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EXHIBIT 10.1
FIRST
AMENDED AND RESTATED
ADVISORY AGREEMENT
BY
AND
BETWEEN
UNITED INVESTORS REALTY TRUST
AND
FCA CORP
DATED AS OF JUNE 9, 1997
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This First Amendment and Restatement of Advisory Agreement (the
"Agreement") by and between United Investors Realty Trust (the "Trust") and FCA
Corp (the "Advisor") has been executed on June 9, 1997. The effective date
(the "Effective Date") of this Agreement shall be the first day of the calendar
quarter in which the Trust's registration statement on Form S-11 has been
declared effective by the Securities and Exchange Commission.
WHEREAS, the Trust entered into an advisory agreement (the "Initial
Agreement") with UST Investment Advisors, Inc. ("UST") and the Advisor
(collectively, the "Initial Advisors") dated as of December 9, 1988, as
subsequently amended by instrument dated as of April 27, 1989, pursuant to
which UST withdrew as an advisor to the Trust.
WHEREAS, the Trust and the Advisor have determined to amend and
restate the Initial Agreement as heretofore amended on the terms and conditions
set forth hereinbelow.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency whereof is hereby
acknowledged by the parties, each to the other, the parties hereby amend and
restate the Initial Agreement so that it reads in its entirety as follows:
SECTION 1. DEFINITIONS.
(a) "Adjusted Funds from Operations" means net income of
the Trust excluding gains or losses from debt
restructuring and property sales plus real estate
related depreciation and amortization, as adjusted by
adding back interest expense and the Advisory Fee (as
determined in accordance with the provisions of
Section 5, below.)
(b) "Affiliate" means as to any Person, any other person
which directly or indirectly, controls, is controlled
by or is under common control with such Person,
including any officer, director, employee, partner or
trustee of such Person, but excluding any shareholder
of the Trust by reason of such shareholder's
beneficial ownership of less than 9.8 percent of the
voting shares of the Trust.
(c) "Gross Receipts" means the gross revenues generated
by the Trust during a particular period of time from
operations, including rents, percentage rents, tenant
reimbursements, interest and other income, but
excluding receipts from capital transactions
including sales, financings, refinancings and the
sale of equity securities.
(d) "Independent Trust Manager" means any Trust Manager
who is not an Affiliate of the Advisor or any
Affiliate of the Advisor.
(e) "Initial Term" means the term that commences with
the Effective Date and ends at 11:59 p.m., Houston
time, on December 31, 1998.
(f) "Officer" means any officer of the Trust as may be
elected or appointed by the Trust Managers, the
Chairman of the Trust Managers, the Chief Executive
Officer or the President of the Trust, or as
otherwise set forth in the Trust's Bylaws. An
officer of the Trust may also be an officer of the
Advisor or an Affiliate of the Advisor.
(g) "Person" means and includes any individual,
corporation, general partnership, limited
partnership, joint venture, land trust, common law
trust, business trust,
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limited liability company or other entity, as well as
any government and agency and political subdivision
thereof.
(h) "REIT" means a real estate investment trust as
defined in the Internal Revenue Code of 1986, as
amended (the "Code").
(i) "Real Estate Investment" means any direct or
indirect investment by the Trust in any interest in
Real Property (including leaseback arrangement), or
in any Person whose principal purpose is to make any
such investment(s).
(j) "Real Property" means land, right and/or interest in
land, leasehold interest, and any building,
structure, improvement, fixture and equipment and
furnishing located on or used in connection with the
land, right and/or interest in land, but excludes any
mortgage and any mortgage loan.
(k) "Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other
evidence of indebtedness or ownership, as well as any
warrants, rights or options to subscribe for, acquire
or purchase any of the foregoing.
(l) "Shares" means the shares of beneficial interest in
the Trust as described in the Trust's Declaration of
Trust.
(m) "Trust Managers" means, as of any particular time,
those persons holding office under the Declaration of
Trust as Trust Managers or successor or additional
trust manager, but shall exclude any officer,
representative, shareholder or agent of the Trust in
his position as such, provided, however, that nothing
herein shall be deemed to preclude any of the Trust
Managers from also serving as an officer,
representative or agent of the Trust or holding
Shares in the Trust.
