EXHIBIT 10(B)
Draft of October 31, 1997
Marked to Show Changes From
Draft of September 15, 1997
Xxxxxxx and Xxxxxx
Draft of 10/31/97
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Advisory Agreement
between
Xxxxxx Preferred Capital Corporation
and
Xxxxxx Trust and Savings Bank
__________________
___________________, 1997
__________________
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Table of Contents
Page
Article 1 Definitions..................................... 1
Section 1.1. Definitions.................................. 1
Article 2 Duties of the Advisor........................... 2
Article 3 Compensation of the Advisor..................... 4
Article 4 Expenses of the Advisor......................... 4
Article 5 Records......................................... 4
Article 6 REIT Qualification and Compliance............... 4
Article 7 Term: Termination............................... 5
Article 8 Other Activities of the Advisor................. 5
Article 9 Binding Effect: Assignment...................... 5
Article 10 Subcontracting.................................. 6
Article 11 Liability and Indemnity of the Advisor.......... 6
Article 12 Action upon Notice of Non-Renewal or Termination 7
Article 13 No Joint Venture or Partnership................. 7
Article 14 Notices......................................... 7
Article 15 Severability.................................... 8
Article 16 Governing Law................................... 8
Article 17 Amendments...................................... 9
Article 18 Headings........................................ 9
Signature Page..................................................... 10
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Advisory Agreement
Advisory Agreement (the "Agreement") entered into as of ______________,
1997 between Xxxxxx Preferred Capital Corporation, a Maryland corporation (the
"Company") and Xxxxxx Trust and Savings Bank, an Illinois banking corporation
(the "Advisor").
Whereas the Company intends to qualify as a "real estate investment trust"
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code");
And Whereas the Company desires to avail itself of the experience and
assistance of the Advisor and to have the Advisor undertake, on the Company's
behalf, the duties and responsibilities hereinafter set forth, subject to the
control and supervision of the Board of Directors of the Company (the "Board of
Directors") as provided for herein;
And Whereas the Advisor desires to render such services to the Company
subject to the control and supervision of the Board of Directors, on the terms
and conditions hereinafter set forth.
Now, Therefore, the parties hereto hereby agree as follows:
Article 1
Definitions
Section 1.1. Definitions. As used herein, the following terms shall have
the respective meanings set forth below:
"Advisor" has the meaning set forth in the forepart of this Agreement.
"Advisor Termination Date" means the date on which this Agreement
terminates.
"Agreement" means this Advisory Agreement, as amended, modified and
supplemented from time to time.
"Board of Directors" has the meaning set forth in the forepart of this
Agreement.
"Company" has the meaning set forth in the forepart of this Agreement.
"Independent Directors" means the members of the Board of Directors
who are not current officers or employees of the Company or current directors,
employees or officers of the Advisor or any affiliate of the Advisor.
"Operating Expenses" for any period means all of the operating
expenses of the Company (with the exception of those expenses to be borne by the
Advisor in accordance with Article 4 hereof).
"Person" means and includes individuals, corporations, limited
partnerships, general partnerships, joint stock companies or associations,
limited liability companies, joint ventures, associations, consortia, companies,
trusts, banks, trust companies, land trusts, common laws trusts, business trusts
or other entities, governments and agencies and political subdivisions thereof.
"REIT" has the meaning set forth in the forepart of this Agreement.
Article 2
Duties of the Advisor
The Advisor shall consult with the Board of Directors and the officers of
the Company and shall, at the request of the Board of Directors and/or the
officers of the Company, furnish advice and recommendations with respect to all
aspects of the business and affairs of the Company. Subject to the control and
discretion and at the request of the Board of Directors, the Advisor shall:
(a) administer the day-to-day operations and affairs of the Company,
including, without limitation, the performance or supervision of the
functions described in this Article 2;
(b) monitor the credit quality of the real estate mortgage assets
held by the Company;
(c) advise the Company with respect to the acquisition, management,
financing and disposition of the Company's real estate mortgage assets;
(d) represent the Company in its day-to-day dealings with Persons
with whom the Company interacts, including, without limitation,
stockholders of the Company, the transfer agent of the Company,
consultants, accountants, attorneys, servicers of the Company's mortgage
loans, custodians, insurers and banks;
(e) establish and provide necessary services for the Company,
including executive, administrative, accounting, stockholder relations,
secretarial, recordkeeping, copying, telephone, mailing and distribution
facilities;
(f) maintain communications and relations with the stockholders of
the Company, including, but not limited to, responding to inquiries, proxy
solicitations, providing reports to stockholders and arranging and
coordinating all meetings of stockholders;
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(g) monitor and supervise the performance of all parties who have
contracts to perform services for the Company, provided that the Advisor
shall have no duty to assume the obligations or guarantee the performance
of such parties under such contracts;
(h) arrange for the execution and delivery of such documents and
instruments by the officers of the Company as may be required in order to
perform the functions herein described and to take any other required
action contemplated by the terms of this Agreement;
(i) maintain proper books and records of the Company's affairs and
furnish or cause to be furnished to the Board of Directors such periodic
reports and accounting information as may be required from time to time by
the Board of Directors, including, but not limited to, quarterly reports of
all income, expenses and distributions of the Company;
(j) consult and work with legal counsel for the Company in
implementing Company decisions and undertaking measures consistent with all
pertinent federal, state, provincial and local laws and rules or
regulations of governmental or quasi-governmental agencies, including, but
not limited to, federal and state securities laws and tax laws, as it
relates to the Company's qualification as a REIT, and the regulations
promulgated under each of the foregoing;
(k) consult and work with accountants for the Company in connection
with the preparation of financial statements, annual reports and tax
returns;
(l) prepare and distribute, in consultation with the accountants for
the Company, annual reports to stockholders which will contain audited
financial statements;
(m) furnish reports to the Board of Directors and provide research,
economical and statistical data in connection with the Company's
investments;
(n) as reasonably requested by the Company, make reports to the
Company of its performance of the foregoing services and furnish advice and
recommendations with respect to other aspects of the business of the
Company; and
(o) take any other action necessary to allow the Company to continue
to qualify as a REIT for federal income tax purposes.
