Form of Warrant


    WARRANT

    


    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, TRANSFERRED OR
      OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS
      TO
      THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS
      OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
      REQUIREMENTS.

    


    THESE
      SECURITIES HAVE THE BENEFIT OF AN INVESTORS’ RIGHTS AGREEMENT DATED AS OF
      APRIL 17, 2007 (THE “INVESTORS’ RIGHTS AGREEMENT”), A COPY OF WHICH IS ON
      FILE IN THE ISSUER’S OFFICES. THE INVESTORS’ RIGHTS AGREEMENT CONTAINS, AMONG
      OTHER THINGS, REGISTRATION RIGHTS IN FAVOR OF THE HOLDER OF THESE SECURITIES.
      

    


    Warrant
      No. WR-[__]         April 17,
      2007

    


    Warrant
      to Purchase _____________________ Shares of Common Stock of

    AeroCentury
      Corp.

    


    AeroCentury
      Corp., a Delaware corporation (the “Company”),
      hereby acknowledges that [______________], a Delaware [___________] (the
“Initial
      Warrant Holder”),
      and
      any other Warrant Holder, are entitled on the terms and conditions set forth
      below to purchase from the Company, upon and at any time after the Exercise
      Date
      and for four (4) years thereafter, the above number of fully paid and
      nonassessable shares of the Common Stock, par value $0.01 per share, of the
      Company (the “Common
      Stock”),
      at the
      Purchase Price per share of Common Stock. The above number of shares of Common
      Stock and the Purchase Price may from time to time hereafter be adjusted
      pursuant to and in accordance with Section 6 hereof.

    


    1.
      Definitions.
      All
      terms
      not otherwise defined herein shall have the meanings given such terms in the
      Agreement.

    


    (a) “Agreement”
      shall
      mean the Securities Purchase Agreement dated as of April 17, 2007, between
      the Company, the Initial Warrant Holder, and each of the other Purchasers party
      thereto.

    


    (b) “Exercise
      Date”
      shall
      mean the first to occur of (i) a Change of Control, (ii) Final
      Maturity, and (iii) so long as the Rights Agreement is in effect, the
      earlier of (x) the Stock Acquisition Date, as defined in the Rights
      Agreement, and (y) the date that a tender or exchange offer by any Person
      (other than an Exempt Person, as defined in the Rights Agreement) is first
      published or sent or given within the meaning of Rule 14d-4(a) promulgated
      under the Exchange Act or any successor rule, if upon consummation of such
      tender or exchange offer such Person would be an Acquiring Person under and
      as
      defined in the Rights Agreement.

    


    (c) “Fair
      Market Value”
      shall
      mean, as of any date of determination, the closing bid price per share of the
      Common Stock of Nasdaq National Market or Small-Cap Market, the American Stock
      Exchange or the New York Stock Exchange, whichever is the principal trading
      exchange or market for the Common Stock (the “Principal
      Market”)
      on such
      date, or, if the Common Stock is not then listed or admitted to trading on
      any
      national securities exchange or quoted on the Nasdaq National Market or
      Small-Cap Market, the closing bid price per share on such date on the
      over-the-counter market as furnished by any New York Stock Exchange member
      firm
      that makes a market in the Common Stock, as reasonably selected from time to
      time by the Company for that purpose, or, if the Common Stock is not then traded
      over-the-counter and the average price cannot then be determined as contemplated
      above, the Fair Market Value shall be as reasonably determined in good faith
      by
      the Company's Board of Directors.

    


    (d) “Purchase
      Price”
      shall be
      $8.75 per share of Common Stock, subject to adjustments pursuant to
      Section 6 hereof.

    


    (e) “Rights
      Agreement”
      shall
      mean the Rights Agreement between the Company and Continental Stock Transfer
      & Trust Company, dated as of April 8, 1998, and amended and restated as
      of January 22, 1999, as amended and in effect from time to time, and any
      successor agreement providing similar rights to the holders of Common Stock.
      

    


    (f) “Warrant
      Holder”
      shall
      mean the Initial Warrant Holder or any registered successor to or permitted
      assignee of all or any portion of this Warrant.