SECTION 2. APPOINTMENT AS ADVISOR.
The Independent Trust Managers unanimously have appointed the
Advisor to serve as Advisor to the Trust on the terms and conditions set forth
below and the Advisor has accepted such appointment on such terms and
conditions.
SECTION 3. TERM; RENEWALS; TERMINATION
(a) The initial term (the "Initial Term") of this Agreement shall
commence on the Effective Date and shall end at 11:59 p.m., Houston time, on
December 31, 1998. This Agreement shall automatically be renewed for five (5)
successive one (1) year terms, provided, however, that prior to each renewal
term, a majority of Independent Trust Managers shall have reviewed the
performance of the Advisor for the term just ending and shall determine that
such performance has been satisfactory.
(b) In the event that (i) the Trust Managers determine that the
performance of the Advisor was not satisfactory as provided in Section 3 (a),
(ii) a majority of the Independent Trust Managers determine to cancel this
Agreement, or (iii) the Advisor shall elect to cancel this Agreement, then, in
any of such events, the party wishing to terminate this Agreement shall give at
least six (6) calendar months' prior written notice to the other party and upon
the expiration of such notice period, this Agreement shall terminate and be of
no further force or effect. In the event
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of a termination of this Agreement by the Trust, other than for cause, the
Trust shall pay to the Advisor a termination fee (the "Termination Fee") equal
to the product of the (i) average of the Advisory Fee paid or payable to the
Advisor for the three calendar months immediately preceding the effective date
of termination, and (ii) twelve (12), less any sums paid or payable to the
Advisor on account of the Advisory Fee for the calendar months, up to a maximum
of six (6), following the giving of the termination notice, but prior to the
effective date of such termination.
(c) Notwithstanding the provisions of Section 3 (b), the Trust may
terminate this Agreement for cause at any time without notice or payment of any
Termination Fee.
(d) In the event of a termination of this Agreement, for any
reason or no reason, the Advisor shall cooperate with the Trust and shall take
all reasonable steps requested by the Trust to make an orderly transition of
the advisory functions.
(e) In connection with such termination, the Advisor shall deliver
to the Trust, forthwith, all books and records of the operations and business
of the Trust as the Trust shall request, and shall retain all other books and
records pertaining to the operations and business of the Trust for a period of
five (5) years following such termination.
(f) In the event of a termination of this Agreement by the
Advisor, other than for cause, no Termination Fee shall be due or payable. In
the event that the Advisor shall terminate this Agreement for cause, the
Advisor shall be entitled to receive a termination fee equal to the Termination
Fee.
(g) All fees (including any fees payable on account of a
termination of this Agreement) payable hereunder shall be due and paid on or
before the expiration of the 10th day of the calendar month immediately
following the calendar month for which they are payable. In the event and to
the extent that the results of operations for the preceding month(s) are not
known by the 10th day of the month in which a fee is to be paid, payment shall
be estimated based on the last month (or three months in the case of a fee for
termination) and an adjustment shall be made to reflect the amount actually due
and payable as soon as is practicable, but no later than the 10th day of the
month following the date that such adjustments have been determined.
