-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G/qBWMtUlg0ugRYN+B2H8DAt+lDvm0RR8ZvVL6Y1UH3kBxNb/NpV/QE1tT5kD3hG PtYl6Jgs+tu7pOaVlEkhvA== 0000930832-04-000006.txt : 20040602 0000930832-04-000006.hdr.sgml : 20040602 20040602141825 ACCESSION NUMBER: 0000930832-04-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20040602 ITEM INFORMATION: Other events FILED AS OF DATE: 20040602 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JETFLEET III CENTRAL INDEX KEY: 0000930832 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943208983 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-84336-LA FILM NUMBER: 04843921 BUSINESS ADDRESS: STREET 1: 1440 CHAPIN AVE STREET 2: STE 310 CITY: BURLINGAME STATE: CA ZIP: 94010 BUSINESS PHONE: 4156963900 MAIL ADDRESS: STREET 1: 1440 CHAPIN AVENUE STREET 2: SUITE 310 CITY: BURLINGAME STATE: CA ZIP: 94010 8-K 1 jf306_028k.txt JUNE 2, 2004 8K DISCLOSING TRANSFER AGREEMENTS 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): May 27, 2004 JETFLEET III (Exact name of Registrant as specified in its charter) CALIFORNIA 94-3208983 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1440 Chapin Avenue, Suite 310 Burlingame, CA 94010 (Address of principal executive offices) (Zip Code) 650-340-1880 (Registrant's telephone number including area code) Not applicable (Former name and former address. if changed since last report) Item 5. Other Events On May 27, 2004, as previously agreed to by the Company pursuant to a letter agreement with Wells Fargo Bank Northwest, National Association, as Indenture Truste (the "Trustee") dated April 8, 2004 , the Company entered into agreements with Trustee, and Wells Fargo Bank, National Association ("Assignee"), transferring to Assignee all of the Company's right, title and interest in, to and under, the Company's aircraft portfolio and related agreements. Pursuant to the agreements, the Company also transferred all remaining cash funds to the Trustee. Upon such transfer in lieu of foreclosure, the Trustee has now assumed responsibility for liquidating the assets and distributing net proceeds to the Company's Bondholders in repayment of out- standing Bondholder Indebtedness. 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: June 2, 2004 JETFLEET III By: /s/ Neal D. Crispin Neal D. Crispin, Chairman of the Board and President Exhibits: 10.1 Form of Letter Agreement, dated April 8, 2004, between the Company and Wells Fargo Bank, Northwest, as Indenture Trustee (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10KSB, for the quarter ended March 31, 2004 10.2 Form of Transfer Agreement,dated May 27, 2004, between the Company, the Trustee and Assignee for S/N 696 10.3 Form of Transfer Agreement,dated May 27, 2004, between the Company, the Trustee and Assignee for S/N 106 10.4 Form of Transfer Agreement,dated May 27, 2004, between the Company, the Trustee and Assignee for S/N 751 10.5 Form of Transfer Agreement,dated May 27, 2004, between the Company, the Trustee and Assignee for S/N 024 10.6 Form of Transfer Agreement,dated May 27, 2004, between the Company, the Trustee and Assignee for S/N 640 EX-10.2 2 jf3sn696.txt SN 696 TRANSFER AGREEMENT TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE dated as of May 27, 2004 among (i) JETFLEET III, a California corporation ("Assignor"), (ii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (f/k/a First Security Bank, National Association), as indenture trustee ("Indenture Trustee") under an Amended and Restated Indenture of Trust dated as of September 22, 1995 (as heretofore amended, supplemented or modified, the "Indenture"), between Indenture Trustee and Assignor and (iii) WELLS FARGO BANK, NATIONAL ASSOCIATION, as owner trustee (in such capacity, ("Assignee") under a Trust Agreement dated of even date herewith between the Owner Trustee and the Indenture Trustee (the "Trust Agreement"). RECITALS A. Assignor and Indenture Trustee are party to the Indenture which sets forth, inter alia, terms and conditions relating to the issuance of JetFleet III Series A Secured Bonds (the "Bonds") by Assignor, and the creation and granting of a security interest for the benefit of Indenture Trustee in (among other items of property) the items of equipment identified on Exhibit A hereto (together with the engines, all parts, avionics, accessories, instruments, modules, appurtenances, furnishings, logs, manuals, books, film and records related thereto, the "Equipment") and the Relevant Agreements (as defined below); B. Assignor has previously entered into certain lease and other agreements identified on Exhibit B hereto covering the Equipment (together with all amendments and supplements thereto, and all related documents, certificates and instruments to the date hereof, the "Relevant Agreements") and has received, in connection therewith, various cash security deposits, maintenance reserves and rent payments, which amounts are held in the accounts described on Exhibit C hereto (such amounts, collectively, the "Cash Collateral"); C. Assignor has defaulted on its obligations to the holders of the Bonds to make payments of principal and interest on the Bonds, which default constitutes an "Event of Default" under Sections 5.01(a) and 5.01(b) of the Indenture, and as a result of such default Indenture Trustee desires to exercise the remedy available to it pursuant to Section 5.04(d) of the Indenture for the benefit of the holders of Bonds; D. The parties hereto anticipate that the proceeds from the sale of the assets subject to the lien of the Indenture will be less than amount outstanding under the Bonds and in order to reduce the costs involved in realizing the value of the Trust Estate (as defined in the Indenture), Assignor has agreed to transfer title to the Equipment to the Indenture Trustee or its nominee in partial satisfaction of its obligations under the Indenture in accordance with Section 9-620 and ff. of the California Uniform Commercial Code and the Letter Agreement between the Indenture Trustee and the Assignor dated April 8, 2004; and E. Indenture Trustee desires to cause legal title to the Equipment to be transferred to Assignee for the benefit of the Indenture Trustee and the ultimate benefit of the holders of Bonds, and therefore directs, pursuant to the terms and conditions set forth below, Assignor to sell, transfer and assign to Assignee all of its right, title and interest in, to and under, the Equipment, the Relevant Agreements and the Cash Collateral (the Cash Collateral, collectively with the Equipment and the Relevant Agreements, the "Assigned Property") in lieu of foreclosure. AGREEMENT NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor, Indenture Trustee and Assignee agree as follows: 1. Assignment; Transfer in Lieu of Foreclosure. Assignor hereby sells, assigns, transfers and sets over unto Assignee, at the direction of Indenture Trustee, in lieu of foreclosure and in partial satisfaction of Assignor's obligations under the Indenture as set forth in the recitals to this Agreement, all of Assignor's right, title and interest in and to the Assigned Property, including without limitation all of its right, title and interest in and to the Equipment and all payments and other amounts due and to become due under the Relevant Agreements, in each case, from and after the date hereof. 2. Acceptance and Assumption; Partial Satisfaction of Bond Obligations. The Assignee hereby accepts (subject to the terms of the Trust Agreement) the assignment of all of Assignor's right, title and interest in and to the Assigned Property pursuant to the terms of this Agreement. The Indenture Trustee hereby accepts the foregoing assignment to the Assignee in partial satisfaction of the obligations of Assignor under the Indenture and agrees to apply the proceeds from disposition of the Assigned Property against such obligations of Assignor as are outstanding under the Indenture. 3. Assignor Representations and Acknowledgement. 3.1 Assignor represents and warrants to the Assignee that at the time of the execution of this Agreement: (a) Organization, Standing and Power. Assignor is a corporation duly organized and validly existing in good standing under the laws of the State of California and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. (b) Title. Except for the lien of the Indenture and the lease agreement between Assignor and Loganair Limited identified as a Relevant Agreement on Exhibit B hereto, Assignor has legal title to the Assigned Property, free and clear of all liens, encumbrances, equities, security interests, restrictions on transfer, and of any other claims whatsoever arising by or through Assignor. (c) No Conflicts. The execution, delivery and performance by Assignor of this Agreement and a FAA bill of sale (or such other similar document as shall be required to record the transfer with the applicable governmental authority) (A) do not require the approval or consent of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority, court, trustee or holder of any indebtedness or obligation on the part of Assignor other than those that have been obtained, made, done or taken, (B) do not and will not contravene any law, rule, regulation, order, writ, injunction or decree applicable to Assignor or Assignor's Articles of Incorporation or By-Laws, and (C) do not and will not result in any breach of or conflict with the terms and provisions of any agreement or instrument to which Assignor is a party or by which Assignor or its properties or assets may be bound or affected. (d) Litigation. There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of Assignor, threatened against Assignor before or by any court, administrative agency or other governmental authority which, if adversely determined, would impair the validity of, or the execution and delivery by Assignor of, this Agreement or any Operative Document or the performance by Assignor of its obligations hereunder or thereunder. (e) Relevant Agreements. Exhibit B sets forth an exhaustive list of all documents and agreements entered into by Assignee with respect to the Equipment (other than the Indenture). Except for the Relevant Agreements and the Indenture, there are no documents that affect in any material respect the rights, interests, duties, obligations or liabilities of the Assignor in respect of the Assigned Property. Assignor has provided Assignee with true and correct copies of all amendments, supplements, and modifications to each Relevant Agreement and the Indenture. (f) No Amounts Due. There are no amounts owed by Assignor to any lessee or sublessee under the Relevant Agreements and no such amount shall be owed by Assignee to any lessee or sublessee as a result of the consummation of the transactions contemplated hereby; provided, however, that Assignor makes no representations as to the existence of any reimbursement obligation owed to Loganair Limited ("Loganair") out of non-refundable reserve payments for maintenance performed by Loganair of which Assignor has not been informed or notified. Assignor has received no information concerning, or notice of, the existence of any such maintenance or reimbursement obligation as of the date hereof. 3.2 ASSIGNOR SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE EQUIPMENT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER (EXCEPT FOR SUCH TITLE REPRESENTATION SET FORTH IN SECTION 3.1(b)), EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. 3.3 Assignor acknowledges that the "Event of Default" under Section 5.01(a) and 5.01(b) of the Indenture has occurred and is continuing, as referred to in Section C of the Recitals hereto. 4. Bill of Sale; Relevant Agreements; Account Information. Assignor shall promptly deliver to Assignee upon the execution of this Agreement (i) executed originals of such registration or recordation documents as shall have reasonably been requested by Assignee to register or record the transactions contemplated herein with any applicable governmental authorities (including, but not limited to a FAA bill of sale), (ii) executed originals of each of the Relevant Agreements (iii) all other documents, instruments or agreements which relate in any material respect to the Relevant Agreements and (iv) copies of the files (including without limitation correspondence with lessees and files pertaining to maintenance) of Assignee that relate to the Equipment. Immediately upon execution hereof, all Cash Collateral which has not already been placed in the Sinking Fund Account (as defined in the Indenture) shall be remitted to Assignee's account at: Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. 