SECOND AMENDMENT TO FORBEARANCE AGREEMENT AND FOURTH AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO FORBEARANCE AGREEMENT
AND
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS
SECOND AMENDMENT TO FORBEARANCE AGREEMENT AND FOURTH AMENDMENT TO
CREDIT AGREEMENT (this “Amendment”) dated as of
December 12,
2019, is entered into by and among AEROCENTURY CORP., a Delaware
corporation (“Borrower”), the
Guarantors (defined below), the Lenders (defined below) and
MUFG UNION BANK, N.A., a
national banking association, as administrative agent for the
Lenders (in such capacity, “Agent”), with reference
to the following facts:
RECITALS
A. 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 Forbearance Agreement, (i) Agent and the Lenders agreed
to temporarily forbear solely during the Forbearance Period from
exercising the Enforcement Actions as a result of the occurrence
and continuance of the Specified Defaults described on Exhibit A to
the Forbearance Agreement and (ii) MUFG Bank, Ltd.
(“MUFG
LTD”) agreed to temporarily forbear from exercising
Termination Rights as a result of such Specified
Defaults.
C. On
November 27, 2019, Borrower delivered to Agent that certain
Compliance Certificate covering the Fiscal Quarter ending
September 30, 2019 (“Q3 Compliance
Certificate”), which 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. In addition to the foregoing, the Q3
Events of Default include the following additional Events of
Default (collectively, 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.
D. Each
New Event of Default constitutes a Forbearance Termination Event,
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, the Lenders and MUFG LTD, which notice is
acknowledged by Borrower and Guarantors as proper and
valid.
E. Pursuant
to that certain Temporary Waiver and Consent dated as of December
4, 2019 (the “Temporary Waiver”), the
Lenders agreed to temporarily waive the Specified Defaults and New
Events of Default and MUFG LTD temporarily waive any event of
default that may arise under the Swap Contracts (defined in the
Forbearance Agreement) as a result of the Specified Defaults and
New Events of Default (the “Swap Default”), solely in
order for the Lenders to consider Borrower’s request for
approval of the November 27 Budget for the purposes of making
disbursements from the Restricted Account for the week ending
December 6th, all as set forth
and subject to the terms of the Temporary Waiver.
F. Borrower
and Guarantors have requested that (i) Agent and the Lenders
(a) waive the Forbearance Termination Events occurring as a
result of the New Events of Default, agree to continue forbear from
exercising Enforcement Actions with respect to the Specified
Defaults, New Events of Defaults and any Event of Default under
Section 9.1.18
of the Credit Agreement that may arise from the Swap Default and,
in conjunction therewith, temporarily waive compliance with certain
requirements in the Credit Agreement to permit the reborrowing of
LIBOR Loans during the Forbearance Period, (b) consent to the
sale of the Collateral consisting of one SAAB-SCANIA model SAAB
340B aircraft bearing manufacturer’s serial number 340B-454
(“454
Aircraft”) and two General Electric model CT7-9B
aircraft engines bearing manufacturer’s serial numbers 785715
and 785784 (together, the “454 Engines” and,
collectively with the 454 Aircraft, the “454 Collateral”),
(c) permit the disbursement from the Restricted Account to
cover Borrower’s Liquidity Needs for the week ending December
13th as
identified on Borrower’s Cash Flow Budget delivered to
Lenders on November 27, 2019 (the “November 27 Budget”), and
(d) amend the Credit Agreement in certain respects, and
(ii) MUFG LTD continue to temporarily forbear from exercising
Termination Rights with respect to the Swap Default.
G. Agent,
the Lenders and MUFG LTD are willing to do so on the terms and
conditions set forth in this Amendment. MUFG LTD is entering into
this Amendment with respect to Sections 4(a) through
(d)
below.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
AGREEMENT
1. Incorporation of Recitals. Each
of the above Recitals is incorporated herein as true and correct in
all material respects and is relied upon by Agent and the Lenders
in agreeing to the terms of this Amendment.
2. Defined Terms. Any and all
initially-capitalized terms used in this Amendment (including,
without limitation, in the Recitals to this Amendment), without
definition shall have the respective meanings specified in the
Forbearance Agreement and/or Credit Agreement, as
applicable.
