Current Report Filing (8-k)
November 02 2020 - 4:34PM
Edgar (US Regulatory)
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): October 30,
2020
AEROCENTURY CORP.
(Exact name of Registrant as specified in its charter)
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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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 the
Exchange 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
On October 30, 2020, Drake Asset Management Jersey Limited
("Drake"), purchased all of the indebtedness of AeroCentury Corp.
(the "Company") held by the lenders (the "MUFG Lenders") under the
Fourth Amended and
Restated Loan and Security Agreement dated as of May 1, 2020
(the "Loan Agreement"), totalling approximately $87.9
million, as well as all of the Company's indebtedness
to MUFG Bank, Ltd.
(totalling approximately $3.1 million) that arose from termination
of interest rate swaps entered into with respect to such Loan
Agreement indebtedness. The purchase and sale was consented
to by the Company pursuant to a Consent and Release Agreement of
Borrower Parties, entered into by the Company and its
subsidiaries. The closing of this debt purchase transaction
satisifed the requirement under the Loan Agreement for execution of
a
strategic alternative ("Strategic Alternative") with
respect to the MUFG Loan indebtedness satisfactory to the MUFG
Lenders.
On the same day,
the Company entered into an Amendment No. 1 to the Loan Agreement
("Amendment No. 1") with Drake and UMB Bank, N.A., the replacement
Administrative Agent under the Loan Agreement, to
amend the Loan Agreement as follows:
●
Deferral of the
cash component of the interest payments due under the Loan
Agreement, commencing with the payments due for March 2020, and
continuing on each consecutive month thereafter, which deferred
interest is to be capitalized and added to the principal balance of
the indebtedness on each respective interest payment due date,
until such time as the indebtedness is repaid.
●
Deletion of the
requirement for the Company's execution of a Strategic Alernative
and of the milestones therefor;
●
Deletion of the
requirement for the Company's maintenance of a restricted account
held with an MUFG Lender to hold aircraft sales proceeds pending
application toward the Loan Agreement
indebtedness;
●
Replacement of
references to "MUFG Union Bank, N.A.," with "UMB, Bank, N.A.", the
new Administrative Agent under the Loan
Agreement;
●
Requirement
of approval by Drake for any "Material Amendments" to leases
for the collateral, defined as any amendment of,
or waiver or consent under, any lease involving a modification of
lease payments, any reduction in, or waiver or deferral of, Rent, a
modification to any residual value guaranty, any modification that
adversely affects the collateral or the rights and interests of the
lender and/or administrative agent in the collateral, any reduction
of any amounts payable to any lender or Agent under any indemnity,
or any change to the state of registration of aircraft collateral;
and
●
Deletion of certain
certain financial reporting requirements and changes to required
frequency of certain other surviving reporting
requirements.
The borrowings under the Loan Agreement continue to be
secured by a first priority lien held by Drake, which lien is
documented in an amended and restated mortgage and security
agreement assigned to Drake by the MUFG Lenders, covering all
of the Company's assets, except for two aircraft on lease to
Kenyan lesses and three aircraft that are subject to special
purpose financing held by a subsidiary of the Company.
The
foregoing description of the Amendment No. 1 is intended to be a
summary and is qualified in its entirety by the copy of Amendment
No. 1 filed as Exhibit 10.2 hereto.
The Company and
Drake are currently engaged in discussions regarding the
satisfaction and discharge of the Loan Agreement
indebtedness.
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Item
2.03.
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Creation of a
Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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The
information set forth in Item 1.01 of this Current Report on Form
8-K is incorporated into this Item 2.03 by
reference.
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Item
9.01
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Financial
Statements and Exhibits
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(d) Exhibits
10.1
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Form of Consent and Release Agreement
of Borrower Parties, entered into by the Company and its
subsidiaries, JetFleet Holding Corp. and JetFleet Management
Corp.
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10.2
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Form of Amendment
No. 1 to Fourth Amended and Restated Loan and Security Agreement,
dated as of October 30, 2020, by and between the Company, Drake
Asset Management Jersey Limited, and UMB Bank,
N.A.
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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:
November 2, 2020
AEROCENTURY
CORP
By: /s/
Harold M. Lyons
Harold
M. Lyons
Sr.
Vice President & Chief Financial Officer
Aerocentury (AMEX:ACY)
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