Common use of Insolvency Proceeding Clause in Contracts

Insolvency Proceeding. (a) Upon the occurrence of any Insolvency Proceeding: (i) the Senior Debt shall be Paid in Full before any Distribution shall be made on account of or applied with respect to any Subordinated Debt; (ii) any Distribution which, but for the provisions of clause 5(a)(i) above, would be payable or deliverable with respect to any Subordinated Debt, shall be paid or delivered directly to Senior Creditors on a pro rata basis, until the Senior Debt has been Paid in Full (after giving effect to any concurrent payment to Senior Creditors with respect to the Senior Debt); and (iii) Subordinated Creditor irrevocably authorizes, empowers, and directs, and shall be deemed to have authorized, empowered, and directed, (x) all receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such Distributions, and (y) Senior Creditors to demand, xxx for, collect, and receive all such Distributions. (b) In the event of any Insolvency Proceeding involving any Obligor, the Subordinated Creditor shall not, without Senior Creditors’ prior written consent, propose any plan of reorganization, liquidation, arrangement or proposal or file any motion, pleading or material in support of any motion or plan of reorganization, liquidation, arrangement or proposal, or encourage other Persons to do any of the foregoing that would impair the rights of Senior Creditors, is in conflict with the terms of this Agreement, or is opposed by Senior Creditors, or oppose any plan of reorganization, liquidation, arrangement or motion filed by or proposed or supported by Senior Creditors. Subordinated Creditor irrevocably authorizes, empowers, and appoints Senior Creditors, and shall be deemed to have authorized, empowered, and appointed Senior Creditors, as its agent and attorney-in-fact to (1) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor to do so prior to 30 days before the expiration of the time to file any such proof of claim and (2) vote such claim in any such Insolvency Proceeding upon the failure of Subordinated Creditor to do so prior to 10 days before the expiration of the time to vote any such claim; provided, that Senior Creditors shall have no obligation to execute, verify, deliver and/or file any such proof of claim or to vote any such claim; and provided, further, that if, following the voting or filing of any such proof of claim by Senior Creditors, Subordinated Creditor timely votes or files a proper proof of claim, such vote or filing by Subordinated Creditor shall, from and after the time of such vote or filing, supersede any such previous vote or filing by Senior Creditors and, upon the written request of Subordinated Creditor, Senior Creditors, to the extent legally permissible, shall withdraw such previous vote or filing. (c) During any Insolvency Proceeding, Subordinated Creditor hereby consents and agrees that Senior Creditors or any Obligor (with Senior Creditors’ consent) may, and authorizes Senior Creditors or any Obligor (with Senior Creditors’ consent) to (i) sell, assign or otherwise dispose of the Collateral by private or public sale with or without notice (other than any UCC Notice required to be provided pursuant to Section 6 hereof), pursuant to court order, under Section 363 of Bankruptcy Code, or otherwise, and by any means, all free and clear of any interest or claim of Subordinated Creditor with respect thereto, and (ii) apply all proceeds thereof to the Senior Debt until the Senior Debt has been Paid in Full. Subordinated Creditor hereby further consents and agrees that Senior Creditors shall be entitled to credit bid at any sale of the Collateral, under Section 363 of the Bankruptcy Code, or otherwise. (d) During any Insolvency Proceeding, Subordinated Creditor waives, with respect to each Obligor’s assets, and with respect to Senior Creditors’ enforcement of any right or remedy arising under any of the Senior Debt Agreements, or at law or in equity, any requirement regarding, and agrees not to demand, request, plead, or otherwise claim the benefit of, any marshaling, foreclosure, appraisement, valuation, or any other right (including without limitation, under Section 1111(b) or any other section of the Bankruptcy Code and the right to seek adequate protection, contemplated at law or in equity (whether or not relating to notice (other than any UCC Notice required to be provided pursuant to Section 6)), diligence, presentment, demand, protest, setoff, reliance, defense, counterclaim, or election) that otherwise may be available to Subordinated Creditor. (e) During any Insolvency Proceeding, Subordinated Creditor agrees not to object to, or seek adequate protection in respect of, any use of cash or noncash collateral by any or more of the Obligors under Section 363 of the Bankruptcy Code permitted by Senior Creditors, or any borrowing by any one or more of the Obligors from Senior Creditors or any borrowing by any one or more of the Obligors from any other Person permitted by Senior Creditors (“DIP Financing”), or to any grant of a Lien by any Person in favor of Senior Creditors and/or any other Person under Section 364 of the Bankruptcy Code in connection with such DIP Financing (“DIP Liens”). Subordinated Creditor agrees that adequate notice to Subordinated Creditor for such DIP Financing or use of cash collateral shall have been delivered to Subordinated Creditor if Subordinated Creditor receives notice at least two (2) Business Days prior to the entry of the order approving such DIP Financing or use of cash collateral. No Subordinated Creditor will oppose Senior Creditors’ motions or other requests to receive or to have allowed to it adequate protection payments, Post-Petition Interest or Post-Petition Charges, or additional collateral in connection with any use of cash collateral or DIP Financing. Subordinated Creditor agrees not to seek to provide, or participate with or support any other Person seeking to provide, financing under section 364 of the Bankruptcy Code to any one or more of the Obligors secured by Liens equal or senior in priority to the Liens securing the Senior Debt without the prior written consent of the Senior Creditors. (f) Subordinated Creditor agrees that Senior Creditors shall have no liability to Subordinated Creditor for, and Subordinated Creditor waives any claim it now or hereafter may have against Senior Creditors arising out of, (i) Senior Creditors’ election, in any Insolvency Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code, or (ii) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Obligor, as debtor in possession. (g) The parties hereto acknowledge and agree that (i) the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims and interests of the Subordinated Creditor under the Subordinated Debt Agreements and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code and, in any Insolvency Proceeding, no Subordinated Creditor will make any assertion to the contrary or object to the assertion that the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims of the Subordinated Creditor under the Subordinated Debt Agreements. In the event that it is held, contrary to the intent of the parties hereto, that the claims and interests of Senior Creditors and the Subordinated Creditor should be classified together, then the Subordinated Creditor hereby agrees that all Distributions shall be made as if the claims and interests of Senior Creditors and the Subordinated Creditor were classified separately, such that, to the extent that the value of the Collateral is sufficient (for this purpose, without regard to the claims of the Subordinated Creditor), Senior Creditors shall be entitled to receive all amounts owing to it in respect of Post-Petition Interest and Post-Petition Charges before any Distribution is made in respect of the claims of the Subordinated Creditor, and the Subordinated Creditor shall turn over to Senior Creditors any amounts received by them to the extent necessary to satisfy Senior Creditors’ entitlement to all such amounts. (h) This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to any Obligor shall be deemed to apply to the trustee for such Obligor and to such Obligor as a debtor-in-possession. The relative rights of Senior Creditors and the Subordinated Creditor in respect of any Collateral or any other assets or proceeds thereof shall continue after any such filing or commencement on the same basis as prior to the date of such filing or commencement, subject to any court order approving the financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its terms.

