SERIES B PREFERRED STOCK PURCHASE AGREEMENT
SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
This SERIES B PREFERRED STOCK
PURCHASE AGREEMENT (this
“Agreement”), dated as of September __, 2021, is
entered into by and among JetFleet Holding Corp., a California
corporation (the “Company”), and ACY Legacy Shareholder
Trust, a Delaware statutory trust (the
“Purchaser”).
RECITALS.
WHEREAS, on March 29, 2021, AeroCentury
Corp., JetFleet Holding Corp., and JetFleet Management Corp.
(collectively, the “Debtors”) commenced voluntary cases
under chapter 11 of title 11 of the United States Code, 11 U.S.C.
§§ 101 et seq. (the “Bankruptcy Code”), which
are being jointly administered under the caption In re AeroCentury
Corp., et al., Case No. 21-10636 (JTD) (the “Chapter 11
Cases”) in the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy
Court”);
WHEREAS, the Debtors filed a Combined
Disclosure Statement and Joint Chapter 11 Plan of AeroCentury
Corp., and its Affiliated Debtors dated July 14, 2021 (the
“Plan,” as it may be altered, amended, modified or
supplemented from time to time including in accordance with any
documents submitted in support thereof and the Bankruptcy Code or
the Bankruptcy Rules) [Docket No. 225];
WHEREAS, the Bankruptcy Court approved
the Plan on an interim basis for solicitation purposes only
pursuant to the Solicitation Procedures Order [Docket No.
222];
WHEREAS, the Plan consists of a toggle
between (i) the Sponsored Plan, which, pursuant to the terms of the
Plan Sponsor Agreement, the Debtors and the Plan Sponsor will agree
to a restructuring of the Debtors’ businesses that will be
implemented through the Sponsored Plan (collectively, the
“Restructuring Transactions”), and (ii) the Stand-Alone
Plan, whereby the Debtors’ remaining Assets will vest in the
Post-Effective Date Debtors and be monetized by the Plan
Administrator;
WHEREAS, the Debtors filed a Notice of
Selection of Plan Sponsor on August 9, 2021 [Docket No. 254], which
included as Exhibit A an Investment Term Sheet between AeroCentury
and Plan Sponsor dated as of August 9, 2021 (the “Term
Sheet”) setting forth the principal terms of an investment by
Plan Sponsor into AeroCentury to be implemented pursuant to the
Plan; and
WHEREAS, pursuant to the Plan, the
Purchaser wishes to purchase, and the
Company wishes to sell, upon the terms and conditions stated in
this Agreement, 1 share of
Series B Preferred Stock, no par value (the
“Shares”).
NOW,
THEREFORE, in consideration of
the mutual promises and covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1.1 Authorization. The Company shall adopt
and file with the Secretary of State of Delaware on or before the
Closing (as defined below) the Amended and Restated Articles of
Incorporation in the form attached hereto
as Exhibit A (the
“Restated
Certificate”).
1.2 Sale of Shares. Subject to the
terms and conditions hereof, the Company agrees to issue and sell
to the Purchaser at the Closing, and the Purchaser agrees to
purchase from the Company, 1 Shares at the aggregate purchase price
of $1.00 (the “Purchase Price”). The Shares shall have
the rights, preferences, privileges and restrictions set forth in
the Restated Certificate.
2. Closing;
Delivery.
2.1 Closing.
The closing of the purchase and sale of the Shares hereunder is
scheduled to take place at the offices of Young Xxxxxxx Stargatt
& Xxxxxx, LLP, 0000 X. Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000, at
____ a.m. local time, on September 30, 2021, or at such other time
and place as the Company and the Purchaser mutually agree upon
orally or in writing (which time and place is designated as the
“Closing”).
2.2 Deliveries.
At the Closing, the Company will deliver to the Purchaser a
certificate or certificates representing the number of Shares that
the Purchaser is purchasing against payment of the Purchase
Price.
3. Representations and
Warranties of the Company. The Company hereby represents and
warrants to the Purchaser that as of the Closing, and except for
the Chapter 11 Cases and except as contemplated by or as a result
of the Plan or the Restructuring Transactions:
3.1 Organization and Good Standing and
Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of California and has all requisite corporate power and authority
to carry on its business as now conducted.
