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ASSET MANAGEMENT AGREEMENT
THIS ASSET MANAGEMENT AGREEMENT ("AGREEMENT") is made effective as of
March 9, 2001 (the "EFFECTIVE DATE") by and among Xxxxxx Advisors, L.L.C., a
Texas limited liability company ("MANAGER"), LSF3 Capital Investments I, LLC, a
Delaware limited liability company ("INVESTMENTS I") and LSF III Capital
Investments L.P., a Delaware limited partnership ("INVESTMENTS II", and together
with Investments I, "OWNERS", and the Owners together with Manager, the
"PARTIES").
RECITALS
A. Pursuant to (a) the Amended and Restated Stock Purchase Agreement dated
as of February 27, 2001, (the "REIT PURCHASE AGREEMENT"), entered into
between U.S. Restaurant Properties, Inc., a Maryland corporation
("USRP"), and Lone Star U.S. Acquisitions, LLC ("LONE STAR") and (b)
the Amended and Restated Stock Purchase Agreement dated as of February
27, 2001 (the "STOCKHOLDER PURCHASE AGREEMENT" and together with the
REIT Purchase Agreement, the "PURCHASE AGREEMENTS") entered into among
certain stockholders of USRP and Lone Star, which subsequently assigned
its rights and obligations under each such agreement to Owners,
Investments I, will acquire up to 2,312,753 shares of Common Stock of
USRP, par value $.001 ("COMMON STOCK"), and Investments II will acquire
up to 1,417,012 shares of Common Stock (collectively, the shares of
Common Stock acquired by Owners pursuant to the Purchase Agreement are
referred to herein as the "ASSETS") as set forth in the Purchase
Agreement.
B. Owners desire that Manager undertake the management of the Assets, as
provided herein, and Manager desires to undertake such management.
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. SERVICES; RIGHTS IN ASSETS.
(a) Owners each hereby acknowledge that they have retained
Manager, and Manager acknowledges that, subject to reasonable
advance notice to accommodate scheduling, Manager will provide
with respect to the Assets (i) oversight and monitoring
services requested by Owners, and (ii) other asset management
services set forth herein (the "SERVICES").
(b) Manager shall not be required to devote its full time and
attention to the management of the Assets, but only such time
as is reasonably necessary for the proper conduct of its
duties under this Agreement.
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(c) Owners each hereby grant Manager the right to exercise any and
all rights Owners may have from time to time under (i) the
Purchase Agreements, (ii) the Registration Rights Agreement
dated as of March 9, 2001 among USRP, Owners and others and
(iii) the Accepted Holder Agreement dated as of March 9, 2001
among USRP, Lone Star and others. Owners each hereby grant to
Manager the right to purchase additional Common Stock and
dispose of any and all of the Assets. Manager shall advise
Owners as to their rights under such agreements from time to
time.
2. CONSULTATION AND COMMUNICATION; REPORTS.
(a) Manager's personnel shall be available at the reasonable
request of either Owner for consultation, as necessary or
appropriate, and shall provide Owners with as much information
pertaining to the Assets or the Services as (i) reasonably
requested and (ii) Manager can reasonably provide with respect
thereto.
(b) Upon reasonable advance written notice to Manager (such notice
setting forth the time, date and location of such meeting, but
not more often than quarterly) Owners and Manager shall meet
(or hold a telephone conference call) to discuss any
proposals, strategy and administrative matters relating to the
Assets. For any of the foregoing meetings which require the
representatives of Manager to travel, Owners shall pay all
travel, lodging, food and other expenses of such
representatives incurred in traveling to, staying at and
returning from the location of any such meeting.
