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EXHIBIT 10.1
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made and entered into as of 1
April 2001 by and between CENTEX DEVELOPMENT COMPANY, L.P., a Delaware limited
partnership (the "Partnership"), and CENTEX HOMES, a Nevada general partnership
("Manager").
WITNESSETH
The Partnership desires to engage the services of Manager to oversee,
manage and increase in value the investment of Centex Development Company (UK)
Limited, a subsidiary of the Partnership, in Xxxxxxxxxx Homes Group Limited, a
United Kingdom house building company ("Xxxxxxxxxx"). Manager desires to accept
such engagement, upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partnership and Manager do
hereby agree as follows:
1. Term of Agreement. The initial term of this Agreement shall extend from
the date hereof to the close of business on 31 March 2002, provided that
this Agreement shall continue thereafter for successive one-year terms
unless either the Manager or the Partnership elects to terminate this
Agreement upon at least thirty (30) days' written notice to the other
party prior to 31 March of any year, and, provided further, that this
Agreement may be sooner terminated in accordance with the provisions of
Section 13 hereof.
2. Management Services. Unless the Partnership shall instruct it otherwise,
Manager shall perform the services hereinafter described in this Section
2 with respect to Xxxxxxxxxx.
a. Oversight of the Operations of Xxxxxxxxxx.
i. Enhancement of Value of the Assets of Xxxxxxxxxx. Manager
shall use reasonable efforts, working in concert with the
employees of Xxxxxxxxxx and of Centex Development Holding
Company UK Limited (together the "European Management"), to
protect and enhance the value of all assets of Xxxxxxxxxx,
including real property, show homes, work in progress,
homes under construction, equipment, cash and accounts
receivable (the "Assets"). Such efforts shall include, but
not be limited to, counseling and participating in
strategic planning and the development of (procuring) an
annual business plan, and providing oversight of Xxxxxxxxxx
operations, including land acquisition and development,
construction, warranty repair, marketing, sales and
completions.
ii. Annual Business Plan. During the fourth quarter of each
fiscal year while this Agreement is in effect, each fiscal
year commencing 1 April and terminating on the following 31
March, Manager will submit to, or will cause (procure) the
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submission to, the Partnership for its review and approval
of an annual business plan for the upcoming fiscal year.
Such annual business plan will be mutually agreed by
Manager and Partnership prior to the commencement of the
upcoming fiscal year.
iii. Expansion of Business. Manager shall use reasonable
efforts, working in concert with the European Management,
to improve and expand the house building operations of
Xxxxxxxxxx, and all collateral operations (herein
collectively the "Business"). Among other things,
management will provide oversight and strategic planning
aid to Xxxxxxxxxx, working in concert with European
Management, in order to enhance and expand the Business.
iv. Implementation of Business Plan. The Partnership hereby
delegates to Manager full authority, working in concert
with European Management, to take all actions necessary to
carry out on behalf of the Partnership the annual business
plan approved by the Partnership for Xxxxxxxxxx, subject to
reacting to unforseen changes in the marketplace and other
appropriate business adjustments. Although this Agreement
contemplates that Manager will work in concert and in
conjunction with European Management, the power delegated
to Manager in this Agreement includes the power to direct
European Management, within the limits of the delegated
power.
b. General.
i. Reporting. Within forty-five (45) days after the end of
each calendar quarter, beginning with the quarter ending 30
June 2001, Manager shall prepare and deliver to, or shall
cause (procure) to be prepared and delivered to, the
Partnership a detailed statement of revenues received and
expenditures incurred or paid during the calendar quarter
by Xxxxxxxxxx.
Within ninety (90) days after the end of each calendar
year, Manager shall prepare and deliver to, or shall cause
(procure) to be prepared and delivered to, the Partnership
a detailed statement of revenues received and expenditures
incurred or paid during the calendar year by Xxxxxxxxxx.
Manager shall furnish, or shall cause (procure) the
furnishing, of such additional information as may be
reasonably requested by the Partnership from time to time
with respect to the financial, physical or operational
condition of Xxxxxxxxxx, the Assets and the Business,
including quarterly reports on operations and a comparison
of the annual business plan to results actually achieved
during each quarter. The foregoing reporting requirements
will not alter in any material respect the accounting
reporting processes which occur typically within ten (10)
working days following the close of each quarter under
which Xxxxxxxxxx provides its financial results for
inclusion within the financial statements of the
Partnership.
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ii. Bookkeeping. All bookkeeping, clerical and other general
and administrative expenses (including but not limited to
costs of office supplies and equipment, data processing
services, postage, transportation for managerial personnel,
telephone services, hotel accommodation, travel,
subsistence, entertaining and other communication services)
shall be borne by Manager out of its own funds.