3.2 Capitalization. Immediately
prior to the Closing, the authorized and outstanding capital of the
Company consists of:
(a) 1,000,000
shares of Common Stock, no par value, of which no shares are issued
and outstanding pursuant to the Plan, of which 100,000 shares of
Common stock will be issued concurrently at the
Closing.
(b) 104,083
shares of Preferred Stock, of which 104,082 Shares have been
designated as Series A Preferred Stock, of which all 104,082 shares
of Series A Preferred Stock will be issued concurrently the
Closing, and 1 share of Series B Preferred Stock will be designated
as Series B Preferred Stock, of which all 1 share of Series B
Preferred Stock will be issued concurrently at the
Closing.
3.3 Corporate Power; Binding
Obligations. The Company has all requisite legal and
corporate power to enter into, execute and deliver this Agreement.
This Agreement constitutes valid and binding obligations of the
Company, enforceable in accordance with their terms, (i) as limited
by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable
remedies, and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
3.4 Authorization. All corporate
action on the part of the Company, its board of directors (the
“Board”) and stockholders necessary for the (i)
authorization, execution, delivery and performance by the Company
of this Agreement; (ii) the authorization, sale, issuance and/or
delivery of the Shares; and (iii) the performance of the
Company’s obligations hereunder has been taken or will be
taken prior to the Closing. The Shares when issued in compliance
with the provisions of this Agreement, will be duly authorized and
validly issued and will be fully paid and nonassessable, and free
of any liens or encumbrances.
3.5 Compliance with Other
Instruments. The Company is not in violation or default of
any term of its Articles of Incorporation or Bylaws, or of any
provision of any mortgage, indenture, agreement, instrument or
contract to which it is party or by which it is bound or of any
judgment, decree, order, writ or any statute, rule or regulation
applicable to the Company which would materially and adversely
affect the Company’s business, assets or results of
operations. The Company’s execution, delivery, and
performance of and compliance with this Agreement and the issuance
and sale of the Shares will not, with or without the passage of
time or giving of notice, result in any such material violation, or
be in conflict with or constitute a default under any such term, or
result in the creation of any lien upon any of the Company’s
assets or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval
applicable to the Company, its business or operations or any of its
assets, except for any such violation, conflict, default or lien
that would not reasonably be expected to materially and adversely
affect the Company’s business, assets or results of
operations.
3.6 Government
Consent. No consent, approval,
order or authorization of, or designation, registration,
declaration or filing with, any federal, state or other
governmental authority on the Company’s part is required in
connection with the valid execution and delivery of this Agreement
or the offer, sale or issuance of the Shares, except for (i) any
notices of sales required to be filed with the SEC under Regulation
D of the Securities Act of 1933, as amended (the “Securities
Act”) and (ii) any filing pursuant to Section 25102(f) of the
California Corporate Securities Law of 1968, as amended, and the
rules thereunder, which filings will be effected within fifteen
(15) days of the sale of the Shares hereunder, or such other
post-closing filings as may be required under other applicable blue
sky laws.
3.7 Litigation.
There is no action, suit, proceeding or investigation pending or,
to the Company’s knowledge, currently threatened against the
Company that questions the validity of this Agreement, or the right
of the Company to enter into the Agreements or to consummate the
transactions contemplated hereby, or thereby, or that, either
individually or in the aggregate, if determined adversely to the
Company, would reasonably be expected to have a material adverse
effect on the Company’s business, assets or results of
operations. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality.
3.8 Liabilities. The
Company has no material liabilities (absolute or contingent) except
(i) liabilities disclosed to the Purchaser in this Agreement, and
(ii) current liabilities incurred in the ordinary course of
business that do not, individually or in the aggregate, have a
material adverse effect on the Company’s financial condition
or business as now conducted.
