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): August 16,
2021
AEROCENTURY CORP.
(Exact name of Registrant as specified in its charter)
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Delaware
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94-3263974
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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1440 Chapin Avenue, Suite 310
Burlingame, CA 94010
(Address of principal executive offices including Zip
Code)
650-340-1888
(Registrant's telephone number, including area code)
Not
applicable
(Former name and former address, if changed since last
report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐Written communications
pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
☐Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)
Securities registered
pursuant to Section 12(b) of the Act:
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Title of each
class
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Name of each exchange
on which registered
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Common
Stock, par value $0.001 per share
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NYSE
American Exchange
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth
company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Item
8.01 Other Events
On August 16, 2021, in
the United States Bankruptcy Court for the District of Delaware
(the “Bankruptcy
Court”) in the Chapter 11
case of AeroCentury Corp. (“AeroCentury”)
and its two U.S. subsidiaries, JetFleet Management Corp., and
JetFleet Holding Corp. (the three corporations collectively
referred to as the “Debtors”),
the Debtors filed unexecuted drafts of its Plan
Sponsor Agreement (the "PSA"), and related agreements and documents
required
threunder (collectively, with the PSA,
the "Plan Sponsor Documents"), which Plan Sponsor Documents forms
the Company believes to be in substantially final form. The
Plan Sponsor Documents are intended to cover the transactions
contemplated by the Investment Term Sheet entered into with YuCheng
Hu, which was described in the Company's Current Report on Form 8-K
filed on August 10, 2021, and are part of the Debtors' plan of
reorganization to be reflected in the Combined Disclosure Statement
and Plan previously filed with the Bankruptcy Court and to be
amended and supplemented. The Court filing of the Plan
Supplement disclosing the Plan Sponsor Documents is available at
the Company's claim agent website on the court docket page at:
https://www.kccllc.net/aerocentury/document/2110636210816000000000004.
Item 9.01 Financial Statements and
Exhibits
(d)
Exhibits
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: August 16, 2021
AEROCENTURY CORP.
By: /s/
Harold M. Lyons
Harold M. Lyons
Sr.
Vice President & Chief Financial Officer
THIS PLAN SPONSOR AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY
SECURITIES OR A SOLICITATION OF VOTES WITH RESPECT TO A CHAPTER 11
PLAN OF REORGANIZATION. ANY SUCH OFFER OR SOLICITATION WILL COMPLY
WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE
BANKRUPTCY CODE. ACCEPTANCES OR REJECTIONS WITH RESPECT TO A
CHAPTER 11 PLAN OF REORGANIZATION MAY NOT BE SOLICITED UNTIL A
DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY
COURT.
PLAN SPONSOR AGREEMENT
This
PLAN SPONSOR AGREEMENT (as amended, supplemented, or otherwise
modified from time to time together with all exhibits attached
hereto and incorporated herein, this “Agreement”),
dated as of August [16], 2021, is entered into by and among
AeroCentury Corp. (“AeroCentury”), JetFleet Holding
Corp. (“JHC)”, and JetFleet Management Corp.
(“JMC,” and collectively with AeroCentury and JHC, the
“Debtors”) and Yucheng Hu, Hao Yang, Jing Li, Yeh
Ching, Yu Wang, TongTong Ma, Qiang Zhang, Yanhua Li, and Yiyi Huang
(collectively, the “Plan Sponsor”). The Debtors and the
Plan Sponsor are referred to herein as the “Parties”
and individually as a Party. Capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such
terms in the Plan (as defined below).
RECITALS
WHEREAS, on March 29, 2021, 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, in connection with the Chapter
11 Cases and the Plan, AeroCentury and Plan Sponsor have engaged in
good faith, arm’s length negotiations regarding the terms of
the proposed Restructuring Transactions;
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, the Parties desire to express
to each other their mutual support and commitment in respect of the
matters discussed in the Term Sheet, this Agreement, and the
Plan.
AGREEMENT
NOW, THEREFORE, in consideration of the
covenants and agreements contained herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:
1.Exhibits
Incorporated by Reference. Each of the exhibits attached hereto
is expressly incorporated herein and made a part of this Agreement,
and all references to this Agreement shall include the exhibits
hereto. In the event of any inconsistency between this Agreement
and the exhibits attached hereto, this Agreement (without reference
to such exhibits) shall govern.
2.Definitive
Documents. The
definitive documents governing the Restructuring Transactions shall
consist of the following and any other material document
contemplated by the Parties needed or utilized to implement,
govern, or consummate the Restructuring Transactions (collectively,
the “Definitive Documents”):
(a) the
disclosure statement (and all exhibits and other documents and
instruments related thereto) with respect to the Plan (the
“Disclosure Statement”);
(b)the Securities
Purchase Agreement attached as Exhibit A hereto (as may
be further amended, supplemented, or otherwise modified in
accordance with its terms, the “SPA”) and all
schedules, annexes, and exhibits thereto, the Common Stock Purchase
Agreement attached as Exhibit B hereto (as may be further amended,
supplemented, or otherwise modified in accordance with its terms,
the “CSPA”) and all schedules, annexes, and exhibits
thereto, Series A Preferred Stock Purchase Agreement attached as
Exhibit C hereto (as may be further amended, supplemented, or
otherwise modified in accordance with its terms, the
“SAPSPA”) and all schedules, annexes, and exhibits
thereto, and Series B Preferred Stock Purchase Agreement attached
as Exhibit D hereto (as may be further amended, supplemented, or
otherwise modified in accordance with its terms, the
“SBPSPA”) and all schedules, annexes, and exhibits
thereto (collectively, the “Commitment
Documents”);
(c)the order approving
on an interim basis the Disclosure Statement, including the form of
ballots and other solicitation materials in respect of the Plan
(the “Solicitation Procedures Order” and, such
solicitation materials, the “Solicitation
Materials”);
(d)the Plan, Plan
Supplement, and all documents, annexes, schedules, exhibits,
amendments, modifications, or supplements thereto, or other
documents contained therein, including any schedules of assumed or
rejected contracts;
(e)the order
confirming the Plan (the “Confirmation Order”) and any
pleadings filed by the Debtors in support of the Bankruptcy
Court’s entry of the Confirmation Order;
(f)the new
organizational or other governance documents of the Reorganized
Debtors; and
(g)any employment
agreements relating to any executive officer of the Reorganized
Debtors.
The
Definitive Documents not executed or not in a form attached to this
Agreement as of the Effective Date remain subject to negotiation
and, upon completion, all Definitive Documents shall (a) reflect
and contain the terms and conditions consistent with this Agreement
and (b) otherwise be in form and substance acceptable to the
Debtors and the Plan Sponsor.
3.Milestones.
The following milestones (the “Milestones”) shall apply
to this Agreement, which in each case can be extended in writing by
the Parties (with confirmation of any extension by electronic mail
among counsel being sufficient for such purposes):
(a)by no later than
September 10, 2021, the Bankruptcy Court shall have entered the
Confirmation Order; and
(b)by
no later than September 30, 2021, the Effective Date of the Plan
shall have occurred (the “Effective Date
Deadline”).
4.Term
Sheet. The Term Sheet
is incorporated herein by reference and to the extent of any
obligations of the Parties set forth therein, such obligations
shall be binding obligations of the Parties subject to the terms
thereof.
5.Commitments
of the Parties.
(a)The
Debtors agree that they shall:
(A)(1)
support and work diligently towards the completion of the
Restructuring Transactions set forth in this Agreement, (2)
negotiate in good faith all Definitive Documentation that is
subject to negotiation as of the effective date of this Agreement
and take any and all reasonable actions in furtherance of the Plan
and this Agreement, (3) take all commercially reasonable actions
necessary to complete the Restructuring Transactions set forth in
the Plan, (4) make commercially reasonable efforts to obtain any
and all required regulatory and third-party approvals necessary to
consummate the Restructuring Transactions, if any, and (5) support
and take such actions as are necessary or appropriate or reasonably
requested by Plan Sponsor in furtherance of the Restructuring
Transactions in accordance with, and within the time frames
contemplated by, this Agreement; and (B) shall not undertake any
action materially inconsistent with the adoption and implementation
of the Plan and the confirmation thereof, including, without
limitation, filing any motion to reject this
Agreement.
afford
Plan Sponsor and its respective attorneys, consultants,
accountants, and other authorized representatives access, upon
reasonable notice during normal business hours, and at other
reasonable times, to the properties, books, contracts, commitments,
records, management personnel, and advisors of the Debtors that are
reasonably requested to consummate the Restructuring Transactions
(but in no event, shall the Debtors be required to provide access
to any materials that are protected by the attorney-client,
work-product or other protective privilege). In addition, the
Debtors shall promptly notify Plan Sponsor of any material
developments with respect to the Debtors’ business, the
Chapter 11 Cases, or otherwise.
as to
themselves and their subsidiaries, after the date of entry into
this Agreement and prior to the Plan Effective Date, and except as
required by applicable law:
(A)Provide the Plan
Sponsor with two (2) business days’ notice prior to entering
into any proposed new contracts and agreements involving individual
commitments of more than $25,000;
(B)Provide the Plan
Sponsor with two (2) business days’ notice prior to entering
into any agreement for the sale or encumbrance of any assets
between the date of this Agreement and the Plan Effective Date in
excess of $25,000 for any single transaction or $50,000 for any
series of related transactions (it being understood that the Plan
Sponsor has already been provided notice of and information
regarding the sales pending in and/or executed during the Chapter
11 Cases);
(C)Use commercially
reasonable efforts to maintain all of the assets and properties in
their current condition, ordinary wear and tear
excepted;
(D)Maintain insurance
upon all of the assets and properties of the Debtors in such
amounts and of such kinds comparable to that in effect on the date
of this Agreement;
(E)(1) Use
commercially reasonable efforts to maintain the books, accounts and
records of the Debtors in the ordinary course of business, (2)
continue to collect accounts receivable and pay accounts payable
utilizing reasonable procedures and without discounting or
accelerating payment of such accounts, and (3) use commercially
reasonable efforts to comply with all contractual and other
obligations applicable to the operation of the
Debtors;
(F)Comply in all
material respects with applicable laws;
(G)The Debtors shall
only submit tax returns and otherwise conduct their affairs with
respect to tax matters in consultation with the Plan Sponsor; and
the Debtors shall not (without Plan Sponsor’s prior written
consent) make or rescind any election relating to taxes, settle or
compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit, or controversy relating to
taxes, or, except as may be required by applicable law or GAAP,
make any material change to any of the Debtors’ methods of
accounting or methods of reporting income or deductions for tax or
accounting practice or policy from those employed in the
preparation of its most recent tax returns;
(H)The Debtors shall
not, without the prior written consent of Plan Sponsor, (1)
materially increase the annual level of compensation of any
employee of the Debtors, (2) increase the annual level of
compensation payable or to become payable by the Debtors to any of
the Debtors’ executive officers, (3) grant any unusual or
extraordinary bonus, benefit, or other direct or indirect
compensation to any employee, director, or consultant, (4)
materially increase the coverage or benefits available under any
(or create any new) severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus, or other incentive compensation,
insurance, pension, or other employee benefit plan or arrangement
made to, for, or with any of the directors, officers, employees,
agents, or representatives of the Debtors or otherwise modify or
amend or terminate any such plan or arrangement or (v) enter into
any employment, deferred compensation, severance, consulting,
non-competition, or similar agreement (or amend any such agreement)
to which the Debtors are a party or involving a director, officer,
or employee of the Debtors in his or her capacity as a director,
officer or employee of the Debtors, provided, however, for the sake
of clarity nothing in this Agreement shall restrict the
Debtors’ ability to honor its existing employment practices
and policies, including, but not limited to, payment of ordinary
course salary and benefits, and, upon termination of employment,
severance and other end-of-employment benefits, all of which have
been disclosed to the Plan Sponsor; and
(I)The Debtors shall
not cancel or compromise any debt or claim or waive or release any
material right of the Debtors except in the ordinary course of
business. For the avoidance of doubt, the foregoing shall not limit
the Debtors’ ability to resolve, fix, settle, compromise,
object to, or allow any claim in the Chapter 11 Cases with the
approval of the Bankruptcy Court or in accordance with the
Plan.
(b)The Plan Sponsor
agrees that they shall:
(i) (A)(1)
support and work diligently towards the completion of the
Restructuring Transactions set forth in this Agreement, (2)
negotiate in good faith all Definitive Documentation that is
subject to negotiation as of the effective date of this Agreement
and take any and all reasonable actions in furtherance of the Plan
and this Agreement, (3) take all commercially reasonable actions
necessary to complete the Restructuring Transactions set forth in
the Plan, (4) make commercially reasonable efforts to obtain any
and all required regulatory and third-party approvals necessary to
consummate the Restructuring Transactions, if any, and (5) support
and take such actions as are necessary or appropriate or reasonably
requested by the Debtors in furtherance of the Restructuring
Transactions in accordance with, and within the time frames
contemplated by, this Agreement; and (B) shall not undertake any
action materially inconsistent with the adoption and implementation
of the Plan and the confirmation thereof, including, without
limitation, filing any motion to reject this
Agreement.
(ii) provide
the Debtors with information satisfactory to the Debtors, in their
reasonable discretion, that the Plan Sponsor shall have adequate
financial means to consummate the Restructuring Transactions,
including, but not limited to, providing proof of funds to
consummate the Restructuring Transactions.
6.Mutual
Representations and Warranties. Each Party, severally and not jointly,
represents and warrants to the other Parties that the following
statements are true and correct as of the Effective Date, subject
in the case of the Debtors to any required approval by the
Bankruptcy Court:
(a)Existence; Power and Authority; and
Authorization. If such Party is an entity, (i) such Party is
validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power
and authority to enter into this Agreement and perform such
Party’s obligations under this Agreement and (ii) the
execution and delivery of this Agreement and the performance of
such Party’s obligations under this Agreement have been duly
authorized by all necessary corporate action on such Party’s
part;
(b)No Conflict. The execution, delivery,
and performance by such Party of this Agreement does not and will
not (i) violate any provision of law, rule, or regulation
applicable to it or, if such Party is an entity, any of its
subsidiaries or its charter or bylaws (or other similar governing
documents) or those of any of its subsidiaries or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any material contractual
obligation to which it or, if such Party is an entity, any of its
subsidiaries is a party;
(c)No Consent or Approval. The execution,
delivery, and performance by such Party of this Agreement does not
and will not require any registration or filing with, consent or
approval of, or notice to, or other action, with or by, any
federal, state, or other governmental authority or regulatory body,
except such filings (i) as may be necessary or required by the U.S.
Securities and Exchange Commission or (ii) with respect to the Plan
Sponsor, that are set forth in SPA; and
(d)Enforceability. This Agreement is the
legally valid and binding obligation of such Party, enforceable
against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium,
or other similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to
enforceability or a ruling of the Bankruptcy Court.
7.Termination
Events.
(a)This
Agreement shall automatically terminate three (3) business days
after delivery of written notice to the other Party (in accordance
with Section 21) from (i) the Debtors at any time after the
occurrence and during the continuance of any Debtors Termination
Event or (ii) Plan Sponsor at any time after the occurrence and
during the continuance of any Plan Sponsor Termination Event. In
addition, this Agreement shall terminate automatically on the Plan
Effective Date without any further required action or
notice.
(i) “Plan
Sponsor Termination Event” shall mean any of the
following:
(A)the breach in any
material respect by the Debtors of any of the undertakings,
representations, warranties, or covenants of the Debtors set forth
herein that would prevent and result in a material adverse effect
on the consummation of the Plan in accordance with this Agreement
that remains uncured for a period of five (5) business days after
the receipt of written notice of such breach to the
Debtors;
(B)the Debtors file
Definitive Documentation in a form not reasonably acceptable to
Plan Sponsor, or make any amendments, modifications, exhibits, or
supplements thereto, in a manner that adversely affects Plan
Sponsor without the consent of Plan Sponsor or except as otherwise
permitted by this Agreement;
(C)the Debtors
withdraw the Plan or publicly announce the Debtors’ intention
to not support the Plan, or propound, or otherwise support any
chapter 11 plan other than the Plan;
(D)the Confirmation
Order is not entered in form and substance reasonably satisfactory
to Plan Sponsor, it being understood and agreed that Plan Sponsor
will act reasonably and commercially in considering any
modifications to the Confirmation Order requested or required by
the Bankruptcy Court and other parties in interest;
(E)the Debtors seek,
pursue, support, or do not oppose an order to be entered by the
Bankruptcy Court or a court of competent jurisdiction either
converting the Chapter 11 Cases to a case under chapter 7 of the
Bankruptcy Code or dismissing the Chapter 11 Cases;
(F)the Debtors seek,
pursue, support, or do not oppose an order of the Bankruptcy Court
seeking appointment, in respect of the Debtors, a trustee, a
responsible officer, or an examiner with enlarged powers
(i.e., powers beyond those
set forth in subclauses (3) and (4) of section 1106(a)) under
section 1106(b) of the Bankruptcy Code);
(G)this Agreement is
waived, modified, amended, or supplemented in any way, except by
mutual agreement of, and in a writing signed by, the Debtors and
the Plan Sponsor; or
(H)the Bankruptcy
Court grants relief that is inconsistent with this Agreement or the
Plan in any material respect, except if such relief is granted
pursuant to a motion by the Plan Sponsor (or with the consent of
the Plan Sponsor); provided, however, that the failure to obtain
confirmation of the Plan and/or the occurrence of the Effective
Date shall not constitute a Plan Sponsor Termination Event pursuant
to this Section 7(a)(viii) unless such failure is the result of any
Plan Sponsor Termination Event identified in Section
7(a)(i)-(vii).
(ii) “Debtors
Termination Event” shall mean any of the
following:
(A)the breach in any
material respect by Plan Sponsor of any of the undertakings,
representations, warranties, or covenants of Plan Sponsor set forth
herein that would result in a material adverse effect on the
consummation of a Plan in accordance with this Agreement that
remains uncured for a period of five (5) business days after the
receipt of written notice of such breach;
(B)the Plan Sponsor
shall have failed to provide the Debtors with information required
by Section 5(b)(ii);
(C)the Plan Sponsor
makes any amendments, modifications, exhibits, or supplements to
the Definitive Documentation, in a manner that adversely affects
the Debtors without the consent of the Debtors or except as
otherwise permitted by this Agreement;
(D)the Plan Sponsor
advises the Debtors or publicly announces its intention to not
support the Plan;
(E)this Agreement is
waived, modified, amended, or supplemented in any way, except by
mutual agreement of, and in a writing signed by, the Debtors and
the Plan Sponsor;
(F)the Bankruptcy
Court denies confirmation of the Plan; or
(G)any governmental
authority or regulatory body having authority blocks the purchase
of the New ACY Shares or does not otherwise grant any approval
required in connection with the purchase of the New ACY
Shares.
(b)Mutual Termination. This Agreement may
be terminated by mutual agreement of the Parties.
(c)Effect of Termination. Subject to the
last sentence of this Section 7(c) and Section 9, upon the
termination of this Agreement in accordance with this Section, this
Agreement shall become void and of no further force or effect and
each Party shall be immediately released from its respective
liabilities, obligations, commitments, undertakings, and agreements
under or related to this Agreement, shall have no further rights,
benefits, or privileges hereunder, and shall have all the rights
and remedies that it would have had and shall be entitled to take
all actions, whether with respect to the Restructuring Transactions
or otherwise, that it would have been entitled to take had it not
entered into this Agreement and no such rights or remedies shall be
deemed waived pursuant to a claim of laches or estoppel; provided
that in no event shall any such termination relieve a Party from
liability for its breach or non-performance of its obligations
hereunder before the date of such termination. Except as set forth
herein, if the transactions contemplated hereby are not
consummated, or if this Agreement is terminated for any reason, the
Parties fully reserve any and all of their rights. In the event
this Agreement as a result of any Debtors Termination Event
specified in Section 7(a)(ii)(A), (B), (C), or (D), the Deposit
shall be retained by the Debtors as liquidated damages and
irrevocably forfeited by the Plan Sponsor. In the event of a
termination pursuant to any other subpart of Section 7, the Deposit
shall be returned to the Plan Sponsor.
(d)Automatic Stay. The Debtors acknowledge
that the giving of notice of termination by any Party pursuant to
this Agreement shall not be a violation of the automatic stay of
section 362 of the Bankruptcy Code; provided that nothing herein
shall prejudice any Party’s rights to argue that the giving
of notice of termination was not proper under the terms of this
Agreement.
8.Amendments
and Waivers. Except
as otherwise expressly set forth herein, this Agreement may not be
waived, modified, amended, or supplemented except in a writing
signed by each Party.
9.Break-Up
Fee. If after the
Effective Date the Bankruptcy Court approves an exit financing
transaction for AeroCentury with a party other than the Plan
Sponsor (an “Alternative Transaction”) then AeroCentury
shall pay Plan Sponsor, upon the closing of such Alternative
Transaction, in addition to the return of the Deposit, a breakup
fee equal to USD$1,000,000.
10.Effectiveness.
Subject to approval by the Bankruptcy Court, this Agreement shall
become effective and binding upon each Party upon the execution and
delivery by such Party of an executed signature page
hereto.
11.Governing
Law; Jurisdiction; Wavier of Jury Trial.
(a)This Agreement
shall be construed and enforced in accordance with, and the rights
of the Parties shall be governed by, the laws of the State of
Delaware, without giving effect to the conflict of laws principles
thereof. The Parties irrevocably agree that any legal action, suit,
or proceeding (each, a “Proceeding”) arising out of or
relating to this Agreement brought by any Party or its successors
or assigns shall be brought and determined in the Bankruptcy Court
or, if the Bankruptcy Court shall not then have jurisdiction, in
any federal or state court in New Castle County, Delaware (the
“Delaware Courts”), and the Parties hereby irrevocably
and generally submit to the exclusive jurisdiction of the Delaware
Courts and any court to which appeals from the Delaware Courts may
be adjudicated for themselves and with respect to their property,
and unconditionally with respect to any Proceeding arising out of
or relating to this Agreement and the Restructuring. The Parties
agree not to commence any Proceeding relating hereto or thereto
except in the Delaware Courts, other than Proceedings in any court
of competent jurisdiction to enforce any judgment, decree, or award
rendered by any Delaware Court. The Parties further agree that
notice as provided herein shall constitute sufficient service of
process and the Parties further waive any argument that such
service is insufficient. The Parties hereby irrevocably and
unconditionally waive and agree not to assert that a Proceeding in
any Delaware Court is brought in an inconvenient forum or the venue
of such Proceeding is improper. Notwithstanding the foregoing,
during the pendency of the Chapter 11 Case, all Proceedings
contemplated by this Section 11 shall exclusively be brought in the
Bankruptcy Court and no other forum.
(b)The Parties hereby
waive, to the fullest extent permitted by applicable law, any right
they may have to a trial by jury in any Proceeding directly or
indirectly arising out of or relating to this Agreement or the
transactions contemplated hereby (whether based on contract, tort
or any other theory).
12.Good Faith
Cooperation; Further Assurances. Each Party hereby covenants and agrees
to cooperate with each other in good faith in connection with, and
shall exercise commercially reasonable efforts with respect to, the
pursuit, approval, implementation, and consummation of the
Restructuring Transactions, as well as the negotiation, drafting,
execution, and delivery of the Definitive Documentation. Subject to
the terms hereof, the Parties shall take such action as may be
reasonably necessary or reasonably requested by any Party to carry
out the purposes and intent of this Agreement, and shall refrain
from taking any action that would frustrate the purposes and intent
of this Agreement.
13.Independent
Analysis. Each Party
hereby confirms that its decision to execute this Agreement has
been based upon its independent assessment of documents and
information available to it, as it has deemed
appropriate.
14.Debtors’
Fiduciary Obligations. Notwithstanding anything to the
contrary in this Agreement, nothing in this Agreement, the Plan, or
anything included in any Definitive Document shall require any
Debtor or any board of directors, board of managers, or similar
governing body of any Debtor, after consulting with counsel, to
take any action or to refrain from taking any action with respect
to this Agreement, the Plan, or the Restructuring Transactions to
the extent taking or failing to take such action would be
inconsistent with applicable law or its fiduciary obligations under
applicable law, and any such action or inaction pursuant to such
exercise of fiduciary duties shall not be deemed to constitute a
breach of this Agreement; provided that the Debtors shall
give prompt written notice to counsel to the Plan Sponsor
(electronic mail among counsel being sufficient) of any
determination made under this Section.
15.Survival.
Notwithstanding the termination of this Agreement pursuant to
Section 7, [Section[s] *] shall survive such termination and shall
continue in full force and effect in accordance with the terms
hereof; provided that any liability of a Party for failure to
comply with the terms of this Agreement shall survive such
termination.
16.Headings.
The headings of the sections, paragraphs, and subsections of this
Agreement are inserted for convenience only and shall not affect
the interpretation hereof or, for any purpose, be deemed a part of
this Agreement.
17.Successors
and Assigns; Severability. This Agreement is intended to bind and
inure to the benefit of the Parties and their respective
successors, permitted assigns, heirs, executors, administrators,
and representatives. If any provision of this Agreement, or the
application of any such provision to any person or entity or
circumstance, shall be held invalid or unenforceable, in whole or
in part, such invalidity or unenforceability shall attach only to
such provision or part thereof and the remaining part of such
provision hereof and this Agreement shall continue in full force
and effect. Upon any such determination of invalidity, the Parties
shall negotiate in good faith to modify this Agreement so as to
effectuate the original intent of the Parties as closely as
possible in a reasonably acceptable manner so that the transactions
contemplated hereby are consummated as originally contemplated to
the greatest extent possible. No assignment of this Agreement or of
any rights or obligations hereunder may be made by any Party (by
operation of law or otherwise) without the prior written consent of
the other parties hereto and any attempted assignment without the
required consents shall be void.
18.Relationship
Among Parties. Unless
expressly stated herein, this Agreement shall be solely for the
benefit of the Parties and no other person or entity shall be a
third-party beneficiary hereof. No Party shall have any
responsibility for the transfer, sale, purchase, or other
disposition of securities by any other entity by virtue of this
Agreement. No prior history, pattern, or practice of sharing
confidences among the Parties shall in any way affect or negate
this understanding and agreement. The Parties have no agreement,
arrangement, or understanding with respect to acting together for
the purpose of acquiring, holding, voting, or disposing of any
securities of the Company and do not constitute a
“group” within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended.
19.Prior
Negotiations; Entire Agreement. This Agreement, including the exhibits
and schedules hereto (including the Term Sheet), constitutes the
entire agreement of the Parties, and supersedes all other prior
negotiations regarding the subject matters hereof and
thereof.
20.Counterparts.
This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all of which together
shall be deemed to be one and the same agreement. Execution copies
of this Agreement delivered by facsimile or PDF shall be deemed to
be an original for the purposes of this paragraph.
21.Notices.
All notices hereunder shall be deemed given if in writing and
delivered, if contemporaneously sent by electronic mail, facsimile,
courier, or by registered or certified mail (return receipt
requested) to the following addresses and facsimile numbers or such
other addresses of which notice is given pursuant
hereto:
(a)
if to the Plan
Sponsor to be delivered in care of the Investor Representative (as
defined in the SPA) to:
Yucheng
Hu
Floor 7
Suite AB, Yuanyang Guangha
International
Chaoyang District
Beijing,
China
Email:
huyucheng@me.com
or at
such other address as the Investor Representative shall have
furnished to the Debtors with a copy to (which copy shall not
constitute notice):
Lewis
Brisbois Bisgaard & Smith LLP
2020
West El Camino Avenue, Suite 700
Sacramento, CA
95833
Attn:
John P. Yung
Facsimile:
916.564.5444
Email:
John.yung@lewisbrisbois.com
(c)
if to the Debtors,
to:
AeroCentury Corp.,
et al.
1440
Chapin Avenue, Suite 310
Burlingame,
California 92618
Attention: Harold
M. Lyons
Email:
hal.lyons@aerocentury.com
or at
such other address as the Debtors shall have furnished to the
Investor Representative (as defined in the SPA) with a copy to
(which copy shall not constitute notice):
Young
Conaway Stargatt & Taylor, LLP
Rodney
Square
1000 N.
King Street
Wilmington, DE
19801
Attention: Joseph
Barry, Craig D. Grear, and Joseph Mulvihill
Facsimile:
(302)576-3296
cgrear@ycst.com
jmulvihill@ycst.com
22.No Solicitation;
Adequate Information.
This Agreement is not and shall not be deemed to be a solicitation
for consents to the Plan. The votes of the holders of claims
against the Company will not be solicited until such holders who
are entitled to vote on the Plan have received the Plan, Disclosure
Statement, related ballots, and other required Solicitation
Materials. In addition, this Agreement does not constitute an offer
to issue or sell securities to any person or entity, or the
solicitation of an offer to acquire or buy securities, in any
jurisdiction where such offer or solicitation would be
unlawful.
23.Business
Day Convention. Any
reference to “business day” means any day, other than a
Saturday, Sunday or a legal holiday (as that term is defined in
Bankruptcy Rule 9006(a)).
24.Interpretation;
Rules of Construction; Representation by Counsel. When a reference is made in this
Agreement to a Section, Exhibit, or Schedule, such reference shall
be to a Section, Exhibit, or Schedule, respectively, of or attached
to this Agreement unless otherwise indicated. Unless the context of
this Agreement otherwise requires, (a) words using the singular or
plural number also include the plural or singular number,
respectively, (b) the terms “hereof,”
“herein,” “hereby” and derivative or
similar words refer to this entire Agreement, (c) the words
“include,” “includes” and
“including” when used herein shall be deemed in each
case to be followed by the words “without limitation,”
and (d) the word “or” shall not be exclusive and shall
be read to mean “and/or.” The Parties agree that they
have been represented by legal counsel during the negotiation and
execution of this Agreement and, therefore, waive the application
of any law, regulation, holding, or rule of construction providing
that ambiguities in an agreement or other document shall be
construed against the party drafting such agreement or
document.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Parties have
caused this Agreement to be executed and delivered by their
respective duly authorized officers, solely in their respective
capacity as officers of the undersigned and not in any other
capacity, as of the date first set forth above.