Insolvency Proceeding. In the event any proceeding (an "Insolvency Proceeding") is brought by or against Obligor and/or the Mortgaged Properties under or pursuant to any bankruptcy, insolvency, receivership or similar law or laws of the United States or any other state or other jurisdiction, including the Bankruptcy Code, and any other law or laws of the United States or any other state or other jurisdiction which affect the rights of debtors and/or creditors generally, including, without limitation: (i) any proceeding seeking to appoint or appointing a receiver or trustee; (ii) any proceeding filed by or against Obligor under the Bankruptcy Code; (iii) any assignment by Obligor of all or substantially all of their respective assets for the benefit of creditors; and (iv) any proceeding or other action wherein all or substantially all of Obligor's assets are attached, seized, subjected to a writ or distress warrant, or otherwise levied upon, Obligor hereby agrees as follows: (a) Upon the occurrence of any Venue for an Insolvency Proceeding: , without waiving the provisions requiring arbitration as set forth in the Loan Instruments, shall lie exclusively in (i) the Senior Debt shall be Paid in Full before any Distribution shall be made on account of county where the Mortgaged Properties is located or applied with respect to any Subordinated Debt; the Division within the Federal District where the Mortgaged Properties is located, or (ii) any Distribution which, but the United States Bankruptcy Court for the provisions Western District of clause 5(a)(i) aboveTexas, would be payable or deliverable with respect to any Subordinated DebtSan Antonio Division, shall be paid or delivered directly to Senior Creditors on a pro rata basis, until the Senior Debt has been Paid in Full (after giving effect to any concurrent payment to Senior Creditors with respect to the Senior Debt); and (iii) Subordinated Creditor irrevocably authorizes, empowers, and directs, and shall be deemed to have authorized, empowered, and directed, (x) all receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such Distributions, and (y) Senior Creditors to demand, xxx for, collect, and receive all such Distributionsas applicable. (b) In the event of any Insolvency Proceeding involving any ObligorObligor agrees that, the Subordinated Creditor shall notsubject to court approval, without Senior Creditors’ prior written consent, propose any plan of reorganization, liquidation, arrangement or proposal or file any motion, pleading or material in support of any motion or plan of reorganization, liquidation, arrangement or proposal, or encourage other Persons to do any of the foregoing that would impair the rights of Senior Creditors, is in conflict with the terms of this Agreement, or is opposed by Senior Creditors, or oppose any plan of reorganization, liquidation, arrangement or motion filed by or proposed or supported by Senior Creditors. Subordinated Creditor irrevocably authorizes, empowers, and appoints Senior Creditors, and Lender shall be deemed pursuant to this Loan Agreement to have authorized, empoweredand be entitled to relief from the automatic stay under Section 362 of the Bankruptcy Code, and appointed Senior Creditors, as its agent Obligor hereby unconditionally and attorney-in-fact irrevocably consents to (1) execute, verify, deliver and file such proofs the granting to Lender of claim upon relief from the failure of Subordinated Creditor to do so prior to 30 days before the expiration automatic stay under Section 362 of the time Bankruptcy Code to file permit Lender to exercise any such proof and all of claim its rights, recourses and (2) vote such claim remedies under the Loan Instruments, at law and/or in any such Insolvency Proceeding upon the failure of Subordinated Creditor to do so prior to 10 days before the expiration equity, including, without limitation, foreclosure of the time Mortgage and sale of the Mortgaged Properties pursuant thereto and/or collection of the rents and profits directly by Lender. Further, if Lender requests such relief, Obligor shall not object to vote or oppose Lender's request for immediate relief from the automatic stay for purposes of exercising any such claim; providedand all rights, that Senior Creditors shall recourses, remedies and benefits Lender may have no obligation to executeunder the Loan Instruments, verifyat law and/or in equity, deliver including, without limitation, foreclosure of the Mortgage and sale of the Mortgaged Properties pursuant thereto and/or file any such proof collection of claim or to vote any such claim; the rents and provided, further, that if, following the voting or filing of any such proof of claim profits directly by Senior Creditors, Subordinated Creditor timely votes or files a proper proof of claim, such vote or filing by Subordinated Creditor shall, from and after the time of such vote or filing, supersede any such previous vote or filing by Senior Creditors and, upon the written request of Subordinated Creditor, Senior Creditors, to the extent legally permissible, shall withdraw such previous vote or filingLender. (c) During Obligor hereby acknowledges and agrees that Lender has a properly perfected, valid and enforceable lien upon and security interest in all or any portion of the Mortgaged Properties, including, without limitation, the leases, rents and profits, and Obligor will acknowledge the same in any Insolvency Proceeding. Further, Subordinated Creditor hereby consents Obligor shall not contest that Lender holds a properly perfected, valid and agrees that Senior Creditors or any Obligor (with Senior Creditors’ consent) may, enforceable first priority lien on and authorizes Senior Creditors or any Obligor (with Senior Creditors’ consent) to (i) sell, assign or otherwise dispose security interest in each and every portion of the