EXHIBIT 10.1
Form of Management Agreement
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT, dated as _____, 1997, is
entered by and among AEROCENTURY FUND IV, INC., a California
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) organization of the Company, and public
offering the ("Offering") of its 10% Secured Promissory Notes as
described in that certain Prospectus (the "Prospectus") and
registration of such offering under applicable federal and state
securities laws; (ii) the identification and selection of income
producing assets ("Assets") for acquisition by the Company with
the proceeds of the Offering; (iii) administration of the leases
for such Assets; (iv) management of remarketing and resale of the
Assets; (v) payment of the holder's Secured Bonds of the Company;
and (vi) 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 Identification. 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.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANY
2.1 The Management Company hereby makes the following
representations andwarranties 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 andauthority 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 xxx 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 Removal or Withdrawal of the Management Company. The
Management Company shall serve at the pleasure of the Company's
Board of Directors and, by resolution of the Board of Directors,
may be removed, and this Agreement terminated, upon 90 days prior
notice, at any time. The Management Company may withdraw as
management company upon 90 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 Removal. 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 quarter, quarterly 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 (subject to Section
3.1 hereof) a management fee payable quarterly on the last day of
each calendar quarter to 0.5% of the Aggregate Gross Offering
Proceeds (as defined in the Prospectus for the Offering) received
by the Company since inception up through the last day of such
calendar quarter. In addition, the Management Company shall
receive reimbursement of expenses incurred by JMC in connection
with the administration and management of the Company.
ARTICLE 4
MISCELLANEOUS PROVISIONS
4.1 Applicable Law. This Agreement shall by governed by
and construed and enforced in accordance with the internal laws
of the State of California without regard to principles of
conflicts of law.
4.2 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.
4.3 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.
4.4 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.
4.5 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.
4.6 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.
4.7 Amendments. This Agreement may only be amended in
writing executed by the
parties hereto.
4.8 Conflicts. In the event a conflict exists or arises
between this Agreement and the Prospectus, the terms and
provisions of the Prospectus shall control.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
THE COMPANY:
AEROCENTURY FUND IV, INC.
a California corporation
By:_____________________________
Xxxx X. Xxxxxxx, President
MANAGEMENT COMPANY:
JETFLEET MANAGEMENT CORP.,
a California corporation
By:_____________________________
Name:
Title:
