COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE
AGREEMENT
This COMMON STOCK PURCHASE
AGREEMENT (this
“Agreement”), dated as of September __, 2021, is
entered into by and among JetFleet Holding Corp., a California
corporation (the “Company”), the purchasers listed on
the Schedule of Purchasers attached hereto as Exhibit A
(individually a
“Purchaser” and collectively the
“Purchasers”) and the individuals listed on the
Schedule of JHC Management Shareholders attached hereto as
Exhibit
B (individually, a “JHC
Management Shareholder” and collectively the “JHC
Management Shareholders”)1. The Company
may amend Exhibit A
in connection with each closing to
reflect the Purchasers at such closing.
RECITALS.
WHEREAS, on March 29, 2021, the 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;
WHEREAS, on or about the date of the
Closing, the Company shall issue and sell to the JHC Management
Shareholders an aggregate of 65,000 shares of Common Stock of the
Company;
WHEREAS, pursuant to the Plan,
each Purchasers, severally and not
jointly, wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement, that aggregate
number of shares of the common stock, no par value, of the Company
(the “Common Stock”), set forth opposite their
respective names on Exhibit A
hereto; and
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 has
authorized the sale and issuance of up to 1,000,000 shares of its
Common Stock, no par value, of which no such shares of Common Stock
are issued and outstanding pursuant to the Plan.
1.2 Sale
of Shares. Subject to the terms and conditions hereof, the
Company agrees to issue and sell to each of the Purchasers at the
Closing, and each Purchaser, severally and not jointly, agrees to
purchase from the Company, that number of shares of Common Stock
specified opposite each Purchaser’s name on the Schedule of
Purchasers (the “Shares”), at a purchase price of $1.00
per share.
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 ▇▇▇▇▇▇▇ Stargatt
& ▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at
____ a.m. local time, on September 30, 2021, or at such other time
and place as the Company and the Purchasers 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 Purchasers a
certificate or certificates representing the number of Shares that
each such Purchaser is purchasing against payment of the purchase
price therefor by check in the amount specified next to such
Purchaser’s name on the Schedule of Purchasers.
3. Representations and
Warranties of the Company. The Company hereby represents and
warrants to the Purchasers 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.
(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 constitute valid and binding obligations of the
Company, enforceable in accordance with their 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.
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. This Agreement, when executed and
delivered by the Company, shall constitute the valid and binding
obligations of the Company enforceable in accordance with their
respective terms. 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 Purchasers 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. Each 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 such Purchaser of the Shares hereunder
has been, to the extent such Purchaser is an entity, duly
authorized by all necessary corporate, partnership or other action
on the part of such Purchaser. This Agreement has been duly
executed and delivered by such Purchaser and constitutes the valid
and binding obligation of such 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 such
Purchaser in reliance upon such Purchaser's representation to the
Company, which by such Purchaser's execution of this Agreement such
Purchaser hereby confirms, that such Purchaser is acquiring the
Shares for investment for such 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 such Purchaser has not
present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, such
Purchaser further represents that such 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. Such
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 of
1933, as amended (“Securities Act”), and that the
Shares are deemed to constitute "restricted securities" under Rule
144 promulgated under the Securities Act. In this connection,
such Purchaser acknowledges and
understands that resale of such 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 (i) is an “accredited investor” within the
meaning of SEC Rule 501 of Regulation D, as presently in effect,
and (ii) has the capacity to protect his/her 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.
Further, the Purchaser hereby (i) certifies that he or she is not a
“U.S. person” within the meaning of SEC Rule 902 of
Regulation S, as presently in effect, that such Purchaser was
offshore both at the time of the Company’s offer to sell
Shares to such Purchaser and at the time of purchase and sale of
such Shares, that such Purchaser is not acquiring Shares for the
account or benefit of any U.S. person, and that such Purchaser
shall be the sole beneficial owner of the Shares with sole
dispositive authority and sole voting authority over the Shares,
(ii) agrees to resell the Shares only in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration, (iii) agrees that any certificate representing
Shares sold to such Purchaser shall contain a legend to the effect
that transfer is prohibited except in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act or pursuant to an available exemption from
registration, and (iv) agrees that the Company is hereby
required to refuse to register any transfer of any Shares issued to
such Purchaser not made in accordance with the provisions of
Regulation S, pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration.
