AMENDED AND RESTATED MANAGEMENT AGREEMENT


         THIS  AMENDED AND  RESTATED  MANAGEMENT  AGREEMENT,  dated as April 23,
1998, is entered by and among  AEROCENTURY  CORP., a Delaware  corporation  (the
"Company"),  and  JETFLEET  MANAGEMENT  CORP.,  a  California  corporation  (the
"Management Company").

                                                    WITNESSETH

         WHEREAS,  pursuant to a Management  Agreement,  dated December 31, 1997
(the "Management Agreement") the Company hired the Management Company to perform
management services for the Company.

         WHEREAS, the parties hereto desire to amend and restate such Management
Agreement.

         NOW  THEREFORE,  in  consideration  of the mutual  covenants  contained
herein, and other good and valuable  consideration,  the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows.

                                                     ARTICLE 1
                                       DELEGATION TO THE MANAGEMENT COMPANY

         1.1 Powers,  Rights and  Obligations  of the  Management  Company.  The
Management  Company  shall  conduct all aspects of the  business  affairs of the
Company including, without limitation, management of; (i) the identification and
selection of income producing  assets  ("Assets") for acquisition by the Company
with the proceeds of the Offering;  (ii)  administration  of the leases for such
Assets;  (iii)  management  of  remarketing  and resale of the Assets;  and (iv)
general  administrative and day-to-day operations of the Company. The Management
shall devote such time as may be  necessary  for the proper  performance  of its
duties and shall use its best  efforts to carry out the  purposes of the Company
and shall  manage the affairs of the Company to the best of its  abilities.  The
Company agrees and acknowledges that the Management  Company may, in the future,
act as  management  company  for  other  investment  entities  sponsored  by the
Management  Company,  which  entities may engage in the same line of business as
the Company.

         1.2   Indemnification.   The  Company  shall  indemnify  and  hold  the
Management Company, its directions, officers, shareholders, employees and agents
harmless  from and  against any and all  liability,  demands,  claims,  actions,
losses, interest, cost of defense, and expenses (including reasonable attorney's
fees) which arise out of or in connection  with the acceptance or appointment as
management  company and the performance of its duties hereunder except such acts
or omissions as may result from the willful  misconduct  or gross  negligence of
the Management  Company.  Promptly  after receipt by the  Management  Company of
notice  of any  demand  or  claim or the  commencement  of any  action,  suit or
proceeding relating to this Management  Agreement,  the Management Company shall
notify the  Company in  writing.  IT IS  EXPRESSLY  THE INTENT OF THE COMPANY TO
INDEMNIFY THE MANAGEMENT COMPANY, AND ITS DIRECTORS, OFFICERS,  SHAREHOLDERS AND
EMPLOYEES  AND AGENTS FROM ERRORS IN  JUDGMENT  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
and  warranties  on which the  Company has relied in making the  delegation  set
forth in Section 1.1:

                  (a)  Organization.  The  Management  Company  is a  California
corporation  duly organized,  validly  existing and in a good standing under the
laws of the States of California and is duly qualified as a foreign  corporation
in  each   jurisdiction   in  which  the  nature  of  its  business  makes  such
qualification necessary.

                  (b)  Authorization.  The Management  Company has all requisite
power and  authority  to execute,  deliver and perform this  Agreement,  and the
execution,  delivery and performance of this Agreement have been duly authorized
by all necessary action on the part of the Management Company.

                  (c) Binding  Obligation.  The  Agreement  constitutes a legal,
valid and binding obligation of the Management Company,  enforceable against the
Management Company in accordance with its terms.

                  (d) No Violations. The execution,  delivery and performance by
the  Management  Company of this Agreement does not (i) violate any provision of
the corporate  charter or by-laws of the  Management  Company,  (ii) violate any
statue or  regulation  or any  order,  writ,  judgment  or decree of any  court,
arbitrator or governmental authority applicable to the Management Company or any
of its assets,  or (iii) violate or constitute,  with or without notice or lapse
of time, a default under, or result in the creation or imposition of any lien on
the  assets  of the  Management  Company  pursuant  to the  provisions  of,  any
mortgage,  indenture,  contract,  agreement  or other  undertaking  to which the
Management Company is a party.

                                    ARTICLE 3
             AGENTS; CHANGES IN THE MANAGEMENT COMPANY; COMPENSATION

         3.1      Agents.

                  (a) The  Management  Company  may  delegate  any or all of the
powers,  rights and  obligations  under this Agreement and may appoint,  employ,
contract  or  otherwise  deal with any person or entity  (each,  an  "Agent") in
respect of the  conduct of the  business  and  affairs of the  Company.  Without
limitation,  the  Management  Company  may assign to any such Agent the right to
receive any fee or reimbursement of expenses as the Management  Company would be
entitled to receive under this Agreement.

                  (b) The Management  Company shall  supervise the activities of
its Agents, and  notwithstanding  the designation of or delegation to any Agent,
the  Management  Company  shall  remain  obligated to the Company for the proper
performance  of  the  obligations  of its  obligations  as  Management  Company;
provided,  however, that the Management Company may enter into any agreement for
indemnification  pursuant to which an Agent may  indemnify and hold harmless the
Management  Company from any  liability to the Company  arising by reason of the
act or omission of such Agent.

         3.2  Effect  of  Termination.   In  the  event  of  the  bankruptcy  or
dissolution  of  Management  Company,  such  Management  Company  shall cease to
participate in the conduct of the business affairs of the Company.

         3.3  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.