5. Indemnification. Assignor shall indemnify and hold harmless Assignee and its successors and assigns from and against any and all claims, including, but not limited to reasonable attorneys fees and costs with respect to such claims, resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of Assignor under this Agreement or Assignor's failure to perform any of its obligations under the Indenture or the Relevant Agreements prior to the date hereof. This indemnification shall survive the consummation of the transactions contemplated by this Agreement and its termination. 6. Further Assurances; Notices; Payments. 6.1 Assignor will promptly and duly execute and deliver such further documents, deeds, bills of sale, and assurances and take such further action as may from time to time be necessary to carry out the intent and purpose of this Agreement, including, without limitation, if requested by Assignee, documents necessary for the deregistration and/or reregistration of the Equipment and/or filing of assignments of the Relevant Agreements with the appropriate governmental authorities. If requested by Assignee, Assignor shall use its reasonable best efforts to cause a lessee under a Relevant Agreement to amend and reissue in the name of the Assignee any documentation originally issued in the name of Assignor under the terms of such Relevant Agreement, and Assignor shall use its reasonable best efforts to cause all payments of amounts due under a Relevant Agreement (from a lessee or sublessee thereunder) to be made to Assignee directly. All reasonable costs and expenses incurred by Assignor, or payable to a lessee or lessee's counsel, in connection with the negotiation and execution of such documentation shall be paid by Assignee from the Cash Collateral, upon presentation of an original invoice for such reasonable costs and expenses. 6.2 Assignor shall obtain from each lessee of the Equipment a written acknowledgement in the form of Annex 1 hereto. 6.3 Assignor shall notify Assignee of, and shall hold in trust for the benefit of Assignee, any payments received by Assignor in respect of the Relevant Agreements. Upon receipt, and without request or demand therefor, any such payment shall be promptly remitted by Assignor to the account of Assignee specified in Section 4 hereof. 6.4 All notices required to be given to Assignor in its capacity as "Lessor" under and as defined in any of the Relevant Agreements or hereunder shall be promptly transmitted by Assignor from and after the date hereof to Wells Fargo Bank, National Association, Sixth and Marquette, MAC N9303-120, Minneapolis, MN, 55479, Fax: (612) 667-7337 Attention: Virginia A. Housum. 7. Reservation of Rights. Indenture Trustee does not waive, and hereby expressly reserves, all rights and remedies available to it pursuant to the Indenture and under any applicable law. The transfer in lieu of foreclosure effected hereby shall be without prejudice to any such right or remedy so provided, which rights and remedies may be exercised at any time hereafter in Indenture Trustee's sole discretion. 8. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Entire Agreement. This Agreement supersedes all previous arrangements and agreements, whether written or oral, and comprises the entire agreement between the parties hereto, in respect of the subject matter hereof. 10. Severability. If any provision hereof shall be held invalid or unenforceable by any court or as a result of future administrative or legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof. 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. JETFLEET III, a California corporation By:________________________ Name: Its: WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, as Indenture Trustee By:________________________ Name: Its: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Owner Trustee By:________________________ Name: Its: EXHIBIT A EQUIPMENT INFORMATION One (1) de Havilland DHC-6-310 aircraft, together with two Pratt & Whitney PW PT6A-27 engines, two Hartzell HC-B3TN-3DY propellers and landing gear, all bearing the following marks: - ------------------------------------------ -------------------------- ------------------------- ---------------------- Aircraft Engines (Manufacturer's Propellers Serial No.) (Manufacturer's Serial No.) Lessee Name - ------------------------------------------ -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- Manufacturer's Serial Registration No. No. - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- 696 G-BZFP PCE41186 and PCE40639 BUA27280 and BUA27633 Loganair Limited - ------------------------ ----------------- -------------------------- ------------------------- ----------------------
EXHIBIT B DESCRIPTIONS OF RELEVANT AGREEMENTS 1. Aircraft Purchase Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 31, 1997. 2. FAA Aircraft Bill of Sale between JetFleet III and Aloha IslandAir, Inc. dated January 31, 1997. 3. Aircraft Lease Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 31, 1997. 4. Aircraft Lease Agreement between JetFleet III and Loganair Limited dated June 29, 2000, as amended, modified or supplemented from time to time covering the de Havilland aircraft more completely described on Exhibit A above. 5. Certificate of Insurance issued by Marsh Ltd dated November 16, 2003 and relating to the Equipment. 6. Any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection with items 1 through 5 above, or otherwise relating to the Equipment. EXHIBIT C CASH COLLATERAL - ------------------------------------------------------------------ -------------------------- Cash Item Amount - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Security Deposit (Loganair Limited) $50,000 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (Aloha IslandAir, Inc.) $85,612 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (Loganair Limited) $171,686 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- TOTAL CASH COLLATERAL $307,298 - ------------------------------------------------------------------ --------------------------
Accounts The Cash Collateral is mingled with the other funds of the Assignor currently held in the following accounts: First Bank & Trust checking Account [deleted from filing] Fiserv Investor Services, Incorporated Account [deleted from filing] Franklin Money Fund Account [deleted from filing] ANNEX 1 [FORM OF LETTER TO LESSEE] LoganAir Limited ("Loganair") St. Andrews Drive, Glasgow Airport Paisley, Renfrewshire PA3 2TG, Scotland TEL 011 44 141 848 7594 FAX 011 44 141 887 6020 Attn: Chief Executive - Jim Cameron [Date] Re: Operating Lease Agreement between JetFleet III ("Lessor") and Loganair dated as of June 29, 2000 (the "Lease") covering one (1) de Havilland DHC-6-310 aircraft bearing UK registration mark G-BZFP and manufacturer's serial number 696, together with two Pratt & Whitney PW PT6A-27 engines bearing manufacturer's serial number PCE41186 and PCE40639, respectively, and two Hartzell HC-B3TN-3DY propellers bearing manufacturer's serial number BUA14215 and BUA26773 (the "Aircraft"). To Whom It May Concern: Reference is made to (i) the Lease, (ii) the Amended and Restated Indenture of Trust dated as of September 22, 1995 (the "Indenture") between Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, National Association), as indenture trustee thereunder ("Indenture Trustee"), and Lessor, and (iii) the Transfer Agreement and Deed in Lieu of Foreclosure dated as of May __, 2004 (the "Transfer Agreement"), a copy of which is attached hereto. Loganair acknowledges the notice and instructions herein contained as adequate notice of the transactions contemplated by the Transfer Agreement. Pursuant to the Transfer Agreement, Lessor has transferred all of its right, title and interest in and to, inter alia, the Lease and the Aircraft to Wells Fargo Bank, National Association, as owner trustee ("Owner Trustee"). On and after the date hereof, all payments due to Lessor under the Lease and any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection therewith (the "Lease Documents") shall be made to Owner Trustee, at its account at Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. Loganair will cause Indenture Trustee and Owner Trustee to be added as additional insureds under the liability insurance and Owner Trustee to be added as sole loss payees under the hull insurance until the expiration of the Lease. Loganair acknowledges and agrees that Lessor is not in default of any of its obligations under the Lease Documents and all payment obligations owed by the Lessor to Lessee under the Lease Documents have been satisfied as of the date hereof. Please indicate your acceptance of the above by signing below. Very truly yours, JETFLEET III, a California corporation By:_____________________ Name: Title: Acknowledged and Agreed: LOGANAIR LIMITED By:____________________ Name: Title: EX-10.3 3 jf3sn106.txt EXHIBIT 10.3 AGREEMENT REGARDING S/N 106 TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE dated as of May 27, 2004 among (i) JETFLEET III, a California corporation ("Assignor"), (ii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (f/k/a First Security Bank, National Association), as indenture trustee ("Indenture Trustee") under an Amended and Restated Indenture of Trust dated as of September 22, 1995 (as heretofore amended, supplemented or modified, the "Indenture"), between Indenture Trustee and Assignor and (iii) WELLS FARGO BANK, NATIONAL ASSOCIATION, as owner trustee (in such capacity, ("Assignee") under a Trust Agreement dated of even date herewith between the Owner Trustee and the Indenture Trustee (the "Trust Agreement"). RECITALS A. Assignor and Indenture Trustee are party to the Indenture which sets forth, inter alia, terms and conditions relating to the issuance of JetFleet III Series A Secured Bonds (the "Bonds") by Assignor, and the creation and granting of a security interest for the benefit of Indenture Trustee in (among other items of property) the items of equipment identified on Exhibit A hereto (together with the engines, all parts, avionics, accessories, instruments, modules, appurtenances, furnishings, logs, manuals, books, film and records related thereto, the "Equipment") and the Relevant Agreements (as defined below); B. Assignor has previously entered into certain lease and other agreements identified on Exhibit B hereto covering the Equipment (together with all amendments and supplements thereto, and all related documents, certificates and instruments to the date hereof, the "Relevant Agreements") and has received, in connection therewith, various cash security deposits, maintenance reserves and rent payments, which amounts are held in the accounts described on Exhibit C hereto (such amounts, collectively, the "Cash Collateral"); C. Assignor has defaulted on its obligations to the holders of the Bonds to make payments of principal and interest on the Bonds, which default constitutes an "Event of Default" under Sections 5.01(a) and 5.01(b) of the Indenture, and as a result of such default Indenture Trustee desires to exercise the remedy available to it pursuant to Section 5.04(d) of the Indenture for the benefit of the holders of Bonds; D. The parties hereto anticipate that the proceeds from the sale of the assets subject to the lien of the Indenture will be less than amount outstanding under the Bonds and in order to reduce the costs involved in realizing the value of the Trust Estate (as defined in the Indenture), Assignor has agreed to transfer title to the Equipment to the Indenture Trustee or its nominee in partial satisfaction of its obligations under the Indenture in accordance with Section 9-620 and ff. of the California Uniform Commercial Code and the Letter Agreement between the Indenture Trustee and the Assignor dated April 8, 2004; and E. Indenture Trustee desires to cause legal title to the Equipment to be transferred to Assignee for the benefit of the Indenture Trustee and the ultimate benefit of the holders of Bonds, and therefore directs, pursuant to the terms and conditions set forth below, Assignor to sell, transfer and assign to Assignee all of its right, title and interest in, to and under, the Equipment, the Relevant Agreements and the Cash Collateral (the Cash Collateral, collectively with the Equipment and the Relevant Agreements, the "Assigned Property") in lieu of foreclosure. AGREEMENT NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor, Indenture Trustee and Assignee agree as follows: 1. Assignment; Transfer in Lieu of Foreclosure. Assignor hereby sells, assigns, transfers and sets over unto Assignee, at the direction of Indenture Trustee, in lieu of foreclosure and in partial satisfaction of Assignor's obligations under the Indenture as set forth in the recitals to this Agreement, all of Assignor's right, title and interest in and to the Assigned Property, including without limitation all of its right, title and interest in and to the Equipment and all payments and other amounts due and to become due under the Relevant Agreements, in each case, from and after the date hereof. 