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,
such 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)
Such 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, such
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) Such
Purchaser acknowledges and agrees that the Shares are subject to a
right of first refusal (“Right of First Refusal”) as
set forth in the Bylaws of the Company, which Right of First
Refusal is incorporated herein by reference irrespective of whether
the Bylaws are amended at some future date to remove the Right of
First Refusal therefrom, and that, except in compliance with such
Right of First Refusal, neither such Purchaser nor any person
receiving the Shares by operation of law or other involuntary
transfer shall sell, hypothecate, encumber or otherwise transfer
any Shares or any right or interest therein.
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
SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO THE TERMS AND CONDITIONS OF A STOCK PURCHASE
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER HEREOF. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO
THE SECRETARY OF THE CORPORATION.
THE
SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFIATE
IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY, AS PROVIDED IN THE
BYLAWS OF THE COMPANY.
4.8 No General Solicitation.
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 each 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 any 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 each Purchaser
under this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions by that
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 for the Shares
purchased by such Purchaser as specified in Section 1.2 and in the
Schedule of Purchasers.
7. Board of Directors;
Observer Rights.
7.1 Board
of Directors.
(a) In
any election of members of the Board of Directors of the Company or
vote to remove members of the Board of Directors, by written
consent or at a meeting of shareholders, each Purchaser hereby
agrees to vote, or cause to be voted, all securities of the Company
that the holders of which are entitled to vote for members of the
Board of Directors, including without limitation all Shares, by
whatever name called, now owned or subsequently acquired by such
Purchaser, however acquired, whether through stock splits, stock
dividends, reclassifications, recapitalizations, similar events or
otherwise, owned by such Purchaser, or over which such Purchaser
has voting control, from time to time and at all times, in the same
proportion and in favor of the election of the same persons or in
favor of the removal of the same persons as the shares of Common
Stock of the Company held by holders other than the Purchasers are
voted in any such election. By way of example and not limitation,
if the shares of Common Stock held by holders other than the
Purchasers are voted 20% in favor of a first nominee, 30% in favor
of a second nominee and 50% in favor of a third nominee, then each
Purchaser shall vote 20% of his or her securities in favor of the
first nominee, 30% in favor of the second nominee and 50% in favor
of the third nominee.
(b) Each
Purchaser hereby constitutes and appoints as the proxy of the
Purchaser and hereby grants a power of attorney to the President of
the Company, with full power of substitution, with respect to the
matters set forth in this Section 7, and hereby authorizes such
proxy to represent and vote all of such Purchaser’s voting
securities in the manner prescribed by this Section 7 or to take
any action reasonably necessary to effect the purposes and intent
of this Section 7. Each of the proxy and power of attorney granted
pursuant to this Section
7 is given in consideration of the agreements and covenants
of the Company and the parties in connection with the transactions
contemplated by this Agreement and, as such, each is coupled with
an interest and shall be irrevocable unless and until this Section
7 expires. Each Purchaser hereby revokes any and all previous
proxies or powers of attorney with respect to the Shares and shall
not hereafter purport to grant any other proxy or power of attorney
with respect to any of the Shares, deposit any of the Shares into a
voting trust or enter into any agreement (other than this
Agreement), arrangement or understanding with any person, directly
or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of any of the Shares.
(c) Each
Purchaser acknowledges and agrees that the Company and each JHC
Management Shareholder hereto will be irreparably damaged in the
event any of the provisions of this Section 7 are not performed by
the Purchasers in accordance with their specific terms or are
otherwise breached. Accordingly, it is agreed that each of the
Company and the JHC Management Shareholders shall be entitled to an
injunction to prevent breaches of this Section 7, and to specific
enforcement of this Section 7 and its terms and provisions in any
action instituted in any court of the United States or any state
having subject matter jurisdiction. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
(d) This
Section 7.1 shall terminate upon the redemption of Series A
Preferred Stock of the Company.