Collateral by private or public sale with or Mortgaged Properties, including, without notice (other than any UCC Notice required to be provided pursuant to Section 6 hereof)limitation, pursuant to court orderthe leases, under Section 363 of Bankruptcy Code, or otherwise, rents and by any means, all free and clear of any interest or claim of Subordinated Creditor with respect thereto, and (ii) apply all proceeds thereof to the Senior Debt until the Senior Debt has been Paid in Full. Subordinated Creditor hereby further consents and agrees that Senior Creditors shall be entitled to credit bid at any sale of the Collateral, under Section 363 of the Bankruptcy Code, or otherwiseprofits. (d) During any Insolvency Proceeding, Subordinated Creditor waives, with respect to each Obligor’s assets, and with respect to Senior Creditors’ enforcement of any right or remedy arising under any of the Senior Debt Agreements, or at law or in equity, any requirement regarding, and agrees not to demand, request, plead, or otherwise claim the benefit of, any marshaling, foreclosure, appraisement, valuation, or any other right (including without limitation, under Section 1111(b) or any other section of the Bankruptcy Code and the right to seek adequate protection, contemplated at law or in equity (whether or not relating to notice (other than any UCC Notice required to be provided pursuant to Section 6)), diligence, presentment, demand, protest, setoff, reliance, defense, counterclaim, or election) that otherwise may be available to Subordinated Creditor. (e) During any Insolvency Proceeding, Subordinated Creditor agrees not to object to, or seek adequate protection in respect of, any use of cash or noncash collateral by any or more of the Obligors under Section 363 of the Bankruptcy Code permitted by Senior Creditors, or any borrowing by any one or more of the Obligors from Senior Creditors or any borrowing by any one or more of the Obligors from any other Person permitted by Senior Creditors (“DIP Financing”), or to any grant of a Lien by any Person in favor of Senior Creditors and/or any other Person under Section 364 of the Bankruptcy Code in connection with such DIP Financing (“DIP Liens”). Subordinated Creditor agrees that adequate notice to Subordinated Creditor for such DIP Financing or use of cash collateral shall have been delivered to Subordinated Creditor if Subordinated Creditor receives notice at least two (2) Business Days prior to the entry of the order approving such DIP Financing or use of cash collateral. No Subordinated Creditor will oppose Senior Creditors’ motions or other requests to receive or to have allowed to it adequate protection payments, Post-Petition Interest or Post-Petition Charges, or additional collateral in connection with any use of cash collateral or DIP Financing. Subordinated Creditor agrees not to seek to provide, or participate with or support any other Person seeking to provide, financing under section 364 of the Bankruptcy Code to any one or more of the Obligors secured by Liens equal or senior in priority to the Liens securing the Senior Debt without the prior written consent of the Senior Creditors. (f) Subordinated Creditor agrees that Senior Creditors shall have no liability to Subordinated Creditor for, and Subordinated Creditor waives any claim it now or hereafter may have against Senior Creditors arising out of, (i) Senior Creditors’ election, in any Insolvency Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code, or (ii) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Obligor, as debtor in possession. (g) The parties hereto acknowledge and agree that (i) the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims and interests of the Subordinated Creditor under the Subordinated Debt Agreements and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code and, in any Insolvency Proceeding, no Subordinated Creditor will make any assertion to the contrary or object to the assertion that the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims of the Subordinated Creditor under the Subordinated Debt Agreements. In the event that it is held, contrary to the intent of the parties hereto, that the claims and interests of Senior Creditors and the Subordinated Creditor should be classified together, then the Subordinated Creditor Obligor hereby agrees that all Distributions shall be made as if the claims to indemnify, defend and interests of Senior Creditors hold Lender harmless from and the Subordinated Creditor were classified separately, such that, to the extent that the value of the Collateral is sufficient (for this purpose, without regard to the claims of the Subordinated Creditor), Senior Creditors shall be entitled to receive all amounts owing to it in respect of Post-Petition Interest and Post-Petition Charges before any Distribution is made in respect of the claims of the Subordinated Creditor, and the Subordinated Creditor shall turn over to Senior Creditors any amounts received by them to the extent necessary to satisfy Senior Creditors’ entitlement to all such amounts. (h) This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted loss, cost, liability, damage or succeeding cases in respect thereof, and all references herein to any Obligor shall be deemed to apply to the trustee for such Obligor and to such Obligor expense Lender may suffer or incur as a debtor-in-possession. The relative rights result of Senior Creditors Obligor's breach of their respective obligations, covenants and the Subordinated Creditor in respect of any Collateral or any other assets or proceeds thereof shall continue after any such filing or commencement on the same basis as prior to the date of such filing or commencement, subject to any court order approving the financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its termsagreements under this Section.