DEBTORS
AeroCentury
Corp.
JetFleet
Holding Corp.
JetFleet
Management Corp.
PLAN
SPONSORS
Yucheng
Hu
Hao
Yang
Jing
Li
Yeh
Ching
Yu
Wang
TongTong
Ma
Qiang
Zhang
Yanhua
Li
Yiyi
Huang
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS
OF ANY STATE OR FOREIGN JURISDICTION OR APPROVED OR DISAPPROVED BY
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE
“SEC”) OR ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY OF ANY JURISDICTION, NOR HAS THE SEC OR ANY
SUCH STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY PASSED
UPON THE MERITS OF THIS OFFERING, NOR IS IT INTENDED THAT THEY
WILL. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES OFFERED HEREBY CANNOT BE OFFERED OR SOLD IN THE
UNITED STATES OR TO “U.S. PERSONS” (AS SUCH TERM IS
DEFINED IN REGULATION S, PROMULGATED UNDER THE SECURITIES ACT)
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT IS AVAILABLE.
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE
AGREEMENT (this
“Agreement”)
dated August __, 2021 (the “Effective
Date”), by and between
Aerocentury Corp., a Delaware corporation (the
“Company”),
the persons listed on the signature page(s) of this Agreement (the
“Investors”),
and Yucheng Hu, in the capacity as the representative for the
Investors in accordance with the terms and conditions of this
Agreement (the “Investor
Representative”).
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;
WHEREAS, the Company and each Investor
are executing and delivering this Agreement in reliance upon the
exemption from registration afforded by one or more of Section
4(a)(2) of the Securities Act of 1933, as amended (the
“Securities
Act”), Rule 506 of Regulation D (“Regulation
D”), and Regulation S (“Regulation S”)
as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under
the Securities Act;
WHEREAS, each Investor, 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, par value $0.001
per share, of the Company (the “Common
Stock”), set forth opposite each Investor’s name
on Exhibit A hereto
(which aggregate amount for all Investors together shall
collectively be referred to herein as the “Securities”);
and
WHEREAS, each Investor shall pay $3.85
hereunder for each of the Securities, with an aggregate amount to
be paid for all Securities of approximately $11,053,068.95 (the
“Purchase
Price”).
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:
SECTION 1. SALE OF COMMON STOCK
1.1 Authorization.
The Company has authorized the sale and issuance of Securities to
the Investors in the amounts set forth opposite each
Investor’s name on Exhibit A
hereto of an aggregate of 2,870,927
Securities, which represents approximately 65% of the outstanding
shares of Common Stock immediately following the
Closing.
1.2 Sale
and Issuance of the Securities.
Subject to the terms and conditions set forth in this Agreement,
the Company will issue and sell to the Investors and the Investors
will buy from the Company the Securities at a per share purchase
price of $3.85.
1.3 Escrow.
On August __, 2021, the Investors deposited the aggregate sum of
$1,650,000 (the “Escrow
Deposit”) with Young
Conaway Stargatt & Taylor, LLP (“Escrow
Agent”) to be held and
distributed in accordance with the terms of this Agreement, the
Plan Sponsor Agreement, dated as of August __, 2021, bay and among
the Debtors and the Investors, and the Escrow Agreement attached
hereto as Exhibit B
(the “Escrow
Agreement”).
SECTION 2. CLOSING DATE; DELIVERY.
2.1 Closing
Date. Subject to the
satisfaction or waiver of the conditions set forth in
Sections
5, 6 and 7, the Closing, of the
purchase and sale of the Securities shall take place at the offices
of Young Conaway Stargatt & Taylor, LLP, 1000 N. King Street,
Wilmington, DE 19801, at ____ a.m. local time, on September 30,
2021, or at such other location, date, and time as may be agreed
upon between the Investors and the Company (such closing being
called the “Closing”
and such date and time being called the “Closing
Date”) but in any event
not later than _____, 2021 so long as all of the conditions
of Sections 5, 6 and
7 have been satisfied (or
otherwise waived in accordance with this
Agreement).
2.2 Delivery
and Payment. At the Closing,
the Company will deliver, or cause its transfer agent and registrar
to deliver, to the Investors, through book-entry delivery with
appropriate restrictive legends, registered in each
Investor’s name, representing the number of Securities to be
purchased by each Investor at the Closing, against payment by the
Purchase Price by the Escrow Agent and the Investors, by (i) a
certified or official bank check payable to the Company, (ii) by
wire transfer per the Company’s instructions, or (iii) by any
combination of (i) and (ii) above. The Company shall not be
obligated to issue and sell any Securities unless and until it
receives the entirety of the Purchase Price.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
Except
as set forth in the disclosure schedules delivered by the Company
to the Investors on the date hereof (the “Company Disclosure
Schedules”), the Section numbers of which are numbered
to correspond to the Section numbers of this Agreement to which
they refer, the Company represents and warrants to the Investors,
as of the date hereof and as of the Closing as
follows:
3.1 Organization
and Standing; Certificate Of Incorporation and
Bylaws. The Company is a
corporation duly organized and validly existing in good standing
under the laws of the State of Delaware. The Company has requisite
corporate power and authority to own its assets and to carry on its
business as now conducted and proposed to be conducted and is duly
qualified as a foreign corporation in each jurisdiction in which
such qualification is necessary. Copies of the Certificate of
Incorporation and Bylaws of the Company have been provided to
Investors. Said copies remain true, correct and complete and
reflect all amendments as of the Closing.
3.2 Corporate
Power. Subject to entry of an
order of the Bankruptcy Court approving the Plan and the
Company’s entry into this Agreement, the Company has all
requisite legal and corporate power and authority to execute and
deliver this Agreement, and to carry out and perform its
obligations under the terms of this Agreement.
3.3 Subsidiaries.
The Company owns or controls, directly or indirectly, all of the
capital stock or comparable equity interests of each subsidiary
free and clear of any liens or encumbrances, and all issued and
outstanding shares of capital stock or comparable equity interest
of each subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights; and the
Company owns or controls, directly or indirectly, only the
following corporations and limited liability
companies:
ACY
E-175 LLC, a Delaware limited liability company
ACY
SN 15129 LLC, a Delaware limited liability company
ACY
SN 19002 Limited, an English limited liability company
ACY
SN 19003 Limited, an English limited liability company
JetFleet
Holding Corp., a California corporation
JetFleet
Management Corp., a California corporation
1314401
Alberta Inc., d/b/a JetFleet Canada, an Alberta, Canada
corporation
3.4 Capitalization.
The authorized capital stock of the Company consists of 10,000,000
shares of Common Stock, $0.001 par value
(“Common
Stock”), of which
1,545,884 shares are and will be issued and outstanding immediately
prior to the Closing, and 2,000,000 shares of Preferred Stock,
$0.001 par value (“Preferred
Stock”), of which none
are or will be issued and outstanding immediately prior to the
Closing. There are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first
refusal or similar rights), or agreements, orally or in writing, to
purchase or acquire from the Company any shares of Common Stock, or
any securities convertible into or exchangeable for shares of
Common Stock. No person, other than the Investors pursuant to this
Agreement, has any right to purchase any portion of the Securities
covered by this Agreement. All issued and outstanding shares of
Common Stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and have been offered,
issued, sold and delivered by the Company in compliance with
applicable federal and state securities laws. The Company holds no
Common Stock in its treasury.
3.5 Authorization.
All corporate action on the part of the Company and its board of
directors and all action on the part of the officers of the Company
necessary for the authorization, execution, delivery and
performance of this Agreement by the Company, the authorization,
sale, issuance and delivery of the Securities and the performance
of the Company’s obligations under this Agreement has been
taken or will be taken prior to the Closing. No action of the
Company’s stockholders is necessary for any of the foregoing
actions. This Agreement constitutes the valid and binding
obligation of the Company, enforceable in accordance with its
terms.
3.6 Private
Offering; Valid Issuance.
(a) The
Securities, when issued in compliance with the provisions of this
Agreement, will be validly issued, fully paid and nonassessable and
will be free of any liens or encumbrances other than restrictions
under pertinent federal and state securities laws, rules and
regulations.
(b) The
Company has taken all necessary action on its part to ensure that,
subject to the accuracy of the Investors’ representations
in Section 4
hereof, the offer, sale and issuance
of the Securities will constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act of
1933, as amended (the “Securities
Act”), and the Securities
will be issued in compliance with all applicable federal and state
securities laws.
(c) No
“bad actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) (a “Disqualification
Event”) promulgated under
the Securities Act, is applicable to the Company or, to the
Company’s knowledge, any person listed in the first paragraph
of Rule 506(d)(1), except for a Disqualification Event as to which
Rule 506(d)(2)(ii–iv) or (d)(3), is
applicable.
3.7 No
Registration, Voting or Liquidation Rights. The Company is not under any contractual
obligation to register under the Securities Act any of its
outstanding securities or any of its securities which may hereafter
be issued. To the Company’s knowledge, no stockholder of the
Company is party to any agreement with any party other than one or
more Investors relating to the voting of capital shares of the
Company. The Company is not under any contractual obligation to
wind-up, liquidate or dissolve whether or not conditioned upon the
occurrence of certain events, lapse of certain periods, or upon
notice or election by one or more persons (other than by its
stockholders in accordance with the requirements of applicable law)
and any such past obligations.
3.8 Governmental
Consent, Etc. No consent,
approval, order or authorization of, or registration,
qualification, designation, declaration, or filing with any
governmental authority on the part of the Company (except the
filing of a Schedule 14f-1 with the U.S. Securities and Exchange
Commission (“SEC”)
under the Securities Exchange Act of 1934 (the
“Exchange
Act”) and the rules and
regulations of the SEC promulgated thereunder) is required in
connection with the valid execution and delivery of this Agreement
or the offer, sale, or issuance of the Securities or other
transactions contemplated hereby, except as set forth on Schedule
3.8 and the filings pursuant to Regulation D of the Securities Act,
applicable state securities laws, NYSE Amex Additional Listing
Application, which filings, if required, will be accomplished by
the Company, at its expense, in a timely
manner.
3.9 Actions.
Except for the Cash Dividend (as defined below), (i) the Company
has not declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its
capital stock or (ii) sold, exchanged or otherwise disposed of any
of its assets or rights.
For
the purposes of (a) and (b) of this
3.10 Certain
Transactions. Except as
disclosed in the Company’s filings with the SEC, and other
than pursuant to this Agreement, no officer, director or employee
of the Company, or any member of the immediate family of any such
officer, director or employee, or any entity in which any of such
persons owns any beneficial interest (other than any publicly-held
corporation whose stock is traded on a national securities exchange
or in the over-the-counter market and less than one percent of the
stock of which is beneficially owned by any of such persons)
(collectively, the “Company
Insiders”), has any
agreement with the Company (other than customary at-will employment
arrangements) or any interest in any property, real, personal or
mixed, tangible or intangible, used in or pertaining to the
business of the Company (other than ownership of capital stock of
the Company). The Company is not indebted to any Company Insider
(except for amounts due as normal salaries and bonuses and in
reimbursement of ordinary business expenses) and no Company Insider
is indebted to the Company except for cash advances for ordinary
business expenses). To the Company’s knowledge, information,
and belief, none of the Company Insiders has any direct or indirect
interest in any person from whom or to whom the Company leases any
property, or in any other person with whom the Company transacts
business of any nature. For purposes of this Section
3.10, the members of the
immediate family of an officer, director or employee shall consist
of the spouse, parents, children and siblings of such officer,
director or employee.
3.11 [Reserved].
3.12 Compliance
With Other Instruments. The
Company is not in violation of (i) any provisions of its
Certificate of Incorporation or Bylaws, (ii) any instrument,
judgment, order, writ, or decree, or (iii) any material provision
of federal or state statute, rule, or regulation applicable to the
Company. The execution, delivery, and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, including the issuance of the Securities, have not resulted
and will not result in any violation of, or conflict with, or
constitute a default under any such term or provision, or result in
the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the assets of the Company; and there is no such
violation or default or event that, with the passage of time or
giving of notice or both, would constitute a violation or default
that would adversely affect the business of the Company or any of
its assets.
3.13 SEC
Reports. The Company has filed all forms,
reports, schedules, statements, registration statements,
prospectuses and other documents required to be filed or furnished
by the Company with the SEC under the Securities Act and the
Exchange Act, as applicable, together with any amendments,
restatements or supplements thereto, and will file all such forms,
reports, schedules, statements and other documents required to be
filed subsequent to the date of this Agreement. Except to the
extent available on the SEC’s web site through EDGAR, the
Company has made available to the Investors copies in the form
filed with the SEC of all of the following: (i) the Company’s
Annual Reports on Form 10-K for each fiscal year of the Company
beginning with the first year the Investor was required to file
such a form, (ii) the Company’s Quarterly Reports on Form
10-Q for each fiscal quarter that the Investor filed such reports
to disclose its quarterly financial results in each of the fiscal
years of the Company referred to in clause (i) above, (iii) all
other forms, reports, registration statements, prospectuses and
other documents (other than preliminary materials) filed by the
Company with the SEC since the beginning of the first fiscal year
referred to in clause (i) above (the forms, reports, registration
statements, prospectuses and other documents referred to in clauses
(i), (ii) and (iii) above, whether or not available through EDGAR,
are, collectively, the “SEC Reports”)
and (iv) all certifications and statements required by (A) Rules
13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C.
§1350 (Section 906 of the Sarbanes-Oxley Act of 2002, as
amended) with respect to any report referred to in clause (i)
above. The SEC Reports (x) were prepared in all material respects
in accordance with the requirements of the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations
thereunder and (y) did not, as of their respective effective dates
(in the case of SEC Reports that are registration statements filed
pursuant to the requirements of the Securities Act) and at the time
they were filed with the SEC (in the case of all other SEC Reports)
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
certifications and statements referenced in clause (iv) above are
each true as of their respective dates of filing. As used in this
Section 3.13, the
term “file” shall be broadly construed to include any
manner permitted by SEC rules and regulations in which a document
or information is furnished, supplied or otherwise made available
to the SEC. As of the date of this Agreement, (A) the Securities is
listed on NYSE American (“NYSE Amex”),
(B) the Company has not received any written deficiency notice from
NYSE AMEX relating to the continued listing requirements of such
Securities, and (C) there are no Actions pending or, to the
Knowledge of the Company, threatened against the Company by the New
York Stock Exchange (“NYSE”) and/or
Financial Industry Regulatory Authority (“FINRA”) with
respect to any intention by such entity to suspend, prohibit or
terminate the quoting of such Securities on NYSE Amex. For purposes
of this Agreement, the term “Knowledge of the
Company” shall mean the actual knowledge of Harold
Lyons.
3.14 Compliance
with NYSE American Continued Listing
Requirements. The Company is,
and has no reason to believe that it shall not, upon the issuance
of the Securities hereunder, continue to be, in compliance with the
listing and maintenance requirements for continued listing on NYSE
Amex in all material respects. Assuming the representations and
warranties of the Investors set forth in Section 4
are true and correct in all material
respects, the consummation of the transactions contemplated by the
Plan does not contravene the rules and regulations of NYSE Amex.
Except as set forth in the SEC Reports, there are no proceedings
pending or threatened against the Company relating to the continued
listing of the Securities on NYSE Amex and the Company has not
received any notice of the delisting of the Securities from NYSE
Amex.
In a telephone conversation with NYSE Amex
representatives on August 9, 2021, NYSE Amex representatives
informed the Company that the approval of the plan of
reorganization by the Bankruptcy Court, after a vote on the plan of
reorganization in which a majority of the stockholders who voted on
the reorganization plan voted in favor of the plan, was a
sufficient substitute for the Company seeking stockholder approval
of the issuance of the Securities pursuant to NYSE Amex Rule 713,
but until NYSE Amex approves an Additional Listing Application
covering the Securities, the Company cannot provide any assurance
that NYSE Amex will not change its position and require a further
stockholder approval of the issuance of Securities in compliance
with NYSE Amex Rule 713. Reference is made to the Company’s
public disclosure of receipt of notice from NYSE Amex of the
Company’s non-compliance with NYSE Amex’s
stockholders’ equity continued listing standards set forth in
NYSE American Company Guide Section 1003(a)(ii); the Company has
not received any notice from NYSE Amex either suspending,
discontinuing, or indicating NYSE’s Amex’s intent to
suspend or discontinue the listing of the Company’s stock as
a result of such non-compliance. Reference
is made to Section 1002 of the NYSE American Company Guide
(“Company
Guide”) and the ability
of NYSE Amex to suspend or discontinue the listing of an
issuer’s shares based on events set forth such Section 1002
of the Company Guide; the Company has not received any notice from
NYSE Amex’s intent to suspend or discontinue the listing of
the Company’s stock based on Section 1002 of the Company
Guide.
3.15 Not
An Investment Company. The
Company is not, and as a result of the sale of the Securities to
the Investors will not be, required to register under the U.S.
Investment Company Act of 1940, as amended.
3.16 DWAC
Eligible. The Company’s
Common Stock is currently eligible at the Depository Trust Company
(“DTC”)
for services pursuant to DTC’s operational arrangements, and
the Company has not received any notice from DTC of its intent to
discontinue such services.
3.17 [Reserved].
3.18 Foreign
Corrupt Practices. Neither the
Company, nor, to the Knowledge of the Company, any director,
officer, agent, employee, or other person associated with or acting
on behalf of the Company has (A) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (B) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (C) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or (D) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
3.19 Books
And Records. The books of
account, minute books, stock record books, and other records of the
Company, have been made available to Investors, have been properly
kept and contain no inaccuracies except for inaccuracies that would
not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the Company.
3.20 [Reserved].
3.21 Absence
of Certain Changes or Events.
Since the date of the balance sheet included in the most recent
financials filed with the SEC (the “Latest
Balance Sheet Date”), the
Company has:
(a) not
waived or compromised any valuable right or material debt owed to
it;
(b) not
incurred any material obligation, liability or commitment (fixed or
contingent), except trade obligations in the ordinary course of
business; and
(c) not
declared , set aside, or paid any distribution in respect of any of
the Company’s capital stock, or made any direct or indirect
redemption, purchase, or other acquisition of any of such
stock.
3.22 Tax
Matters.
(a) To
the Company’s knowledge: (i) the Company has timely filed all
returns, declarations, reports, estimates, information returns, and
statements, including any schedules and amendments to such
documents (“Company
Returns”), that were due
and required to be filed in respect of any Taxes by any taxing
authority having jurisdiction; (ii) all such Company Returns are
complete and accurate in all material respects; (iii) to the extent
not precluded as a result of the filing of the Chapter 11 Cases,
the Company has timely and properly paid all Taxes required to be
paid by it; (iv) the Company has established , in accordance with
GAAP, reserves that are adequate for the payment of any Taxes not
yet due and payable; and (v) the Company has complied with all
applicable laws, rules, and regulations relating to the collection
or withholding of Taxes from third parties, including without
limitation employees, and the payment thereof (including
withholding of Taxes under Internal Revenue Code of 1986
(“Code”)
Sections 1441 and 1442).
(b) For
all purposes of this Agreement, the terms
“Tax”
and “Taxes”
shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes,
environmental taxes, customs duties, capital stock, franchise,
employees’ income withholding, foreign or domestic
withholding, social security, unemployment, disability,
workers’ compensation, employment-related insurance, real
property, personal property, sales, use, transfer, value added,
alternative or add-on minimum or other governmental tax, fee,
assessment or charge of any kind whatsoever including any interest,
penalties or additions to any Tax or additional amounts in respect
of the foregoing.
(c) There
have been made available to the Investors true and complete copies
of all Company tax returns with respect to taxes based on net
income and any other Company tax returns requested by the Investors
that may be relevant to the Company or its respective business,
assets, or operations for any and all taxable periods ending before
the date hereof and for any other taxable periods that remain
subject to audit or investigation by any tax
authority.
(d) The
Company is a corporation or association taxable as a corporation
for federal income tax purposes.
3.23 Brokers
or Finders. Except as set forth
on Schedule 3.23, neither the Investors nor the Company have nor
will incur, directly, or indirectly, as a result of any action
taken by or on behalf of the Company, any liability for brokerage
or finders’ fees in connection with the transactions
contemplated hereby.1
3.24 Disclosure.
Neither this Agreement, nor any other written statement furnished
to the Investors or their counsel in connection with the offer and
sale of the Securities contains or will contain any untrue
statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained
therein or herein not misleading in the light of the circumstances
under which they were made. There is no fact which the Company has
not disclosed to the Investors in writing that, to the knowledge of
the Company, materially adversely affects, the ability of the
Company to perform this Agreement or the other actions contemplated
herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS.
The
Investors, severally and not jointly, hereby represent and warrant
to the Company, as of the date hereof and as of the Closing, as
follows:
4.1 Business
and Financial Experience. Each
Investor is an accredited investor within the meaning of Rule 501
of Regulation D promulgated under the Securities Act and has such
knowledge and experience in financial and business matters that
each Investor is capable of evaluating the merits and risks of the
Investor’s purchase of Securities as contemplated by this
Agreement. Each Investor’s financial situation is such that
such Investor can afford to bear the economic risk of holding the
Securities for an indefinite period of time and suffer complete
loss of such Investor’s investment.
4.2 Non-U.S.
Person. Each Investor is not a “U.S. Person” as
defined by Regulation S and is not acquiring the Securities for the
account or benefit of a U.S. Person. Each Investor acknowledges
that the Investor was not in the United States at the time the
offer to purchase the Securities was received from the Company and
that all substantive negotiations and communications between the
Investors and the Company have occurred outside the United States.
Each Investor agrees not to engage in hedging transactions with
regard to the Securities unless in compliance with the Securities
Act.
4.3 Investment
Intent; Blue Sky. Each Investor
is acquiring the Securities for investment for such
Investor’s own account, not as a nominee or agent, and not
with a view to or for resale in connection with any distribution
thereof. Each Investor understands that the issuance of the
Securities has not been, and will not be, registered under the
Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the
Investor’s true and correct state of domicile, upon which the
Company may rely for the purpose of complying with applicable Blue
Sky laws.
4.4 Rule
144. Each Investor acknowledges
that the Securities must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from
such registration is available. Each Investor is aware of the
provisions of Rule 144 promulgated under the Securities Act that
permit limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among
other things, cessation of status as a “shell company”
as defined pursuant to the Securities Act, the existence of a
public market for the shares, the availability of certain current
public information about the Company, required holding periods, the
sale being effected through a “broker’s
transaction” or in a transaction directly with a
“market maker”, and applicable volume limitations. The
Company makes no representation as to the future availability of
any exemption from such registration
requirements.
4.5 Restrictions
on Transfer; Restrictive Legends. Each Investor understands that the transfer of
the Securities, if applicable, is restricted by applicable state
and federal securities laws, and that the certificates representing
the Securities will be imprinted with legends restricting transfer
except in compliance therewith.
4.6 Access
To Company Information. Each
Investor has had an opportunity to review and discuss the
Company’s business, management, and financial affairs with
the Company’s management. Each Investor understands that such
discussions, as well as any written information issued by the
Company, were intended to describe the material aspects of the
Company’s business. Each Investor has also had an opportunity
to review all materials provided to them by the Company in
connection with this Agreement and to ask questions of the officers
of the Company.
4.7 Authorization.
All action on the part of each Investor necessary for the
authorization, execution, delivery, and performance of this
Agreement by the Investor, the purchase of and payment for the
Securities and the performance of all of such Investor’s
obligations under this Agreement has been taken or will be taken
prior to the Closing. This Agreement, when executed and delivered
by each Investor, shall constitute the valid and binding obligation
of each Investor, enforceable in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency,
and the relief of debtors and rules of law governing specific
performance, injunctive relief, or other equitable remedies. The
execution of this Agreement and consummation by Investors of the
transactions on their part contemplated herein will not breach or
violate any order or judgment of any court or governmental agency
or any contract or agreement to which any of the Investors is a
party or may be bound.
4.8 Brokers
or Finders. The Company has not
and will not incur, directly or indirectly, as a result of any
action taken by any Investor, any liability for brokerage or
finders’ fees or agents’ commissions or any similar
charges in connection with this Agreement or the transactions
contemplated hereby. Without limiting generality of the foregoing,
the Investors shall pay and be solely responsible for, and shall
indemnify and hold the Company harmless firm and against any claim
relating to, any fees, compensation or remuneration due or owing to
the Breckenridge Group and Robert G. Oliver.
4.9 No
Violations, Etc. None of the
Investors has had a criminal conviction; been the subject of any
regulatory enforcement action or any civil order or judgment
involving financial fraud or wrongdoing; or been denied or had
revoked any license or permit involving securities or any financial
business.
SECTION 5. CONDITIONS TO EACH PARTY’S
OBLIGATIONS.
The
obligations of each Party to consummate the transactions described
herein shall be subject to the satisfaction or written waiver
(where permissible) by the Company and the Investor Representative
of the following conditions:
5.1 Required
Bankruptcy Court Approval. The Bankruptcy Court shall have
entered an order confirming the Plan.
5.2 Plan
Effective Date. The date on which all conditions
to effectiveness of the Plan have been satisfied and the
effectiveness of the Plan has been declared by the Company, in
consultation with the Investor Representative, (the
“Plan
Effective Date”) is on or before September 30,
2021.
5.3 No
Objection. NYSE Amex shall have raised no objection to the
consummation of the transactions contemplated by the Plan and the
publicly traded shares of Common Stock shall not have been delisted
from NYSE Amex.
5.4 No
Stop Order. No stop order or suspension of trading shall
have been imposed by NYSE Amex, the SEC, or any other governmental
or regulatory body with respect to public trading in the publicly
traded shares of Common Stock.
5.5 Additional
Listing. The Company shall have filed the NYSE Amex
Additional Listing Application with NYSE for the listing of the
Securities, a copy of which have been provided to the Investor
Representative.
5.6 Securities
Registration. The Securities are registered under Section
12(b) of the Exchange Act, and the Company has not taken any action
designed to or likely to have the effect of termination the
registration of the Securities under the Exchange Act.
SECTION 6. CONDITIONS TO CLOSING OF THE PURCHASERS.
The
Investors obligation to purchase the Securities is, unless waived
in writing by the Investor Representative, subject to the
fulfillment as of the Closing Date of the following
conditions:
6.1 Representations
and Warranties Correct. The
representations and warranties made by the Company in
Section
3 hereof shall be true and
correct in all material respects as of the Closing
Date.
6.2 Covenants.
All covenants, agreements and conditions contained in this
Agreement to be performed or complied with by the Company have been
performed or complied with in all material
respects.
6.3 Compliance
Certificate. The Company shall
have delivered to the Investors a certificate of the Company
executed by the President and Chief Executive Officer of the
Company, dated as of the Closing Date certifying to the fulfillment
of the conditions specified in Sections 6.1 and
6.2 of this
Agreement.
6.4
Certificate of
Incorporation. The Amended and
Restated Certificate of Incorporation, substantially in the form
of Exhibit C
attached hereto
(“Restated
Certificate”), shall have
been filed with the Secretary of State of
Delaware.
6.5
Bylaws.
The Amended and Restated Bylaws, substantially in the form
of Exhibit D
attached hereto
(“Restated
Bylaws”), shall have been
adopted by the bylaws for the Company.
6.6
Stockholders.
As of the Plan Effective Date, the existing holders of the Common
Stock shall be entitled retain all interests in such Common Stock
without impairment or cancellation.
6.7
UK
Subsidiaries. ACY SN 19002
Limited and ACY 19003 Limited (collectively, the
“UK
Entities”) shall have
remitted any cash, including the full amount of the tax refunds
received by UK Entities prior to the Plan Effective Date, to
JetFleet Holding Corp., a California corporation
(“JHC”),
and concurrent with the Plan Effective Date, the Company shall
transfer to JHC 100% of the ownership interests of the ACY E-175
LLC, a Delaware limited liability company ACY SN 15129 LLC, a
Delaware limited liability company, JetFleet Management Corp., a
California corporation, 1314401 Alberta Inc., d/b/a JetFleet
Canada, an Alberta, Canada corporation, and the UK
Entities.
6.8 Board
of Directors. The Company shall
have taken all actions necessary to establish the total number of
directors constituting the Board of Directors of the Company as
five (5) directors and ________, _________, ___________, ________,
and _________ shall have been appointed or elected, as applicable,
to serve as directors of the Company effective as of the
Closing.
6.9 Employment
Agreements. All of the
Company’s employment agreements or relationships, written or
oral, shall have been cancelled as of the Closing
Date.
6.10 Required
Notice. The Company shall have
properly prepared, filed with the SEC and dispatched to
stockholders the Form 14f-1 and the 10-day period required by Rule
14f-1 shall have elapsed. Notwithstanding the foregoing, the
Investors shall bear the costs and expenses of drafting, printing,
mailing and filing the Form 14f-1.
6.11 Resignations
and Terminations. Each of the
Company’s officers and employees shall have resigned or been
terminated in writing (and provided a full release of any and all
liabilities against the Company) by the Company effective as of the
Closing, and all existing members of the Board of Directors shall
have delivered their written resignations from the Board of
Directors, effective as of the Closing.
6.12 Share
and Warrant Certificates. The
Company (or its authorized transfer agent and registrar) shall have
issued and delivered to the Investors certificates representing the
Securities in accordance with this Agreement.
6.13 [Reserved].
6.14 Proceedings.
On or before the Closing Date, all actions, proceedings,
instruments and documents required by, or on behalf of, the Company
to execute, deliver and carry out this Agreement, and all
agreements incidental hereto, and all other related legal matters,
shall be reasonably satisfactory to the Investors and their
counsel.
6.15 No
Material Event. The Investors
shall not have discovered any material error in, misstatement of or
omission to disclose any material fact relating to the
Company.
6.16 Reports
and Returns. The Company shall
have timely filed its Form 10-Q for the quarter ended June 30, 2021
and such other periodic reports as may be required to be filed with
the SEC and shall have filed federal and state tax returns for such
fiscal year to the extent required to be filed prior to the
Closing.
