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EXHIBIT 1.01
DEALER MANAGER AGREEMENT
August __, 1997
▇▇▇▇▇▇ & ▇▇▇▇▇▇ INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
AeroCentury Corp., a Delaware corporation (the "Company"), proposes to
issue (the "Offer") an aggregate of up to _____________ shares of common stock,
par value $0.001 per share, of the Company ("Common Stock"), to the investors
in JetFleet Aircraft, L.P. and JetFleet Aircraft II, L.P. listed on Schedule I
of this Agreement (collectively, "Partnerships" and individually,
"Partnership"), in connection with the proposed merger of the Partnerships with
and into the Company. The aggregate shares of Common Stock to be issued in
connection with the Offer are collectively referred to herein as the "Shares."
CMA Capital Group, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, are the
general partners of each of the Partnerships (collectively, the "General
Partner"). JetFleet Management Corp. (the "Sponsor") is the founder and sole
shareholder of the Company. The limited partners (and their permitted assigns)
and the general partners of the Partnerships are collectively referred to
herein as the "Partners." The Offer will be made upon the terms and subject to
the conditions set forth in the Prospectus/Consent Solicitation Statement and
Supplements (as defined in Section 1 hereof) and the consent card to be
distributed therewith (the "Consent Card").
If all conditions to the merger of the Partnerships into the Company
(as set forth in the Prospectus/Consent Solicitation Statement) are either
satisfied or waived, then the Offer will be effected with such Partnerships by
merging such Partnerships with and into the Company (the "Merger"), upon the
terms and subject to the conditions set forth in Merger Agreement dated of even
date herewith by and among each of the Partnerships that duly accepts the Offer
with the Company (the "Participating Partnerships") and the Company (such
agreement, as the same may be amended, is referred to herein as the "Merger
Agreement"). The Offer and the Merger, including, without limitation, the
solicitation of consents in connection therewith (the "Consents"), are herein
collectively referred to as the "Consolidation." This Agreement and the Merger
Agreement are collectively referred to herein as the "Operative Agreements."
The following sets forth the agreement among the General Partner,
Partnerships, the Sponsor, the Company and you as Dealer Manager.
1. PROSPECTUS/CONSENT SOLICITATION STATEMENT AND REGISTRATION
STATEMENT. The Company, with the assistance of the Sponsor, has prepared and
filed with the Securities and Exchange Commission (the "Commission"), a
Registration Statement on Form S-4 (No. 333-24743) for the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of the Shares to
be issued in connection with the Merger in the manner described in the
Prospectus/Consent Solicitation Statement. The Company has filed with the
Commission such amendments thereto, if any, as have been required to the date
hereof. Such registration statement
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(as amended) at the time it becomes effective is hereinafter called the
"Registration Statement," except that if the Company files a post-effective
amendment to the Registration Statement, then the term "Registration Statement"
shall, from and after the declaration of the effectiveness of such
post-effective amendment thereto, refer to the Registration Statement as
amended by such post-effective amendment. The Registration Statement includes a
prospectus/consent solicitation statement and prospectus/consent solicitation
statement supplements, relating to each of the Partnerships, which
prospectus/consent solicitation statement, together with the relevant
supplement, serves as the prospectus and consent solicitation statement for
each of the Partnerships, and has been prepared and filed by the Company on
behalf of each of the Partnerships pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") and Securities Act. The
Prospectus/Consent Solicitation Statement and Prospectus/Consent Solicitation
Statement Supplements on file with the Commission as they may be amended at the
time the Registration Statement becomes effective are hereinafter called the
"Prospectus/Consent Solicitation Statement" and the "Supplements,"
respectively, except that, if any revised Prospectus/Consent Solicitation
Statement or Supplement shall be provided to any of the Partners by the
Company, any Partnership or the Sponsor in connection with the Consolidation
which differs from the Prospectus/Consent Solicitation Statement or such
Supplement(s) on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised Prospectus/Consent Solicitation
Statement or Supplement is required to be filed by the Company pursuant to the
rules and regulations of the Commission under the Securities Act (the
"Securities Act Regulations"), or by the Company on behalf of any of the
Partnerships under the rules and regulations of the Commission under the
Exchange Act (the "Exchange Act Regulations"), then the terms
"Prospectus/Consent Solicitation Statement" or "Supplement," as the case may
be, shall refer to such revised Prospectus/Consent Solicitation Statement or
Prospectus/Consent Solicitation Statement Supplement from and after the time it
is first provided to any of the Partners of a Partnership.
2. THE OFFER. The Company will, as soon as practicable after the
Registration Statement shall have become effective under the Securities Act,
commence the Offer by mailing copies of the Prospectus/Consent Solicitation
Statement, the relevant Supplements, the Consent Card and other Solicitation
materials to the Partners (the time of commencement of such mailing being
referred to herein as the "Time of Mailing"); provided, however, that no
mailing will be made unless the covenants set forth in Section 9 hereof to be
satisfied at the Time of Mailing shall have been satisfied prior to or
concurrently with the commencement of such mailing. The Offer shall expire at
the time specified as the "Approval Date" in the Prospectus/Consent
Solicitation Statement (which Approval Date shall be at least 60 days following
the date that the mailing is completed), unless extended by the Company with
your consent, which consent shall not be unreasonably withheld, as also
provided in the Prospectus/Consent Solicitation Statement.
The materials to be distributed to each of the Partners will consist
of a letter relating to the Offer accompanied by copies of the
Prospectus/Consent Solicitation Statement, the Supplement relating to the
Partnership of which such Partner is an investor, a Consent Card and other
soliciting materials, including a question and answer supplement, the use of
which will be subject to approval by counsel to the Company and by your
counsel. The documents to be distributed as aforesaid, any other documents
relating to the Offer or the Consolidation
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distributed by or on behalf of the Company, the Sponsor or the Partnerships and
any public announcements or advertisements relating to the Offer or the
Consolidation, shall be collectively approved by the Company, counsel to the
Company, the Sponsor, you and your counsel, and such materials, as such
materials may be amended, modified or supplemented from time to time, are
hereinafter referred to collectively as the "Offer Materials."
3. APPOINTMENT AND DUTIES AS A DEALER MANAGER: ENGAGEMENT LETTER.
(a) On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, you are hereby appointed to act as Dealer Manager in connection with the
Consolidation. On the basis of the representations, warranties and covenants
herein contained, but subject to the terms and conditions herein set forth,
you, as Dealer Manager, agree to perform those services in connection with the
Consolidation as are customarily performed by investment banking concerns in
connection with transactions of such nature, including (i) familiarizing
yourself to the extent you deem appropriate with the business, operations,
properties, financial condition and prospects of the Partnerships and the
Company, (ii) assisting the Company in reviewing and evaluating the
Consolidation, and (iii) assisting the Company in connection with any
regulatory proceeding relating to the Consolidation.