    


    (g) “Warrant
      Shares”
      shall
      mean the shares of Common Stock or other securities issuable upon exercise
      of
      this Warrant.

    


    2.
      Exercise
      or Exchange of Warrant.

    


    (a) This
      Warrant may be exercised by the Warrant Holder, in whole or in part, at any
      time
      upon and after the Exercise Date and from time to time thereafter by surrender
      of this Warrant, together with the form of exercise attached hereto as
Exhibit A
      (the
“Exercise
      Form”)
      duly
      executed by the Warrant Holder, together with the full Purchase Price (as
      defined in Section 1) for each share of Common Stock as to which this
      Warrant is then exercised, to the Company at the address set forth in
      Section 15 hereof. At the option of the Warrant Holder, payment of the
      Purchase Price may be made either by (i) certified check payable to the order
      of
      the Company, (ii) surrender of certificates then held representing, or deduction
      from the number of shares issuable upon exercise of this Warrant of, that number
      of shares which has an aggregate Fair Market Value on the date of exercise
      equal
      to the aggregate Purchase Price for all shares to be purchased pursuant to
      this
      Warrant on such date, or (iii) by any combination of the foregoing
      methods.

    


    (b) In
      the
      event that this Warrant is not exercised in full, the number of Warrant Shares
      shall be reduced by the number of such Warrant Shares for which this Warrant
      is
      exercised, and the Company, at its expense, shall forthwith issue and deliver
      to
      or upon the order of the Warrant Holder a new Warrant of like tenor in the
      name
      of the Warrant Holder or as the Warrant Holder may request, reflecting such
      adjusted number of Warrant Shares.

    


    (c) The
      “date
      of exercise”
      of this
      Warrant shall be the date that the completed Exercise Form is delivered to
      the
      Company, together with the original Warrant and payment in full of the Purchase
      Price.

    


    3.
      Delivery
      of Stock Certificates.

    


    (a) Subject
      to the terms and conditions of this Warrant, as soon as practicable after the
      exercise of this Warrant in full or in part, and in any event within five (5)
      Business Days thereafter, the Company at its expense (including, without
      limitation, the payment by it of any applicable issue taxes) will cause to
      be
      issued in the name of and delivered to the Warrant Holder, or as the Warrant
      Holder may lawfully direct, a certificate or certificates for the number of
      fully paid and non-assessable shares of Common Stock to which the Warrant Holder
      shall be entitled on such exercise, together with any other stock or other
      securities or property (including, where applicable, cash or any Rights
      Certificates issuable under the Rights Agreement) to which the Warrant Holder
      is
      entitled upon such exercise in accordance with the provisions
      hereof.

    


    (b) This
      Warrant may not be exercised as to fractional shares of Common Stock. In the
      event that the exercise of this Warrant, in full or in part, would result in
      the
      issuance of any fractional share of Common Stock, then in such event the Warrant
      Holder shall be entitled to cash equal to the Fair Market Value of such
      fractional share. 

    


    4.
      Representations
      and Warranties by the Initial Warrant Holder.
      The
      Initial Warrant Holder represents and warrants to the Company, as of the date
      of
      this Warrant, as follows:

     

    (a)  This
      Warrant and the Warrant Shares issuable upon exercise thereof are being acquired
      for its own account, for investment and not with a view to, or for resale in
      connection with, any distribution or public offering thereof within the meaning
      of the Securities Act. Upon exercise of this Warrant, the Warrant Holder shall,
      if so requested by the Company, confirm in writing, in a form reasonably
      satisfactory to the Company, that the securities issuable upon exercise of
      this
      Warrant are being acquired for investment and not with a view toward
      distribution or resale.

