EXHIBIT 10(b)
EXECUTION COPY
SECOND AMENDED AND RESTATED CONSULTING AGREEMENT
This SECOND AMENDED AND RESTATED CONSULTING AGREEMENT, dated as of January
9, 2005, among UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND, a Michigan
limited partnership (the "Partnership"), P.I. ASSOCIATES, a Michigan limited
partnership (the "General Partner") and MANUFACTURED HOUSING SERVICES INC. (the
"Consultant").
WITNESSETH:
WHEREAS, pursuant to the Section 12i of the Agreement of Limited
Partnership (as amended by the First Amendment to Uniprop Manufactured Housing
Communities Income Fund Agreement of Limited Partnership dated May 16, 1985, and
by the Second Amendment to Agreement of Limited Partnership dated as of January
23, 1997, the "Partnership Agreement"), the General Partner has no authority to
take any action without the prior consent of the Consultant, to the extent that
such consent is required by this Agreement, without the prior approval of a
majority in interest of the Limited Partners of the Partnership;
WHEREAS, the Partnership, the General Partner and the Consultant entered
into a Consulting Agreement as of February 10, 1986 in order to set forth the
types of transactions as to which the General Partner is required to consult
with the Consultant and the terms and conditions on which the Consultant will
provide such consulting services; and
WHEREAS, the Partnership, the General Partner and the Consultant now desire
to enter into this Second Amended and Restated Consulting Agreement (the
"Agreement") to modify certain provisions;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:
1. Transactions Covered. The Partnership and the General Partner agree that
in the following transactions and matters the General Partner (i) shall consult
with the Consultant and obtain its written recommendation, and (ii) shall not
take action on such transactions or matters on behalf of the Partnership
contrary to any recommendation of the Consultant without the prior approval of a
majority in interest of the Limited Partners.
(a) The Financing of any Property owned by the Partnership. In this
connection, the General Partner shall obtain the written affirmative
recommendation of the Consultant prior to incurring any indebtedness
or pledging directly or indirectly any property of the Partnership as
security for the payment of any obligation.
(b) The sale of any Property owned by the Partnership. In this
connection, the General Partner shall obtain the written affirmative
recommendation of the Consultant prior to entering into any agreement
for the sale of any Property, but not including occasional sales in
the ordinary course of business of inventory, operating equipment or
furniture, fixtures and equipment.
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(c) The entering into by the Partnership of any other Capital Transaction.
In this connection, the General Partner shall obtain the written
affirmative recommendation of the Consultant prior to entering into
any agreement for or with respect to a Capital Transaction on behalf
of the Partnership.
(d) Annual appraisals of Properties and net asset value per Unit. In this
connection, the General Partner shall obtain the written affirmative
recommendation of the Consultant prior to selecting any real estate
appraiser other than Xxxxxxx & Xxxxxxxxx, Inc. to perform the annual
appraisal of the Properties, and the General Partner shall select only
national real estate appraisers comparable in reputation to Xxxxxxx &
Wakefield, Inc.
(e) Property management arrangements. In this connection, the General
Partner shall obtain the written affirmative recommendation of the
Consultant prior to taking any action authorizing any party other than
Uniprop AM, LLC to provide management services with respect to any of
the Properties and prior to authorizing any arrangement with any
property manager, including Uniprop, Inc., with respect to fees
payable for such management services, other than as set forth in the
Partnership Agreement. The Consultant has the right at any time to
recommend the removal or change of any property manager.
(f) The entering into by the Partnership of any other agreement. In this
connection, the General Partner shall furnish to the Consultant, prior
to entering into, a copy of every written agreement and a summary of
every oral agreement to be entered into by or on behalf of the
Partnership or the General Partner (in its capacity as such) involving
(i) the furnishing of property or services to the Partnership by any
person other than the General Partner if such agreement provides for
payment by the Partnership equal to or in excess of $50,000 in any
year, or (ii) the furnishing of property or services to the
Partnership by the General Partner or an Affiliate of the General
Partner if such agreement provides for payment by the Partnership in
excess of $25,000 in any year and in the case of each of clauses (i)
or (ii) shall obtain the written affirmative recommendation of the
Consultant prior to entering into any such agreement relating to the
Partnership's business. The Consultant has the right at any time to
recommend the amendment or termination of any such agreement in
accordance with its terms.
