earlier closing time is announced by the Relevant Stock Exchange or Related
                                         Futures or Options Exchange, as applicable, at least one hour prior to the earlier of
                                         (1) the actual closing time for the regular trading session on such Relevant Stock Exchange
                                         or Related Futures or Options Exchange, as applicable, and (2) the submission deadline
                                         for orders to be entered into the Relevant Stock Exchange or Related Futures or Options 

 

    5 

     

    

 

	 	 	Exchange, as applicable, system for execution at such actual closing time on that day.

 

		(F)	The
                                         Relevant Stock Exchange for any security underlying the Index or Successor Equity Index
                                         or any Related Futures or Options Exchange fails to open for trading during its regular
                                         trading session.

 

For
purposes of determining whether a Market Disruption Event has occurred:

 

		(1)	the
                                         relevant percentage contribution of a security to the level of the Index or any Successor
                                         Equity Index will be based on a comparison of (x) the portion of the level of such Index
                                         attributable to that security and (y) the overall level of the Index or Successor Equity
                                         Index, in each case immediately before the occurrence of the Market Disruption Event;

 

		(2)	the
                                         “Close of Trading” on any Trading Day for the Index or any Successor
                                         Equity Index means the Scheduled Closing Time of the Relevant Stock Exchanges with respect
                                         to the securities underlying the Index or Successor Equity Index on such Trading Day;
                                         provided that, if the actual closing time of the regular trading session of any
                                         such Relevant Stock Exchange is earlier than its Scheduled Closing Time on such Trading
                                         Day, then (x) for purposes of clauses (A) and (C) of the definition of “Market
                                         Disruption Event” above, with respect to any security underlying the Index or Successor
                                         Equity Index for which such Relevant Stock Exchange is its Relevant Stock Exchange, the
                                         “Close of Trading” means such actual closing time and (y) for purposes of
                                         clauses (B) and (D) of the definition of “Market Disruption Event” above,
                                         with respect to any futures or options contract relating to the Index or Successor Equity
                                         Index, the “close of trading” means the latest actual closing time of the
                                         regular trading session of any of the Relevant Stock Exchanges, but in no event later
                                         than the Scheduled Closing Time of the Relevant Stock Exchanges;

 

		(3)	the
                                         “Scheduled Closing Time” of any Relevant Stock Exchange or Related
                                         Futures or Options Exchange on any Trading Day for the Index or any Successor Equity
                                         Index means the scheduled weekday closing time of such Relevant Stock Exchange or Related
                                         Futures or Options Exchange on such Trading Day, without regard to after hours or any
                                         other trading outside the regular trading session hours; and

 

		(4)	an
                                         “Exchange Business Day” means any Trading Day for the Index or any
                                         Successor Equity Index on which each Relevant Stock Exchange for the securities underlying
                                         the Index or any Successor Equity Index and each Related Futures or Options Exchange
                                         are open for trading during their respective regular trading sessions, notwithstanding
                                         any such Relevant Stock Exchange or Related Futures or Options Exchange closing prior
                                         to its Scheduled Closing Time.

 

    6 

     

    

 

Calculation
Agent

 

The
Calculation Agent will determine the Maturity Payment Amount and the Ending Level. In addition, the Calculation Agent will (i)
determine if adjustments are required to the Closing Level of the Index under the circumstances described in this Security, (ii)
if publication of the Index is discontinued, select a Successor Equity Index or, if no Successor Equity Index is available, determine
the Closing Level of the Index under the circumstances described in this Security, and (iii) determine whether a Market Disruption
Event or non-Trading Day has occurred.

 

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall
be a broker-dealer, bank or other financial institution) with respect to this Security.

 

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

 

Tax
Considerations

 

The
Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed
to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States
federal income tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

 

Redemption
and Repayment

 

This
Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to December
10, 2024. This Security is not entitled to any sinking fund.

 

Acceleration

 

If
an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment
Amount (calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with
the effect provided in the Indenture. The amount payable to the Holder
hereof upon any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount hereof calculated as provided
herein as though the date of acceleration was the Calculation Day. 