         3.4  Compensation.  As full and exclusive  compensation  for all duties
assumed and services provided  hereunder,  the Management Company shall entitled
to receive a  management  fee payable  monthly on the last day of each  calendar
month  equal to 0.25% of the Asset  Value of the  Company  as of the last day of
such  calendar  month.  In  addition,   the  Management  Company  shall  receive
reimbursement  of expenses  paid to third  parties  incurred  by the  Management
Company in connection with the administration and management of the Company. For
purposes of this  Agreement,  Asset Value shall mean the  original  costs of the
assets  recorded on the books of the  Company  less  depreciation  not offset by
liabilities,   calculated  in  accordance  with  generally  accepted  accounting
principles.

         3.5 Term of Management  Agreement.  This Agreement shall have a term of
twenty years subject to termination rights under Section 3.6 below.

         3.6      Termination.

                  (a)  This  Agreement  may be  terminated  by a party  upon six
months  prior  notice  upon the  material  breach by the other  party of any its
respective  material  agreements  and  obligations  under this  Agreement  which
remains  uncured  for a period  of after 90 days  after  written  notice of such
breach.  In the event the Company  breaches this  Agreement,  then as liquidated
damages for such breach,  and not as a penalty  therefor,  the Company shall pay
liquidated damages in the amount set forth on Schedule 1 hereto. The Company and
the Management  Company hereby acknowledge that the damages suffered as a result
of the breach by the Company of this  Agreement are difficult to ascertain,  but
that such  liquidated  damage  amounts  are  reasonable  in light of the  actual
anticipated damages.

                  (b) A sale or disposition by the Company of substantially  all
or a significant portion of the assets of the Company in a single transaction or
series of transactions not recommended by the Management Company shall be deemed
to be a termination by the Company in breach of this Agreement.  For purposes of
this subsection,  a sale of a "significant portion" of the assets of the Company
shall mean a sale,  disposition  or transfer of 25% or more of the assets (based
on fair market value).

                                    ARTICLE 4
                      OPTION TO PURCHASE MANAGEMENT COMPANY

         4.1 Option to  Acquire  Management  Company.  In  consideration  of the
Company  entering into this Agreement,  the Management  Company hereby grants to
the Company, the exclusive right to acquire all of the outstanding capital stock
of the Management Company. The purchase price would be set at 90% of the product
of (i) the Earnings (as defined below) of the Management  Company as of the most
recent 12-month period prior to the acquisition,  multiplied by (ii) the average
price to earnings  ratio of the Company over the same 12 month  period,  each as
determined  according to generally  accepted  accounting  principles;  provided,
however, that if the purchase price is less than $12 million, Management Company
would have the right to decline the  acquisition.  The  purchase  price would be
payable  in the form of  freely  tradeable  securities  of the  Company  and the
closing of the purchase shall be conditioned upon the approval of the respective
boards of  directors  and  shareholders  of both the Company and the  Management
Company, as required by law, and shall expire on December 31, 2003. For purposes
of this Section 4.1, the term "Earnings"  shall mean Earnings before  cumulative
equity in earnings/losses of subsidiaries.

                                    ARTICLE 5
                            MISCELLANEOUS PROVISIONS

         5.1 Applicable  Law. This Agreement  shall by governed by and construed
and  enforced in  accordance  with the laws of the State of  California  without
regard to principles of conflicts of law.

         5.2   Counterparts.   This   Agreement   may  be  executed  in  several
counterparts,  all of which together shall  constitute one agreement  binding on
all parties  hereto,  notwithstanding  that all the parties  have not signed the
same counterpart.

         5.3  Separability of Provisions.  If any provision of this Agreement is
determined  by a court  of  competent  jurisdiction  to be  unenforceable,  such
provision  shall be  automatically  reformed and construed so as to be valid and
enforceable to the maximum extent permitted by law while most nearly  preserving
its original  intent.  The invalidity of all or any part of this Agreement shall
not render invalid the remainder of this Agreement.

         5.4 Captions.  Article and Section titles and any table of contents are
for  convenience of reference only and shall not control or alter the meaning of
this Agreement as set forth in this text.

         5.5 No Benefit to Third Parties. The provisions of this Agreement shall
not be  construed  for the  benefit  of or  enforceable  by a person not a party
hereto.

         5.6  Successors  and Assigns.  The covenants and  agreements  contained
herein shall be binding upon,  and inure to the benefit of, the  successors  and
permitted assigns of the respective parties hereto.

         5.7 Amendments.  This Agreement may only be amended in writing executed
by the parties hereto.

         5.8 Prior Management  Agreement  Superseded.  This Amended and Restated
Management  Agreement  supersedes and replaces that certain Management Agreement
between the parties hereto, dated December 31, 1997.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date first above written.

COMPANY:                                    MANAGEMENT COMPANY:

AEROCENTURY CORP.                           JETFLEET MANAGEMENT CORP.,
a Delaware corporation                      a California corporation

By:_____________________________            By:_____________________________
         Neal D. Crispin, President                   Neal D. Crispin, President


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                                   SCHEDULE A



Liquidated Damages For Termination

         From September 1, 1997 to October 31, 2007: $12,000,000*.

         From  September  1, 2007 to  October  31,  2017:  $12,000,000*  less
         $1,000,000  for each year or portion
         thereof remaining in the term of this Agreement.

* This  $12,000,000  amount shall be adjusted to reflect changes in the Consumer
Price Index (as  published by the United  States  Department  of Labor) from the
date of this Agreement to the  termination  date. If the Consumer Price Index is
or becomes unavailable,  then a comparable index will be mutually agreed upon by
the Company and the Management Company.