     

    (b)  The
      Warrant Holder understands that the Warrant and the Warrant Shares have not
      been
      registered under the Securities Act by reason of their issuance in a transaction
      exempt from the registration and prospectus delivery requirements of the
      Securities Act pursuant to Section 4(2) thereof, and that they must be held
      by the Warrant Holder indefinitely, and that the Warrant Holder must therefore
      bear the economic risk of such investment indefinitely, unless and until there
      is a subsequent disposition thereof which is registered under the Securities
      Act
      or is exempt from such registration. The Warrant Holder further understands
      that
      the Warrant Shares have not been qualified under the California Securities
      Law
      of 1968 (the “California
      Law”)
      by
      reason of their issuance in a transaction exempt from the qualification
      requirements of the California Law pursuant to Section 25102(f) thereof,
      which exemption depends upon, among other things, the bona fide nature of the
      Warrant Holder’s investment intent expressed above.

     

    (c)  The
      Warrant Holder has such knowledge and experience in financial and business
      matters that it is capable of evaluating the merits and risks of the purchase
      of
      this Warrant and the Warrant Shares purchasable pursuant to the terms of this
      Warrant. 

     

    (d)  The
      Warrant Holder is able to bear the economic risk of the purchase of the Warrant
      Shares pursuant to the terms of this Warrant.

     

    (e)  The
      Warrant Holder is an “accredited investor” as such term is defined in Rule 501
      of Regulation D promulgated under the Securities Act.

    


    5.
      Covenants
      of the Company.

    


    (a) The
      Company shall take all reasonable and necessary action and proceedings as may
      be
      required and permitted by applicable law, rule and regulation, including,
      without limitation, the notification of the Principal Market, for the legal
      and
      valid issuance of this Warrant and the Warrant Shares to the Warrant
      Holder.

    


    (b) From
      the
      date hereof through the last date on which this Warrant is exercisable, the
      Company shall take all steps necessary and within its control to ensure that
      the
      Common Stock remains listed or quoted on the Principal Market and shall not
      amend its Certificate of Incorporation, its By-Laws or the Rights Agreement
      so
      as to adversely affect any rights of the Warrant Holder under this Warrant
      differently than the rights of other holders of the Company’s Common Stock;
provided,
      however,
      that
      increasing the number of authorized shares shall not be deemed such an adverse
      effect.

    


    (c) The
      Company shall at all times reserve and keep available, solely for issuance
      and
      delivery as Warrant Shares hereunder, such number of shares of Common Stock
      as
      shall from time to time be issuable as Warrant Shares.

    


    (d) The
      Warrant Shares, when issued in accordance with the terms hereof, will be duly
      authorized and, when paid for or issued in accordance with the terms hereof,
      shall be validly issued, fully paid and non-assessable. The Company has
      authorized and reserved for issuance the requisite number of shares of Common
      Stock to be issued pursuant to this Warrant.

    


    (e) With
      a
      view to making available to the Warrant Holder the benefits of Rule 144
      promulgated under the Securities Act (“Rule
      144”),
      and
      any other rule or regulation of the Commission that may at any time permit
      Warrant Holder to sell securities of the Company to the public without
      registration, the Company agrees to use its best efforts to: (i) make and keep
      public information available, as those terms are understood and defined in
      Rule
      144, at all times; and (ii) file with the Commission in a timely manner all
      reports and other documents required of the Company under the Securities Act
      and
      the Exchange Act.

    


    (f) So
      long
      as the Rights Agreement is in effect, the Company shall ensure that the holder
      of any Warrant Shares issuable upon exercise of this Warrant shall hold the
      same
      rights to receive Rights or shares of the Company’s Series A Preferred
      Stock, as the case may be, as each other holder of shares of Common Stock who
      is
      not an Acquiring Person (as defined in the Rights Agreement).

    


    6.
      Adjustment
      of Purchase Price and Number of Shares.
      The
      number of and kind of securities purchasable upon exercise of this Warrant
      and
      the Purchase Price shall be subject to adjustment from time to time as
      follows:

    


    (a) Subdivisions,
      Combinations and Other Issuances.
      If the
      Company shall at any time after the date hereof but prior to the expiration
      of
      this Warrant subdivide its outstanding securities as to which purchase rights
      under this Warrant exist, by stock split, spin-off, or otherwise, or combine
      its
      outstanding securities as to which purchase rights under this Warrant exist,
      the
      number of Warrant Shares as to which this Warrant is exercisable as of the
      date
      of such subdivision or combination shall forthwith be proportionately increased
      in the case of a subdivision, or proportionately decreased in the case of a
      combination. Appropriate adjustments shall also be made to the Purchase Price,
      but the aggregate purchase price payable for the total number of Warrant Shares
      purchasable under this Warrant as of such date shall remain the
      same.

