Attached files
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| EX-10.1 - EXH 10.1 FORM OF FOURTH AMENDMENT - AEROCENTURY CORP | fourthamendmenttocreditag.htm |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 8-K
__________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December
12,
2019
AEROCENTURY CORP.
(Exact name of Registrant as specified in its
charter)
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Delaware
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94-3263974
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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000-1036848
(Commission File Number)
1440 Chapin Avenue, Suite 310
Burlingame, CA 94010
(Address of principal executive offices including Zip
Code)
650-340-1888
(Registrant's telephone number, including area
code)
Not applicable
(Former name and former address, if changed since last
report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c)
under theExchange Act (17 CFR 240.13e-4(c)
Securities
registered pursuant to Section 12(b) of the
Act:
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Title of
each class
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Name of
each exchange on which registered
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Common
Stock, par value $0.001 per share
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NYSE
American Exchange
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).Emerging growth
company
☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ☐
Item 1.01 Entry into a Material Definitive
Agreement
Amendment to Credit Agreement and Forbearance
Agreement
On
December 12, 2019, AeroCentury Corp. (the "Company") and two of its
subsidiary corporations, JetFleet Holding Corp. and JetFleet
Management Corp., entered into a Second Amendment to Forbearance
Agreement and Fourth Amendment to Credit Agreement (the
"Amendment") with MUFG Union Bank, N.A., as Agent, MUFG Bank Ltd.
("MUFG Ltd."), as swap counterparty, and the lenders ("Lenders")
under that certain Third Amended and Restated Credit Agreement
dated as of February 19, 2019, as amended (the "Credit
Agreement").
The
Amendment effected the following changes to the Credit Agreement:
(i) conversion of the variable interest rate margins that varied
based on a leverage ratio to a fixed margin on Prime Rate-based
loans and LIBOR-based loans at 2.75% and 6% per annum,
respectively; (ii) assessment of additional interest in the form of
a payment-in-kind interest payment equivalent to 2.5% per annum of
the outstanding principal due under such loans, to be added to the
principal of each loan at each interest payment date; (iii)
deletion of the requirement that LIBOR-based loans be drawn in
multiples of $100,000; (iv) reduction of the minimum amount of
proceeds from sale of collateral required to trigger a mandatory
repayment under the Credit Agreement from $2.5 million to $200,000;
(v) revision to provisions relating to the Lenders' right to field
examinations and inspection rights of the Company's books and
records; (vi) modification of the Company's obligations with
respect to disposition of net proceeds from sales of assets subject
to special purpose subsidiary financing to require that all such
proceeds be applied toward repayment of the Credit Agreement
indebtedness; and (vii) elimination of the Company's right, in the
absence of a default under the Credit Agreement, to consent to an
assignment of a Lender's loan participation.
The
Amendment also effected the following changes and additions to that
certain Forbearance Agreement dated as of October 28, 2019, as
amended (the "Forbearance Agreement") between the parties to the
Credit Agreement: (i) extension of the forbearance period to
January 14, 2020; (ii) consent to rollover of LIBOR loans under the
Credit Agreement notwithstanding the Company's defaults under the
Credit Agreement specified in the Forbearance Agreement; (iii)
extension of the deadline for the Company's cure of the Credit
Agreement borrowing base covenant default from January13, 2020 to
February 12, 2020; (iv) addition of a provision for the engagement
by the Lenders of a consultant to review and analyze the Company's
financial condition, at the Company's expense; (v) addition of
provisions requiring periodic reporting by the Company to the
Lenders regarding the Company's financial condition and the
collateral securing the Credit Agreement indebtedness; and (vi)
payment by the Company, on December 16, 2019, of an extension fee
equal to 100 basis points of the outstanding principal under the
Credit Agreement loans, or approximately $832,000 which may be paid
in kind by capitalizing the amount thereof and adding it to the
principal indebtedness under the Credit Agreement. In addition to
the foregoing amendments, the Amendment also contained the Lender's
consent to the sale of an aircraft that is part of the collateral
for the Credit Agreement indebtedness, and also provided for Lender
approval of the Company's December 9, 2019 cash flow budget and the
disbursements to the Company for the week of December 13, 2019,
from the Company's restricted account provided for in such budget.
The foregoing description of the Amendment is qualified in its
entirety by reference to the copy of the Amendment filed as Exhibit
10.1 hereto.
The foregoing description of the Amendment is qualified in its
entirety by reference to the copy of the Amendment filed as Exhibit
10.1 hereto.
Item 9.01
(d) Exhibits
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10.1
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Second Amendment to Forbearance Agreement and Fourth Amendment to
Credit Agreement between and among the Company; JetFleet
Holding Corp.; JetFleet Management Corp.; MUFG Union Bank,
N.A., as Administrative Agent and Lender; MUFG Bank, Ltd., as swap
counterparty; and
Zions Bancorporation, N.A. (fka ZB, N.A.) dba California Bank and
Trust, Umpqua Bank, U.S. Bank National Association, and
Columbia State Bank, as Lenders; dated as of December
12,
2019
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.
Date:
December 16,
2019
AEROCENTURY
CORP.
By: /s/
Toni M. Perazzo
Toni M.
Perazzo
S.V.P -
Finance & Chief Financial Officer