FOURTH AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT dated as of May 1, 2020 made by AEROCENTURY CORP. in favor of MUFG UNION BANK, N.A. as Agent for itself and theLenders

 

ARTICLE 1. CERTAIN DEFINITIONS 

Section 1.01 Definitions  

ARTICLE 2. GRANTING CLAUSE 

ARTICLE 3. COVENANTS 

Section 3.01 Registration; Maintenance and Operation  

Section 3.02 Further Assurances.  

Section 3.03 Liens  

Section 3.04 Books and Records; Inspection  

Section 3.05 Certificate of Title.  

Section 3.06 Loss of Value.  

Section 3.07 Insurance.  

Section 3.08 Mortgagee's Rights.  

Section 3.09 Reinstatement.  

Section 3.10 Warranties.  

ARTICLE 4. EVENTS OF DEFAULT AND REMEDIES 

Section 4.01 Events of Default and Remedies.  

Section 4.02Possession of Airframe, Engine, APU, Parts and Spare Parts.  

Section 4.03 Receiver.  

Section 4.04 Sale and Suits for Enforcement.  

Section 4.05 Expenses of Enforcement.  

Section 4.06 Waiver of Appraisement, Etc.  

Section 4.07 Remedies Cumulative.  

Section 4.08 Application of Proceeds.  

Section 4.09 Delay or Omission; Possession of Notes.  

Section 4.10 Power of Attorney.  

Section 4.11 Waiver of Claims.  

Section 4.12 Additional Waivers.  

ARTICLE 5. CONCERNING THE LEASES 

Section 5.01 Acknowledgement of Leases.  

Section 5.02 Quiet Enjoyment, Etc.  

Section 5.03 Only One Original Lease.  

Section 5.04 Miscellaneous.  

ARTICLE 6. MISCELLANEOUS PROVISIONS 

Section 6.01 Amendments, Etc.  

Section 6.02 Notices.  

Section 6.03 Continuing Lien and Security Interests; Transfer.  

Section 6.04Governing Law; Service of Process; Choice of Forum.  

Section 6.05 Severability; Drafting.  

Section 6.06 Entire Agreement.  

Section 6.07 Counterparts.  

Section 6.08 Loan Agreement to Control.  

Section 6.09 Section Titles.  

Section 6.10 Time of the Essence.  

Section 6.11 Termination and Release.  

Section 6.12 Amendment and Restatement.  

 

THIS FOURTH AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT, dated as of May 1, 2020 (this "Mortgage"), is made by AEROCENTURY CORP., a Delaware corporation (together with its successors and assigns, "Borrower"), with its chief executive office and chief place of business at 1440 Chapin Avenue, Suite 310, Burlingame, California in favor of MUFG UNION BANK, N.A. (formerly Union Bank, N.A.), as agent for itself and the Lenders as described in the Loan Agreement referred to below (MUFG Union Bank, N.A. in its capacity as agent for itself and the Lenders, together with its successors and assigns, "Mortgagee").

WHEREAS, pursuant to that certain Loan and Security Agreement dated as of April 28, 2010, (as amended, the “Original Loan Agreement”), the financial institutions as lender parties thereto (collectively, the “Original Lenders”) and Union Bank, N.A., as administrative agent for itself and the Original Lenders, made available to Borrower a revolving credit facility for the purposes set forth in the Original Agreement.

WHEREAS, the Original Loan Agreement was amended and restated pursuant to that certain Amended and Restated Loan and Security Agreement dated as of March 13, 2013 (the “First Amended and Restated Loan Agreement”), among Borrower, the financial institutions as lender parties thereto (collectively, the “First A&R Lenders”) and Union Bank, N.A., as administrative agent for itself and the First A&R Lenders; by that certain Second Amended and Restated Loan and Security Agreement dated as of May 30, 2014 (the “Second Amended and Restated Loan Agreement”), among Borrower, the financial institutions as lender parties thereto (collectively, the “Second A&R Lenders”) and Union Bank, N.A., as administrative agent for itself and the Second A&R Lenders; and by that certain Third Amended and Restated Loan and Security Agreement dated as of February 19, 2019, among Borrower, the financial institutions as lender parties thereto (collectively, the “Third A&R Lenders”) and MUFG Union Bank, N.A., as administrative agent for itself and the Third A&R Lenders (as so amended, the “Third Amended and Restated Loan Agreement”).

