CONSENT AND RELEASE AGREEMENT OF BORROWER PARTIES
EXHIBIT 10.1
CONSENT AND RELEASE AGREEMENT OF BORROWER PARTIES
THIS CONSENT AND RELEASE AGREEMENT OF BORROWER
PARTIES (this “Agreement”) is made and entered
into as of October 2, 2020 (the “Effective Date”), by AeroCentury
Corp., a Delaware corporation (“Borrower”), each of the
“Guarantor Subsidiaries” named in the signature blocks
to this Agreement (“Guarantor
Subsidiaries”, and together with Borrower,
collectively the “Borrower
Parties”), in favor of MUFG Union Bank, N.A.
(“MUFG”), Umpqua
Bank (“Umpqua”),
Zions Bancorporation, N.A. (fka ZB, N.A.) dba California Bank &
Trust (“Zions”),
U.S. Bank National Association (“U.S. Bank”), Columbia State Bank
(“Columbia”),
and MUFG Bank, Ltd. (“MUFG
Bank”) and, with respect to Section 1 below, Buyer and New
Agent (as each such term is defined hereinafter). MUFG (solely in
its capacity as a lender, and not in its capacity as administrative
agent for the Lenders), Umpqua, Zions, U.S. Bank and Columbia are
sometimes referred to herein individually as a “Lender” and collectively as the
“Lenders”. The
Lenders and MUFG Bank are sometimes referred to herein individually
as a “Seller”
and collectively as the “Sellers”. MUFG, solely in its
capacity as the existing administrative agent for the Lenders, is
sometimes referred to herein as “Agent.”
This
Agreement is being executed and delivered in connection with that
certain Loan Purchase and Sale Agreement dated as of October
2, 2020 by and
among Drake Asset Management Jersey Limited, a company incorporated
in Jersey (registered number 127856) whose registered office is at
▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (“Buyer”), UMB Bank, N.A., a
national banking association formed under the laws of the United
States of America (“New
Agent”), Agent and the Sellers (the
“Loan Purchase
Agreement”). Capitalized terms used but not defined in
this Agreement shall have the meanings assigned thereto in the Loan
Purchase Agreement.
IN
ORDER TO INDUCE Agent and Sellers to enter into and to close under
the Loan Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each Borrower Party acknowledges and agrees as
follows:
1. Waiver of
Assignment Restrictions. Notwithstanding anything in the
Loan Documents or the documents giving rise to the MUFG Bank Swap
Termination Value to the contrary (“Swap Documents”), at such time as
the Loan Purchase Agreement becomes effective upon the satisfaction
of the conditions precedent to effectiveness of the Loan Purchase
Agreement, any and all restrictions contained in the Loan Documents
or in the Swap Documents on the sale or assignment of Agent’s
or any Lender’s interest in the obligations arising under the
Loan Documents (including any restrictions in Section 12.8.2 of the
Credit Agreement) or the Swap Documents shall be deemed waived with
respect to such sale and/or assignment by Agent and the Lenders
pursuant to the Loan Purchase Agreement, and the Loan Documents and
the Swap Documents shall be deemed amended to permit Agent and/or
any or all Sellers to sell or assign its respective Note and any
other interest in the Loan Documents and/or the Swap Documents to
the Buyer pursuant to the Loan Purchase Agreement without the
consent of any Borrower Party (subject to any right Agent may have
under the Loan Documents to consent to any such transfer or
condition such transfer on payment of any assignment fee required
pursuant to the Loan Documents).
2. Loan Status.
Each Borrower Party hereby confirms to Agent and Sellers and their
respective successors and assigns that neither Agent nor any Seller
has breached any of its obligations under the Loan, the Loan
Documents and the MUFG Bank Swap Termination Value, as applicable,
and there exists no claim, counterclaim, defense or offset of any
kind relating to the Loan, the Loan Documents or the MUFG Bank Swap
Termination Value.
