AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AMONG AEROCENTURY CORP., as Borrower DRAKE ASSET MANAGEMENT JERSEY LIMITED, as Lender and UMB BANK, N.A., as Administrative Agent October 30, 2020
EXHIBIT
10.2
AMENDMENT NO. 1 TO
FOURTH
AMENDED AND RESTATED
AMONG
as
Borrower
DRAKE ASSET MANAGEMENT JERSEY LIMITED,
as
Lender
and
UMB BANK, N.A.,
as
Administrative Agent
October 30, 2020
This
Amendment No. 1 to Fourth Amended and Restated Loan and Security
Agreement (this “Amendment”), dated as of October
30, 2020 (the “Effective
Date”), is entered into by and between AeroCentury
Corp., a Delaware corporation, as borrower (“Borrower”), Drake Asset Management
Jersey Limited, as lender (“Lender”) and UMB Bank, N.A.
(successor-in-interest to MUFG Union Bank, N.A.), as administrative
agent (in such capacity, “Agent”). Each of the Borrower,
Lender and the Agent are referred to herein as a
“Party” and
collectively as the “Parties”.
WHEREAS, Borrower, Lender and Agent are
parties to that certain Fourth Amended and Restated Loan and
Security Agreement dated as of May 1, 2020 (as amended,
supplemented or otherwise modified from time to time prior to the
date hereof, the “Loan
Agreement”);
WHEREAS, MUFG Union Bank, N.A., as a
seller, a lender and as Agent, and Umpqua Bank, Zions
Bancorporation, N.A. (fka ZB, N.A.) dba California Bank &
Trust, U.S. Bank National Association and Columbia State Bank, as
sellers and as lenders (collectively, the “Existing Lenders”), MUFG Bank,
Ltd., as swap contract counterparty (“MUFG Ltd.”), Lender, as buyer, and
UMB Bank, N.A., as new agent, have entered into that certain Loan
Purchase and Sale Agreement dated as of October 2, 2020 (the
“LPA”), pursuant
to which, among other things, Lender acquired 100% of the Existing
Lenders’ respective interests in the Loans and the Loan
Documents and 100% of MUFG Ltd.’s interest in the MUFG Bank
Swap Termination Value; and
WHEREAS, Borrower, Lender and Agent
desire to enter into this Amendment to delete certain references in
the Loan Agreement to the “Restricted Account” and to
make certain other modifications described herein on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the
premises and other good and sufficient consideration which is
hereby acknowledged, the Parties hereto hereby agree as
follows:
Section
1. Definitions. Unless the context
otherwise requires, capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Loan
Agreement for all purposes of this Amendment, and this Amendment
shall be interpreted in accordance with the rules of construction
set forth in Section 1.4 of the Loan Agreement.
Section
2. Amendments to Loan Agreement.
The Parties acknowledge that the Loan Agreement shall be and is
hereby amended as follows:
2.1 Section 1.1 of the
Loan Agreement is hereby amended to delete the definition of each
of “Exclusivity Milestone”, “LOI”,
“Restricted Account”, “Revised Transaction
Letter”, “Second Amendment”, “Second ISDA
Notice”, “Strategic Alternative”,
“Strategic Alternative Closing Milestone”,
“Strategic Alternative Event of Default” and
“Strategic Alternative LOI Milestone” in its
entirety.
2.2 The following new
definition is added in Section 1.1 of the Loan Agreement in
alphabetical order as follows:
“‘Kenyan
Aircraft Collateral’ means the Equipment identified on
Schedule 1.1c hereto as bearing manufacturer’s serial
number 406 and 407, respectively, and their respective engines and
any Collateral Documents related thereto.”
2.3 The definition of
“Collateral” in Section 1.1 of the Loan Agreement is
hereby amended by adding the following to the end thereof:
“excluding the Kenyan Aircraft
Collateral.”
2.4 The definition of
“Reference Rate” in Section 1.1 of the Loan Agreement
is hereby amended by deleting the words “MUFG Union Bank,
N.A.” in each instance it appears and inserting the words
“UMB Bank, N.A.” in lieu thereof.
2.5 The definition of
“Unrestricted Cash” in Section 1.1 of the Loan
Agreement is hereby amended to delete the words “other than
the Restricted Account” therefrom.
2.6 The text of Clause
(d) of Section 2.2.1 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
(d) Deferred Interest.
Notwithstanding anything herein to the contrary, the cash component
of the interest payments commencing with the month of March 2020
and continuing on each consecutive month thereafter will be
deferred, capitalized and added to the principal balance of the
Loans on each respective due date, until such time as
repaid.
2.7 Section 2.2.2 of
the Loan Agreement is hereby amended by deleting the proviso
appearing therein in its entirety.
2.8 Section 2.5 of the
Loan Agreement is hereby amended by deleting the first sentence in
its entirety and inserting the following in lieu
thereof:
2.9 Section 2.15 of the
Loan Agreement is hereby amended by deleting the words
“(including the Restricted Account)”
therefrom.
