FORM OF MANAGEMENT, ORIGINATION AND SERVICING AGREEMENT
Exhibit 10.3
THIS
MANAGEMENT, ORIGINATION AND SERVICING AGREEMENT, dated as of the ___ day of ___,
2010 (this “Agreement”) by and between SQN Alternative Investment Fund III, L.P., a
Delaware limited partnership (the “Fund”) and SQN Capital Management, LLC, a Delaware
limited liability company (the “Investment Manager”). All capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Amended and Restated Limited
Partnership Agreement of the Fund, dated as of ___, 2010, as amended from time to time (the
“Partnership Agreement”).
WHEREAS, the Fund was formed for the purpose of making Investments; and
WHEREAS, the Investment Manager is engaged in the business of managing, and providing
management, originating and servicing services with respect to, Investments; and
WHEREAS, the Fund desires to engage the Investment Manager, and the Investment Manager desires
to be engaged, to perform certain services to the Fund in connection with the Investments and the
operations of the Fund.
NOW THEREFORE, in consideration of the covenants set forth in this Agreement and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Services.
(a) The Investment Manager shall provide the Fund with certain services as may be requested or
required by the Fund to manage the Investments and operate the Fund, which advice and services
(collectively, the “Services”) shall include, without limitation, the following:
(i) Provide advice, analysis, and recommendations with respect to the origination,
investigation, structuring, financing, acquisition, monitoring, syndication, remarketing,
extending, renewing and disposing of potential and existing Investments;
(ii) Prepare and review and supervise the preparation and review of all agreements,
certificates, amendments, notices, instruments, and other documents required to originate, acquire,
manage, finance, syndicate, remarket or dispose of any Investment or potential Investment;
(iii) Provide accounting, finance, financial reporting, legal, tax, investor relations,
portfolio and asset management, treasury, marketing, receivables and payables management, and other
administrative services with respect to existing and potential Investments and the operations of
the Fund; and
(iv) Originate, manage, service, administer and make collections on the Investments;
(v) Establish and monitor residual value assessments of Investments (to the extent applicable)
using information from any one or more of a number of sources, including management’s prior
experience, secondary market publications, interviews with manufacturers and used equipment
dealers, auction sales guides, historical sales data, industry organizations and valuation
companies; and
(vi) Provide such additional assistance and services to, and develop, license, and/or acquire
such systems and software for the benefit of, the Fund and perform any other reasonable actions
that may be required by the Fund as the general partner of the Fund may reasonably request or
deem appropriate in connection with the foregoing.
(b) The Fund hereby appoints the Investment Manager as its agent and attorney-in-fact with
full power, discretion and authority to make management decisions concerning the Investments and to
enter into agreements and commitments, on behalf of and in the name of the Fund and its affiliates
and subsidiaries, including, without limitation, lease agreements, loan agreements, financing
agreements, purchase and sale agreements, option agreements, participation agreements and
agreements with service providers and other third parties related to the Investments. This
appointment of the Investment Manager as agent and attorney-in-fact includes the full power of
substitution and further includes the full power to appoint agents and subagents to enter into
agreements on behalf of the Fund and its affiliates and subsidiaries.
(c) The Investment Manager hereby agrees that the Services shall be carried out in accordance
with customary and usual procedures of institutions that perform the Services, unless otherwise
provided specifically in the Partnership Agreement.
(d) To the extent any expenses are incurred by the Investment Manager on behalf of the Fund
and/or its subsidiaries and one or more funds or accounts managed by the Investment Manager, such
expenses will be allocated, as determined by the Investment Manager in its sole discretion, between
or among the Fund and/or the subsidiaries and such other funds or accounts based on the extent to
which such expenses are reasonably attributable to such entities as determined by the Investment
Manager.
(e) The Investment Manager shall not be required to spend any specified amount of time in
performing the Services for the Fund. The Investment Manager shall be required to devote only such
time and attention to the performance of the Services as it, in its sole discretion, deems
necessary to carry out the purposes of this Agreement.