2. Acceptance and Assumption; Partial Satisfaction of Bond Obligations. The Assignee hereby accepts (subject to the terms of the Trust Agreement) the assignment of all of Assignor's right, title and interest in and to the Assigned Property pursuant to the terms of this Agreement. The Indenture Trustee hereby accepts the foregoing assignment to the Assignee in partial satisfaction of the obligations of Assignor under the Indenture and agrees to apply the proceeds from disposition of the Assigned Property against such obligations of Assignor as are outstanding under the Indenture. 3. Assignor Representations and Acknowledgement. 3.1 Assignor represents and warrants to the Assignee that at the time of the execution of this Agreement: (a) Organization, Standing and Power. Assignor is a corporation duly organized and validly existing in good standing under the laws of the State of California and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. (b) Title. Except for the lien of the Indenture and the lease agreement between Assignor and Caribbean Star Airlines Limited identified as a Relevant Agreement on Exhibit B hereto, Assignor has legal title to the Assigned Property, free and clear of all liens, encumbrances, equities, security interests, restrictions on transfer, and of any other claims whatsoever arising by or through Assignor. (c) No Conflicts. The execution, delivery and performance by Assignor of this Agreement and a FAA bill of sale (or such other similar document as shall be required to record the transfer with the applicable governmental authority) (A) do not require the approval or consent of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority, court, trustee or holder of any indebtedness or obligation on the part of Assignor other than those that have been obtained, made, done or taken, (B) do not and will not contravene any law, rule, regulation, order, writ, injunction or decree applicable to Assignor or Assignor's Articles of Incorporation or By-Laws, and (C) do not and will not result in any breach of or conflict with the terms and provisions of any agreement or instrument to which Assignor is a party or by which Assignor or its properties or assets may be bound or affected. (d) Litigation. There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of Assignor, threatened against Assignor before or by any court, administrative agency or other governmental authority which, if adversely determined, would impair the validity of, or the execution and delivery by Assignor of, this Agreement or any Operative Document or the performance by Assignor of its obligations hereunder or thereunder. (e) Relevant Agreements. Exhibit B sets forth an exhaustive list of all documents and agreements entered into by Assignee with respect to the Equipment (other than the Indenture). Except for the Relevant Agreements and the Indenture, there are no documents that affect in any material respect the rights, interests, duties, obligations or liabilities of the Assignor in respect of the Assigned Property. Assignor has provided Assignee with true and correct copies of all amendments, supplements, and modifications to each Relevant Agreement and the Indenture. (f) No Amounts Due. There are no amounts owed by Assignor to any lessee or sublessee under the Relevant Agreements and no such amount shall be owed by Assignee to any lessee or sublessee as a result of the consummation of the transactions contemplated hereby; provided, however, that Assignor makes no representations as to the existence of any reimbursement obligation owed to Caribbean Star Airlines Limited ("CSAL") out of non-refundable reserve payments for maintenance performed by CSAL of which Assignor has not been informed or notified. Assignor has received no information concerning, or notice of, the existence of any such maintenance or reimbursement obligation as of the date hereof. 3.2 ASSIGNOR SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE EQUIPMENT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER (EXCEPT FOR SUCH TITLE REPRESENTATION SET FORTH IN SECTION 3.1(b)), EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. 3.3 Assignor acknowledges that the "Event of Default" under Section 5.01(a) and 5.01(b) of the Indenture has occurred and is continuing, as referred to in Section C of the Recitals hereto. 4. Bill of Sale; Relevant Agreements; Account Information. Assignor shall promptly deliver to Assignee upon the execution of this Agreement (i) executed originals of such registration or recordation documents as shall have reasonably been requested by Assignee to register or record the transactions contemplated herein with any applicable governmental authorities (including, but not limited to a FAA bill of sale), (ii) executed originals of each of the Relevant Agreements (iii) all other documents, instruments or agreements which relate in any material respect to the Relevant Agreements and (iv) copies of the files (including without limitation correspondence with lessees and files pertaining to maintenance) of Assignee that relate to the Equipment. Immediately upon execution hereof, all Cash Collateral which has not already been placed in the Sinking Fund Account (as defined in the Indenture) shall be remitted to Assignee's account at: Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. 5. Indemnification. Assignor shall indemnify and hold harmless Assignee and its successors and assigns from and against any and all claims, including, but not limited to reasonable attorneys fees and costs with respect to such claims, resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of Assignor under this Agreement or Assignor's failure to perform any of its obligations under the Indenture or the Relevant Agreements prior to the date hereof. This indemnification shall survive the consummation of the transactions contemplated by this Agreement and its termination. 6. Further Assurances; Notices; Payments. 6.1 Assignor will promptly and duly execute and deliver such further documents, deeds, bills of sale, and assurances and take such further action as may from time to time be necessary to carry out the intent and purpose of this Agreement, including, without limitation, if requested by Assignee, documents necessary for the deregistration and/or reregistration of the Equipment and/or filing of assignments of the Relevant Agreements with the appropriate governmental authorities. If requested by Assignee, Assignor shall use its reasonable best efforts to cause a lessee under a Relevant Agreement to amend and reissue in the name of the Assignee any documentation originally issued in the name of Assignor under the terms of such Relevant Agreement, and Assignor shall use its reasonable best efforts to cause all payments of amounts due under a Relevant Agreement (from a lessee or sublessee thereunder) to be made to Assignee directly. All reasonable costs and expenses incurred by Assignor, or payable to a lessee or lessee's counsel, in connection with the negotiation and execution of such documentation shall be paid by Assignee from the Cash Collateral, upon presentation of an original invoice for such reasonable costs and expenses. 6.2 Assignor shall obtain from each lessee of the Equipment a written acknowledgement in the form of Annex 1 hereto. 6.3 Assignor shall notify Assignee of, and shall hold in trust for the benefit of Assignee, any payments received by Assignor in respect of the Relevant Agreements. Upon receipt, and without request or demand therefor, any such payment shall be promptly remitted by Assignor to the account of Assignee specified in Section 4 hereof. 6.4 All notices required to be given to Assignor in its capacity as "Lessor" under and as defined in any of the Relevant Agreements or hereunder shall be promptly transmitted by Assignor from and after the date hereof to Wells Fargo Bank, National Association, Sixth and Marquette, MAC N9303-120, Minneapolis, MN, 55479, Fax: (612) 667-7337 Attention: Virginia A. Housum. 7. Reservation of Rights. Indenture Trustee does not waive, and hereby expressly reserves, all rights and remedies available to it pursuant to the Indenture and under any applicable law. The transfer in lieu of foreclosure effected hereby shall be without prejudice to any such right or remedy so provided, which rights and remedies may be exercised at any time hereafter in Indenture Trustee's sole discretion. 8. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Entire Agreement. This Agreement supersedes all previous arrangements and agreements, whether written or oral, and comprises the entire agreement between the parties hereto, in respect of the subject matter hereof. 10. Severability. If any provision hereof shall be held invalid or unenforceable by any court or as a result of future administrative or legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof. 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. JETFLEET III, a California corporation By:________________________ Name: Its: WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, as Indenture Trustee By:________________________ Name: Its: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Owner Trustee By:________________________ Name: Its: 300126912v3 EXHIBIT A EQUIPMENT INFORMATION One (1) de Havilland DHC-8-102 aircraft, together with two Pratt & Whitney PW120 engines, two Hamilton Standard 14SF-7 propellers, all bearing the following marks: - ------------------------------------------ -------------------------- ------------------------- ---------------------- Aircraft Engines (Manufacturer's Propellers Serial No.) (Manufacturer's Serial No.) Lessee Name - ------------------------------------------ -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- Manufacturer's Serial Registration No. No. - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- 106 V2-LFO 120967 and 120945 880218 and 880112 Caribbean Star Airlines Limited - ------------------------ ----------------- -------------------------- ------------------------- ----------------------
EXHIBIT B DESCRIPTIONS OF RELEVANT AGREEMENTS 1. Used Aircraft Purchase Agreement between JetFleet III and Bombardier, Inc. dated October 31, 2001. 2. Bill of Sale between JetFleet III and Wells Fargo Bank Northwest, National Association dated November 29, 2001. 3. Warranty of Title signed by Bombardier Services Corporation dated November 29, 2001. 4. Aircraft Lease Agreement between JetFleet III and Caribbean Star Airlines Limited dated November 29, 2001, as amended, modified or supplemented from time to time covering the de Havilland aircraft more completely described on Exhibit A above. 5. Certificate of Insurance issued by Willis Limited dated June 27, 2003 and relating to the Equipment. 6. Any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection with items 1 through 5 above, or otherwise relating to the Equipment. EXHIBIT C CASH COLLATERAL - ------------------------------------------------------------------------- ------------------- Cash Item Amount - ------------------------------------------------------------------------- ------------------- - ------------------------------------------------------------------------- ------------------- Security Deposit (Caribbean Star Airlines Limited) $110,000 - ------------------------------------------------------------------------- ------------------- - ------------------------------------------------------------------------- ------------------- Maintenance Reserves (Caribbean Star Airlines Limited) $832,130 - ------------------------------------------------------------------------- ------------------- - ------------------------------------------------------------------------- ------------------- TOTAL CASH COLLATERAL $942,130 - ------------------------------------------------------------------------- -------------------