7.2 Observer Rights. As long as
▇▇▇▇▇▇▇ ▇▇ beneficially owns 5% or more of the outstanding shares
of Common Stock of the Company, the Company will permit the ▇▇▇▇▇▇▇
▇▇ (or his permitted designee) (the “Observer”) to
attend all meetings of the Board of Directors, and any committee
thereof, in a nonvoting observer capacity and, in this respect,
Company shall provide the Observer with copies of all notices,
minutes, consents and all other materials provided to the
directors, at the time such materials are provided to the
directors; provided, however, that the Observer
shall agree to hold in confidence all information so provided; and
provided further,
that the Company may withhold any information and exclude the
Observer from any meeting or portion thereof if access to such
information or attendance at such meeting could adversely affect
the attorney-client privilege between the Company and its counsel
or result in disclosure of trade secrets or a conflict of interest,
or if the Board of Directors of the Company determines in good
faith that the Observer is a competitor or representative of a
competitor of the Company.
7.3 Termination.
This Section 7 shall terminate upon an underwritten public offering
of the Shares in which the aggregate proceeds to the Company are at
least $25,000,000.
8. Right
of Secondary
Refusal and Co-Sale Right.
8.1 Right of First
Offer.
(a) Proposed Transfers by
Purchaser. Should a Purchaser or a JHC Management
Shareholder receive a bona fide offer (individually, a
“Purchase Offer”), from any person to purchase or enter
into any transaction to Transfer (as defined below) any Shares, or
any interest in, any Shares (the “Qualifying Stock”)
held by the Purchaser or JHC Management Shareholder (the
“Selling Holder”), then the Selling Holder shall
promptly notify the Company and the JHC Management Shareholders (in
the case of a Selling Holder that is a Purchaser) or the Purchasers
(in the case of a Selling Holder that is a JHC Management
Shareholder) of the terms and conditions of such Purchase Offer
(the “Purchase Offer Notice”). The Purchase Offer
Notice must specify: (a) the name and address of the person to
which the Selling Holder proposes to sell or otherwise Transfer the
Qualifying Stock or an interest in the Qualifying Stock (the
“Offeror”), (b) the number of shares of Qualifying
Stock the Selling Holder proposes to sell or otherwise Transfer
(the “Offered Shares”), (c) the consideration per share
to be delivered to the Selling Holder for the proposed Transfer
(“Offered Price”), and (d) all other material terms and
conditions of the proposed transaction.
(b) Company Right of
FirstRefusal.
(i) The Company shall
have the right of first refusal to purchase all or any part of the
Offered Shares for the consideration per share and on the terms and
conditions specified in the Purchase Offer Notice pursuant to the
Bylaws of the Company.
(ii) To
the extent that the consideration proposed to be paid by the
Offeror for the Offered Shares consists of property other than cash
or a promissory note, the consideration required to be paid by the
Company exercising its right of first refusal may consist of cash
equal to the value of such property, as determined in good faith by
agreement of the Selling Holder and the Company.
(c) Secondary Right of
Refusal.
(i) In the event that
the Company does not purchase all of the Offered Shares pursuant to
Section 8.1(b), each JHC Management Shareholder (in the case of a
Selling Holder that is a Purchaser) or each Purchaser (in the case
of a Selling Holder that is a JHC Management Shareholder) shall
have a secondary right of refusal, exercisable for a period of ten
(10) days from the date of expiration of the Company’s right
of first refusal, to purchase, on a pro rata basis according to the
number of Shares owned by such JHC Management Shareholder or
Purchaser, relative to the total number of Shares then held by all
JHC Management Shareholders or Purchasers, respectively, all or
part of the Offered Shares not purchased by the Company for the
consideration per share and on the terms and conditions set forth
in the Purchase Offer Notice. Such secondary right of refusal shall
be exercised by delivery by such JHC Management Shareholder or such
Purchaser of written notice to the Secretary of the
Company.
(ii) In
the event the JHC Management Shareholders or Purchasers have
exercised their secondary rights of refusal with respect to some
but not all of the remaining Offered Shares, those JHC Management
Shareholders or Purchasers who have so exercised such rights within
the 10-day period specified in Section 8.1(c)(i) shall have an
additional option, for a period of five (5) days next succeeding
the expiration of such 10-day period, to purchase all or any part
of the balance of such Offered Shares on the terms and conditions
set forth in the Purchase Offer Notice, which option shall be
exercised by the delivery of written notice to the Secretary of the
Company. In the event there are two (2) or more such JHC Management
Shareholders or Purchasers that choose to exercise the
last-mentioned option for a total number of remaining Offered
Shares in excess of the number available, the remaining Offered
Shares available for each such JHC Management Shareholder’s
or Purchaser’s option shall be allocated to such JHC
Management Shareholder or Purchaser pro rata based on the number of
Shares owned by the JHC Management Shareholders or Purchasers so
electing.