Notwithstanding the foregoing, the portion of the
bookkeeping, clerical and other general and administrative
expenses that is reasonably allocable to the performance by
Manager of its duties and obligations under this Agreement
shall be borne by the Partnership and shall be paid to
Manager upon demand, but not more frequently than every
three (3) months. Compensation for such services performed
by the Manager, including insurance costs described in
Section 11 below, shall be paid directly to Manager from
the resources of the Partnership.
iii. Statutory Compliance. Manager shall perform its duties
hereunder in full compliance with all applicable laws and
regulations of the United Kingdom and all subparts thereof.
3. Additional Services. Manager shall provide such additional tax,
accounting, bookkeeping, clerical, financial reporting, legal and similar
services to the Partnership relative to Xxxxxxxxxx as may from time to
time be reasonably requested by the Partnership.
4. Authority of Manager to Act on General Instructions. The authority
granted to Manager, working in conjunction with the European Management,
by the terms of this Agreement shall be deemed to include the authority
to take, without further authorization from the Partnership, such
specific actions as may be reasonably necessary or appropriate in
connection with the performance by Manager of its duties and obligations
under this Agreement and the carrying out of the instructions given to it
by the Partnership in accordance with this Agreement, notwithstanding the
fact that such actions may not have been specifically authorized by the
provisions of this Agreement or by the Partnership. However, unless
contemplated in the current business plan, Manager may not take any of
the following actions without the prior written consent of Partnership:
a. sell or transfer all or a substantial part of any of the business,
assets or undertaking of Xxxxxxxxxx;
b. resolve that Xxxxxxxxxx be wound up voluntarily in circumstances
where such winding up would be a voluntary winding up under the
United Kingdom Insolvency Xxx 0000;
c. require the employees of Xxxxxxxxxx to devote significant time or
attention otherwise than to the business of Xxxxxxxxxx;
d. allow any goods and/or services purchased by Xxxxxxxxxx to be used
otherwise than exclusively for the benefit of Xxxxxxxxxx;
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e. consolidate or merge the businesses carried on by Xxxxxxxxxx with
any other entity;
f. change the Auditors of Xxxxxxxxxx;
g. allow Xxxxxxxxxx to incur or enter into any agreement or
commitment involving any capital expenditure in excess
of(pound)500,000 per item and(pound)1,500,000 in aggregate in any
one financial year;
h. increase the indebtedness of Xxxxxxxxxx in excess of(pound)2
million per transaction and in excess of(pound)5 million in
aggregate in any one financial year;
i. allow Xxxxxxxxxx to acquire or agree to acquire or dispose of or
agree to dispose of any material asset or material stocks or enter
into or amend any material contract or arrangement which in
aggregate or per item involves consideration, expenditure or
liabilities in excess of (pound)5 million in any one financial
year.
j. allow Xxxxxxxxxx to acquire or agree to acquire any share, shares
or other interest in any company, partnership or joint venture
(other than the establishment of joint venture management
companies) which would have a material impact on Xxxxxxxxxx'x
business;
k. except in the ordinary course of its business including, without
limitation, normal debt recovery actions, allow Xxxxxxxxxx to
initiate, compromise, settle, release, discharge or compound
litigation or arbitration proceedings or a liability, claim,
action, demand or dispute or waive all rights in relation to
litigation or arbitration proceedings in excess of (pound)350,000
per action and in excess of (pound)750,000 in aggregate in any one
fiscal year;
l. take any steps directly or indirectly to cause Xxxxxxxxxx to cease
carrying on its business or to change the nature of its business
in a manner which its directors should reasonably have been aware
would have a material adverse effect on the operating profits of
the business;
m. take or omit to take any steps directly or indirectly which would
affect (or by omission would affect) adversely the ability of
European Management to operate effectively its business during the
term of this Agreement or its ability to maximize operating
profits from its business.
5. Use of Affiliates. Manager shall have the right to hire any affiliate of
Manager or the European Management to perform any services in connection
with the operation, management or development of Xxxxxxxxxx, provided,
however, that the fees paid to any affiliate of Manager or the European
Management for such services shall be similar to fees charged by
nonaffiliate entities providing the same or similar services on an arms
length basis.
6. Liability of Manager. Manager shall not be liable, responsible or
accountable in damages or otherwise to the Partnership for any act
performed by Manager on behalf of the Partnership and
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in a manner reasonably believed by Manager to be within the scope of the
authority granted to it by this Agreement and in the best interests of
the Partnership, provided that Manager was not guilty of gross negligence
or willful or wanton misconduct with respect to such act.
