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EXHIBIT 10.02
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT, dated as _____, 1997, is entered by and
among AEROMAX, INC., a Delaware corporation (the "Company"), and JETFLEET
MANAGEMENT CORP., a California corporation (the "Management Company").
WITNESSETH
WHEREAS, the Company will be engaged in the business of acquiring
income producing assets, consisting primarily of aircraft equipment on lease to
third party users;
WHEREAS, the Company desires to hire the Management Company to perform
management services for the Company.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows.
ARTICLE 1
DELEGATION TO THE MANAGEMENT COMPANY
1.1 POWERS, RIGHTS AND OBLIGATIONS OF THE MANAGEMENT COMPANY. The
Management Company shall conduct all aspects of the business affairs of the
Company including, without limitation, management of; (i) the identification
and selection of income producing assets ("Assets") for acquisition by the
Company with the proceeds of the Offering; (ii) administration of the leases
for such Assets; (iii) management of remarketing and resale of the Assets; and
(iv) general administrative and day-to-day operations of the Company. The
Management shall devote such time as may be necessary for the proper
performance of its duties and shall use its best efforts to carry out the
purposes of the Company and shall manage the affairs of the Company to the best
of its abilities. The Company agrees and acknowledges that the Management
Company may, in the future, act as management company for other investment
entities sponsored by the Management Company, which entities may engage in the
same line of business as the Company.
1.2 INDEMNIFICATION. The Company shall indemnify and hold the
Management Company, its directions, officers, shareholders, employees and
agents harmless from and against any and all liability, demands, claims,
actions, losses, interest, cost of defense, and expenses (including reasonable
attorney's fees) which arise out of or in connection with the acceptance or
appointment as management company and the performance of its duties hereunder
except such acts or omissions as may result from the willful misconduct or
gross negligence of the Management Company. Promptly after receipt by the
Management Company of notice of any demand or claim or the commencement of any
action, suit or proceeding relating to this Management Agreement, the
Management Company shall notify the Company in writing. IT IS EXPRESSLY THE
INTENT OF THE COMPANY TO INDEMNIFY THE MANAGEMENT COMPANY, AND ITS DIRECTORS,
OFFICERS, SHAREHOLDERS AND EMPLOYEES AND AGENTS FROM ERRORS IN JUDGEMENT OR
OTHER ACTS OR OMISSIONS NOT AMOUNTING TO WILFUL MISCONDUCT OR GROSS NEGLIGENCE.
Mgmt. Agmt.
Aeromax, Inc.
3/6/97
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANY
2.1 The Management Company hereby makes the following
representations and warranties on which the Company has relied in making the
delegation set forth in Section 1.1:
(a) ORGANIZATION. The Management Company is a California
corporation duly organized, validly existing and in a good standing under the
laws of the States of California and is duly qualified as a foreign corporation
in each jurisdiction in which the nature of its business makes such
qualification necessary.
(b) AUTHORIZATION. The Management Company has all
requisite power and authority to execute, deliver and perform this Agreement,
and the execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Management Company.
(c) BINDING OBLIGATION. The Agreement constitutes a
legal, valid and binding obligation of the Management Company, enforceable
against the Management Company in accordance with its terms.
(d) NO VIOLATIONS. The execution, delivery and
performance by the Management Company of this Agreement does not (i) violate
any provision of the corporate charter or by-laws of the Management Company,
(ii) violate any statue or regulation or any order, writ, judgment or decree of
any court, arbitrator or governmental authority applicable to the Management
Company or any of its assets, or (iii) violate or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on the assets of the Management Company pursuant to the
provisions of, any mortgage, indenture, contract, agreement or other
undertaking to which the Management Company is a party.
ARTICLE 3
AGENTS; CHANGES IN THE MANAGEMENT COMPANY; COMPENSATION
3.1 AGENTS.
(a) The Management Company may delegate any or all of the
powers, rights and obligations under this Agreement and may appoint, employ,
contract or otherwise deal with any person or entity (each, an "Agent") in
respect of the conduct of the business and affairs of the Company. Without
limitation, the Management Company may assign to any such Agent the right to
receive any fee or reimbursement of expenses as the Management Company would be
entitled to receive under this Agreement.
(b) The Management Company shall supervise the activities
of its Agents, and notwithstanding the designation of or delegation to any
Agent, the Management Company shall remain obligated to the Company for the
proper performance of the obligations of its obligations as Management Company;
provided, however, that the Management Company may enter into any agreement for
indemnification pursuant to which an Agent may indemnify and hold harmless the
Management Company from any liability to the Company arising by reason of the
act or omission of such Agent.
3.2 WITHDRAWAL OF THE MANAGEMENT COMPANY. The Management Company
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may withdraw as management company upon 180 days prior notice, at any time,
upon which withdrawal this Agreement shall terminate; provided, however that
such withdrawal and termination shall not take effect until the Company has
selected a substitute management company to take over the responsibilities of
the Management Company.