Insolvency Proceeding. (a) Upon In the occurrence event of any payment or distribution of assets of AeroCentury of any kind or character, whether in cash, property or securities, upon the dissolution, winding up or total or partial liquidation or reorganization, readjustment, arrangement or similar proceeding relating to AeroCentury or its respective property, whether voluntary or involuntary or in connection with an Insolvency Proceeding: Proceeding or upon any other marshalling or composition of the assets and liabilities of AeroCentury, or otherwise: (i) the Senior Debt shall be Paid in Full before any Distribution shall be made all amounts owing on account of the Senior Indebtedness shall first be paid in full in cash, or applied with respect to payment provided for in cash before any Subordinated Debt; JMC Payments are made; and (ii) to the extent permitted by applicable law, any Distribution which, but JMC Payments to which JMC would be entitled except for the provisions of clause 5(a)(i) above, would be payable or deliverable with respect to any Subordinated Debtthis Section 3, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such payment or distribution directly to Senior Creditors on a pro rata basisthe Agent, until for the benefit of the Lenders, for application to the payment of the Senior Debt has been Paid Indebtedness in Full accordance with clause (i) above, after giving effect to any concurrent payment or distribution or provision therefor to the Agent, for the benefit of the Lenders, in respect of such Senior Creditors with respect Indebtedness; provided that JMC may receive and retain shares of stock and any debt securities of AeroCentury that are subordinated to the Senior Debt); and (iii) Subordinated Creditor irrevocably authorizes, empowersIndebtedness, and directsto any debt securities received by the Agent to at least the same extent as the JMC Payments are subordinated pursuant to this Agreement. JMC hereby designates and appoints the Agent as its agent to prove the claims of JMC on account of the JMC Payments in any such proceedings, and shall be deemed to have authorized, empowered, represent JMC in any reorganization of AeroCentury and directed, (x) all receivers, trustees, liquidators, custodians, conservators and others having authority therein to vote the claim or interest of JMC in respect of the premises to effect all such Distributions, and (y) Senior Creditors to demand, xxx for, collect, and receive all such Distributions. (b) In the event JMC Payments in any poll or voting of any Insolvency Proceeding involving any Obligor, the Subordinated Creditor shall not, without Senior Creditors’ prior written consent, propose any acceptances of a proposed plan of reorganization, liquidationand JMC agrees to furnish the Agent with such information, arrangement soliciting materials, evidence and further authorizations and the Agent may request, in order that the Agent may do so, but the Agent shall not be liable for any failure to prove any such claim, or proposal to collect any sums payable thereon, or file to take any motionother affirmative action in connection therewith. As used herein, pleading "Insolvency Proceeding" means (A) any case, action or material in support of proceeding before any motion court or plan of other governmental authority involving AeroCentury relating to bankruptcy, reorganization, insolvency, liquidation, arrangement receivership, dissolution, winding-up or proposal, or encourage other Persons to do any relief of the foregoing that would impair the rights of Senior Creditors, is in conflict with the terms of this Agreement, or is opposed by Senior Creditors, or oppose any plan of reorganization, liquidation, arrangement or motion filed by or proposed or supported by Senior Creditors. Subordinated Creditor irrevocably authorizes, empowers, and appoints Senior Creditors, and shall be deemed to have authorized, empowered, and appointed Senior Creditors, as its agent and attorney-in-fact to (1) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor to do so prior to 30 days before the expiration of the time to file any such proof of claim and (2) vote such claim in any such Insolvency Proceeding upon the failure of Subordinated Creditor to do so prior to 10 days before the expiration of the time to vote any such claim; provided, that Senior Creditors shall have no obligation to execute, verify, deliver and/or file any such proof of claim or to vote any such claim; and provided, further, that if, following the voting or filing of any such proof of claim by Senior Creditors, Subordinated Creditor timely votes or files a proper proof of claim, such vote or filing by Subordinated Creditor shall, from and after the time of such vote or filing, supersede any such previous vote or filing by Senior Creditors and, upon the written request of Subordinated Creditor, Senior Creditors, to the extent legally permissible, shall withdraw such previous vote or filing. (c) During any Insolvency Proceeding, Subordinated Creditor hereby consents and agrees that Senior Creditors or any Obligor (with Senior Creditors’ consent) may, and authorizes Senior Creditors or any Obligor (with Senior Creditors’ consent) to (i) sell, assign or otherwise dispose of the Collateral by private or public sale with or without notice (other than any UCC Notice required to be provided pursuant to Section 6 hereof), pursuant to court order, under Section 363 of Bankruptcy Code, or otherwise, and by any means, all free and clear of any interest or claim of