3. Acknowledgments. Borrower and
Guarantors each restates and reaffirms the acknowledgments each
made in Section 3 of the
Forbearance Agreement as of the Amendment Effective Date as such
term is defined in Section 10 hereof. Except
as expressly set forth herein, all terms, conditions, covenants,
representations and warranties contained in the Credit Agreement,
the other Loan Documents and all rights of Agent and the Lenders
and all obligations of Borrower and the Guarantors thereunder,
remain in full force and effect.
4. Forbearance; Temporary
Waiver.
(a) Waiver of Forbearance Termination
Events. The Lenders and MUFG LTD hereby waive the
Forbearance Termination Events occurring under the Forbearance
Agreement as a result of the New Events of Defaults and any Event
of Default under Section 9.1.18 of the
Credit Agreement that may arise from the Swap Default.
(b) Specified Defaults. The
Specified Defaults under the Forbearance Agreement shall hereby
include the New Events of Default and any Event of Default under
Section 9.1.18
of the Credit Agreement that may arise from the Swap Default and
the term “Specified Defaults” in the Forbearance
Agreement and Exhibit
A thereto are hereby each modified to include the New Events
of Default and the Event of Default under Section 9.1.18 of the Credit
Agreement with respect to the Swap Default.
(c) Forbearance Period.
Section 4(a)(i)
of the Forbearance Agreement is hereby amended to read as
follows:
“(i)
11:59 p.m. (New
York City time) on January 14, 2020;”
(d) Temporary Waiver. The
provisions of the Credit Agreement and the other Loan Documents to
the contrary notwithstanding, subject to the terms and conditions
of the Forbearance Agreement (as amended hereby) and as long as a
Forbearance Termination Event has not then occurred, Agent and the
Lenders hereby agree to temporarily waive compliance with the
following requirements of the Credit Agreement for the reborrowing
of LIBOR Loans: (i) the requirement of Section 2.1.1 of the Credit
Agreement that Loans shall be made as Base Rate Loans if a Default
or Event of Default has occurred and is continuing, and (ii) the
requirements of Section
2.1.4(b) of the Credit Agreement that (1) no Default or
Event of Default shall then exist and be continuing on the date of
such reborrowing and (2) that Borrower provide two
(2) Business Days’ notice prior to the date of such
reborrowing (such requirements in the forgoing clauses (i) and (ii)
are referred to collectively herein as the “Reborrowing
Requirements”). For clarity, the purpose of this
temporary waiver of the Reborrowing Requirements is solely to
permit the reborrowing (i.e., rollover) of outstanding LIBOR
Loans and not for the extension for any new Loans (and Borrower
acknowledges its covenant under the Forbearance Agreement to not
request borrowing of new Loans). Each Obligor hereby acknowledges
and agrees each of the Specified Default (as such term is amended
hereby) exists as of the date hereof and will continue to exist
after the Amendment Effective Date.
(e) Limited Effect of Waiver. The
waiver set forth in Section 4(d) above shall
be limited precisely as written and shall not be deemed (a) to be a
waiver of any other term or condition of the Credit Agreement or
the other Loan Documents, (b) to be a waiver of any Default or
Event of Default (including, without limitation, the Specified
Defaults, as such term is amended hereby), (c) to prejudice
any right or remedy which Agent or the Lenders may now have or may
have in the future under or in connection with the Credit Agreement
or the other Loan Documents, nor shall the entering into this
Amendment or the Forbearance Agreement (as amended hereby) preclude
agent or the Lenders from refusing to enter into any further
waivers or amendments with respect to the Credit Agreement or any
other Loan Document, (d) to be a consent to any future waiver
under the Credit Agreement or the other Loan Documents, or
(e) to constitute a course of dealing or other basis for
altering any Obligations or any other contract or
instrument.
(f) Extension of Cure Deadline.
Borrower acknowledges that there exists a Borrowing Base Deficiency
that constitutes a Default (“Borrowing Base Default”)
and will constitute an Event of Default if not cured by January 13,
2020 (the “Deficiency Cure
Deadline”). It is hereby confirmed that the Borrowing
Base Default is a Specified Default under the Forbearance Agreement
as amended hereby. Notwithstanding the provisions of the Credit
Agreement or any other Loan Documents, the Deficiency Cure Deadline
is hereby extended to February 12, 2020. For the avoidance of
doubt, the failure to cure the Borrowing Deficiency Default by the
Deficiency Deadline as extended hereby shall constitute an
immediate Event of Default under the Credit Agreement.