    


    (b) Stock
      Dividend.
      If at
      any time after the date hereof the Company declares a dividend or other
      distribution on Common Stock payable in Common Stock or other securities or
      rights convertible into or exchangeable for Common Stock (“Common
      Stock Equivalents”), without
      payment of any consideration by holders of Common Stock for the additional
      shares of Common Stock or the Common Stock Equivalents (including the additional
      shares of Common Stock issuable upon exercise or conversion thereof), then
      the
      number of shares of Common Stock for which this Warrant may be exercised shall
      be increased as of the record date (or the date of such dividend distribution
      if
      no record date is set) for determining which holders of Common Stock shall
      be
      entitled to receive such dividends, in proportion to the increase in the number
      of outstanding shares (and shares of Common Stock issuable upon conversion
      of
      all such securities convertible into Common Stock) of Common Stock as a result
      of such dividend, and the Purchase Price shall be adjusted so that the aggregate
      amount payable for the purchase of all the Warrant Shares issuable hereunder
      immediately after the record date (or on the date of such distribution, if
      applicable), for such dividend shall equal the aggregate amount so
      payable.

    


    (c) Other
      Distributions.
      If at
      any time after the date hereof the Company distributes to holders of its Common
      Stock, other than as part of a dissolution or liquidation or the winding up
      of
      its affairs, any shares of its capital stock, any evidence of indebtedness
      or
      any of its assets without payment of any consideration by holders of Common
      Stock (other than cash, Common Stock or securities convertible into or
      exchangeable for Common Stock), then, in any such case, the Warrant Holder
      shall
      be entitled to receive, upon exercise of this Warrant, with respect to each
      share of Common Stock issuable upon such exercise, the amount of cash or
      evidences of indebtedness or other securities or assets which such Warrant
      Holder would have been entitled to receive with respect to each such share
      of
      Common Stock as a result of the happening of such event had this Warrant been
      exercised immediately prior to the record date or other date determining the
      shareholders entitled to participate in such distribution. 

    


    (d) Merger,
      Consolidation, etc.
      If at
      any time after the date hereof there shall be a merger or consolidation of
      the
      Company with or into, or a transfer of all or substantially all of the assets
      of
      the Company to, another entity (a “Consolidation
      Event”),
      then
      the Warrant Holder shall be entitled to receive upon such transfer, merger
      or
      consolidation becoming effective, and upon payment of the aggregate Purchase
      Price then in effect, the number of shares and/or other securities and/or
      property of the Company or of the successor entity resulting from such merger
      or
      consolidation which would have been received by the Warrant Holder for the
      shares of stock subject to this Warrant had this Warrant been exercised
      immediately prior to such transfer, merger or consolidation becoming effective
      or to the applicable record date thereof, as the case may be. The Company shall
      not effect any Consolidation Event unless the resulting successor entity (if
      not
      the Company) either (i) is obligated by operation of law and without further
      action on the part of the Company or the Warrant Holder, or (ii) assumes by
      written instrument the obligation, to deliver to the Warrant Holder upon
      exercise of this Warrant such shares of stock and/or other securities and/or
      property as the Warrant Holder would have been entitled to receive had this
      Warrant been exercised in accordance with the preceding sentence.

    


    (e) Reclassification,
      Etc. If
      at any
      time after the date hereof there shall be a reclassification of any securities
      as to which purchase rights under this Warrant exist, into the same or a
      different number of securities of any other class or classes, then the Warrant
      Holder shall thereafter be entitled to receive upon exercise of this Warrant,
      during the period specified herein and upon payment of the Purchase Price then
      in effect, the number of shares or other securities or property resulting from
      such reorganization or reclassification, which would have been received by
      the
      Warrant Holder for the shares of stock subject to this Warrant had this Warrant
      at such time been exercised.