3. EXPENSES.
Subject to the limitation contained in the last sentence of this
Section 3, Operating Expenses incurred by Manager on behalf of an Owner
or otherwise incurred by Manager in the performance of its duties
hereunder shall be paid or reimbursed by Owners. In no event shall
Manager be obligated to pay any expenses related to the Assets. If
Manager, in its sole discretion, shall elect to pay any such Operating
Expenses, Owners shall reimburse Manager. "OPERATING EXPENSES" means
all necessary and reasonable third party costs incurred by Manager
after the Effective Date in providing the Services. Operating Expenses
include, but are not limited to, all reasonable and necessary third
party (a) expenses, fees (including legal fees), duties, taxes,
disbursements and costs relating to any agreements and transactions
which have been or may be entered into in relation to the Assets; (b)
fees of attorneys or consultants (other than employees of Manager); and
(c) costs incurred to obtain documents or information.
4. FEES AND PAYMENT.
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(a) In addition to the reimbursements of expenses provided in Section 3
above, Owners shall, during the term of this Agreement, pay Manager a
cumulative annual base advisory fee in accordance with the terms set
forth on Exhibit A attached hereto.
(b) If Owners fail or refuse to pay any amounts hereunder when due,
interest in respect of the outstanding amount shall accrue at the rate
of eighteen percent (18%) from the date due until the aggregate amount
outstanding (including interest) is paid in full. In the event that
Owners dispute any portion of any charges by Manager (whether for
reimbursement of Operating Expenses or for services under Section 4),
Owners agree to pay any undisputed portion of such charges and to
submit such dispute as to the remainder for resolution in accordance
with the dispute resolution procedures set forth in Section 12 hereof.
(c) Except to the extent an Owner agrees to pay for Operating Expenses
pursuant to the last sentence of Section 3, each Owner shall pay a pro
rata share of all amounts due under this Agreement, based on each
Owner's Asset holding on the date such amount became due.
5. ANCILLARY SERVICES.
Manager may, but is not required to, perform certain additional
services on behalf of Owners, including, without limitation, book and
record keeping, financial and tax accounting and preparation services
("Ancillary Services"). Such Ancillary Services shall be performed in a
commercially reasonable manner and on a competitive basis. Any charges
for such services shall not exceed charges customarily levied by
non-affiliated organizations providing similar services. Any financial
and accounting services performed hereunder shall be performed by
Manager in accordance with generally accepting accounting principles in
the United States of America consistently applied.
6. TERM.
(a) This Agreement shall be effective as of the date first above
written, and shall terminate either (i) upon any Party giving the other
written notice of its intention to terminate the Agreement, such notice
effective thirty (30) days from the date of receipt by each other Party
or (ii) immediately if Manager becomes insolvent, files for bankruptcy
or makes an assignment for all or substantially all of its creditors.
(b) Upon expiration or termination of this Agreement for any reason (by
expiration of time or otherwise), Manager shall deliver to each Owner,
or its nominee, (i) all books, documents, records, materials, supplies,
and funds in its possession belonging to Owners or received by Manager
pursuant to the terms of this Agreement, and (ii) a statement of
expenses incurred by Manager, and amounts payable to Manager, pursuant
to this Agreement.
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(c) Termination of this Agreement shall not release Manager or Owners,
as the case may be, from liability for failure to perform any of the
duties or obligations of Manager or Owners, as the case may be, under
this Agreement that have accrued as of the date of termination.
7. CONFIDENTIALITY.
Each Party shall maintain in confidence the facts and terms of this
Agreement and all other information received from the other Party that is
identified in writing at the time of delivery as being confidential; provided,
however, that each Party may disclose such information (a) to its and its
Affiliates' (as hereinafter defined) directors, officers, employees or agents
(it being understood that they shall be informed by such Party of the
confidential nature of such information and that such Party shall cause them to
treat such information confidentially), (b) if required to do so by applicable
laws, rules, regulations or orders, (c) if such information becomes part of the
public domain, and (d) if such information otherwise was or becomes available to
such Party on a non-confidential basis, provided that the source of such
information was not known by such Party to be bound by a confidentiality
obligation. "AFFILIATE" means, with respect to any person or entity, any other
person or entity that directly or indirectly controls, is controlled by, or is
under common control with such person or entity. As used in this definition, the
word "control," including its correlative meanings "controlled by" and "under
common control with" means the direct or indirect possession of at least 50% of
the voting power and equity interests in a person or entity.