(g) Interest Rate Increase. From
and after the Amendment Effective Date, all LIBOR Loans under the
Credit Agreement shall bear interest at the Applicable LIBOR Rate
in effect after giving effect to the amendments to the Credit
Agreement described below (which interest rate shall remain in
effect notwithstanding any occurrence of a Forbearance Termination
Date).
5. Amendments to Forbearance
Agreement.
(a) Section 5 of the
Forbearance Agreement titled “Covenants” is hereby
amended by adding the following paragraphs immediately below
paragraph (c) thereof:
(d)
Lenders’ Consultant. Each
Obligor acknowledges that Agent and the Lenders are entitled under
the Credit Agreement to retain (or cause Agent’s counsel to
retain) at Borrower’s costs a financial advisor or consultant
(“Lenders’
Consultant”) to review, analyze and make
recommendations with respect to, Obligor’s historical and
projected financial and operating performance, liquidity, financial
statements, any proposed sale, financial restructuring or other
strategic alternatives and any other matter relating to Obligors
and the Collateral. Borrower shall pay or reimburse Agent and the
Lenders upon demand for the fees, costs and expenses of
Lenders’ Consultant. Each Obligor hereby agrees to (i)
provide Lender's Consultant reasonable access during normal
business hours to the offices, properties, officers, employees,
accountants, auditors, counsel and other representatives, books and
records of Obligors, and (ii) furnish to Lenders’ Consultant
such financial, operating and property related data and other
information as Lenders’ Consultant reasonably requests. Each
Obligor hereby (1) agrees and acknowledges that all of
Lenders’ Consultant's analyses, conclusions, reports and
other work product are confidential and covered by the
attorney-work product privilege and the common interest privilege
and, consequently, are exempt from disclosure to any Obligor or any
other Person, (2) acknowledges and agrees that Agent, the Lenders
and Lenders’ Consultant may use and share, without liability,
among themselves and their respective advisors, attorneys,
consultants, accounts, and agents information regarding such
Obligor, the Collateral, the Credit Facility and the Loan
Documents, including, without limitation, personally identifiable
information and data, financial information, projections, lessee
information, and (3) waives any rights or claims with respect
to such use or sharing, including regarding financial privacy and
data protection laws and regulations.
(e)
Lender Update. Borrower agrees
to make available, on as frequently as a bi-weekly basis, senior
management of Borrower and, at Borrower’s option or upon
request of Agent, Borrower’s financial advisor or other
advisors for meetings or conference calls with Agent and the
Lenders (and their representatives and consultants), at such dates
and times to be provided by Agent upon reasonable notice. The
purpose of such meetings will be to discuss the status of the
financial, collateral, and operational condition, businesses,
liabilities, assets, and prospects of Borrower and the Collateral,
any sale, refinance or other strategic transaction efforts.
Borrower and Guarantors shall promptly provide copies of all
non-privileged non-confidential written materials provided to, or
produced by, Borrower or Guarantors in connection with any sale,
refinance, other strategic transaction efforts (including, without
limitation, any letters of intent, confidentiality agreements,
draft purchase documents, commitment letters, and correspondence to
or from any Governmental Authority) and material third party
reports relating to the financial, collateral, or operational
performance of Borrower and the Collateral or any other
non-privileged non-confidential written material as Agent may
reasonably request from time to time. Without limiting the
foregoing, Borrower agrees to notify Agent immediately upon either
Borrower becoming aware of any material change or development
relating to any sale or refinance efforts or to the financial,
collateral, or operational condition, businesses, assets,
liabilities, or prospects of Borrower or the
Collateral.