(ii) If
the JHC Management Shareholders or Purchasers exercise in full
their secondary rights of refusal to purchase the remaining Offered
Shares, the Company shall immediately notify all of the exercising
JHC Management Shareholders or Purchasers of that fact. The closing
of the purchase of the remaining Offered Shares shall take place at
the offices of the Company no later than (a) five (5) days after
the date of such notice to the JHC Management Shareholders or
Purchasers, or (b) the date that is sixty (60) days after the date
of the Purchase Offer Notice.
(d) Sale to Offeror. In the event
that the Company and the JHC Management Shareholders or Purchasers
as a whole do not purchase all of the Offered Shares pursuant to
this Section 8.1, then the Selling Holder may Transfer, subject to
Section 8.2, all of the remaining Offered Shares, if any, to the
Offeror on the terms and conditions set forth in the Purchase Offer
Notice; provided,
however, that (i)
such sale is bona fide, (ii) the price for the sale to the Offeror
is a price not less than the Offer Price and the sale is otherwise
on terms and conditions no less favorable to the Selling Holder
than those set forth in the Purchase Offer Notice, and (iii) the
Transfer is made within one hundred twenty (120) days after the
giving of the Purchase Offer Notice. If such a Transfer does not
occur within such 120-day period for any reason, the restrictions
provided for in Section 8.1 shall again become effective, and no
Transfer of any shares of Common Stock may be made by the Selling
Holder thereafter without again complying with this Section
8.1.
(e) Definition of Transfer. For the
purpose of this Agreement, “Transfer” means and
includes any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by bequest, devise or descent,
or other transfer or disposition of any kind, including, without
limitation, transfers to receivers, levying creditors, trustees or
receivers in bankruptcy proceedings or general assignees for the
benefit of creditors, whether voluntary or by operation of law,
directly or indirectly, except for:
(i) the transfer of any
or all of the Shares during the JHC Management Shareholder’s
or Purchaser’s lifetime by gift or on the Management
Shareholder’s or Purchaser’s death by will or intestacy
to the Management Shareholder’s or Purchaser’s spouse
or member of the immediate family of the Management Shareholder or
Purchaser (“Immediate Family”) or to a trust for the
benefit of the Management Shareholder or Purchaser or the
Management Shareholder’s or Purchaser’s Immediate
Family;
(ii) any
transfers of Shares to the Company or to a Management Shareholder
or Purchaser upon exercise of the right of first refusal or
secondary right of refusal pursuant to this Section
8.1;
(iii) any
transfer of Shares amongst the Purchasers or amongst the Management
Shareholders; or
(iv) any
sale to the public pursuant to an effective registration statement
filed with the U.S. Securities and Exchange
Commission;
provided that (y)
the JHC Management Shareholder or Purchaser or the Permitted
Transferees (as defined below) shall inform the Company of such
pledge, transfer or gift prior to effecting it, and (z) the
pledgee, transferee or donee of any conveyance contemplated by
clauses (i) through (iii) above (collectively, the “Permitted
Transferees”) shall furnish the Company with a written
agreement to be bound by and comply with all provisions of this
Agreement applicable to the JHC Management Shareholder or
Purchaser.