WHEREAS, in connection with the Original Loan Agreement, the First Amended and Restated Loan Agreement, the Second Amended and Restated Loan Agreement, and the Third Amended and Restated Loan Agreement, Borrower and Mortgagee entered into that certain Mortgage and Security Agreement dated as of April 28, 2010, as amended and restated by that certain Amended and Restated Mortgage and Security Agreement dated as of June 17, 2013, by that certain Second Amended and Restated Mortgage and Security Agreement dated as of May 30, 2014, and as further amended and restated by that certain Third Amended and Restated Mortgage and Security Agreement dated as of February 19, 2019 (as further supplemented and amended from time to time, as described on Exhibit A attached hereto, collectively, the “Security Agreement”).

WHEREAS, concurrently herewith, Borrower, MUFG Union Bank, N.A., as Lender, together with any other Lenders under the Loan Agreement (defined hereafter) from time to time (collectively, the "Lenders") and MUFG Union Bank, N.A., as Agent, are entering into that certain Fourth Amended and Restated Loan and Security Agreement, dated as of the date hereof (as amended, restated, modified or supplemented from time to time, the "Loan Agreement"), which Loan Agreement shall amend and restate in full the Third Amended and Restated Loan Agreement.

WHEREAS, in connection with the Loan Agreement, the parties hereto desire to and hereby do amend and restate the Security Agreement in its entirety by this Mortgage.

WHEREAS, as a condition to the making of the Loans under the Loan Agreement, Borrower must provide collateral security to secure the prompt payment and performance of all Obligations (referred to herein collectively as the "Secured Obligations"), for the ratable benefit of the Lenders, which collateral includes, without limitation, the Collateral (as defined herein); and

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

. Capitalized terms used in this Mortgage which are not otherwise defined herein shall have the respective meanings ascribed to them in the Loan Agreement. The following terms shall have the following defined meanings (and shall be applicable to both the singular and the plural forms of such terms):

"Acknowledgement" shall mean the Lessee Acknowledgement and Consent executed by each Lessee whereby, among other things, Lessee acknowledges receipt of the Quiet Enjoyment Letter executed by Mortgagee.

"Act" shall mean the United States Federal Aviation Act of 1958, as amended, as in effect on the date of this Mortgage, as recodified in 49 U.S.C. §§ 40101 et seq., as amended, or any successor or substituted legislation at the time in effect and applicable.

"Airframe" means each airframe purchased by Borrower described in Exhibit B or in a Mortgage Supplement hereto, together with any and all Parts which are either incorporated or installed in or attached to such airframe or required to be subject to the lien and security interest of this Mortgage.

"APU" means, whether or not installed on the Aircraft, the auxiliary power unit of the manufacture and model described in Exhibit B or in a Mortgage Supplement hereto, together with any and all modules and Parts which are either incorporated or installed from time to time in or attached to such APU.

"Cape Town Convention" means the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, both of which were signed in Cape Town, South Africa on November 16, 2001, and including the Regulations for the International Registry and the Procedures for the International Registry, as promulgated thereafter.

"Collateral" shall have the meaning set forth in the Granting Clause (Article 2) hereof.

"Convention" means the Cape Town Convention, the Protocol, and related regulations and procedures, with an effective date in the United States of March 1, 2006.

"Default" means any event specified in Section 4.01 hereof, whether or not any requirement for the giving of notice, the lapse of time, or both or for the happening of any other condition, event or act has been satisfied.

"Engine" means each engine described in Exhibit B or in a Mortgage Supplement hereto (each of which has 550 or more rated takeoff horsepower or the equivalent of such horsepower), together with any and all Parts which are either incorporated or installed in or attached to such engine or required to be subject to the lien and security interest of this Mortgage.

"Event of Default" means any of the events specified in Section 4.01 hereof, provided that any requirement for the giving of notice, the lapse of time or both for the happening of any other condition, event or act has been satisfied.

"International Registry" means the international registry created pursuant to the Convention.

