8. Related Party Transactions

The Company's portfolio of leased aircraft assets is managed and administered under the terms of a management agreement (the "Management Agreement") with JetFleet Management Corp. ("JMC"), which is an integrated aircraft management, marketing and financing business and a subsidiary of JHC. Certain officers of the Company are also officers of JHC and JMC and hold significant ownership positions in both JHC and the Company.

Under the Management Agreement, JMC receives a monthly management fee based on the net asset value of the assets under management. JMC also receives an acquisition fee for locating assets for the Company. Acquisition fees are included in the cost basis of the asset purchased. JMC may receive a remarketing fee in connection with the re-lease or sale of the Company's assets. Remarketing fees are amortized over the applicable lease term or included in the gain or loss on sale.

See the description of the Merger Agreement between the Company and JHC in Note 7 above.

In April 2018, subsequent to the execution of the Merger Agreement for the acquisition of JHC, JHC agreed to waive its right to receive management and acquisition fees ("Contract Fees") otherwise owed by the Company to JHC pursuant to the Management Agreement for all periods after March 31, 2018 and until the earlier of the consummation of the Merger or August 15, 2018. In return, the Company agreed to reimburse JMC for expenses ("Management Expense") incurred in providing management services set forth under the Management Agreement. In July 2018, JHC agreed to extend the expiration of this agreement (the "Waiver and Reimbursement Agreement") through October 15, 2018. Thus, if the Merger Agreement is terminated on or before October 15, 2018 or the Merger otherwise does not close by October 15, 2018, the Company would become obligated to JMC pay any excess (the "JMC Margin") of (i) the Contract Fees that would have been paid to JMC since April 1, 2018 in the absence of the Waiver and Reimbursement Agreement over (ii) the Management Expenses actually paid by the Company to JMC since April 1, 2018. For the quarter and six months ended June 30, 2018, contractual fees exceeded the reimbursed management fees by $497,200 of management fees and $494,400 of acquisition fees. Notwithstanding the Waiver and Reimbursement Agreement, until the closing or termination of the Merger Agreement, the Company will accrue as an expense the total Contract Fees that would have been due under the Management Agreement. If the Merger closes on or before October 15, 2018, the Waiver and Reimbursement Agreement for the period beginning on April 1, 2018, and ending on the consummation of the Merger will be considered in the acquisition accounting for the calculation of the settlement loss recognized by the Company when the Merger is consummated.

Fees incurred during the three months and six months ended June 30, 2018 and 2017 were as follows:

	For the Six Months Ended June 30,				For the Three Months Ended June 30,
	2018		2017		2018		2017
Management fees	$	2,948,800	$	3,005,100	$	1,502,100	$	1,498,300
Acquisition fees		494,400		641,900		494,400		421,400
Remarketing fees		-		51,100		-		-

In March 2017, the Company exchanged one of its engines for 150,000 shares of common stock of the Company held by a holder of more than 5% of the Company's then-outstanding common stock. The Company recorded no gain or loss related to the exchange.