8. REPRESENTATIONS AND WARRANTIES.
Each Party represents and warrants to the other that, as of the date
hereof:
(a) It is duly organized and validly existing and is in good standing
under the laws of the jurisdiction of its formation. It has all
requisite power and authority to enter into and to perform its
obligations under this Agreement.
(b) Its execution, delivery, and performance of this Agreement have
been duly authorized, and do not and will not (i) violate any law,
rule, regulation, order, or decree applicable to it or (ii) violate its
organizational documents.
(c) This Agreement is a legal and binding obligation, enforceable
against it in accordance with its terms, except to the extent
enforceability is modified by bankruptcy, reorganization and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
(d) There is no litigation pending or, to the best of its knowledge,
threatened to which it is a party that, if adversely determined, would
have a material adverse effect on the transaction contemplated in this
Agreement or its financial condition, prospects, or business.
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9. SUB-SERVICING AND OUTSOURCING.
Manager shall have the right to delegate the performance of any or all
of the Services to one or more asset management companies selected by
Manager in Manager's sole discretion through sub-servicing or other
outsourcing agreements; provided, that, such delegation shall not
relieve Manager of its duties and obligations hereunder.
10. NO ASSIGNMENT.
Subject to the right of Manager under Section 9 above, no Party may
assign any of its rights, duties or obligations under this Agreement
without the prior written consent of each other Party; provided, that
any party may assign this Agreement without prior consent to its
Affiliates or to a third party acquiring all of the equity interests or
all or substantially all of the assets of the assigning Party.
11. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas (without reference to its rules as to
conflicts of laws), except to the extent the laws of the State of
Maryland govern voting of shares of Common Stock.
12. DISPUTE RESOLUTION.
(a) All disputes relating to or arising under this Agreement shall be
resolved by arbitration pursuant to the Rules of Arbitration (the
"RULES") of the International Chamber of Commerce (excluding its
conflicts-of-laws principles). Such arbitration shall involve a panel
of three arbitrators selected in accordance with the Rules, take place
in Dallas, Texas. The arbitration decision shall be final and binding
upon the Parties and judgment upon the award may be entered in any
court having jurisdiction over the Party against which enforcement is
sought.
(b) Each Party agrees that arbitration under this Section 12 is the
exclusive method for resolving any dispute arising under or related to
this Agreement, and that such Party will not commence an action or
proceeding based on a dispute, except to enforce arbitrators' decisions
as provided in Section 12(a) or to compel the other Party to
participate in arbitration under this Section 12.
13. NO PARTNERSHIP OR GENERAL AGENCY.
The relationship between the Parties is that of independent contractors
solely as set forth herein, and each Party shall be responsible only
for its obligations as set forth herein. It is not the intention of the
Parties to render the Parties liable as partners, associates, or joint
venturers or to create a partnership, joint venture or other
association. The liability of the Parties hereunder to third parties
shall be several and not joint or collective. Except as specifically
otherwise provided herein, or agreed in writing, Manager (i) is not an
agent or
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representative of any Owner and (ii) shall not have, and shall not
represent itself as having or allow any of its employees, officers,
directors, agents or representatives to represent that it or any of
them has, any authority to commit Owners by negotiation or otherwise to
any contract, agreement or other legal commitment in the name of, or
otherwise binding on, Owners, or to pledge or extend their credit.
14. EMPLOYEES AND INDEPENDENT CONTRACTORS.
Manager shall be responsible for its employees and shall use reasonable
care in selecting and supervising independent contractors. All matters
pertaining to the employment, supervision, compensation, promotion and
discharge of Manager's employees are the responsibility of Manager, and
Manager shall be liable to such employees for their compensation (in
whatever form or amount such compensation may be). None of the Owners
shall not be the employer of such employees, nor shall Owners ever be
directly responsible for their compensation. Manager shall comply with
all applicable laws and regulations relating to workmen's compensation,
social security, unemployment insurance, hours of labor, wages, working
conditions, and other employer-employee related matters. Manager shall
be responsible for negotiating the terms of contracts with and
overseeing the performance of its contractors.