"Lease" means any "Lease" as such term is defined in the Loan Agreement, of the Collateral now existing or hereafter arising, including, but not limited to, each of the lease agreements described in Exhibit C hereto and in the Mortgage Supplement(s) hereto, upon which Borrower is the lessor or an assignee of the lessor as the same may be modified, amended or supplemented from time to time.

"Lease Event of Default" means an Event of Default as defined in a given Lease.

"Lessee" means, with respect to a given Lease, the "Lessee" as defined therein.

"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge or encumbrance, lease, right of others or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same legal effect as any of the foregoing (e.g., a lease which would be treated as a security agreement)), and, as applicable, the filing of, or consent or agreement to give, any financing statement or comparable document, or record or register any such document or interest under the Act or the Convention.

"Mortgage" means this Fourth Amended and Restated Mortgage and Security Agreement, as the same may be amended, modified or supplemented from time to time (including by means of one or more Mortgage Supplements).

"Mortgage Supplement" means a Mortgage Supplement, substantially in the form of Exhibit D hereto.

"Parts" means, at any time, all parts, components, equipment, instruments, propellers, landing gear, appliances, avionics, radio and radar devices, cargo handling systems and loose equipment that are at such time incorporated or installed in or attached to an Airframe, Engine or APU.

"Permitted Lessee" means, with respect to a given Lease, the Lessee thereunder and any substitute Lessee which is acceptable to Mortgagee.

"Proceeds" means whatever is receivable or received when the Airframe or any Engine or any APU or any Part or any Spare Part or other collateral is sold, exchanged, collected or otherwise disposed of, including, without limitation, all amounts payable or paid under insurance, requisition or other payments as the result of any loss (including an Event of Loss) or damage to such Airframe or Engine or APU or Part or Spare Part.

"Protocol" shall mean the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, adopted contemporaneously and as a part of the Cape Town Convention.

"Records" shall have the meaning set forth in the Granting Clause (Article 2) hereof.

"Security Deposit" means, with respect to a given Lease, the "Security Deposit" as such term is defined in such Lease.

"Spare Part" means an accessory, appurtenance or part of an Airframe (except an Engine) or appliance that is to be installed at a later time in an Airframe, Engine, APU, or appliance as described in Exhibit B or in a Mortgage Supplement hereto.

Notwithstanding anything to the contrary herein the following terms, when capitalized herein, shall have the meanings set forth in the Convention: "administrator," "aircraft object", "contracting state," "contract of sale," "international interest," "professional user," "searchable," and "situated in".

 

Borrower hereby assigns, mortgages, transfers and confirms unto Mortgagee, and hereby grants to Mortgagee, a first priority security interest in, all right, title and interest of Borrower in and to the following property, whether now owned or hereafter acquired, and all replacements of the following property as collateral security for the prompt and complete payment and performance when due of all the Secured Obligations (herein collectively called the "Collateral") to wit:

 

Borrower, at its own cost and expense, will, (a) prior to mortgaging an Airframe, (i) register with the International Registry, if applicable, or complete such other registration necessary under Applicable Law, the ownership interest of Borrower in each Airframe and (ii) cause each Airframe to be duly registered and at all times thereafter remain duly registered in the name of Borrower in accordance with the Act, if applicable, or other Applicable Law; (b) at all times maintain, service, repair, overhaul and test or cause to be maintained, serviced, repaired, overhauled and tested each Engine, APU, Part and Spare Part so as to keep the same in as good operating condition as when originally mortgaged hereunder, ordinary wear and tear excepted, and, in any event in the condition required by the relevant Lease; and (c) maintain or cause to be maintained (in the English language) all Records.

Borrower hereby confirms, represents and warrants that no further action, including any filing or recording of any document (including any financing statement in respect thereof under Article 9 of the Uniform Commercial Code of any applicable jurisdiction), is necessary or advisable to establish as against third parties the perfected first priority Lien of the Mortgagee on Borrower's interest in each Airframe, Engine, APU, Parts or Spare Parts pertaining thereto or any Lease and in order to properly file, register and record this Mortgage, the International Interest of the Mortgagee under the Mortgage, the assignment of International Interest of Mortgagee under the Lease, or the International Interest of the Lessor in each Airframe and Engine under the Lease, in any applicable jurisdiction in the United States. Borrower agrees to furnish Mortgagee with copies of all documents relating to the foregoing and with recording and registration data as promptly as practicable following the issuance of the same by the FAA and the International Registry.