Accounts The Cash Collateral is mingled with the other funds of the Assignor currently held in the following accounts: First Bank & Trust checking Account [deleted from filing] Fiserv Investor Services, Incorporated Account [deleted from filing] Franklin Money Fund Account [deleted from filing] ANNEX 1 [FORM OF LETTER TO LESSEE] Caribbean Star Airlines Limited ("CSAL") P.O. Box W 1628 Airport Road, Coolidge Antigua & Barbuda, W.I. TEL (268) 480-2518; (268) 480-2570 FAX (268) 480-2592; (268) 480-2578 Attn: President/CEO - Paul Moreira [Date] Re: Operating Lease Agreement between JetFleet III ("Lessor") and CSAL dated as of November 29, 2001 (the "Lease") covering one (1) de Havilland DHC-8-102 aircraft bearing Antigua & Barbuda registration mark V2-LFO and manufacturer's serial number 106, together with two Pratt & Whitney PW120 engines bearing manufacturer's serial number 120967 and 120945, respectively, and two Hamilton Standard 14SF-7 propellers bearing manufacturer's serial number 880218 and 880112 (the "Aircraft"). To Whom It May Concern: Reference is made to (i) the Lease, (ii) the Amended and Restated Indenture of Trust dated as of September 22, 1995 (the "Indenture") between Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, National Association), as indenture trustee thereunder ("Indenture Trustee"), and Lessor, and (iii) the Transfer Agreement and Deed in Lieu of Foreclosure dated as of May __, 2004 (the "Transfer Agreement"), a copy of which is attached hereto. CSAL acknowledges the notice and instructions herein contained as adequate notice of the transactions contemplated by the Transfer Agreement. Pursuant to the Transfer Agreement, Lessor has transferred all of its right, title and interest in and to, inter alia, the Lease and the Aircraft to Wells Fargo Bank, National Association, as owner trustee ("Owner Trustee"). On and after the date hereof, all payments due to Lessor under the Lease and any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection therewith (the "Lease Documents") shall be made to Owner Trustee, at its account at Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. CSAL will cause Indenture Trustee and Owner Trustee to be added as additional insureds under the liability insurance and Owner Trustee to be added as sole loss payees under the hull insurance until the expiration of the Lease. CSAL acknowledges and agrees that Lessor is not in default of any of its obligations under the Lease Documents and all payment obligations owed by the Lessor to Lessee under the Lease Documents have been satisfied as of the date hereof. Please indicate your acceptance of the above by signing below. Very truly yours, JETFLEET III, a California corporation By:_____________________ Name: Title: Acknowledged and Agreed: CARIBBEAN STAR AIRLINES LIMITED By:____________________ Name: Title: EX-10.4 4 jf3sn751fi.txt TRANSFER AGREEMETN S/N 751 TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE dated as of May 27, 2004 among (i) JETFLEET III, a California corporation ("Assignor"), (ii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (f/k/a First Security Bank, National Association), as indenture trustee ("Indenture Trustee") under an Amended and Restated Indenture of Trust dated as of September 22, 1995 (as heretofore amended, supplemented or modified, the "Indenture"), between Indenture Trustee and Assignor and (iii) WELLS FARGO BANK, NATIONAL ASSOCIATION, as owner trustee (in such capacity, ("Assignee") under a Trust Agreement dated of even date herewith between the Owner Trustee and the Indenture Trustee (the "Trust Agreement"). RECITALS A. Assignor and Indenture Trustee are party to the Indenture which sets forth, inter alia, terms and conditions relating to the issuance of JetFleet III Series A Secured Bonds (the "Bonds") by Assignor, and the creation and granting of a security interest for the benefit of Indenture Trustee in (among other items of property) the items of equipment identified on Exhibit A hereto (together with the engines, all parts, avionics, accessories, instruments, modules, appurtenances, furnishings, logs, manuals, books, film and records related thereto, the "Equipment") and the Relevant Agreements (as defined below); B. Assignor has previously entered into certain lease and other agreements identified on Exhibit B hereto covering the Equipment (together with all amendments and supplements thereto, and all related documents, certificates and instruments to the date hereof, the "Relevant Agreements") and has received, in connection therewith, various cash security deposits, maintenance reserves and rent payments, which amounts are held in the accounts described on Exhibit C hereto (such amounts, collectively, the "Cash Collateral"); C. Assignor has defaulted on its obligations to the holders of the Bonds to make payments of principal and interest on the Bonds, which default constitutes an "Event of Default" under Sections 5.01(a) and 5.01(b) of the Indenture, and as a result of such default Indenture Trustee desires to exercise the remedy available to it pursuant to Section 5.04(d) of the Indenture for the benefit of the holders of Bonds; D. The parties hereto anticipate that the proceeds from the sale of the assets subject to the lien of the Indenture will be less than amount outstanding under the Bonds and in order to reduce the costs involved in realizing the value of the Trust Estate (as defined in the Indenture), Assignor has agreed to transfer title to the Equipment to the Indenture Trustee or its nominee in partial satisfaction of its obligations under the Indenture in accordance with Section 9-620 and ff. of the California Uniform Commercial Code and the Letter Agreement between the Indenture Trustee and the Assignor dated April 8, 2004; and E. Indenture Trustee desires to cause legal title to the Equipment to be transferred to Assignee for the benefit of the Indenture Trustee and the ultimate benefit of the holders of Bonds, and therefore directs, pursuant to the terms and conditions set forth below, Assignor to sell, transfer and assign to Assignee all of its right, title and interest in, to and under, the Equipment, the Relevant Agreements and the Cash Collateral (the Cash Collateral, collectively with the Equipment and the Relevant Agreements, the "Assigned Property") in lieu of foreclosure. AGREEMENT NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor, Indenture Trustee and Assignee agree as follows: 1. Assignment; Transfer in Lieu of Foreclosure. Assignor hereby sells, assigns, transfers and sets over unto Assignee, at the direction of Indenture Trustee, in lieu of foreclosure and in partial satisfaction of Assignor's obligations under the Indenture as set forth in the recitals to this Agreement, all of Assignor's right, title and interest in and to the Assigned Property, including without limitation all of its right, title and interest in and to the Equipment and all payments and other amounts due and to become due under the Relevant Agreements, in each case, from and after the date hereof. 2. Acceptance and Assumption; Partial Satisfaction of Bond Obligations. The Assignee hereby accepts (subject to the terms of the Trust Agreement) the assignment of all of Assignor's right, title and interest in and to the Assigned Property pursuant to the terms of this Agreement. The Indenture Trustee hereby accepts the foregoing assignment to the Assignee in partial satisfaction of the obligations of Assignor under the Indenture and agrees to apply the proceeds from disposition of the Assigned Property against such obligations of Assignor as are outstanding under the Indenture. 3. Assignor Representations and Acknowledgement. 3.1 Assignor represents and warrants to the Assignee that at the time of the execution of this Agreement: (a) Organization, Standing and Power. Assignor is a corporation duly organized and validly existing in good standing under the laws of the State of California and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. (b) Title. Except for the lien of the Indenture and the lease agreement between Assignor and Trans Maldivian Airways identified as a Relevant Agreement on Exhibit B hereto, Assignor has legal title to the Assigned Property, free and clear of all liens, encumbrances, equities, security interests, restrictions on transfer, and of any other claims whatsoever arising by or through Assignor. (c) No Conflicts. The execution, delivery and performance by Assignor of this Agreement and a FAA bill of sale (or such other similar document as shall be required to record the transfer with the applicable governmental authority) (A) do not require the approval or consent of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority, court, trustee or holder of any indebtedness or obligation on the part of Assignor other than those that have been obtained, made, done or taken, (B) do not and will not contravene any law, rule, regulation, order, writ, injunction or decree applicable to Assignor or Assignor's Articles of Incorporation or By-Laws, and (C) do not and will not result in any breach of or conflict with the terms and provisions of any agreement or instrument to which Assignor is a party or by which Assignor or its properties or assets may be bound or affected. (d) Litigation. There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of Assignor, threatened against Assignor before or by any court, administrative agency or other governmental authority which, if adversely determined, would impair the validity of, or the execution and delivery by Assignor of, this Agreement or any Operative Document or the performance by Assignor of its obligations hereunder or thereunder. (e) Relevant Agreements. Exhibit B sets forth an exhaustive list of all documents and agreements entered into by Assignee with respect to the Equipment (other than the Indenture). Except for the Relevant Agreements and the Indenture, there are no documents that affect in any material respect the rights, interests, duties, obligations or liabilities of the Assignor in respect of the Assigned Property. Assignor has provided Assignee with true and correct copies of all amendments, supplements, and modifications to each Relevant Agreement and the Indenture. (f) No Amounts Due. There are no amounts owed by Assignor to any lessee or sublessee under the Relevant Agreements and no such amount shall be owed by Assignee to any lessee or sublessee as a result of the consummation of the transactions contemplated hereby; provided, however, that Assignor makes no representations as to the existence of any reimbursement obligation owed to Trans Maldivian Airways Private Limited ("TMA") out of non-refundable reserve payments for maintenance performed by TMA of which Assignor has not been informed or notified. Assignor has received no information concerning, or notice of, the existence of any such maintenance or reimbursement obligation as of the date hereof. 3.2 ASSIGNOR SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE EQUIPMENT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER (EXCEPT FOR SUCH TITLE REPRESENTATION SET FORTH IN SECTION 3.1(b)), EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. 3.3 Assignor acknowledges that the "Event of Default" under Section 5.01(a) and 5.01(b) of the Indenture has occurred and is continuing, as referred to in Section C of the Recitals hereto. 