In connection with the services of the Dealer Manager hereunder it is
understood that the Dealer Manager may rely, without independent verification,
upon the completeness and accuracy of publicly available information and other
information obtained by the Dealer Manager from other sources which it
reasonably determines to be reliable, including the Sponsor and General
Partner. The Dealer Manager shall not be obligated to undertake any
independent appraisal of the assets of the Partnerships, or to undertake to
independently verify the accuracy of information obtained from sources which it
reasonably determines to be reliable.
(b) The obligations of the Dealer Manager hereunder shall
commence as of the Time of Mailing and, except as otherwise provided herein,
shall continue until the earlier of (i) the Approval Date or (ii) the close of
business on ________, 1997 (the "Expiration Time"), unless extended by the
agreement of the Sponsor and you to a date not later than _______, 1997.
(c) You shall not be liable to the General Partner, any
Partnership, any Partner, the Sponsor, the Company or any other person for any
act or omission on the part of any broker, commercial bank or trust company,
and you shall not be liable for your own acts or omissions in performing your
obligations hereunder except to the extent any loss, claim, damage, liability
or expense is found in a final judgment by a court of competent jurisdiction to
have resulted from your bad faith, gross negligence, recklessness or willful
misconduct. You, as Dealer Manager shall be deemed to act as the agent of the
others of you or any broker, commercial bank or trust company or of any of the
Partnerships, the Partners, the Sponsor or the Company or any other third
party.
(d) The Partnerships, the Sponsor and the Company hereby
authorize you communicate with MacKenzie Partners, Inc., in its capacity as
Information Agent (the "Information Agent"), with respect to matters relating
to the Consolidation.
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(e) The Partnerships, the Sponsor and the Company further
authorize you to use the Offer Materials in connection with the Offer and for
such period of time as any Offer Materials are required by law to be delivered
in connection therewith.
4. PROSPECTUS/CONSENT SOLICITATION STATEMENT MATERIALS. Each
Partnership, as to such Partnership, the Company and the Sponsor agree to
provide or cause to be provided to you for your use in connection with the
Consolidation a list showing (i) the names and addresses of the brokers that
assisted in the sale of the interests or units in each Partnership's public
offering ("Partnership Interests") and the number of Partnership Interests of
each Partnership sold through each such broker and (ii) the names and addresses
of, and the numbers of Partnership Interests held by (and the name of the
broker through which such Partnership Interests were purchased), the Partners
as of a recent date, and to use their best efforts to obtain other information
concerning such brokers and the Partners reasonably requested by you in
connection with the Consolidation and to cause you to be advised daily as soon
thereafter as reasonably practicable prior to the Approval Date as to any
transfers of record of Partnership Interests of each Partnership. Dealer
Manager, on behalf of itself and its affiliates, authorizes the Sponsor and its
affiliates to supply the information described in clauses (i) and (ii) above to
the Dealer Manager and the Information Agent. Each Partnership, as to the
Prospectus/Consent Solicitation Statement and its own Supplement and other
related solicitation materials filed with the Commission, the Company and the
Sponsor agree to furnish or cause to be furnished to you at their expense as
many copies as you may reasonably request of the Prospectus/Consent
Solicitation Statement, the Supplements, the Consent Cards and all other Offer
Materials. Each Partnership, the Sponsor and the Company authorize you to use
the Offer Materials in connection with the Consolidation, and you agree that
you shall not use any material in connection with any communications with
brokers or Partners of any Partnership other than the Offer Materials and such
other materials, if any, as such Partnership, the Company, counsel to the
Company and the Sponsor may approve. You shall have no obligation to cause
copies of the Offer Materials to be transmitted generally to broker-dealers or
to the Partners.
Each Partnership, the Sponsor and the Company agree that, prior to
using or permitting the use of any material in connection with the
Consolidation required to be filed with the Commission and prior to filing any
such material with the Commission or with any other person, they shall submit
copies of such material to you and you shall have reasonable opportunity to
object thereto, and each Partnership, the Sponsor and the Company further agree
that no such materials shall be used or filed to which you reasonably object.
If any Partnership, the Sponsor or the Company uses or permits the use of any
material in connection with the Consolidation or files any such material with
the Commission or with any other person (i) which has not been submitted to you
for your comments or (ii) which has been so submitted and with respect to which
you have reasonably objected, such materials shall nevertheless be deemed Offer
Materials and shall be subject to the provisions of Section 10 hereof.
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5. FEES AND REIMBURSEMENT OF EXPENSES.
(a) For its services hereunder, the Partnerships, the Sponsor
and the Company, jointly and severally, agree to pay Dealer Manager a dealer
manager fee equal to $125,000 ("Dealer Manager Fee").
The Partnerships, the Sponsor and the Company, jointly and severally,
agree to pay all (i) expenses of preparing the Offer Materials, (ii) appraisal,
financial advisory and accounting fees and related expenses incurred in
connection with the Consolidation, (iii) expenses incident to the qualification
or registration of the Shares under securities laws in accordance with the
terms of this Agreement, including filing fees of the Commission, the National
Association of Securities Dealers, Inc. and applicable state governmental
agencies and the fees and expenses of counsel in connection therewith and in
connection with the preparation of a Blue Sky memorandum if necessary, (iii)
charges for printing of the Offer Materials, (iv) travel and entertainment
expenses incurred in connection with the Consolidation as reasonably approved
by a Sponsor, (v) other reasonable out-of-pocket expenses incurred by you
(other than any expense that may be deemed Solicitation Expenses as described
below) in connection with your services pursuant to this Agreement or and (vi)
other expenses incurred or authorized by any Partnership, the Sponsor, or the
Company, in connection with the Consolidation (collectively, with the Dealer
Manager Fees, the "Transaction Expenses").
Notwithstanding the foregoing, (i) in the event the Consolidation is
consummated, but the merger of a Partnership is not approved by the requisite
vote of the Partners of such Partnership, then the Sponsor shall solely bear
and be responsible for all Transaction Expenses payable with respect to that
portion of the Transaction Expenses attributable to such Partnership on the
basis of its respective Exchange Value, and (ii) in the event the Consolidation
is not consummated with respect to any of the Partnerships, then the Sponsor
shall solely bear and be responsible for a percentage of the Transaction
Expenses allocable to each Nonparticipating Partnership (on the basis of its
respective Exchange Value) equal to the percentage of votes to reject the
Consolidation of each such Partnership and each Nonparticipating Partnership
shall solely bear and be responsible for a percentage of the Transaction
Expenses allocable to such Partnership (on the basis of its respective Exchange
Value) equal to the percentage of votes to accept the Consolidation of such
Partnership.