Borrower will not create or suffer to exist any Lien upon or with respect to any of the Collateral, except for Permitted Liens.

Borrower shall faithfully keep complete and accurate books and records and make all necessary entries therein to reflect the quantities, costs, current values and locations of all the Collateral, the events and transactions giving rise thereto and all payments, credits and adjustments applicable thereto, shall keep Mortgagee fully and accurately informed as to the locations of all such books and records and shall permit Mortgagee's agents to have such access to them and to any other records pertaining to Borrower's business as Mortgagee may request from time to time. In addition, Borrower agrees to permit Mortgagee to visit the property of Borrower to inspect any Airframe, Engine, APU, Parts or Spare Parts, and in the case of any such items that are subject to a Lease, to the extent permitted under a given Lease, to arrange for Lessee to permit Mortgagee to inspect all items of Collateral. All inspections completed by Mortgagee pursuant to this Section 3.04 shall occur during normal business hours and upon reasonable prior notice to Borrower or Lessee (unless a Default or Event of Default has occurred and is continuing hereunder or under any Lease, in which event no notice shall be required and Mortgagee shall have access at any and all times). Borrower shall make available to Mortgagee 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 Mortgagee may reasonably request. Borrower shall deliver any document or instrument reasonably necessary for Mortgagee, as it may from time to time request, to obtain records from any service bureau, Governmental Authority, or other Person that maintains records for Borrower.

If any item or unit of the Collateral is now or hereafter the subject of a certificate of title or is required by law so to be, Borrower will promptly procure the necessary certificate of title and take all steps necessary to cause Mortgagee's Lien or security interest therein to be noted on the face of such certificate and undertake such other steps as may be necessary to assure that Mortgagee has a first priority, perfected security interest in each such item or unit of the Collateral and shall thereafter deposit the original of such certificate of title with Mortgagee.

Borrower shall immediately, and in any event within five (5) Business Days, notify Mortgagee of any event causing any deterioration, loss or depreciation in value of any substantial portion of the Collateral and Borrower's best estimate of the amount of such deterioration, loss or depreciation.

The provisions of this Mortgage shall to the extent permitted by Applicable Law remain in full force and effect and continue to be effective even if: (a) any petition is filed by or against Borrower for liquidation or reorganization; (b) Borrower becomes insolvent or makes an assignment for the benefit of creditors; (c) a receiver or trustee is appointed for all or any significant part of Borrower's assets; or (d) at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to Applicable Law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a "voidable preference," "fraudulent transfer" or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations and Mortgagee's Liens in the Collateral shall be reinstated and deemed reduced only by any amount paid and not so rescinded, reduced, restored or returned.

 

Upon the occurrence of any Event of Default, Mortgagee, at its option, may exercise any rights and remedies provided to Agent under the Loan Agreement and/or available at law or equity, including all rights and remedies provided under the Uniform Commercial Code or the Convention in any jurisdiction where enforcement is sought, which include but are not limited to, the following: (i) without notice accelerate the maturity of any part or all of the Secured Obligations and terminate any agreement for the granting of further credit to Borrower; (ii) sell, lease or otherwise dispose of Collateral at public or private sale; (iii) transfer any Collateral into its own name or that of its nominee; (iv) retain Collateral in satisfaction of the Secured Obligations, with notice of such retention sent to Borrower as required by law; (v) notify any parties obligated on any Collateral consisting of Accounts, Instruments, Chattel Paper, chooses in action or the like to make payment to Mortgagee and enforce collection of any Collateral; (vi) file any action or proceeding which Mortgagee deems necessary or appropriate to protect and preserve the right, title and interest of Mortgagee in the Collateral; (vii) exercise its banker's lien or right of setoff in the same manner as though the credit were unsecured and (viii) apply all or a portion of sums received or collected from or on account of Collateral, including the proceeds of any sales thereof, to the payment of the costs and expenses incurred in preserving and enforcing rights of Mortgagee including reasonable attorneys' fees (including the reasonably allocated costs of Mortgagee's in-house counsel, but in no event including general overhead and administrative expenses or expenses in excess of the cost of work if performed by comparable outside counsel), and after application of such sums to the Secured Obligations as set forth in the Loan Agreement, Mortgagee shall account to Borrower for any surplus remaining thereafter, and shall pay such surplus to the party entitled thereto, including any second secured party who has made a proper demand upon Mortgagee and has furnished proof to Mortgagee as requested in the manner provided by law; in like manner, Borrower agrees to pay to Mortgagee without demand any deficiency after any Collateral has been disposed of and proceeds applied as aforesaid.

Upon an Event of Default, Mortgagee may, without notice, take possession of the whole or any part of any Airframe, Engine, APU, Parts or Spare Parts and may exclude Borrower, and all persons claiming under Borrower, wholly or partly therefrom. At the request of Mortgagee, Borrower shall promptly deliver or cause to be delivered to Mortgagee or to whomsoever Mortgagee shall designate, at such time or times and place or places as Mortgagee may specify any item of Collateral specified by Mortgagee. In addition, Borrower will provide, without cost or expense to Mortgagee, storage facilities for such Airframe, Engine, APU, Parts or Spare Parts and will cause such Airframe, Engine, APU, Parts or Spare Parts to be maintained as required by the terms hereof and of the Loan Agreement. If Borrower shall for any reason fail to deliver such Airframe, Engine, APU, Parts or Spare Part or any part thereof after demand by Mortgagee, Mortgagee may, without being responsible for loss or damage, except to the extent caused by the gross negligence or willful misconduct of Mortgagee, (a) obtain a judgment conferring on Mortgagee the right to immediate possession or requiring Borrower to deliver immediate possession of all or part of such Airframe, Engine, APU, Parts or Spare Part to Mortgagee, to the entry of which judgment Borrower hereby specifically consents, or (b) with or, to the fullest extent provided by law, without such judgment, pursue the whole or any part of such Airframe, Engine, APU, Part or Spare Part wherever it may be found and enter any of the premises where such Airframe, Engine, APU, Parts or Spare Part may be and take possession of and remove the same. Upon every such taking of possession, Mortgagee may (but shall not be obligated to), from time to time, make all such reasonable expenditures for maintenance, insurance, repairs, replacements, alterations, additions and improvements to and of the Airframe, Engine, APU, Part or Spare Part as Mortgagee may deem proper, which amounts shall be reimbursed in accordance with Section 4.05.

Mortgagee shall be entitled, as a matter of right as against Borrower, without notice or demand and without regard to the adequacy of the security for the Secured Obligations by virtue of this Mortgage or any other Collateral or to the solvency of Borrower, upon the commencement of judicial proceedings by it to enforce any right under this Mortgage, to the appointment of a receiver of all or any part of the Collateral.

Borrower shall pay to Mortgagee on demand any and all reasonable expenses (including reasonable attorneys' fees and legal expenses) which may have been incurred by Mortgagee, with interest: (a) in the prosecution or defense of any action growing out of or connected with the subject matter of this Mortgage, the Secured Obligations, the Collateral or any of Mortgagee's rights therein or thereto; or (b) in connection with the custody, preservation, use, operation, preparation for sale or sale of any of the Collateral or in connection with obtaining possession of any of the Collateral, the incurring of all of which are hereby authorized to the extent Mortgagee deems the same advisable. Borrower's liability to Mortgagee for any such payment with interest shall be included in the Secured Obligations. The Proceeds of any Collateral received by Mortgagee at any time before or after default, whether from a sale or other disposition of the Collateral or otherwise, or the Collateral itself, may be applied to the payment in full or in part of such of the Secured Obligations and in such order and manner as Mortgagee may elect. Borrower, to the extent of its rights in the Collateral, waives and releases any right to require Mortgagee to collect any of the Secured Obligations from any other of the Collateral or any other collateral then held by Mortgagee under any theory of marshaling of assets or otherwise.

Borrower agrees, to the fullest extent that it lawfully may, that Borrower will not (and hereby irrevocably waives its right to) at any time plead, or claim the benefit or advantage of, any appraisement, valuation, stay, extension, moratorium or redemption law now or hereafter in force, in order to prevent or hinder the enforcement of this Mortgage or the absolute sale of the Collateral.