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Article 3
Compensation of the Advisor
The Company shall pay to the Advisor, for services rendered by the Advisor
hereunder, an advisory fee equal to Twenty-Five Thousand Dollars ($25,000) per
year, payable in equal quarterly installments.
Article 4
Expenses of the Advisor
(a) Without regard to the compensation received pursuant to Article 3
hereof, the Advisor shall bear the following expenses:
(i) employment expenses of the personnel employed by the Advisor,
including, without limitation, salaries, wages, payroll taxes and the cost
of employee benefit plans; and
(ii) rent, telephone equipment, utilities, office furniture and
equipment and machinery and other office expenses of the Advisor incurred
in connection with the maintenance of any office facility of the Advisor.
(b) The Company shall reimburse the Advisor within 30 days of a written
request by the Advisor for any Operating Expenses paid or incurred by the
Advisor on behalf of the Company.
Article 5
Records
The Advisor shall maintain appropriate books of account and records
relating to services performed hereunder, and such books of account and records
shall be accessible for inspection by the Board of Directors and representatives
of the Company at all times.
Article 6
REIT Qualification and Compliance
The Advisor shall consult and work with the Company's legal counsel in
maintaining the Company's qualification as a REIT. Notwithstanding any other
provisions of this Agreement to the contrary, the Advisor shall refrain from any
action which, in its reasonable judgment or in the judgment of the Board of
Directors (of which the Advisor has received written notice), may
adversely affect the qualification of the Company as a REIT or
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which would violate any laws, rule or regulation of any governmental body or
agency having jurisdiction over the Company or its securities, or which would
otherwise not be permitted by the articles of incorporation or by-laws of the
Company. Furthermore, the Advisor shall take any action which, in its judgment
or the judgment of the Board of Directors (of which the Advisor has received
written notice), may be necessary to maintain the qualification of the Company
as a REIT or prevent the violation of any law or regulation of any governmental
body or agency having jurisdiction over the Company or its securities.
Article 7
Term: Termination
This Agreement shall be in full force and effect for a term beginning on
the date hereof with an initial term of one year, and may be renewed for
additional one-year periods at the election of the Company. Notwithstanding the
foregoing, at any time after the initial term, the Company may terminate this
Agreement at any time upon 60 days' prior written notice; provided, however,
that as long as any shares of the Company's _____% Noncumulative Exchangeable
Preferred Stock, Series A, par value $.01 per share, remain outstanding, any
decision by the Company to renew, terminate or modify this Agreement must be
approved by a majority of the Board of Directors, as well as by a majority of
the Independent Directors.
Article 8
Other Activities of the Advisor
(a) Nothing herein contained shall prevent the Advisor, an affiliate of
the Advisor or an officer, director, employee or stockholder of the Advisor from
engaging in any activity, including, without limitation, originating, purchasing
and managing real estate mortgage assets, rendering of services and investment
advice with respect to real estate investment opportunities to any other Person
(including other REITs) and managing other investments (including the
investments of the Advisor and its affiliates).
(b) Officers, directors, employees, stockholders and agents of the Advisor
or of any affiliate of the Advisor may serve as officers, directors, employee or
agents of the Company, but shall receive no compensation (other than
reimbursement for expenses) from the Company for such service.