    


    (f) Purchase
      Price Adjustment. In
      the
      event that the Company issues or sells any Common Stock or securities which
      are
      convertible into or exchangeable for its Common Stock or any convertible
      securities, or any warrants or other rights to subscribe for or to purchase
      or
      any options for the purchase of its Common Stock or any such convertible
      securities (other than issuance of shares of Common Stock upon conversion
      thereof, shares or options issued or which may be issued to employees, directors
      or consultants of or to the Company pursuant to the Company's stock option
      or
      stock purchase plans as in effect on the date of execution and delivery of
      this
      Warrant, or shares issued upon exercise of options, warrants or rights
      outstanding on such date) at an effective purchase price per share which is
      less
      than the Fair Market Value on the trading day next preceding such issue or
      sale
      (or if the Common Stock is not then traded, the next preceding Business Day),
      then and in each such case, the Purchase Price in effect immediately prior
      to
      such issue or sale shall be reduced effective concurrently with such issue
      or
      sale to an amount determined by multiplying the Purchase Price in effect
      immediately prior to such issue or sale by a fraction, (x) the numerator of
      which shall be the sum of (i) the number of shares of Common Stock
      outstanding on a fully-diluted basis immediately prior to such issue or sale,
      assuming the issuance of all shares of Common Stock then issuable upon exercise
      of all outstanding options, warrants or other rights to subscribe for or
      purchase Common Stock, including, without duplication, all outstanding Warrants,
      plus (ii) the number of shares of Common Stock which the aggregate
      consideration received by the Company for such additional shares would purchase
      at the Fair Market Value then in effect, and (y) the denominator of which shall
      be the number of shares of Common Stock outstanding on a fully-diluted basis
      immediately after such issue or sale, assuming the issuance of all shares of
      Common Stock then issuable upon exercise of all outstanding options, warrants
      or
      other rights to subscribe for or purchase Common Stock, including, without
      duplication, all outstanding Warrants. 

    


    The
      foregoing price adjustment shall not apply to the issuance of shares of Common
      Stock which may be issued upon exercise of options under the Company's employee
      or director stock option plans, upon the conversion or exchange of convertible
      or exchangeable securities or upon the exercise of warrants or other rights,
      which options, convertible or exchangeable securities, warrants or other rights
      are outstanding on the date of execution and delivery of this
      Warrant.

    


    The
      number of shares which may be purchased shall be increased proportionately
      to
      any reduction in Purchase Price pursuant to this Section 6(f), so that
      after such adjustments the aggregate Purchase Price payable hereunder for the
      increased number of shares of Common Stock shall be the same as the aggregate
      Purchase Price in effect immediately prior to such adjustments.

    


    (g) Additional
      Shares, Securities or Assets. In
      the
      event that at any time, as a result of an adjustment made pursuant to this
      Section 6, the Warrant Holder shall, upon exercise of this Warrant, become
      entitled to receive shares and/or other securities or assets (other than Common
      Stock) then, wherever appropriate, all references herein to shares of Common
      Stock shall be deemed to refer to and include such shares and/or other
      securities or assets, and thereafter the number of such shares and/or other
      securities or assets shall be subject to adjustment from time to time in a
      manner and upon terms as nearly equivalent as practicable to the provisions
      of
      this Section 6. 

    


    (h) Other
      Adjustments. If
      any
      event occurs of the type contemplated by the provisions of this Section 6
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company's Board of Directors,
      acting in good faith and consistent with their fiduciary duties, shall make
      an
      appropriate adjustment in the Purchase Price and the number of shares of Warrant
      Shares obtainable upon exercise of this Warrant so as to protect the rights
      of
      the holders of the Warrants; provided,
      that no
      such adjustment shall increase the Purchase Price or decrease the number of
      shares of Warrant Shares obtainable as otherwise determined pursuant to this
      Section 6.

