AMENDMENT TO MANAGEMENT AGREEMENT
AMENDMENT as of April 1, 1997, to the Management Agreement dated as of
January 1, 1995, as amended, (the "Management Agreement"), between ASSET
INVESTORS CORPORATION, a Maryland corporation (the "Company"), and FINANCIAL
ASSET MANAGEMENT LLC, a Colorado corporation (the "Manager"), assigned from
Financial Asset Management Corporation on April 1, 1996.
RECITALS
A. The Company and the Manager entered into the Management
Agreement pursuant to which the Manager performs the duties and responsibilities
set forth in the Management Agreement, subject to the supervision of the
Company's Board of Directors; and
B. The Company has received a substantial amount of cash
through a restructuring of its interests in Mortgage Assets and plans in the
future to invest its available funds in equity investments in real estate.
NOW, THEREFORE, in consideration for the mutual agreements herein set
forth, the parties hereto agree as follows:
1. A new definition of "Cash Earned for Stockholders for incentive fee
purposes" shall be added to the Management Agreement as follows:
(ss)Except as otherwise provided in Section 9(b)(2), "Incentive
Compensation" with respect to any fiscal year means an amount
equal to the sum of (x) .2 times the sum of (A) the Company's
Cash Earned for Incentive Fee minus (B) Adjusted Equity minus
(y) Incentive Compensation paid in respect of prior fiscal
quarters in such year.
For purposes of this definition:
(1) "Adjusted Equity" means Stockholders Equity at
the end of a fiscal quarter with respect to which Incentive
Compensation is being determined less the Company's
investment in CAI, multiplied by the Annualized Adjusted
Treasury Rate plus one percentage point;
(2) the "Annualized Adjusted Treasury Rate" means
(x) the Ten Year U.S. Treasury Rate plus one percentage point
multiplied by (y) a fraction, the numerator of which is the
number of quarters in the fiscal year elapsed at the end of
the fiscal quarter for which Incentive Compensation is being
determined and the denominator of which is four.
(3) the "Company's Cash Earned for Incentive Fee
purposes" means GAAP Net Income as reported by the Company
for each of its first three fiscal quarters as reported in
its quarterly report of Form 10-Q as filed with the
Securities and Exchange Commission, and for its fiscal year
as reported in its annual report on Form 10-K as filed with
the Securities and Exchange Commission, reduced by (A) the
Company's share of CAI's net income for the quarter then
ended, or the year then ended as the case may be, and (B) a
provision for capital replacements for manufactured housing
communities, and increased by (C) real estate depreciation
and goodwill amortization associated with purchased property
management companies, and (D) the Incentive Compensation paid
in respect of all prior fiscal quarters in the fiscal year
for which the Company's Cash Earned for Incentive Fee
purposes is being computed.
2. Section 9(a) of the Management Agreement is amended and restated
hereby as follows:
(a) Base Fee. (i) Subject to Sections 9(c) and 9(e) hereof,
the Company shall pay to the Manager, for services
rendered under this Agreement, an annual base management
fee, quarterly installments as provided in paragraph (ii)
below, in the amount equal to (x) 1% per annum of the
Average Invested Assets, 3/8 of 1%, with respect to
Mortgage Assets held by the Company during each fiscal
year.
(ii) An amount equal to 1/4 of 1% of the Average
Invested Assets, 3/32 of 1%, with respect to Mortgage
Assets for each fiscal quarter (pro rata based on the
number of days elapsed during any partial fiscal quarter),
shall be paid to the Manager, as provided by, and subject
to adjustment under, Section 9(e) of this Agreement.
3. Section 9(b) of the Management Agreement is amended and restated
hereby as follows:
(b) Incentive Compensation.
(1) Incentive Compensation may be earned by the Manager for
each fiscal year and shall be paid to the Manager or
refunded by the Manager to the Company (as provided in (3)
below) quarterly during each fiscal year on a cumulative
basis, as provided in Section 9(e).
(2) For purposes of the fiscal quarter ended March 31, 1997,
Incentive Compensation shall mean .2 times the sum of (x)
the Company's GAAP Net Income minus (y) Adjusted Equity.
(3) During any fiscal year, the Manager will be required to
refund to the Company Incentive Compensation previously
paid in that fiscal year if, as to any fiscal quarter for
which Incentive Compensation is being determined, the
amount of Incentive Compensation earned is less than the
Incentive Compensation for the comparable period in the
prior fiscal year. The amount refunded by the Manager to
the Company shall be the lesser of (x) the difference
between the Incentive Compensation paid for the comparable
period in the prior fiscal year and the determination is
being made and (y) the Incentive Compensation paid with
respect to fiscal quarter immediately preceding the
quarter for which the determination is being made.
Quarterly payment shall be paid to the Manager, or
refunded to the Company, as provided by, and subject to
adjustment under, Section 9(e) of this Agreement.
4. A new section, designated Section 9d(i) shall be added to the
Management Agreement as follows:
d(i) Acquisition Fee. Unless otherwise agreed, in addition to
any other fee payable to the Manager under this
Agreement, the Company shall pay the Manager, at the end
of each fiscal quarter of the Company, an Acquisition
Fee equal to 0.5% of the cost of acquisition of the real
estate assets acquired during such fiscal quarter of the
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
[CORPORATE SEAL] ASSET INVESTORS CORPORATION
ATTEST: By: /s/Xxxxx X. Nystrom_________________________
Name: Xxxxx X. Xxxxxxx
/s/Xxxx X. Xxxxxx Title: Senior Vice President and Chief
Xxxx X. Xxxxxx, Secretary Financial Officer
FINANCIAL ASSET MANAGEMENT LLC
By: Xxxxx Considine_____________________________
Name: Xxxxx Xxxxxxxxx
Title: Member