4. Bill of Sale; Relevant Agreements; Account Information. Assignor shall promptly deliver to Assignee upon the execution of this Agreement (i) executed originals of such registration or recordation documents as shall have reasonably been requested by Assignee to register or record the transactions contemplated herein with any applicable governmental authorities (including, but not limited to a FAA bill of sale), (ii) executed originals of each of the Relevant Agreements (iii) all other documents, instruments or agreements which relate in any material respect to the Relevant Agreements and (iv) copies of the files (including without limitation correspondence with lessees and files pertaining to maintenance) of Assignee that relate to the Equipment. Immediately upon execution hereof, all Cash Collateral which has not already been placed in the Sinking Fund Account (as defined in the Indenture) shall be remitted to Assignee's account at: Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. 5. Indemnification. Assignor shall indemnify and hold harmless Assignee and its successors and assigns from and against any and all claims, including, but not limited to reasonable attorneys fees and costs with respect to such claims, resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of Assignor under this Agreement or Assignor's failure to perform any of its obligations under the Indenture or the Relevant Agreements prior to the date hereof. This indemnification shall survive the consummation of the transactions contemplated by this Agreement and its termination. 6. Further Assurances; Notices; Payments. 6.1 Assignor will promptly and duly execute and deliver such further documents, deeds, bills of sale, and assurances and take such further action as may from time to time be necessary to carry out the intent and purpose of this Agreement, including, without limitation, if requested by Assignee, documents necessary for the deregistration and/or reregistration of the Equipment and/or filing of assignments of the Relevant Agreements with the appropriate governmental authorities. If requested by Assignee, Assignor shall use its reasonable best efforts to cause a lessee under a Relevant Agreement to amend and reissue in the name of the Assignee any documentation originally issued in the name of Assignor under the terms of such Relevant Agreement, and Assignor shall use its reasonable best efforts to cause all payments of amounts due under a Relevant Agreement (from a lessee or sublessee thereunder) to be made to Assignee directly. All reasonable costs and expenses incurred by Assignor, or payable to a lessee or lessee's counsel, in connection with the negotiation and execution of such documentation shall be paid by Assignee from the Cash Collateral, upon presentation of an original invoice for such reasonable costs and expenses. 6.2 Assignor shall obtain from each lessee of the Equipment a written acknowledgement in the form of Annex 1 hereto. 6.3 Assignor shall notify Assignee of, and shall hold in trust for the benefit of Assignee, any payments received by Assignor in respect of the Relevant Agreements. Upon receipt, and without request or demand therefor, any such payment shall be promptly remitted by Assignor to the account of Assignee specified in Section 4 hereof. 6.4 All notices required to be given to Assignor in its capacity as "Lessor" under and as defined in any of the Relevant Agreements or hereunder shall be promptly transmitted by Assignor from and after the date hereof to Wells Fargo Bank, National Association, Sixth and Marquette, MAC N9303-120, Minneapolis, MN, 55479, Fax: (612) 667-7337 Attention: Virginia A. Housum. 7. Reservation of Rights. Indenture Trustee does not waive, and hereby expressly reserves, all rights and remedies available to it pursuant to the Indenture and under any applicable law. The transfer in lieu of foreclosure effected hereby shall be without prejudice to any such right or remedy so provided, which rights and remedies may be exercised at any time hereafter in Indenture Trustee's sole discretion. 8. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Entire Agreement. This Agreement supersedes all previous arrangements and agreements, whether written or oral, and comprises the entire agreement between the parties hereto, in respect of the subject matter hereof. 10. Severability. If any provision hereof shall be held invalid or unenforceable by any court or as a result of future administrative or legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof. 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. JETFLEET III, a California corporation By:________________________ Name: Its: WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, as Indenture Trustee By:________________________ Name: Its: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Owner Trustee By:________________________ Name: Its: 300126876v3 EXHIBIT A EQUIPMENT INFORMATION One (1) de Havilland DHC-6-300 aircraft, together with two Pratt & Whitney PW PT6A-27 engines, two Hartzell HC-B3TN-3D propellers and landing gear, all bearing the following marks: - ------------------------------------------ -------------------------- ------------------------- ---------------------- Aircraft Engines (Manufacturer's Propellers Serial No.) (Manufacturer's Serial No.) Lessee Name - ------------------------------------------ -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- Manufacturer's Serial Registration No. No. - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- 751 8Q-TMK PCE41344 and PCE40897 BUA24559 and BUA19694 TransMaldivian Airways - ------------------------ ----------------- -------------------------- ------------------------- ----------------------
- --------------------------------------------------- Landing Gear (Manufacturer's Serial No.) - --------------------------------------------------- - --------------------------------------------------- Nose Landing Gear H789 - --------------------------------------------------- - --------------------------------------------------- LH Main Landing Gear 543 - --------------------------------------------------- - --------------------------------------------------- RH Main Landing Gear 40106 - --------------------------------------------------- EXHIBIT B DESCRIPTIONS OF RELEVANT AGREEMENTS 1. Aircraft Purchase Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 2. FAA Aircraft Bill of Sale between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 3. Bill of Sale between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 4. Cross Receipt between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 5. Aircraft Lease Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 6. Operating Lease Agreement between JetFleet III and Trans Maldivian Airways Pvt. Ltd. dated September 27, 2001, as amended, modified or supplemented from time to time covering the de Havilland aircraft more completely described on Exhibit A above. 7. Certificate of Insurance issued by Aon Global Insurance Services Private Limited dated August 19, 2003 and relating to the Equipment. 8. Any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection with items 1 through 7 above, or otherwise relating to the Equipment. EXHIBIT C CASH COLLATERAL - ------------------------------------------------------------------ -------------------------- Cash Item Amount - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Security Deposit (TransMaldivian Airways) $60,000 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (Aloha IslandAir, Inc.) $37,741 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (TransMaldivian Airways) $349,163 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- TOTAL CASH COLLATERAL $446,904 - ------------------------------------------------------------------ --------------------------
Accounts The Cash Collateral is mingled with the other funds of the Assignor currently held in the following accounts: First Bank & Trust checking Account [deleted from filing] Fiserv Investor Services, Incorporated Account [deleted from filing]. Franklin Money Fund Account [deleted from filing] ANNEX 1 [FORM OF LETTER TO LESSEE] Trans Maldivian Airways Private Limited ("TMA") Male' International Airport P.O. Box 2079 Male', Rep. Of Maldives TEL 011 960 325 708 FAX 011 960 323 161 Attn: Managing Director - Bram Steller Finance Director - Krishnan Balakrishnan [Date] Re: Operating Lease Agreement between JetFleet III ("Lessor") and TMA dated as of October 17, 2001 (the "Lease") covering one (1) de Havilland DHC-6-300 aircraft bearing Maldives registration mark 8Q-TMK and manufacturer's serial number 751, together with two Pratt & Whitney PW PT6A-27 engines bearing manufacturer's serial number PCE41344 and PCE40897, respectively, and two Hartzell HC-B3TN-3D propellers bearing manufacturer's serial number BUA24559 and BUA19694 (the "Aircraft"). To Whom It May Concern: Reference is made to (i) the Lease, (ii) the Amended and Restated Indenture of Trust dated as of September 22, 1995 (the "Indenture") between Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, National Association), as indenture trustee thereunder ("Indenture Trustee"), and Lessor, and (iii) the Transfer Agreement and Deed in Lieu of Foreclosure dated as of May __, 2004 (the "Transfer Agreement"), a copy of which is attached hereto. TMA acknowledges the notice and instructions herein contained as adequate notice of the transactions contemplated by the Transfer Agreement. Pursuant to the Transfer Agreement, Lessor has transferred all of its right, title and interest in and to, inter alia, the Lease and the Aircraft to Wells Fargo Bank, National Association, as owner trustee ("Owner Trustee"). On and after the date hereof, all payments due to Lessor under the Lease and any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection therewith (the "Lease Documents") shall be made to Owner Trustee, at its account at Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. TMA will cause Indenture Trustee and Owner Trustee to be added as additional insureds under the liability insurance and Owner Trustee to be added as sole loss payees under the hull insurance until the expiration of the Lease. TMA acknowledges and agrees that Lessor is not in default of any of its obligations under the Lease Documents and all payment obligations owed by the Lessor to Lessee under the Lease Documents have been satisfied as of the date hereof. Please indicate your acceptance of the above by signing below. Very truly yours, JETFLEET III, a California corporation By:_____________________ Name: Title: Acknowledged and Agreed: TRANS MALDIVIAN AIRWAYS By:____________________ Name: Title: EX-10.5 5 jf3sn24.txt TRANSFER AGREEMENT RE: SN 24 TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE dated as of May __, 2004 among (i) JETFLEET III, a California corporation ("Assignor"), (ii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (f/k/a First Security Bank, National Association), as indenture trustee ("Indenture Trustee") under an Amended and Restated Indenture of Trust dated as of September 22, 1995 (as heretofore amended, supplemented or modified, the "Indenture"), between Indenture Trustee and Assignor and (iii) WELLS FARGO BANK, NATIONAL ASSOCIATION, as owner trustee (in such capacity, ("Assignee") under a Trust Agreement dated of even date herewith between the Owner Trustee and the Indenture Trustee (the "Trust Agreement"). RECITALS A. Assignor and Indenture Trustee are party to the Indenture which sets forth, inter alia, terms and conditions relating to the issuance of JetFleet III Series A Secured Bonds (the "Bonds") by Assignor, and the creation and granting of a security interest for the benefit of Indenture Trustee in (among other items of property) the items of equipment identified on Exhibit A hereto (together with the engines, all parts, avionics, accessories, instruments, modules, appurtenances, furnishings, logs, manuals, books, film and records related thereto, the "Equipment") and the Relevant Agreements (as defined below); B. Assignor (or its affiliate) has previously entered into certain agreements identified on Exhibit B hereto covering the Equipment (together with all amendments and