    


    (i) Maximum
      Number of Warrant Shares.
      Notwithstanding anything to the contrary herein, in no event shall the Company
      take any action which would result in the number of shares of Common Stock
      for
      which this Warrant, together with all other Warrants issued pursuant to the
      Agreement, is exercisable exceeding 307,108, such number being subject to
      subsequent adjustment pursuant to and in accordance with Section 6(a) above,
      without the Company’s first having received such approval from its shareholders
      or other Persons as may be required by the regulations of the Principal Market
      or any other applicable law or regulation.

    


    7.
      No
      Impairment.
      The
      Company will not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, but will at
      all
      times in good faith assist in the carrying out of all such terms and in the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the Warrant Holder against impairment. Without limiting the
      generality of the foregoing, the Company (a) will not increase the par value
      of
      any Warrant Shares above the amount payable therefor on such exercise, and
      (b)
      will take all such action as may be reasonably necessary or appropriate in
      order
      that the Company may validly and legally issue fully paid and nonassessable
      Warrant Shares on the exercise of this Warrant.

    


    8.
      Notice
      of Adjustments; Notices.
      Whenever
      the Purchase Price or number of Warrant Shares purchasable hereunder shall
      be
      adjusted pursuant to Section 6 hereof, the Company shall execute and
      deliver (by first class mail, postage prepaid) to the Warrant Holder a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated, and the Purchase Price and number of shares of Common Stock
      or
      other securities purchasable hereunder after giving effect to such
      adjustment.

    


    9.
      Rights
      as Shareholder.
      Prior
      to
      exercise of this Warrant, the Warrant Holder shall not be entitled to any rights
      as a shareholder of the Company with respect to the Warrant Shares, including
      (without limitation) the right to vote such shares, receive dividends or other
      distributions thereon (other than pursuant to Sections 6(b) and 6(c)) or be
      notified of stockholder meetings. However, in the event of any taking by the
      Company of a record of the holders of any class of securities for the purpose
      of
      determining the holders thereof who are entitled to receive any dividend (other
      than a cash dividend) or other distribution, any right to subscribe for,
      purchase or otherwise acquire any shares of stock of any class or any other
      securities or property, or to receive any other right, the Company shall mail
      to
      the Warrant Holder, at least 10 days prior to the date specified therein, a
      notice specifying the date on which any such record is to be taken for the
      purpose of such dividend, distribution or right, and the amount and character
      of
      such dividend, distribution or right.

    


    10.
      Replacement
      of Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of the Warrant and, in the case of any such loss,
      theft or destruction of the Warrant, upon delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation of the Warrant, upon surrender and cancellation
      of
      such Warrant, the Company at its expense will execute and deliver, in lieu
      thereof, a new Warrant of like tenor.

    


    11.
      Consent
      to Jurisdiction.
      THE
      COMPANY (A) HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
      THE
      UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OR ANY
      STATE
      COURT LOCATED IN NEW YORK CITY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION
      OR
      PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AND (B) HEREBY WAIVES,
      AND
      AGREES NOT TO ASSERT IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT
      IT
      IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT,
      ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
      OF
      THE SUIT, ACTION OR PROCEEDING IS IMPROPER. THE COMPANY CONSENTS TO PROCESS
      BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
      TO
      SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND
      AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS
      AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR LIMIT ANY RIGHT
      TO
      SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

    


    12.  Entire
      Agreement; Amendments.
      This
      Warrant and the Agreement contain the entire understanding of the parties with
      respect to the matters covered hereby and thereby. No provision of this Warrant
      may be waived or amended other than by a written instrument signed by the party
      against whom enforcement of any such amendment or waiver is sought.

    


    13.
      Restricted
      Securities.

    


    (a) Registration
      or Exemption Required. This
      Warrant has been issued in a transaction exempt from the registration
      requirements of the Securities Act in reliance upon the provisions of
      Section 4(2) of the Securities Act. This Warrant and the Warrant Shares
      issuable upon exercise hereof may not be resold except pursuant to an effective
      registration statement or an exemption to the registration requirements of the
      Securities Act and applicable state laws.

    


    (b) Legend.
      This
      Warrant and any Warrant Shares issued upon exercise hereof shall bear the
      following legend:

    


    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
      OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS
      TO
      THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE EXEMPTION FROM SUCH
      REGISTRATION REQUIREMENTS.