No remedy herein conferred upon Mortgagee is intended to be exclusive of any other remedy, but every such remedy shall be cumulative and shall be in addition to every other remedy herein conferred or now or hereafter existing in law. In addition, to the remedies provided in this Mortgage, the Mortgagee shall have and enjoy all of the remedies provided to it in the Convention.

Proceeds of any sale, lease or other disposition or other realization upon any Collateral pursuant to this Mortgage and all other sums realized or held by the Mortgagee under this Mortgage or any proceedings hereunder (including any proceeds of insurance) shall be applied by Mortgagee and any Lender upon receipt as set forth in the Loan Agreement.

Borrower hereby irrevocably appoints Mortgagee the true and lawful attorney of Borrower for the duration of this Mortgage (with full power of substitution) in the name, place and stead of, and at the expense of, Borrower in connection with the enforcement of the rights and remedies provided for in this Article 4: (a) to give any necessary receipts or acquittances for amounts collected or received hereunder; (b) to make all necessary transfers of the Airframe, Engine, APU, Parts or Spare Parts in connection with any sale, lease or other disposition made pursuant hereto; (c) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale, lease or other disposition, Borrower hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant hereto; (d) to execute in Borrower's name and file one or more financing, amendment and continuation statements covering the Collateral in order to perfect or continue a perfected Mortgagee's Lien upon the Collateral if Borrower fails to do so promptly after request therefore by Mortgagee, including filing any financing or continuation statement without the signature of Borrower to the extent permitted by Applicable Law; (e) to register, amend, assign, subordinate, consent to or discharge any registrations on the International Registry; (f) to sign any agreements, orders or other documents in connection with or pursuant to a given Lease; (g) to receive, open, and retain all mail addressed to Borrower relating to the Collateral, (h) to make, settle, and adjust all claims under Borrower's or any Lessee’s policies of insurance and make all determinations and decisions with respect to such policies of insurance relating to the Collateral; and (i) to settle and adjust disputes and claims respecting the Accounts directly with Account Debtors, for amounts and upon terms which Mortgagee determines to be reasonable, and Mortgagee may cause to be executed and delivered any documents and releases which Mortgagee determines to be necessary. Except for item (d) above, the power of attorney granted hereby may not be exercised unless an Event of Default has occurred and is continuing and Mortgagee has notified Borrower that it will enforce its security interest in the Collateral if such notice is specifically required under the applicable Loan Documents (including pursuant to any notice and cure rights). The appointment of Mortgagee as Borrower's attorney-in-fact, and each and every one of Mortgagee's rights and powers, being coupled with an interest, is irrevocable until all of the Secured Obligations have been fully repaid and performed. MORTGAGEE AND ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, LENDERS OR REPRESENTATIVES SHALL NOT BE RESPONSIBLE TO BORROWER OR ANY OTHER PERSON FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED UNDER THE POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. Nevertheless, if so requested by Mortgagee or a purchaser, lessor or lessee, Borrower shall ratify and confirm any such sale, lease or other disposition by executing and delivering to Mortgagee or such purchaser, lessor or lessee all proper bills of sale, assignments, releases, leases and other instruments as may be designated in any such request. Any such attorney of Borrower shall have full power to do any and all things necessary to be done with respect to the above transactions as fully and effectually as Borrower might do, and Borrower hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. The rights of the Mortgagee under this section shall be in addition to the rights of the Mortgagee under the IDERA, as set forth in section 3.02 above.

To the maximum extent permitted by Applicable Law, Borrower waives all claims, damages, and demands against Mortgagee, its Affiliates, agents, and the officers and employees of any of them arising out of the repossession, retention or sale of any Collateral and any other acts or failure to act in connection with Mortgagee's rights and remedies hereunder, except such as are determined in a final judgment by a court of competent jurisdiction to have arisen out of the gross negligence or willful misconduct of such Person.