(b) The Partnerships, the Sponsor and the Company, jointly and
severally, agree to pay all (i) expenses of mailing the Offer Materials, (ii)
fees and expenses of the Information Agent in connection with the Consolidation
and (iii) any direct marketing expenses such as telephone calls, broker-dealer
fact sheets, legal and other expenses related to the solicitation as well as
reimbursements of costs incurred by brokers and banks in forwarding the Offer
Materials to Partners (collectively, "Solicitation Expenses").
Notwithstanding the foregoing, (i) if the Consolidation is consummated
with 100% Partnership Participation, all Solicitation Expenses will be payable
by the Company and (ii) in the event the Consolidation is not consummated with
respect to a Partnership, then the Sponsor shall solely bear and be responsible
for the Solicitation Expenses for such Partnership.
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(c) The Partnerships, the Sponsor and the Company, jointly and
severally, also agree to reimburse you promptly for your reasonable
out-of-pocket expenses incurred in connection with any litigation (subject to
Sections 10 and 19 hereof, other than litigation commenced by any Partnership,
the Sponsor or the Company against you), administrative proceeding,
investigation, inquiry, hearing or other formal or informal proceeding to which
you may be called upon to give evidence, produce documents or take any other
action arising out of your acting as Dealer Manager or otherwise.
Payment to you in reimbursement of your expenses (including
Solicitation Expenses and Transaction Expenses (other than the Dealer Manager
Fees) shall be made promptly upon your request submitted from time to time. If
so requested, you will provide a monthly status report of your expenses
including the fees and disbursements of your legal counsel. If this Agreement
shall have been terminated pursuant to Sections 3(b), 12 or 17, the
reimbursement for expenses (including Solicitation Expenses and Transaction
Expenses (other than the Dealer Manager Fees)) incurred by you through the date
of such withdrawal or termination shall be paid to you as soon as practicable
after the date of such withdrawal or termination. Payment of the Dealer Manager
Fees shall be made on the Closing Date (as defined in Section 7 hereof).
The obligation of the Company, the Partnerships and the Sponsor, as
the case may be, to reimburse your expenses (including Transaction Expenses
(other than the Dealer Manager Fees) shall survive the expiration or
termination of this Agreement and any cancellation or abandonment of the
Consolidation prior to consummation of the Consolidation. Reimbursement of
your expenses (including Transaction Expenses) shall be due and payable at your
option in immediately available funds or by certified or official bank check.
6. STATUS OF SOLICITATION. The Partnerships, the Company or the
Sponsor shall advise you daily as to the number of Partnership Interests with
respect to which Consents have been submitted pursuant to the
Prospectus/Consent Solicitation Statement and, upon request, the names and
addresses of the registered owners thereof.
7. REPRESENTATIONS AND WARRANTIES CONCERNING THE PARTNERSHIPS. Each
Partnership (as to itself), the General Partner, the Sponsor and the Company
hereby jointly and severally represents and warrants to you, as of the date
hereof and as of the effective date of the Merger (such latter date being
hereinafter referred to as the "Closing Date"), and agrees with you that, with
respect to each such Partnership:
(a) Such Partnership has been duly formed and is validly
existing in good standing as a limited partnership in good standing under the
laws of the Sate of California with full partnership owner and authority to
own, lease and operate its properties and to conduct its business as described
in its partnership agreement and the Prospectus/Consent Solicitation Statement.
The certificate of limited partnership of such Partnership as filed with the
Secretary of State of the State of California includes the information required
to be set forth therein by the California Revised Limited Partnership Act (the
"Act"), and all of the statements contained in such certificate of limited
partnership are true and correct in all material respects. Such Partnership is
and as of the Closing Date will be duly qualified or registered as a foreign
limited
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partnership or otherwise qualified as a limited partnership in each
jurisdiction in which such qualification or registration is required or
necessary, whether by reason of the ownership or leasing of its property or the
conduct of its business, except where the failure to so qualify or register
would not subject it to any material liability or disability and would not
subject any of its Partners to any material liability or disability.
(b) Such Partnership has duly taken all necessary partnership
action to authorize the Consolidation (other than the required approval of its
Partners as described in the Prospectus/Consent Solicitation Statement and
Supplement relating to such Partnership), and the execution, delivery and
performance of this Agreement, and the Merger Agreement, and such Partnership
has duly taken or will duly take all necessary partnership action to authorize
the Offer Materials and any amendments thereto. Each of this Agreement, and the
Merger Agreement has been duly executed and delivered by, and is a valid and
binding agreement of, such Partnership, enforceable in accordance with its
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights and except as may be limited by
judicial discretion in applying principles of equity (regardless of whether
such agreements are considered in a proceeding in equity or law).
(c) The Consolidation, and the execution, delivery and
performance of this Agreement and the Merger Agreement, do not and will not
violate any law, regulation, order, award, judgment, determination, writ,
injunction or decree applicable to such partnership or its property or assets,
except for such violations that would not, either singly or in the aggregate,
have a material adverse effect on the condition (financial or otherwise) or on
the operations, earnings, business affairs or business prospects of such
Partnership.
(d) The Consolidation, subject to the receipt of Partnership
approval as described in the Prospectus/Consent Solicitation Statement and the
Supplement relating to such Partnership, and the execution, delivery and
performance of this Agreement and the Merger Agreement, do not and will not (i)
conflict with or violate the partnership agreement or certificate of limited
partnership of such Partnership or (ii) conflict with or result in a breach of
any of the terms or provisions of, or constitute a default (with or without due
notice and/or lapse of time) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of such Partnership
pursuant to, any indenture, loan agreement or other agreement, instrument or
contract affecting such Partnership or any of its property or assets or to
which such Partnership is a party or by which such Partnership or any of its
property or assets is bound, except for such conflicts, violations, defaults,
liens, charges or encumbrances that would not, either singly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise) or on the operations, earnings, business affairs or business
prospects of such Partnership.
(e) On behalf of the Partnerships, the Company has filed the
Prospectus/Consent Solicitation Statement and Supplement relating to such
Partnership with the Commission in definitive form, including any schedules and
exhibits required to be filed in connection therewith, and has filed or will
promptly file as required any and all necessary amendments thereto. A correct
and complete copy of such Prospectus/Consent Solicitation Statement,
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Supplement and any amendments thereto has been or will be furnished to you
promptly upon the filing thereof.