15. COMPLIANCE WITH LAWS.
Manager shall comply with all applicable laws, including the U.S.
Foreign Corrupt Practices Act, in connection with this Agreement.
16. NO CONSEQUENTIAL DAMAGES.
Under no circumstances, whether based on contract, warranty,
negligence, strict liability or otherwise, shall any Party be liable
for any consequential, indirect, incidental or punitive damages of any
kind or character, including, but not limited to, loss of profits or
revenues, loss of product, loss of use, cost of capital and the like,
arising out of or related to any performance under or breach of this
Agreement. The Parties specifically acknowledge that the benefits each
Party contemplates deriving from the provisions of this Agreement
reflect such allocation of risk and limitation of liabilities.
17. EXCULPATION.
Neither Manager nor any of its shareholders, consultants, agents,
members, officers, directors, partners and employees (collectively,
"Covered Persons") shall be liable for any losses, claims, damages or
liabilities arising from any act performed or omitted by Manager or any
Covered Person in connection with this Agreement, except any such
losses, claims, damages or liabilities that are finally determined
pursuant to the arbitration procedure set forth in Section 12 hereof to
be caused by the fraud or willful misconduct of Manager or such Covered
Person.
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18. INDEMNIFICATION.
(a) Each Owner, to the fullest extent permitted by law, shall
indemnify, defend and hold harmless each Covered Person from and
against any and all losses, claims, damages or liabilities of any
nature whatsoever, including legal fees and other expenses reasonably
incurred, arising out of or in connection with the management and
disposition of the Assets, any duty of Manager hereunder, or any action
taken or omitted by any such Covered Person by or on behalf of Owner
pursuant to authority granted by this Agreement, except to the extent
any such losses, claims, damages or liabilities are caused by the bad
faith, fraud, gross negligence, or willful misconduct of any Covered
Person. In the event that any Covered Person becomes involved in any
capacity in any suit, action, proceeding or investigation in connection
with any matter arising out of or in connection with the management and
disposition of the Assets, or any duty of Manager hereunder, Owners
shall within twenty (20) days after submission of a request for
reimbursement, reimburse such Covered Person for its reasonable legal
and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith. Owners acknowledge that
the foregoing indemnity shall be applicable to all claims, liabilities,
losses, damages or expenses that have resulted from or are alleged to
have resulted from the active or passive or the sole, joint or
concurrent ordinary negligence of Manager or any Covered Person.
(b) Promptly after a Covered Person receives notice of the commencement
of any action or other proceeding in respect of which indemnification
may be sought hereunder, such Covered Person shall notify each Owner
thereof; provided, that the failure to do so shall not relieve any
Owner from any obligation hereunder unless, and only to the extent
that, such failure results in Owners' forfeiture of substantive rights
or defenses.
(c) The foregoing right to indemnity shall be in addition to any rights
that Manager and/or any other Covered Person may have at common law or
otherwise and shall remain in full force and effect following the
completion or any termination of the engagement. Each Owner hereby
consents, and shall cause its subsidiaries (if any) to consent, to
personal jurisdiction and to service and venue in any court in which
any claim which is subject to this agreement is brought against Manager
or any other Covered Person.
(d) It is understood that, in connection with Manager's engagement,
Manager may also be engaged to act for Owners or any of their
subsidiaries in one or more additional capacities, and that the terms
of this engagement or any such additional engagement may be embodied in
one or more separate written agreements. This indemnification shall
apply to the engagement specified in Section 1 hereof as well as to any
such additional engagement(s) (whether written or oral) and any
modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or
termination of said engagement or such additional engagements.
(e) Owners further understand that if Manager is asked to furnish
Owners or any of their subsidiaries a financial opinion letter or to
act for Owners or any such subsidiary in
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any other formal capacity, such further action may be subject to a
separate agreement containing provisions and terms to be mutually
agreed upon.