supplements thereto, and all related documents, certificates and instruments to the date hereof, the "Relevant Agreements"); C. Assignor has defaulted on its obligations to the holders of the Bonds to make payments of principal and interest on the Bonds, which default constitutes an "Event of Default" under Sections 5.01(a) and 5.01(b) of the Indenture, and as a result of such default Indenture Trustee desires to exercise the remedy available to it pursuant to Section 5.04(d) of the Indenture for the benefit of the holders of Bonds; D. The parties hereto anticipate that the proceeds from the sale of the assets subject to the lien of the Indenture will be less than amount outstanding under the Bonds and in order to reduce the costs involved in realizing the value of the Trust Estate (as defined in the Indenture), Assignor has agreed to transfer title to the Equipment to the Indenture Trustee or its nominee in partial satisfaction of its obligations under the Indenture in accordance with Section 9-620 and ff. of the California Uniform Commercial Code and the Letter Agreement between the Indenture Trustee and the Assignor dated April 8, 2004; and E. Indenture Trustee desires to cause legal title to the Equipment to be transferred to Assignee for the benefit of the Indenture Trustee and the ultimate benefit of the holders of Bonds, and therefore directs, pursuant to the terms and conditions set forth below, Assignor to sell, transfer and assign to Assignee all of its right, title and interest in, to and under, the Equipment and the Relevant Agreements (collectively, the "Assigned Property") in lieu of foreclosure. AGREEMENT NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor, Indenture Trustee and Assignee agree as follows: 1. Assignment; Transfer in Lieu of Foreclosure. Assignor hereby sells, assigns, transfers and sets over unto Assignee, at the direction of Indenture Trustee, in lieu of foreclosure and in partial satisfaction of Assignor's obligations under the Indenture as set forth in the recitals to this Agreement, all of Assignor's right, title and interest in and to the Assigned Property, including without limitation all of its right, title and interest in and to the Equipment and all payments and other amounts due and to become due under the Relevant Agreements, in each case, from and after the date hereof. 2. Acceptance and Assumption; Partial Satisfaction of Bond Obligations. The Assignee hereby accepts (subject to the terms of the Trust Agreement) the assignment of all of Assignor's right, title and interest in and to the Assigned Property pursuant to the terms of this Agreement. The Indenture Trustee hereby accepts the foregoing assignment to the Assignee in partial satisfaction of the obligations of Assignor under the Indenture and agrees to apply the proceeds from disposition of the Assigned Property against such obligations of Assignor as are outstanding under the Indenture. 3. Assignor Representations and Acknowledgement. 3.1 Assignor represents and warrants to the Assignee that at the time of the execution of this Agreement: (a) Organization, Standing and Power. Assignor is a corporation duly organized and validly existing in good standing under the laws of the State of California and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. (b) Title. Except for the lien of the Indenture, Assignor has legal title to the Assigned Property, free and clear of all liens, encumbrances, equities, security interests, restrictions on transfer, and of any other claims whatsoever arising by or through Assignor. (c) No Conflicts. The execution, delivery and performance by Assignor of this Agreement and a FAA bill of sale (or such other similar document as shall be required to record the transfer with the applicable governmental authority) (A) do not require the approval or consent of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority, court, trustee or holder of any indebtedness or obligation on the part of Assignor other than those that have been obtained, made, done or taken, (B) do not and will not contravene any law, rule, regulation, order, writ, injunction or decree applicable to Assignor or Assignor's Articles of Incorporation or By-Laws, and (C) do not and will not result in any breach of or conflict with the terms and provisions of any agreement or instrument to which Assignor is a party or by which Assignor or its properties or assets may be bound or affected. (d) Litigation. There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of Assignor, threatened against Assignor before or by any court, administrative agency or other governmental authority which, if adversely determined, would impair the validity of, or the execution and delivery by Assignor of, this Agreement or any Operative Document or the performance by Assignor of its obligations hereunder or thereunder. (e) Relevant Agreements. Exhibit B sets forth an exhaustive list of all documents and agreements entered into by Assignee with respect to the Equipment (other than the Indenture). Except for the Relevant Agreements and the Indenture, there are no documents that affect in any material respect the rights, interests, duties, obligations or liabilities of the Assignor in respect of the Assigned Property. Assignor has provided Assignee with true and correct copies of all amendments, supplements, and modifications to each Relevant Agreement and the Indenture. (f) No Amounts Due. There are no amounts owed by Assignor to any party under the Relevant Agreements and no such amount shall be owed by Assignee to any lessee or sublessee as a result of the consummation of the transactions contemplated hereby. 3.2 ASSIGNOR SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE EQUIPMENT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER (EXCEPT FOR SUCH TITLE REPRESENTATION SET FORTH IN SECTION 3.1(b)), EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. 3.3 Assignor acknowledges that the "Event of Default" under Section 5.01(a) and 5.01(b) of the Indenture has occurred and is continuing, as referred to in Section C of the Recitals hereto. 4. Bill of Sale; Relevant Agreements; Account Information. Assignor shall promptly deliver to Assignee upon the execution of this Agreement (i) executed originals of such registration or recordation documents as shall have reasonably been requested by Assignee to register or record the transactions contemplated herein with any applicable governmental authorities (including, but not limited to a FAA bill of sale), (ii) executed originals of each of the Relevant Agreements (iii) all other documents, instruments or agreements which relate in any material respect to the Relevant Agreements and (iv) copies of the files (including without limitation correspondence with lessees and files pertaining to maintenance) of Assignee that relate to the Equipment. 5. Indemnification. Assignor shall indemnify and hold harmless Assignee and its successors and assigns from and against any and all claims, including, but not limited to reasonable attorneys fees and costs with respect to such claims, resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of Assignor under this Agreement or Assignor's failure to perform any of its obligations under the Indenture or the Relevant Agreements prior to the date hereof. This indemnification shall survive the consummation of the transactions contemplated by this Agreement and its termination. 6. Further Assurances; Notices; Payments. 6.1 Assignor will promptly and duly execute and deliver such further documents, deeds, bills of sale, and assurances and take such further action as may from time to time be necessary to carry out the intent and purpose of this Agreement, including, without limitation, if requested by Assignee, documents necessary for the deregistration and/or reregistration of the Equipment and/or filing of assignments of the Relevant Agreements with the appropriate governmental authorities. If requested by Assignee, Assignor shall use its reasonable best efforts to cause a lessee under a Relevant Agreement to amend and reissue in the name of the Assignee any documentation originally issued in the name of Assignor under the terms of such Relevant Agreement, and Assignor shall use its reasonable best efforts to cause all payments of amounts due under a Relevant Agreement (from a lessee or sublessee thereunder) to be made to Assignee directly. 6.2 Assignor shall cause its affiliate, AeroCentury Corp., and by executing an acknowledgement to this Agreement AeroCentury Corp. hereby agrees (i) to the assignment to Assignee of all of its right, title and interest in the Storage Agreement between AeroCentury Corp. and Embraer Aircraft Maintenance Services, Inc. dated February 11, 2004 and (ii) to obtain from Embraer Aircraft Maintenance Services, Inc, a written acknowledgement in the form of Annex I hereto. 6.3 Assignor shall notify Assignee of, and shall hold in trust for the benefit of Assignee, any payments received by Assignor in respect of the Relevant Agreements. Upon receipt, and without request or demand therefor, any such payment shall be promptly remitted by Assignor to the account of Assignee specified in Section 4 hereof. 6.4 All notices required to be given to Assignor in its capacity as "Lessor" under and as defined in any of the Relevant Agreements or hereunder shall be promptly transmitted by Assignor from and after the date hereof to Wells Fargo Bank, National Association, Sixth and Marquette, MAC N9303-120, Minneapolis, MN, 55479, Fax: (612) 667-7337 Attention: Virginia A. Housum. 7. Reservation of Rights. Indenture Trustee does not waive, and hereby expressly reserves, all rights and remedies available to it pursuant to the Indenture and under any applicable law. The transfer in lieu of foreclosure effected hereby shall be without prejudice to any such right or remedy so provided, which rights and remedies may be exercised at any time hereafter in Indenture Trustee's sole discretion. 8. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Entire Agreement. This Agreement supersedes all previous arrangements and agreements, whether written or oral, and comprises the entire agreement between the parties hereto, in respect of the subject matter hereof. 10. Severability. If any provision hereof shall be held invalid or unenforceable by any court or as a result of future administrative or legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof. 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. JETFLEET III, a California corporation By:________________________ Name: Its: WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, as Indenture Trustee By:________________________ Name: Its: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Owner Trustee By:________________________ Name: Its: AGREED AND ACKNOWLEDGED for purposes of Section 6.2 hereof: AEROCENTURY CORP. By:________________________ Name: Its: 300126946v3 EXHIBIT A EQUIPMENT INFORMATION One (1) Saab 340A aircraft, together with two General Electric GE CT7-5A2 engines, two Dowty Rotol R320/4-123-F/1 propellers, all bearing the following marks: - ------------------------------------------ -------------------------- ------------------------- Aircraft Engines (Manufacturer's Propellers Serial No.) (Manufacturer's Serial No.) - ------------------------------------------ -------------------------- ------------------------- - ------------------------ ----------------- -------------------------- ------------------------- Manufacturer's Serial Registration No. No. - ------------------------ ----------------- -------------------------- ------------------------- - ------------------------ ----------------- -------------------------- ------------------------- 024 N111PX GE-E367206DKU and DRG2770/84 and DRG GE-E367170 1729/84 - ------------------------ ----------------- -------------------------- -------------------------