SECTION 7. CONDITIONS TO CLOSING OF THE COMPANY.
The
Company’s obligation to issue and sell and issue the
Securities is, unless waived in writing by the Company, subject to
the fulfillment as of the Closing Date of the following
conditions:
7.1 Representations
and Warranties Correct. The
representations and warranties made by the Investors in
Section
4 hereof shall be true and
correct in all material respects as of the Closing
Date.
7.2 Covenants.
All covenants, agreements, and conditions contained in this
Agreement to be performed or complied with by the Investors on or
prior to the Closing Date shall have been performed or complied
with in all material respects.
7.3 Compliance
Certificate. The Investors
shall have delivered to the Company a certificate executed by each
of the Investors dated as of the Closing Date certifying to the
fulfillment of the conditions specified in Sections 7.1 and
7.2.
7.4 Required
Notice. The Company shall have
properly prepared, filed with the SEC and dispatched to
stockholders the Form 14f-1 and the 10-day period required by Rule
14f-1 shall have elapsed.
SECTION 8. COVENANTS OF THE COMPANY.
8.1 Other
Offers. Pending consummation of
the transactions contemplated herein, the Company shall not seek or
solicit other purchasers of the Company or any equity interest in
the Company or otherwise entertain any proposal therefor, subject,
however, to the fiduciary responsibility of the Company’s
Board of Directors.
8.2 Regulatory
Reports. As soon as practicable
on or after the Effective Date, the Company shall file with the SEC
and dispatch to its stockholders an information statement (the
“Form
14f-1”) satisfying all of
the requirements of Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder with respect to this Agreement and the
transactions contemplated hereby. The Company shall prepare and
file timely with the SEC, state securities departments and other
applicable regulatory authorities, including FINRA, such other
reports or other filings as may be required in connection with the
transactions contemplated herein.
8.3 Disclosure
Review. The Company will
furnish to the Investors copies of all documents disclosing this
Agreement, the transactions contemplated herein and other of the
matters discussed herein that the Company proposes to file with the
SEC, including all amendments, supplements or exhibits thereto. All
such copies must be provided sufficiently in advance to provide a
reasonable opportunity to review such document and comment thereon.
The Company agrees not to file any document described in
this Section 8.3
if an Investor has expressed its
objection to such filing or the substance thereof. Notwithstanding
this Section
8.3, if (i) no Investor has
communicated an objection and (ii) three business days have elapsed
since the date on which all Investors received a copy of a proposed
filing, then the Company may file such document with the
SEC.
8.4 Dividend.
As promptly as practicable following the Plan Effective Date, the
Company will make a cash dividend distribution to Legacy ACY
Shareholders (as defined below) in the aggregate amount of
$1,000,000 (“Cash
Dividend”). For the
purpose of this agreement “Legacy ACY
Shareholders” means any
holder of Common Stock as the day prior to the Plan Effective
Date.
8.5 JHC
Series B Preferred Stock.
Concurrent with the Closing, the Company will enter into a Series B
Preferred Stock Purchase Agreement with JHC, substantially in the
form of Exhibit E
attached hereto, for the purchase of
104,082 shares of Series A Preferred Stock of JHC for an aggregate
purchase price of $2,000,000.
SECTION 9. INVESTOR REPRESENTATIVE.
9.1 By
the execution and delivery of this Agreement, each Investor, on
behalf of itself and its successors and assigns, hereby irrevocably
constitutes and appoints Yucheng Hu in his capacity as the Investor
Representative, as the true and lawful agent and attorney-in-fact
of such Investor with full powers of substitution to act in the
name, place and stead of thereof with respect to the performance on
behalf of such Investor under the terms and provisions of this
Agreement and the Escrow Agreement to which the Investor
Representative is a party, as the same may be from time to time
amended, and to do or refrain from doing all such further acts and
things, and to execute all such documents on behalf of such
Investor, if any, as the Investor Representative will deem
necessary or appropriate in connection with any of the transactions
contemplated under this Agreement or Escrow Agreement, including:
(i) acting on behalf of such Investor under the Escrow Agreement;
(ii) terminating, amending or waiving on behalf of such Investor
any provision of this Agreement or the Escrow Agreement to which
the Investor Representative is a party (provided, that any such
action, if material to the rights and obligations of Investors in
the reasonable judgment of the Investor Representative, will be
taken in the same manner with respect to all Investors unless
otherwise agreed by each Investor who is subject to any disparate
treatment of a potentially material and adverse nature); (iii)
signing on behalf of such Investor any releases or other documents
with respect to any dispute or remedy arising under this Agreement
or Escrow Agreement; (iv) employing and obtaining the advice of
legal counsel, accountants and other professional advisors as the
Investor Representative, in its reasonable discretion, deems
necessary or advisable in the performance of its duties as the
Investor Representative and to rely on their advice and counsel;
(v) incurring and paying reasonable out-of-pocket costs and
expenses, including fees of brokers, attorneys and accountants
incurred pursuant to the transactions contemplated hereby, and any
other reasonable out-of-pocket fees and expenses allocable or in
any way relating to such transaction, whether incurred prior or
subsequent to Closing; (vi) receiving all or any portion of the
Escrow Deposit provided to the Investors under the Escrow Agreement
and to distribute the same to the Investors as applicable; and
(vii) otherwise enforcing the rights and obligations of any such
Investors under this Agreement and the Escrow Agreement, including
giving and receiving all notices and communications hereunder or
thereunder on behalf of such Investor. All decisions and actions by
the Investor Representative, including any agreement between the
Investor Representative and the Company related to this Agreement
and the Escrow Agreement, shall be binding upon the Investors and
their respective successors and assigns, and neither they nor any
other Party shall have the right to object, dissent, protest or
otherwise contest the same. The provisions of this Section 9.1 are irrevocable and
coupled with an interest. The Investor Representative hereby
accepts its appointment and authorization as the Investor
Representative under this Agreement
9.2 The
Company and the Escrow Agent may conclusively and absolutely rely,
without inquiry, upon any actions of the Investor Representative as
the acts of the Investors hereunder or the Escrow Agreement. The
Company and the Escrow Agent shall not have any liability to any
Investors for any allocation or distribution among the Investors by
the Investor Representative of payments made to or at the direction
of the Investor Representative. All notices or other communications
required to be made or delivered to an Investor under this
Agreement or the Escrow Agreement shall be made to the Investor
Representative for the benefit of such Investor, and any notices so
made shall discharge in full all notice requirements of the other
parties hereto or thereto to such Investor with respect thereto.
All notices or other communications required to be made or
delivered by an Investor shall be made by the Investor
Representative (except for a notice under Section 9.4 of the replacement
of the Investor Representative).
9.3 The
Investor Representative will act for the Investors on all of the
matters set forth in this Agreement in the manner the Investor
Representative believes to be in the best interest of the
Investors, but the Investor Representative will not be responsible
to the Investors for any losses that any Investor may suffer by
reason of the performance by the Investor Representative of the
Investor Representative’s duties under this Agreement, other
than Losses arising from the bad faith, gross negligence or willful
misconduct by the Investor Representative in the performance of its
duties under this Agreement. The Investors do hereby jointly and
severally agree to indemnify, defend and hold the Investor
Representative harmless from and against any and all losses
reasonably incurred or suffered as a result of the performance of
the Investor Representative’s duties under this Agreement,
except for any such liability arising out of the bad faith, gross
negligence or willful misconduct of the Investor Representative. In
no event shall the Investor Representative in such capacity be
liable to the Investors hereunder or in connection herewith for any
indirect, punitive, special or consequential damages. The Investor
Representative shall not be liable for any act done or omitted
under this Agreement or the Escrow Agreement as the Investor
Representative while acting in good faith and without willful
misconduct or gross negligence, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence of
such good faith. The Investor Representative shall be fully
protected in relying upon any written notice, demand, certificate
or document that it in good faith believes to be genuine, including
facsimiles or copies thereof. In connection with the performance of
its rights and obligations hereunder, the Investor Representative
shall have the right at any time and from time to time to select
and engage, at the reasonable cost and expense of the Investors,
attorneys, accountants, investment bankers, advisors, consultants
and clerical personnel and obtain such other professional and
expert assistance, maintain such records and incur other reasonable
out-of-pocket expenses, as the Investor Representative may
reasonably deem necessary or appropriate from time to time, but the
Investor Representative will not be entitled to any fee, commission
or other compensation for the performance of its services
hereunder. All of the indemnities, immunities, releases and powers
granted to the Investor Representative under this Section 9.3 shall survive the
Closing and continue indefinitely.
9.4 If
the Investor Representative shall die, become disabled, resign, or
otherwise be unable or unwilling to fulfill his responsibilities as
representative and agent of Investors, then the Investors shall,
within ten (10) days after such death, disability, resignation, or
other event, appoint a successor Investor Representative (by vote
or written consent of the Investors), and promptly thereafter (but
in any event within two (2) business days after such appointment)
notify the Company in writing of the identity of such successor.
Any such successor so appointed shall become the
“Investor
Representative” for purposes of this
Agreement.
SECTION
10.
MISCELLANEOUS.
10.1 Governing
Law. This Agreement shall be
governed by and construed and enforced in accordance with the
internal laws of the State of Delaware without giving effect to
conflict of laws provisions.
10.2 Entire
Agreement; Amendment. This
Agreement, and any other documents delivered pursuant hereto,
including exhibits or schedules hereto constitute the full and
entire understanding and agreement among the parties with regard to
the subject hereof and no party shall be liable or bound to any
other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.
Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other
than by a written instrument signed by the Company and the Investor
Representative.
10.3 Notices,
Etc. All notices and other
communications required or permitted hereunder shall be in writing
and shall be mailed by registered or certified mail, postage
prepaid, or otherwise delivered by electronic mail, facsimile
transmission, by hand or by messenger or overnight express,
addressed:
(a) if
to any Investors to be delivered in care of the Investor
Representative.
(b) if
to the Investor Representative, to:
Floor
7 Suite AB, Yuanyang Guangha
International
Chaoyang District
Beijing,
China
Email:
huyucheng@me.com
or at such other address as the Investor Representative shall have
furnished to the Company with a copy to (which copy shall not
constitute notice):
Lewis
Brisbois Bisgaard & Smith LLP
2020
West El Camino Avenue, Suite 700
Sacramento,
CA 95833
Attn:
John P. Yung
Facsimile:
916.564.5444
Email: John.yung@lewisbrisbois.com
(c) if
to the Company, to:
AeroCentury
Corp., et al.
1440
Chapin Avenue, Suite 310
Burlingame,
California 92618
Attention:
Harold M. Lyons
Email:
hal.lyons@aerocentury.com
or at such other address as the Company shall have furnished to the
Investor Representative with a copy to (which copy shall not
constitute notice):
Young
Conaway Stargatt & Taylor, LLP
Rodney
Square
1000
N. King Street
Wilmington,
DE 19801
Attention:
Joseph Barry, Craig D. Grear, and Joseph Mulvihill
Facsimile:
(302)576-3296
cgrear@ycst.com
jmulvihill@ycst.com
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when
received if delivered personally, if sent by electronic mail or
facsimile, the first business day after the date of confirmation
that the electronic mail or facsimile, as applicable, has been
successfully transmitted to the email address or facsimile number,
as applicable, for the party notified, or, if sent by mail, at the
earlier of its receipt and seventy-two (72) hours after the same
has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed and mailed as
aforesaid.
10.4 Delays
or Omissions. Except as
expressly provided herein, no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach or
default of another party under this Agreement, shall impair any
such right, power, or remedy of such party nor shall it be
construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall nay waiver of any single breach or
default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent,
or approval of any kind or character on the part of any party of
any breach or default under this Agreement, or any waiver on the
part of any party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any party,
shall be cumulative and not alternative.
10.5 Expenses.
Each party will pay all of their expenses, including without
limitation counsel or other professional fees and disbursements but
excluding any brokerage or finders’ fees or agents’
commissions or any similar charges, reasonably incurred in
connection with the negotiation and preparation of this Agreement
and the transactions contemplated herein.
10.6 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be an original, and all of which together shall
constitute one instrument.
10.7 Severability.
In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force
and effect without said provision, which shall be replaced with an
enforceable provision closest in intent and economic effect as the
severed provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this
Agreement to any party.
10.8 Title
and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
10.9 Knowledge
Convention. For all purposes of
this Agreement, the term “knowledge” means, with
respect to an individual, that such individual is actually aware of
a particular fact or other matter, with no obligation to conduct
any inquiry or other investigation to determine the accuracy of
such fact or other matter. A person other than an individual shall
be deemed to have knowledge of a particular fact or other matter if
the officers, directors or other management personnel of such
person had knowledge of such fact or other
matter.
10.10 Survival
of Warranties. The
representations and warranties of the Company and the Investors
contained in or made pursuant to this Agreement shall survive
execution and delivery of this Agreement and the Closing for a
period of two years and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of
the Investors or the Company.
10.11 Successors
and Assigns. Except as
otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto,
as the case may be.
10.12 Further
Assurances. Each party hereto
agrees to do all acts and things, and to make, execute and delivery
such written instruments, as shall from time to time be reasonably
required to carry out the terms and provisions of this
Agreement.
[Signatures
on Following Page]
IN
WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement as of the day and year first above
written.
The
Company:
Aerocentury
Corp.
Investors:
Yucheng
Hu
TongTong
Ma
Qiang
Zhang
Yanhua
Li
Yiyi
Huang
Yu
Wang
Hao
Yang
Jing
Li
Yeh
Cheng
Investor
Representative:
Yucheng
Hu
4812-3131-1094.2 [Signature Page to Securities
Purchase Agreement]
Exhibit A
SCHEDULE OF INVESTORS
|
Name and Address of Purchaser
|
Shares
|
Investment
|
|
Yucheng
Hu
Group
7,Yantai Village, Liaoye Town,
Yingshan,
Sichuan, China 637700
|
1,598,201
|
$
6,153,073.85
|
|
TongTong
Ma
4-3-8
Guofeng Community, Congtai District, Handan, Hebei, China
056000
|
181,818
|
$
699,999.30
|
|
Qiang
Zhang
Group
6,Yantai Village, Liaoye Town,
Yingshan,
Sichuan, China 637700
|
207,792
|
$
799,999.20
|
|
Yanhua
Li
58
Litao Hutong, Fusan Village, Dianshang, Handan, Hebei, China
057350
|
194,805
|
$
749,999.25
|
|
Yiyi
Huang
Huoli
Kangcheng Community, Houjiatang Street, Yuhua District, Changsha,
Hunan, China 410000
|
168,831
|
$
649,999.35
|
|
Yu
Wang
D1988
Jindi Sanqianfu, Leifeng Road, Wangcheng, Changsha, Hunan, China
410000
|
51,948
|
$
199,999.80
|
|
Hao
Yang
G2-102
Xinchengshijia, Renmin East Road 398, Changsha, Hunan, China
410000
|
207,792
|
$
799,999.20
|
|
Jing
Li
6
Floor, Sigma Plaza, No. 49 Zhichun Road, Haidian District, Beijing,
China 100000
|
181,818
|
$
699,999.30
|
|
Yeh
Cheng
World
Trade Apartment, Building B,
Apartment
5e, Beijing,China 100001
|
77,922
|
$
299,999.70
|
Exhibit B
ESCROW AGREEMENT
Exhibit C
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Exhibit D
AMENDED AND RESTATED
BYLAWS
Exhibit E
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
28486733.2
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AEROCENTURY CORP.
Pursuant
to Sections 242, 245 and 303 of the
General
Corporation Law of the State of Delaware
AeroCentury Corp.
(the “Corporation”), a
corporation organized and existing under the General Corporation
Law of the State of Delaware (the “DGCL”), does hereby
certify as follows:
1. The
name of the Corporation is AeroCentury Corp. The original
Certificate of Incorporation was filed with the Secretary of State
of the State of Delaware on February 28, 1997.
2. An
Amended and Restated Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Delaware on
August 19, 1997 and a Certificate of Amendment thereto was filed
with the Secretary of State of Delaware on May 6, 2008 (as so
amended, the “Amended and Restated
Certificate”).
2. On
March 29, 2021, the Corporation and certain of its affiliates
(collectively, the “Debtors”) filed voluntary
petitions for relief under Chapter 11 of Title 11 of the United
States Bankruptcy Code (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the District of Delaware (the
“Bankruptcy
Court”) in accordance with the reorganization
proceeding styled In
re AeroCentury Cop, et al, Case No. 21-10636
(JTD).
3. This
Second Amended and Restated Certificate of Incorporation restates
and further amends the Amended and Restated Certificate, and has
been duly adopted in accordance with Sections 242, 245 and 303 of
the DGCL, pursuant to the authority granted to the Corporation
under Section 303 of the DGCL to put into effect and carry out
the Combined Disclosure Statement and Joint Chapter 11 Plan of
AeroCentury Corp., and its Affiliated Debtors, filed on July 14,
2021 [DE 225], as supplemented from time to time, which was
confirmed by an order of the United States Bankruptcy Court for the
District of Delaware entered on August [*], 2021, in the jointly
administered chapter 11 cases captioned In re Aerocentury Corp., et
al. Case No. 21-10636 (JTD).
4. Provision
for amending and restating the Corporation’s Certificate of
Incorporation is contained in the order of the Bankruptcy Court
having jurisdiction under the Bankruptcy Code for the
reorganization of the Corporation.
5. The
text of the Corporation’s Amended and Restated Certificate is
amended and restated in its entirety as follows:
ARTICLE I.
Name
The
name of the Corporation is AeroCentury Corp.
ARTICLE II.
Registered Office
The
address of the Corporation's registered office in the State of
Delaware is 251 Little Falls Drive, in the City of Wilmington,
County of New Castle, Delaware 19808. The name of its registered
agent at such address is Corporation Service Company.
ARTICLE III.
Purpose
The
nature of the business of the Corporation and the purposes for
which it is organized are to engage in any lawful act or activity
for which corporations may be organized under the DGCL
ARTICLE IV.
Capital Stock
(A)
Authorized Capital
Stock.
The
total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is 15,000,000 shares of
capital stock, consisting of (i) 13,000,000 shares of common
stock, par value $0.001 per share (the “Common Stock”), and
(ii) 2,000,000 shares of preferred stock, par value $0.001 per
share (the “Preferred
Stock”).
Notwithstanding
anything to the contrary contained herein, the rights and
preferences of the Common Stock shall at all times be subject to
the rights and preferences of the Preferred Stock as may be set
forth in this Second Amended and Restated Certificate of
Incorporation or one or more certificates of designations filed
with the Secretary of State of the State of Delaware from time to
time in accordance with the DGCL and this Second Amended and
Restated Certificate of Incorporation. The number of authorized
shares of Common Stock or Preferred Stock may be increased or
decreased (but not below the number of shares thereof then
outstanding) from time to time by the affirmative vote of the
holders of at least a majority of the voting power of the
Corporation’s then outstanding shares of capital stock
entitled to vote thereon, voting together as a single class,
irrespective of the provisions of Section 242(b)(2) of the
DGCL (or any successor provision thereto), and no vote of the
holders of the Common Stock or the Preferred Stock voting
separately as a class or series shall be required therefor unless a
vote of any such holder is required pursuant to this Second Amended
and Restated Certificate of Incorporation (including any
certificate of designation relating to any series of Preferred
Stock).
The
voting powers, designations, preferences and relative,
participating, optional or other special rights and such
qualifications, limitations or restrictions of the Common Stock, in
addition to those set forth elsewhere herein, are as
follows:
(1) Voting
Rights. Each holder of shares of Common Stock shall be
entitled to vote at all meetings of the stockholders and to cast
one vote for each outstanding share of Common Stock held by such
holder on all matters on which stockholders are entitled to vote
generally. Except as otherwise required by law or this Article IV,
the holders of each class of the Common Stock shall vote together
as a single class. Notwithstanding the foregoing, except as
otherwise required by law, holders of Common Stock shall not be
entitled to vote on any amendment to this Second Amended and
Restated Certificate of Incorporation (including any certificate of
designation relating to any series of Preferred Stock) that relates
solely to the terms of one or more outstanding series of Preferred
Stock if the holders of such affected series are entitled, either
separately or together with the holders of one or more other such
series, to vote thereon pursuant to this Second Amended and
Restated Certificate of Incorporation (including any certificate of
designation relating to any series of Preferred Stock) or pursuant
to the DGCL.
(2) Dividends
and Distributions. Subject to the prior rights of the
holders of all series of Preferred Stock at the time outstanding
having prior rights as to dividends or other distributions, the
holders of shares of Common Stock shall be entitled to receive,
when, as and if declared by the Board of Directors of the
Corporation (the “Board of Directors”), out
of the assets of the Corporation legally available therefor, such
dividends and other distributions as may be declared from time to
time by the Board of Directors and shall share equally on a per
share basis in all such dividends and other
distributions.
(3) Liquidation.
Subject to the prior rights of creditors of the Corporation,
including without limitation the payment of expenses relating to
any liquidation, dissolution or winding up of the Corporation, and
the holders of all series of Preferred Stock at the time
outstanding having prior rights as to distributions upon
liquidation, dissolution or winding up of the Corporation, in the
event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of shares
of Common Stock shall be entitled to receive their ratable and
proportionate share of the remaining assets of the Corporation.
Except as expressly provided in this Second Amended and Restated
Certificate of Incorporation or in one or more certificates of
designation with respect to series of Preferred Stock, a merger or
consolidation of the Corporation with any other corporation or
other entity, or a sale or conveyance of all or any part of the
assets of the Corporation (which shall not in fact result in the
liquidation of the Corporation and the distribution of assets to
its stockholders) shall not be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation.
The
Board of Directors is hereby expressly authorized to provide for
the issuance of all or any shares of the Preferred Stock in one or
more series, and to fix for each such series the voting powers, if
any, designations, preferences and relative, participating,
optional or other special rights and such qualifications,
limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issuance of such series, including,
without limitation, the authority to provide:
(1) the
number of shares included in such series, and the distinctive
designation of that series;
(2) the
dividend rate (or method of determining such rate) on the shares of
any series, whether dividends shall be cumulative and, if so, from
which date or dates, and the relative rights of priority, if any,
of payment of dividends on shares of that series;
(3) whether
any series shall have voting rights, in addition to the voting
rights provided by applicable law, and, if so, the number of votes
per share and the terms and conditions of such voting
rights;
(4) whether
any series shall have conversion privileges and, if so, the terms
and conditions of conversion, including provision for adjustment of
the conversion rate upon such events as the Board of Directors
shall determine;
(5) whether
the shares of any series shall be redeemable and, if so, the terms
and conditions of such redemption, including the date or dates upon
or after which they shall be redeemable and the amount per share
payable in case of redemption, which amount may vary under
different conditions and at different redemption
dates;
(6) whether
any series shall have a sinking fund for the redemption or purchase
of shares of that series, and, if so, the terms and amount of such
sinking fund;
(7) the
rights of the shares of any series in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of
payment of shares of that series; and
(8) any
other powers, preferences, rights, qualifications, limitations, and
restrictions of any series.
The
powers, preferences and relative, participating, optional and other
special rights of the shares of each series of Preferred Stock, and
the qualifications, limitations or restrictions thereof, if any,
may differ from those of any and all other series at any time
outstanding. Unless otherwise provided in the resolution or
resolutions providing for the issuance of such series of Preferred
Stock, shares of Preferred Stock, regardless of series, which shall
be issued and thereafter acquired by the Corporation through
purchase, redemption, exchange, conversion or otherwise shall
return to the status of authorized but unissued Preferred Stock,
without designation as to series of Preferred Stock, and the
Corporation shall have the right to reissue such
shares.
ARTICLE V.
Board of Directors
(A)
Powers of the Board of
Directors.
The
business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.
Subject
to the rights of the holders of Preferred Stock, the Board of
Directors shall consist of five (5) or more members, the exact
number of which shall be fixed by, or in the manner provided in,
the Corporation’s Bylaws.
Each
director shall hold office until the next annual meeting of the
stockholders and until such director’s successor is duly
elected and qualified, or until such director’s earlier
death, resignation, disqualification or removal. A director may
resign at any time upon notice to the Corporation as provided in
the Corporation’s Bylaws.
(D)
No Cumulative Voting. No
stockholder will be permitted to cumulate votes at any election of
directors.
(E)
Powers and
Authority.
In
addition to the powers and authority expressly conferred upon them
herein or by statute, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the DGCL and this Second Amended and Restated
Certificate of Incorporation.
ARTICLE VI.
Stockholder Action
(A)
Election of
Directors.
Elections of
directors need not be by written ballot except and to the extent
provided in the Corporation’s Bylaws.
Advance
notice of nominations for the election of directors or proposals or
other business to be considered by stockholders, which are made by
any stockholder of the Corporation, shall be given in the manner
and to the extent provided in the Corporation’s
Bylaws.
ARTICLE VII.
Limitation of Director Liability
No
director shall be personally liable to the Corporation or to any of
its stockholders for monetary damages for breach of fiduciary duty
as a director, except to the extent such elimination from liability
or limitation thereof is not permitted under the DGCL as the same
exists or may hereafter be amended. If the DGCL is amended
hereafter to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
authorized by the DGCL, as so amended. Any repeal or modification
of this Article VII, because of amendments or modifications of the
DGCL or otherwise, shall not adversely affect any right or
protection of a director of the Corporation existing at the time of
such repeal or modification with respect to acts or omissions
occurring prior to the effective date of such repeal or
modification.
ARTICLE VIII.
Business Combinations
The
Corporation hereby elects not to be governed by Section 203 of
the DGCL.
ARTICLE IX.
Amendment of Bylaws
In
furtherance and not in limitation of the powers conferred upon it
by the laws of the State of Delaware, the Board of Directors shall
have the power to adopt, amend or repeal the Corporation’s
Bylaws by the affirmative vote of a majority of the entire Board of
Directors (assuming no vacancies on the Board of Directors). The
Corporation’s Bylaws may also be adopted, amended, altered or
repealed by the affirmative vote of at least a majority of the
voting power of the Corporation’s issued and outstanding
shares of capital stock entitled to vote generally in the election
of directors, voting together as a single class.
ARTICLE X.
Amendment of Certificate of Incorporation
The
Corporation reserves the right at any time, and from time to time,
to amend or repeal any provision contained in this Second Amended
and Restated Certificate of Incorporation, and add other provisions
authorized by the laws of the State of Delaware at the time in
force, in the manner now or hereafter prescribed by the DGCL; and
all rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Second Amended and Restated
Certificate of Incorporation (as amended) are granted subject to
the rights reserved in this ARTICLE X.
ARTICLE XI.
Forum Selection
Unless
the Corporation consents in writing to the selection of an
alternative forum, the Court of Chancery of the State of Delaware
shall, to the fullest extent permitted by law, be the sole and
exclusive forum for (a) any derivative action or proceeding
brought on behalf of the Corporation, (b) any action asserting
a claim of breach of a fiduciary duty owed by any director,
officer, or stockholder of the Corporation to the Corporation or
the Corporation’s stockholders, (c) any action asserting
a claim arising pursuant to any provision of the DGCL or as to
which the DGCL confers jurisdiction on the Court of Chancery of the
State of Delaware, or (d) any action asserting a claim
governed by the internal affairs doctrine. Any person or entity
purchasing or otherwise acquiring or holding any interest in shares
of the capital stock of the Corporation shall be deemed to have
notice of and consented to the provisions of this Article
XI.
*
* *
IN WITNESS WHEREOF, the Corporation
has caused this Second Amended and Restated Certificate of
Incorporation to be executed on its behalf on September __,
2021.
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AEROCENTURY CORP.
|
|
|
|
|
|
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|
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By:
|
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Michael
G. Magnusson
President
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4825-3780-6326.1 [Signature Page to Second
Amended and Restated Certificate of
Incorporation]
SECOND AMENDED AND RESTATED BYLAWS
OF
AEROCENTURY CORP.
(a Delaware Corporation)
as amended and restated on September __, 2021
ARTICLE I
OFFICES
Section
1.01
Registered Office. The registered office
of AeroCentury Corp. (the “Corporation”) will be fixed in the
Certificate of Incorporation of the Corporation (the
“Certificate of
Incorporation”).
Section
1.02
Other Offices. The Corporation may have
other offices, both within and without the State of Delaware, as
the board of directors of the Corporation (the “Board of Directors”) from time to
time shall determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section
2.01
Place of Meetings. All meetings of the
stockholders shall be held at such place, if any, either within or
without the State of Delaware, or by means of remote communication,
as shall be designated from time to time by resolution of the Board
of Directors and stated in the notice of meeting.
Section
2.02
Annual Meeting. The annual meeting of
the stockholders for the election of directors and for the
transaction of such other business as may properly come before the
meeting in accordance with these by-laws shall be held at such
date, time, and place, if any, as shall be determined by the Board
of Directors and stated in the notice of the meeting.
Section
2.03
Special
Meetings.
(a)
Purpose. Special meetings of
stockholders for any purpose or purposes shall be called
only:
(i)
by the Board of
Directors; or
(ii)
by the Secretary
(as defined in Section 4.01) following receipt of one or more
written demands to call a special meeting of the stockholders in
accordance with, and subject to, this Section 2.03 from
stockholders of record who own, in the aggregate, at least Twenty
Five percent (25%) of the voting power of the outstanding shares of
the Corporation then entitled to vote on the matter or matters to
be brought before the proposed special meeting.
(b)
Notice. A request to the Secretary shall
be delivered to him or her at the Corporation’s principal
executive offices and signed by each stockholder, or a duly
authorized agent of such stockholder, requesting the special
meeting and shall set forth:
(i) a
brief description of each matter of business desired to be brought
before the special meeting;
(ii) the
reasons for conducting such business at the special
meeting;
(iii) the
text of any proposal or business to be considered at the special
meeting (including the text of any resolutions proposed to be
considered and in the event that such business includes a proposal
to amend these by-laws, the language of the proposed amendment);
and
(iv) the
information required in Section 2.12(b) of these by-laws (for
stockholder nomination demands) or Section 2.12(c) of these by-laws
(for all other stockholder proposal demands), as
applicable.
(c) Business.