 

 

 

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

 

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature
or its duly authorized agent under the Indenture referred

 

    7 

     

    

 

to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

[The
remainder of this page has been left intentionally blank]

 

    8 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

DATED:

	 	 	 
	 	WELLS FARGO FINANCE LLC
	 	 	 
	 	By:	 
	 	 	 
	 	 	Its:
	 	 	 
	 	Attest:	 
	 	 	 
	 	 	Its:

 

	
TRUSTEE’S CERTIFICATE OF 

AUTHENTICATION

This is one of the Securities of the 

series designated therein described 

in the within-mentioned Indenture.

	
 

	
 

	
 

	
CITIBANK, N.A.,

	
 

	
as Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

	
 

	
 

	
 

	
 

	
OR

	
 

	
 

	
 

	
 

	
WELLS FARGO BANK, N.A.,

	
 

	
as Authenticating Agent for the Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

 

     

     

    

 

[Reverse
of Note]

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A 

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the S&P 500® Index

due December 10, 2024

 

This
Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an indenture dated as of April 25, 2018, as amended or supplemented from time to
time (herein called the “Indenture”), among the Company, as issuer, Wells Fargo & Company, as guarantor
(the “Guarantor”) and Citibank, N.A., as trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series A, of the Company. The
amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-, commodity-
or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures of economic or financial
performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest at a fixed
rate or a floating rate. The Securities of this series may mature at different times, be redeemable at different times or not
at all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies.

 

The
Securities are issuable only in registered form without coupons and will be either (a) book-entry securities represented by one
or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued
to and registered in the names of, the beneficial owners or their nominees.

 

The
Company agrees, to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of
interest against a Holder of this Security.

 

Guarantee

 

The
Securities of this series are fully and unconditionally guaranteed by the Guarantor as and to the extent set forth in the Indenture.

 

Modification
and Waivers 

 

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture
at any time by the

 

    10 

     

    

 

Company, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of all series to be affected, acting together as a class. The Indenture also contains provisions
permitting the Holders of a majority in principal amount of the Securities of all series at the time Outstanding affected by certain
provisions of the Indenture, acting together as a class, on behalf of the Holders of all Securities of such series, to waive compliance
by the Company or the Guarantor with those provisions of the Indenture. Certain past defaults under the Indenture and their consequences
may be waived under the Indenture by the Holders of a majority in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series. Solely
for the purpose of determining whether any consent, waiver, notice or other action or Act to be taken or given by the Holders
of Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding Securities in the requisite aggregate
principal amount, the principal amount of this Security will be deemed to be equal to the amount set forth on the face hereof
as the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.

 

Defeasance

 

Section
403 and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating to
defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon compliance
by the Company or the Guarantor with certain conditions set forth therein, shall not apply to this Security. The remaining provisions
of Section 401 of the Indenture shall apply to this Security.

 

Authorized
Denominations

 

This
Security is issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000.

 

Registration
of Transfer

 

Upon
due presentment for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis,
Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for
an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject
to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental
charge imposed in connection therewith.

 

This
Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days after
the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that
this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect

 

    11 

     

    

 

to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable
pursuant to the preceding sentence, it shall be exchangeable for definitive Securities in registered form, having the same date
of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like amount.

 

This
Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary
or a nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

 

Prior
to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall
be affected by notice to the contrary.

 

Obligation
of the Company Absolute

 

No
reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Maturity Payment Amount at the times, place and rate, and in the coin
or currency, herein prescribed, except as otherwise provided in this Security.

 

No
Personal Recourse

 

No
recourse shall be had for the payment of the Maturity Payment Amount, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or any successor corporation or of the Guarantor or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

 

Defined
Terms

 

All
terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless
otherwise defined in this Security.

 

Governing
Law

 

This
Security shall be governed by and construed in accordance with the law of the State of New York, without regard to principles
of conflicts of laws.