Subordinated Creditor with respect thereto, and (ii) apply all proceeds thereof to the Senior Debt until the Senior Debt has been Paid in Full. Subordinated Creditor hereby further consents and agrees that Senior Creditors shall be entitled to credit bid at any sale of the Collateral, under Section 363 of the Bankruptcy Code, or otherwise. (d) During any Insolvency Proceeding, Subordinated Creditor waives, with respect to each Obligor’s assets, and with respect to Senior Creditors’ enforcement of any right or remedy arising under any of the Senior Debt Agreements, or at law or in equity, any requirement regarding, and agrees not to demand, request, plead, or otherwise claim the benefit of, any marshaling, foreclosure, appraisement, valuation, or any other right (including without limitation, under Section 1111(b) or any other section of the Bankruptcy Code and the right to seek adequate protection, contemplated at law or in equity (whether or not relating to notice (other than any UCC Notice required to be provided pursuant to Section 6)), diligence, presentment, demand, protest, setoff, reliance, defense, counterclaim, or election) that otherwise may be available to Subordinated Creditor. (e) During any Insolvency Proceeding, Subordinated Creditor agrees not to object to, or seek adequate protection in respect of, any use of cash or noncash collateral by any or more of the Obligors under Section 363 of the Bankruptcy Code permitted by Senior Creditors, or any borrowing by any one or more of the Obligors from Senior Creditors or any borrowing by any one or more of the Obligors from any other Person permitted by Senior Creditors (“DIP Financing”), or to any grant of a Lien by any Person in favor of Senior Creditors and/or any other Person under Section 364 of the Bankruptcy Code in connection with such DIP Financing (“DIP Liens”). Subordinated Creditor agrees that adequate notice to Subordinated Creditor for such DIP Financing or use of cash collateral shall have been delivered to Subordinated Creditor if Subordinated Creditor receives notice at least two (2) Business Days prior to the entry of the order approving such DIP Financing or use of cash collateral. No Subordinated Creditor will oppose Senior Creditors’ motions or other requests to receive or to have allowed to it adequate protection payments, Post-Petition Interest or Post-Petition Charges, or additional collateral in connection with any use of cash collateral or DIP Financing. Subordinated Creditor agrees not to seek to provide, or participate with or support any other Person seeking to provide, financing under section 364 of the Bankruptcy Code to any one or more of the Obligors secured by Liens equal or senior in priority to the Liens securing the Senior Debt without the prior written consent of the Senior Creditors. (f) Subordinated Creditor agrees that Senior Creditors shall have no liability to Subordinated Creditor for, and Subordinated Creditor waives any claim it now or hereafter may have against Senior Creditors arising out of, (i) Senior Creditors’ election, in any Insolvency Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Codedebtors, or (iiB) any borrowing general assignment for the benefit of creditors, composition, marshalling of assets for creditors or grant of a security interest under Section 364 of the Bankruptcy Code similar arrangement by any Obligor, as debtor in possession. (g) The parties hereto acknowledge and agree that (i) the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims and interests of the Subordinated Creditor under the Subordinated Debt Agreements and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code and, in any Insolvency Proceeding, no Subordinated Creditor will make any assertion to the contrary or object to the assertion that the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims of the Subordinated Creditor under the Subordinated Debt Agreements. In the event that it is held, contrary to the intent of the parties hereto, that the claims and interests of Senior Creditors and the Subordinated Creditor should be classified together, then the Subordinated Creditor hereby agrees that all Distributions shall be made as if the claims and interests of Senior Creditors and the Subordinated Creditor were classified separately, such that, to the extent that the value of the Collateral is sufficient (for this purpose, without regard to the claims of the Subordinated Creditor), Senior Creditors shall be entitled to receive all amounts owing to it AeroCentury in respect of Post-Petition Interest and Post-Petition Charges before any Distribution is made in respect of the claims of the Subordinated Creditor, and the Subordinated Creditor shall turn over to Senior Creditors any amounts received by them to the extent necessary to satisfy Senior Creditors’ entitlement to all such amounts. (h) This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to any Obligor shall be deemed to apply to the trustee for such Obligor and to such Obligor as a debtor-in-possession. The relative rights of Senior Creditors and the Subordinated Creditor in respect of any Collateral its creditors generally or any other assets substantial portion of its creditors, in each of case (A) and (B) undertaken under federal, state or proceeds thereof shall continue after foreign law, including any such filing or commencement on the same basis as prior to the date of such filing or commencement, subject to any court order approving the financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its termsLaw.