Business transacted at a special meeting requested by stockholders
shall be limited to the matters described in the special meeting
request; provided, however,
that nothing herein shall prohibit the Board of Directors from
submitting matters to the stockholders at any special meeting
requested by stockholders.
(d) Time
and Date. A special meeting requested by stockholders shall
be held at such date and time as may be fixed by the Board of
Directors; provided,
however, that the date of any such special meeting shall be
not more than 90 days after the request to call the special meeting
is received by the Secretary. Notwithstanding the foregoing, a
special meeting requested by stockholders shall not be held
if:
(i) the
Board of Directors has called or calls for an annual or special
meeting of the stockholders to be held within 90 days after the
Secretary receives the request for the special meeting and the
Board of Directors determines in good faith that the business of
such meeting includes (among any other matters properly brought
before the meeting) the business specified in the
request;
(ii) the
stated business to be brought before the special meeting is not a
proper subject for stockholder action under applicable
law;
(iii) an
identical or substantially similar item (a “Similar Item”) was presented at
any meeting of stockholders held within 120 days prior to the
receipt by the Secretary of the request for the special meeting
(and, for purposes of this Section 2.03(d)(iii), the election of
directors shall be deemed a Similar Item with respect to all items
of business involving the election or removal of directors);
or
(iv) the
special meeting request was made in a manner that involved a
violation of Regulation 14A under the Securities Exchange Act of
1934, as amended and the rules and regulations promulgated
thereunder (the “Exchange
Act”).
(e)
Revocation. A stockholder may revoke a
request for a special meeting at any time by written revocation
delivered to the Secretary, and if, following such revocation,
there are unrevoked requests from stockholders holding in the
aggregate less than the requisite number of shares entitling the
stockholders to request the calling of a special meeting, the Board
of Directors, in its discretion, may cancel the special
meeting.
Section
2.04
Adjournments. Any meeting of the
stockholders, annual or special, may be adjourned from time to time
to reconvene at the same or some other place, if any, and notice
need not be given of any such adjourned meeting if the time, place,
if any, thereof and the means of remote communication, if any, are
announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which
might have been transacted at the original meeting. If the
adjournment is for more than 30 days, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to
vote at the meeting. If after the adjournment a new record date is
fixed for stockholders entitled to vote at the adjourned meeting,
the Board of Directors shall fix a new record date for notice of
the adjourned meeting and shall give notice of the adjourned
meeting to each stockholder of record entitled to vote at the
adjourned meeting as of the record date fixed for notice of the
adjourned meeting.
Section
2.05
Notice of Meetings. Notice of the place
(if any), date, hour, the record date for determining the
stockholders entitled to vote at the meeting (if such date is
different from the record date for stockholders entitled to notice
of the meeting), and means of remote communication, if any, of
every meeting of stockholders shall be given by the Corporation not
less than ten days nor more than 60 days before the meeting (unless
a different time is specified by law) to every stockholder entitled
to vote at the meeting as of the record date for determining the
stockholders entitled to notice of the meeting. Notices of special
meetings shall also specify the purpose or purposes for which the
meeting has been called. Notices of meetings to stockholders may be
given by mailing the same, addressed to the stockholder entitled
thereto, at such stockholder’s mailing address as it appears
on the records of the corporation and such notice shall be deemed
to be given when deposited in the U.S. mail, postage prepaid.
Without limiting the manner by which notices of meetings otherwise
may be given effectively to stockholders, any such notice may be
given by electronic transmission in the manner provided in Section
232 of the Delaware General Corporation Law. Notice of any meeting
need not be given to any stockholder who shall, either before or
after the meeting, submit a waiver of notice or who shall attend
such meeting, except when the stockholder attends for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of the
meeting shall be bound by the proceedings of the meeting in all
respects as if due notice thereof had been given.
Section
2.06
List of Stockholders. The Corporation
shall prepare a complete list of the stockholders entitled to vote
at any meeting of stockholders (provided, however, if the record date
for determining the stockholders entitled to vote is less than ten
days before the date of the meeting, the list shall reflect the
stockholders entitled to vote as of the tenth day before the
meeting date), arranged in alphabetical order, and showing the
address of each stockholder and the number of shares of capital
stock of the Corporation registered in the name of each stockholder
at least ten days before any meeting of the stockholders. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting for a period of at least ten days
before the meeting: (a) on a reasonably accessible electronic
network, provided that the information required to gain access to
such list was provided with the notice of the meeting; or (b)
during ordinary business hours, at the principal place of business
of the Corporation. If the meeting is to be held at a place, the
list shall also be produced and kept at the time and place of the
meeting the whole time thereof and may be inspected by any
stockholder who is present. If the meeting is held solely by means
of remote communication, the list shall also be open for inspection
by any stockholder during the whole time of the meeting as provided
by applicable law. Except as provided by applicable law, the stock
ledger of the Corporation shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger and the list
of stockholders or to vote in person or by proxy at any meeting of
stockholders.
Section
2.07
Quorum. Unless otherwise required by
law, the Certificate of Incorporation or these by-laws, at each
meeting of the stockholders, a majority in voting power of the
shares of the Corporation entitled to vote at the meeting, present
in person or represented by proxy, shall constitute a quorum. If,
however, such quorum shall not be present or represented at any
meeting of the stockholders, the chair of the meeting or the
stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power, by the affirmative vote of
a majority in voting power thereof, to adjourn the meeting from
time to time, in the manner provided in Section 2.04, until a
quorum shall be present or represented. A quorum, once established,
shall not be broken by the subsequent withdrawal of enough votes to
leave less than a quorum. At any such adjourned meeting at which
there is a quorum, any business may be transacted that might have
been transacted at the meeting originally called.
Section
2.08
Organization. The Board of Directors may
adopt by resolution such rules and regulations for the conduct of
the meeting of the stockholders as it shall deem appropriate. At
every meeting of the stockholders, the Chair of the Board, or in
his or her absence or inability to act, the Chief Executive Officer
(as defined in Section 4.01), or, in his or her absence or
inability to act, the officer or director whom the Board of
Directors shall appoint, shall act as chair of, and preside at, the
meeting. The Secretary or, in his or her absence or inability to
act, the person whom the chair of the meeting shall appoint
secretary of the meeting, shall act as secretary of the meeting and
keep the minutes thereof. Except to the extent inconsistent with
such rules and regulations as adopted by the Board of Directors,
the chair of any meeting of the stockholders shall have the right
and authority to prescribe such rules, regulations, and procedures
and to do all such acts as, in the judgment of such chair, are
appropriate for the proper conduct of the meeting. Such rules,
regulations, or procedures, whether adopted by the Board of
Directors or prescribed by the chair of the meeting, may include,
without limitation, the following:
(a) the
establishment of an agenda or order of business for the
meeting;
(b) the
determination of when the polls shall open and close for any given
matter to be voted on at the meeting;
(c) rules
and procedures for maintaining order at the meeting and the safety
of those present;
(d) limitations
on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted
proxies, or such other persons as the chair of the meeting shall
determine;
(e) restrictions
on entry to the meeting after the time fixed for the commencement
thereof; and
(f) limitations
on the time allotted to questions or comments by
participants.
Section
2.09
Voting;
Proxies.
(a) General.
Unless otherwise required by law or provided in the Certificate of
Incorporation, each stockholder shall be entitled to one vote, in
person or by proxy, for each share of capital stock held by such
stockholder.
(b) Election
of Directors. Unless otherwise required by the Certificate
of Incorporation, the election of directors shall be by written
ballot. Unless otherwise required by law, the Certificate of
Incorporation, or these by-laws, the election of directors shall be
decided by a plurality of the votes cast at a meeting of the
stockholders by the holders of stock entitled to vote in the
election.
(c) Other
Matters. Unless otherwise required by law, the Certificate
of Incorporation, or these by-laws, any matter, other than the
election of directors, brought before any meeting of stockholders
shall be decided by the affirmative vote of the majority of shares
present in person or represented by proxy at the meeting and
entitled to vote on the matter.
(d) Proxies.
Each stockholder entitled to vote at a meeting of stockholders may
authorize another person or persons to act for such stockholder by
proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
Such authorization may be in a writing executed by the stockholder
or his or her authorized officer, director, employee, or agent. To
the extent permitted by law, a stockholder may authorize another
person or persons to act for him or her as proxy by transmitting or
authorizing the transmission of an electronic transmission to the
person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization, or like
agent duly authorized by the person who will be the holder of the
proxy to receive such transmission, provided that the electronic
transmission either sets forth or is submitted with information
from which it can be determined that the electronic transmission
was authorized by the stockholder. A copy, facsimile transmission,
or other reliable reproduction of the proxy authorized by this
Section 2.09(d) may be substituted for or used in lieu of the
original writing or electronic transmission for any and all
purposes for which the original writing or electronic transmission
could be used, provided that such copy, facsimile transmission, or
other reproduction shall be a complete reproduction of the entire
original writing or electronic transmission. A proxy shall be
irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A stockholder may revoke any proxy
that is not irrevocable by attending the meeting and voting in
person or by delivering to the Secretary a revocation of the proxy
or a new proxy bearing a later date.
Section
2.10
Inspectors at Meetings of Stockholders.
In advance of any meeting of the stockholders, the Board of
Directors shall, appoint one or more inspectors, who may be
employees of the Corporation, to act at the meeting or any
adjournment thereof and make a written report thereof. The Board of
Directors may designate one or more persons as alternate inspectors
to replace any inspector who fails to act. If no inspector or
alternate is able to act at a meeting, the person presiding at the
meeting shall appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the
best of his or her ability. The inspector or inspectors may appoint
or retain other persons or entities to assist the inspector or
inspectors in the performance of their duties. In determining the
validity and counting of proxies and ballots cast at any meeting of
stockholders, the inspector or inspectors may consider such
information as is permitted by applicable law. No person who is a
candidate for office at an election may serve as an inspector at
such election. When executing the duties of inspector, the
inspector or inspectors shall:
(a) ascertain
the number of shares outstanding and the voting power of
each;
(b) determine
the shares represented at the meeting and the validity of proxies
and ballots;
(c) count
all votes and ballots;
(d) determine
and retain for a reasonable period a record of the disposition of
any challenges made to any determination by the inspectors;
and
(e) certify
their determination of the number of shares represented at the
meeting and their count of all votes and ballots.
Section
2.11
Fixing
the Record Date.
(a) In
order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than sixty (60)
nor less than ten (10) days before the date of such meeting. If no
record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting;
provided, however, that the
Board of Directors may fix a new record date for the determination
of stockholders entitled to notice of or to vote at the adjourned
meeting.
(b) In
order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise
any rights in respect of any change, conversion, or exchange of
stock, or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed, the record
date for determining stockholders for any such purpose shall be at
the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
Section
2.12
Advance
Notice of Stockholder Nominations and Proposals.
(a)
Annual Meetings. At a meeting of the
stockholders, only such nominations of persons for the election of
directors and such other business shall be conducted as shall have
been properly brought before the meeting. Except for nominations
that are included in the Corporation’s annual meeting proxy
statement pursuant to Section 2.13, to be properly brought before
an annual meeting, nominations or such other business must
be:
(i) specified
in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors or any committee
thereof;
(ii) otherwise
properly brought before the meeting by or at the direction of the
Board of Directors or any committee thereof; or
(iii) otherwise
properly brought before an annual meeting by a stockholder who is a
stockholder of record of the Corporation at the time such notice of
meeting is delivered, who is entitled to vote at the meeting, and
who complies with the notice procedures set forth in this Section
2.12.
In
addition, any proposal of business (other than the nomination of
persons for election to the Board of Directors) must be a proper
matter for stockholder action. For business (including, but not
limited to, director nominations) to be properly brought before an
annual meeting by a stockholder pursuant to Section 2.12(a)(iii),
the stockholder or stockholders of record intending to propose the
business (the “Proposing
Stockholder”) must have given timely notice thereof
pursuant to this Section 2.12(a), in writing to the Secretary even
if such matter is already the subject of any notice to the
stockholders or Public Disclosure from the Board of Directors. To
be timely, a Proposing Stockholder’s notice for an annual
meeting must be delivered to or mailed and received at the
principal executive offices of the Corporation: (x) not later than
the close of business on the 90th day, nor earlier
than the close of business on the 120th day, in advance of
the anniversary of the previous year’s annual meeting if such
meeting is to be held on a day which is not more than 30 days in
advance of the anniversary of the previous year’s annual
meeting or not later than 60 days after the anniversary of the
previous year’s annual meeting; and (y) with respect to any
other annual meeting of stockholders, including in the event that
no annual meeting was held in the previous year, not earlier than
the close of business on the 120th day prior to the
annual meeting and not later than the close of business on the
later of: (1) the 90th day prior to the
annual meeting and (2) the close of business on the tenth day
following the first date of Public Disclosure of the date of such
meeting. In no event shall the Public Disclosure of an adjournment
or postponement of an annual meeting commence a new notice time
period (or extend any notice time period). For the purposes of this
Section 2.12 and Section 2.13, “Public Disclosure” shall mean a
disclosure made in a press release reported by the Dow Jones News
Services, The Associated Press, or a comparable national news
service or in a document filed by the Corporation with the
Securities and Exchange Commission (”SEC”) pursuant to Section 13, 14,
or 15(d) of the Exchange Act.
(b)
Stockholder Nominations. For the
nomination of any person or persons for election to the Board of
Directors pursuant to Section 2.12(a)(iii) or Section 2.12(d), a
Proposing Stockholder’s notice to the Secretary shall set
forth or include:
(i) the
name, age, business address, and residence address of each nominee
proposed in such notice;
(ii) the
principal occupation or employment of each such
nominee;
(iii) the
class and number of shares of capital stock of the Corporation
which are owned of record and beneficially by each such nominee (if
any);
(iv) such
other information concerning each such nominee as would be required
to be disclosed in a proxy statement soliciting proxies for the
election of such nominee as a director in an election contest (even
if an election contest is not involved) or that is otherwise
required to be disclosed, under Section 14(a) of the Exchange
Act;
(v) a
written questionnaire with respect to the background and
qualification of such proposed nominee (which questionnaire shall
be provided by the Secretary upon written request) and a written
statement and agreement executed by each such nominee acknowledging
that such person:
(A) consents
to being named in the Company’s proxy statement as a nominee
and to serving as a director if elected,
(B) intends
to serve as a director for the full term for which such person is
standing for election, and
(C) makes
the following representations: (1) that the director nominee has
read and agrees to adhere to the Corporation’s CODE OF BUSINESS CONDUCT AND ETHICS, and
any other of the Corporation’s policies or guidelines
applicable to directors, including with regard to securities
trading, and (2) that the director nominee is not and will not
become a party to any agreement, arrangement, or understanding
with, and has not given any commitment or assurance to, any person
or entity as to how such person, if elected as a director of the
Corporation, will act or vote on any issue or question (a
“Voting
Commitment”) that has not been disclosed to the
Corporation or any Voting Commitment that could limit or interfere
with such person’s ability to comply, if elected as a
director of the Corporation, with such person’s fiduciary
duties under applicable law,and (3) that the director nominee is
not and will not become a party to any agreement, arrangement, or
understanding with any person or entity other than the Corporation
with respect to any direct or indirect compensation, reimbursement,
or indemnification (”Compensation Arrangement”) that
has not been disclosed to the Corporation in connection with such
person’s nomination for director or service as a director;
and
(vi)
as to the Proposing
Stockholder:
(A) the
name and address of the Proposing Stockholder as they appear on the
Corporation’s books and of the beneficial owner, if any, on
whose behalf the nomination is being made,
(B) the
class and number of shares of the Corporation which are owned by
the Proposing Stockholder (beneficially and of record) and owned by
the beneficial owner, if any, on whose behalf the nomination is
being made, as of the date of the Proposing Stockholder’s
notice, and a representation that the Proposing Stockholder will
notify the Corporation in writing of the class and number of such
shares owned of record and beneficially as of the record date for
the meeting within five business days after the record date for
such meeting,
(C) a
description of any agreement, arrangement, or understanding with
respect to such nomination between or among the Proposing
Stockholder or the beneficial owner, if any, on whose behalf the
nomination is being made and any of their affiliates or associates,
and any others (including their names) acting in concert with any
of the foregoing, and a representation that the Proposing
Stockholder will notify the Corporation in writing of any such
agreement, arrangement, or understanding in effect as of the record
date for the meeting within five business days after the record
date for such meeting,
(D) a
description of any agreement, arrangement, or understanding
(including any derivative or short positions, profit interests,
options, hedging transactions, and borrowed or loaned shares) that
has been entered into as of the date of the Proposing
Stockholder’s notice by, or on behalf of, the Proposing
Stockholder or the beneficial owner, if any, on whose behalf the
nomination is being made and any of their affiliates or associates,
the effect or intent of which is to mitigate loss to, manage risk
or benefit of share price changes for, or increase or decrease the
voting power of such person or any of their affiliates or
associates with respect to shares of stock of the Corporation, and
a representation that the Proposing Stockholder will notify the
Corporation in writing of any such agreement, arrangement, or
understanding in effect as of the record date for the meeting
within five business days after the record date for such
meeting,
(E) a
representation that the Proposing Stockholder is a holder of record
of shares of the Corporation entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, and
(F) a
representation whether the Proposing Stockholder intends to deliver
a proxy statement and/or form of proxy to holders of at least the
percentage of the Corporation’s outstanding capital stock
required to approve the nomination and/or otherwise to solicit
proxies from stockholders in support of the nomination. The
Corporation may require any proposed nominee to furnish such other
information as it may reasonably require to determine the
eligibility of such proposed nominee to serve as an independent
director of the Corporation or that could be material to a
reasonable stockholder’s understanding of the independence,
or lack thereof, of such nominee.
(c)
Other Stockholder Proposals. For all
business other than director nominations, a Proposing
Stockholder’s notice to the Secretary shall set forth as to
each matter the Proposing Stockholder proposes to bring before the
annual meeting:
(i) a
brief description of the business desired to be brought before the
annual meeting;
(ii) the
reasons for conducting such business at the annual
meeting;
(iii) the
text of any proposal or business (including the text of any
resolutions proposed for consideration and in the event that such
business includes a proposal to amend these by-laws, the language
of the proposed amendment);
(iv) any
substantial interest (within the meaning of Item 5 of Schedule 14A
under the Exchange Act) in such business of such stockholder and
the beneficial owner (within the meaning of Section 13(d) of the
Exchange Act), if any, on whose behalf the business is being
proposed;
(v) any
other information relating to such stockholder and beneficial
owner, if any, on whose behalf the proposal is being made, required
to be disclosed in a proxy statement or other filings required to
be made in connection with solicitations of proxies for the
proposal and pursuant to and in accordance with Section 14(a) of
the Exchange Act and the rules and regulations promulgated
thereunder;
(vi) a
description of all agreements, arrangements, or understandings
between or among such stockholder, the beneficial owner, if any, on
whose behalf the proposal is being made, any of their affiliates or
associates, and any other person or persons (including their names)
in connection with the proposal of such business and any material
interest of such stockholder, beneficial owner, or any of their
affiliates or associates, in such business, including any
anticipated benefit therefrom to such stockholder, beneficial
owner, or their affiliates or associates; and
(vii) the
information required by Section 2.12(b)(vi) above.
(d)
Special Meetings of Stockholders. Only
such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant
to the Corporation’s notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a
special meeting of stockholders called by the Board of Directors at
which directors are to be elected pursuant to the
Corporation’s notice of meeting:
(i) by
or at the direction of the Board of Directors or any committee
thereof; or
(ii) provided
that the Board of Directors has determined that directors shall be
elected at such meeting, by any stockholder of the Corporation who
is a stockholder of record at the time the notice provided for in
this Section 2.12(d) is delivered to the Secretary, who is entitled
to vote at the meeting, and upon such election and who complies
with the notice procedures set forth in this Section
2.12.
In the
event the Corporation calls a special meeting of stockholders for
the purpose of electing one or more directors to the Board of
Directors, any such stockholder entitled to vote in such election
of directors may nominate a person or persons (as the case may be)
for election to such position(s) as specified in the
Corporation’s notice of meeting, if such stockholder delivers
a stockholder’s notice that complies with the requirements of
Section 2.12(b) to the Secretary at its principal executive offices
not earlier than the close of business on the 120th day prior to such
special meeting and not later than the close of business on the
later of: (x) the 90th day prior to such
special meeting; or (y) the tenth (10th) day following the date of
the first Public Disclosure of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at
such meeting. In no event shall the Public Disclosure of an
adjournment or postponement of a special meeting commence a new
time period (or extend any notice time period).
(e) Effect
of Noncompliance. Only such persons who are nominated in
accordance with the procedures set forth in this Section 2.12 or
Section 2.13 shall be eligible to be elected at any meeting of
stockholders of the Corporation to serve as directors and only such
other business shall be conducted at a meeting as shall be brought
before the meeting in accordance with the procedures set forth in
this Section 2.12 or Section 2.13, as applicable. If any proposed
nomination was not made or proposed in compliance with this Section
2.12 or Section 2.13, as applicable, or other business was not made
or proposed in compliance with this Section 2.12, then except as
otherwise required by law, the chair of the meeting shall have the
power and duty to declare that such nomination shall be disregarded
or that such proposed other business shall not be transacted.
Notwithstanding anything in these by-laws to the contrary, unless
otherwise required by law, if a Proposing Stockholder intending to
propose business or make nominations at an annual meeting or
propose a nomination at a special meeting pursuant to this Section
2.12 does not provide the information required under this Section
2.12 to the Corporation, including the updated information required
by Section 2.12(b)(vi)(B), Section 2.12(b)(vi)(C), and Section
2.12(b)(vi)(D) within five business days after the record date for
such meeting or the Proposing Stockholder (or a qualified
representative of the Proposing Stockholder) does not appear at the
meeting to present the proposed business or nominations, such
business or nominations shall not be considered, notwithstanding
that proxies in respect of such business or nominations may have
been received by the Corporation.
(f) Rule
14a-8. This Section 2.12 and Section 2.13 shall not apply to
a proposal proposed to be made by a stockholder if the stockholder
has notified the Corporation of the stockholder’s intention
to present the proposal at an annual or special meeting only
pursuant to and in compliance with Rule 14a-8 under the Exchange
Act and such proposal has been included in a proxy statement that
has been prepared by the Corporation to solicit proxies for such
meeting.
Section
2.13
Proxy
Access.
(a)
Inclusion of Proxy Access Stockholder Nominee
in Proxy Statement. Subject to the provisions of this
Section 2.13, the Corporation shall include in its proxy statement
(including its form of proxy and ballot) for an annual meeting of
stockholders the name of any stockholder nominee for election to
the Board of Directors submitted pursuant to this Section 2.13
(each a “Proxy Access
Stockholder Nominee”) provided:
(i) timely
written notice of such Proxy Access Stockholder Nominee satisfying
this Section 2.13 (”Proxy
Access Notice”) is delivered to the Corporation by or
on behalf of a stockholder or stockholders that, at the time the
Proxy Access Notice is delivered, satisfy the ownership and other
requirements of this Section 2.13 (such stockholder or
stockholders, and any person on whose behalf they are acting, the
“Eligible
Stockholder”);
(ii) the
Eligible Stockholder expressly elects in writing at the time of
providing the Proxy Access Notice to have its Proxy Access
Stockholder Nominee included in the Corporation’s proxy
statement pursuant to this Section 2.13; and
(iii) the
Eligible Stockholder and the Proxy Access Stockholder Nominee
otherwise satisfy the requirements of this Section
2.13.
(b) Timely
Notice. To be timely, the Proxy Access Notice must be
delivered to the Secretary at the principal executive offices of
the Corporation, not later than 120 days nor more than 150 days
prior to the first anniversary of the date (as stated in the
Corporation’s proxy materials) that the Corporation’s
definitive proxy statement was first sent to stockholders in
connection with the preceding year’s annual meeting of
stockholders/of the preceding year’s annual meeting;
provided, however, that in
the event that the date of the annual meeting is advanced by more
than 30 days or delayed by more than 60 days from the anniversary
of the preceding year’s annual meeting, or if no annual
meeting was held in the preceding year, the Proxy Access Notice
must be so delivered not earlier than the close of business on the
150th day prior to such annual meeting and not later than the close
of business on the later of: (i) the 120th day prior to such annual
meeting; or (ii) the 10th day following the day on which Public
Disclosure of the date of such annual meeting is first made by the
Corporation. In no event shall the public announcement of an
adjournment or postponement of an annual meeting commence a new
time period (or extend any time period) for the giving of the Proxy
Access Notice.
(c) Information
to be Included in Proxy Statement. In addition to including
the name of the Proxy Access Stockholder Nominee in the
Corporation’s proxy statement for the annual meeting, the
Corporation shall also include (collectively, the
“Required
Information”):
(i) the
information concerning the Proxy Access Stockholder Nominee and the
Eligible Stockholder that is required to be disclosed in the
Corporation’s proxy statement pursuant to the Exchange Act,
and the rules and regulations promulgated thereunder;
and
(ii) if
the Eligible Stockholder so elects, a written statement of the
Eligible Stockholder (or in the case of a group, a written
statement of the group), not to exceed 500 words, in support of its
Proxy Access Stockholder Nominee, which must be provided at the
same time as the Proxy Access Notice for inclusion in the
Corporation’s proxy statement for the annual meeting (a
“Statement”).
Notwithstanding
anything to the contrary contained in this Section 2.13, the
Corporation may omit from its proxy materials any information or
Statement that it, in good faith, believes is untrue in any
material respect (or omits a material fact necessary in order to
make the statements made, in light of the circumstances under which
they are made, not misleading) or would violate any applicable law,
rule, regulation, or listing standard. Additionally, nothing in
this Section 2.13 shall limit the Corporation’s ability to
solicit against and include in its proxy statement its own
statements relating to any Proxy Access Stockholder
Nominee.
(d)
Proxy Access Stockholder Nominee Limits.
The number of Proxy Access Stockholder Nominees (including Proxy
Access Stockholder Nominees that were submitted by an Eligible
Stockholder for inclusion in the Corporation’s proxy
statement pursuant to this Section 2.13 but either are subsequently
withdrawn or that the Board of Directors decides to nominate (a
“Board
Nominee”)) appearing in the Corporation’s proxy
statement with respect to a meeting of stockholders shall not
exceed the greater of: (x) two; or (y) 20% of the number of
directors in office as of the last day on which notice of a
nomination may be delivered pursuant to this Section 2.13 (the
“Final Proxy Access
Nomination Date”) or, if such amount is not a whole
number, the closest whole number below 20% (the “Permitted Number”); provided, however, that:
(i) in
the event that one or more vacancies for any reason occurs on the
Board of Directors at any time after the Final Proxy Access
Nomination Date and before the date of the applicable annual
meeting of stockholders and the Board of Directors resolves to
reduce the size of the Board of Directors in connection therewith,
the Permitted Number shall be calculated based on the number of
directors in office as so reduced; and
(ii) any
Proxy Access Stockholder Nominee who is included in the
Corporation’s proxy statement for a particular meeting of
stockholders but either: (A) withdraws from or becomes ineligible
or unavailable for election at the meeting, or (B) does not receive
a number of votes cast in favor of his or her election at least
equal to 25% of the shares present in person or represented by
proxy at the annual meeting and entitled to vote on the Proxy
Access Stockholder Nominee’s election, shall be ineligible to
be included in the Corporation’s proxy statement as a Proxy
Access Stockholder Nominee pursuant to this Section 2.13 for the
next two annual meetings of stockholders following the meeting for
which the Proxy Access Stockholder Nominee has been nominated for
election; and
(iii) any
director in office as of the nomination deadline who was included
in the Corporation’s proxy statement as a Proxy Access
Stockholder Nominee for any of the two preceding annual meetings
and whom the Board of Directors decides to nominate for election to
the Board of Directors also will be counted against the Permitted
Number.
In the
event that the number of Proxy Access Stockholder Nominees
submitted by Eligible Stockholders pursuant to this Section 2.13
exceeds the Permitted Number, each Eligible Stockholder shall
select one Proxy Access Stockholder Nominee for inclusion in the
Corporation’s proxy statement until the Permitted Number is
reached, going in order of the amount (from greatest to least) of
voting power of the Corporation’s capital stock entitled to
vote on the election of directors as disclosed in the Proxy Access
Notice. If the Permitted Number is not reached after each Eligible
Stockholder has selected one Proxy Access Stockholder Nominee, this
selection process shall continue as many times as necessary,
following the same order each time, until the Permitted Number is
reached.
(e)
Eligibility of Nominating Stockholder;
Stockholder Groups. An Eligible Stockholder must have owned
(as defined below) continuously for at least three years a number
of shares that represents 3% or more of the outstanding shares of
the Corporation entitled to vote in the election of directors (the
“Required
Shares”) as of both the date the Proxy Access Notice
is delivered to or received by the Corporation in accordance with
this Section 2.13 and the record date for determining stockholders
entitled to vote at the meeting and must intend to continue to own
the Required Shares for at least one year following the date of the
annual meeting/deliver a statement regarding the Eligible
Stockholder’s intent with respect to continued ownership of
the Required Shares for at least one year following the annual
meeting. For purposes of satisfying the ownership requirement under
this Section 2.13, the voting power represented by the shares of
the Corporation’s capital stock owned by one or more
stockholders, or by the person or persons who own shares of the
Corporation’s capital stock and on whose behalf any
stockholder is acting, may be aggregated, provided
that:
(i) the
number of stockholders and other persons whose ownership of shares
is aggregated for such purpose shall not exceed 10;
and
(ii) each
stockholder or other person whose shares are aggregated shall have
held such shares continuously for at least three
years.
Whenever
an Eligible Stockholder consists of a group of stockholders and/or
other persons, any and all requirements and obligations for an
Eligible Stockholder set forth in this Section 2.13 must be
satisfied by and as to each such stockholder or other person,
except that shares may be aggregated to meet the Required Shares as
provided in this Section 2.13(e). With respect to any one
particular annual meeting, no stockholder or other person may be a
member of more than one group of persons constituting an Eligible
Stockholder under this Section 2.13.