 

    12 

     

    

ABBREVIATIONS

 

 The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	
TEN COM

	
--

	
as tenants in common

	
 

	
 

	
 

	
TEN ENT

	
--

	
as tenants by the entireties

	
 

	
 

	
 

	
JT TEN

	
--

	
as joint tenants with right

	
 

	
 

	
of survivorship and not

	
 

	
 

	
as tenants in common

 

	
UNIF GIFT MIN ACT

	
--

	
 

	
Custodian

	
 

	
 

	
 

	
(Cust)

	
 

	
(Minor)

 

Under Uniform Gifts to Minors Act

 

	
 

	
 

	
(State)

	
 

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

 

Please Insert Social Security or 

Other Identifying Number of Assignee

 

 

	
 

	
 

	 	 
	
 

	
 

	
 

	
 

(Please
print or type name and address including postal zip code of Assignee)

 

    13 

     

    

 

the
within Security of WELLS FARGO FINANCE LLC and does hereby irrevocably constitute and appoint __________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution in the premises.

 

	
Dated:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.

 

    14Blueprint

 

 

 

TEMPORARY WAIVER AND CONSENT AND

 

THIRD AMENDMENT TO CREDIT
AGREEMENT

 

THIS
TEMPORARY WAIVER AND CONSENT THIRD AMENDMENT TO CREDIT AGREEMENT
(this "Agreement")
is made as of December 4, 2019, by and among AEROCENTURY CORP., a
Delaware corporation (“Borrower”), the Lenders
(defined below) and MUFG UNION BANK, N.A., as agent for the Lenders
(in such capacity, "Agent"), with reference to the
following recitals:

 

 

RECITALS

 

A. 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 Agent and the lenders (collectively, the
“Lenders”) under that
certain Third Amended and Restated Credit Agreement dated as of
February 19, 2019 (as amended by that First Amendment of
Forbearance Agreement and First Amendment to Credit Agreement dated
as of November 13, 2019 (the “First Amendment”) and
that Second Amendment to Credit Agreement and Consent for Sale of
Collateral dated as of November 26, 2019 (the
“Second
Amendment”), and as may be further amended, extended,
renewed, supplemented or otherwise modified from time to time, the
“Credit
Agreement”), on the other hand, are parties to that
certain Forbearance Agreement dated as of October 28, 2019, as
amended pursuant to the First Amendment (as may be further amended,
extended, renewed, supplemented or otherwise modified from time to
time, the “Forbearance
Agreement”).

 

B. Pursuant to the
Second Amendment, a Restricted Account (as defined therein) was
established with MUFG Union Bank, N.A., in its capacity as a
depository bank and proceeds of the sale of certain Collateral were
deposited therein. The Second Amendment provided that, during the
Forbearance Period (defined in the Forbearance Agreement), Agent
and the Lenders may consider requests by Borrower for disbursements
from the Restricted Account in accordance with the procedure
outlined therein to fund Borrower’s Liquidity Needs (defined
in the Second Amendment) identified in a Cash Flow Budget that is
approved by the Lenders.

 

C. On November 27,
2019, Borrower delivered to Agent that certain Compliance
Certificate covering the Fiscal Quarter ending September 30,
2019 (“Q3 Compliance
Certificate”). The Q3 Compliance Certificate disclosed
violation of several financial covenants (“Q3 Events of Default”).
The Q3 Events of Default include the following Events of Default
that are Specified Defaults: Borrower’s failure to maintain
for the third Fiscal Quarter of 2019 (i) Minimum Recourse Debt
Interest Coverage Ratio of at least 2.25x as required by
Section 6.15.4
of the Credit Agreement, (ii) Minimum Recourse Debt Service
Coverage Ratio of at least1.05x as required by Section 6.15.5 of the
Credit Agreement, and (iii) no net loss as required by
Section 6.15.7
of the Credit Agreement. However, in addition to the foregoing, the
Q3 Compliance Certificate discloses the following additional Events
of Default (the “New
Events of Default”): Borrower’s failure to
maintain for the third Fiscal Quarter of 2019: (a) Interest
Coverage Ratio of at least 2.25x as required by Section 6.15.2 of the
Credit Agreement, (b) Debt Service Coverage Ratio of at least
1.05x as required by Section 6.15.3 of the
Credit Agreement, and (c) Minimum Tangible Net Worth as
required by Section
6.15.6 of the Credit Agreement. The Specified Defaults
described in the Forbearance Agreement and the New Events of
Defaults are referred to collectively herein as the
“Existing
Defaults”.