(f)
Collateral Report. Borrower
shall deliver to the Lenders, on a bi-weekly basis beginning on
December 30, 2019, a detailed report containing the following
information, satisfactory to the Lenders, regarding the aircraft
and engines that are part of the Collateral (the
“Collateral
Report”): (i) the base location of the Collateral
Covered thereby and the country in which each aircraft is
registered and the countries to which it is flown by its Lessee,
(ii) whether such Collateral is on Lease, (iii) if it is on Lease,
whether there is a default under such Lease and, if there is such a
default, a description of the default and Borrower’s intended
action with respect thereto, and (iv) with respect to
aircraft bearing manufacturer’s serial numbers 15128, 15207,
15215, an accounting of the ongoing expenses for storage, insurance
and similar expenses for such Collateral, the date and time of any
visits by or on behalf of Borrower to monitor such Collateral and
the name of the person(s) undertaking such visits (beginning with
the most recent visit made as of the date hereof and continuing for
any visits made thereafter), and an update with respect to the
marketing process of such aircraft.
(g)
Restricted Account. Each
Obligor hereby acknowledges the establishment of the restricted
account, bearing account number XXXXX00046
(“Restricted Account”),
with MUFG Union Bank, N.A., in its capacity as depository bank as
set forth in the Second Amendment and recognizes Agent’s
control over the disposition of funds in the Restricted Account.
Borrower agrees to comply with Sections 8 (Restricted Account)
and 9 (Cash Flow
Budgets Review; Disbursement) of the Second Amendment.
(h)
Excess Proceeds. Borrower
covenants and agrees that Borrower shall immediately use any Excess
Proceeds Borrower receives from the disposition of the Excluded
Assets to repay the Loans.
6. Amendments to Credit Agreement.
The Credit Agreement shall be amended as follows:
(a) The following
definition is hereby added to Section 1.1 in
alphabetical order:
“Base Rate Cash Margin”
means a per annum rate of interest equal to 2.75%.
“LIBOR Cash Margin” means
a per annum rate of interest equal to 6.00%.
“PIK Margin” means a per
annum rate of interest equal to 2.50%.
(b) The following terms
and their respective definitions set forth in Section 1.1 of the Credit
Agreement shall be deleted and replaced with the
following:
“Applicable Base Rate
Margin” means, for any period, the sum of (a) the Base
Rate Cash Margin for such period and (b) the PIK Margin for such
Period.
“Applicable LIBOR Margin”
means, for any period, the sum of (a) the LIBOR Cash Margin for
such period and (b) the PIK Margin for such period.
(c) The term
“Pricing Leverage” and its definition set forth in
Section 1.1 of the
Credit Agreement shall be deleted and the reference to such term in
second paragraph of the form Compliance Certificate attached as
Exhibit C to the Credit Agreement, along with first numbered
paragraph of the form Compliance Certificate, is hereby
deleted.
(d) Sections 2.1.4(a)(i) and
(b) are hereby
amended to delete “and in an integral multiple of
$100,000.00” where they appear in such Sections. The form of
Borrowing Notice attached as Exhibit B to the Credit Agreement
is amended to delete such sentence from its footnote number
1.
(e) Section 2.2.1(a) of the Credit
Agreement is amended by adding the following at the end
thereof:
Notwithstanding the
foregoing, in lieu of cash payment, interest accruing on such Base
Rate Loan at the PIK Margin shall be due and payable in-kind on the
payment date thereof by being capitalized and added to the
outstanding principal balance of such Base Rate Loan on such date
(after which time such capitalized interest shall no longer be
treated as accrued and unpaid interest but instead shall be treated
as a portion of the outstanding principal balance of the Base Rate
Loans and bear interest in accordance with this Agreement for all
purposes).
(f) Section 2.2.1(b) of the Credit
Agreement is amended by adding the following at the end
thereof:
Notwithstanding the
foregoing, in lieu of cash payment, interest accruing on such LIBOR
Loan at the PIK Margin shall be due and payable in-kind on each
Payment Date by being capitalized and added to the outstanding
principal balance of such LIBOR Loan on such date (after which time
such capitalized interest shall no longer be treated as accrued and
unpaid interest but instead shall be treated as a portion of the
outstanding principal balance of the LIBOR Loans and bear interest
in accordance with this Agreement for all purposes).
(g) Section 2.2.1(c) of the Credit
Agreement shall be deleted and replaced with the
following:
(c)
Reserved.