(f)
Funds. A group of two or more funds
shall be treated as one stockholder or person for this Section 2.13
provided that the other terms and conditions in this Section 2.13
are met (including Section 2.13(h)(v)(A)) and the funds
are:
(i) under
common management and investment control;
(ii) under
common management and funded primarily by the same employer (or by
a group of related employers that are under common control);
or
(iii) a
“group of investment companies,” as such term is
defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of
1940, as amended.
(g)
Ownership. For purposes of this Section
2.13, an Eligible Stockholder shall be deemed to
“own” only those
outstanding shares of the Corporation’s capital stock as to
which the person possesses both:
(i)
the full voting and
investment rights pertaining to the shares; and
(ii)
the full economic
interest in (including the opportunity for profit and risk of loss
on) such shares; provided that the number of shares calculated in
accordance with clauses (i) and (ii) shall not include any
shares:
(A) sold
by such person or any of its affiliates in any transaction that has
not been settled or closed,
(B) borrowed
by such person or any of its affiliates for any purposes or
purchased by such person or any of its affiliates pursuant to an
agreement to resell, or
(C) subject
to any option, warrant, forward contract, swap, contract of sale,
other derivative, or similar agreement entered into by such person
or any of its affiliates, whether any such instrument or agreement
is to be settled with shares or with cash based on the notional
amount or value of outstanding shares of the Corporation’s
capital stock, in any such case which instrument or agreement has,
or is intended to have, the purpose or effect of: (1) reducing in
any manner, to any extent or at any time in the future, such
person’s or affiliates’ full right to vote or direct
the voting of any such shares; and/or (2) hedging, offsetting, or
altering to any degree gain or loss arising from the full economic
ownership of such shares by such person or affiliate.
An
Eligible Stockholder “owns” shares held in the name of a
nominee or other intermediary so long as the Eligible Stockholder
retains the right to instruct how the shares are voted with respect
to the election of directors and possesses the full economic
interest in the shares. An Eligible Stockholder’s ownership
of shares shall be deemed to continue during any period in which
the Eligible Stockholder has delegated any voting power by means of
a proxy, power of attorney, or other instrument or arrangement that
is revocable at any time by the person. An Eligible
Stockholder’s ownership of shares shall be deemed to continue
during any period in which the Eligible Stockholder has loaned such
shares, provided that the Eligible Stockholder has the power to
recall such loaned shares on three business days’ notice and
recalls such loaned shares not more than three business days after
being notified that any of its Proxy Access Stockholder Nominees
will be included in the Corporation’s proxy statement. The
terms “owned,”
“owning,” and
other variations of the word “own” shall have correlative
meanings. For purposes of this Section 2.13, the term
“affiliate”
shall have the meaning ascribed thereto in the regulations
promulgated under the Exchange Act.
(h)
Nomination Notice and Other Eligible
Stockholder Deliverables. An Eligible Stockholder must
provide with its Proxy Access Notice the following information in
writing to the Secretary:
(i)
one or more written
statements from the record holder of the shares (and from each
intermediary through which the shares are or have been held during
the requisite three-year holding period) verifying that, as of a
date within seven calendar days prior to the date the Proxy Access
Notice is delivered to or received by the Corporation, the Eligible
Stockholder owns, and has owned continuously for the preceding
three years, the Required Shares, and the Eligible
Stockholder’s agreement to provide:
(A)
within five
business days after the record date for the meeting, written
statements from the record holder and intermediaries verifying the
Eligible Stockholder’s continuous ownership of the Required
Shares through the record date, and
(B)
immediate notice if
the Eligible Stockholder ceases to own any of the Required Shares
prior to the date of the applicable annual meeting of
stockholders;
(ii)
the Eligible
Stockholder’s representation and agreement that the Eligible
Stockholder (including each member of any group of stockholders
that together is an Eligible Stockholder under this Section
2.13):
(A) intends
to continue to satisfy the eligibility requirements described in
this Section 2.13 through the date of the annual meeting, including
a statement that the Eligible Stockholder intends to continue to
own the Required Shares for at least one year following the date of
the annual meeting/regarding the Eligible Stockholder’s
intent with respect to continued ownership of the Required Shares
for at least one year following the annual meeting,
(B) acquired
the Required Shares in the ordinary course of business and not with
the intent to change or influence control of the Corporation, and
does not presently have such intent,
(C) has
not nominated and will not nominate for election to the Board of
Directors at the meeting any person other than the Proxy Access
Stockholder Nominee(s) being nominated pursuant to this Section
2.13,
(D) has
not engaged and will not engage in, and has not and will not be, a
“participant” in another person’s
“solicitation” within the meaning of Rule 14a-1(l)
under the Exchange Act in support of the election of any individual
as a director at the meeting other than its Proxy Access
Stockholder Nominee(s) or a Board Nominee,
(E) will
not distribute to any stockholder any form of proxy for the meeting
other than the form distributed by the Corporation,
(F) has
provided and will provide facts, statements, and other information
in all communications with the Corporation and its stockholders
that are or will be true and correct in all material respects and
do not and will not omit to state a material fact necessary in
order to make the statements made, in light of the circumstances
under which they were made, not misleading,
(G) agrees
to assume all liability stemming from any legal or regulatory
violation arising out of the Eligible Stockholder’s
communications with the Corporation’s stockholders or out of
the information that the Eligible Stockholder provides to the
Corporation,
(H) agrees
to indemnify and hold harmless the Corporation and each of its
directors, officers, and employees individually against any
liability, loss, or damages in connection with any threatened or
pending action, suit, or proceeding, whether legal, administrative,
or investigative, against the Corporation or any of its directors,
officers, or employees arising out of any nomination submitted by
the Eligible Stockholder pursuant to this Section
2.13,
(I) will
file with the SEC any solicitation or other communication with the
Corporation’s stockholders relating to the meeting at which
the Proxy Access Stockholder Nominee will be nominated, regardless
of whether any such filing is required under Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder
or whether any exemption from filing is available for such
solicitation or other communication under Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder,
and
(J) will
comply with all other applicable laws, rules, regulations, and
listing standards with respect to any solicitation in connection
with the meeting;
(iii) the
written consent of each Proxy Access Stockholder Nominee to be
named in the Corporation’s proxy statement, and form of proxy
and ballot and, as a nominee and, if elected, to serve as a
director;
(iv) a
copy of the Schedule 14N (or any successor form) that has been
filed with the SEC as required by Rule 14a-18 under the Exchange
Act;
(v) in
the case of a nomination by a group of stockholders that together
is an Eligible Stockholder:
(A) documentation
satisfactory to the Corporation demonstrating that a group of funds
qualifies pursuant to the criteria set forth in Section 2.13(f) to
be treated as one stockholder or person for purposes of this
Section 2.13, and
(B) the
designation by all group members of one group member that is
authorized to act on behalf of all members of the nominating
stockholder group with respect to the nomination and matters
related thereto, including withdrawal of the nomination;
and
(vi)
if desired, a
Statement.
(i)
Stockholder Nominee Agreement. Each
Proxy Access Stockholder Nominee must:
(i)
provide within five
business days of the Corporation’s request an executed
agreement, in a form deemed satisfactory to the Corporation,
providing the following representations:
(A) the
Proxy Access Stockholder Nominee has read and agrees to adhere to
the Corporation’s CODE OF
BUSINESS CONDUCT AND ETHICS, and any other of the
Corporation’s policies or guidelines applicable to directors,
including with regard to securities trading, and
(B) the
Proxy Access Stockholder Nominee is not and will not become a party
to: (1) any Voting Commitment that has not been disclosed to the
Corporation; or (2) any Voting Commitment that could limit or
interfere with such person’s ability to comply, if elected as
a director of the Corporation, with such person’s fiduciary
duties under applicable law, and
(C) the
Proxy Access Stockholder Nominee is not and will not become a party
to any Compensation Arrangement in connection with such
person’s nomination for director or service as a director
that has not been disclosed to the Corporation;
(ii) complete,
sign, and submit all questionnaires required of the
Corporation’s Board of Directors within five business days of
receipt of each such questionnaire from the Corporation;
and
(iii) provide
within five business days of the Corporation’s request such
additional information as the Corporation determines may be
necessary to permit the Board of Directors to determine whether
such Proxy Access Stockholder Nominee meets the requirements of
this Section 2.13 or the Corporation’s requirements with
regard to director qualifications and policies and guidelines
applicable to directors, including whether:
(A) such
Proxy Access Stockholder Nominee is independent under the
independence requirements, including the committee independence
requirements, set forth in the listing standards of the stock
exchange on which shares of the Corporation’s capital stock
are listed, any applicable rules of the SEC, and any publicly
disclosed standards used by the Board of Directors in determining
and disclosing the independence of the directors (the
“Independence
Standards”),
(B) such
Proxy Access Stockholder Nominee has any direct or indirect
relationship with the Corporation that has not been deemed
categorically immaterial pursuant to the Corporation’s
CODE OF BUSINESS CONDUCT AND
ETHICS, and
(C) such
Proxy Access Stockholder Nominee is not and has not been subject
to: (1) any event specified in Item 401(f) of Regulation S-K under
the Securities Act of 1933, as amended (the “Securities Act”), or (2) any order
of the type specified in Rule 506(d) of Regulation D under the
Securities Act.
(j) Eligible
Stockholder/Proxy Access Stockholder Nominee Undertaking. In
the event that any information or communications provided by the
Eligible Stockholder or Proxy Access Stockholder Nominee to the
Corporation or its stockholders ceases to be true and correct in
any respect or omits a fact necessary to make the statements made,
in light of the circumstances under which they were made, not
misleading, each Eligible Stockholder or Proxy Access Stockholder
Nominee, as the case may be, shall promptly notify the Secretary of
any such inaccuracy or omission in such previously provided
information and of the information that is required to make such
information or communication true and correct. Notwithstanding the
foregoing, the provision of any such notification pursuant to the
preceding sentence shall not be deemed to cure any defect or limit
the Corporation’s right to omit a Proxy Access Stockholder
Nominee from its proxy materials as provided in this Section
2.13.
(k) Exceptions
Permitting Exclusion of Proxy Access Stockholder Nominee.
The Corporation shall not be required to include pursuant to this
Section 2.13 a Proxy Access Stockholder Nominee in its proxy
statement (or, if the proxy statement has already been filed, to
allow the nomination of a Proxy Access Stockholder Nominee,
notwithstanding that proxies in respect of such vote may have been
received by the Corporation):
(i) if
the Eligible Stockholder who has nominated such Proxy Access
Stockholder Nominee has nominated for election to the Board of
Directors at the meeting any person other than pursuant to this
Section 2.13, or has or is engaged in, or has been or is a
“participant” in another person’s,
“solicitation” within the meaning of Rule 14a-1(l)
under the Exchange Act in support of the election of any individual
as a director at the meeting other than its Proxy Access
Stockholder Nominee(s) or a Board Nominee;
(ii) if
the Corporation has received a notice (whether or not subsequently
withdrawn) that a stockholder intends to nominate any candidate for
election to the Board of Directors pursuant to the advance notice
requirements in Section 2.12 of these by-laws;
(iii) who
is not independent under the Independence Standards;
(iv) whose
election as a member of the Board of Directors would violate or
cause the Corporation to be in violation of these by-laws, the
Corporation’s CODE OF
BUSINESS CONDUCT AND ETHICS, or other document setting forth
qualifications for directors, the listing standards of the stock
exchange on which shares of the Corporation’s capital stock
is listed, or any applicable state or federal law, rule, or
regulation;
(v) if
the Proxy Access Stockholder Nominee is or becomes a party to any
undisclosed Voting Commitment;
(vi) if
the Proxy Access Stockholder Nominee is or becomes a party to any
undisclosed Compensation Arrangement;
(vii) who
is or has been, within the past three years, an officer or director
of a competitor, as defined in Section 8 of the Clayton Antitrust
Act of 1914;
(viii) who
is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses) or has been convicted
in such a criminal proceeding within the past ten
years;
(ix) who
is subject to any order of the type specified in Rule 506(d) of
Regulation D under the Securities Act; or
(x) if
such Proxy Access Stockholder Nominee or the applicable Eligible
Stockholder shall have provided information to the Corporation in
respect of such nomination that was untrue in any material respect
or omitted to state a material fact necessary in order to make the
statement made, in light of the circumstances under which they were
made, not misleading or shall have breached its or their
agreements, representations, undertakings, or obligations pursuant
to this Section 2.13.
(l) Invalidity.
Notwithstanding anything to the contrary set forth herein, the
Board of Directors or the person presiding at the meeting shall be
entitled to declare a nomination by an Eligible Stockholder to be
invalid, and such nomination shall be disregarded notwithstanding
that proxies in respect of such vote may have been received by the
Corporation; and the Corporation shall not be required to include
in its proxy statement any successor or replacement nominee
proposed by the applicable Eligible Stockholder or any other
Eligible Stockholder if:
(i) the
Proxy Access Stockholder Nominee and/or the applicable Eligible
Stockholder shall have breached its or their agreements,
representations, undertakings, or obligations pursuant to this
Section 2.13, as determined by the Board of Directors or the person
presiding at the meeting; or
(ii) the
Eligible Stockholder (or a qualified representative thereof) does
not appear at the meeting to present any nomination pursuant to
this Section 2.13.
(m)
Interpretation. The Board of Directors
(and any other person or body authorized by the Board of Directors)
shall have the power and authority to interpret this Section 2.13
and to make any and all determinations necessary or advisable to
apply this Section 2.13 to any persons, facts, or circumstances,
including the power to determine whether:
(i) a
person or group of persons qualifies as an Eligible
Stockholder;
(ii) outstanding
shares of the Corporation’s capital stock are
“owned” for purposes of meeting the ownership
requirements of this Section 2.13;
(iii) a
notice complies with the requirements of this Section
2.13;
(iv) a
person satisfies the qualifications and requirements to be a Proxy
Access Stockholder Nominee;
(v) inclusion
of the Required Information in the Corporation’s proxy
statement is consistent with all applicable laws, rules,
regulations, and listing standards; and
(vi) any
and all requirements of this Section 2.13 have been
satisfied.
(vii) Any
such interpretation or determination adopted in good faith by the
Board of Directors (or any other person or body authorized by the
Board of Directors) shall be conclusive and binding on all persons,
including the Corporation and all record or beneficial owners of
stock of the Corporation.
Section
2.14
Consent Of Stockholders In Lieu Of
Meeting. Unless otherwise provided in the Certificate of
Incorporation, any action required or permitted to be taken at any
Annual or Special Meeting of Stockholders of the Corporation, may
be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of
the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
Section
3.01
General Powers. The business and affairs
of the Corporation shall be managed by or under the direction of
the Board of Directors. The Board of Directors may adopt such rules
and procedures, not inconsistent with the Certificate of
Incorporation, these by-laws, or applicable law, as it may deem
proper for the conduct of its meetings and the management of the
Corporation.
Section
3.02
Number; Term of Office. The Board of
Directors shall consist of five (5) or more members, the exact
number of which shall be fixed from time to time solely by the
Board of Directors. Until changed by such a resolution of
directors, the number of directors shall be five (5). Each director
shall hold office until a successor is duly elected and qualified
or until the director’s earlier death, resignation,
disqualification, or removal.
Section
3.03
Newly Created Directorships and
Vacancies. Any newly created directorships resulting from an
increase in the authorized number of directors and any vacancies
occurring in the Board of Directors, shall be filled solely by the
affirmative votes of a majority of the remaining members of the
Board of Directors, although less than a quorum, or by a sole
remaining director. A director so elected shall be elected to hold
office until the earlier of the expiration of the term of office of
the director whom he or she has replaced, a successor is duly
elected and qualified, or the earlier of such director’s
death, resignation, or removal.
Section
3.04
Resignation. Any director may resign at
any time by notice given in writing or by electronic transmission
to the Corporation. Such resignation shall take effect at the date
of receipt of such notice by the Corporation or at such later
effective date or upon the happening of an event or events as is
therein specified. A resignation that is conditioned on a director
failing to receive a specified vote for reelection as a director
may provide that it is irrevocable. A verbal resignation shall not
be deemed effective until confirmed by the director in writing or
by electronic transmission to the Corporation.
Section
3.05
Removal. Except as prohibited by
applicable law or the Certificate of Incorporation, the
stockholders holding a majority of the shares then entitled to vote
at an election of directors may remove any director from office
with or without cause.
Section
3.06
Fees and Expenses. Directors shall
receive such reasonable fees for their services on the Board of
Directors and any committee thereof and such reimbursement of their
actual and reasonable expenses as may be fixed or determined by the
Board of Directors.
Section
3.07
Regular Meetings. Regular meetings of
the Board of Directors may be held without notice at such times and
at such places as may be determined from time to time by the Board
of Directors.
Section
3.08
Special Meetings. Special meetings of
the Board of Directors may be held at such times and at such places
as may be determined by the Chair of the Board or the Chief
Executive Officer on at least 24 hours’ notice to each
director given by one of the means specified in Section 3.11 hereof
other than by mail or on at least three days’ notice if given
by mail. Special meetings shall be called by the Chair of the Board
or the Chief Executive Officer in like manner and on like notice on
the written request of any three (3) or more directors. The notice
need not state the purposes of the special meeting and, unless
indicated in the notice thereof, any and all business may be
transacted at a special meeting.
Section
3.09
Telephone Meetings. Board of Directors
or Board of Directors committee meetings may be held by means of
telephone conference or other communications equipment by means of
which all persons participating in the meeting can hear each other
and be heard. Participation by a director in a meeting pursuant to
this Section 3.09 shall constitute presence in person at such
meeting.
Section
3.10
Adjourned Meetings. A majority of the
directors present at any meeting of the Board of Directors,
including an adjourned meeting, whether or not a quorum is present,
may adjourn and reconvene such meeting to another time and place.
At least 24 hours’ notice of any adjourned meeting of the
Board of Directors shall be given to each director whether or not
present at the time of the adjournment, if such notice shall be
given by one of the means specified in Section 3.11 hereof other
than by mail, or at least three days’ notice if by mail. Any
business may be transacted at an adjourned meeting that might have
been transacted at the meeting as originally called.
Section
3.11
Notices. Subject to Section 3.08,
Section 3.10, and Section 3.12 hereof, whenever notice is required
to be given to any director by applicable law, the Certificate of
Incorporation, or these by-laws, such notice shall be deemed given
effectively if given in person or by telephone, mail addressed to
such director at such director’s address as it appears on the
records of the Corporation, facsimile, e-mail, or by other means of
electronic transmission.
Section
3.12
Waiver of Notice. Whenever notice to
directors is required by applicable law, the Certificate of
Incorporation, or these by-laws, a waiver thereof, in writing
signed by, or by electronic transmission by, the director entitled
to the notice, whether before or after such notice is required,
shall be deemed equivalent to notice. Attendance by a director at a
meeting shall constitute a waiver of notice of such meeting except
when the director attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of
any business on the ground that the meeting was not lawfully called
or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special Board of Directors or committee
meeting need be specified in any waiver of notice.
Section
3.13
Organization. At each regular or special
meeting of the Board of Directors, the Chair of the Board or, in
his or her absence, another director selected by the Board of
Directors shall preside. The Secretary shall act as secretary at
each meeting of the Board of Directors. If the Secretary is absent
from any meeting of the Board of Directors, an assistant secretary
of the Corporation shall perform the duties of secretary at such
meeting; and in the absence from any such meeting of the Secretary
and all assistant secretaries of the Corporation, the person
presiding at the meeting may appoint any person to act as secretary
of the meeting.
Section
3.14
Quorum of Directors. Except as otherwise
provided by these by-laws, the Certificate of Incorporation, or
required by applicable law, the presence of a majority of the total
number of directors on the Board of Directors shall be necessary
and sufficient to constitute a quorum for the transaction of
business at any meeting of the Board of Directors.
Section
3.15
Action by Majority Vote. Except as
otherwise provided by these by-laws, the Certificate of
Incorporation, or required by applicable law, the vote of a
majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section
3.16
Directors’ Action Without Meeting.
Unless otherwise restricted by the Certificate of Incorporation or
these by-laws, any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if all directors or members of such
committee, as the case may be, consent thereto in writing or by
electronic transmission.
Section
3.17
Chair of the Board. The Board of
Directors shall annually elect one of its members to be its chair
(the “Chair of the
Board”) and shall fill any vacancy in the position of
Chair of the Board at such time and in such manner as the Board of
Directors shall determine. Except as otherwise provided in these
by-laws, the Chair of the Board shall preside at all meetings of
the Board of Directors and of stockholders. The Chair of the Board
shall perform such other duties and services as shall be assigned
to or required of the Chair of the Board by the Board of
Directors.
Section
3.18
Committees of the Board of Directors.
The Board of Directors may designate one or more committees, each
committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee.
If a member of a committee shall be absent from any meeting, or
disqualified from voting thereat, the remaining member or members
present at the meeting and not disqualified from voting, whether or
not such member or members constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any
such committee, to the extent permitted by applicable law, shall
have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be
affixed to all papers that may require it to the extent so
authorized by the Board of Directors. Unless the Board of Directors
provides otherwise, at all meetings of such committee, a majority
of the then authorized members of the committee shall constitute a
quorum for the transaction of business, and the vote of a majority
of the members of the committee present at any meeting at which
there is a quorum shall be the act of the committee. Each committee
shall keep regular minutes of its meetings. Unless the Board of
Directors provides otherwise, each committee designated by the
Board of Directors may make, alter and repeal rules and procedures
for the conduct of its business. In the absence of such rules and
procedures each committee shall conduct its business in the same
manner as the Board of Directors conducts its business pursuant to
this Article III.
ARTICLE IV
OFFICERS
Section
4.01
Positions and Election. The officers of
the Corporation shall be chosen by the Board of Directors and shall
include a chief executive officer (the “Chief Executive Officer”), a
president (the “President”), a chief financial
officer (the “Chief Financial
Officer”), a treasurer (the “Treasurer”), and a secretary (the
“Secretary”).
The Board of Directors, in its discretion, may also elect one or
more vice presidents, assistant treasurers, assistant secretaries,
and other officers in accordance with these by-laws. Any two or
more offices may be held by the same person.
Section
4.02
Term. Each officer of the Corporation
shall hold office until such officer’s successor is elected
and qualified or until such officer’s earlier death,
resignation, or removal. Any officer elected or appointed by the
Board of Directors may be removed by the Board of Directors at any
time with or without cause by the majority vote of the members of
the Board of Directors then in office. The removal of an officer
shall be without prejudice to his or her contract rights, if any.
The election or appointment of an officer shall not of itself
create contract rights. Any officer of the Corporation may resign
at any time by giving written notice of his or her resignation to
the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall
become effective shall not be specified therein, immediately upon
its receipt. Unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Should any vacancy occur among the officers, the position shall be
filled for the unexpired portion of the term by appointment made by
the Board of Directors.
Section
4.03
Chief Executive Officer. The Chief
Executive Officer shall, subject to the provisions of these by-laws
and the control of the Board of Directors, have general
supervision, direction, and control over the business of the
Corporation and over its officers. The Chief Executive Officer
shall perform all duties incident to the office of the Chief
Executive Officer, and any other duties as may be from time to time
assigned to the Chief Executive Officer by the Board of Directors,
in each case subject to the control of the Board of
Directors.
Section
4.04
President. The President shall report
and be responsible to the Chief Executive Officer. The President
shall have such powers and perform such duties as from time to time
may be assigned or delegated to the President by the Board of
Directors or the Chief Executive Officer or that are incident to
the office of president.
Section
4.05
Vice Presidents. Each vice president of
the Corporation shall have such powers and perform such duties as
may be assigned to him or her from time to time by the Board of
Directors, the Chief Executive Officer, or the President, or that
are incident to the office of vice president.
Section
4.06
Secretary. The Secretary shall attend
all sessions of the Board of Directors and all meetings of the
stockholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose, and shall
perform like duties for committees of the Board of Directors when
required. He or she shall give, or cause to be given, notice of all
meetings of the stockholders and meetings of the Board of
Directors, and shall perform such other duties as may be prescribed
by the Board of Directors, the Chair of the Board, or the Chief
Executive Officer. The Secretary shall keep in safe custody the
seal of the Corporation and have authority to affix the seal to all
documents requiring it and attest to the same.
Section
4.07
Chief Financial Officer. The Chief
Financial Officer shall be the principal financial officer of the
Corporation and shall have such powers and perform such duties as
may be assigned by the Board of Directors, the Chair of the Board,
or the Chief Executive Officer.
Section
4.08
Treasurer. The treasurer of the
Corporation shall have the custody of the Corporation’s funds
and securities, except as otherwise provided by the Board of
Directors, and shall keep full and accurate accounts of receipts
and disbursements in records belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to
the credit of the Corporation in such depositories as may be
designated by the Board of Directors. The treasurer shall disburse
the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall
render to the Chief Executive Officer and the President and the
directors, at the regular meetings of the Board of Directors, or
whenever they may require it, an account of all his or her
transactions as treasurer and of the financial condition of the
Corporation.
Section
4.09
Other Officers. Such other officers as
the Board of Directors may choose shall perform such duties and
have such powers as from time to time may be assigned to them by
the Board of Directors. The Board of Directors may delegate to any
other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and
powers.
Section
4.10
Duties of Officers May Be Delegated. In
case any officer is absent, or for any other reason that the Board
of Directors may deem sufficient, the Chief Executive Officer or
the President or the Board of Directors may delegate for the time
being the powers or duties of such officer to any other officer or
to any director.
ARTICLE V
INDEMNIFICATION
Section
5.01
Indemnification. The Corporation shall
indemnify and hold harmless to the fullest extent permitted by
applicable law as it presently exists or may hereafter be amended,
any person who was or is made or is threatened to be made a party
or is otherwise involved in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (a
“Proceeding”),
by reason of the fact that he or she, or a person for whom he or
she is the legal representative, is or was a director, officer,
employee, or agent of the Corporation or, while a director,
officer, employee, or agent of the Corporation, is or was serving
at the request of the Corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust,
enterprise, or nonprofit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and
expenses (including attorneys’ fees) actually and reasonably
incurred by such person. Notwithstanding the preceding sentence,
the Corporation shall be required to indemnify a person in
connection with a Proceeding (or part thereof) commenced by such
person only if the commencement of such Proceeding (or part
thereof) by the person was authorized in the specific case by the
Board of Directors.
Section
5.02
Advancement of Expenses. The Corporation
shall pay the expenses (including attorneys’ fees) actually
and reasonably incurred by a director, officer, employee, or agent
of the Corporation in defending any Proceeding in advance of its
final disposition, upon receipt of an undertaking by or on behalf
of such person to repay all amounts advanced if it shall ultimately
be determined by final judicial decision from which there is no
further right to appeal that such person is not entitled to be
indemnified for such expenses under this Section 5.02 or otherwise.
Payment of such expenses actually and reasonably incurred by such
person, may be made by the Corporation, subject to such terms and
conditions as the general counsel of the Corporation in his or her
discretion deems appropriate.
Section
5.03
Non-Exclusivity of Rights. The rights
conferred on any person by this Article V will not be exclusive of
any other right which such person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation,
these by-laws, agreement, vote of stockholders or disinterested
directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding office.
The Corporation is specifically authorized to enter into individual
contracts with any or all of its directors, officers, employees, or
agents respecting indemnification and advances, to the fullest
extent not prohibited by the DGCL.
Section
5.04
Other Indemnification. The
Corporation’s obligation, if any, to indemnify any person who
was or is serving at its request as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust,
enterprise, or nonprofit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise, or nonprofit
entity.
Section
5.05
Insurance. The Corporation may purchase
and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the Corporation, or is or
was serving at the request of Corporation as a director, officer,
employee, or agent of another corporation, partnership, joint
venture, trust, enterprise, or nonprofit entity against any
liability asserted against him or her and incurred by him or her in
any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify
him or her against such liability under the provisions of the
DGCL.
Section
5.06
Repeal, Amendment, or Modification. Any
amendment, repeal, or modification of this Article V shall not
adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE VI
STOCK CERTIFICATES AND THEIR TRANSFER
Section
6.01
Certificates Representing Shares. The
shares of stock of the Corporation shall be represented by
certificates; provided that the Board of Directors may provide by
resolution or resolutions that some or all of any class or series
shall be uncertificated shares that may be evidenced by a
book-entry system maintained by the registrar of such stock. If
shares are represented by certificates, such certificates shall be
in the form, other than bearer form, approved by the Board of
Directors. The certificates representing shares of stock shall be
signed by, or in the name of, the Corporation by any two authorized
officers of the Corporation. Any or all such signatures may be
facsimiles. Although any officer, transfer agent, or registrar
whose manual or facsimile signature is affixed to such a
certificate ceases to be such officer, transfer agent, or registrar
before such certificate has been issued, it may nevertheless be
issued by the Corporation with the same effect as if such officer,
transfer agent, or registrar were still such at the date of its
issue.
Section
6.02
Transfers of Stock. Stock of the
Corporation shall be transferable in the manner prescribed by law
and in these by-laws. Transfers of stock shall be made on the books
administered by or on behalf of the Corporation only by the
direction of the registered holder thereof or such person’s
attorney, lawfully constituted in writing, and, in the case of
certificated shares, upon the surrender to the Company or its
transfer agent or other designated agent of the certificate
thereof, which shall be cancelled before a new certificate or
uncertificated shares shall be issued.
Section
6.03
Transfer Agents and Registrars. The
Board of Directors may appoint, or authorize any officer or
officers to appoint, one or more transfer agents and one or more
registrars.
Section
6.04
Lost, Stolen, or Destroyed Certificates.
The Board of Directors or the Secretary may direct a new
certificate or uncertificated shares to be issued in place of any
certificate theretofore issued by the Corporation alleged to have
been lost, stolen, or destroyed upon the making of an affidavit of
that fact by the owner of the allegedly lost, stolen, or destroyed
certificate. When authorizing such issue of a new certificate or
uncertificated shares, the Board of Directors or the Secretary may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of the lost, stolen, or destroyed
certificate, or the owner’s legal representative to give the
Corporation a bond sufficient to indemnify it against any claim
that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen, or destroyed or the
issuance of such new certificate or uncertificated
shares.