SECTION 4. DUTIES OF ADVISOR
(a) The primary duties of the Advisor shall be to use its
best efforts to administer the day-to-day operations of the Trust and to
implement the directives of the Trust Managers with respect to Property
operations, maintenance, rehabilitation, acquisitions, financings, refinancings
and dispositions. In connection therewith, the Advisor shall use its best
efforts to:
(i) perform necessary or appropriate administrative
functions in the management of the Trust;
(ii) serve as the Trust's investment and financial advisor
and in connection therewith, provide research,
economic and statistical data in support of the
Trust's investment and financial policies, and
monitor the trust's investments and financial
policies;
(iii) investigate, retain, replace and conduct relations on
behalf of the Trust with accountants, attorneys, real
estate brokers and property managers, investors,
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builders, developers, bankers and other lenders,
insurance underwriters, securities underwriters,
stock exchanges, registrars and transfer agents, the
Securities and Exchange Commission and state blue sky
commissions, public relations companies, appraisers,
engineers, and other professional entities whose
services the Trust may wish to retain;
(iv) maintain bank accounts for the Trust, and arrange for
fidelity bonds covering the personnel who handle
funds and other liquid assets of the Trust;
(v) administer such day-to-day bookkeeping and accounting
functions as are necessary or appropriate for the
proper management of the assets of the Trust;
(vi) contract for audits and prepare or cause to be
prepared such reports as may be required to comply
with governmental requirements;
(vii) obtain such services as may be necessary or
appropriate to acquire and dispose of trust assets,
collect and disburse Trust funds, and prosecute,
defend and settle Trust claims;
(viii) supervise and monitor the services of all
professionals and agents retained by or for the
benefit of the Trust to ensure that the Properties
are operated and the business of the Trust is
conducted in a prudent and businesslike manner; and
(ix) render advice and, where appropriate, assistance in
the conduct of the Trust's business and affairs.
(b) In connection with the performance of its duties under this
Agreement, the Advisor shall, at the request of the Trust, (i) provide for the
payment by the Advisor of all salaries, bonuses, if any, payroll taxes and
fringe benefits for all officers and other employees of the Trust and/or of the
Advisor who perform services for the Trust, (ii) make available, at its own
cost, such other support personnel (other than contract labor) as the Trust may
require, (iii) supply the Trust with office space and equipment, including
telephones, facsimile and duplicating equipment, and (iv) grant access to
conference rooms and other amenities generally utilized by a company of similar
size and business activity as the Trust.
(c) The Trust shall pay for the fees and expenses of its Trust
Managers and for its own direct and variable expenses that are identifiable
directly to the Trust's activities and operations. In this regard, the trust
will bear its own costs for long distance telephone and travel, postage,
printing costs and contract labor costs.
SECTION 5. COMPENSATION TO THE ADVISOR.
(a) During the Initial Term of this Agreement, the Trust shall pay
to the Advisor, as compensation for the Advisor's services performed hereunder,
a fee (the "Advisory Fee") in an amount equal to 6.8% of the Trust's Adjusted
Funds from Operations. Such Advisory Fee shall be paid to the Advisor monthly
in arrears on or before the 10th day of the calendar month immediately
following the calendar month for which it is payable. Adjustments shall be
made, monthly in arrears, to reflect any bad checks or similar debits to the
Gross Receipts actually received by or for the benefit of the Trust during the
preceding calendar month. In the event and to the extent that the results of
operations for the preceding month(s) are not known by the 10th day of the
month in which a fee is to be paid, payment shall be estimated based on the
last month (or three months in the case of a fee for termination). Adjustments
shall be made to reflect the amount actually due
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and payable as soon as is practicable, but no later than the 10th day of the
month following the date that such adjustments have been determined.
(b) The Advisory Fee payable to the Advisor during any renewal
term shall be fixed by a majority of the Independent Trust Managers and shall
be determined on the basis of the size, composition and profitability of the
Trust and the amount of similar compensation paid by other real estate entities
owning and operating portfolios of real estate similar in size, type, location
and/or profitability to that of the Trust. Such compensation shall also take
into account the quality and extent of the services provided. The performance
of the Trust's portfolio and the degree of difficulty encountered in the
markets where the Trust's properties are located. The Advisory Fee, however,
shall not exceed 6.8% of the Trust's Adjusted Funds from Operations per annum.
(c) In addition to the Advisory Fee, the Trust shall establish an
incentive plan for the granting of shares of the Trust, options to purchase
such shares and/or other incentive compensation and may grant such shares,
options and/or other incentive compensation directly to the Trust Managers,
officers and other key employees and/or through the Adviser for the benefit of
the officers and other key personnel who are instrumental in the business,
affairs and success of the Trust. To the extent that such shares, options
and/or other incentive compensation are granted to the Adviser for the benefit
of officers and other key personnel who tend to the business, affairs and
success of the Trust, such shares, options and/or other incentive compensation
may be held by the Adviser and/or transferred directly to such officers and
other key personnel. Such shares, options and/or other incentive compensation
granted by the Trust to the Advisor may be in lieu of a portion (but not more
than 50%) of the Advisory Fee and/or in addition to the Advisory Fee.