(g) The establishment of Reserves. In this connection, the General Partner
shall obtain the written affirmative recommendation of the Consultant
prior to creating or distributing any Reserves and prior to changing
the level of Reserves that the Partnership shall maintain.
(h) Amendment of the Partnership Agreement. In this connection, the
General Partner shall obtain the written affirmative recommendation of
the Consultant prior to effecting any amendment to the Partnership
Agreement or submitting any proposed amendment for approval by the
Limited Partners.
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(i) Reports to Partners. In this connection, the General Partner shall
furnish to the Consultant or its designated Affiliate all information
furnished to the Limited Partners generally.
(j) Investor servicing. In this connection, the Consultant has the right
at any time to recommend the removal of any person performing investor
services for the Partnership and to recommend the appointment of any
other person, including itself or an Affiliate of the Consultant, to
perform such services at reasonable cost to the Partnership.
(k) Insurance. In this connection, the General Partner shall obtain, prior
to entering into any contract of insurance with respect to the
Partnership or the Properties, the written affirmative recommendation
of the Consultant as to the type, terms and amounts of insurance to be
maintained under such contract. The Consultant shall have the right at
any time to make recommendations to the General Partner as to
increasing, decreasing or otherwise changing the type, terms and
amounts of insurance maintained by the Partnership, so long as the
costs of such insurance are reasonable.
(1) Selection of accountants. In this connection, the General Partner
shall obtain the written affirmative recommendation of the Consultant
prior to the selection of any Person to perform accounting services
for the Partnership other than BDO Xxxxxxx, LLP, and the Consultant
shall have the right at any time to recommend to the General Partner
the change or removal of any accountants performing services for the
Partnership, provided such change shall not cause the Partnership to
incur unreasonable additional costs.
2. Consulting Services.
(a) The General Partner shall submit from time to time in writing to the
Consultant each proposal to be considered by the Consultant pursuant
to the provisions of Section 1 above, and shall notify the Consultant
of the date the Consultant's recommendation shall be submitted, which
date shall not be less than fifteen business days after the receipt of
the General Partner's notice unless otherwise agreed in writing by the
Consultant. The Consultant shall render its recommendation to the
Partnership by the date specified by the General Partner; provided
that the Consultant may submit its recommendation to the Partnership
up to thirty calendar days after the date specified by the General
Partner if the Consultant submits a written request for such an
extension to the General Partner and the General Partner receives that
request on or before the due date originally specified. If the General
Partner makes a material modification to the proposal during the 15
business day period or during the 30 calendar day extension, if
applicable, the Consultant may submit its recommendation up to 15
calendar days after the end of the 15 business day period or 30
calendar day extension, as applicable. The General Partner shall
concurrently or thereafter furnish to the Consultant the following
information:
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(i) if the General Partner has submitted a proposal for the
Financing of a Property by the Partnership, current
operating information concerning such Property including the
latest financial statements for such Property, the proposed
terms of such Financing including whether any lender will
require as a condition to such Financing that its consent be
obtained prior to any change in or removal of the General
Partner of the Partnership, and projections showing the
impact of the proposed Financing on the anticipated results
of operation of the Property and allocations and
distributions of the Partnership;
(ii) if the General Partner has submitted a proposal for the sale
of a Property by the Partnership, current operating
information concerning such Property including the latest
financial statements for such Property and the proposed
terms of sale including whether the Partnership intends to
accept purchase-money obligations from the buyers of such
Property; and
(iii) with respect to every other transaction or matter listed in
Section 1 above, such information as the Partnership
possesses that is directly or indirectly related to the
matter being considered by the Consultant.