(h) Section 2.6.3 of the Credit
Agreement is amended by deleting and replacing second sentence
thereof with the following:
Unless
the Requisite Lenders otherwise agree in writing, upon (i) the sale
of any Collateral for a sale price that exceeds $200,000.00 or (ii)
the receipt of proceeds in excess of $200,000.00 from any recovery
under any applicable insurance policies (or otherwise) in
connection with an Event of Loss, Borrower shall repay immediately
all or such portion of the Loans in an amount equal to the proceeds
from such sale or recovery.
(i) Section 3.3.3 of the Credit
Agreement is amended as follows:
3.3.3
For the purposes of
allowing Agent to conduct a Field Examination, Borrower shall, with
respect to each owned, leased, or controlled property or facility,
during normal business hours: (1) provide access to such facility
or property to Agent and any of its officers, employees and Agent,
as frequently as Agent determines to be appropriate; (2) permit
Agent and any of its officers, employees and Agent to inspect,
audit and make extracts from all of Borrower’s books and
records; and (3) subject to the Lessee’s rights under any
Lease, permit Agent to inspect, review, evaluate and make physical
verifications and appraisals of any Equipment and other Collateral
in any manner and through any medium that Agent considers
advisable, and Borrower shall provide to Agent, at Borrower’s
cost and expense, such clerical and other assistance as may be
requested with regard thereto. Borrower shall make available to
Agent and its counsel, as quickly as practicable under the
circumstances, originals or copies of all of Borrower’s books
and records and any other instruments and documents which Agent may
request. Borrower shall deliver any document or instrument
necessary for Agent, as it may from time to time request, to obtain
records from any service bureau or other Person that maintains
records for Borrower. Agent shall be entitled to cause a Field
Examination to be completed at times and as often as it deems
necessary in its sole discretion. Borrower shall reimburse Agent
upon demand for the expense of such Field Examinations whether the
examination is performed by Agent or a third party approved by
Agent. Borrower’s obligation to reimburse Agent for the costs
of such Field Examinations shall not exceed $20,000 per year. At
all times, it is understood and agreed by Borrower that all
expenses in connection with any such Field Examination which may be
incurred by Borrower, any officers and employees thereof and the
attorneys and independent certified public accountants therefor
shall be expenses payable by Borrower and shall not be expenses of
Agent or the Lenders nor part of the foregoing cap.
(j) Section 6.6 of the Credit
Agreement is hereby amended and replaced with the
following:
6.6
Inspection Rights. At any time
during regular business hours and as often as requested, permit
Agent, or any authorized employee or representative thereof, to
examine, audit and make copies and abstracts from the records and
books of account of, and to visit and inspect the Property of,
Borrower and its Subsidiaries and to discuss the affairs, finances
and accounts of Borrower and its Subsidiaries with any of its
officers, key employees or accountants. In addition, Agent shall
have the right to cause a Field Examination to be completed as
described in Section 3.3.3.
(k) Section 6.25 of the Credit
Agreement is amended by deleting and replacing subsection (b)
thereof with the following:
Except
as provided in subsection (c) below, if the sale or disposition of
an Excluded Asset generates funds in excess of the amount
sufficient to prepay or repay the Permitted Excluded Subsidiary
Financing secured by such Excluded Asset and pay the third-party
costs associated with such prepayment or repayment and sale (the
“Excess
Proceeds”), Borrower shall immediately cause such
Excess Proceeds to be used to repay the Loans.
(l) Section 12.8.2 of the Credit
Agreement is amended by deleting the following sentence from clause
(i) thereof:
and,
provided no Default or Event of Default then exists,
Borrower
7. Consent to Sale.
(a) The Lenders consent
to sale of the 454 Collateral and the release of the security
interests and liens granted under the Collateral Documents solely
with respect to 454 Collateral. The Lenders hereby authorize Agent
to enter into and deliver appropriate lien releases, filings and
related instruments necessary to effectuate the terms of this
Agreement and the discharge of the liens granted to Agent under the
Collateral Documents with respect to the 454 Collateral, including
the Credit Agreement and the Mortgage.