Article 9
Binding Effect: Assignment
This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto and their respective successors and assigns. Neither party may
assign this Agreement
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or any of its respective rights hereunder (other than an assignment to a
successor organization which acquires substantially all of the property of such
party or, in the case of the Advisor, to an affiliate of the Advisor) without
the prior written consent of the other party to this Agreement.
Article 10
Subcontracting
The Advisor may at any time subcontract all or a portion of its obligations
under this Agreement to one or more affiliates of the Advisor that are involved
in the business of managing real estate mortgage assets without the consent of
the Company. If no affiliate of the Advisor is engaged in the business of
managing real estate mortgage assets, the Advisor may, with the approval of a
majority of the Board of Directors, as well as a majority of the Independent
Directors, subcontract all or a portion of its obligations under this Agreement
to unrelated third parties. Notwithstanding the foregoing, the Advisor will
not, in connection with subcontracting any of its obligations under this
Agreement, be discharged or relieved in any respect from its obligations under
this Agreement.
Article 11
Liability and Indemnity of the Advisor
The Advisor assumes no responsibilities under this Agreement other than to
perform the services called for hereunder in good faith. Neither the Advisor
nor any of its affiliates, stockholders, directors, officers or employees will
have any liability to the Company, stockholders of the Company or others except
by reason of acts or omissions constituting gross negligence or willful breach
of any of the Advisor's material obligations under this Agreement. The Company
shall indemnify and reimburse (if necessary) the Advisor, its stockholders,
directors, officers, employees and agents for any and all expenses (including,
without limitation, attorneys' fees and expenses), losses, damages, liabilities,
demands and charges of any nature whatsoever in respect of or arising from any
acts or omissions by the Advisor pursuant to this Agreement, provided that the
conduct against which the claim is made was determined by such Person, in good
faith, to be in the best interests of the Company and was not the result of
gross negligence by such Person or willful breach of any of such Person's
material obligations by such Person. The Advisor agrees that any such
indemnification is recoverable only from the assets of the Company and not from
the stockholders.
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Article 12
Action upon Notice of Non-Renewal or Termination
Forthwith upon giving of notice of non-renewal of this Agreement by the
Company or of termination of this Agreement by the Company, the Advisor shall
not be entitled to compensation after the Advisor Termination Date for further
services under this Agreement, but shall be paid all compensation accruing to
the Advisor Termination Date and shall be reimbursed for all expenses of the
Company paid or incurred by the Advisor as of the Advisor Termination Date which
are reimbursable by the Company under this Agreement. The Advisor shall promptly
after the Advisor Termination Date:
(a) deliver to the Company all assets and documents of the Company
then in the custody of the Advisor; and
(b) cooperate with the Company and take all reasonable steps
requested to assist the Board of Directors in making an orderly transfer of
the administrative functions of the Company.
Article 13
No Joint Venture or Partnership
Nothing in this Agreement shall be deemed to create a joint venture or
partnership between the parties, whether for purposes of taxation or otherwise.
Furthermore, nothing in this Agreement conveys to, or otherwise grants, the
Advisor the authority to conclude contracts in the name of the Company.
Article 14
Notices
Unless expressly provided otherwise herein, all notices, requests, demands
and other communications required or permitted under this Agreement shall be in
writing and shall be made by hand delivery, certified mail, overnight courier
service, telex or telecopier. Any notice shall be duly addressed to the parties
as follows:
(a) If to the Company: Xxxxxx Preferred Capital Corporation
_______________________________
_______________________________
(b) If to the Advisor: Xxxxxx Trust and Savings Bank
_______________________________
_______________________________
_______________________________
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Either party may alter the address to which communications or copies are to
be sent by giving notice of such change of address in conformity with the
provisions of this Article 14 for the giving of notice.
Article 15
Severability
If any term or provision of this Agreement or the application thereof with
respect to any Person or circumstance shall, to any extent, be invalid or
unenforceable (other than Article 13), the remainder of this Agreement, or the
application of that term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
Article 16
Governing Law
Each of the parties hereto irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of any court sitting
in Illinois, and any appellate court thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction. Each of the
parties hereto irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection they may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in the courts of Illinois. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court. The parties hereto hereby agree that the final judgment in any such
action or proceeding shall be conclusive and may be in force in any other
jurisdiction by suit on the judgment or in any other manner provided by law.
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Article 17
Amendments
This Agreement shall not be amended, changed, modified, terminated or
discharged in whole or in part except by an instrument in writing signed by both
parties hereto or their respective successors or assigns, or otherwise as
provided herein.
Article 18
Headings
The article headings herein have been inserted for convenience of reference
only and shall not be construed to affect the meaning, construction or effect of
this Agreement.
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In Witness Whereof, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the date first
written above.
Xxxxxx Preferred Capital Corporation
By
_________________________________
Xxxxxx Trust and Savings Bank
By
_________________________________
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