    


    (c) Assignment.
      Assuming
      the conditions of clause (a) above regarding registration or exemption have
      been satisfied, the Warrant Holder may sell, transfer, assign, pledge or
      otherwise dispose of this Warrant, in whole or in part. The Warrant Holder
      shall
      deliver a written notice to Company, substantially in the form of the Assignment
      attached hereto as Exhibit
      B,
      indicating the person or persons to whom the Warrant shall be assigned and
      the
      respective number of warrants to be assigned to each assignee. The Company
      shall
      deliver to the assignee(s) designated by the Warrant Holder, within 10 days
      after delivery to the Company of the original Warrant or Warrants for
      cancellation, a Warrant or Warrants of like tenor for the appropriate number
      of
      shares.

    


    14.
      Lock-up
      Agreements.
      

    


    (a) Restrictions
      on Public Sale by Holders of Investor Securities.
      The
      Warrant Holder, if the Company or the managing underwriters so request in
      connection with any underwritten registration of the Company’s securities, will
      not, except in connection with such underwritten registration, without the
      prior
      written consent of the Company or such underwriters, effect any Public Sale
      (as
      defined in the Rights Agreement) or other distribution of any equity securities
      of the Company, including any sale pursuant to Rule 144, during the period
      beginning on the date of such request from the Company or the managing
      underwriters and ending on the 180th day after the effective date of the
      applicable registration statement (the
      “Lock-Up
      Period”),
      or,
      if required by the managing underwriters, such longer period of time as is
      necessary to enable such underwriters to issue a research report or make a
      public appearance that relates to an earnings release or announcement by the
      Company within eighteen (18) days before or after the last day of the Lock-Up
      Period, but in any event not to exceed two hundred ten (210) days following
      the
      effective date of the registration statement relating to such offering, and
      upon
      request by the managing underwriters will execute a lock-up agreement to that
      affect. 

     

    (b) Restrictions
      on Public Sale by the Company.
      If the
      managing underwriters so request in connection with any underwritten
      registration of the Company’s securities, the Company will not effect any Public
      Sale or other distribution of its equity securities, or any securities
      convertible into or exchangeable or exercisable for such equity securities,
      during the period commencing on the seventh day prior to, and ending on the
      ninetieth day following, the effective date of any underwritten Demand
      Registration (as defined in the Investors’ Rights Agreement) or Piggyback
      Registration (as defined in the Investors’ Rights Agreement) , except
      (i) in connection with any such underwritten registration and (ii) for
      Excluded Registrations (as defined in the Investors’ Rights Agreement)
      .

     

    15.
      Notices.
      Any
      notice or other communication required or permitted to be given hereunder shall
      be in writing and shall be effective (a) upon hand delivery or delivery by
      facsimile at the address or number designated below (if delivered on a Business
      Day during normal business hours where such notice is to be received), or the
      first Business Day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second Business Day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be:

    


    to
      the
      Company:  AeroCentury
      Corp.

    1440
      Chapin Avenue

    Suite
      310

    Burlingame,
      CA 94010 

    Attention:
      Toni M. Perazzo

    Tel:
      (650) 340-1888

    Fax:
      

    


    with
      a
      copy to:   Morrison
      & Foerster LLP

    755
      Page
      Mill Road

    Palo
      Alto, CA 94304

    Attention:
      Justin Bastian, Esq.

    Tel:
      (650) 813-5641

    Fax:
      (650) 494-0792

    


    to
      the
      Initial Warrant Holder: c/o
      Satellite Asset Management, L.P.

    623
      Fifth
      Avenue, 19th Floor

    New
      York,
      NY 10022

    Attn:
      

    Tel:
      (212) 209-2000

    Fax:
      (212) 209-2001

    


    with
      a
      copy to:   Bingham
      McCutchen LLP

    One
      State
      Street

    Hartford,
      CT 06103-3178

    Attention:
      F. Mark Fucci, Esq.