8.2 Co-Sale Rights. In the event
that a JHC Management Shareholder or Purchaser does not elect to
purchase any Offered Shares pursuant to Section 8.1(c) above, such
JHC Management Shareholder or Purchaser shall have the right (to
the extent set forth below), exercisable upon written notice to the
Selling Holder and the Company within ten (10) days after receipt
of the Purchase Offer Notice (“Tag-along Election”), to
participate in the Selling Holder’s sale or other Transfer of
the Offered Shares pursuant to the specified terms and conditions
of such Purchase Offer Notice. To the extent the JHC Management
Shareholder or Purchasers exercise such right of co-sale in
accordance with the terms and conditions set forth below, the
number of Offered Shares that the Selling Holder may sell pursuant
to such Purchase Offer shall be correspondingly reduced. The right
of co-sale of the JHC Management Shareholder or Purchasers shall be
subject to the following terms and conditions:
(a) As soon as
practicable after the receipt of the Tag-along Election from the
JHC Management Shareholder or Purchaser, the Company shall notify
the Selling Holder and each JHC Management Shareholder or Purchaser
that has submitted the Tag-along Election (“Tag-along
Offeree”) of the number of Shares such Tag-along Offeree is
obligated to sell or otherwise dispose of pursuant to this Section
8.2, such number to be calculated in accordance with Sections
8.2(b). Upon receipt of the notice from the Company, the Selling
Holder shall notify in writing to the Company and each accepting
Tag-along Offeree of the proposed date of Transfer to the Offeror
(“Sale Date”), which notice shall not be less than ten
(10) days of the Sale Date. The Tag-along Offeree shall deliver to
the Selling Holder prior to the Sale Date the duly endorsed
certificate or certificates representing the Shares to be sold or
otherwise disposed of pursuant to such offer by such Tag-along
Offeree, together with a limited power-of-attorney authorizing the
Selling Holder to sell or otherwise dispose of such Shares pursuant
to the terms of the Purchase Offer Notice.
(b) Each JHC Management
Shareholder or Purchaser may sell all or any part of that number of
Shares owned by such JHC Management Shareholder or Purchaser that
is not in excess of the product obtained by multiplying (i) the
aggregate number of Shares covered by the Purchase Offer Notice, by
(ii) a fraction, the numerator of which is the number of Shares at
the time owned by such JHC Management Shareholder or Purchaser, and
the denominator of which is the sum of (X) the number of Shares
then held by the JHC Management Shareholders or Purchasers that are
participating in such sale, plus (Y) the total number of Shares
owned the Selling Holder.
(c) The stock
certificate or certificates that a Tag-along Offeree delivers to
the Selling Holder pursuant to Section 8.2(a) shall be transferred
by the Selling Holder to the Offeror upon the consummation of the
sale of the Shares pursuant to the terms and conditions specified
in the Purchase Offer Notice, and the Selling Holder shall promptly
thereafter remit to the respective Tag-along Offeree that portion
of the sale proceeds to which a Tag-along Offeree is entitled by
reason of its participation in such sale. To the extent the Offeror
prohibits such assignment or otherwise refuses to purchase shares
or other securities from a Tag-along Offeree exercising rights
hereunder, the Selling Holder shall not sell to such Offeror unless
and until simultaneous with such sale, the Selling Holder shall
purchase such shares from such Tag-along Offeree on terms
consistent with the Purchase Offer.
(d) The exercise or
non-exercise of the rights of a JHC Management Shareholder or
Purchaser hereunder to participate in one or more sales or other
Transfers of Shares made by a Selling Holder shall not adversely
affect its rights to participate in subsequent sales or other
Transfers of Shares by a JHC Management Shareholder or Purchaser or
Permitted Transferee (collectively, the “Holder”)
pursuant to Section 8.2 hereof.
8.3 Prohibited
Transfers.
(a) In the event a
Holder should sell any Shares in contravention of Section 8.2 above
(a “Prohibited Transfer”) the Holder, in addition to
such other remedies as may be available at law, in equity or
hereunder, shall have the put option provided in this Section 8.3,
and such Holder shall be bound by the applicable provisions of such
put option.
(b) In the event of a
Prohibited Transfer, any JHC Management Shareholder or Purchaser
shall have the right to sell to such Holder a number of Shares
equal to the number of Shares that such JHC Management Shareholder
or Purchaser would have been entitled to transfer to the purchaser
in the Prohibited Transfer pursuant to the terms hereof. Such sale
shall be made on the following terms and conditions:
(i) The
price per share at which the Shares are to be sold to such Holder
shall be equal to the price per share, if any, paid by the
purchaser to such Holder in the Prohibited Transfer.
(ii) Within
a period of sixty (60) days after the later of the dates on which
the JHC Management Shareholders or Purchasers (i) receive
notice from such Holder of the Prohibited Transfer or
(ii) otherwise become aware of the Prohibited Transfer, the
JHC Management Shareholders or Purchasers shall, if exercising the
put option created hereby, deliver to such Holder the certificate
or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer. If the JHC Management
Shareholders or Purchasers do not do so within that period, they
will have waived irrevocably all rights under this Agreement with
respect to that Prohibited Transfer, but not with respect to other
Prohibited Transfers.