(f) The Prospectus/Consent Solicitation Statement (and all
documents incorporated therein by reference), the Supplement for such
Partnership and the other Offer Materials for such Partnership filed with the
Commission or distributed to Partners of such Partnership including any
schedules and exhibits required to be filed in connection therewith, comply and
will comply, at the dates of such filing and distribution (unless the Offer
Materials include a Prospectus/Consent Solicitation Statement or Supplement
which has been provided to the Partners of a Partnership by the Company, any of
the Partnerships or the Sponsor in connection with the Consolidation which
differs from the Prospectus/Consent Solicitation Statement or Supplement on
file at the Commission at the time the Registration Statement becomes
effective, in which case such date with respect to such Prospectus/Consent
Solicitation Statement or Supplement shall be the date it is first provided to
such Partners) and at the Closing Date, with the provisions of the Securities
Act, the Securities Act Regulations, the Exchange Act and the Exchange Act
Regulations; and, when the Registration Statement or any amendment thereto
becomes effective, none of the Registration Statement (including, without
limitation, the Prospectus/Consent Solicitation Statement and the Supplement
relating to such Partnership), the documents incorporated by reference and all
amendments thereto contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary to make the statement made therein, in light of the
circumstances under which they were made, not misleading; and none of the Offer
Materials contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The properties, operations,
business and indebtedness, if any, of the Partnerships conform in all material
respects to the descriptions thereof in the Prospectus/Consent Solicitation
Statement and the Supplement relating to such Partnership.
(g) The accountants who certified the financial statements of
such Partnership and supporting schedules included in the Registration
Statement, the Prospectus/Consent Solicitation Statement and the Supplement
relating to such partnership are independent public accountants as required by
the Securities Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations.
(h) The financial statements of such Partnership included in
the Registration Statement, the Prospectus/Consent Solicitation Statement and
the Supplement relating to such Partnership present fairly the financial
position of such Partnership as at the dates indicated and the results of its
operations for the periods specified, and, except as otherwise stated therein,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; the supporting
schedules included in the Registration Statement, the Prospectus/Consent
Solicitation Statement and the Supplement relating to such Partnership present
fairly the information required go be stated therein; the selected financial
data included or incorporated by reference in the Registration Statement, the
Prospectus/Consent Solicitation Statement and the Supplement present fairly the
information shown therein and have
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been compiled on a basis consistent with that of the audited financial
statements included or incorporated by reference in the Registration Statement,
the Prospectus/Consent Solicitation Statement and the Supplement; the pro forma
financial information included in the Registration Statement, the
Prospectus/Consent Solicitation Statement and the Supplement presents fairly
the information shown therein and has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, has been properly compiled on the pro forma basis described
therein, and, in the opinion of such Partnership, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(i) Since the respective dates as of which information is
given in the Registration Statement, the Prospectus/Consent Solicitation
Statement and the Supplement relating to such Partnership, except as otherwise
stated therein or contemplated thereby, (i) there has been no material adverse
change in the condition, financial or otherwise, or in the operations,
earnings, business affairs or business prospects of such Partnership, whether
or not arising in the ordinary course of business, (ii) there have been no
transactions entered into by such Partnership which are material with respect
to such Partnership, (iii) there has been no change in the Partnership
Interests, and (iv) there has been no distribution of any kind declared, paid
or made by such Partnership on any of its Partnership Interests or otherwise to
any of its Partners, other than the quarterly distributions in the ordinary
course of business of such Partnership.
(j) The Consolidation, and the execution, delivery and
performance of this Agreement and the Merger Agreement by such Partnership,
comply and will comply with all applicable laws and regulations, and no
consent, license, authorization, approval of, or filing with, any governmental
authority or agency or any third party by or with respect to such partnership
is required in connection with the consummation by such Partnership of the
Consolidation, other than (i) any consent, approval or filing as may be
required under state securities laws, (ii) filings evidencing the consummation
of the Merger, (iii) clearance of the consolidation with the National
Association of Securities Dealers, Inc., and (iv) as described in the
Prospectus/Consent Solicitation Statement and Supplement for such Partnership.
(k) Such Partnership is not an "investment company," as that
term is defined in the Investment Company Act of 1940, as amended (the "1940
Act"), and is not subject to regulation under the 1940 Act.
(l) Such Partnership is not currently in violation, and at the
Closing Date will not be in violation, of its partnership agreement or
certificate of limited partnership or in default in the performance or
observance of nay obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which such partnership is a party or by which it may be bound, or to which
any of the property or assets of such Partnership is subject, except for any
such defaults which would not, either singly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise) or on the
operations, earnings, business affairs or business prospects of such
Partnership.
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(m) Except as otherwise disclosed in the Prospectus/Consent
Solicitation Statement or the Supplement relating to such Partnership: (i) such
Partnership has good and marketable title to all assets (or a valid first lien
as to mortgaged properties) described in the Prospectus/Consent Solicitation
Statement or such Supplement as being owned (or mortgaged) by such Partnership
or as reflected in the most recent balance sheet of such Partnership contained
in the Prospectus/Consent Solicitation Statement or such Supplement; (ii) all
liens, charges, encumbrances, claims, or restrictions on or affecting the
properties and assets of such Partnership which are required to be disclosed in
the Prospectus/Consent Solicitation Statement or such Supplement are disclosed
therein; (iii) the equipment leases, if any, relating to each of such
properties are in full force and effect and will be transferred to the Company
by the Partnership by operation of the Merger.
(n) Such Partnership is currently in compliance, and at the
Closing Date will be in compliance, with all applicable laws and regulations,
except for any laws or regulations the violation of which would not, either
singly or in the aggregate, have a material adverse effect on the condition
(financial or otherwise) or on the operations, earnings, business affairs or
business prospects of such Partnership.
(o) To the knowledge of such Partnership and the Sponsor,
there is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or threatened against or
affecting such Partnership or any of its properties, which is required to be
disclosed in the Prospectus/Consent Solicitation Statement or Supplement
relating to such Partnership (other than as disclosed therein), or which might,
either singly or in the aggregate, result in any material adverse change in the
condition (financial or otherwise) or in the operations, earnings, business
affairs or business prospects of such Partnership, or which might, either
singly or in the aggregate, materially and adversely affect the property or
assets of such Partnership or which might, either singly or in the aggregate,
materially and adversely affect the Consolidation; all pending legal or
governmental proceedings to which such Partnership is a party or of which any
of its property or assets is the subject which are not described in the
Prospectus/Consent Solicitation Statement or Supplement relating to such
Partnership, including ordinary routine litigation incidental to the business,
are, considered in the aggregate, not material; and there are no contracts or
documents of such Partnership required to be described in the
Prospectus/Consent Solicitation Statement or Supplement relating to such
Partnership that are not described as so required.
(p) Such Partnership possesses such certificates, licenses,
authorities or permits issued by the appropriate state or federal regulatory
agencies or bodies necessary to conduct the business now operated by it, and
such Partnership has not received any notice of proceedings relating to the
revocation or modification of any such certificate, license, authority or
permit which would, either singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, materially and adversely affect the
condition (financial or otherwise) or the operations, earnings, business
affairs or business prospects of such Partnership.
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(q) In connection with the Consolidation, such Partnership has
complied and will comply in all material respects with the Securities Act, the
Securities Act Regulations, the Exchange Act and the Exchange Act Regulations.
(r) No restraining order has been issued or proceedings,
litigation or investigation initiated or, to the best knowledge of such
Partnership, threatened, with respect to the Consolidation or the execution,
delivery and performance of this Agreement or the Merger Agreement by or before
the Commission, or any other regulatory, administrative, governmental or public
body or authority or any court other than as described in the
Prospectus/Consent Solicitation Statement and other than the receipt by the
Sponsor of requests for investor lists from several parties.
(s) Such Partnership has filed all tax returns to be filed and
has paid all taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any tax returns which such
Partnership is contesting in good faith or which are not material to such
Partnership and there is no tax deficiency that has been, or to the knowledge
of such Partnership might be, asserted against such Partnership or any of its
properties or assets that would or could reasonably be expected to have a
material adverse effect upon the condition (financial or otherwise) or results
of operations of the Company.
(t) Any certificate signed by or on behalf of any such
Partnership, the General Partner or the Sponsor and delivered to you or your
counsel shall be deemed a representation and warranty by such Partnership, the
General Partner or such Sponsor, respectively, to you as to the matters covered
thereby.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SPONSOR. The
Company and the Sponsor hereby jointly and severally represent and warrant to
you, as of the date hereof (except as set forth below) and as of the Closing
Date, and agrees with you that:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and, immediately after the effective time of the Consolidation, will
have corporate power and authority to own, lease and operate the properties
currently owned, leased and operated by the Participating Partnerships and to
conduct the business currently conducted by the Participating Partnerships as
described in the Prospectus/Consent Solicitation Statement and the Supplements.
As of the Closing Date, the Company will be duly qualified as a foreign
corporation to transact business and will be in good standing in each
jurisdiction in which such qualification will be required after the effective
date of the Consolidation, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition (financial or
otherwise) or on the operations, earnings, business affairs or business
prospects of the Company. The Company does not and will not as of the Closing
Date have any subsidiaries or hold any capital stock or ownership interest in
any other entity.
(b) The Company has duly taken all necessary corporate action
to authorize the Consolidation, the issuance of the Shares, and the execution,
delivery and performance of each of this Agreement and the Merger Agreement,
and it has duly taken or will duly take prior to the
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Closing Date all necessary corporate action to authorize the Offer Materials
and all amendments thereto. Each of this Agreement and the Merger Agreement has
been duly executed and delivered by, and is a valid and binding agreement of,
the Company enforceable in accordance with its respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights and except as may be limited by judicial discretion in
applying principles of equity (regardless of whether such agreements are
considered in a proceeding in equity or at law).
(c) The Company has authorized outstanding capital stock as
set forth on the balance sheet of the Company included in the
Prospectus/Consent Solicitation Statement; the Shares have been duly authorized
for issuance pursuant to the Merger Agreement and the Prospectus/Consent
Solicitation Statement; the Shares, when issued by the Company pursuant to the
Prospectus/Consent Solicitation Statement and the Merger Agreement, will be,
and all outstanding shares of capital stock of the Company are, validly issued,
fully paid and nonassessable securities of the Company; the Shares conform to
all statements relating thereto contained in the Registration Statement and
Prospectus/Consent Solicitation Statement and such statements conform to the
rights set forth in the instruments defining the same; and the issuance of the
Shares is not subject to any preemptive or other similar rights.
(d) The Consolidation, and the execution, delivery and
performance of this Agreement and the Merger Agreement, and the issuance of the
Shares, do not and will not violate any law, regulation, order, award,
judgment, determination, writ, injunction or decree applicable to the Company
or any of its subsidiaries or any of their respective properties or assets,
except for such violations that would not, either singly or in the aggregate,
have a material adverse effect on the condition (financial or otherwise) or on
the operations, earnings, business affairs or business prospects of the
Company.
(e) The Consolidation, and the execution, delivery and
performance of the Operative Agreements, and the issuance of the Shares, do not
and will not (i) conflict with or violate the certificate of incorporation or
by-laws of the Company or (ii) conflict with or result in a breach of any of
the terms or provisions of, or constitute a default (with or without due notice
and/or lapse of time) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to, any indenture, loan agreement or other agreement, instrument or contract
affecting the Company or to which the Company is a party or by which it or any
of its properties is bound, except for such conflicts, violations, defaults,
liens, charges or encumbrances that would not, either singly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise) or on the operations, earnings, business affairs or business
prospects of the Company.
(f) The Company has filed the Registration Statement with the
Commission, and has filed or will promptly file, as required, any and all
necessary amendments or supplements thereto. An accurate and complete copy of
the Registration Statement and any amendments thereto (including the documents
filed therewith as exhibits thereto) have been or will be furnished to you
promptly upon the filing thereof.
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(g) The Registration Statement (and all documents incorporated
therein by reference) filed with the Commission and the Offer Materials filed
with the Commission or distributed to the Partners, comply and will comply at
the dates of such filing and distribution (unless the Registration Statement
includes a Prospectus/Consent Solicitation Statement or Supplement which has
been provided to the any of the Partners of a Partnership by the Company, any
of the Partnerships, or the Sponsor in connection with the Consolidation which
differs from the Prospectus/Consent Solicitation Statement or Supplement on
file at the Commission at the time the Registration Statement becomes
effective, in which case such date with respect to such Prospectus/Consent
Solicitation Statement or Supplement shall be the date it is first provided to
any such Partners) and at the Closing Date, with the provisions of the
Securities Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations; when the Registration Statement or any amendment
thereto becomes effective, none of the Registration Statement (including,
without limitation, the Prospectus/Consent Solicitation Statement and
Supplements), the documents incorporated therein by reference and all
amendments thereto contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and none of the Offer
Materials contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(h) The accountants who certified the financial statements of
the Company and supporting schedules included in the Registration Statement and
the Prospectus/Consent Solicitation Statement are independent public
accountants as required by the Securities Act, the Securities Act Regulations,
the Exchange Act and the Exchange Act Regulations.
(i) The financial statements of the Company included in the
Registration Statement, the Prospectus/Consent Solicitation Statement and the
Supplements present fairly the financial position of the Company as at the date
indicated, and, except as otherwise stated therein, said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; the supporting schedules included in the
Registration Statement, the Prospectus/Consent Solicitation Statement and the
Supplements present fairly the information required to be stated therein; the
selected financial data included or incorporated by reference in the
Registration Statement, the Prospectus/Consent Solicitation Statement and the
Supplements present fairly the information shown therein and have been compiled
on a basis consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement, the Prospectus/Consent
Solicitation Statement and the Supplements; the pro forma financial information
included in the Registration Statement, the Prospectus/Consent Solicitation
Statement and the Supplements presents fairly the information shown therein and
has been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, has been properly compiled on the
pro forma bases described therein, and, in the opinion of the Company and the
Sponsor, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
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(j) Since the respective dates as of which information is
given in the Registration Statement, the Prospectus/Consent Solicitation
Statement and the Supplements, except as otherwise stated therein or
contemplated thereby, (i) there has bean no material adverse change in the
condition (financial or otherwise) or in the operations, earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, (ii) there have been no transactions entered into
by the Company which are material with respect to the Company, and (iii) there
has been no change in the capital stock, (iv) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(k) There are no contracts or documents of the Company or any
of its subsidiaries or any of the Partnerships which are required to be filed
as exhibits to the Registration Statement which have not been so filed.
(l) The Consolidation, the issuance of the Shares, and the
execution, delivery and performance of the Operative Agreements by the Company,
fully comply and will fully comply with all applicable laws and no consent,
license, authorization or approval of, filing with, any governmental authority
or agency or third party by or with respect to the Company is required in
connection with the consummation by the Company of the Consolidation, other
than (i) any consent, approval or filing as may be required under state
securities laws, (ii) filings evidencing the consummation of the Consolidation,
(iii) clearance of the Consolidation with the National Association of
Securities Dealers, Inc., and (iv) as described in the Prospectus/Consent
Solicitation Statement and the Supplements for each Partnership.
(m) Upon consummation of the Consolidation, the Company will
not be an "investment company," as that term is defined in the 1940 Act, and
will not be subject to regulation under the 1940 Act.
(n) The Company is not currently in violation, or at the
Closing Date will be in violation, of its certificate of incorporation or
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it is a
party or by which it may be bound, or to which any of its property or assets is
subject, except for any such defaults which would not, either singly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise) or on the operations, earnings, business affairs or business
prospects of the Company.
(o) Upon consummation of the Merger of the Participating
Partnerships with and into the Company all property belonging to the
Partnerships will be the property of the Company, in each case subject to the
debts, liabilities, obligations and duties of the Participating Partnerships.
(p) To the Company's and the Sponsor's knowledge, there is no
action, suit or proceeding before or by any court or governmental agency or
body, or foreign, now pending or threatened against or affecting the Company or
any of its properties, which is required to be disclosed in the
Prospectus/Consent Solicitation Statement and the Supplements/Consent
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Solicitation Statement or any Supplement (other than as disclosed therein), or
which might, either singly or in the aggregate, result in any material adverse
change in the condition (financial or otherwise) or in the operations,
earnings, business affairs or business prospects of the Company, or which
might, either singly or in the aggregate, materially and adversely affect the
properties or assets thereof or which might, either singly or in the aggregate,
materially and adversely affect the Consolidation or the issuance of the
Shares; all pending legal or governmental proceedings to which the Company is a
party or of which any of their respective property or assets is the subject
which are not described in the Prospectus/Consent Solicitation Statement or a
Supplement, including ordinary routine litigation incidental to the business,
are, considered in the aggregate, not material; and there are no contracts or
documents of the Company required to be described in the Prospectus/Consent
Solicitation Statement and the Supplements that are not described as so
required.
(q) The Company does, and immediately after giving effect to
the Consolidation will, possess such certificates, licenses, authorities or
permits issued by the appropriate state or federal regulatory agencies or
bodies necessary to conduct the business now operated by the Participating
Partnerships, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate, authority
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition (financial or otherwise) or the operations, earnings, business
affairs or business prospects of the Company.
(r) In connection with the Consolidation, the Company has
complied and will comply in all material respects with the Securities Act, the
Securities Act Regulations, the Exchange Act and the Exchange Act Regulations.
(s) No restraining order has been issued or proceedings,
litigation or investigation initiated or, to the Company's and the Sponsor's
best knowledge, threatened, with respect to the Consolidation, the issuance of
the Shares, or the execution, delivery and performance of the Operative
Agreements by or before the Commission, or any other regulatory,
administrative, governmental or public body or authority or any court other
than as described in the Prospectus/Consent Solicitation Statement and other
than the receipt by the Sponsor of requests for investor lists from several
parties.
(t) The Company has filed all tax returns to be filed and has
paid all taxes which were payable pursuant to said returns or any assessments
with respect thereto, other than any tax returns which the Company is
contesting in good faith or which are not material to the Company and there is
no tax deficiency that has been, or to the knowledge of the Company might be,
asserted against the Company or any of its properties or assets that would or
could reasonably be expected to have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company.
(u) All offers and sales of the Company's capital stock prior
to the date hereof were at the relevant times exempt from the registration
requirements of the Securities Act and
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were duly registered with, or the subject of an available exemption from, the
registration requirements of the applicable state securities laws.
(v) Except as disclosed in the Prospectus/Consent Solicitation
Statement, no transaction has occurred between or among the Company, on the one
hand, and any of its officers or directors or any affiliate or affiliates of
any such officer or director, on the other hand, that is required to be
disclosed, including, but not limited to, any outstanding loans, advances or
guaranties of indebtedness by the Company to or for the benefit of any
affiliates of the Company, or any of the officers or directors of the Company,
or any family member of any of them.
(w) The Company has not, directly or indirectly, at any time
(A) made any contributions to any candidate for foreign political office, or if
made, failed to disclose fully any such contribution made in violation of law,
or (B) made any payment to any state, federal or foreign governmental officer
or official, or other person charged with similar public or quasi-public
duties, other than payments or contributions required or allowed by applicable
law. The Company's internal accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the Foreign
Corrupt Practices Act of 1977, as amended.
(x) The Company does no business with the government of Cuba
or with any person or entity located in Cuba.
(y) Any certificate signed by any officer of the Company or
the Sponsor and delivered to you or your counsel shall be deemed a
representation and warranty by the Company or the Sponsor, respectively, to you
as to the matters covered thereby.