ARTICLE VII
GENERAL PROVISIONS
Section
7.01
Seal. The seal of the Corporation shall
be in such form as shall be approved by the Board of Directors. The
seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise, as may be
prescribed by law or custom or by the Board of
Directors.
Section
7.02
Fiscal Year. The fiscal year of the
Corporation shall be the calendar year.
Section
7.03
Checks, Notes, Drafts, Etc. All checks,
notes, drafts, or other orders for the payment of money of the
Corporation shall be signed, endorsed, or accepted in the name of
the Corporation by such officer, officers, person, or persons as
from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make
such designation.
Section
7.04
Conflict with Applicable Law or Certificate of
Incorporation. These by-laws are adopted subject to any
applicable law and the Certificate of Incorporation. Whenever these
by-laws may conflict with any applicable law or the Certificate of
Incorporation, such conflict shall be resolved in favor of such law
or the Certificate of Incorporation.
Section
7.05
Books and Records. Any records
administered by or on behalf of the Corporation in the regular
course of its business, including its stock ledger, books of
account, and minute books, may be maintained on any information
storage device, method, or one or more electronic networks or
databases (including one or more distributed electronic networks or
databases); provided that the records so kept can be converted into
clearly legible paper form within a reasonable time, and, with
respect to the stock ledger, the records so kept comply with
Section 224 of the DGCL. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect
such records pursuant to applicable law.
Section
7.06
Forum for Adjudication of Disputes.
Unless the Corporation consents in writing to the selection of an
alternative forum, the Court of Chancery of the State of Delaware
(or, if the Court of Chancery does not have jurisdiction, the
federal district court for the District of Delaware) shall be the
sole and exclusive forum for:
(a) any
derivative action or proceeding brought on behalf of the
Corporation;
(b) any
action asserting a claim for breach of a fiduciary duty owed by any
director, officer, employee, or agent of the Corporation to the
Corporation or the Corporation’s stockholders;
(c) any
action asserting a claim arising pursuant to any provision of the
Delaware General Corporation Law, the Certificate of Incorporation,
or these by-laws; or
(d) any
action asserting a claim governed by the internal affairs
doctrine;
in each
case, subject to said court having personal jurisdiction over the
indispensable parties named as defendants therein. If any action
the subject matter of which is within the scope of this Section
7.06 is filed in a court other than a court located within the
State of Delaware (a “Foreign
Action”) in the name of any stockholder, such
stockholder shall be deemed to have consented to: (i) the personal
jurisdiction of the state and federal courts located within the
State of Delaware in connection with any action brought in any such
court to enforce this Section 7.06 (an “Enforcement Action”); and (ii)
having service of process made upon such stockholder in any such
Enforcement Action by service upon such stockholder’s counsel
in the Foreign Action as agent for such stockholder. Any person or
entity purchasing or otherwise acquiring any interest in shares of
capital stock of the Corporation shall be deemed to have notice of
and consented to the provisions of this Section 7.06.
ARTICLE VIII
AMENDMENTS
These
by-laws may be adopted, amended, or repealed by the stockholders
entitled to vote; provided,
however, that the Corporation may, in its Certificate of
Incorporation, confer the power to adopt, amend, or repeal these
by-laws upon the Board of Directors; and, provided further, that
any proposal by a stockholder to amend these by-laws will be
subject to the provisions of Article II of these by-laws except as
otherwise required by law. The fact that such power has been so
conferred upon the Board of Directors will not divest the
stockholders of the power, nor limit their power to adopt, amend,
or repeal by-laws.
I
HEREBY CERTIFY that I am the duly elected, qualified and acting
Corporate Secretary of AeroCentury Corp., a Delaware corporation
(the “Corporation”), and that the above and foregoing
Bylaws were adopted as the Bylaws of the Corporation as of
September __, 2021 pursuant to Section 303 of the Delaware General
Corporation Law pursuant to the Combined Disclosure Statement and Joint
Chapter 11 Plan of AeroCentury Corp., and its Affiliated
Debtors, filed on July 14, 2021 [DE 225], as supplemented
from time to time (the “Plan”), which was confirmed by
an order of the United States Bankruptcy Court for the District of
Delaware entered on August [*], 2021, in the jointly administered
chapter 11 cases captioned In re
Aerocentury Corp., et al. Case No. 21-10636
(JTD).
.
Harold
M. Lyons, Secretary
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. Authorization and Sale of Shares of
Common Stock.
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 Conaway Stargatt
& Taylor, LLP, 1000 N. King Street, Wilmington, DE 19801, 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
Yucheng Hu beneficially owns 5% or more of the outstanding shares
of Common Stock of the Company, the Company will permit the Yucheng
Hu (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 Clara, 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]
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written
above.
COMPANY:
JetFleet Holding
Corp.
a
California corporation
4848-7355-0316.2
[Signature Page to Stock
Purchase Agreement]
PURCHASERS:
Yucheng
Hu
TongTong
Ma
Qiang
Zhang
Yanhua
Li
Yiyi
Huang
Yu
Wang
Hao
Yang
Jing
Li
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
|
|
Yucheng
Hu
Group
7,Yantai Village, Liaoye Town,
Yingshan,
Sichuan, China 637700
|
19,412
|
$19,412.00
|
|
TongTong
Ma
4-3-8
Guofeng Community, Congtai District, Handan, Hebei, China
056000
|
2,227
|
$2,227.00
|
|
Qiang
Zhang
Group
6,Yantai Village, Liaoye Town,
Yingshan,
Sichuan, China 637700
|
2,545
|
$2,545.00
|
|
Yanhua
Li
58
Litao Hutong, Fusan Village, Dianshang, Handan, Hebei, China
057350
|
2,386
|
$2,386.00
|
|
Yiyi
Huang
Huoli
Kangcheng Community, Houjiatang Street, Yuhua District, Changsha,
Hunan, China 410000
|
2,068
|
$2,068.00
|
|
Yu
Wang
D1988
Jindi Sanqianfu, Leifeng Road, Wangcheng, Changsha, Hunan, China
410000
|
636
|
$636.00
|
|
Hao
Yang
G2-102
Xinchengshijia, Renmin East Road 398, Changsha, Hunan, China
410000
|
2,545
|
$2,545.00
|
|
Jing
Li
6
Floor, Sigma Plaza, No. 49 Zhichun Road, Haidian District, Beijing,
China 100000
|
2,227
|
$2,227.00
|
|
Yeh
Cheng
World
Trade Apartment, Building B,
Apartment
5e, Beijing,China 100001
|
954
|
$954.00
|
|
TOTAL
|
35,000
|
$35,000.00
|
EXHIBIT B
SCHEDULE OF JHC MANAGEMENT SHAREHOLDERS
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
SERIES A PREFERRED STOCK
PURCHASE AGREEMENT
This SERIES A 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 AeroCentury Corp., a
Delaware corporation (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, 104,082 shares
of Series A 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. Authorization and Sale of Shares of
Series A Preferred Stock.
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, 104,082 Shares at the aggregate purchase
price of $2,000,000 (the “Purchase Price”), or $19.2156
per share. 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 Conaway Stargatt
& Taylor, LLP, 1000 N. King Street, Wilmington, DE 19801, 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 (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 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.
5.2 Board of Directors. The Board
of Directors of the Company at the Closing shall consist of
[______________], [______________] and
[______________].
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.
6.3 Board of Directors. The Board
of Directors of the Company at the Closing shall consist of
[______________], [______________] and
[______________].
7. Audited Financial
Information. So long as the Purchaser beneficially owns a
majority of the voting rights of the Company, the Company shall
deliver to the Purchaser (a) within sixty (60) days after the end
of each fiscal year of the Company, the annual audited financial
statements of the Company certified by a PCAOB independent public
accountants of recognized standing, and (b) within thirty (30) days
after the end of each quarter, the Company’s unaudited but
reviewed financial statements. Notwithstanding anything to the
contrary in this Agreement, the Company consents to the disclosure
of such financial information by the Purchaser as reasonably
necessary to comply with the Purchaser’s accounting and
disclosure requirements. Further, if at any time the Purchaser or
its independent auditor determines that applicable auditing
standards require that the Company be included within the scope of
such auditor’s audit procedures with respect to its audit of
the Purchaser and its affiliates, the Company shall, at the
Purchaser’s sole expense, reasonably cooperate in a timely
fashion with reasonable requests to facilitate any such audit
procedures.
8. Cooperation.
So long as they are employed by the Company, the Company shall
cause its officers who are the former Chief Financial Officer of
Purchaser and the former Controller of Purchaser to assist and
cooperate with the Purchaser (not to exceed thirty (30) hours in
the aggregate) in the Purchaser’s preparation of its
financial statements and reports filed with the U.S. Securities and
Exchange Commission for the quarter ending September 30, 2021 and
for the year ending December 31, 2021 (the “SEC
Reports”) and the provision of all information requested by
the Purchaser’s auditors and counsel for the preparation of
such SEC Reports in a timely fashion.
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
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.
9.3 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.
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
the Purchaser each hereby submits to the jurisdiction of the state
and Federal courts located in Santa Clara, 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 (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.
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. 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.
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]
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written
above.
COMPANY:
JetFleet Holding
Corp.
a
California corporation
PURCHASER:
AeroCentury
Corp.
a
Delaware corporation
EXHIBIT A
RESTATED CERTIFICATE
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. Authorization and Sale of Shares of
Series B Preferred Stock.
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 Conaway Stargatt
& Taylor, LLP, 1000 N. King Street, Wilmington, DE 19801, 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 Clara, 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]
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written
above.
COMPANY:
JetFleet Holding
Corp.
a
California corporation
PURCHASER:
ACY
Legacy Shareholder Trust,
a
Delaware statutory trust
EXHIBIT A
RESTATED CERTIFICATE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
JETFLEET HOLDING CORP.
a California corporation
The
undersigned Michael G. Magnussen and Christopher B. Tigno hereby
certify that:
ONE: They are the duly elected and
acting Chief Executive Officer and Secretary respectively of
JetFleet Holding Corp., a California corporation (the
“Corporation”).
TWO: This Amended and Restated Articles
of Incorporation was duly adopted without the need for approval of
the Board of Directors or the stockholders of the Corporation
pursuant to the Combined
Disclosure Statement and Joint Chapter 11 Plan of AeroCentury
Corp., and its Affiliated Debtors, filed on July 14, 2021
[DE 225], as supplemented from time to time (the
“Plan”), which was confirmed by an order of the United
States Bankruptcy Court for the District of Delaware entered on
August [*], 2021, in the jointly administered chapter 11 cases
captioned In re Aerocentury Corp.,
et al. Case No. 21-10636
(JTD) (the “Order”), and in accordance with the
California Corporations Code.
THREE:
The
Articles of Incorporation of the Corporation, as amended to the
date of the filing of this certificate, shall be amended and
restated to read in full as follows:
ARTICLE I
The
name of this corporation is JetFleet Holding Corp.
ARTICLE II
The
purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the
trust company business, or the practice or a profession permitted
to be incorporated by the California Corporations
Code.
ARTICLE III
The
liability of the directors of this corporation for monetary damages
shall be eliminated to the fullest extent permissible under
California law. Unless applicable law otherwise provides, any
amendment, repeal or modification of this Article III shall not
adversely affect any right of any director under this Article III
that existed at or prior to the time of such amendment, repeal or
modification.
ARTICLE IV
A. This corporation is
authorized to provide indemnification of agents (as defined in
Section 317 of the California Corporations Code) through bylaw
provisions, agreements with the agents, vote of shareholders or
disinterested directors, or otherwise in excess of the
indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to applicable limits on
such excess indemnification set forth in Section 204 of the
California Corporations Code. Unless applicable law otherwise
provides, any amendment, repeal or modification of this Article IV
shall not adversely affect any right of any director under this
Article IV that existed at or prior to the time of such amendment,
repeal or modification.
B. This corporation
shall have power to purchase and maintain insurance on behalf of
any agent of this corporation in such capacity or arising out of
the agent’s status as such whether or not this corporation
would have the power to indemnify the agent against such liability
under the provisions of the California Corporations Code. The fact
that this corporation owns all or a portion of the shares of the
company issuing a policy of insurance shall not render this Article
IV void if any policy issued by such company is limited to the
extent required by applicable California law.
ARTICLE V
A. Classes of Stock; Designation. This
corporation is authorized to issue two classes of stock to be
designated, respectively, common stock and preferred stock. The
total number of shares that this corporation is authorized to issue
is One Million One Hundred Four Thousand and Eighty-Three
(1,104,083). The total number of shares of common stock authorized
to be issued is One Million (1,000,000), no par value (the
“Common Stock”). The total number of shares of
preferred stock authorized to be issued is One Hundred Four
Thousand and Eighty-Three (104,083), no par value (the
“Preferred Stock”), of which One Hundred Four Thousand
and Eighty-Two (104,082) shares are designated as “Series A
Preferred Stock”, and One (1) share is designated as
“Series B Preferred Stock”. All shares of Series B
Preferred Stock will, with respect to dividend rights, redemption
rights and rights upon the liquidation, dissolution or winding-up
of the Company, rank junior to Series A Preferred
Stock.
B. Rights, Preferences and Restrictions of
Preferred Stock. The rights, preferences, privileges and
restrictions granted to and imposed on the Preferred Stock are as
set forth as follows:
1. Dividend Rights.
(a) The holders of
shares of Series A Preferred Stock, in preference to the holders of
the Common Shares, shall be entitled to receive quarterly dividends
at a rate of 7.50% (the “Dividend Rate”) of the Series
A Original Issue Price per annum per share of Series A Preferred
Stock commencing in the first fiscal quarter following the first
fiscal year for which this corporation reports a positive Earnings
Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for
the preceding 12 month period (the “Initial Profitable
Year”). Dividends due pursuant to this paragraph (a) shall
begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the first fiscal quarter of the Initial
Profitable Year and will be declared and paid
currently.
(b) The holder of the
Series B Preferred Stock shall not be entitled to receive any
dividends, whether payable in cash, in property or in shares of
capital stock of the Corporation.
(c) After payment of
such dividends, any additional dividends or distributions may be
distributed among all holders of Common Stock in proportion to the
number of shares of Common Stock held by each such
holder.
(d) So long as any
shares of Series A Preferred Stock are outstanding, this
corporation shall not pay or declare any dividend, whether in cash
or property, or make any other distribution on the Common Stock, or
purchase, redeem or otherwise acquire for value any shares of
Common Stock until all dividends as set forth in paragraph (a)
above on the Series A Preferred Stock shall have been paid or
declared and set apart.
2. Liquidation
Preference.
(a) In the event of any
Liquidation Event (as defined below), either voluntary or
involuntary, the holders of Series A Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of
the proceeds of such Liquidation Event (the “Proceeds”)
to the holders of the other series of Preferred Stock or the Common
Stock by reason of their ownership thereof, an amount per share
equal to Series A Original Issue Price (as defined below), plus
declared but unpaid dividends on such share. If, upon the
occurrence of such event, the Proceeds thus distributed among the
holders of the Series A Preferred Stock shall be insufficient to
permit the payment to such holders of the full aforesaid
preferential amounts, then the entire Proceeds legally available
for distribution shall be distributed ratably among the holders of
the Series A Preferred Stock in proportion to the full preferential
amount that each such holder is otherwise entitled to receive under
this paragraph (a). The “Series A Original Issue Price”
shall mean, with respect to the Series A Preferred Stock, $19.2156
per share, subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar
recapitalization with respect to the Series A Preferred
Stock.
(b) Upon the completion
of the distribution required by paragraph (a) above, the remaining
Proceeds available for distribution to shareholders shall be
distributed ratably among the holders of Series B Preferred Stock
in the amount of (X) $1,000,000 in the case of a Liquidation Event
described in clause (i) or clause (ii) of the definition of
“Liquidation Event” that occurs after an Initial
Profitable Year, or (Y) $1.00 per share (as adjusted for any stock
splits, stock dividends, combinations, recapitalizations or the
like with respect to the Series B Preferred Stock)
otherwise.
(c) Upon the completion
of the distributions required by paragraphs (a) and (b) of this
Section 2, the excess Proceeds shall be paid ratably solely to the
holders of Common Stock in proportion to the number of shares of
Common Stock held by each such holder, without participation of the
holders of Series A Preferred Stock or Series B Preferred
Stock.
As used
herein, a “Liquidation Event” shall mean any of the
following: (i) the acquisition of this corporation by another
entity by means of any transaction or series of related
transactions to which this corporation is party (including, without
limitation, any stock acquisition, reorganization, merger or
consolidation but excluding any sale of stock for capital raising
purposes) other than a transaction or series of related
transactions in which the holders of the voting securities of this
corporation outstanding immediately prior to such transaction or
series of related transactions retain, immediately after such
transaction or series of related transactions, as a result of
shares in this corporation held by such holders prior to such
transaction or series of related transactions, at least a majority
of the total voting power represented by the outstanding voting
securities of this corporation or such other surviving or resulting
entity (or if this corporation or such other surviving or resulting
entity is a wholly-owned subsidiary immediately following such
acquisition, its parent) (for the avoidance of doubt, the
reorganization, merger or consolidation of this corporation with
any wholly-owned subsidiary of this corporation (a
“Consolidating Event”) shall not be deemed to occasion
a Liquidation Event); (ii) a sale, lease or other disposition of
all or substantially all of the assets of this corporation and its
subsidiaries taken as a whole by means of any transaction or series
of related transactions, except where such sale, lease or other
disposition is to a wholly-owned subsidiary of this corporation; or
(iii) any liquidation, dissolution or winding up of this
corporation, whether voluntary or involuntary.
3. Redemption.
(a) Subject to the
terms and conditions of this Section 3, upon receiving at any time
on or after the Redemption Commencement Date (as defined below), a
written request from the holders of a majority of the outstanding
shares of Series A Preferred for the redemption, in whole, of all
of the outstanding shares of Series A Preferred Stock, the
Corporation shall redeem, within thirty (30) days following receipt
of such written request (the date of such redemption, the
“Redemption Date”), all outstanding shares of Series A
Preferred Stock from any source of funds legally available therefor
at the redemption price (the “Redemption Price”)
described in this paragraph. The Redemption Price per share of
Series A Preferred Stock shall be equal to:
(i) if redeemed prior
to an Initial Profitable Year: (A) the Series A Original Issue
Price, plus (B) any
declared but unpaid dividends, plus (C) an amount per quarter equal to
the Series A Original Issue Price multiplied by the Dividend Rate
and divided by four for any full quarterly period for which
dividends were not declared that falls within the period beginning
on the date such share was issued by the Corporation and ending on
the Redemption Date; or
(ii) if
redeemed after an Initial Profitable Year: (A) the Series A
Original Issue Price, plus
(B) any declared but unpaid dividends, plus (C) an amount per quarter equal to
the Series A Original Issue Price multiplied by the Dividend Rate
and divided by four for any full quarterly period after the Initial
Profitable Year for which dividends were not declared that falls
within the period beginning on the date such shares was issued by
the Corporation and ending on the Redemption Date.
(b) Subject to the
terms and conditions of this Section 3 and following the redemption
in full of all outstanding shares of Series A Preferred Stock, the
Company shall redeem the share of Series B Preferred Stock from any
source of funds legally available therefor at an aggregate
redemption amount equal to (i) $1,000,000, if the Series A
Preferred Stock is redeemed after an Initial Profitable Year, or
(ii) $0.001 per share, if the Series A Preferred Stock is redeemed
prior to an Initial Profitable Year.
(c) The
Corporation shall have the right to ratably redeem, in whole or in
parts, any shares of Series A Preferred Stock from any source of
funds legally available therefor at the Redemption Price upon
fifteen (15) days prior written notice to the holders of Series A
Preferred Stock.
(d) As
used herein, the “Redemption Commencement Date” shall
mean the date that is seven (7) years after the date upon which the
Corporation first issues any shares of the Series A Preferred
Stock.
(e) If
upon the date of any redemption of shares of Preferred Stock,
applicable law governing distributions to shareholders prevents the
Corporation from redeeming all shares of Preferred Stock to be
redeemed, the Corporation shall ratably redeem the maximum number
of shares that it may redeem consistent with such law, and shall
redeem the remaining shares as soon as it may lawfully do so under
such law. On or before the applicable date of any redemption of
shares of Preferred Stock, each holder of such shares shall, if a
holder of shares in certificated form, surrender the certificate or
certificates representing such shares (or, if such registered
holder alleges that such certificate has been lost, stolen or
destroyed, a lost certificate affidavit and agreement reasonably
acceptable to the Corporation to indemnify the Corporation against
any claim that may be made against the Corporation on account of
the alleged loss, theft or destruction of such certificate) to the
Corporation, in the manner and at the place designated by the
Corporation, and thereupon the redemption proceeds for such shares
shall be payable to the order of the person whose name appears on
such certificate or certificates as the owner thereof. If the
redemption proceeds payable upon redemption of the shares of
Preferred Stock to be redeemed is paid or tendered for payment or
deposited with an independent payment agent so as to be available
therefor in a timely manner, then notwithstanding that any
certificates evidencing any of the shares of Preferred Stock so
redeemed shall not have been surrendered, and all rights with
respect to such shares shall forthwith after the applicable
redemption date terminate, except only the right of the holders to
receive the redemption proceeds without interest upon surrender of
any such certificate or certificates therefor.
4. Conversion. The holder of the
shares of Series A Preferred Stock and Series B Preferred Stock
shall not have any rights hereunder to convert such shares into, or
exchange such share for, shares of any other series or class of
capital stock of the Corporation or of any other
person.
5. Transferability. The shares of
Series A Preferred Stock and Series B Preferred Stock, and any
interest therein, may not be transferred, assigned or otherwise
disposed of without the prior approval of the Board of Directors of
the Corporation. Any attempted transfer, assignment or other
disposition in violation of this provision shall be void
ab initio and of no force
or effect.
6. Voting Rights.
(a) The holders of
Series A Preferred Stock shall be entitled to one (1) vote for each
share of Series A Preferred Stock held as of the applicable date on
any matter that is submitted to a vote or for the consent of the
shareholders of this corporation
.
(b) Except as otherwise
provided herein or by applicable law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock
and any other capital stock of this corporation having general
voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of this
corporation.
(c) Except as otherwise
provided herein or by applicable law, the holders of shares Series
B Preferred Stock shall have no voting rights and their consent
shall not be required for the taking of any corporate
action.
7. Series
A Preferred Stock Protective Provisions. At any time when
shares of Series A Preferred Stock are outstanding, the Corporation
shall not, either directly or indirectly by amendment, merger,
consolidation, recapitalization, reclassification, or otherwise, do
any of the following without (in addition to any other vote
required by law or this Second Amended and Restated Certificate of
Incorporation) the written consent or affirmative vote of holders
of at least a majority of the outstanding shares of series A
Preferred Stock given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class,
and any such act or transaction entered into without such
consent or vote shall be null and void ab initio, and of no force or
effect:
(a) amend,
alter or repeal any provision of this Amended and Restated
Certificate of Incorporation in a manner that adversely affects the
powers, preferences or rights of the Series A Preferred
Stock;
(b) create,
or authorize the creation of, or issue or obligate itself to issue
shares of, or reclassify, any capital stock unless the same ranks
junior to the Series A Preferred Stock with respect to its rights,
preferences and privileges, or (ii) increase the authorized number
of shares of Preferred Stock or any additional class or series of
capital stock of the Corporation unless the same ranks junior to
the Series A Preferred Stock with respect to its rights,
preferences and privileges; or
(c) purchase
or redeem (or permit any subsidiary to purchase or redeem) or pay
or declare any dividend or make any distribution on, any shares of
capital stock of the Corporation other than (i) redemptions of or
dividends or distributions on the Preferred Stock as expressly
authorized herein, (ii) dividends or other distributions payable on
the Common Stock solely in the form of additional shares of Common
Stock and (iii) repurchases of stock from former employees,
officers, directors, consultants or other persons who performed
services for the Corporation or any subsidiary in connection with
the cessation of such employment or service at no greater than the
original purchase price thereof.
FOUR: The foregoing amendment and
restatement has been approved by the Board of Directors of the
Corporation.
FIVE: In accordance with
Section 1401 of the California Corporations Code, provision for
making the foregoing amendment and restatement of the Articles of
Incorporation of the Corporation is contained in the Order
confirming the Plan.
THE UNDERSIGNED certifies under penalty
of perjury that he has read the foregoing Amended and Restated
Articles of Incorporation and knows the contents thereof, and that
the statements therein are true.
THE UNDERSIGNED has executed this
certificate on September __, 2021, in __________,
California.
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Michael
G. Magnussen
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Chief
Executive Officer
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Christopher
B. Tigno
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Secretary
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AMENDED AND RESTATED BYLAWS
OF
JETFLEET HOLDING CORP.,
a
California corporation
Offices
Section
1.1 Principal
Executive Office.
The
principal executive office of the corporation shall be at such
location within or outside the State of California as is fixed by
the Board of Directors. The Board of Directors is hereby granted
full power and authority to change said principal executive office
from one location to another. Any such change shall be noted on
these Bylaws by the Secretary opposite this Section, or this
Section may be amended to state the new location.
Section
1.2 Other Offices.
Other
business offices may at any time be established at any place or
places specified by the Board of Directors.
Meetings
of Shareholders
Section
2.1 Place
of Meetings.
All
meetings of shareholders shall be held at the principal executive
office of the corporation or at any other place within or without
the State of California specified by the Board of Directors, or, to
the extent permitted by and in accordance with Section 2.6, by
electronic transmission by and to the corporation (as these terms
are defined in Article 12 hereof) or by electronic video screen
communication.
Section
2.2 Annual
Meeting.
The
annual meeting of the shareholders, after the year 2021, shall be
held at the time and date in each year fixed by the Board of
Directors, or, if not so designated, then on June 30 in each year
if not a legal holiday, and, if a legal holiday, on the next
succeeding day not a legal holiday. At the annual meeting directors
shall be elected, reports of the affairs of the corporation shall
be considered, and any other business may be transacted that is
within the power of the shareholders.
Section
2.3 Notice
of Annual Meeting.
(a) Written notice of
each annual meeting shall be given to each shareholder entitled to
vote, either personally, by electronic transmission by the
corporation (as defined in Article 12 hereof), or by first-class
mail, or, if the corporation has outstanding shares held of record
by 500 or more persons (determined in accordance with Section 605
of the General Corporation Law) on the record date for the meeting,
by third-class mail, or by other means of written communication,
charges prepaid, addressed to such shareholder at the
shareholder’s address appearing on the books of the
corporation or given by such shareholder to the corporation for the
purpose of notice.
(b) If any notice or
report addressed to the shareholder at the address of such
shareholder appearing on the books of the corporation is returned
to the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver
the notice or report to the shareholder at such address, all future
notices or reports shall be deemed to have been duly given without
further mailing if the same shall be available for the shareholder
upon written demand of the shareholder at the principal executive
office of the corporation for a period of one year from the date of
the giving of the notice or report to all other shareholders. If a
shareholder gives no address, notice shall be deemed to have been
given to such shareholder if addressed to the shareholder at the
place where the principal executive office of the corporation is
situated, or if published at least once in some newspaper of
general circulation in the county in which said principal executive
office is located.
(c) Notice given by
electronic transmission by the corporation (as defined in
Article 12 hereof) shall be valid only if such notice complies
with the procedures set forth in such definition and as long as
neither of the following has occurred: (i) the corporation is
unable to deliver two consecutive notices to the shareholder by
that means; or (ii) the inability to so deliver the notices to the
shareholder becomes known to the secretary, any assistant
secretary, the transfer agent, or other person responsible for the
giving of the notice. If the circumstances described in either
clauses (i) or (ii) above occurs with respect to a shareholder, the
corporation shall again obtain the consent of such shareholder as
required by the definition of “electronic transmission by the
corporation” set forth in Article 12 hereof prior to
utilizing electronic transmission by the corporation to provide
notices of shareholders meetings to such shareholder.
(d) All such notices
shall be given to each shareholder entitled thereto not less than
ten (10) days (or, if sent by third-class mail, thirty (30) days)
nor more than sixty (60) days before each annual meeting. Any such
notice shall be deemed to have been given at the time when
delivered personally, sent by electronic transmission by the
corporation (as defined in Article 12 hereof), or deposited in the
mail or sent by other means of written communication. An affidavit
of mailing or electronic transmission of any such notice in
accordance with the foregoing provisions, executed by the
Secretary, Assistant Secretary or any transfer agent of the
corporation, shall be prima
facie evidence of the giving of the notice.
Such
notice shall specify:
(1) the place (unless
the meeting is to be conducted solely by electronic transmission by
and to the corporation (as these terms are defined in Article 12
hereof) if permitted by Section 2.6), the date, and the hour of
such meeting;
(2) if the meeting is
to be conducted in whole or in part by means of electronic
communication by and to the corporation, (i) the means of
electronic transmission by and to the corporation (as these terms
are defined in Article 12 hereof) or electronic video screen
communication, if any, by which shareholders may participate in
that meeting and (ii) notice that absent the valid consent of all
of the shareholders of the corporation for the utilization of
electronic transmission by and to the corporation (as these terms
are defined in Article 12 hereof) as required by such definitions,
the meeting shall include a physical location;
(3) those matters that
the Board of Directors, at the time of the mailing of the notice,
intends to present for action by the shareholders (but, subject to
the provisions of subsection (d) below, any proper matter may be
presented at the meeting for such action);
(4) if directors are to
be elected, the names of nominees intended at the time of the
notice to be presented by the Board of Directors for
election;
(5) the general nature
of a proposal, if any, to take action with respect to approval of
(i) a contract or other transaction with an interested
director, (ii) amendment of the Articles of Incorporation,
(iii) a reorganization of the corporation as defined in
Section 181 of the General Corporation Law, (iv) voluntary
dissolution of the corporation, or (v) a distribution in
dissolution other than in accordance with the rights of outstanding
preferred shares, if any; and
(6) such other matters,
if any, as may be expressly required by statute.