EXHIBIT B DESCRIPTIONS OF RELEVANT AGREEMENTS 1. Aircraft Sale and Purchase Agreement between AeroCentury Corp. and TA Air V Corp. dated August 12, 1999. 2. FAA Aircraft Bill of Sale between JetFleet III and State Street Bank and Trust Company dated August 13, 1999. 3. Long Form Warranty Bill of Sale dated August 13, 1999. 4. Aircraft Lease Agreement between Fleet National Bank and Express Airlines I, Inc. dated June 1, 1996. 5. Certificate of Name Change Amendment changing "Express Airlines I, Inc." to Pinnacle Airlines, Inc. 6. Storage and Maintenance Letter Agreement between JetFleet Management Corp. and Worldwide Aircraft Services, Inc. dated January 3, 2003. 7. Storage Agreement between AeroCentury Corp. and Embraer Aircraft Maintenance Services, Inc. dated February 11, 2004. 8. Certificate of Insurance issued by Frank Crystal & Co., Inc. dated May 18, 2004 and relating to the Equipment. 9. Any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection with items 1 through 8 above, or otherwise relating to the Equipment. ANNEX 1 [FORM OF LETTER TO STORAGE COMPANY] EAMS-Embraer Aircraft Maintenance Services, Inc. 10 Airways Blvd Nashville, TN 37217 USA TEL (615) 367-2100 FAX (615) 367-4327 Attn: Scott Hall [Date] Re: Storage Agreement between AeroCentury Corp. ("AeroCentury") and Embraer Aircraft Maintenance Services, Inc. ("EAMS") dated as of February 11, 2004 (the "Storage Agreement") covering one (1) Saab 340A Aircraft, bearing registration number N111PX and manufacturer's serial number 024, together with two General Electric GE CT7-5A2 engines bearing manufacturer's serial number GE-E367206DKU and GE-E367170, respectively, and two Dowty Rotol R320/4-123-F/1 propellers bearing manufacturer's serial number DRG2770/84 and DRG1729/84 (the "Aircraft"). To Whom It May Concern: Reference is made to (i) the Storage Agreement, (ii) the Amended and Restated Indenture of Trust dated as of September 22, 1995 (the "Indenture") between Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, National Association), as indenture trustee thereunder ("Indenture Trustee"), and Lessor, and (iii) the Transfer Agreement and Deed in Lieu of Foreclosure dated as of May __, 2004 (the "Transfer Agreement"), a copy of which is attached hereto. EAMS acknowledges the notice and instructions herein contained as adequate notice of the transactions contemplated by the Transfer Agreement. Pursuant to the Transfer Agreement, AeroCentury has transferred all of its right, title and interest in and to, inter alia, the Storage Agreement and the Aircraft to Wells Fargo Bank, National Association, as owner trustee ("Owner Trustee"). EAMS acknowledges and agrees that AeroCentury is not in default of any of its obligations under the Storage Documents and all payment obligations owed by the AeroCentury to EAMS under the Storage Documents have been satisfied as of the date hereof. Please indicate your acceptance of the above by signing below. Very truly yours, AeroCentury Corp., a Delaware corporation By:_____________________ Name: Title: Acknowledged and Agreed: EMBRAER AIRCRAFT MAINTENANCE SERVICES By:____________________ Name: Title: EX-10.6 6 jf32n640.txt TRANSFER AGREEMENT S/N 640 TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE TRANSFER AGREEMENT AND DEED IN LIEU OF FORECLOSURE dated as of May 27, 2004 among (i) JETFLEET III, a California corporation ("Assignor"), (ii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (f/k/a First Security Bank, National Association), as indenture trustee ("Indenture Trustee") under an Amended and Restated Indenture of Trust dated as of September 22, 1995 (as heretofore amended, supplemented or modified, the "Indenture"), between Indenture Trustee and Assignor and (iii) WELLS FARGO BANK, NATIONAL ASSOCIATION, as owner trustee (in such capacity, ("Assignee") under a Trust Agreement dated of even date herewith between the Owner Trustee and the Indenture Trustee (the "Trust Agreement"). RECITALS A. Assignor and Indenture Trustee are party to the Indenture which sets forth, inter alia, terms and conditions relating to the issuance of JetFleet III Series A Secured Bonds (the "Bonds") by Assignor, and the creation and granting of a security interest for the benefit of Indenture Trustee in (among other items of property) the items of equipment identified on Exhibit A hereto (together with the engines, all parts, avionics, accessories, instruments, modules, appurtenances, furnishings, logs, manuals, books, film and records related thereto, the "Equipment") and the Relevant Agreements (as defined below); B. Assignor has previously entered into certain lease and other agreements identified on Exhibit B hereto covering the Equipment (together with all amendments and supplements thereto, and all related documents, certificates and instruments to the date hereof, the "Relevant Agreements") and has received, in connection therewith, various cash security deposits, maintenance reserves and rent payments, which amounts are held in the accounts described on Exhibit C hereto (such amounts, collectively, the "Cash Collateral"); C. Assignor has defaulted on its obligations to the holders of the Bonds to make payments of principal and interest on the Bonds, which default constitutes an "Event of Default" under Sections 5.01(a) and 5.01(b) of the Indenture, and as a result of such default Indenture Trustee desires to exercise the remedy available to it pursuant to Section 5.04(d) of the Indenture for the benefit of the holders of Bonds; D. The parties hereto anticipate that the proceeds from the sale of the assets subject to the lien of the Indenture will be less than amount outstanding under the Bonds and in order to reduce the costs involved in realizing the value of the Trust Estate (as defined in the Indenture), Assignor has agreed to transfer title to the Equipment to the Indenture Trustee or its nominee in partial satisfaction of its obligations under the Indenture in accordance with Section 9-620 and ff. of the California Uniform Commercial Code and the Letter Agreement between the Indenture Trustee and the Assignor dated April 8, 2004; and E. Indenture Trustee desires to cause legal title to the Equipment to be transferred to Assignee for the benefit of the Indenture Trustee and the ultimate benefit of the holders of Bonds, and therefore directs, pursuant to the terms and conditions set forth below, Assignor to sell, transfer and assign to Assignee all of its right, title and interest in, to and under, the Equipment, the Relevant Agreements and the Cash Collateral (the Cash Collateral, collectively with the Equipment and the Relevant Agreements, the "Assigned Property") in lieu of foreclosure. AGREEMENT NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor, Indenture Trustee and Assignee agree as follows: 1. Assignment; Transfer in Lieu of Foreclosure. Assignor hereby sells, assigns, transfers and sets over unto Assignee, at the direction of Indenture Trustee, in lieu of foreclosure and in partial satisfaction of Assignor's obligations under the Indenture as set forth in the recitals to this Agreement, all of Assignor's right, title and interest in and to the Assigned Property, including without limitation all of its right, title and interest in and to the Equipment and all payments and other amounts due and to become due under the Relevant Agreements, in each case, from and after the date hereof. 2. Acceptance and Assumption; Partial Satisfaction of Bond Obligations. The Assignee hereby accepts (subject to the terms of the Trust Agreement) the assignment of all of Assignor's right, title and interest in and to the Assigned Property pursuant to the terms of this Agreement. The Indenture Trustee hereby accepts the foregoing assignment to the Assignee in partial satisfaction of the obligations of Assignor under the Indenture and agrees to apply the proceeds from disposition of the Assigned Property against such obligations of Assignor as are outstanding under the Indenture. 3. Assignor Representations and Acknowledgement. 3.1 Assignor represents and warrants to the Assignee that at the time of the execution of this Agreement: (a) Organization, Standing and Power. Assignor is a corporation duly organized and validly existing in good standing under the laws of the State of California and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. (b) Title. Except for the lien of the Indenture and the lease agreement between Assignor and Trans Maldivian Airways identified as a Relevant Agreement on Exhibit B hereto, Assignor has legal title to the Assigned Property, free and clear of all liens, encumbrances, equities, security interests, restrictions on transfer, and of any other claims whatsoever arising by or through Assignor. (c) No Conflicts. The execution, delivery and performance by Assignor of this Agreement and a FAA bill of sale (or such other similar document as shall be required to record the transfer with the applicable governmental authority) (A) do not require the approval or consent of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority, court, trustee or holder of any indebtedness or obligation on the part of Assignor other than those that have been obtained, made, done or taken, (B) do not and will not contravene any law, rule, regulation, order, writ, injunction or decree applicable to Assignor or Assignor's Articles of Incorporation or By-Laws, and (C) do not and will not result in any breach of or conflict with the terms and provisions of any agreement or instrument to which Assignor is a party or by which Assignor or its properties or assets may be bound or affected. (d) Litigation. There is no action, suit, claim, proceeding or investigation pending or, to the knowledge of Assignor, threatened against Assignor before or by any court, administrative agency or other governmental authority which, if adversely determined, would impair the validity of, or the execution and delivery by Assignor of, this Agreement or any Operative Document or the performance by Assignor of its obligations hereunder or thereunder. (e) Relevant Agreements. Exhibit B sets forth an exhaustive list of all documents and agreements entered into by Assignee with respect to the Equipment (other than the Indenture). Except for the Relevant Agreements and the Indenture, there are no documents that affect in any material respect the rights, interests, duties, obligations or liabilities of the Assignor in respect of the Assigned Property. Assignor has provided Assignee with true and correct copies of all amendments, supplements, and modifications to each Relevant Agreement and the Indenture. (f) No Amounts Due. There are no amounts owed by Assignor to any lessee or sublessee under the Relevant Agreements and no such amount shall be owed by Assignee to any lessee or sublessee as a result of the consummation of the transactions contemplated hereby; provided, however, that Assignor makes no representations as to the existence of any reimbursement obligation owed to Trans Maldivian Airways Private Limited ("TMA") out of non-refundable reserve payments for maintenance performed by TMA of which Assignor has not been informed or notified. Assignor has received no information concerning, or notice of, the existence of any such maintenance or reimbursement obligation as of the date hereof. 3.2 ASSIGNOR SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE EQUIPMENT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER (EXCEPT FOR SUCH TITLE REPRESENTATION SET FORTH IN SECTION 3.1(b)), EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT. 3.3 Assignor acknowledges that the "Event of Default" under Section 5.01(a) and 5.01(b) of the Indenture has occurred and is continuing, as referred to in Section C of the Recitals hereto. 4. Bill of Sale; Relevant Agreements; Account Information. Assignor shall promptly deliver to Assignee upon the execution of this Agreement (i) executed originals of such registration or recordation documents as shall have reasonably been requested by Assignee to register or record the transactions contemplated herein with any applicable governmental authorities (including, but not limited to a FAA bill of sale), (ii) executed originals of each of the Relevant Agreements (iii) all other documents, instruments or agreements which relate in any material respect to the Relevant Agreements and (iv) copies of the files (including without limitation correspondence with lessees and files pertaining to maintenance) of Assignee that relate to the Equipment. Immediately upon execution hereof, all Cash Collateral which has not already been placed in the Sinking Fund Account (as defined in the Indenture) shall be remitted to Assignee's account at: Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. 