(f) Notwithstanding anything to the contrary in this Agreement, the Investment Manager may
engage in or possess an interest in, directly or indirectly, any other present or future business
venture of any nature or description for its own account, independently or with others, including,
but not limited to, any aspect of the equipment leasing and finance business or any other business
engaged in by the Fund and may become the managing member, investment manager or general partner in
other entities and neither the Fund nor any of its Partners shall have any rights in or to such
independent venture or the income or profits derived or received therefrom.
Section 2. Term and Termination.
This Agreement shall be deemed effective upon execution by the Fund and the Investment Manager
(the “Effective Date”). The term of this Agreement shall continue from the Effective Date
for ten (10) years and thereafter shall automatically renew for additional one-year periods unless
earlier terminated by the Fund. The Fund may terminate this Agreement at any time by giving the
other party at least thirty (30) days written notice of termination. At the termination date
specified in the Fund’s notice (the “Termination Date”), the obligations of the other party
with respect to the Services related to the Investments shall terminate to the extent they have not
yet been performed or are not required by this Agreement to have been performed before the
Termination Date.
Section 3. Fees and Expenses.
In consideration of the Services to be provided under this Agreement, the Investment Manager
shall receive certain fees as set forth in Section 9.4 of the Partnership Agreement and be
reimbursed for
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certain expenses as set forth in Section 9.3(f) of the Partnership Agreement. Following the
Termination Date, any fees and expenses accrued but not yet paid for Services provided up to and
including the Termination Date shall be paid but no other fees and expenses shall be payable to the
Investment Manager following such Termination Date. The Investment Manager hereby expressly
acknowledges and agrees to be bound by Section 9.4 (e) of the Partnership Agreement (and any
provision of the Partnership Agreement necessary to give effect thereto) as it relates to the
Management Fee.
Section 4. Miscellaneous.
(a) Assignability. The rights and obligations of the Investment Manager hereunder may
only be assigned if the proposed assignee(s) is approved by the Fund in writing prior to any such
assignment.
(b) Delegation of Duties. Notwithstanding anything to the contrary in this Agreement,
the Investment Manager may, from time to time and in its sole discretion, subcontract or delegate
all or any part of the Services to any entity chosen by it, including any entity affiliated with
it, with respect to one or more of the Services. Such subcontract or delegation, however, shall not
relieve the Investment Manager of its responsibilities to the Fund hereunder with respect to any of
the Services that are subject to the subcontract or the delegation.
(c) Notices. Notices under this Agreement shall be deemed to have been given if
mailed, postage prepaid, by registered or certified mail, return receipt required, or delivered by
courier service to the other party at each party’s address stated above or at any other address as
a party may have provided by written notice to the other party.
(d) Section Headings. Section, titles or captions contained in this Agreement are
inserted as a matter of convenience and for reference only, and shall not be construed in any way
to define, limit or extend or describe the scope of this Agreement or the intention of the
provisions thereof.
(e) Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto with respect to the matters set forth herein and supersedes any prior understanding or oral
or written agreement. In the event of a conflict between the terms of this Agreement and the
Partnership Agreement, the terms of the Partnership Agreement shall prevail; provided, that if any
provision of this Agreement shall be deemed to conflict with the Partnership Agreement in any
respect, the remainder of this Agreement and the application thereof shall not be affected thereby
and the provision deemed to conflict with the Partnership Agreement shall be deemed rewritten to
the extent necessary to eliminate such conflict.
(f) No Third Party Rights. Nothing contained herein shall confer any rights upon any
person that is not a party to this Agreement.
(g) Choice of Law; Venue; Waiver of Trial by Jury. This Agreement will be governed by
and construed in accordance with the laws of the State of New York without regard to the conflicts
of law rules thereof. The parties to this Agreement consent to the jurisdiction of any local,
State, or federal court located within New York, and waive any objection relating to improper venue
or forum non conveniens to the conduct of any proceeding in any such court and further waive any
right to have any claim or dispute arising from or related to this Agreement by parties to this
Agreement against one or more parties to this Agreement, whether or not there are any additional
third-parties to the action or proceeding, heard by a jury.
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IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement as of the day
and year first above written.
| SQN ALTERNATIVE INVESTMENT III, L.P. | ||||||||
| By: | SQN AIF III GP, LLC | |||||||
| By: | ||||||||
| SQN CAPITAL MANAGEMENT, L.L.C. | ||||||||
| By: | ||||||||
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