3. Consent.
Each Borrower Party hereby consents to the Loan Purchase Agreement
and the consummation of all transactions provided for therein
(without the necessity for any further consents or approvals of any
Borrower Party). Without limiting the generality of the preceding
sentence, each Borrower Party acknowledges and agrees that (without
any further consents or approvals of any Borrower Party), in
accordance with the Loan Purchase Agreement and all documents
delivered pursuant thereto: (i) Agent and each Seller shall have
the right to transfer and assigned to Buyer all of such
Seller’s right, title and interest in and to the Loan
Documents and the Swap Documents; (ii) Agent shall have the
right to resign as administrative agent for the Lenders, and Buyer
shall have the right to designate and appoint New Agent as the new
administrative agent for the Lenders; (iii) from and after the
Closing Date, Buyer shall be entitled to receive all amounts due
under the Loan and the Loan Documents as and when due from the
Borrower Parties, and the Borrower Parties will deliver all such
amounts to Buyer; (iv) from and after the Closing Date, Buyer
shall have assumed all of Sellers’ duties and obligations
under the Loan Documents and the Swap Documents and New Agent shall
have assumed all of Agent’s duties and obligations as
administrative agent for the “Lenders” under the Loan
Documents, Agent and Sellers shall be thereafter relieved of all
further duties and obligations under the Loan Documents and the
Swap Documents, and the Borrower Parties will look solely to Buyer
or New Agent (as applicable) to perform the duties and obligations
of Agent and the Sellers under the Loan Documents and the Swap
Documents. Borrower Parties acknowledge that they have introduced
Buyer to Agent and Sellers and have requested that Agent and
Sellers enter into the Loan Purchase Agreement, and that Borrower
Parties have a financial interest in the transactions described in
the Loan Purchase Agreement and expect to derive financial and
other benefit therefrom.
4. Release.
Borrower and each Guarantor Subsidiary, for and on behalf of itself
and its legal representatives, successors and assigns
(collectively, the “Releasing
Parties”), each does hereby waive, release, relinquish
and forever discharge Agent and each Seller and their past and
present directors, officers, agents, employees, parents,
subsidiaries, affiliates, insurers, attorneys, representatives and
assigns, and each and all thereof (collectively, the
“Released
Parties”), of and from any and all manner of action or
causes of action, suits, claims, demands, judgments, damages,
levies and executions of whatsoever kind, nature and/or description
arising on or before the Effective Date, including any claims,
losses, costs or damages, including compensatory and punitive
damages, in each case whether known or unknown, liquidated or
unliquidated, fixed or contingent, direct or indirect, which each
Releasing Party ever had or now has or may claim to have against
any of the Released Parties, with respect to any matter whatsoever,
including the Loan Purchase Agreement, the Loan Documents, the Swap
Documents, the administration of the Loan, and the negotiations
relating to this Agreement, arising on or before the Effective Date
and, subject to the occurrence of the Closing, the Closing Date
(collectively, “Claims”). Each Releasing Party
acknowledges that it is aware that it may discover facts different
from or in addition to those it now knows or believes to be true
with respect to the Claims, and each agrees that the release of
this Agreement is and will remain in effect in all respects as a
complete and general release as to all matters released in this
Agreement, notwithstanding any such different or additional
facts.
Each
Releasing Party acknowledges that it has been informed of its
rights under and the provisions of Section 1542 of the Civil
Code of the State of California and expressly waives and
relinquishes all rights and benefits that it has or may have had
under such statute, which reads as follows:
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.
EACH
RELEASING PARTY UNDERSTANDS THE SIGNIFICANCE AND CONSEQUENCES OF
THE FOREGOING WAIVER OF SECTION 1542, AND ASSUMES FULL
RESPONSIBILITY FOR ANY INJURIES, DAMAGES OR LOSSES THAT IT MAY
INCUR AS A RESULT OF THE EXECUTION OF THIS AGREEMENT.
Each of
the Releasing Parties represents and warrants that it (i) has not
previously assigned or transferred in any manner, or purported to
have assigned or transferred in any manner, any interest in any of
the claims or rights released or waived by it in this Agreement;
and (ii) has the full right and authority to enter into this
Agreement.
5. Entire
Agreement. This Agreement contains the entire understanding
and agreement between the parties to this Agreement relating to the
subject matter of this Agreement and supersedes and replaces any
and all prior negotiations, discussions, understanding or
agreements whether written or oral and all other writings with
respect to the subject matter of this Agreement.