(iii) Such
Holder shall, upon receipt of the certificate or certificates for
the Shares to be sold by the JHC Management Shareholder or
Purchasers pursuant to Section 8.3, pay to the order of the
Purchasers the aggregate purchase price as set forth in Section
8.3(b)(i).
(iv) Notwithstanding
the foregoing, any attempt to transfer the Shares in violation of
this Agreement shall be void, and the Company agrees it will not
effect such a transfer nor will it treat any alleged transferee as
the holder of such Shares.
8.4 Termination. This Section 8
shall terminate upon an underwritten public offering of the Shares
in which the aggregate proceeds to the Company are at least
$25,000,000.
9. Miscellaneous.
9.1 Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the
subject matters hereof and thereof.
9.2 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
(i) the Company, (ii) the holders of a majority of the Shares held
by the Purchasers, and (iii) the holders of a majority of the
shares of Common Stock held by the JHC Management Shareholders. 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, each JHC Management Shareholder and the
Company.
9.3 Survival
of Warranties. The warranties, representations, and
covenants of the Company and the Purchasers contained in this
Agreement or made pursuant to this Agreement will survive the
execution and delivery of this Agreement and the
Closing.
9.4 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.
9.5 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
each Purchaser each hereby submits to the jurisdiction of the state
and Federal courts located in Santa ▇▇▇▇▇, State of California,
with respect to all actions relating to this Agreement.
9.6 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 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 a Purchaser, at the Purchaser’s
address listed on Exhibit
A hereto, 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
Purchasers.
9.7 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. Each 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 such Purchaser or any of
such Purchaser's directors, officers, employees, agents or
affiliates is responsible. The Company agrees to indemnify and to
hold each 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.
9.8 Expenses. Each party shall pay
all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this
Agreement.
9.9 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.
9.10 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.
9.11 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.
9.12 Facsimile.
Executed copies of this Agreement may be exchanged via facsimile,
and such signatures shall be deemed as originals.
[INTENTIONALLY
LEFT BLANK]
4848-8622-3350.1
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:
4848-7355-0316.2
[Signature Page to Stock
Purchase Agreement]
PURCHASERS:
▇▇▇▇▇▇▇
▇▇
TongTong
Ma
▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇
▇▇▇▇▇
▇▇
▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇
Yeh
Cheng
4848-7355-0316.2
[Signature Page to Stock
Purchase Agreement]
JHC MANAGEMENT
SHAREHOLDERS:
[_____________]
[_____________]
[_____________]
[_____________]
[_____________]
[_____________]
[_____________]
[_____________]
4848-7355-0316.2
[Signature Page to Stock
Purchase Agreement]
EXHIBIT A
SCHEDULE OF PURCHASERS
|
Name and Address of Purchaser
|
No. of Shares of Common Stock
|
Purchase Price
|
|
▇▇▇▇▇▇▇
▇▇
Group
▇,▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
|
19,412
|
$19,412.00
|
|
TongTong
Ma
▇-▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
056000
|
2,227
|
$2,227.00
|
|
▇▇▇▇▇
▇▇▇▇▇
Group
▇,▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
|
2,545
|
$2,545.00
|
|
▇▇▇▇▇▇
▇▇
58
Litao Hutong, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇
|
2,386
|
$2,386.00
|
|
▇▇▇▇
▇▇▇▇▇
Huoli
Kangcheng Community, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
|
2,068
|
$2,068.00
|
|
▇▇
▇▇▇▇
D1988
Jindi Sanqianfu, Leifeng Road, Wangcheng, Changsha, Hunan, China
410000
|
636
|
$636.00
|
|
▇▇▇
▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
410000
|
2,545
|
$2,545.00
|
|
▇▇▇▇
▇▇
6
Floor, Sigma Plaza, ▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ 100000
|
2,227
|
$2,227.00
|
|
Yeh
Cheng
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇,▇▇▇▇▇ 100001
|
954
|
$954.00
|
|
TOTAL
|
35,000
|
$35,000.00
|
4848-8622-3350.1
EXHIBIT B
SCHEDULE OF JHC MANAGEMENT SHAREHOLDERS
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
4847-7569-7904.1