Insolvency Proceeding. (a) Upon the occurrence of any Insolvency Proceeding: (i) the Senior Debt shall be Paid in Full before any Distribution shall be made on account of or applied with respect to any Subordinated Debt; (ii) any Distribution which, but for the provisions of clause 5(a)(i) above, would be payable or deliverable with respect to any Subordinated Debt, shall be paid or delivered directly to Senior Creditors on a pro rata basis, until the Senior Debt has been Paid in Full (after giving effect to any concurrent payment to Senior Creditors with respect to the Senior Debt); and (iii) Subordinated Creditor irrevocably authorizes, empowers, and directs, and shall be deemed to have authorized, empowered, and directed, (x) all receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such Distributions, and (y) Senior Creditors to demand, xxx for, collect, and receive all such Distributions. (b) In the event of any Insolvency --------------------- Proceeding involving all Credit Obligations shall first be paid, discharged and performed in full before any Obligor, payment or performance is made upon the Subordinated Creditor shall not, without Senior Creditors’ prior written consent, propose Obligations notwithstanding any plan of reorganization, liquidation, arrangement or proposal or file any motion, pleading or material other provisions which may be made in support such Insolvency Proceeding. In the event of any motion Insolvency Proceeding, each Subordinate Creditor will at any time prior to the Termination Date (a) file, at the request of any Senior Creditor, any claim, proof of claim or plan of reorganizationsimilar instrument necessary to enforce the Borrower's or any Subsidiary's obligation to pay the Subordinated Obligations, liquidationand (b) hold in trust for and pay to the Senior Creditors any and all monies, arrangement obligations, property, stock dividends or proposal, or encourage other Persons to do assets received in any such proceeding on account of the foregoing Subordinated Obligations in order that would impair the rights Senior Creditors may apply such monies or the cash proceeds of such other assets to the Credit Obligations. In the event that any Subordinate Creditor fails to take such action upon any Senior CreditorsCreditor's request, is in conflict with the terms of this Agreement, or is opposed by such Senior Creditors, or oppose any plan of reorganization, liquidation, arrangement or motion filed by or proposed or supported by Senior Creditors. Subordinated Creditor irrevocably authorizes, empowers, and appoints Senior Creditors, and shall be deemed to have authorized, empowered, and been appointed Senior Creditors, as its agent and the attorney-in-fact for such Subordinate Creditor with respect to the Subordinated Obligations, and such Senior Creditor may in that capacity (1i) executedemand, verifyxxx for, deliver collect and file receive any and all such proofs of claim upon the failure of Subordinated Creditor to do so prior to 30 days before the expiration of the time to monies, dividends or other assets, (ii) file any such proof of claim and (2) vote such claim in any such Insolvency Proceeding upon the failure of Subordinated Creditor to do so prior to 10 days before the expiration of the time to vote any such claim; provided, that Senior Creditors shall have no obligation to execute, verify, deliver and/or file any such proof of claim or to vote any such claim; and providedsimilar instrument, further, that if, following the voting or filing of any such proof of claim by Senior Creditors, Subordinated Creditor timely votes or files a proper proof of claim, such vote or filing by Subordinated Creditor shall, from and after the time of such vote or filing, supersede any such previous vote or filing by Senior Creditors and, upon the written request of Subordinated Creditor, Senior Creditors, to the extent legally permissible, shall withdraw such previous vote or filing. (ciii) During any Insolvency Proceeding, Subordinated Creditor hereby consents and agrees that Senior Creditors or any Obligor (with Senior Creditors’ consent) may, and authorizes Senior Creditors or any Obligor (with Senior Creditors’ consent) to (i) sell, assign or otherwise dispose of the Collateral by private or public sale with or without notice (other than any UCC Notice required to be provided pursuant to Section 6 hereof), pursuant to court order, under Section 363 of Bankruptcy Code, or otherwise, and by any means, all free and clear of any interest or claim of Subordinated Creditor with respect theretovote, and (iiiv) apply all proceeds thereof to institute such other proceedings which such Senior Creditor, may deem reasonably necessary for the Senior Debt until the Senior Debt has been Paid in Full. Subordinated Creditor hereby further consents and agrees that Senior Creditors shall be entitled to credit bid at any sale of the Collateral, under Section 363 of the Bankruptcy Code, or otherwise. (d) During any Insolvency Proceeding, Subordinated Creditor waives, with respect to each Obligor’s assets, and with respect to Senior Creditors’ enforcement of any right or remedy arising under any of the Senior Debt Agreements, or at law or in equity, any requirement regarding, and agrees not to demand, request, plead, or otherwise claim the benefit of, any marshaling, foreclosure, appraisement, valuation, or any other right (including without limitation, under Section 1111(b) or any other section of the Bankruptcy Code and the right to seek adequate protection, contemplated at law or in equity (whether or not relating to notice (other than any UCC Notice required to be provided pursuant to Section 6)), diligence, presentment, demand, protest, setoff, reliance, defense, counterclaim, or election) that otherwise may be available to Subordinated Creditor. (e) During any Insolvency Proceeding, Subordinated Creditor agrees not to object to, or seek adequate protection in respect of, any use of cash or noncash collateral by any or more of the Obligors under Section 363 of the Bankruptcy Code permitted by Senior Creditors, or any borrowing by any one or more of the Obligors from Senior Creditors or any borrowing by any one or more of the Obligors from any other Person permitted by Senior Creditors (“DIP Financing”), or to any grant of a Lien by any Person in favor of Senior Creditors and/or any other Person under Section 364 of the Bankruptcy Code in connection with such DIP Financing (“DIP Liens”). Subordinated Creditor agrees that adequate notice to Subordinated Creditor for such DIP Financing or use of cash collateral shall have been delivered to Subordinated Creditor if Subordinated Creditor receives notice at least two (2) Business Days prior to the entry of the order approving such DIP Financing or use of cash collateral. No Subordinated Creditor will oppose Senior Creditors’ motions or other requests to receive or to have allowed to it adequate protection payments, Post-Petition Interest or Post-Petition Charges, or additional collateral in connection with any use of cash collateral or DIP Financing. Subordinated Creditor agrees not to