Section
2.4 Shareholder
Proposals at Annual Meetings.
At an
annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting.
To be properly brought before an annual meeting, business must be
specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, otherwise
properly brought before the meeting by or at the direction of the
Board of Directors or otherwise properly brought before the meeting
by a shareholder.
In
addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing (as
defined in Article 12) to the Secretary of the corporation. To be
timely, a shareholder’s notice must be delivered to or mailed
and received at the principal executive offices of the corporation,
not less than 45 days nor more than 75 days prior to the date on
which the corporation first mailed or sent by electronic
transmission by the corporation (as defined in Article 12 hereof)
its proxy materials for the previous year’s annual meeting of
shareholders (or the date on which the corporation mails or sends
by electronic transmission by the corporation (as defined in
Article 12 hereof) its proxy materials for the current year if
during the prior year the corporation did not hold an annual
meeting or if the date of the annual meeting was changed more than
30 days from the prior year). A shareholder’s notice to the
Secretary shall set forth as to each matter the shareholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the shareholder
proposing such business, (iii) the class and number of shares
of the corporation which are beneficially owned by the shareholder,
and (iv) any material interest of the shareholder in such
business.
Notwithstanding
anything in these Bylaws to the contrary, no business shall be
conducted at the annual meeting except in accordance with the
procedures set forth in this Section 2.4; provided, however, that nothing
in this Section 2.4 shall be deemed to preclude discussion by
any shareholder of any business properly brought before the annual
meeting in accordance with said procedure.
The
chair of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this
Section 2.4, and if the chair should so determine, the chair
shall so declare to the meeting, and any such business not properly
brought before the meeting shall not be transacted.
Nothing
in this Section 2.4 shall affect the right of a shareholder to
request inclusion of a proposal in the corporation’s proxy
statement to the extent that such right is provided by an
applicable rule of the Securities and Exchange
Commission.
Section
2.5 Special
Meetings.
Special
meetings of the shareholders for any purpose or purposes whatsoever
may be called at any time by the Chairman of the Board (if there be
such an officer appointed), by the President, by the Board of
Directors, or by one or more shareholders entitled to cast not less
than ten percent (10%) of the votes at the meeting.
Section
2.6 Annual
or Special Meeting by Electronic Communication.
A
meeting of the shareholders may be conducted, in whole or in part,
by electronic transmission by and to the corporation (as these
terms are defined in Article 12 hereof) or by electronic video
screen communication (a) if the corporation implements measures to
provide shareholders (in person or by proxy) an opportunity to
participate in the meeting and to vote on matters submitted to the
shareholders, including an opportunity to read or hear the
proceedings of the meeting concurrently with those proceedings, and
(b) if any shareholder votes or takes other action at the meeting
by means of electronic transmission to the corporation (as defined
in Article 12 hereof) or electronic video screen communication, a
record of that vote or action is maintained by the corporation. If
authorized by the Board of Directors in its sole discretion, and
subject to the statutory requirements of shareholder consent then
in effect and those guidelines and procedures as the Board of
Directors may adopt, shareholders not physically present in person
or by proxy at a meeting of shareholders may, by electronic
transmission by and to the corporation (as these terms are defined
in Article 12 hereof) or by electronic video screen communication,
participate in a meeting of shareholders, be deemed present in
person or by proxy, and vote at a meeting of shareholders whether
that meeting is to be held at a designated place or in whole or in
part by means of electronic transmission by and to the corporation
(as these terms are defined in Article 12 hereof) or by electronic
video screen communication, in accordance with this Section 2.6. A
shareholder’s participation in a meeting of the shareholders
by electronic communication by and to the corporation (as these
terms are defined in Article 12) is predicated upon the consent of
such shareholder to electronic communication by the corporation (as
such term is defined in Article 12 and as required by such
definition). Unless all of the shareholders have consented to the
use of electronic transmission by and to the corporation (as these
terms are defined in Article 12) for the purposes of a shareholders
meeting (or to the use of such transmissions for such meetings
generally) a shareholders’ meeting shall include a physical
location determined in accordance with Section 2.1.
Section
2.7 Notice
of Special Meetings.
Upon
request in writing (as defined in Article 12) that a special
meeting of shareholders be called for any proper purpose, directed
to the Chairman of the Board (if there be such an officer
appointed), President, Vice President or Secretary by any person
(other than the Board of Directors) entitled to call a special
meeting of shareholders, the officer forthwith shall cause notice
to be given to the shareholders entitled to vote that a meeting
will be held at a time requested by the person or persons calling
the meeting, not less than thirty-five (35) nor more than sixty
(60) days after the receipt of the request. Except in special cases
where other express provision is made by statute, notice of any
special meeting of shareholders shall be given in the same manner
as for annual meetings of shareholders. In addition to the matters
required by Section 2.3(d)(1) and, if applicable, Sections
2.3(d)(2)-(6) of these Bylaws, notice of any special meeting shall
specify the general nature of the business to be transacted, and no
other business may be transacted at such meeting.
Section
2.8 Quorum.
The
presence in person or by proxy of persons entitled to vote a
majority of the voting shares at any meeting shall constitute a
quorum for the transaction of business. If a quorum is present, the
affirmative vote of a majority of the shares represented and voting
at the meeting (which shares voting affirmatively also constitute
at least a majority of the required quorum) shall be the act of the
shareholders, unless the vote of a different number or voting by
classes is required by the General Corporation Law, the Articles of
Incorporation or these Bylaws. Any meeting of shareholders, whether
or not a quorum is present, may be adjourned from time to time by
the vote of the holders of a majority of the shares present in
person or represented by proxy thereat and entitled to vote, but in
the absence of a quorum no other business may be transacted at such
meeting, except that the shareholders present or represented by
proxy at a duly called or held meeting, at which a quorum is
present, may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less
than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to
constitute a quorum, or if required by the General Corporation Law
or the Articles of Incorporation, the vote of a greater number or
voting by classes.
Section
2.9 Adjourned
Meeting and Notice.
When
any shareholders’ meeting, either annual or special, is
adjourned for more than forty-five (45) days, or if after
adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an
original meeting. Except as provided above, it shall not be
necessary to give any notice of the time and place of the adjourned
meeting (or the means of electronic transmission by and to the
corporation (as these terms are defined in Article 12 hereof) or
electronic video screen communication, if any, by which the
shareholders may participate), or of the business to be transacted
thereat, other than by announcement of the time and place thereof
at the meeting at which such adjournment is taken.
Section
2.10 Record
Date.
(a) The Board of
Directors may fix a time in the future as a record date for the
determination of the shareholders entitled to notice of and to vote
at any meeting of shareholders or entitled to give consent to
corporate action in writing (as defined in Article 12) without a
meeting, to receive any report, to receive any dividend or other
distribution, or allotment of any rights, or to exercise rights in
respect of any other lawful action. The record date so fixed shall
be not more than sixty (60) days nor less than ten (10) days prior
to the date of such meeting, nor more than sixty (60) days prior to
any other action. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting unless the Board of
Directors fixes a new record date for the adjourned meeting, but
the Board of Directors shall fix a new record date if the meeting
is adjourned for more than forty-five (45) days from the date set
for the original meeting. When a record date is so fixed, only
shareholders of record at the close of business on that date are
entitled to notice of and to vote at any such meeting, to give
consent without a meeting, to receive any report, to receive the
dividend, distribution, or allotment of rights, or to exercise the
rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date,
except as otherwise provided in the Articles of Incorporation or
these Bylaws.
(b) If no record date
is fixed:
(1) The record date for
determining shareholders entitled to notice of or to vote at a
meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the business day
preceding the day on which the meeting is held.
(2) The record date for
determining shareholders entitled to give consent to corporate
action in writing (as defined in Article 12) without a meeting,
when no prior action by the Board of Directors has been taken,
shall be the day on which the first written consent is
given.
(3) The record date for
determining shareholders for any other purpose shall be at the
close of business on the day on which the Board of Directors adopts
the resolution relating thereto, or the sixtieth (60th) day prior
to the date of such other action, whichever is later.
Section
2.11 Voting.
(a) Except as may be
otherwise provided in the Articles of Incorporation, each
outstanding share, regardless of class, shall be entitled to one
vote on each matter submitted to a vote of shareholders. Any
holders of shares entitled to vote on any matter may vote part of
the shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, other than
elections to office, but, if the shareholder fails to specify the
number of shares such shareholder is voting affirmatively, it will
be conclusively presumed that the shareholder’s approving
vote is with respect to all shares such shareholder is entitled to
vote.
(b) Subject to the
provisions of Sections 702 through 704 of the General Corporation
Law (relating to voting of shares held by a fiduciary, receiver,
pledgee, or minor, in the name of a corporation, or in joint
ownership), persons in whose names shares entitled to vote stand on
the stock records of the corporation at the close of business on
the record date shall be entitled to vote at the meeting of
shareholders. Such vote may be viva voce or by ballot; provided, however, that all
elections for directors must be by ballot upon demand made by a
shareholder at any election and before the voting begins. Shares of
this corporation owned by another corporation (the “Other
Corporation”) shall not be entitled to vote on any matter if
this corporation, directly or through or one or more majority-owned
subsidiaries of this corporation, owns more than twenty-five
percent (25%) of the voting power of the Other
Corporation.
(c) The candidates for
directors receiving the highest number of affirmative votes of
shares entitled to be voted for them, up to the number of directors
to be elected by such shares, shall be elected and votes against a
director and votes withheld shall have no legal
effect.
Section
2.12 Proxies.
(a) Every person
entitled to vote shares (including voting by written consent) may
authorize another person or other persons to act by proxy with
respect to such shares. “Proxy” means a written
authorization signed or an electronic transmission authorized by a
shareholder or the shareholder’s attorney-in-fact giving
another person or persons power to vote with respect to the shares
of such shareholder. “Signed” for the purpose of this
Section 2.12 means the placing of the shareholder’s name or
other authorization on the proxy (whether by manual signature,
typewriting, telegraphic, or electronic transmission or otherwise)
by the shareholder or the shareholder’s attorney-in-fact. A
proxy may be transmitted by an oral telephone transmission if it is
submitted with information from which it may be determined that the
proxy was authorized by the shareholder, or his or her
attorney-in-fact. Any proxy duly executed is not revoked and
continues in full force and effect until (i) a written
instrument revoking it is filed with the Secretary of the
corporation prior to the vote pursuant thereto, (ii) a
subsequent proxy executed by the person executing the prior proxy
is presented to the meeting, (iii) the person executing the
proxy attends the meeting and votes in person, or (iv) written
notice of the death or incapacity of the maker of such proxy is
received by the corporation before the vote pursuant thereto is
counted; provided
that no such proxy shall be valid after the expiration of eleven
(11) months from the date of its execution, unless otherwise
provided in the proxy. Notwithstanding the foregoing sentence, a
proxy that states that it is irrevocable, is irrevocable for the
period specified therein to the extent permitted by Section 705(e)
and (f) of the General Corporation Law. The dates contained on the
forms of proxy presumptively determine the order of execution,
regardless of the postmark dates on the envelopes in which they are
mailed.
(b) As long as no
outstanding class of securities of the corporation is registered
under Section 12 of the Securities Exchange Act of 1934, or is not
exempted from such registration by Section 12(g)(2) of such Act,
any form of proxy or written consent distributed to ten (10) or
more shareholders of the corporation when outstanding shares of the
corporation are held of record by 100 or more persons shall afford
an opportunity on the proxy or form of written consent to specify a
choice between approval and disapproval of each matter or group of
related matters intended to be acted upon at the meeting for which
the proxy is solicited or by such written consent, other than
elections to office, and shall provide, subject to reasonable
specified conditions, that where the person solicited specifies a
choice with respect to any such matter the shares will be voted in
accordance therewith. In any election of directors, any form of
proxy in which the directors to be voted upon are named therein as
candidates and which is marked by a shareholder
“withhold” or otherwise marked in a manner indicating
that the authority to vote for the election of directors is
withheld shall not be voted for the election of a
director.
Section
2.13 Validation
of Defectively Called or Noticed Meetings.
The
transactions of any meeting of shareholders, however called and
noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call and notice, if a quorum is present
either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in
person or by proxy, provides a waiver of notice or consent to the
holding of the meeting or approval of the minutes thereof in
writing (as defined in Article 12). All such waivers, consents and
approvals shall be filed with the corporate records or made a part
of the minutes of the meeting. Attendance of a person at a meeting
shall constitute a waiver of notice of and presence at such
meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened and except that attendance at a
meeting is not a waiver of any right to object to the consideration
of matters required by these Bylaws or by the General Corporation
Law to be included in the notice if such objection is expressly
made at the meeting. Neither the business to be transacted at nor
the purpose of any regular or special meeting of shareholders need
be specified in any written waiver of notice, consent to the
holding of the meeting or approval of the minutes thereof, unless
otherwise provided in the Articles of Incorporation or these
Bylaws, or unless the meeting involves one or more matters
specified in Section 2.3(d)(4) of these Bylaws.
Section
2.14 Action
Without Meeting.
(a) Directors may be
elected without a meeting by a consent in writing (as defined in
Article 12), setting forth the action so taken, signed by all of
the persons who would be entitled to vote for the election of
directors, provided
that, without notice except as hereinafter set forth, a
director may be elected at any time to fill a vacancy not filled by
the directors (other than a vacancy created by removal of a
director) by the written consent of persons holding a majority of
the outstanding shares entitled to vote for the election of
directors.
Any
other action that may be taken at a meeting of the shareholders,
may be taken without a meeting, and without prior notice except as
hereinafter set forth, if a consent in writing (as defined in
Article 12), setting forth the action so taken, is signed by the
holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted.
(b) Unless the consents
of all shareholders entitled to vote have been solicited in writing
(as defined in Article 12):
(1) notice of any
proposed shareholder approval of (i) a contract or other
transaction with an interested director, (ii) indemnification of an
agent of the corporation, (iii) a reorganization of the corporation
as defined in Section 181 of the General Corporation Law, or (iv) a
distribution in dissolution other than in accordance with the
rights of outstanding preferred shares, if any, without a meeting
by less than unanimous written consent, shall be given at least ten
(10) days before the consummation of the action authorized by such
approval in accordance with Section 2.3 of these Bylaws;
and
(2) prompt notice shall
be given of the taking of any other corporate action approved by
shareholders without a meeting by less than unanimous written
consent to those shareholders entitled to vote who have not
consented in writing (as defined in Article 12). Such notices shall
be given in the manner provided in Section 2.3 of these
Bylaws.
Any
shareholder giving a written consent, or the shareholder’s
proxyholders, or a transferee of the shares or a personal
representative of the shareholder or their respective proxyholders,
may revoke the consent personally or by proxy by a writing (as
defined in Article 12) received by the corporation prior to the
time that written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary of
the corporation, but may not do so thereafter. Such revocation is
effective upon its receipt by the Secretary of the
corporation.
Section
2.15 Inspectors
of Election.
(a) In advance of any
meeting of shareholders, the Board of Directors may appoint
inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed, or if any
persons so appointed fail to appear or refuse to act, the chair of
any such meeting may, and on the request of any shareholder or the
holder of such shareholder’s proxy shall, appoint inspectors
of election (or persons to replace those who so fail or refuse) at
the meeting. The number of inspectors shall be either one or three.
If inspectors are appointed at a meeting on the request of one or
more shareholders or holders of proxies, the majority of shares
represented in person or by proxy shall determine whether one
inspector or three inspectors are to be appointed.
(b) The inspectors of
election shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and effect of
proxies; receive votes, ballots or consents; hear and determine all
challenges and questions in any way arising in connection with the
right to vote; count and tabulate all votes or consents; determine
when the polls shall close; determine the result; and do such acts
as may be proper to conduct the election or vote with fairness to
all shareholders.
(c) The inspectors of
election shall perform their duties impartially, in good faith, to
the best of their ability and as expeditiously as is practical. If
there are three inspectors of election, the decision, act or
certificate of a majority is effective in all respects as the
decision, act or certificate of all. Any report or certificate made
by the inspectors of election is prima facie evidence of the facts
stated therein.
Board
of Directors
Section
3.1 Powers.
Subject
to the provisions of the General Corporation Law and any
limitations in the Articles of Incorporation relating to action
required to be approved by the shareholders or by the outstanding
shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the
direction of the Board of Directors. The Board of Directors may
delegate the management of the day-to-day operation of the business
of the corporation to a management company or other person,
provided that the
business and affairs of the corporation shall be managed and all
corporate powers shall be exercised under the ultimate direction of
the Board of Directors.
Section
3.2 Number
and Qualification of Directors.
The
number of directors of the corporation shall not be less than three
(3) nor more than five (5) until changed by amendment of the
Articles of Incorporation or by a Bylaw amending this Section 3.2
duly adopted by the vote or written consent of holders of a
majority of the outstanding shares, provided that if the minimum
number of directors is five or more, any proposal to reduce the
minimum number of directors to a number less than five cannot be
adopted if the votes cast against its adoption at a meeting, or the
shares not consenting in the case of action by written consent, are
equal to more than sixteen and two-thirds percent (16-2/3%) of the
outstanding shares entitled to vote. The exact number of directors
shall be fixed from time to time, within the limits specified in
the Articles of Incorporation or in this Section 3.2, by a
bylaw or amendment thereof duly adopted by the vote of a majority
of the shares entitled to vote represented at a duly held meeting
at which a quorum is present, or by the written consent of the
holders of a majority of the outstanding shares entitled to vote,
or by the Board of Directors.
Subject
to the foregoing provisions for changing the number of directors,
the number of directors of the corporation has been fixed at three
(3).
Section
3.3 Election
and Term of Office.
The
directors shall be elected at each annual meeting of shareholders,
but, if any such annual meeting is not held or the directors are
not elected thereat, the directors may be elected at any special
meeting of shareholders held for that purpose. Each director,
including a director elected to fill a vacancy, shall hold office
until the expiration of the term for which elected and until a
successor has been elected and qualified, subject, however, to such
director’s prior death, resignation, retirement,
disqualification or removal from office.
Section
3.4 Vacancies.
A
vacancy in the Board of Directors shall be deemed to exist in case
of the death, resignation or removal of any director, if a director
has been declared of unsound mind by order of court or convicted of
a felony, if the authorized number of directors is increased, if
the incorporator or incorporators have failed to appoint the
authorized number of directors in any resolution for appointment of
directors upon the initial organization of the corporation, or if
the shareholders fail, at any annual or special meeting of
shareholders at which any director or directors are elected, to
elect the full authorized number of directors to be voted for at
that meeting.
Vacancies in the
Board of Directors, except for a vacancy created by the removal of
a director, may be filled by a majority of the directors present at
a meeting at which a quorum is present, or if the number of
directors then in office is less than a quorum, (a) by the
unanimous written consent of the directors then in office, (b) by
the vote of a majority of the directors then in office at a meeting
held pursuant to notice or waivers of notice in compliance with
these Bylaws, or (c) by a sole remaining director. Each director so
elected shall hold office until his or her successor is elected at
an annual or a special meeting of the shareholders. A vacancy in
the Board of Directors created by the removal of a director may be
filled only by the vote of a majority of the shares entitled to
vote represented at a duly held meeting at which a quorum is
present, or by the written consent of all of the holders of the
outstanding shares.
The
shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such
election by written consent other than to fill a vacancy created by
removal which requires the unanimous written consent of all shares
entitled to vote for the election of directors shall require the
consent of holders of a majority of the outstanding shares entitled
to vote. Any such election by written consent to fill a vacancy
created by removal shall require the unanimous written consent of
all shares entitled to vote for the election of
directors.
Any
director may resign effective upon giving written notice to the
Chairman of the Board (if there be such an officer appointed), the
President, the Secretary or the Board of Directors of the
corporation, unless the notice specifies a later time for the
effectiveness of such resignation. If the resignation is effective
at a future time, a successor may be elected to take office when
the resignation becomes effective.
No
reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the
director’s term of office.
No
director may be removed (unless the entire Board of Directors is
removed) when the votes cast against removal, or not consenting in
writing (as defined in Article 12) to the removal, would be
sufficient to elect the director if voted cumulatively at an
election at which the same total number of votes were cast (or, if
the action is taken by written consent, all shares entitled to vote
were voted) and the entire number of directors authorized at the
time of the director’s most recent election were then being
elected.
Section
3.5 Time
and Place of Meetings.
The
Board of Directors shall hold a regular meeting immediately after
the meeting of shareholders at which it is elected and at the place
where such meeting is held, or as shall otherwise be fixed by the
Board of Directors, for the purpose of organization, election of
officers of the corporation and the transaction of other business.
Notice of such meeting is hereby dispensed with. Other regular
meetings of the Board of Directors shall be held without notice at
such times and places as are fixed by the Board of Directors.
Special meetings of the Board of Directors may be held at any time
whenever called by the Chairman of the Board (if there be such an
officer appointed), the President, any Vice-President, the
Secretary or any two directors.
Except
as hereinabove provided in this Section 3.5, all meetings of the
Board of Directors may be held at any place within or without the
State of California that has been designated by resolution of the
Board of Directors as the place for the holding of regular
meetings, or by written consent of all directors as specified in
the notice for the meeting or, if designated by the Board of
Directors, by means of conference telephone, electronic video
screen communication or electronic transmission by and to the
corporation (as these terms are defined in Article 12 hereof). In
the absence of such designation, meetings of the Board of Directors
shall be held at the principal executive office of the
corporation.
Section
3.6 Notice
of Special Meetings.
Notice
of the time and place of special meetings shall be delivered
personally to each director or communicated to each director by
telephone, telegraph, facsimile (or other electronic transmission
by the corporation (as defined in Article 12 hereof)), or mail,
charges prepaid, addressed to the director at the director’s
address as it is shown upon the records of the corporation or, if
it is not so shown on such records or is not readily ascertainable,
at the place at which the meetings of the directors are regularly
held. In case such notice is mailed, it shall be deposited in the
United States mail at least four (4) days prior to the time of the
holding of the meeting. In case such notice is delivered personally
or by telephone, telegraph, facsimile, electronic mail message or
other electronic transmission by the corporation (as defined in
Article 12 hereof), it shall be so delivered at least forty-eight
(48) hours prior to the time of the holding of the meeting. Any
such transmission of notice, as above provided, shall be due, legal
and personal notice to such director. As used herein, notice by
telephone shall be deemed to include a voice messaging system or
other system or technology designed to record and communicate
messages, or wireless, to the recipient, including the
recipient’s designated voice mailbox or address on such a
system.
Notice
of a meeting need not be given to any director who provides a
waiver of notice or a consent to holding the meeting or an approval
of the minutes thereof in writing (as defined in Article 12),
whether before or after the meeting, or who attends the meeting
without protesting, prior thereto or at its commencement, the lack
of notice to such director. All such waivers, consents and
approvals shall be filed with the corporate records or made a part
of the minutes of the meetings.
Section
3.7 Action
at a Meeting: Quorum and Required Vote.
(a) Presence of a
majority of the authorized number of directors at a meeting of the
Board of Directors constitutes a quorum for the transaction of
business, except as hereinafter provided.
(b) Members of the
Board of Directors may participate in a meeting through use of
conference telephone, electronic video screen communication or
electronic transmission by and to the corporation (as these terms
are defined in Article 12 hereof). Participation in a meeting
through use of conference telephone or electronic video screen
communication pursuant to this subsection (b) constitutes
presence in person at such meeting as long as all members
participating in the meeting are able to hear one another.
Participation in a meeting through electronic transmission by and
to the corporation (as these terms are defined in Article 12
hereof), other than conference telephone or electronic video screen
communication (to which the restrictions in this sentence do not
apply), pursuant to this subsection (b) constitutes presence
in person at such meeting, if both of the following apply:
(i) each member participating in the meeting can communicate
with all of the other members concurrently, and (ii) each
member is provided the means of participating in all matters before
the Board of Directors, including, without limitation, the capacity
to propose, or to interpose an objection to, a specific action to
be taken by the corporation.
(c) Every act or
decision done or made by a majority of the directors present at a
meeting duly held at which a quorum is present is the act of the
Board of Directors, unless a greater number, or the same number
after disqualifying one or more directors from voting, is required
by law, by the Articles of Incorporation, or by these Bylaws. A
meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required
quorum for such meeting.
Section
3.8 Action
Without a Meeting.
Any
action required or permitted to be taken by the Board of Directors
may be taken without a meeting, if all members of the Board of
Directors shall individually or collectively consent in writing (as
defined in Article 12) to such action. Such written consent or
consents shall be filed with the minutes of the proceedings of the
Board of Directors. Such action by written consent shall have the
same force and effect as a unanimous vote of such directors. All
members of the board" shall include an "interested director" or a
"common director" as described in Sections 310(a) or (b) of the
General Corporation Law, who abstains in writing from providing
consent, where the material facts of the contract or transaction,
and the interest or other directorship of the interested or common
director are fully disclosed to the non-interested or non-common
directors prior to their execution of the written consent or
consents, such disclosures are conspicuously included in the
written consent or consents executed by the noninterested or
noncommon directors, and noninterested or noncommon directors
constituting a quorum approve the action.
Section
3.9 Adjourned
Meeting and Notice.
A
majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than twenty-four (24) hours, notice
of any adjournment to another time or place shall be given prior to
the time of the adjourned meeting to the directors who were not
present at the time of the adjournment.
Section
3.10 Fees
and Compensation.
Directors and
members of committees may receive such compensation, if any, for
their services, and such reimbursement for expenses, as may be
fixed or determined by resolution of the Board of
Directors.
Section
3.11 Appointment
of Executive and Other Committees.
The
Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees,
each consisting of two or more directors, to serve at the pleasure
of the Board of Directors. The Board of Directors may designate one
or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. The
appointment of members or alternate members of a committee requires
the vote of a majority of the authorized number of directors. Any
such committee, to the extent provided in the resolution of the
Board of Directors or in these Bylaws, shall have all the authority
of the Board of Directors, except with respect to:
(a) The approval of any
action for which the General Corporation Law also requires
shareholders’ approval or approval of the outstanding
shares.
(b) The filling of
vacancies on the Board of Directors or in any
committee.
(c) The fixing of
compensation of the directors for serving on the Board of Directors
or on any committee.
(d) The amendment or
repeal of these Bylaws or the adoption of new Bylaws.
(e) The amendment or
repeal of any resolution of the Board of Directors that by its
express terms is not so amendable or repealable.
(f) A distribution to
the shareholders of the corporation, except at a rate, in a
periodic amount or within a price range determined by the Board of
Directors.
(g) The appointment of
other committees of the Board of Directors or the members
thereof.
The
provisions of Sections 3.5 through 3.9 of these Bylaws apply also
to committees of the Board of Directors and action by such
committees, mutatis
mutandis (with the necessary changes having been made in the
language thereof).
Section
3.12 Emergency
Provisions.
In the
event of any emergency, disaster or catastrophe, as defined in
Section 207 of the General Corporation Law, or other similar
emergency condition, as a result of which a quorum of the Board of
Directors or a standing committee of the Board of Directors cannot
readily be convened for action, any director or officer of the
corporation may call a meeting of the Board of Directors or any
standing committee of the Board of Directors by any practical
means. Notice of the time and place of the meeting shall be given
by any available means of communication by the person calling the
meeting to such of the directors as it may be feasible to reach.
Such notice shall be given at such time in advance of the meeting
as, in the judgment of the person calling the meeting,
circumstances permit.
If, as
a result of such an emergency, disaster or catastrophe, a quorum of
the Board of Directors or a standing committee of the Board of
Directors cannot readily be convened for action, the director or
directors in attendance at the meeting shall constitute a quorum.
To the extent necessary to constitute a quorum at any meeting of
the Board of Directors during such emergency, the officers of the
corporation who are present, in order of rank, and within the same
rank in order of seniority, shall be deemed directors for such
meeting. Such director or directors in attendance may further take
action to appoint one or more of themselves or other directors to
membership on any standing or temporary committees of the Board of
Directors as they shall deem necessary and
appropriate.
The
Board of Directors, either before or during any such emergency, may
provide, and from time to time modify, lines of succession in the
event that during such emergency any or all officers or agents of
the corporation shall for any reason be rendered incapable of
discharging their duties.
Any
actions taken in good faith in anticipation of or during an
emergency under Section 207 of the General Corporation Law shall
bind the corporation and may not be used to impose liability on a
director, officer, employee or agent.
Officers
Section
4.1 Officers.
The
officers of the corporation shall consist of the President, the
Secretary and the Chief Financial Officer, and each of them shall
be appointed by the Board of Directors. The corporation may also
have a Chairman of the Board, one or more Vice-Presidents, a
Controller, one or more Assistant Secretaries and Assistant Chief
Financial Officers, and such other officers as may be appointed by
the Board of Directors, or with authorization from the Board of
Directors by the President. The order of the seniority of the
Vice-Presidents shall be in the order of their nomination, unless
otherwise determined by the Board of Directors. Any two or more of
such offices may be held by the same person. The Board of Directors
may appoint, and may empower the President to appoint, such other
officers as the business of the corporation may require, each of
whom shall have such authority and perform such duties as are
provided in these Bylaws or as the Board of Directors may from time
to time determine.
All
officers of the corporation shall hold office from the date
appointed to the date of the next succeeding regular meeting of the
Board of Directors following the meeting of shareholders at which
the Board of Directors is elected, and until their successors are
elected; provided that all officers, as well as any other employee
or agent of the corporation, may be removed at any time at the
pleasure of the Board of Directors, or, except in the case of an
officer chosen by the Board of Directors, by any officer upon whom
such power of removal may be conferred by the Board of Directors,
and upon the removal, resignation, death or incapacity of any
officer, the Board of Directors or the President, in cases where he
or she has been vested by the Board of Directors with power to
appoint, may declare such office vacant and fill such vacancy.
Nothing in these Bylaws shall be construed as creating any kind of
contractual right to employment with the corporation.
Any
officer may resign at any time by giving written notice to the
Board of Directors, the President, or the Secretary of the
corporation, without prejudice, however, to the rights, if any, of
the corporation under any contract to which such officer is a
party. Any such resignation shall take effect at the date of the
receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it
effective.