4. Purchaser
Representations and Warranties. The Purchaser represents and
warrants to the Company as follows:
4.1 Organization, Authority If the
Purchaser is an entity, such Purchaser is a corporation,
partnership, limited liability company or partnership, association,
joint stock company, trust, unincorporated organization or other
entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with the requisite
corporate, partnership or other power and authority to enter into
and to consummate the transactions contemplated by the Agreement
and otherwise to carry out its obligations hereunder and
thereunder. The purchase by the Purchaser of the Shares hereunder
has been, to the extent the Purchaser is an entity, duly authorized
by all necessary corporate, partnership or other action on the part
of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and constitutes the valid and binding
obligation of the Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
4.2 Purchase
Entirely for Own Account. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representation to the
Company, which by the Purchaser's execution of this Agreement the
Purchaser hereby confirms, that the Purchaser is acquiring the
Shares for investment for the Purchaser's own account, not as a
nominee or agent, and not with a view to, or for, resale or
distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the
Purchaser further represents that the Purchaser does not have any
contract, undertaking, agreement or arrangement with any person or
entity to sell, transfer or grant participations to such person or
to any third person, with respect to any of the
Shares.
4.3 Investment Experience. The
Purchaser is an investor in securities of companies in the
development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such
knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in
the Shares. If other than an individual, the Purchaser also
represents that it has not been organized for the purpose of
acquiring the Shares.
4.4 Compliance with Securities
Laws. The Purchaser acknowledges that it is aware that the
Shares to be issued to the Purchaser by the Company pursuant to
this Agreement has not been registered under the Securities Act,
and that the Shares are deemed to constitute "restricted
securities" under Rule 144 promulgated under the Securities Act. In
this connection, the Purchaser
acknowledges and understands that resale of the Purchaser's Shares
may be restricted indefinitely unless they are subsequently
registered under the Securities Act and qualified under applicable
state securities laws or an exemption from such registration and
such qualification is available, and that the Company is under no
obligation to file any registration statement under the Securities
Act or to qualify any Shares under applicable state securities
laws. The Purchaser warrants and represents that the
Purchaser has either (i) preexisting personal or business
relationships with the Company or any of its officers, directors or
controlling persons, (ii) qualified as an “accredited
investor” within the meaning of SEC Rule 501 of Regulation D,
as presently in effect, or (iii) the capacity to protect its own
interests in connection with the purchase of the Shares by virtue
of the business or financial expertise of any professional advisors
to the Purchaser who are unaffiliated with and who are not
compensated by the Company or any of its affiliates, directly or
indirectly.
4.5 Representations
and Reliance. The Purchaser understands that the Shares are
being offered and sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and
state securities laws and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth
herein.
4.6 Further
Limitations on Disposition.
Without in any way limiting the representations set forth above,
the Purchaser further agrees not to make any disposition of all or
any portion of the Shares unless and until the transferee has
agreed in writing for the benefit of the Company to be bound by
this Section 4 provided and to the extent this Section and such
agreement are then applicable; and:
(a) There
is then in effect a Registration Statement under the Securities Act
covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i)
The Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed
disposition, and (ii) if reasonably requested by the Company, the
Purchaser shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the
Securities Act.
(c) The
Purchaser has complied with all restrictions on transfer set forth
in the Restated Certificate.
4.7 Legends. It is understood that
the certificates evidencing the Shares may bear one or all of the
following legends:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE TRANSFER IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER AS PROVIDED IN THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF THE COMPANY.
4.8 No General Solicitation. The
Purchaser has not been offered any of the Shares by any form of
advertisement, article, notice or other communication published in
any newspaper, magazine, the Internet, or similar media or
broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any such media.
4.9 No Public Market. The Purchaser
understands and acknowledges that no public market now exists for
any of the Shares and that the Company has made no assurances that
a public market will ever exist for the Shares.
4.10 No
Investment, Tax or Legal Advice. The Purchaser understands
that nothing in this Agreement, or any other materials presented to
the Purchaser in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice. The Purchaser
has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection
with its purchase of Shares.