seek to provide, or participate with or support any other Person seeking to provide, financing under section 364 of the Bankruptcy Code to any one or more of the Obligors secured by Liens equal or senior in priority to the Liens securing the Senior Debt without the prior written consent of the Senior Creditors. (f) Subordinated Creditor agrees that Senior Creditors shall have no liability to Subordinated Creditor for, and Subordinated Creditor waives any claim it now or hereafter may have against Senior Creditors arising out of, (i) Senior Creditors’ election, in any Insolvency Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code, or (ii) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Obligor, as debtor in possession. (g) The parties hereto acknowledge and agree that (i) the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims and interests collection of the Subordinated Obligations and the enforcement of the terms of this Subordination Agreement. Upon request of any Senior Creditor, each Subordinate Creditor under will execute and deliver to such Senior Creditor such other and further powers of attorney or other instruments as such Senior Creditor may reasonably request to effect the Subordinated Debt Agreements and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code and, this Subordination Agreement. If in any Insolvency Proceeding, no Subordinated Creditor will make any assertion proceeding to enforce the contrary or object to the assertion that the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims payment of the Subordinated Obligations it becomes necessary that any Subordinate Creditor under the Subordinated Debt Agreementsitself prove such claims, such Subordinate Creditor shall do so upon request by such Senior Creditor. In the event that it is heldproving these claims, contrary to the intent of the parties hereto, that the claims and interests of Senior Creditors and the Subordinated Creditor should be classified together, then the Subordinated Creditor hereby agrees that all Distributions shall be made as if the claims and interests of Senior Creditors and the Subordinated Creditor were classified separatelyhowever, such that, to the extent that the value of the Collateral is sufficient (for this purpose, without regard to the claims of the Subordinated Creditor), Senior Creditors shall be entitled to receive all amounts owing to it in respect of Post-Petition Interest and Post-Petition Charges before any Distribution is made in respect of the claims of the Subordinated Creditor, and the Subordinated Subordinate Creditor shall turn over to act as the collection agent of such Senior Creditors Creditor and shall promptly pay any amounts funds so received by them to the extent necessary to satisfy Senior Creditors’ entitlement to all such amounts. (h) This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to any Obligor shall be deemed to apply to the trustee for such Obligor and to such Obligor as a debtor-in-possession. The relative rights of Senior Creditors and the Subordinated Creditor in respect of any Collateral or any other assets or proceeds thereof shall continue after any such filing or commencement on the same basis as prior to the date of such filing or commencement, subject to any court order approving the financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its termsCreditor.

Insolvency Proceeding. The MPO agrees that in the event of any Insolvency Proceeding relating to Borrower, or any of the Bank’s Collateral, the following shall apply: (a) Upon All indebtedness under the occurrence Loan Agreement and the Bank’s Loan Documents (including any interest thereon accruing at the legal rate after the commencement of any such Insolvency Proceeding and any other interest that would have accrued thereon but for the commencement of such Insolvency Proceeding: ) (ithe “Bank Debt”) the Senior Debt shall first be Paid paid in Full full before any Distribution payment or distribution, whether in cash, securities or other property, shall be made to the MPO on account of the indebtedness under the Transload Development Agreement and MPO Security Agreement and in connection therewith, the MPO will not vote for any plan of reorganization unless the same provides for payment of the Bank Debt in full prior to the payment of any amount to the MPO which is secured by any portion of the Bank’s Collateral. Any payment or applied with respect to any Subordinated Debt; distribution, whether in cash, securities or other property, which would otherwise (ii) any Distribution which, but for the subordination provisions of clause 5(a)(ithis Agreement) above, would be payable or deliverable with in respect to any Subordinated Debtof the MPO Security Agreement shall be received by the MPO, as applicable, in trust for Bank’s benefit and shall immediately be paid or delivered directly to Senior Creditors on a pro rata basis, Bank until the Senior Bank’s Debt has been Paid is paid in Full (after giving effect full according to the original terms and provisions of the Loan Agreement and the Bank’s Loan Documents without reference to any concurrent payment to Senior Creditors with respect to plan or reorganization or readjustment (including any interest thereon accruing at the Senior Debtlegal rate after the commencement of any such Insolvency Proceeding and any other interest that would have accrued thereon but for the commencement of such proceeding); and (iii) Subordinated Creditor irrevocably authorizes, empowers, and directs, and shall be deemed to have authorized, empowered, and directed, (x) all receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such Distributions, and (y) Senior Creditors to demand, xxx for, collect, and receive all such Distributions. (b) In The MPO will not object to any order pursuant to 11 U.S.C. Sections 363 and 364 for the event use of any Insolvency Proceeding involving any Obligor, Bank’s cash collateral as that term is defined in 11 U.S.C. Section 363(a) and pursuant to the Subordinated Creditor shall not, without Senior Creditors’ prior written consent, propose any plan of reorganization, liquidation, arrangement or proposal or file any motion, pleading or material in support of any motion or plan of reorganization, liquidation, arrangement or proposal, or encourage other Persons to do any terms and conditions of the foregoing that would impair Loan Agreement and the rights Bank’s Loan Documents. The MPO will not seek to take any action not permitted under this Agreement to obtain a lien of Senior Creditors, is in conflict with the terms of this Agreement, senior or is opposed by Senior Creditors, or oppose any plan of reorganization, liquidation, arrangement or motion filed by or proposed or supported by Senior Creditors. Subordinated Creditor irrevocably authorizes, empowers, and appoints Senior Creditors, and shall be deemed to have authorized, empowered, and appointed Senior Creditors, as its agent and attorney-in-fact to (1) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor to do so prior to 30 days before the expiration of the time to file any such proof of claim and (2) vote