7. Indemnification. The Partnership shall indemnify, save harmless and
defend Manager and each of Manager's partners and its and their
shareholders, directors, officers, employees, agents, attorneys, insurers
and any affiliate of Manager hired or authorized by Manager pursuant to
the terms of this Agreement to perform any services in connection with
the operation, management or development of the Assets and the Business
(individually, an "Indemnitee") against any and all losses, damages,
liabilities, judgments, fines, penalties, amounts paid in settlement and
expenses (including reasonable attorneys' fees), including losses,
damages, liabilities, judgments, fines, penalties, amounts paid in
settlement and expenses (including reasonable attorneys' fees) incurred
as the result of the NEGLIGENCE OF ANY INDEMNITEE, arising out of or in
connection with anything done or omitted by such Indemnitee in connection
with the performance by Manager of its duties and obligations under this
Agreement, provided that such Indemnitee's conduct did not constitute
gross negligence or willful or wanton misconduct.
Manager agrees that if the Partnership defaults under this Agreement, the
Partnership's liability under this Agreement will be limited to its
interest in Xxxxxxxxxx. Manager waives any rights it may have to seek
recourse for such obligations against the partners, members, officers,
employees, directors, or shareholders of the Partnership or against any
other assets or interests of the Partnership (other than its interest in
Xxxxxxxxxx).
The terms of this Section 7 shall survive, and remain in effect
following, the termination of this Agreement.
8. Reimbursement of Manager. Manager shall in no event be required to
advance any of its own funds for the payment of the costs and expenses
that it is authorized by this Agreement to pay. If, however, Manager
shall at any time advance any of its own funds in payment of such costs
and expenses (which Manager shall have the right but not the obligation
to do), Manager may submit an invoice to the Partnership for the amount
of such advance (which invoice shall describe in reasonable detail the
costs and expenses so paid by Manager and shall be accompanied by the
receipt(s) for such payment), and the Partnership shall pay such amount
to Manager within ten (10) days after its receipt of such invoice and
accompanying receipts. If the Partnership fails to make such payment
within such ten (10) day period, the amount so owing by the Partnership
to Manager, if Manager so elects, shall bear interest from and after the
day on which Manager paid such costs and expenses on behalf of the
Partnership until such amount has been paid in full at a rate equal to
the lesser of the prime rate announced or published by Bank of America
(or its successor) from time to time or the maximum rate of interest
permitted under applicable law.
9. Insurance. Manager may (but shall not be obligated to) maintain, at the
expense of the Partnership, a program of insurance approved by the
Partnership, which program may include,
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without limitation, such insurance as Manager shall deem prudent to
protect against liability of Manager that may be occasioned by its
activities under this Agreement. Manager shall not make any material
change in such program of insurance without the prior written consent of
the Partnership (which consent shall not be unreasonably withheld or
delayed), unless such change does not result in an increase in the
potential liability of the Partnership in any respect.
Unless otherwise specifically authorized by the Partnership, Manager
shall obtain the insurance authorized by this Section 10 from the
insurance carriers that currently provide similar types of insurance
coverage to Centex Corporation and its subsidiary companies, and, to the
extent practicable, Manager shall, in lieu of obtaining separate
insurance coverage, be added as an insured under the policies
constituting the program of insurance maintained by the Partnership
(which program, as in effect on the date hereof, is hereby approved by
the Partnership for purposes of this Section 10), whether such policies
were obtained directly by the Partnership or through Centex Corporation
or its subsidiary corporations. Manager shall provide to the Partnership,
promptly after obtaining any insurance policy pursuant to this Section 10
(other than a policy under which the Partnership is also an insured), a
description, in reasonable detail, of the terms and provisions of such
policy.
Manager shall give written notice to the Partnership of the expiration or
anticipated termination of any insurance policy maintained by Manager in
connection with its performance of this Agreement at least fifteen (15)
days before such expiration or anticipated termination. Manager shall not
be liable to the Partnership or its general partner or to any other
person for damages, including consequential damages, for its failure to
obtain or maintain adequate insurance coverage.
10. Compensation.
a. Management Fee. Manager shall receive a fee for its services under
this Agreement of $1,000 per month, which shall be paid by the
Partnership to Manager within five (5) days after the end of each
month.
b. Additional Compensation. It is understood that all actions taken
by Manager pursuant to the provisions of this Agreement shall be
on behalf and for the sole benefit of the Partnership and that
Manager shall not be entitled to any compensation for such actions
except as expressly provided in this Agreement. Notwithstanding
the foregoing, the Partnership shall negotiate with Manager from
time to time in good faith regarding the payment by the
Partnership to Manager of, and shall pay to Manager, reasonable
additional compensation for the efforts taken or to be taken by
Manager pursuant to the provisions of this Agreement that the
parties agree have resulted or will result in the enhancement of
the value of the Assets or the Business; provided, however, that
any such payments shall be approved in advance by the Board of
Directors of 3333 Development Corporation, General Partner of the
Partnership.