2.10 The
text of Section 2.18 of the Loan Agreement is hereby deleted in its
entirety and the word “[Reserved]” is inserted in lieu
thereof.
2.11 Section
3.2 of the Loan Agreement is hereby amended by deleting the words
“MUFG UNION BANK, N.A.” and inserting the words
“UMB BANK, N.A.” in lieu thereof.
2.12 Section
3.3.5 of the Loan Agreement is hereby amended by deleting the words
“(other than the Restricted Account, which shall be governed
by the terms of Section 2.18)” therefrom.
2.13 Section
3.8 of the Loan Agreement is hereby amended by deleting the words
“the Restricted Account” and inserting the words
“any deposit account with respect to which an Account Control
Agreement has been executed and delivered with the relevant bank
and Borrower in favor of Agent” in lieu thereof.
2.14 Section
4.1.13 of the Loan Agreement is hereby amended by deleting the
words “(other than the Restricted Account)”
therefrom.
2.15 The
text of Section 6.22 of the Loan Agreement is hereby deleted in its
entirety and the word “[Reserved]” is inserted in lieu
thereof.
2.16 Section
7.20 of the Loan Agreement is hereby amended by deleting the words
“the Restricted Account” and inserting the word
“[Reserved]” in lieu thereof.
2.17 Section
7.21.2 of the Loan Agreement is hereby amended and restated in its
entirety as follows:
7.21.2
Lease Amendments. Borrower
shall not enter into any amendment of, or waiver or consent under,
any Lease involving a modification of lease payments, any reduction
in, or waiver or deferral of, Rent, a modification to any residual
value guaranty, any modification that adversely affects the
Collateral (or any portion thereof) or the rights and interests of
the Lenders and/or Agent in the applicable Equipment or Lease, any
reduction of any amounts payable to any of the Lenders and/or Agent
under any indemnity, any change to the state of registration of the
applicable Aircraft, the term of such Lease or the return
conditions of the Equipment subject thereto (each a
“Material Lease
Amendment”), except with the prior written approval of
Agent (such approval not to be unreasonably withheld or delayed)
and Requisite Lenders (in their sole discretion). In addition, the
Borrower shall provide written notice to the Agent within three (3)
Business Days of any amendment of, or waiver or consent under, any
Lease which does not constitute a Material Lease
Amendment.
2.18 Section
8.1.4 of the Loan Agreement is hereby amended by deleting the words
“setting forth in each case in comparative form the figures
for the corresponding periods in the previous year, and”
therefrom.
2.19 Section
8 of the Loan Agreement is hereby amended by adding the following
new Section 8.11 immediately following Section 8.10:
8.11 Information
and Reporting Requirements Generally. Notwithstanding
anything to the contrary set forth in this Section 8, until such
time as the Agent in its sole discretion notifies the Borrower in
writing to the contrary, the Borrower shall only be required to
satisfy the information and reporting requirements pursuant to
Sections 8.1.1, 8.1.3, 8.1.4, 8.1.5, 8.1.9, 8.1.10, 8.1.11, 8.1.12,
8.1.13, 8.1.14, 8.1.16, 8.2 (provided that the requirement of the
Borrower thereunder shall be to deliver bi-weekly reports), 8.3,
8.5, 8.7 (provided that the requirement of the Borrower thereunder
shall be to deliver monthly reports, and with respect to reports
due under Sections 8.3 and 8.7, such shall be due within 20
Business Days and 5 Business Days after the end of the calendar
month, respectively) and 8.10.
2.20 The
text of Section 9.1.18 of the Loan Agreement is hereby deleted in
its entirety and the word “[Reserved]” is inserted in
lieu thereof.
2.21 Section
12.7.1 of the Loan Agreement is hereby amended by deleting the
notice information in clause (b) and inserting the following notice
information in lieu thereof:
UMB
Bank, N.A.
0000 X. Xxxxxxxx
Xxxxx, Xxxxx 000
Xxxx Xxxx
Xxxx, Xxxx 00000
Attention:
Corporate Trust Aviation
Email:
XXXXX@xxx.xxx
2.22 Section
12.7.1 of the Loan Agreement is hereby further amended by adding
the following new clause (c) immediately following clause (b)
thereof:
(c)
If to Drake Asset
Management Jersey Limited, as Lender:
Drake
Asset Management Jersey Limited
XXX0,
Xx
Xxxxxx
Xxxxxx
XX0
0XX
Attn:
The Directors
Email:
XXXXXXX
With a
copy to:
Falko
Regional Aircraft Limited
0
Xxxxxx Xxxxxx
Xx.
Xxxxxx Xx. Xxxx
Xxxxxxxx
XX00
0XX
Attn:
Xxxxx Xxxxxxxx
Email:
XXXXXXX
2.23 Section
12.16.1 of the Loan Agreement is hereby amended by deleting the
words by deleting the text “impose or waive the Late Fee in
connection with a Strategic Alternative Event of Default and
(z)” therefrom.
2.24 Exhibit
C of the Loan Agreement is hereby amended by deleting the words
“other than the Restricted Account” from paragraph 1
thereof.