3.3 EFFECT OF TERMINATION. In the event of the bankruptcy,
dissolution, withdrawal or removal of a Management Company, such Management
Company shall cease to participate in the conduct of the business affairs of
the Company. If the termination of the Management Company takes effect on a
day other than the end of a calendar month, monthly management fees shall be
prorated based on the number of days that the Management Company served as
management company during such calendar until termination.
3.4 SUCCESSOR BY MERGER OR ACQUISITION OF BUSINESS. Any entity
resulting from any merger or consolidation to which the Management Company
shall be a party or succeeding to the business of the Management Company will
be the successor to the Management Company hereunder without the execution or
filing of any paper or any further act on the part of any the parties hereto.
The Management Company shall provide prompt written notice of any such event to
the Company.
3.5 COMPENSATION. As full and exclusive compensation for all
duties assumed and services provided hereunder, the Management Company shall
entitled to receive a management fee payable monthly on the last day of each
calendar month equal to 0.25% of the Net Asset Value of the Company as of the
last day of such calendar month. In addition, the Management Company shall
receive reimbursement of expenses paid to third parties incurred by the
Management Company in connection with the administration and management of the
Company. For purposes of this Agreement, Net Asset Value shall mean the
original costs of the assets recorded on the books of the Company less
depreciation, calculated in accordance with generally accepted accounting
principles.
3.6 TERM OF MANAGEMENT AGREEMENT. This Agreement shall have a
term of fifteen years subject to termination rights under Section 3.7 below.
3.7 TERMINATION. This Agreement may be terminated by a party upon
six months prior notice upon the material breach by the other party of any its
respective material agreements and obligations under this Agreement which
remains uncured for a period of after 90 days after written notice of such
breach. In the event the Company breaches this Agreement, then as liquidated
damages for such breach, and not as a penalty therefor, the Company shall pay
liquidated damages in the amount set forth on Schedule 1 hereto. The Company
and the Management Company hereby acknowledge that the damages suffered as a
result of the breach by the Company of this Agreement are difficult to
ascertain, but that such amounts are reasonable in light of the actual
anticipated damages.
ARTICLE 4
OPTION TO PURCHASE MANAGEMENT COMPANY
4.1 OPTION TO ACQUIRE MANAGEMENT COMPANY. In consideration of the
Company entering into this Agreement, the Management Company hereby grants to
the Company, the exclusive right to acquire all of its outstanding capital
stock for payable in the form of freely tradeable securities of the Company.
The purchase price would be set at 90% of the product of (i) the earnings of
the Management Company as of the most recent 12-month period prior to the
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acquisition, multiplied by (ii) the average price to earnings ratio of the
Management Company over the same 12-month period, each as determined according
to generally accepted accounting principles; provided, however, that if the
purchase price is less than $12 million, Management Company would have the
right to decline the acquisition. The purchase shall be conditioned upon the
approval of the respective boards of directors and shareholders of both the
Company and the Management Company, as required by law, and shall expire on
December 31, 2000.
ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 APPLICABLE LAW. This Agreement shall by governed by and
construed and enforced in accordance with the laws of the State of California
without regard to principles of conflicts of law.
5.2 COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all the parties have not signed the
same counterpart.
5.3 SEPARABILITY OF PROVISIONS. If any provision of this
Agreement is determined by a court of competent jurisdiction to be
unenforceable, such provision shall be automatically reformed and construed so
as to be valid and enforceable to the maximum extent permitted by law while
most nearly preserving its original intent. The invalidity of all or any part
of this Agreement shall not render invalid the remainder of this Agreement.
5.4 CAPTIONS. Article and Section titles and any table of
contents are for convenience of reference only and shall not control or alter
the meaning of this Agreement as set forth in this text.
5.5 NO BENEFIT TO THIRD PARTIES. The provisions of this Agreement
shall not be construed for the benefit of or enforceable by a person not a
party hereto.
5.6 SUCCESSORS AND ASSIGNS. The covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
successors and permitted assigns of the respective parties hereto.
5.7 AMENDMENTS. This Agreement may only be amended in writing
executed by the parties hereto.
5.8 CONFLICTS. In the event a conflict exists or arises between
this Agreement and the Prospectus, the terms and provisions of the Prospectus
shall control.
Mgmt. Agmt.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY: MANAGEMENT COMPANY:
AEROMAX, INC. JETFLEET MANAGEMENT CORP.,
a Delaware corporation a California corporation
By:_____________________________ By:_____________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
Mgmt. Agmt.
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SCHEDULE A
LIQUIDATED DAMAGES FOR TERMINATION
From July 1, 1997 until ______, 199_.
$__________ for each year or portion thereof remaining in the term of the
Agreement.
From ________, 199_ to ______
$__________ for each year or portion thereof remaining in the term of the
Agreement.
Mgmt. Agmt.
Aeromax, Inc.
3/6/97