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11. Assignment and Subcontracting. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by either party without the prior written consent of the other
party hereto. Any consent granted by either party to an assignment by the
other party shall not be deemed a consent to any subsequent assignment.
Notwithstanding the foregoing, Manager may, without the consent of the
Partnership, assign and delegate the performance of, and the
responsibility for, all but not less than all of the duties and
obligations of Manager hereunder to any corporation, firm, joint venture
or partnership fifty percent (50%) or more of whose voting stock (or its
equivalent) is owned directly or indirectly by, or which is otherwise
controlled by, Centex Corporation. Upon execution of any such assignment
and delegation, notice thereof in the form of an executed copy of the
document or instrument effecting such assignment and delegation shall be
delivered promptly by Manager to the Partnership and Manager shall be
released from any further obligation or responsibility under this
Agreement for the performance of the duties and obligations so assigned
and delegated.
12. Termination. This Agreement may be terminated by any of the following
methods:
a. By notice of Manager or Partnership, as provided in Section 1
hereof.
b. By written agreement of the parties hereto.
c. If the Partnership breaches any of the terms of this Agreement, or
if Manager breaches any of the terms of this Agreement, then the
other party hereto shall give the breaching party written notice
of such breach. If the breaching party fails to remedy the breach
within thirty (30) days after receiving such notice, the other
party may terminate this Agreement.
d. If either party hereto shall be dissolved and its business
terminated, this Agreement shall automatically terminate upon the
effectiveness of such dissolution.
e. By Manager if there is a detachment from Centex Corporation common
stock of the ownership interests in the Partnership and 3333
Holding Corporation which are presently held by a nominee for and
on behalf of the holders of Centex Corporation common stock, and
such stock and ownership interests no longer trade in tandem.
No termination of this Agreement shall have the effect of terminating
Manager's right to collect any amounts owed to it under this Agreement.
Within ninety (90) days following the termination of this Agreement,
Manager shall deliver to the Partnership the originals of all books,
accounts and records in its possession or under its control pertaining to
Xxxxxxxxxx. The Manager may, at its expense, retain copies of any such
documents.
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13. Notices. Any notice, statement or demand required or permitted to be
given under this Agreement shall be in writing and shall be personally
delivered, sent by mail, or sent by telegram or telex, confirmed by
letter, addressed to the party in the manner and at the address shown
below, or at such other address as the party shall have designated in
writing to the other party:
To the Partnership:
Centex Development Company, L.P.
c/o 3333 Development Corporation
0000 X. Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: President
To Manager:
Centex Homes
0000 X. Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Chairman and CEO
14. Nature of Relationship. The parties hereto intend that Manager's
relationship to the Partnership shall be that of an independent
contractor. Nothing contained in this Agreement shall constitute or be
construed to be or create a partnership or joint venture between Manager
and the Partnership or their successors or assigns, and neither Manager
nor any officer or employee of Manager shall be considered at any time to
be an employee of the Partnership.
15. Amendments. This Agreement cannot be amended, changed or modified except
by another agreement in writing, duly signed by both parties hereto.
16. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof, and supersedes in
its entirety the Management Agreement previously made between the parties
as of 1 October 2000, which agreement is hereby cancelled and terminated.
17. Headings. The section headings contained herein are for convenience of
reference only and are not intended to define, limit or describe the
scope or intent of any provision of this Agreement.
18. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Texas.
19. Severability. Any provision of this Agreement that is prohibited or
unenforceable under the laws of any jurisdiction shall be ineffective in
such jurisdiction to the extent necessary to
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render such provision valid and enforceable, and if such provision cannot
be rendered valid and enforceable in such jurisdiction by limitation it
shall be ineffective therein. The invalidity or unenforceability of any
provision of this Agreement shall not render invalid or unenforceable any
other provision of this Agreement.
IN WITNESS WHEREOF, the Partnership and Manager have duly executed this
Agreement as of the day and year first set forth above.
CENTEX DEVELOPMENT COMPANY, L.P.
By 3333 Development Corporation
General Partner
By: /s/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
President and CEO
CENTEX HOMES
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By Centex Real Estate Corporation, General Partner
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Chairman and CEO
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