19. FURTHER ASSURANCES.
Each Party agrees to execute and deliver such additional documents and
to take such additional actions as may be necessary or appropriate to
effect the provisions of this Agreement and all transactions
contemplated hereby.
20. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all prior
written or oral understandings or agreements between the Parties.
21. NO THIRD-PARTY BENEFICIARIES.
Except as set forth in Sections 17 and 18 hereof, this Agreement is
solely for the benefit of the Parties and their respective successors
and assigns, and this Agreement shall not otherwise be deemed to confer
upon or give to any third party any remedy, claim, liability,
reimbursement, cause of action or other right.
22. SEVERABILITY.
If any provision of this Agreement is prohibited by applicable law, the
Parties shall amend such provision to the extent (and only to the
extent) necessary to comply with such rules or laws. Subject to the
preceding sentence, if any provision of this Agreement or the
application thereof to either Party or circumstance shall be held
invalid or unenforceable to any extent, the remainder of this Agreement
and the application of such provision to other parties or circumstances
shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
23. NOTICES.
All notices, requests and demands to or upon the respective parties
hereto shall be effective in writing (including by facsimile, telex or
cable communication), and shall be deemed to have been duly given or
made when delivered by hand, in the case of facsimile, telex or cable
communication upon being sent (provided that, in the case of facsimile
and telex communications, electronic confirmation of delivery of such
communication is received by the Party upon sending such communication)
or, if sent within the United States three (3) days after being
deposited in the United States mail, certified or registered, postage
prepaid. Notices shall be sent to the following addresses:
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If to Owners, to:
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Mr. X.X. Dell
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Manager, to:
Xxxxxx Advisors, L.L.C.
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
24. AMENDMENT.
An amendment or modification of this Agreement shall be effective or
binding on a Party only if it is in writing and signed by that Party.
25. SURVIVAL.
The provisions of Sections 3, 4, 7, 11, 12, 13, 14, 16, 17, 18, 20, 21,
23 and 26 shall survive any termination of this Agreement.
26. WAIVERS.
Any waiver, express or implied, by a Party of any right under this
Agreement or of any breach by the other Party shall not constitute or
be deemed a waiver of any other right or any other breach, whether of a
similar or dissimilar nature to the right or breach being waived. A
waiver of a Party's rights under this Agreement, including with respect
to the other Party's breach, shall be effective only if that Party
agrees in writing.
27. HEADINGS.
The headings contained in this Agreement are for convenience only and
shall not affect the construction or interpretation of any provisions
of this Agreement.
28. BINDING EFFECT.
Subject to the restrictions on assignment set forth in this Agreement,
this Agreement shall inure to the benefit of and be binding upon the
Parties and their respective legal representatives, successors and
permitted assigns. Whenever this Agreement refers to
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any Party, such reference shall be deemed to include the legal
representatives, successors and permitted assigns of such Party.
29. INTENTION OF PARTIES TO ACT REASONABLY.
The Parties hereby acknowledge and agree that they will act reasonably
and in good faith in implementing the provisions of this Agreement and
in the management and disposition of the Assets.
30. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute
but one agreement.
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IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute and deliver this Agreement on August 13, 2001, with
this Agreement to be effective as of March 9, 2001.
XXXXXX ADVISORS, L.L.C., a Texas
limited liability company
By: Xxxxxx Advisors Association, L.P.,
a Texas limited partnership and its
managing member
By: Advisors GenPar, Inc., a Texas
corporation and its general partner
By: /s/ Xxxxxx X.Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President
LSF3 CAPITAL INVESTMENTS I, LLC
a Delaware limited liability company
By: /s/ X.X. Dell
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X.X. Dell
President
LSF III CAPITAL INVESTMENTS, L.P.
a Delaware limited partnership
By: Lone Star Partners III, L.P.,
a Bermuda limited partnership
and its General Partner
By: Lone Star Management Co. III,
Ltd., a Bermuda exempted
limited liability company and
its General Partner
By: /s/ X.X. Dell
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X.X. Dell
Vice President
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