In addition, the General Partner shall furnish to the Consultant such other
information as is in its possession upon request with respect to any such
transaction or matter and shall endeavor to obtain such other information as the
Consultant shall reasonably request if it is not then in the possession of the
General Partner.
(b) The Consultant shall review all proposals submitted to it by the
General Partner for the transactions and matters listed in Section 1
above and shall provide the General Partner and the Partnership with a
written recommendation with respect to each such proposal. The
Consultant's recommendation shall address the proposal from the
perspective of the Partnership and its Limited Partners. The
Consultant shall submit its recommendation to the General Partner on
or before the date specified in Section 2(a).
(c) If the Consultant makes a recommendation with respect to any
transaction or matter covered by Section 1 and the General Partner
determines to solicit the approval of a majority in interest of the
Limited Partners of the Partnership in order that it may nevertheless
enter into such transaction or matter on the Partnership's behalf or
not comply with the recommendation of the Consultant, the General
Partner shall, not less than 15 days before the first mailing of
materials soliciting the approval of any Limited Partner, notify
promptly the Consultant of such determination by the General Partner.
The Consultant shall thereupon have the right to furnish to the
General Partner a written statement of the Consultant in support of
its recommendation within 10 days after the notice of the General
Partner referred to in the preceding sentence. The General Partner
shall include in its soliciting material the statement of the
Consultant, and neither the General Partner nor the Partnership shall
be responsible for such statement. If the General Partner intends to
include in its soliciting material
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any statement supporting the approval by the Limited Partners, the
General Partner shall, not later than five days prior the earlier of
the date such soliciting materials are first filed with the Securities
and Exchange Commission or mailed to the Limited Partners, furnish to
the Consultant a copy of the General Partner's statement supporting
approval by the Limited Partners.
The Consultant's written recommendation shall be in a form suitable
for distribution to the Limited Partners and for filing with the
Securities and Exchange Commission or state securities regulators as
part of a registration statement or proxy statement. The Consultant
agrees that it will revise or expand upon such written recommendation
if and to the extent required by the Securities and Exchange
Commission or any other regulatory authority. The parties acknowledge
that the requirements of the paragraph do not expand upon the scope of
the recommendation letter required to be rendered by the Consultant
pursuant to Section 2(b). In particular, the parties acknowledge that
if a formal fairness opinion were required to be rendered in
connection with a particular proposal, the preparation and rendering
of such an opinion would be outside the scope of this Agreement. The
Partnership and the General. Partner would be free to contract with
the Consultant or with any other party, in their sole and absolute
discretion, to obtain such a formal fairness opinion.
3. Compensation. For its services hereunder, the Consultant will be paid
a fee of $20,000 annually (the "Consultant's Fee"). On January 9,
2011, if this Agreement is then still in effect, the Consultant's Fee
shall increase to $22,000 annually. The Consultant's Fee shall be
payable in four equal installments, in part in advance and in part in
arrears, on the forty-fifth day of each calendar quarter. If this
Agreement commences other than on the first day of a calendar quarter
the Consultant's Fee for the partial calendar quarter shall be pro
rated to reflect the actual number of days in the calendar quarter for
which the Consultant is to provide services and shall be paid on the
forty-fifth day of such calendar quarter or on the date of
commencement of this Agreement, if later.
If this Agreement terminates for cause pursuant to Section 5(a) hereof, no
further Consultant's Fee shall be payable pursuant to this Agreement. If the
for-cause termination occurs other than on the last day of a calendar quarter,
the Consultant's Fee shall be pro rated to reflect the actual number of days in
the calendar quarter for which this Agreement is in force, and within 10
business days following termination the Partnership shall pay the Consultant any
amount then owing or the Consultant shall refund to the Partnership any amount
overpaid with respect to that quarter, as the case may be.
If this Agreement terminates for any reason other than a for-cause
termination pursuant to Section 5(a) hereof, the Partnership shall continue to
pay the Consultant the Consultant's Fee through the period ending seven years
from the date of this Agreement.