6. Merger and
Integration, Superseding Effect. This Agreement embodies the
entire agreement and understanding between the parties to this
Agreement with respect to the subject matter of this Agreement, and
supersedes and has merged into it all prior oral and written
negotiations and agreements of the same subject matter by and
between the parties hereto.
7. Choice of
Law/Venue. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK INCLUDING SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAWS WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. Any action arising out of this Agreement shall be
brought in accordance with the venue provisions of the Loan
Documents. Sections 12.14 and 12.15 of the Credit Agreement
are incorporated herein and made applicable hereto by this
reference.
8. Tax Liabilities and
Advice of Counsel. Each Borrower Party acknowledges and
agrees that it has received the advice of independent counsel
selected by it, or the opportunity to obtain such advice, before
entering into this Agreement, and has not relied upon Agent, any
Seller or any of their officers, directors, employees, agents or
attorneys concerning any aspect of the transactions contemplated by
this Agreement. Each Borrower Party acknowledges and agrees that
Agent or a Seller may be required to and may record and report any
forgiven indebtedness to all applicable private, public,
quasi-governmental and governmental entities or agencies in
accordance with all applicable laws, codes, rules and regulations,
including filing a Form 1099 with the United States Internal
Revenue Service. Each Borrower Party acknowledges that there may be
tax consequences to it arising out of the transactions contemplated
by this Agreement and by the Loan Purchase Agreement, and that each
is obligated to pay all taxes of any kind due by it as the result
of any transactions contemplated by this Agreement or the Loan
Purchase Agreement, and each Borrower Party shall jointly and
severally indemnify each Seller and save each Seller harmless for
payment or responsibility for any such taxes, fees, penalties or
interest.
9. No Impairment; No
Novation. Except as specifically provided herein, the Loan
Documents and the Swap Documents shall each remain unaffected by
this Agreement and all such documents shall remain in full force
and effect. Nothing in this Agreement shall impair the liens and/or
security interests created by any mortgage or any other security
interest of Agent or any Seller. The execution and delivery of this
Agreement shall not constitute a novation of the Loan, the Loan
Documents or the Swap Documents.
10. No Waiver or
Modification. The parties agree that no waiver, amendment or
modification of any of the terms of this Agreement shall be
effective unless in writing and signed by the parties
hereto.
11. Attorneys’
Fees and Costs. In any action or other proceeding arising
out of this Agreement, the prevailing party shall be entitled to
recover from the non-prevailing party, in addition to all other
relief provided by law or equity, all costs and expenses incurred
by the prevailing party, including attorneys’ fees and
costs.
12. Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and each of their respective
representatives, heirs, successors and assigns.
13. Notices. Any
notices pursuant to this Agreement shall be given in the manner
provided for in the Credit Agreement.
14. Organization and
Authority. Each Borrower Party represents and warrants to
Agent and Lenders that (a) such party is duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it was organized or incorporated, (b) such party has all
necessary approvals, whether internal, third party or otherwise,
and full right, power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement, and
(iii) this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with this
Agreement, except to the extent that enforceability of the
obligations may be subject to bankruptcy, insolvency, moratorium
and other similar laws affecting the rights of creditors generally
and to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
15. Rules
of Construction. Words used in this Agreement in the
singular, where the context so permits, shall be deemed to include
the plural and vice versa. When used in this Agreement,
“include” means
“include but are not limited to”, “includes” means “includes
but is not limited to” and “including” means “including,
but not limited to”. Section headings in this Agreement are
included for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
[Signatures
on Following Pages]
IN
WITNESS WHEREOF, each Borrower Party caused this Consent and
Release Agreement of Borrower Parties to be executed and delivered
by their duly authorized officers as of the date first above
written.
|
|
“Borrower”
a
Delaware corporation
By: _________________________________
Name: _________________________________
Title: _________________________________
|
|
|
“Guarantor
Subsidiaries”
JETFLEET
HOLDING CORP.,
a
California corporation
By: _________________________________
Name: _________________________________T
itle: _________________________________
|
|
|
JETFLEET
MANAGEMENT CORP.,
a
California corporation
By: _________________________________
Name: _________________________________
Title: _________________________________
|
|
|
|