Section
3. Conditions Precedent. The
effectiveness of this Amendment is subject to the following
conditions precedent having been complied with to the satisfaction
of or waived in writing by Agent on or
before the Effective Date (each document,
instrument, certificate, opinion or other paper referred to below
to be in form and substance reasonably satisfactory to Agent and,
unless otherwise specified, to be
dated the Effective Date):
3.1 This Amendment
shall have been duly executed and delivered by each of the Parties;
and
3.2 The Agent shall
have received a bringdown certificate from Borrower in relation to
its organizational documents, governing documents, incumbency
certificates and the other documentation contemplated by Section
4.1.1(b) of the Loan Agreement.
Section 4. Miscellaneous.
4.1 Specified Expenses. The Parties
hereby acknowledge that, pursuant to Section 10(b) of the LPA,
MUFG Union Bank, N.A. has agreed to pay (a) the fee due on the
Closing Date (as defined in the LPA) from AeroCentury Corp., as
borrower under the Loan Agreement, to X. Xxxxx FBR, Inc. in
connection with the purchase and sale transaction under the LPA
(which fee is due pursuant to that certain engagement letter dated
October 8, 2019 between X. Xxxxx FBR, Inc., and AeroCentury Corp.
(as amended pursuant to that certain Amendment No. 1 to
Engagement Letter Agreement dated May 1, 2020)), and (b) the fees
and expenses of Huron Consulting Services, Sheppard, Mullin,
Xxxxxxx & Hampton LLP, MUFG’s FAA Counsel (as defined in
the LPA) and MUFG’s Retained Local Counsel (as defined in the
LPA), in each case subject to the occurrence of the Closing Date
(as defined in the LPA).
4.2 Representations and Warranties.
The representations and warranties of each of the Borrower
contained in this Amendment or any other Loan Document to which it
is a party shall be true and correct on and as of the Effective
Date as though made on and as of the Effective Date, except to the
extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties
shall be correct on and as of such earlier date).
4.3 Waivers; Amendments. No term or
provision of this Amendment may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the
terms hereof shall be effective only in the specific instance and
for the specific purpose given. Except as expressly modified by
this Amendment, each of the Parties acknowledges and agrees that
all terms and conditions of the Loan Agreement and the other Loan
Documents shall remain in full force and effect in all respects.
From and after the date hereof, the Loan Agreement (and any
reference contained therein in any other Loan Document) shall be
read and construed to mean the Loan Agreement as amended by this
Amendment.
4.4 Severability. Any provision of
this Amendment which is prohibited or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other
jurisdiction.
4.5 Headings. The headings of the
various sections herein are for convenience of reference only and
shall not define or limit any of the terms or provisions
hereof.
4.6 GOVERNING LAW; VENUE. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN OR IN ANY OTHER LOAN DOCUMENTS,
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND
THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. BORROWER HEREBY CONSENTS AND AGREES, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THAT THE
STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, NEW YORK
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN BORROWER AND AGENT OR ANY CREDIT FACILITY
LENDER PERTAINING TO AMENDMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AMENDMENT; PROVIDED, THAT AGENT AND
BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS AMENDMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT OR ANY CREDIT FACILITY LENDER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH AGENT OR CREDIT
FACILITY LENDER. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS
SET FORTH IN SECTION 12.7.1 OF THE LOAN AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE BORROWER’S ACTUAL
RECEIPT THEREOF.
4.7 WAIVER OF JURY TRIAL. TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
HEREBY WAIVE TRIAL BY JURY FOR ANY ACTION, SUIT, JUDICIAL
REFERENCE, OR OTHER PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THIS AMENDMENT, THE
OTHER LOAN DOCUMENTS AND/OR THE RELATIONSHIP ESTABLISHED BETWEEN
THE PARTIES HERETO IN CONNECTION WITH THIS AMENDMENT OR AMONG THE
PARTIES TO THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
4.8 Counterpart Form. This
Amendment may be executed by the Parties hereto in separate
counterparts (or upon separate signature pages bound together into
one or more counterparts), each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
4.9 Entire Agreement. This
Amendment constitutes the entire agreement of the Parties hereto
with respect to the subject matter hereof, and all prior or
contemporaneous understandings or agreements, whether written or
oral, among any of the Parties hereto with respect to such subject
matter are hereby superseded in their entireties. This Amendment
shall be a Loan Document.
[Signature page
follows]
[Amendment
No. 1 to Fourth Amended and Restated Loan Agreement]
IN WITNESS WHEREOF, each of the
undersigned Parties has caused this Amendment to be executed and
delivered by a duly authorized officer as of the day and year first
written above.
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AEROCENTURY CORP., as
Borrower
By: /s/
Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
SVP Finance
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UMB BANK, N.A., as Agent
By: /s/
Xxxxx Xxxx
Name:
Xxxxx
Xxxx
Title:
Vice President
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DRAKE ASSET MANAGEMENT JERSEY LIMITED,
as Lender
By: /s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Director
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Signature
Page to Amendment No. 1 to Fourth Amended and Restated Loan
Agreement
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