(b) Borrower shall
cause the proceeds of the sale of the 454 Collateral in the amount
of $975,000 (the “454 Sale Proceeds”) to be
deposited into the Restricted Account. Borrower hereby acknowledges
and agrees that the 454 Sale Proceeds and any and all funds in the
Restricted Account shall be subject to Agent’s security
interest, shall constitute Collateral for the Obligations and shall
be subject to the terms hereof and the terms of the Credit
Agreement (including Section 2.11 thereof
(Application of Payments)) and of the Forbearance
Agreement.
(c) Effective upon
Agent’s receipt of a wire transfer confirmation number
evidencing the transfer of the 454 Sale Proceeds as described in
Section 7(b) above
and Agent’s confirmation of receipt of such funds, and
provided no Forbearance Termination Event then exists, Agent agrees
to release and discharge its security interests and liens in the
454 Collateral and authorizes and consents to any filings necessary
to evidence the releases pursuant to this Section 7 or the discharge of
any liens thereof.
8. Disbursements. Provided no
Forbearance Termination Event then exists, the Lenders hereby
approve Borrower’s Cash Flow Budget prepared on December 9,
2019 for the limited purpose of making disbursements from available
funds in the Restricted Account to fund Borrower’s Liquidity
Needs identified in such Cash Flow Budget through the week ending
December 13th and authorize Agent
to make such disbursements. Notwithstanding the foregoing approval
of such Cash Flow Budget, to the extent future disbursements from
the Restricted Account are requested after December 13, 2019,
Borrower must obtain the approval of the Lenders of a new Cash Flow
Budget as set forth in Section 5(g) of the Forbearance
Agreement (as amended hereby) that references the applicable
provisions of the Second Amendment.
9. Representations and Warranties.
Each of Borrower and Guarantors represents and warrants that (a)
after giving effect to this Amendment, 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 Amendment Effective Date, as if made on and
as of such date; (b) after giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing (other
than the Specified Defaults, as such term is amended hereby); (c)
the execution, delivery and performance of this Amendment are
within the corporate power and authority of such Person and have
been duly authorized by appropriate corporate action and
proceedings; (d) this Amendment 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
Amendment; 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.
10. Conditions Precedent. This
Amendment shall become effective on the date (the
“Amendment Effective
Date”) each of the following conditions shall have
been satisfied or waived by Agent in its sole
discretion:
(a) This Amendment. Agent shall
have received this Amendment, duly executed by Borrower, Guarantors
and the Lenders.
(b) No Default. Upon giving effect
to this Amendment, there shall be no Default or Event of Default
(other than the Specified Defaults as such term is amended
hereby).
(c) Representations and Warranties.
The representations and warranties in this Amendment shall be true
and correct in all material respects.
(d) Prior Amendment Fee. Agent
shall have received the fee due pursuant to the First Amendment in
the amount of $225,000 in accordance with Section 7
thereof.
11. Forbearance Extension Fee. In
consideration for the agreement of Lenders to enter into this
Amendment, Borrower shall pay to Agent for the account of the
Lenders a forbearance amendment fee in the amount of 100 basis
points of the outstanding principal amount of the Loans (the
“Amendment
Fee”), which Amendment Fee shall be deemed fully
earned and non-refundable for any reason whatsoever and shall be
due and payable on December 16, 2019 after giving effect to
the rollover of the LIBOR Loan due on such Payment Date. In lieu of
cash payment, the Amendment Fee may be paid in kind by capitalizing
the amount thereof and adding it to the principal amount of the
Loans, whereby the principal amount of each outstanding LIBOR Loan
shall thereafter increase by 100 basis points and such increase
shall become part of the principal amount of such LIBOR Loan and
bear interest in accordance with the Credit Agreement for all
purposes.