5. Indemnification. Assignor shall indemnify and hold harmless Assignee and its successors and assigns from and against any and all claims, including, but not limited to reasonable attorneys fees and costs with respect to such claims, resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of Assignor under this Agreement or Assignor's failure to perform any of its obligations under the Indenture or the Relevant Agreements prior to the date hereof. This indemnification shall survive the consummation of the transactions contemplated by this Agreement and its termination. 6. Further Assurances; Notices; Payments. 6.1 Assignor will promptly and duly execute and deliver such further documents, deeds, bills of sale, and assurances and take such further action as may from time to time be necessary to carry out the intent and purpose of this Agreement, including, without limitation, if requested by Assignee, documents necessary for the deregistration and/or reregistration of the Equipment and/or filing of assignments of the Relevant Agreements with the appropriate governmental authorities. If requested by Assignee, Assignor shall use its reasonable best efforts to cause a lessee under a Relevant Agreement to amend and reissue in the name of the Assignee any documentation originally issued in the name of Assignor under the terms of such Relevant Agreement, and Assignor shall use its reasonable best efforts to cause all payments of amounts due under a Relevant Agreement (from a lessee or sublessee thereunder) to be made to Assignee directly. All reasonable costs and expenses incurred by Assignor, or payable to a lessee or lessee's counsel, in connection with the negotiation and execution of such documentation shall be paid by Assignee from the Cash Collateral, upon presentation of an original invoice for such reasonable costs and expenses. 6.2 Assignor shall obtain from each lessee of the Equipment a written acknowledgement in the form of Annex 1 hereto. 6.3 Assignor shall notify Assignee of, and shall hold in trust for the benefit of Assignee, any payments received by Assignor in respect of the Relevant Agreements. Upon receipt, and without request or demand therefor, any such payment shall be promptly remitted by Assignor to the account of Assignee specified in Section 4 hereof. 6.4 All notices required to be given to Assignor in its capacity as "Lessor" under and as defined in any of the Relevant Agreements or hereunder shall be promptly transmitted by Assignor from and after the date hereof to Wells Fargo Bank, National Association, Sixth and Marquette, MAC N9303-120, Minneapolis, MN, 55479, Fax: (612) 667-7337 Attention: Virginia A. Housum. 7. Reservation of Rights. Indenture Trustee does not waive, and hereby expressly reserves, all rights and remedies available to it pursuant to the Indenture and under any applicable law. The transfer in lieu of foreclosure effected hereby shall be without prejudice to any such right or remedy so provided, which rights and remedies may be exercised at any time hereafter in Indenture Trustee's sole discretion. 8. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Entire Agreement. This Agreement supersedes all previous arrangements and agreements, whether written or oral, and comprises the entire agreement between the parties hereto, in respect of the subject matter hereof. 10. Severability. If any provision hereof shall be held invalid or unenforceable by any court or as a result of future administrative or legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof. 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. JETFLEET III, a California corporation By:________________________ Name: Its: WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, as Indenture Trustee By:________________________ Name: Its: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Owner Trustee By:________________________ Name: Its: 300123477v6 EXHIBIT A EQUIPMENT INFORMATION One (1) de Havilland DHC-6-300 aircraft, together with two Pratt & Whitney PW PT6A-27 engines, two Hartzell HC-B3TN-3D propellers and landing gear, all bearing the following marks: - ------------------------------------------ -------------------------- ------------------------- ---------------------- Aircraft Engines (Manufacturer's Propellers Serial No.) (Manufacturer's Serial No.) Lessee Name - ------------------------------------------ -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- Manufacturer's Serial Registration No. No. - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- - ------------------------ ----------------- -------------------------- ------------------------- ---------------------- 640 8Q-TML PCE40016 and PCE41904 BUA19567 and BUA27896* TransMaldivian Airways - ------------------------ ----------------- -------------------------- ------------------------- ----------------------
- --------------------------------------------------- Landing Gear (Manufacturer's Serial No.) - --------------------------------------------------- - --------------------------------------------------- Nose Landing Gear S/N H840 - --------------------------------------------------- - --------------------------------------------------- LH Main Landing Gear S/N 025RW - --------------------------------------------------- - --------------------------------------------------- RH Main Landing Gear S/N VAL011 - --------------------------------------------------- * On September 30, 2003 Propeller BUA14371 was removed and its hub was replaced with the Hartzell HC-B3TN-3D propeller hub bearing manufacturer's serial no. BUA27896. On November 12, 2003 the refurbished propeller was re-installed on the Aircraft. Assignor represents and warrants that TMA has good and marketable title to the replacement propeller and agrees to obtain a bill of sale for such propeller as set forth in the Lessee Acknowledgment attached hereto as Annex 1. EXHIBIT B DESCRIPTIONS OF RELEVANT AGREEMENTS 1. Aircraft Purchase Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 2. FAA Aircraft Bill of Sale between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 3. Bill of Sale between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 4. Cross Receipt between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 5. Aircraft Lease Agreement between JetFleet III and Aloha IslandAir, Inc. dated January 30, 1997. 6. Storage and Maintenance Letter Agreement between JetFleet III and Aloha IslandAir, Inc. dated March 18, 2002. 7. Operating Lease Agreement between JetFleet III and Trans Maldivian Airways Pvt. Ltd. dated June 10, 2002, as amended, modified or supplemented from time to time covering the de Havilland aircraft more completely described on Exhibit A above. 8. Certificate of Insurance issued by Aon Global Insurance Services Private Limited dated August 19, 2003 and relating to the Equipment. 9. Any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection with items 1 through 8 above, or otherwise relating to the Equipment. EXHIBIT C CASH COLLATERAL - ------------------------------------------------------------------ -------------------------- Cash Item Amount - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Security Deposit (TransMaldivian Airways) $52,485 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (Aloha IslandAir, Inc.) $41,895 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- Maintenance Reserves (TransMaldivian Airways) $233,109 - ------------------------------------------------------------------ -------------------------- - ------------------------------------------------------------------ -------------------------- TOTAL CASH COLLATERAL $327,489 - ------------------------------------------------------------------ --------------------------
Accounts The Cash Collateral is mingled with the other funds of the Assignor currently held in the following accounts: First Bank & Trust checking Account [deleted from filing] Fiserv Investor Services, Incorporated Account [deleted from filing] Franklin Money Fund Account [deleted from filing] ANNEX 1 [FORM OF LETTER TO LESSEE] Trans Maldivian Airways Private Limited ("TMA") Male' International Airport P.O. Box 2079 Male', Rep. Of Maldives TEL 011 960 325 708 FAX 011 960 323 161 Attn: Managing Director - Bram Steller Finance Director - Krishnan Balakrishnan [Date] Re: Operating Lease Agreement between JetFleet III ("Lessor") and TMA dated as of August 7, 2002 (the "Lease") covering one (1) de Havilland DHC-6-300 aircraft bearing Maldives registration mark 8Q-TML and manufacturer's serial number 640, together with two Pratt & Whitney PW PT6A-27 engines bearing manufacturer's serial number PCE40016 and PCE41904, respectively, and two Hartzell HC-B3TN-3D propellers bearing manufacturer's serial number BUA19567 and BUA14371 (the "Aircraft"). To Whom It May Concern: Reference is made to (i) the Lease, (ii) the Amended and Restated Indenture of Trust dated as of September 22, 1995 (the "Indenture") between Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, National Association), as indenture trustee thereunder ("Indenture Trustee"), and Lessor, and (iii) the Transfer Agreement and Deed in Lieu of Foreclosure dated as of May __, 2004 (the "Transfer Agreement"), a copy of which is attached hereto. 1. Assignment of Lease TMA acknowledges the notice and instructions herein contained as adequate notice of the transactions contemplated by the Transfer Agreement. Pursuant to the Transfer Agreement, Lessor has transferred all of its right, title and interest in and to, inter alia, the Lease and the Aircraft to Wells Fargo Bank, National Association, as owner trustee ("Owner Trustee"). On and after the date hereof, all payments due to Lessor under the Lease and any other agreement, supplement, guaranty, instrument, certificate, or other document entered into in connection therewith (the "Lease Documents") shall be made to Owner Trustee, at its account at Wells Fargo Bank Northwest, N.A., ABA No. 121000248, Account Name: JetFleet III OT, Attn: Corporate Trust Services, Account No. 051-09221-15, Re: 40059/SEI No. 16118100. TMA will cause Indenture Trustee and Owner Trustee to be added as additional insureds under the liability insurance and Owner Trustee to be added as sole loss payees under the hull insurance until the expiration of the Lease. TMA acknowledges and agrees that Lessor is not in default of any of its obligations under the Lease Documents and all payment obligations owed by the Lessor to Lessee under the Lease Documents have been satisfied as of the date hereof. 2. Propeller Substitution TMA acknowledges that on or about September 30, 2003 the Hartzell HC-B3TN-3D propeller bearing manufacturer's serial no. BUA14371 (the "Original Propeller") was removed from the Aircraft and subsequently was replaced with the Hartzell HC-B3TN-3D propeller bearing manufacturer's serial no. BUA27896 (the "Replacement Propeller"). TMA represents and warrants that it has good an marketable title to the Hartzell HC-B3TN-3D propeller bearing manufacturer's serial no. BUA27896, free and clear of all liens and encumbrances. TMA agrees, for the benefit Lessor and the Owner Trustee, that it will enter into such lease amendments and provide such bills of sale with respect to the Replacement Propeller as shall reasonably be requested by Lessor or the Owner Trustee in order to (i) transfer title to the Replacement Propeller to Lessor or Owner Trustee, as the case may be, free and clear of all liens and encumbrances and (ii) subject the Replacement Propeller to the Lease; provided, that TMA's obligations to transfer title to the Replacement Propeller shall be subject to the concurrent transfer of title to TMA of the Original Propeller from Lessor or Owner Trustee, as the case may be, free and clear of all liens and encumbrances. Please indicate your acceptance of the above by signing below. Very truly yours, JETFLEET III, a California corporation By:_____________________ Name: Title: Acknowledged and Agreed: TRANS MALDIVIAN AIRWAYS By:____________________ Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----