 

D. Each of the New
Event of Default constitutes a Forbearance Termination Event (as
defined in the Forbearance Agreement), thereby causing the
occurrence of a Forbearance Termination Date on November 27, 2019.
On December 3, 2019, Agent delivered to Borrower and
Guarantors a notice of default and reservation of rights letter
providing notice of the occurrence of the Forbearance Termination
Date and reservation of the respective rights and remedies of
Agent, Lenders and MUFG LTD, which notice is acknowledged by
Borrower and Guarantors as proper and valid.

 

E. Borrower has
requested that, notwithstanding the occurrence of the Forbearance
Termination Date, (a) Agent and Lenders (i) grant a
temporary waiver of the Existing Defaults, (ii) consider for
approval the Cash Flow Budget delivered to Lenders on
November 27, 2019 (the “November 27 Budget”)
and (iii)  to the extent the November 27 Budget is
approved by the Lenders, permit the disbursement from the
Restricted Account to cover Borrower’s Liquidity Needs for
the week ending December 6th, and (b) MUFG Bank,
Ltd. (“MUFG
LTD”) grant a temporary waiver of any event of default
under the Swap Contracts (defined in the Forbearance Agreement)
resulting from the Existing Defaults (the “Swap
Default”).

 

F. While under no
obligations to do so, Agent, Lenders and MUFG LTD have agreed to
the foregoing request on the terms set forth herein. Additionally,
Lenders have agreed to make certain modifications to the Credit
Agreement on the terms set forth herein.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto represent, warrant and
agree as follows:

 

1. Recitals. The recitals set
forth above are true and correct and are hereby incorporated
herein.

 

2. Defined Terms. Unless stated
otherwise, any and all initially-capitalized terms used in this
Agreement not defined herein shall have the respective meanings
specified in the Credit Agreement and/or Forbearance Agreement, as
applicable.

 

3. Temporary Waiver;
Consent.

 

(a) Subject to the
terms of this Agreement, until the date (“Waiver Termination Date”)
that is the earlier to occur of (i) 11:59 p.m. (New York Time) on
December 12, 2019 and (ii) the date of the occurrence of a
Waiver Default (as defined below), the Lenders hereby agree to
temporarily waive the Q3 Events of Default and MUFG LTD hereby
agrees to temporarily waive the Swap Default. The waiver set forth
in this Section 3(a) is temporary
in nature and the Existing Defaults and the Swap Default shall,
unless otherwise agreed to in writing by the Requisite Lenders and
MUFG LTD, respectively, be immediately and automatically reinstated
on the Waiver Termination Date and shall constitute an “Event
of Default” under the Credit Agreement and the other Loan
Documents and the Swap Contracts. The waiver by the Lenders and
MUFG LTD described above is contingent upon the satisfaction of the
conditions precedent set forth below and is limited to the Existing
Defaults and the Swap Default, as applicable. This waiver is
limited to the extent described herein and shall not be construed
to be a consent to or a permanent waiver of the Existing Defaults,
the Swap Default or any other terms, provisions, covenants,
warranties or agreements contained in the Credit Agreement or in
any of the other Loan Documents or a waiver of any Default or Event
of Default that may hereafter occur. The Lenders and MUFG LTD
reserve their respective right to exercise any rights and remedies
available to them in connection with any other present or future
defaults with respect to the Credit Agreement or any other
provision of any Loan Document and the Swap Contracts, as
applicable.

 

(b) Borrower and each
Guarantor hereby agrees and acknowledges that (i) the Existing
Defaults and Swap Default have not been permanently waived as a
result of this Agreement and that such waiver is temporary in
nature, and (ii) concurrent with the Waiver Termination Date, all
rights and remedies of the Lenders and MUFG LTD enjoined as a
result of this Section
3 shall, unless otherwise agreed to in writing by the
Requisite Lenders and MUFG LTD, respectively, be
reinstated.