The
salary and other compensation of the officers shall be fixed from
time to time by resolution of or in the manner determined by the
Board of Directors.
Section
4.2 The
Chairman of the Board.
The
Chairman of the Board (if there be such an officer appointed)
shall, when present, preside at all meetings of the Board of
Directors and shall perform all the duties commonly incident to
that office. The Chairman of the Board shall have authority to
execute in the name of the corporation bonds, contracts, deeds,
leases and other written instruments to be executed by the
corporation (except where by law the signature of the President is
required), and shall perform such other duties as the Board of
Directors may from time to time determine.
Section
4.3 The
President.
Subject
to such supervisory powers, if any, as may be given by the Board of
Directors to the Chairman of the Board, the President shall be the
chief executive officer of the corporation and shall perform all
the duties commonly incident to that office. The President shall
have authority to execute in the name of the corporation bonds,
contracts, deeds, leases and other written instruments to be
executed by the corporation. The President shall preside at all
meetings of the shareholders and, in the absence of the Chairman of
the Board or if there is none, at all meetings of the Board of
Directors, and shall perform such other duties as the Board of
Directors may from time to time determine.
Section
4.4 Vice-Presidents.
The
Vice-Presidents (if there be such officers appointed), in the order
of their seniority (unless otherwise established by the Board of
Directors), may assume and perform the duties of the President in
the absence or disability of the President or whenever the offices
of the Chairman of the Board and President are vacant. The
Vice-Presidents shall have such titles, perform such other duties,
and have such other powers as the Board of Directors, the President
or these Bylaws may designate from time to time.
Section
4.5 The
Secretary.
The
Secretary shall record or cause to be recorded, and shall keep or
cause to be kept, at the principal executive office and such other
place as the Board of Directors may order, a record of minutes of
actions taken at all meetings of directors and committees thereof
and of shareholders, with the time and place of holding, whether
regular or special, and, if special, how authorized, the notice
thereof given, the names of those present at directors’
meetings, the number of shares present or represented at
shareholders’ meetings, and the proceedings thereof. Minutes
and other books and records shall be kept either in written form or
in another form capable of being converted into clearly legible
tangible form or in any a combination of the
foregoing.
The
Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation’s
transfer agent, a share register or a duplicate share register in a
form capable of being converted into written form, showing the
names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates
issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The
Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board of Directors and
committees thereof required by these Bylaws or by law to be given,
and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors or by these
Bylaws.
The
President may direct any Assistant Secretary to assume and perform
the duties of the Secretary in the absence or disability of the
Secretary, and each Assistant Secretary shall perform such other
duties and have such other powers as the Board of Directors or the
President may designate from time to time.
Section
4.6 Chief
Financial Officer.
The
Chief Financial Officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct accounts of the
properties and business transactions of the corporation. The books
of account shall at all reasonable times be open to inspection by
any director.
The
Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with
such depositaries as may be designated by the Board of Directors.
The Chief Financial Officer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall
render to the President and directors, whenever they request it, an
account of all of the Chief Financial Officer’s transactions
as Chief Financial Officer and of the financial condition of the
corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or
these Bylaws.
The
President may direct any Assistant Chief Financial Officer to
assume and perform the duties of the Chief Financial Officer in the
absence or disability of the Chief Financial Officer, and each
Assistant Chief Financial Officer shall perform such other duties
and have such other powers as the Board of Directors or the
President may designate from time to time.
Section
4.7 The
Controller.
The
Controller (if there be such an officer appointed) shall be
responsible for the establishment and maintenance of accounting and
other systems required to control and account for the assets of the
corporation and provide safeguards therefor, and to collect
information required for management purposes, and shall perform
such other duties and have such other powers as the Board of
Directors or the President may designate from time to
time.
The
President may direct any Assistant Controller to assume and perform
the duties of the Controller, in the absence or disability of the
Controller, and each Assistant Controller shall perform such other
duties and have such other powers as the Board of Directors, the
Chairman of the Board (if there be such an officer appointed) or
the President may designate from time to time.
Execution
of Corporate Instruments,
Ratification,
and Voting of Stocks
Owned
by the Corporation
Section
5.1 Execution
of Corporate Instruments.
In its
discretion, the Board of Directors may determine the method and
designate the signatory officer or officers or other person or
persons, to execute any corporate instrument or document, or to
sign the corporate name without limitation, except where otherwise
provided by law, and such execution or signature shall be binding
upon the corporation.
All
checks and drafts drawn on banks or other depositaries on funds to
the credit of the corporation, or in special accounts of the
corporation, shall be signed by such person or persons as the Board
of Directors shall authorize to do so.
The
Board of Directors shall designate an officer who personally, or
through his representative, shall vote shares of other corporations
standing in the name of this corporation. The authority to vote
shares shall include the authority to execute a proxy in the name
of the corporation for purposes of voting the shares.
Section
5.2 Ratification
by Shareholders.
In its
discretion, the Board of Directors may submit any contract or act
for approval or ratification of the shareholders at any annual
meeting of shareholders, or at any special meeting of shareholders
called for that purpose; and any contract or act that shall be
approved or ratified by the holders of a majority of the voting
power of the corporation shall be as valid and binding upon the
corporation and upon the shareholders thereof as though approved or
ratified by each and every shareholder of the corporation, unless a
greater vote is required by law for such purpose.
Section
5.3 Voting
of Stocks Owned by the Corporation.
All
stock of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and
all proxies with respect thereto shall be executed, by the person
authorized to do so by resolution of the Board of Directors, or in
the absence of such authorization, by the Chairman of the Board (if
there be such an officer appointed), the President or any
Vice-President, or by any other person authorized to do so by the
Chairman of the Board, the President or any Vice
President.
Annual
and Other Reports
Section
6.1 Reports
to Shareholders.
The
Board of Directors of the corporation shall cause an annual report
to be sent to the shareholders not later than 120 days after the
close of the fiscal year, and at least fifteen (15) days (or, if
sent by third-class mail, thirty-five (35) days) prior to the
annual meeting of shareholders to be held during the next fiscal
year. If approved by the Board of Directors, the report and any
accompanying material may be sent by electronic transmission by the
corporation (as defined in Article 12 hereof). This report shall
contain a balance sheet as of the end of that fiscal year and an
income statement and statement of changes in financial position for
that fiscal year, accompanied by any report thereon of independent
accountants or, if there is no such report, the certificate of an
authorized officer of the corporation that the statements were
prepared without audit from the books and records of the
corporation. This report shall also contain such other matters as
required by Section 1501(b) of the General Corporation Law, unless
the corporation is subject to the reporting requirements of Section
13 of the Securities Exchange Act of 1934, and is not exempted
therefrom under Section 12(g)(2) thereof. As long as the
corporation has less than 100 holders of record of its shares
(determined as provided in Section 605 of the General Corporation
Law), the foregoing requirement of an annual report is hereby
waived.
If no
annual report for the last fiscal year has been sent to
shareholders, the corporation shall, upon the written request of
any shareholder made more than 120 days after the close of such
fiscal year, deliver (including by electronic transmission by the
corporation (as defined in Article 12 hereof) or mail to the person
making the request within thirty (30) days thereafter the financial
statements for such year as required by Section 1501(a) of the
General Corporation Law. A shareholder or shareholders holding at
least five percent (5%) of the outstanding shares of any class of
the corporation may make a written request to the corporation for
an income statement of the corporation for the three-month,
six-month or nine-month period of the current fiscal year ended
more than thirty (30) days prior to the date of the request and a
balance sheet of the corporation as of the end of such period and,
in addition, if no annual report for the last fiscal year has been
sent to shareholders, the annual report for the last fiscal year,
unless such report has been waived under these Bylaws. The
statements shall be delivered (including by electronic transmission
by the corporation (as defined in Article 12 hereof) if such
transmission is permitted to such shareholder pursuant to such
definition) or mailed to the person making the request within
thirty (30) days thereafter. A copy of any such statements shall be
kept on file in the principal executive office of the corporation
for twelve (12) months, and they shall be exhibited at all
reasonable times to any shareholder demanding an examination of the
statements, or a copy shall be mailed to the
shareholder.
The
quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the corporation or the
certificate of an authorized officer of the corporation that the
financial statements were prepared without audit from the books and
records of the corporation.
Section
6.2 Report
of Shareholder Vote.
For a
period of sixty (60) days following the conclusion of an annual,
regular, or special meeting of shareholders, the corporation shall,
upon written request from a shareholder, forthwith inform the
shareholder of the result of any particular vote of shareholders
taken at the meeting, including the number of shares voting for,
the number of shares voting against, and the number of shares
abstaining or withheld from voting. If the matter voted on was the
election of directors, the corporation shall report the number of
shares (or votes if voted cumulatively) cast for each nominee for
director. If more than one class or series of shares voted, the
report shall state the appropriate numbers by class and series of
shares.
Section
6.3 Reports to the Secretary of
State.
(a) Except as otherwise
required by the Secretary of State, every year, during the calendar
month in which the original Articles of Incorporation were filed
with the California Secretary of State, or during the preceding
five calendar months, the corporation shall file a certified
statement with the Secretary of State on the prescribed form,
setting forth the names and complete business or residence
addresses of all incumbent directors; the number of vacancies on
the Board of Directors, if any; the names and complete business or
residence addresses of the chief executive officer, the secretary,
and the chief financial officer; the street address of the
corporation’s principal executive office or principal
business office in California; a statement of the general type of
business constituting the principal business activity of the
corporation; and a designation of the agent of the corporation for
the purpose of service of process, all in compliance with Section
1502 of the General Corporation Law.
(b) Notwithstanding the
provisions of paragraph (a) of this section, if there has been no
change in the information contained in the corporation’s last
annual statement on file in the Secretary of State’s office,
the corporation may in lieu of filing the annual statement
described in paragraph (a) of this section, advise the Secretary of
State, on the appropriate form, that no changes in the required
information have occurred during the applicable period, as
permitted by Section 1502 of the General Corporation
Law.
Shares
of Stock
Section
7.1 Stock
Certificates.
Every
holder of shares in the corporation shall be entitled to have a
certificate signed in the name of the corporation by the Chairman
or Vice Chairman of the Board (if there be such officers appointed)
or the President or a Vice-President and by the Chief Financial
Officer or any Assistant Chief Financial Officer or the Secretary
or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any of the
signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate has ceased
to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the
same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
Any
such certificate shall also contain such legends or other
statements as may be required by Sections 417 and 418 of the
General Corporation Law, the Corporate Securities Law of 1968,
federal or other state securities laws, and any agreement between
the corporation and the issuee of the certificate.
Certificates for
shares may be issued prior to full payment, under such restrictions
and for such purposes as the Board of Directors or these Bylaws may
provide; provided, however, that the certificate issued to
represent any such partly paid shares shall state on the face
thereof the total amount of the consideration to be paid therefor,
the amount remaining unpaid and the terms of payment.
No new
certificate for shares shall be issued in lieu of an old
certificate unless the latter is surrendered and canceled at the
same time; provided, however, that a new certificate will be issued
without the surrender and cancellation of the old certificate if
(1) the old certificate is lost, apparently destroyed or wrongfully
taken; (2) the request for the issuance of the new certificate is
made within a reasonable time after the owner of the old
certificate has notice of its loss, destruction, or theft; (3) the
request for the issuance of a new certificate is made prior to the
receipt of notice by the corporation that the old certificate has
been acquired by a bona fide purchaser; (4) the owner of the old
certificate files a sufficient indemnity bond with or provides
other adequate security to the corporation; and (5) the owner
satisfies any other reasonable requirement imposed by the
corporation. In the event of the issuance of a new certificate, the
rights and liabilities of the corporation, and of the holders of
the old and new certificates, shall be governed by the provisions
of Sections 8104 and 8405 of the California Commercial
Code.
Section
7.2 Uncertificated
Shares.
Notwithstanding
Section 7.1, the corporation may adopt a system of issuance,
recordation and transfer of its shares by electronic or other means
not involving any issuance of certificates, including provisions
for notice to purchasers in substitution for the required
statements on certificates under Sections 417, 418, and 1302 of the
California Corporations Code, and as may be required by the
commissioner in administering the Corporate Securities Law of 1968,
which system (1) has been approved by the United States
Securities and Exchange Commission, (2) is authorized in any
statute of the United States, or (3) is in accordance with
Division 8 (commencing with Section 8101) of the California
Commercial Code. Any system so adopted shall not become effective
as to issued and outstanding certificated securities until the
certificates therefor have been surrendered to the
corporation.
Inspection
of Corporate Records
Section
8.1 General
Records.
The
accounting books and records and the minutes of proceedings of the
shareholders, the Board of Directors and committees thereof of the
corporation and any subsidiary of the corporation shall be open to
inspection upon the written demand on the corporation of any
shareholder or holder of a voting trust certificate at any
reasonable time during usual business hours, for a purpose
reasonably related to such holder’s interests as a
shareholder or as the holder of such voting trust certificate. Such
inspection by a shareholder or holder of a voting trust certificate
may be made in person or by agent or attorney, and the right of
inspection includes the right to copy and make extracts. Minutes of
proceedings of the shareholders, Board of Directors, and committees
thereof and other books and records shall be kept either in written
form or in another form capable of being converted into clearly
legible tangible form or any combination of the
foregoing.
A
shareholder or shareholders holding at least five percent (5%) in
the aggregate of the outstanding voting shares of the corporation
or who hold at least one percent (1%) of such voting shares and
have filed a Schedule 14A with the United States Securities and
Exchange Commission relating to the election of directors of the
corporation shall have (in person, or by agent or attorney) the
right to inspect and copy the record of shareholders’ names
and addresses and shareholdings during usual business hours upon
five (5) business days’ prior written demand upon the
corporation or to obtain from the transfer agent for the
corporation, upon written demand and upon the tender of its usual
charges for such list, a list of the shareholders’ names and
addresses, who are entitled to vote for the election of directors,
and their shareholdings, as of the most recent record date for
which it has been compiled or as of a date specified by the
shareholder subsequent to the date of demand. The list shall be
made available on or before the later of five (5) business days
after the demand is received or the date specified therein as the
date as of which the list is to be compiled.
Every
director shall have the absolute right at any reasonable time to
inspect and copy all books, records and documents of every kind and
to inspect the physical properties of the corporation and its
subsidiaries. Such inspection by a director may be made in person
or by agent or attorney, and the right of inspection includes the
right to copy and make extracts.
Section
8.2 Inspection
of Bylaws.
The
corporation shall keep at its principal executive office in
California, or if its principal executive office is not in
California, then at its principal business office in California (or
shall otherwise provide upon written request of any shareholder if
it has no such office in California) the original or a copy of
these Bylaws as amended to date, which shall be open to inspection
by the shareholders at all reasonable times during office
hours.
Indemnification
of Officers, Directors, Employees and Agents
Section
9.1 Right
to Indemnification.
Each
person who was or is a party or is threatened to be made a party to
or is involved (as a party, witness, or otherwise), in any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative
(hereafter a “Proceeding”), by reason of the fact that
such person, or another person of whom such person is the legal
representative, is or was a director, officer, employee, or agent
of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust,
or other enterprise, or was a director, officer, employee, or agent
of a foreign or domestic corporation that was a predecessor
corporation of the corporation or of another enterprise at the
request of such predecessor corporation, including service with
respect to employee benefit plans, whether the basis of the
Proceeding is alleged action in an official capacity as a director,
officer, employee, or agent or in any other capacity while serving
as a director, officer, employee, or agent (hereafter an
“Agent”), shall be indemnified and held harmless by the
corporation to the fullest extent authorized by statutory and
decisional law, as the same exists or may hereafter be interpreted
or amended (but, in the case of any such amendment or
interpretation, only to the extent that such amendment or
interpretation permits the corporation to provide broader
indemnification rights than were permitted prior thereto) against
all expenses, liability, and loss (including attorneys’ fees,
judgments, fines, ERISA excise taxes and penalties, amounts paid or
to be paid in settlement, any interest, assessments, or other
charges imposed thereon, and any federal, state, local, or foreign
taxes imposed on any Agent as a result of the actual or deemed
receipt of any payments under this Article) reasonably incurred or
suffered by such person in connection with investigating,
defending, being a witness in, or participating in (including on
appeal), or preparing for any of the foregoing in, any Proceeding
(hereafter “Expenses”); provided, however, that except as to actions to
enforce indemnification rights pursuant to Section 9.3 of these
Bylaws, the corporation shall indemnify any Agent seeking
indemnification in connection with a Proceeding (or part thereof)
initiated by such person only if the Proceeding (or part thereof)
was authorized by the Board of Directors of the corporation. The
right to indemnification conferred in this Article shall be a
contract right. It is the corporation’s intention that these
Bylaws provide indemnification in excess of that expressly
permitted by Section 317 of the General Corporation Law, as
authorized by the corporation’s Articles of
Incorporation.
Section
9.2
Authority
to Advance Expenses.
The
right to indemnification provided in Section 9.1 of these Bylaws
shall include the right to be paid, in advance of a
Proceeding’s final disposition, Expenses incurred in
defending that Proceeding; provided, however, that if required by the
General Corporation Law, as amended, the payment of Expenses in
advance of the final disposition of the Proceeding shall be made
only upon delivery to the corporation of an undertaking by or on
behalf of the Agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
corporation as authorized under this Article or otherwise. The
Agent’s obligation to reimburse the corporation for Expense
advances shall be unsecured, and no interest shall be charged
thereon.
Section
9.2 Right
of Claimant to Bring Suit.
If a
claim under Section 9.1 or 9.2 of these Bylaws is not paid in full
by the corporation within thirty (30) days after a written claim
has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense (including
attorneys’ fees) of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce
a claim for expenses incurred in defending a Proceeding in advance
of its final disposition where the required undertaking has been
tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General
Corporation Law for the corporation to indemnify the claimant for
the amount claimed. The burden of proving such a defense shall be
on the corporation. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel, or
its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper under the circumstances because he or she has met the
applicable standard of conduct set forth in the General Corporation
Law, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its shareholders)
that the claimant had not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
claimant has not met the applicable standard of
conduct.
Section
9.3 Provisions
Nonexclusive.
The
rights conferred on any person by this Article shall not be
exclusive of any other rights that such person may have or
hereafter acquire under any statute, provision of the Articles of
Incorporation, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office. To
the extent that any provision of the Articles of Incorporation,
agreement, or vote of the shareholders or disinterested directors
is inconsistent with these Bylaws, the provision, agreement, or
vote shall take precedence.
Section
9.4 Authority
to Insure.
The
corporation may purchase and maintain insurance to protect itself
and any Agent against any Expense asserted against or incurred by
such person, whether or not the corporation would have the power to
indemnify the Agent against such Expense under applicable law or
the provisions of this Article, provided that, in cases where the
corporation owns all or a portion of the shares of the company
issuing the insurance policy, the company and/or the policy must
meet one of the two sets of conditions set forth in Section 317 of
the General Corporation Law, as amended.
Section
9.5 Survival
of Rights.
The
rights provided by this Article shall continue as to a person who
has ceased to be an Agent and shall inure to the benefit of the
heirs, executors, and administrators of such person.
Section
9.6 Settlement
of Claims.
The
corporation shall not be liable to indemnify any Agent under this
Article (a) for any amounts paid in settlement of any action or
claim effected without the corporation’s written consent,
which consent shall not be unreasonably withheld; or (b) for any
judicial award, if the corporation was not given a reasonable and
timely opportunity to participate, at its expense, in the defense
of such action.
Section
9.7 Effect
of Amendment.
Any
amendment, repeal, or modification of this Article shall not
adversely affect any right or protection of any Agent existing at
the time of such amendment, repeal, or modification.
Section
9.8 Subrogation.
In the
event of payment under this Article, the corporation shall be
subrogated to the extent of such payment to all of the rights of
recovery of the Agent, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
corporation effectively to bring suit to enforce such
rights.
Section
9.9 No
Duplication of Payments.
The
corporation shall not be liable under this Article to make any
payment in connection with any claim made against the Agent to the
extent the Agent has otherwise actually received payment (under any
insurance policy, agreement, vote, or otherwise) of the amounts
otherwise indemnifiable hereunder.
Amendments
Section
10.1 Power
of Shareholders.
New
bylaws may be adopted or these Bylaws may be amended or repealed by
the affirmative vote of a majority of the outstanding shares
entitled to vote, or by the written assent of shareholders entitled
to vote such shares, except as otherwise provided by law or by the
Articles of Incorporation or by these Bylaws.
Section
10.2 Power
of Directors.
Subject
to the right of shareholders as provided in Section 10.1 of this
Article 10 to adopt, amend or repeal these Bylaws, these Bylaws
(other than a bylaw or amendment thereof providing for the approval
by the Board of Directors, acting alone, of a loan or guarantee to
any officer or an employee benefit plan providing for the same) may
be adopted, amended or repealed by the Board of Directors;
provided, however, that the Board of Directors may adopt a bylaw or
amendment thereof changing the authorized number of directors only
for the purpose of fixing the exact number of directors within the
limits specified in the Articles of Incorporation or in Section 3.2
of these Bylaws.
RIGHT
OF FIRST REFUSAL
Section
11.1
Right
of First Refusal.
No
shareholder shall sell, assign, pledge, or in any manner transfer
any of the shares of common stock of the corporation or any right
or interest therein, whether voluntarily or by operation of law, or
by gift or otherwise, except by a transfer which meets the
requirements hereinafter set forth in this bylaw:
(a) (i) In the event a
shareholder receives from anyone a bona fide offer acceptable to
the shareholder to purchase any of his shares of common stock or
(ii) in the event of a restricted transfer (as defined below) by a
shareholder, such shareholder shall give written notice thereof to
the corporation. The notice shall name the proposed transferee and
state the number of shares, right or interest to be transferred,
the price per share and all other terms and conditions of the offer
or restricted transfer, as applicable. As used herein,
“restricted transfer” shall mean: (v) the filing
of a petition in bankruptcy by or against a shareholder;
(w) an adjudication that a shareholder is an insane or
incompetent person; (x) any assignment by a shareholder for
the benefit of his, her or its creditors; (y) any transfer,
award, or confirmation of any common stock to a shareholder’s
spouse pursuant to a decree of divorce, dissolution, or separate
maintenance, or pursuant to a property settlement or separation
agreement; and (z) any testamentary or other similar
disposition of any interest in any common stock upon a
shareholder’s death.
(b) For thirty (30)
days following receipt of such notice, the corporation or its
assigns shall have the option to purchase all or any lesser part of
the shares specified in the notice at the price and upon the terms
set forth in such bona fide offer; provided, however, that in the
event of a restricted transfer, the purchase price per share shall
equal the net book value per share of the common stock of the
corporation determined on a fully diluted, fully converted basis as
of the last day of the preceding fiscal year, as determined by the
independent accountants of the corporation (or, in the event that
the corporation has not engaged an independent accountant, the
Board of Directors of the corporation) based on their review, but
not necessarily an audit, of the corporation’s financial
statements. Net book value shall be calculated using the historical
cost of the corporation’s assets as reflected on its
financial statements decreased by any depreciation, amortization or
other cost recover method consistently applied for financial
accounting purposes. Net book value shall not include any
unrealized gain or loss on the corporation’s assets or the
value, if any, of the corporation’s goodwill or other assets
that are not reflected on the corporation’s financial
statements.
(c) In the event the
corporation elects to purchase all or any part of the shares, the
Secretary of the corporation shall give written notice to the
selling shareholder of such election and the corporation shall,
within thirty (30) days after the Secretary of the corporation
mails such notice, deliver to the selling shareholder the
consideration set forth in the selling shareholder’s notice
of sale.
(d) In the event that
all of the shares are not purchased by the corporation, the selling
shareholder may, within the sixty (60) day period following the
expiration of the option rights granted to the corporation, sell
elsewhere the shares specified in said selling shareholder’s
notice which were not acquired by the corporation in accordance
with the provisions of paragraph (e) of this bylaw, provided that
said sale shall not be on terms and conditions more favorable to
the purchaser than those contained in the bona fide offer set forth
in said selling shareholder’s notice. All shares so sold by
said selling shareholder shall continue to be subject to the
provisions of this bylaw in the same manner as before said
transfer.
(e) Anything to the
contrary contained herein notwithstanding, the following
transactions shall be exempt from the provisions of this
bylaw:
(1) A
shareholder’s transfer of any or all shares held either
during such shareholder’s lifetime to such
shareholder’s immediate family. “Immediate
family” as used herein shall mean spouse (subject to
limitations in the event of a restricted transfer), lineal
descendent, father, mother, brother, or sister of the shareholder
making such transfer.
(2) A
shareholder’s bona fide pledge or mortgage of any shares of
common stock with a commercial lending institution, provided that
any subsequent transfer of said shares by said institution shall be
conducted in the manner set forth in this bylaw.
(3) A
shareholder’s transfer of any or all of such
shareholder’s shares of common stock to any other shareholder
of the corporation.
(4) A
shareholder’s transfer of any or all of such shareholders
shares of common stock to a person who, at the time of such
transfer, is an officer or director of the
corporation.
(5) A corporate
shareholder’s transfer of any or all of its shares of common
stock pursuant to and in accordance with the terms of any merger,
consolidation, reclassification of shares or capital reorganization
of the corporate shareholder, or pursuant to a sale of all or
substantially all of the stock or assets of a corporate
shareholder.
(6) A corporate
shareholder’s transfer of any or all of its shares of common
stock to any or all of its shareholders.
(7) A transfer by a
shareholder which is a limited or general partnership to any or all
of its partners.
In any
such case, the transferee, assignee, or other recipient shall
receive and hold such stock subject to the provisions of this
bylaw, and there shall be no further transfer of such stock except
in accord with this bylaw.
(f) The provisions of
this bylaw may be waived with respect to any transfer either by the
corporation, upon duly authorized action of its Board of Directors,
or by the shareholders, upon the express written consent of the
owners of a majority of the voting power of the corporation
(excluding the votes represented by those shares to be sold by the
selling shareholder). This bylaw may be amended or repealed either
by a duly authorized action of the Board of Directors or by the
shareholders, upon the express written consent of the owners of a
majority of the voting power of the corporation.
(g) Any sale or
transfer, or purported sale or transfer, of securities of the
corporation by shareholders shall be null and void unless the
terms, conditions, and provisions of this bylaw are strictly
observed and followed.
(h) The foregoing right
of first refusal shall terminate upon the date securities of the
corporation are first offered to the public pursuant to a
registration statement filed with, and declared effective by, the
Securities and Exchange Commission under the Securities Act of
1933, as amended.
(i) The certificates
representing shares of common stock of the corporation shall bear
on their face the following legend so long as the foregoing right
of first refusal remains in effect:
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION, AS PROVIDED IN THE BYLAWS OF THE
CORPORATION.”
(j) Whenever
the corporation shall have the right to purchase common stock under
this right of first refusal, the corporation may designate and
assign to one or more employees, officers, directors or
shareholders of the corporation or other persons or organizations,
to exercise all or a part of the corporation’s right of first
refusal.
Definitions
Unless
the context otherwise requires, the general provisions, rules of
construction and definitions contained in the General Corporation
Law as amended from time to time shall govern the construction of
these Bylaws. Without limiting the generality of the foregoing, the
masculine gender includes the feminine and neuter, the singular
number includes the plural and the plural number includes the
singular, and the term “person” includes a corporation
as well as a natural person.
Certain
definitions in the General Corporation Law are set forth below;
provided that the definitions in the General Corporation Law, as
amended from time to time, shall govern and control for purposes of
these Bylaws with respect to the terms set forth below and the
other terms utilized in these Bylaws:
“Electronic transmission by the
corporation” means a communication (a) delivered by
(1) facsimile telecommunication or electronic mail when
directed to the facsimile number or electronic mail address,
respectively, for that recipient on record with the corporation,
(2) posting on an electronic message board or network which the
corporation has designated for those communications, together with
a separate notice to the recipient of the posting, which
transmission shall be validly delivered upon the later of the
posting or delivery of the separate notice thereof, or (3) other
means of electronic communication, (b) to a recipient who has
provided an unrevoked consent to the use of those means of
transmission for communications under or pursuant to this code and
(c) that creates a record that is capable of retention, retrieval
and review, and that may thereafter be rendered into clearly
legible tangible form. In addition, an electronic transmission by a
corporation to an individual shareholder or director recipient is
not authorized unless, in addition to satisfying the requirements
above, the consent to the electronic transmission has been preceded
by or includes a clear written statement to the recipient as to:
(a) any right of
the recipient to have the record provided or made available on
paper or in non-electronic form; (b) whether the consent applies
only to that transmission, to specified categories of
communications, or to all communications from the corporation; and
(c) the procedures the recipient must use to withdraw
consent.
“Electronic transmission to the
corporation” means “a communication (a)
delivered by (1) facsimile telecommunication or electronic mail
when directed to the facsimile number or electronic mail address,
respectively, which the corporation has provided from time to time
to shareholders or members and directors for sending communications
to the corporation, (2) posting on an electronic message board or
network which the corporation has designated for those
communications, and which transmission shall be validly delivered
upon the posting, or (3) other means of electronic communication
(b) as to which the corporation has placed in effect reasonable
measures to verify that the sender is the shareholder or member (in
person or by proxy) or director purporting to send the
transmission, and (c) that creates a record that is capable of
retention, retrieval, and review, and that may thereafter be
rendered into clearly legible tangible form.
"General Corporation Law" means
the General Corporate Law of the State of California, as may be
amended from time to time.
“Writing” includes any
form of recorded message capable of comprehension by ordinary
visual means; and when used to describe communications between the
corporation and its shareholders or directors, writing shall
include electronic transmissions by and to a corporation, as
defined above in this Article 12.
CERTIFICATE OF SECRETARY
The
undersigned, Secretary of JetFleet Holdings Corp., a California
corporation, hereby certifies that the foregoing is a full, true
and correct copy of the Bylaws of the corporation with all
amendments to date of this Certificate.
WITNESS
the signature of the undersigned this _____ day of September,
2021.
Secretary