Borrower waives: (a) all right to require Mortgagee to proceed against any other person including any other borrower hereunder or under the Loan Agreement or to apply any Collateral Mortgagee may hold at any time or to pursue any other remedy, Collateral, endorsers or guarantors may be released, substituted or added without affecting the liability of Borrower hereunder; (b) the defense of the statute of limitations in any action upon any obligations of Borrower secured hereby; (c) any right of subrogation and any right to participate in Collateral until all obligations secured hereby have been paid in full; and (d) to the fullest extent permitted by law, any right to oppose the appointment of a receiver or similar official to operate Borrower's business after the occurrence and during the continuance of an Event of Default.

 

Borrower and Mortgagee acknowledge and agree for the benefit of each Permitted Lessee that notwithstanding any other provisions hereof to the contrary, including but not limited to Mortgagee’s remedies under Sections 4.02 and 4.04, the Lien of this Mortgage shall be expressly subject to all of the rights of such Permitted Lessee under the applicable Lease so long as no Event of Default under a given Lease has occurred and so long as the Lessee performs its obligations under the Acknowledgement.

Borrower and Mortgagee acknowledge and agree for the benefit of each Permitted Lessee that notwithstanding any other provision hereof to the contrary:

One originally executed counterpart of each Lease included in the Collateral shall be marked "original" and legended in form satisfactory to Mortgagee to indicate that such Lease is the original of a given Lease with all other copies marked "copy." The original Lease shall be delivered by Borrower to Mortgagee or its designee together with the original bill of sale for the equipment being leased, prior to said Lease being included in the Borrowing Base (subject to the terms and conditions in the Loan Agreement).

 

No amendment or waiver of any provision of this Mortgage, or consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Mortgagee, and registered with the International Registry if required by Mortgagee, and any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

All notices, requests and demands to or upon the respective parties hereto to be effective, shall be in writing and shall be personally delivered or sent by facsimile (with subsequent written confirmation) or by registered or certified first class mail, postage prepaid, return receipt requested, or by nationally recognized overnight (or next business day) courier service and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, on the day that such facsimile is transmitted, or, if by first class mail, five (5) days following the date on which such writing is deposited with the postal service, or the day after the date when deposited with a nationally recognized overnight (or next business day) courier service, addressed as follows, or to such other address as either party hereto may hereafter specify in writing to the other party:

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 STATE OF NEW YORK AND SITTING IN THE COUNTY OF NEW YORK, NEW YORK, RESPECTIVELY, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE PARTIES HERETO PERTAINING TO THIS MORTGAGE OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT EACH OF THE BORROWER AND MORTGAGEE 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 MORTGAGE SHALL BE DEEMED OR OPERATE TO PRECLUDE MORTGAGEE OR ANY CREDIT FACILITY LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS DUE UNDER THE CREDIT FACILITY, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR SUCH OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF MORTGAGEE OR SUCH 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 TO BORROWER AS SET FORTH IN SECTION 6.02 HEREIN AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON SUCH PARTY'S ACTUAL RECEIPT THEREOF.

The invalidity of any one or more of the provisions of this Mortgage shall not affect the remaining provisions of this Mortgage. If any one or more of the provisions of this Mortgage should be held by any court of law to be invalid, or should operate to render this Mortgage invalid or to impair the lien and security interest of this Mortgage on all or the major portion of the property intended to be mortgaged hereunder, this Mortgage shall be construed as if such provisions had not been contained therein. In the event of a dispute between any of the parties hereto over the meaning of this Mortgage, all parties shall be deemed to have been the drafter hereof, and any Applicable Law that states that contracts are construed against the drafter shall not apply.

This Mortgage (including all exhibits hereto) and the documents executed pursuant hereto constitute the entire agreement of the parties with respect to the subject matter hereof and there are no other prior or contemporaneous written or oral understandings with regard to the subject matter hereof.

This Mortgage may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

In the event of a conflict between the terms of this Mortgage and the terms of the Loan Agreement, the terms of the Loan Agreement shall control.

The Section titles and Table of Contents contained in this Mortgage and any other Loan Document are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

Time is of the essence for performance of any obligations under this Mortgage.

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amended and Restated Mortgage and Security Agreement to be duly executed and delivered as of the day and year first above written.

AEROCENTURY CORP.,

as Borrower

By /s/ Frank Pegueros

Name: Frank Pegueros