 

(c) The following shall
constitute a “Waiver
Default” under this Agreement: (i) the failure of
Borrower or any Guarantor to comply with any covenant or agreement
contained in this Agreement; (ii) any representation or warranty
contained in this Agreement shall be incorrect in any material
respect; or (iii) the existence of any Default or Event of Default
(other than the Existing Defaults).

 

(d) Notwithstanding the
occurrence of the Forbearance Termination Date or any provision of
the Credit Agreement or the Forbearance Agreement, Lenders hereby
(i) agree to consider for approval the November 27
Budget, (ii) approve the November 27 Budget for the
limited purpose of making disbursements from the Restricted Account
to fund Borrower’s Liquidity Needs identified therein through
the week ending December 6th, and
(iii) authorize Agent to disburse funds from the Restricted
Account to fund Borrower’s Liquidity Needs described in the
November 27 Budget for the week ending December 6, 2019. For
clarity, (i) disbursements after the week ending
December 6th from the Restricted
Account may not resume unless and until such time as agreed to by
all the Lenders in writing and (ii) nothing herein shall be
deemed to constitute a Lender consent of the sale of the aircraft
bearing manufacturer’s serial number 454 projected in the
November 27 Budget for the week ending December 13th.

 

4. Amendment to Credit Agreement.
The Credit Agreement shall be amended as follows:

 

(a) The definitions of
“Revolving Commitment” and “Maximum Amount”
shall each be deleted and the following new definitions shall
substitute thereof:

 

“Revolving Commitment”
means, subject to Section
2.8, Eighty Five Million and 00/100 Dollars
($85,000,000.00). The respective Pro Rata Shares of the Lenders
with respect to the Revolving Commitment are set forth in
Schedule
A.

 

“Maximum Amount” means
Eighty Five Million and 00/100 Dollars ($85,000,000.00), or such
other decreased amount as provided for under Sections 2.8 of this
Agreement.

 

(b) 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
$85,000,000.

 

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

 

(d) Section 2.18 of the Credit
Agreement shall be deleted in its entirety and replaced with the
following:

 

2.18.                       

Reserved.

 

5. Representations and Warranties.
Each of Borrower and Guarantors represents and warrants that (a)
after giving effect to this Agreement, except for the
representations and warranties which are made only as of a prior
date, the representations and warranties set forth in the Credit
Agreement and in the other Loan Documents are true and correct in
all respects as of the Effective Date, as if made on and as of such
date; (b) after giving effect to this Agreement, no Default has
occurred and is continuing; (c) the execution, delivery and
performance of this Agreement are within the corporate power and
authority of such Person and have been duly authorized by
appropriate corporate action and proceedings; (d) this Agreement
constitutes a legal, valid, and binding obligation of such Person
enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the rights of creditors generally and
general principles of equity; (e) there are no governmental or
other third party consents, licenses and approvals required in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Loan
Documents are valid and subsisting and secure Borrower’s and
such Person’s obligations under the Loan
Documents.

 

6. Conditions Precedent. This
Agreement shall become effective on the date (the
“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 all the Lenders.

 

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

 

(c) Representations and Warranties.
The representations and warranties in this Agreement shall be true
and correct in all material respects.

 

7. Reaffirmation; Loan Documents
Unaffected. Each of Borrower and Guarantors hereby reaffirms
all of its respective Obligations under the Loan Documents, and
acknowledges that it has no claims, offsets or defenses with
respect to the payment of sums due under the Credit Agreement, the
Notes or under any 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. There are no promises or inducements that have been
made to any party hereto to cause such party to enter into this
Agreement other than those that are set forth in this Agreement.
Except as otherwise specifically amended hereby, all provisions of
the Credit Agreement and the other Loan Documents (including the
Forbearance Agreement) shall remain in full force and effect and be
unaffected hereby.