12. General Release. Each of
Borrower and Guarantors, on behalf of itself and on behalf of its
Subsidiaries, successors, assigns, legal representatives and
financial advisors (collectively, the “Releasing Parties”),
hereby releases, acquits and forever discharges Agent, the Lenders
and each of their respective past and present directors, officers,
employees, agents, attorneys, affiliates, predecessors, successors,
administrators and assigns (the “Released Parties”) of and
from any and all claims, actions, causes of action, demands,
rights, damages, costs, loss of service, expenses and compensation
whatsoever heretofore or hereafter arising from any events or
occurrences, or anything done, omitted to be done, or allowed to be
done by any of the Released Parties, on or before the date of
execution of this Amendment, WHETHER KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, including, without limitation, any of the same arising
from or related to anything done, omitted to be done, or allowed to
be done by any of the Released Parties and in any way connected
with this Amendment, the Forbearance Agreement, or any of the Loan
Documents, any other credit facilities provided or not provided,
any advances made or not made, or any past or present deposit or
other accounts of any Releasing Party with any Released Party and
the handling of the same by any Released Party, including, without
limitation, the manner and timing in which items were deposited or
credited thereto or funds transferred therefrom or made available
to any of the Releasing Parties, the honoring or returning of any
checks drawn on any account, and any other dealings between the
Releasing Parties and the Released Parties (the “Released Matters”).
Releasing Parties each further agree never to commence, aid or
participate in (except to the extent required by order or legal
process issued by a court or governmental agency of competent
jurisdiction) any legal action or other proceeding based in whole
or in part upon the Released Matters. In furtherance of this
general release, Releasing Parties each acknowledge and waive the
benefits of California Civil Code Section 1542 (and all similar
ordinances and statutory, regulatory, or judicially created laws or
rules of any other jurisdiction), which provides:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT IF KNOWN BY
HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASED PARTY.
Releasing Parties
each agree that this waiver and release is an essential and
material of this Amendment, and that the agreements in this
paragraph are intended to be in full satisfaction of any alleged
injuries or damages to or of any Releasing Parties in connection
with the Released Matters. Each Releasing Party represents and
warrants that it has not purported to convey, transfer or assign
any right, title or interest in any Released Matter to any other
person or entity and that the foregoing constitutes a full and
complete release of the Released Matters. Releasing Parties each
also understand that this release shall apply to all unknown or
unanticipated results of the transactions and occurrences described
above, as well as those known and anticipated. Releasing Parties
each have consulted with legal counsel prior to signing this
release, or had an opportunity to obtain such counsel and knowingly
chose not to do so, and each Releasing Party executes such release
voluntarily, with the intention of fully and finally extinguishing
all Released Matters.
13. Miscellaneous.
(a) Breach as Event of Default; Agreement
as Loan Document. It shall be an immediate Event of Default
under the Credit Agreement if Obligor breaches any covenant
contained herein or in the Forbearance Agreement (as amended
hereby) or if any representation or warranty contained herein or in
the Forbearance Agreement (as amended hereby) proves to be
inaccurate or untrue in any material respect. Each of the Loan
Documents shall be deemed modified so far as to be consistent with
this Amendment. Except as specifically modified and amended herein,
all of the terms, covenants, conditions and agreements contained in
the Credit Agreement and the other Loan Documents shall remain in
full force and effect. In the event of any inconsistency between
this Amendment and any Loan Document, the provisions of this
Amendment shall control. This Amendment and the Forbearance
Agreement (as amended hereby) shall each constitute a Loan Document
under the Credit Agreement. Any provision of any Loan Document
which applies to Loan Documents generally shall apply to this
Amendment and the Forbearance Agreement (as amended
hereby).
(b) Review And Construction Of
Documents. Each party hereto hereby acknowledges, and
represents and warrants to the other parties hereto,
that:
(i) it has had the
opportunity to consult with legal counsel of its own choice and has
been afforded an opportunity to review this Amendment and the
Forbearance Agreement (as amended by this Amendment) with legal
counsel;
(ii) it
has carefully reviewed this Amendment and the Forbearance Agreement
(as amended by this Amendment) and fully understands all terms and
provisions of this Amendment and the Forbearance Agreement (as
amended by this Amendment);
(iii) it
has freely, voluntarily, knowingly, and intelligently entered into
this Amendment and the Forbearance Agreement (as amended by this
Amendment) of its own free will and volition;
(iv) none
of the Lenders or Agent have a fiduciary relationship with any
Obligor and the Obligor does not have a fiduciary relationship with
Agent or the Lenders, and the relationship between the Lenders or
Agent, on the one hand, and Obligor, on the other hand, is solely
that of creditor and debtor; and
(v) no joint venture
exists among Obligor and the Lenders or Agent.
(c) Severability. Any provision of
this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the
remainder of this Amendment, and the effect thereof shall be
confined to the provision so held to be invalid or
unenforceable.