9. COVENANTS OF THE PARTNERSHIPS, THE SPONSOR AND THE COMPANY.
(a) The Company, the Partnerships and the Sponsor shall notify
you immediately, and confirm the notice in writing, (i) of the effectiveness of
the Registration Statement and any amendment thereto (including any
post-effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment or
supplement to the Registration Statement, the Prospectus/Consent Solicitation
Statement, any Supplement or any other Offer Materials or for additional
information, and (iv) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, the suspension of
the qualification of the Shares in any jurisdiction or the initiation of any
proceedings for any such purpose. The Company will make every reasonable effort
to prevent the issuance of any stop order or suspension and, if any stop order
or suspension is issued, to obtain the lifting thereof at the earliest possible
moment. The Partnerships, the Sponsor and the Company shall notify you
immediately, and confirm the notice in writing, of any events described in
clauses (ii) and (iii) above pertaining to the Prospectus/Consent Solicitation
Statement, any Supplement or other Offer Materials.
(b) The Company shall deliver to you, without charge, one
manually signed copy of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith), as well as copies
of the Prospectus/Consent Solicitation Statement and
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Supplements in such quantities as you shall have reasonably requested or may
hereafter reasonably request.
(c) The Company shall use its best efforts to qualify the
issuance of Shares in connection with the Consolidation in each state
jurisdiction in which such qualification is required and to file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect through the effective date of the
Consolidation.
(d) The Company shall use its best efforts to effect the
listing of the Shares on the American Stock Exchange and you shall cooperate in
all respects to effect such listing.
(e) The Partnerships, the Sponsor and the Company shall advise
you promptly of the occurrence of any event which may or could cause any
Partnership, the Sponsor or the Company to amend or terminate the Consolidation
or the Merger Agreement and also advise you promptly of any proposal or
requirement to amend or supplement the Prospectus/Consent Solicitation
Statement, any Supplement, any Offer Materials or any other filing required by
the Securities Act, the Exchange Act, the Securities Act Regulations or the
Exchange Act Regulations and no such document shall be filed without your prior
approval.
10. INDEMNIFICATION AND CONTRIBUTION. The Partnerships, the Sponsor
and the Company jointly and severally agree, whether or not the Consolidation
is consummated or any Consents are submitted pursuant to the Prospectus/Consent
Solicitation Statement, to indemnify and hold harmless you (including any
affiliated companies) and any officer, director, employee or agent of you or
such affiliated companies and any person who controls you (including any
affiliated companies) within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (you and each such person to be so indemnified
being herein referred to as an "Indemnified Person"), from and against any and
all losses, claims, damages, expenses and liabilities whatsoever, whether joint
or several (including any investigation, legal or other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which such Indemnified Person may become
subject, under the Securities Act, the Securities Act Regulations, the Exchange
Act, the Exchange Act Regulations or any other applicable federal or state law
or otherwise, related to or arising out of (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment thereto, or the omission or alleged omission to state in any such
document a material fact required to be stated therein or necessary to make the
statements made therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus/Consent
Solicitation Statement or any amendment thereto, any Supplement of any
amendment thereto, any other Offer Materials or any other material used or
authorized for use by any of the Partnerships, the General Partner, the Sponsor
or the Company in connection with the Consolidation, or the omission or alleged
omission to state in any such document a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, (iii) any withdrawal
by any Partnership, the General Partner, the Sponsor or the Company from, or
failure by any Partnership, the General Partner, the Sponsor or the Company
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to consummate, the Consolidation, or (iv) any breach by any Partnership, the
General Partner, the Sponsor or the Company of any representation or warranty
contained herein or failure to comply with any of the agreements referred to
herein or this Agreement. None of the Partnerships, the General Partner, the
Sponsor or the Company shall, however, be liable for such loss, claim, damage,
expense or liability under this Section 10 to the extent that such loss, claim,
damage, expense or liability is found in a final judgment by a court of
competent jurisdiction or in a final settlement among you and the Company, the
General Partner, the Sponsors and the Partnerships to have resulted from your
bad faith, gross negligence, recklessness or willful misconduct.
The Partnerships, the Sponsor and the Company jointly and severally
agree to reimburse each Indemnified Person for all expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom, whether or not such
Indemnified Person is a party and whether or not such claim, action or
proceeding is initiated or brought by any of the Partnerships, the General
Partner, the Sponsor or the Company.
Promptly after receipt by an Indemnified Person of written notice of
any claim or commencement of any action as to which such Indemnified Person may
seek indemnification hereunder, such Indemnified Person shall notify the
Partnerships, the General Partner, the Sponsor and the Company in writing of
such claim or of the commencement of such action; but the omission so to notify
the Partnerships, the General Partner, the Sponsor, or the Company shall not
relieve the Partnerships, the Sponsor or the Company from any liability which
they may have to such Indemnified Person under this Section 10 or otherwise. In
the event that any such action shall be brought against any Indemnified Person,
and such Indemnified Person shall notify the Partnerships, the General Partner,
the Sponsor and the Company of the commencement thereof, the Partnerships, the
General Partner, the Sponsor or the Company shall assume the defense thereof,
with counsel reasonably satisfactory to such Indemnified Person, and shall pay
the fees and expenses of such counsel; provided, however, that if there exists
or will exist a conflict of interest which would make it inappropriate in the
reasonable judgment of the Indemnified Person for the same counsel to represent
both the Indemnified Person, on the one hand, and any of the Partnerships, the
General Partner, the Sponsor or the Company or any of their affiliates or
associates, on the other hand, or if such Indemnified Person reasonably
determines that the assumption of the defense of such claim or action by the
Company, the General Partner, the Sponsor, any Partnership or any other
affiliates or associates does not adequately represent such Indemnified
Person's interests, the Indemnified Person shall be entitled to retain its own
counsel at the joint and several expense of the Partnerships, the General
Partner, the Sponsor and the Company. Notwithstanding the previous sentence, in
no event shall the Company, the General Partner, the Sponsor and the
Partnerships be liable for the fees and expenses of more than one counsel (in
addition to local counsel) for all Indemnified Persons in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. In any action or
proceeding the defense of which is assumed by the Company, the General Partner,
the Sponsor or the Partnerships, the Indemnified Persons will have the right to
participate in such litigation and to retain its own counsel at its own
expense.