(d) The Trust shall not pay to the Advisor, or to any Affiliate of
the Advisor, any fee for the acquisition or disposition of any Real Property.
The preceding sentence shall not preclude the Trust from contracting with any
third party to act as its agent, broker or finder in connection with the
acquisition and/or disposition of Real Property and to pay reasonable fees or
commissions to such third parties in connection therewith. Nor shall the
foregoing preclude the Trust or the Advisor from hiring directly any
acquisition/disposition personnel whose compensation shall be based, in part,
on commissions earned from acquisition and/or disposition activities.
(e) The Advisor shall furnish to the Trust monthly, quarterly and
annual statements in form and content reasonably satisfactory to the Trust,
which statements reflect the computation of the Advisory Fee with respect to
the calendar month, quarter or year then ended.
(f) The Trust shall reimburse the Advisor for any necessary and
proper expenses which the Advisor incurs for the benefit of the Trust and with
respect to which the Trust is obligated hereunder to pay.
SECTION 6. OTHER ACTIVITIES OF THE ADVISOR.
(a) The Advisor may engage in business activities and advisory
services in addition to those set forth herein, either for its own account or
for the account of others. The Advisor shall not, however, perform similar
functions for any other real estate entity whose primary function is to own and
operate shopping centers in the United States.
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(b) Except as expressly prohibited in Section 6 (a), nothing set
forth in this Agreement shall (i) prohibit the Advisor from advising other real
estate entities or engaging in other activities which complement the Trust's
investments, or (ii) prohibit , limit or restrict the right of any director,
officer, employee or shareholder of the Advisor, whether or not such person is
also a Trust Manager, officer , or employee of the Trust, to engage in any
other business or render services of any kind to any other person or entity.
(c) The Advisor, including any Affiliate, may lend money to or
participate with the Trust in any investment, with or without remuneration,
provided, however, that neither the Advisor nor any Affiliate shall invest or
participate in an investment in any shopping center (other than by way of a
loan or a foreclosure of a secured loan or deed given in lieu thereof) within
the United States.
SECTION 7. FIDUCIARY RELATIONSHIP.
The Advisor, as a result of its relationship with the Trust, stands in
a fiduciary relationship with the shareholders of the Trust.
SECTION 8. NO PARTNERSHIP OR JOINT VENTURE.
The Trust and the Advisor are not, and shall not be deemed to be,
partners or joint venturers with each other. Nothing herein contained shall be
construed to make them partners or joint venturers or to impose any liability
on either of them as if one of them was the partner or joint venturer with the
other.
SECTION 9. RECORDS.
The Advisor shall keep proper books of account and records relating to
the services performed hereunder. Such books and records shall be accessible
for inspection by or for the benefit of the Trust Managers upon reasonable
notice during regular business hours.
SECTION 10. REIT QUALIFICATION; VIOLATION OF LAW.
The Advisor shall refrain from any action which in its judgment, or in
the judgment of the Trust Managers after reasonable notice to the Advisor,
might adversely affect the qualification of the Trust as a REIT or which would
violate any law or regulation of any governmental body or agency having
jurisdiction over the Trust or its securities.
SECTION 11. BANK ACCOUNTS.
The Advisor may establish one or more bank accounts in its own name
and may deposit into and disburse from such accounts any money on behalf of the
Trust under such terms and conditions as a majority of the Independent Trust
Managers may approve, provided, that no funds in such accounts shall be
commingled with funds of the Advisor or any other Affiliate or client of
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the Advisor. The Advisor shall render a monthly accounting of such deposits
and payments to the Trust and to the auditors of the Trust.
SECTION 12. INFORMATION FURNISHED THE ADVISOR; CONFIDENTIALITY.
(a) The Trust is, or soon will be, a publicly traded REIT. As
such information regarding the Trust's operations, activities and intentions
may be confidential. The Advisor will treat such information as confidential
and proprietary and will not divulge or otherwise disclose such information to
others not affiliated with the Trust without the approval of an Independent
Trust Manager unless under a legal obligation to do so.