such claim in any such Insolvency Proceeding upon the failure of Subordinated Creditor to do so prior to 10 days before the expiration of the time to vote any such claim; provided, that Senior Creditors shall have no obligation to execute, verify, deliver and/or file any such proof of claim or to vote any such claim; and provided, further, that if, following the voting or filing of any such proof of claim by Senior Creditors, Subordinated Creditor timely votes or files a proper proof of claim, such vote or filing by Subordinated Creditor shall, from and after the time of such vote or filing, supersede any such previous vote or filing by Senior Creditors and, upon the written request of Subordinated Creditor, Senior Creditors, equal priority to the extent legally permissible, shall withdraw such previous vote or filingBank’s Loan Documents pursuant to 11 U.S.C. Section 364. (c) During The MPO will not contest or object to any request made by the Bank for adequate protection in any Insolvency Proceeding, Subordinated Creditor hereby consents and agrees that Senior Creditors or any Obligor (with Senior Creditors’ consent) may, and authorizes Senior Creditors or any Obligor (with Senior Creditors’ consent) to (i) sell, assign or otherwise dispose of the Collateral by private or public sale with or without notice (other than any UCC Notice required to be provided pursuant to Section 6 hereof), pursuant to court order, under Section 363 of Bankruptcy Code, or otherwise, and by any means, all free and clear of any interest or claim of Subordinated Creditor with respect thereto, and (ii) apply all proceeds thereof to the Senior Debt until the Senior Debt has been Paid in Full. Subordinated Creditor hereby further consents and agrees that Senior Creditors shall be entitled to credit bid at any sale of the Collateral, under Section 363 of the Bankruptcy Code, or otherwise. (d) During So long as any Insolvency Proceeding, Subordinated Creditor waives, with respect to each Obligor’s assets, and with respect to Senior Creditors’ enforcement of any right or remedy arising under any portion of the Senior Bank Debt Agreementsremains outstanding and unpaid, or at law or in equitythe MPO shall not, any requirement regarding, and agrees not to demand, request, plead, or otherwise claim the benefit of, any marshaling, foreclosure, appraisement, valuation, or any other right (including without limitation, under Section 1111(b) or any other section of the Bankruptcy Code and the right to seek adequate protection, contemplated at law or in equity (whether or not relating to notice (other than any UCC Notice required to be provided pursuant to Section 6)), diligence, presentment, demand, protest, setoff, reliance, defense, counterclaim, or election) that otherwise may be available to Subordinated Creditor. (e) During any Insolvency Proceeding, Subordinated Creditor agrees not to object to, or seek adequate protection in respect of, any use of cash or noncash collateral by any or more of the Obligors under Section 363 of the Bankruptcy Code permitted by Senior Creditors, or any borrowing by any one or more of the Obligors from Senior Creditors or any borrowing by any one or more of the Obligors from any other Person permitted by Senior Creditors (“DIP Financing”), or to any grant of a Lien by any Person in favor of Senior Creditors and/or any other Person under Section 364 of the Bankruptcy Code in connection with such DIP Financing (“DIP Liens”). Subordinated Creditor agrees that adequate notice to Subordinated Creditor for such DIP Financing or use of cash collateral shall have been delivered to Subordinated Creditor if Subordinated Creditor receives notice at least two (2) Business Days prior to the entry of the order approving such DIP Financing or use of cash collateral. No Subordinated Creditor will oppose Senior Creditors’ motions or other requests to receive or to have allowed to it adequate protection payments, Post-Petition Interest or Post-Petition Charges, or additional collateral in connection with any use of cash collateral or DIP Financing. Subordinated Creditor agrees not to seek to provide, or participate with or support any other Person seeking to provide, financing under section 364 of the Bankruptcy Code to any one or more of the Obligors secured by Liens equal or senior in priority to the Liens securing the Senior Debt without the prior written consent of the Senior Creditors. (f) Subordinated Creditor agrees that Senior Creditors shall have no liability to Subordinated Creditor forBank, and Subordinated Creditor waives commence or join with any claim it now or hereafter may have against Senior Creditors arising out of, (i) Senior Creditors’ election, other Person in commencing any Insolvency Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code, or (ii) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Obligor, as debtor in possessionProceedings against Borrower. (g) The parties hereto acknowledge and agree that (i) the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims and interests of the Subordinated Creditor under the Subordinated Debt Agreements and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code and, in any Insolvency Proceeding, no Subordinated Creditor will make any assertion to the contrary or object to the assertion that the claims and interests of Senior Creditors under the Senior Debt Agreements are substantially different from the claims of the Subordinated Creditor under the Subordinated Debt Agreements. In the event that it is held, contrary to the intent of the parties hereto, that the claims and interests of Senior Creditors and the Subordinated Creditor should be classified together, then the Subordinated Creditor hereby agrees that all Distributions shall be made as if the claims and interests of Senior Creditors and the Subordinated Creditor were classified separately, such that, to the extent that the value of the Collateral is sufficient (for this purpose, without regard to the claims of the Subordinated Creditor), Senior Creditors shall be entitled to receive all amounts owing to it in respect of Post-Petition Interest and Post-Petition Charges before any Distribution is made in respect of the claims of the Subordinated Creditor, and the Subordinated Creditor shall turn over to Senior Creditors any amounts received by them to the extent necessary to satisfy Senior Creditors’ entitlement to all such amounts. (h) This Agreement shall be applicable both before and after the filing of any petition by or against any Obligor under the Bankruptcy Code or the commencement of any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to any Obligor shall be deemed to apply to the trustee for such Obligor and to such Obligor as a debtor-in-possession. The relative rights of Senior Creditors and the Subordinated Creditor in respect of any Collateral or any other assets or proceeds thereof shall continue after any such filing or commencement on the same basis as prior to the date of such filing or commencement, subject to any court order approving the financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its terms.