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If the indemnification of an Indemnified Person provided for in this
Agreement is for any reason held unenforceable or is insufficient, the
Partnerships, the Sponsor and the Company, jointly and severally, agree to
contribute to the claims, losses, expenses, damages or liabilities for which
such indemnification is held unavailable (i) in such proportion as is
appropriate to reflect the relative benefits to the Partnerships, the General
Partner, the Sponsor and the Company, on the one hand, and you, on the other
hand, in connection with the matter giving rise to such claims, losses,
expenses, damages and liabilities or (ii) if (but only if) the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Partnerships, the General
Partner, the Sponsor and the Company, on the one hand, and you, on the other
hand, as well as any other relevant equitable considerations. It is hereby
agreed that, for purposes of this paragraph, the relative benefits of the
Partnerships, the General Partner, the Sponsor and the Company, on the one
hand, and you, on the other hand, with respect to the Consolidation shall be
deemed to be in the same proportion as (x) the maximum total exchange value of
the Consolidation (whether or not the Consolidation is consummated) bears to
(y) the fees paid to you with respect to the Consolidation. Notwithstanding the
foregoing, in any event your aggregate contribution to all claims, losses,
expenses, damages and liabilities shall not exceed the amount of fees actually
received by you with respect to the Consolidation. The foregoing indemnity and
contribution agreements shall be in addition to any liability which the
Partnerships, the General Partner, the Sponsor or the Company might otherwise
have to an Indemnified Person and shall survive the expiration or termination
of the Consolidation or the termination of this Agreement.
A withdrawal by you as Dealer Manager as permitted hereunder, the
termination or expiration of the Consolidation or the termination of this
Agreement by you, any of the Partnerships, the General Partner, the Sponsor or
the Company shall not in any way affect the rights of any Indemnified Person
hereunder.
The Partnerships, the General Partner, the Sponsor and the Company
agree to promptly notify you of the assertion of any claim or the commencement
of any claim or proceeding relating to the Consolidation or the matters subject
to this Section 10, against any of them, any of their respective officers,
directors or employees or any person who controls any of them within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
11. NOTICES. Any communication or notice provided for hereunder shall
be in writing and mailed, telegraphed or delivered to the applicable party at
the addresses indicated below:
If to the Partnerships, the General Partner or the Sponsor:
JetFleet Management Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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If to the Company:
AeroCentury Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Dealer Manager:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or, as to each party, at such other address as shall be designated by such
party in a written notice complying as to delivery with the terms of this
paragraph.
12. CONDITIONS TO OBLIGATIONS OF DEALER MANAGER. Your obligation to
act as Dealer Manager hereunder shall be subject at all times to the conditions
that (i) all representations, warranties and other statements contained herein
by any of the Partnerships, the General Partner, the Sponsor or the Company are
now, and at all times during the period of the Consolidation shall be, true and
correct in all material respects, (ii) the Partnerships, the General Partner,
the Sponsor and the Company at all times during the period of the Consolidation
shall have performed in a timely manner all of their respective obligations
hereunder, (iii) the Registration Statement shall have become effective not
later than the date a Prospectus/Consent Solicitation Statement is first used
in connection with the Consolidation, and (iv) no stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Prospectus/Consent Solicitation Statement or any Supplement or order
under the proxy rules of the Commission pursuant to the Exchange Act with
respect to the transactions contemplated in the Registration Statement or
Merger Agreement shall have been issued and no proceedings for any such purpose
shall have been initiated or threatened by the Commission. If any condition
specified in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement may be terminated by the Dealer Manager by notice
to the Partnerships, the Sponsor and the Company at any time, and such
termination shall be without liability of any party to any other party except
as provided in Section 17 hereof.
13. PARTIES IN INTEREST. This Agreement has been and is made for your
benefit, for the benefit of the other Indemnified Persons, for the benefit of
the Partnerships, the Sponsor and the Company and for the benefit of your and
their respective successors, assigns, executors and administrators, and no
other person shall acquire or have any right under or by virtue of this
Agreement.
14. COUNTERPARTS: SEVERABILITY. This Agreement may be executed in any
number of counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed shall be an original, but all of
the counterparts shall together constitute one and the same agreement. Any term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or
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unenforceability with rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.
15. MISCELLANEOUS. Subheadings are provided solely for convenience,
and are not intended to be part of this Agreement.
16. ENTIRE AGREEMENT: AMENDMENT. This Agreement supersedes all prior
negotiations and understandings of the parties hereto with respect to the
Consolidation and constitute the entire understanding of the parties hereto
with respect to the Consolidation. This Agreement may not be amended,
terminated or modified except in writing.
17. TERMINATION.
(a) The obligations of Dealer Manager, any Partnership, the
General Partner, the Sponsor and the Company under this Agreement, except as
provided below in clause (b), may be terminated by Dealer Manager, on the one
hand, or by any Partnership (as to itself only), the General Partner, the
Sponsor (as to itself only) and the Company, on the other hand, for any reason
upon ten days prior written notice to that effect to the other parties. The
termination of this Agreement by the Dealer Manager will not affect the
obligations of the Partnerships, the Company, the General Partner, or the
Sponsor hereunder.
(b) The Partnerships, the General Partner, the Sponsor and the
Company understand and agree that the provisions of Sections 5, 10, 12 and 18
will survive any termination of the obligations of any of the parties either
pursuant to this Section 17 or pursuant to Sections 3(b) or 12 of this
Agreement.
18. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California (not including
choice-of-laws rules thereof) applicable to agreements made and to be performed
in said State.
19. ATTORNEYS' FEES. If any party to this Agreement brings any action
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation,
reasonable attorneys' fees and disbursements, incurred in connection with such
action, including any appeal of such action.
20. OBLIGATIONS OF PARTNERSHIPS. The Dealer Manager acknowledges that,
as among themselves, the Partnerships intend to allocate their obligations
under this Agreement, including, without limitation, the payment of fees and
expenses, indemnification and contribution, in accordance with the exchange
ratios offered to the Partners in connection with the Consolidation, whether or
not the Consolidation is consummated. Such allocation, however, shall not
affect the joint and several nature of the obligations of the Partnerships, the
General Partner, the Sponsor and the Company under this Agreement and shall
comply with all applicable laws, rules, regulations and orders; provided,
however, that any Partnership that is a Nonparticipating Partnership shall be
deemed not to be subject to Section 10 hereof.
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Kindly indicate your willingness to act as Dealer Manager and your
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to us a copy of this agreement so signed,
whereupon this agreement and your acceptance shall constitute a binding
agreement among us.
Very truly yours,
AEROCENTURY CORP. JETFLEET MANAGEMENT CORP.,
a Delaware corporation a California corporation
By By
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
JETFLEET AIRCRAFT, L. P., JETFLEET AIRCRAFT II, L. P.,
a California Limited Partnership a California Limited Partnership
By: CMA CAPITAL GROUP, INC., By: CMA CAPITAL GROUP, INC.,
General Partner General Partner
By By
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
CMA CAPITAL GROUP, INC.,
By
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
ACCEPTED:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ INCORPORATED
By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, [CORPORATE TITLE]
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SCHEDULE I
PARTNERSHIPS
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JetFleet Aircraft, L.P.
JetFleet Aircraft II, L.P.
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