(b) Further, under applicable securities laws, the Advisor and its
directors, officers and other key employees may be deemed to be "Insiders" as
such term is used by the Securities and Exchange Commission. The Advisor will
use its best efforts to prevent its directors, officers and other key employees
from violating any applicable "Insider" restrictions.
(c) The Trust Managers shall keep the Advisor informed, in
writing, concerning investment and operating policies of the Trust and shall
make available to the Advisor a copy of (i) all financial statements prepared
by the Trust's independent certified public accountants, and (ii) such other
information regarding the policies and affairs of the Trust as the Advisor
shall reasonably request.
SECTION 13. DEFAULT.
At the option of the Trust, this Agreement shall automatically
terminate upon written notice from the Trust to the Advisor if any of the
following events shall occur:
(a) the Advisor shall fail to make any payment of money to or for
the benefit of the Trust after the expiration of five (5) business days after
receipt of written notice of such failure;
(b) the Advisor shall fail to cure (or shall have failed to
commence the curing of such failure and be diligently prosecuting the curing
of) any non-monetary default within thirty (30) days after receipt of written
notice of such failure; or
(c) the Advisor shall be adjudged bankrupt or insolvent by a court
of competent jurisdiction, or any order shall be made by such court for the
appointment of a receiver, liquidator or trustee of the Advisor of all or
substantially all of its property of the Advisor by reason of the foregoing, or
the Advisor shall file a voluntary petition in bankruptcy or for relief of
debtors, or shall consent to the appointment of a receiver, or shall make a
general assignment for the benefit of creditors, and in any of such events
such default shall not be eliminated within thirty (30) days after receipt of
written notice.
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SECTION 14. MISCELLANEOUS.
(a) Whenever action on the part of the Trust Managers is
contemplated hereunder, action by a majority of the Independent Trust Managers
shall constitute the action required hereunder.
(b) This Agreement shall not be modified, amended or terminated
except by written instrument duly executed by both parties hereto.
(c) This Agreement may not be assigned by the Advisor without the
prior written consent of a majority of the Independent Trust Managers. Any
assignment in violation of the preceding sentence shall be void ab initio.
(d) The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas.
(e) The Advisor assumes no responsibility under this Agreement
other than to render the services called for herein in good faith, and shall
not be responsible for any action of the Trust in following or declining to
follow any advice or recommendation of the Advisor. None of the Advisor, its
shareholders, directors, officers or employees shall be liable to the Trust,
the Trust Managers or the shareholders of the Trust or for the debts or
obligations of the Trust except (i) by reason of acts constituting bad faith,
willful misfeasance, gross negligence or reckless disregard of their duties, or
(ii) with respect to obligations of the Trust for which the Advisor has
expressly assumed an undertaking hereunder to pay to or on behalf of the Trust,
in which event the Advisor, but not any of its directors, officers or
employees, shall be liable.
(f) Any communications given hereunder shall be in writing
delivered at the address of the respective party at which that party most
recently has established as its principal office, or at such other address as a
party shall have specified to the other party. As of the effective date
hereof, the addresses of each party are as follows:
(i) If to the Trust: at its principal office at 0000 Xxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Chief Executive
Officer,
(ii) If to the Advisor: at its principal office at 0000 Xxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Chairman.
SECTION 15. EXCULPATION FROM PERSONAL LIABILITY.
This Agreement is made on behalf of the Trust by the Chief Executive
Officer, not individually but solely as an executive officer of the Trust. The
obligations of the Trust under this Agreement are not binding upon, nor shall
resort be had to, the private property of any of the Trust Managers,
shareholders, executive officers, officers, employees or agents of the Trust
personally, but bind only the Trust property.
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IN WITNESS WHEREOF, each of the Trust and the Advisor has executed and
delivered this Agreement on their respective behalves on or as of the 9th day
of June, 1997.
TRUST: UNITED INVESTORS REALTY TRUST
By: /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Chief Executive Officer
ADVISOR: FCA CORP
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
Chairman
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