(d) APPLICABLE LAW. THIS AMENDMENT,
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(e) WAIVER OF JURY TRIAL. EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT,
THE FORBEARANCE AGREEMENT (AS AMENDED BY THIS AMENDMENT) OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
(f) Successors and Assigns. This
Amendment is binding upon and shall inure to the benefit of Agent,
Lenders and Obligor and their respective successors and assigns;
provided,
however, that
Obligor may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of Agent and Lenders.
The execution and delivery of this Amendment by any Lender prior to
the Amendment Effective Date shall be binding upon its successors
and assigns and shall be effective as to any Loans or Revolving
Commitment assigned to such Lender after such execution and
delivery.
(g) Counterparts. This Amendment
may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when
taken together shall constitute one and the same instrument. An
executed signature page of this Amendment may be delivered by
facsimile transmission or electronic PDF of the relevant signature
page hereof.
(h) Headings. The headings,
captions and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this
Amendment.
(i) Expenses of Agent and Lenders.
Borrower shall promptly pay all fees, costs, charges, expenses, and
disbursements of Agent incurred in connection with the preparation,
execution, and delivery of this Amendment, and the other documents
contemplated by this Amendment, including all legal fees and
expenses.
(j) Further Assurances. Obligor
agrees to execute, acknowledge, deliver, file and record such
further certificates, instruments and documents, and to do all
other acts and things, as may be reasonably requested by Agent and
necessary or reasonably advisable to carry out the intents and
purposes of this Amendment.
(k) Amendments. The provisions of
the Forbearance Agreement (as amended by this Amendment) may be
further amended or waived by an instrument in writing signed by
Borrower, the Lenders and Agent, provided that an amendment
limited to extending the Forbearance Period shall be effective
pursuant to a writing signed by Agent, at the direction of the
Requisite Lenders, and Borrower.
(l) Integration; No Oral
Agreements. This Amendment, the Forbearance Agreement (as
amended), the Credit Agreement, the other Loan Documents and the
other written agreements, instruments, and documents entered into
in connection therewith set forth in full the terms of agreement
between the parties hereto and thereto with respect to the subject
matter thereof and are intended as the full, complete, and
exclusive contracts governing the relationship between such parties
with respect to the subject matter thereof, superseding all other
discussions, promises, representations, warranties, agreements, and
understandings between the parties with respect thereto. There are
no oral agreements among the parties hereto.
(m) THIS AMENDMENT AND
THE FORBEARANCE AGREEMENT (AS AMENDED) EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO REGARDING THE CREDIT
PARTIES’ FORBEARANCE WITH RESPECT TO THEIR RIGHTS AND
REMEDIES WHICH MAY ARISE AS A RESULT OF THE SPECIFIED EVENTS OF
DEFAULT AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED
OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSION OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
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IN
WITNESS WHEREOF, the parties have entered into this Amendment by
their respective duly authorized officers as of the date first
above written.
BORROWER:
a
Delaware corporation
By:
_________________________
Name:
_________________________
Title:
_________________________
GUARANTORS:
JETLEET
HOLDING CORP.,
a
California corporation
By:
_________________________
Name:
_________________________
Title:
_________________________
JETFLEET MANAGEMENT
CORP.,
a
California corporation
By:
_________________________
Name:
_________________________
Title:
_________________________
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ADMINISTRATIVE
AGENT AND LENDER:
MUFG
UNION BANK, N.A.
By:
_________________________
Name:
_________________________
Title:
_________________________
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MUFG LTD:
MUFG
BANK, LTD.
By:
_________________________
Name:
_________________________
Title:
_________________________
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LENDER:
UMPQUA
BANK
By:
_________________________
Name:
_________________________
Title:
_________________________
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LENDER:
ZIONS
BANCORPORATION, N.A. (fka ZB, N.A.) dba CALIFORNIA BANK AND
TRUST
By:
_________________________
Name:
_________________________
Title:
_________________________
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LENDER:
U.S.
BANK NATIONAL ASSOCIATION
By:
_________________________
Name:
_________________________
Title:
_________________________
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LENDER:
COLUMBIA STATE
BANK
By:
_________________________
Name:
_________________________
Title:
_________________________
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