 

8. No Course of Dealing. Each of
Borrower and Guarantor acknowledges and agrees that, (a) this
Agreement is not intended to, nor shall it, establish any course of
dealing between Borrower, Guarantor, Agent and the Lenders that is
inconsistent with the express terms of the Credit Agreement or any
other Loan Document (including the Forbearance Agreement), (b)
notwithstanding any course of dealing between Borrower, Guarantors,
Agent and the Lenders prior to the date hereof, except as set forth
herein, the Lenders shall not be obligated to make any Loan or
permit the use of their cash collateral, and (c) nothing herein
shall be deemed to obligate Agent or any Lender to forbear from
exercising any of its rights or remedies as a result of any Default
or Event of Default, including the Specified Defaults or the Events
of Default disclosed in the Q3 Compliance Certificate.

 

9. No Waiver. Each of Borrower and
Guarantors acknowledges and agrees that, other than as expressly
set forth in Section
3(a), this Agreement shall not operate as a waiver of any
right, power or remedy of Agent or the Lenders under the Credit
Agreement or any Loan Document, nor shall it constitute a
continuing waiver at any time and (b) nothing herein shall be
deemed to constitute a waiver of any Default or Event of Default
and, nothing herein shall in any way prejudice the rights and
remedies of Agent or the Lenders under the Credit Agreement, any
Loan Document (including the Forbearance Agreement) or applicable
law

 

10. 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 other 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.

 

11. 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.

 

12. 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,
THE FORBEARANCE AGREEMENT (AS AMENDED BY THIS AGREEMENT) OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

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

 

(a) 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;

 

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

 

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

 

(d) 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

 

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

 

14. Entire Agreement. This
Agreement and the other agreements referred to herein constitute
all of the agreements among the parties relating to the matters set
forth herein and supersede all other prior or concurrent oral or
written letters, agreements or understandings with respect to the
matters set forth herein.

 

15. Further Assurances. Borrower
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.

 

16. Counterparts. This Agreement
and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by each party hereto in
separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts shall
constitute one and the same Agreement. The facsimile or email (PDF)
signature of any party executing this Agreement shall be binding
upon such party and may be relied upon by all other parties
hereto.

 

[SIGNATURE PAGES
FOLLOW]

 

	

	

1

	
 

	
 

	
 

	
 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above
written.

 

	
 

	

BORROWER:

 

AEROCENTURY CORP.,
a Delaware corporation

By: __________________________________

Name: ___________________________

Title: ___________________________

	
 

	
 

	

ACKNOWLEDGED AND
AGREED TO BY:

 

JETLEET
HOLDING CORP., a California corporation

By:__________________________________

Name:___________________________

Title:___________________________

 

	
 

	

JETFLEET MANAGEMENT
CORP.,a California corporation

By:__________________________________

Name:___________________________

Title:___________________________

 

	
 

	

	

S-1

	
 

	
 

	
 

	
 

 

 

AGENT
AND LENDER:

MUFG
UNION BANK, N.A.

By:

Name:

Title

 

MUFG LTD (with respect to Section
3(a)): 

MUFG BANK, LTD.

By:

Name:

Title

LENDER:

UMPQUA BANK

By:

Name:

Title

 

LENDER:

 

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

By:

Name:

Title

 
LENDER:

 

U.S.
BANK NATIONAL ASSOCIATION

By:

Name:

Title

 

LENDER:

COLUMBIA STATE
BANK

By:

Name:

Title

 

	

	

S-2

	
 

	
 

	
 

	
 

 

 

Schedule A

 

Revolving Commitment

 

	

Lender

 

	

Commitment

 

	

Pro
Rata Share

 

	

MUFG
Union Bank, N.A.

 

	

$21,689,655.17

	

25.5172413793%

	

Umpqua
Bank

	

$20,517,241.38

	

24.1379310345%

	

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

	

$17,586,206.90

	

20.6896551724%

	

U.S.
Bank National Association

	

$16,413,793.10

	

19.3103448276%

	

Columbia State
Bank

	

$8,793,103.45

	

10.3448275862%

	

TOTAL:

	

$85,000,000.00

	

100.0000000000%

 

 

 

	

	

Schedule
A

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