Exhibit 10.3


 


SERIES A PREFERRED STOCK
PURCHASE AGREEMENT


 


This SERIES A PREFERRED
STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of September 30, 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 the State of California 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.


 






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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 4:00 p.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.


 






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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.


 






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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.


 






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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 Michael Magnusson, Chris Tigno and Harold Lyons.


 






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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 Michael Magnusson, Chris Tigno and Harold Lyons.


 


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.


 






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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]


 




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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first written above.


 


	 	COMPANY:
	 	 	 
	 	JetFleet Holding Corp.
	 	a California corporation
	 	 	 
	 	By:	/s/ Michael Magnusson
	 	 	Michael Magnusson
	 	 	President



 


	 	Address: 	1440 Chapin Avenue, Suite 310
	 	 	Burlingame, CA 94010



 


	 	PURCHASER:
	 	 	 
	 	AeroCentury Corp.
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Michael Magnusson
	 	 	Michael Magnusson
	 	 	President



 


	 	Address: 	1440 Chapin Avenue, Suite 310
	 	 	Burlingame, CA 94010



 




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EXHIBIT A


 


RESTATED CERTIFICATE