5. Purchaser Closing
Conditions. The obligations of the Purchaser under Section
1.2 of this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions, the waiver of
which will not be effective against the Purchaser who does not
consent thereto:
5.1 Representations
and Warranties Correct. The Company's representations and
warranties in Section 3 hereof shall be true and correct in all
material respects as of such Closing with the same effect as though
such representations and warranties had been made on and as of the
date of such Closing.
6. Company Closing
Conditions. The obligations of the Company to the Purchaser
under this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions by the
Purchaser:
6.1 Representations
and Warranties. The
Purchaser's representations and warranties in Section 4 hereof
shall be true and correct in all material respects as of such
Closing with the same effect as though such representations and
warranties had been made on and as of the date of the
Closing.
6.2 Payment of Purchase Price. The
Purchaser shall have delivered the purchase price specified in
Section 1.2 and in the Schedule of Purchasers.
7. Miscellaneous.
7.1 Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the
subject matters hereof and thereof.
7.2 Waivers
and Amendments. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the Purchaser. Any amendment or waiver effected in
accordance with this paragraph will be binding upon each holder of
any securities purchased under this Agreement at the time
outstanding (including any securities into which such securities
are convertible), each holder of all such securities, and the
Company.
7.3 Survival
of Warranties. The warranties, representations, and
covenants of the Company and the Purchaser contained in this
Agreement or made pursuant to this Agreement will survive the
execution and delivery of this Agreement and the
Closing.
7.4 Successors and Assigns. Except
as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties (including
transferees of any Shares). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the
parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this
Agreement.
7.5 Governing
Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
without regard to the conflicts of law provisions. The Company and
the Purchaser each hereby submits to the jurisdiction of the state
and Federal courts located in Santa Xxxxx, State of California,
with respect to all actions relating to this Agreement.
7.6 Notices. All notices and other
communications required or permitted hereunder shall be in writing
and shall be deemed effective upon delivery to the party to be
notified in person or by courier service or five (5) days after
deposit with the United States mail by registered or certified
mail, postage prepaid, or one (1) day after deposit with Federal
Express, United Parcel Service or other guaranteed overnight
delivery service, addressed (a) if to the Purchaser, at the
Purchaser’s address listed on the signature page, or (b) if
to any other holder of any Shares, at such address as such holder
shall have furnished the Company in writing, or, until any such
holder so furnishes an address to the Company, then to and at the
address of the last holder of such Shares who has so furnished an
address to the Company, or (c) if to the Company, one (1) copy
should be sent to its address set forth on the signature page of
this Agreement and addressed to the attention of the
Company’s Secretary, or at such other address as the Company
shall have furnished to the Purchaser.
7.7 Finder’s Fee. Each party
represents and warrants to the others that such party is not and
will not be obligated for any finder's or brokers fee or commission
(collectively “Finder’s Fee”) in connection with
the transactions described herein. The Purchaser agrees to
indemnify and to hold the Company harmless from any liability for
any Finder’s Fee (and the cost of defending against such
liability or asserted liability) for which the Purchaser or any of
the Purchaser’s directors, officers, employees, agents or
affiliates is responsible. The Company agrees to indemnify and to
hold the Purchaser harmless from any liability for any
Finder’s Fee (and the cost of defending against such
liability or asserted liability) for which such Company or any of
its managers, officers, employees, agents or affiliates is
responsible.
7.8 Expenses. Each party shall pay
all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this
Agreement.
7.9 Severability. If one or more
provisions of this Agreement are held to be unenforceable under
applicable law, such provision will be excluded from this Agreement
and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance
with its terms.
7.10 Titles
and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in
construing or interpreting this Agreement.
7.11 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall be
deemed to constitute one instrument.
7.12 Facsimile.
Executed copies of this Agreement may be exchanged via facsimile,
and such signatures shall be deemed as originals.
[INTENTIONALLY
LEFT BLANK]
4847-5207-1158.1
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written
above.
COMPANY:
JetFleet Holding
Corp.
a
California corporation
By:
Name:
Title:
Address:
PURCHASER:
ACY
Legacy Shareholder Trust,
a
Delaware statutory trust
By:
Name:
Title:
Address:
EXHIBIT A
RESTATED CERTIFICATE