    Tel:
      (860) 240-2700

    Fax:
      (860) 240-2800

    


    If
      to any
      subsequent Warrant Holder, to his, her or its address as set forth in the
      Assignment pursuant to which such Warrant Holder received this Warrant.


    


    Either
      party hereto may from time to time change its address or facsimile number for
      notices under this Section 15 by giving at least 10 days prior written
      notice of such changed address or facsimile number to the other party
      hereto.

    


    16.
      Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be construed and enforced in accordance with and governed by the laws of the
      State of New York. The headings in this Warrant are for purposes of reference
      only, and shall not limit or otherwise affect any of the terms hereof. The
      invalidity or unenforceability of any provision hereof shall in no way affect
      the validity or enforceability of any other provision.

    


    [Remainder
      of page intentionally left blank. Next page is a signature
      page.]

     

    



     

    IN
      WITNESS WHEREOF,
      each of
      the Company and the Initial Warrant Holder has caused this Warrant to be
      executed in its corporate name by one of its officers thereunto duly authorized,
      all as of the day and year first above written.

    


    AEROCENTURY
      CORP.

    


    


    


    By:     

    
      	 	
              Name:

            	 


    

    
      	 	
              Title:

            	 


    

    


    


    


    [NAME
      OF INITIAL WARRANT HOLDER]

    


    By:
      _____________________________, its         [__________]

     

    


    


    By:
      __________________________ 

    Name:
      

    Title

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    [signature
      page to Warrant]

    



    EXHIBIT
      A

    


    Exercise
      Form

    


    I/we
      hereby exercise AeroCentury Corp. (the “Company”) Common Stock Purchase Warrant
      #___, as follows:

    


    (a) Number
      of
      shares of Common Stock to be purchased ____________________________

    


    (b) Total
      Purchase Price ($_____ per
      share)           $___________________________

     

    (c) Payment (i) in
      cash
      of $___________;

    


    (ii)
      in
      _______ surrendered shares of outstanding Common Stock with an aggregate Fair
      Market Value of $___________; and/or

    


    (iii)
      in
      surrendered rights to receive _______Warrant Shares with an aggregate Fair
      Market Value of $___________.

    


    


    I/we
      wish
      to register the shares of the Company’s Common Stock acquired upon this exercise
      as follows:

    


    
      	
              a.

            	
              (
                )

            	
              Individual
                Ownership

            


    

    
      	
              b.

            	
              (
                )

            	
              Husband
                and Wife as Community Property

            


    

    
      	
              c.

            	
              (
                )

            	
              Joint
                Tenants w/Right to Survivorship
                (JTRS)

            


    

    
      	
              d.

            	
              (
                )

            	
              Tenants
                in Common

            


    

    e. (
      ) Other
           

    


    Dated:
           ,
      20 .

    


    


    ______________________________

    Signature
      

    


    


    Name
      (please print):

    


    


    Address
      (including zip code):

    


    


    


    Social
      Security/Employer Identification Number:

    


    


    Telephone
      Number:

    


    EXHIBIT
      B

    


    Form
      of Assignment

    


    (To
      be
      executed by the registered Warrant Holder desiring to transfer the
      Warrant)

    


    FOR
      VALUED RECEIVED, the undersigned holder of the attached Warrant hereby sells,
      assigns and transfers unto the person(s) below named the right to purchase
        
      shares
      of the Common Stock of AEROCENTURY CORP. evidenced by the attached Warrant,
      and
      does hereby irrevocably constitute and appoint    
      attorney
      to transfer the said Warrant on the books of the Company, with full power of
      substitution in the premises.

    


    Dated:
           ,
      20 .

    


    


    ______________________________

    Signature
      

    


    


    Fill
      in
      for registration of new Warrant Holder:

    


    


    Name
      (please print):

    


    


    Address
      (including zip code):

    


    


    


    Social
      Security/Employer Identification Number:

    


    


    Telephone
      Number:

    


    


    


    


    


    


    


    


    NOTICE:
      The signature to the foregoing Assignment must correspond to the name as written
      upon the face of the attached Warrant in every particular, without any
      alteration whatsoever.