In addition, the Consultant shall be reimbursed up to a maximum of $11,250
plus the reasonable, accountable cost of any errors and omissions or other
similar insurance obtained by the Consultant (up to $5,000 annually) in any year
for all accountable out-of-pocket expenses incurred by it in connection with the
performance of consulting services hereunder, other than expenses for any person
retained by Consultant to perform an additional current appraisal of a Property
in connection
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with a transaction being reviewed by Consultant. The Consultant shall not have
recourse against the General Partner in the event such fees and expenses are not
paid by the Partnership. This Section 3 shall survive termination of this
Agreement.
4. Term. Unless sooner terminated under Section 5, this Agreement shall
continue until the first to occur of the following: the dissolution and
liquidation of the Partnership in accordance with the terms of the Partnership
Agreement; or the expiration of the term of the Partnership as provided therein.
5. Termination for Cause. The Partnership or the General Partner may
terminate this Agreement at any time for cause upon delivery of written notice
to the Consultant. The Consultant may terminate this Agreement at any time for
cause upon delivery of written notice to the Partnership.
(a) The Partnership or General Partner shall have cause for
termination:
(i) If the Consultant shall default in the performance of its
obligations pursuant to Section 2(b) of this Agreement; or
(ii) If bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings for relief
under any bankruptcy law or similar law for the relief of
debtors, are instituted by or against the Consultant, are
allowed against the Consultant or are consented to or are
not dismissed, stayed or otherwise nullified within thirty
days after such institution; or
(iii) If Xxxxxx Xxxxxx shall cease to be the sole shareholder and
President of the Consultant unless the Partnership, in its
sole and absolute discretion, shall give written consent for
the transfer of Xxxxxx Xxxxxx'x ownership interest in the
Consultant; or
(iv) If any change in applicable law renders this Agreement, in
whole or material part, illegal or unenforceable.
(b) The Consultant shall have cause for termination:
(i) If the Partnership or the General Partner shall default in
the performance of any material covenant, agreement, term or
provision of this Agreement and such default shall continue
for a period of sixty days after written notice to the
Partnership from the Consultant stating the specific
default; or
(ii) If bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings for relief
under any bankruptcy law or similar law for the relief of
debtors, are instituted by or against the Partnership, and,
if instituted against the Partnership, are allowed against
the Partnership or are consented to or are not dismissed,
stayed or otherwise nullified within thirty days after such
institution; or
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(iii) If any change in applicable law renders this Agreement, in
whole or material part, illegal or unenforceable.
(c) Upon the expiration or termination of this Agreement, no party
shall have any further right hereunder or any further obligation
hereunder to the others, except for the obligations, promises or
covenants contained herein which are expressly made to extend
beyond the term of this Agreement.
(d) Any party having actual knowledge of an event creating cause for
termination of this Agreement shall be deemed to have waived its
right to terminate with cause on the basis of that particular
event pursuant to this Section 5 if it has not exercised its
termination right within 30 calendar days after actually knowing
of the event.
6. Relationship of the Parties. It is expressly understood and agreed by
the parties that, in providing services under this Agreement, the Consultant
shall at all times act as an independent contractor, not as an employee or agent
of the Partnership, nor shall the Partnership be an employee or agent of the
Consultant. Further, it is expressly understood and agreed by the parties that
nothing contained in this Agreement shall be construed to create a joint
venture, partnership, association or other affiliation or like relationship
among the parties, or a relationship of landlord and tenant, it being
specifically agreed that their relationship is and shall remain that of
independent parties to a contractual relationship as set forth in this
Agreement, hi no event shall either party be liable for the debts or obligations
of the other of them, except as otherwise specifically provided in this
Agreement.
7. Indemnification.
(a) The Partnership agrees to indemnify and hold harmless the
Consultant against any losses, claims, damages or liabilities,
joint or several, to which the Consultant may become subject
under or on account of this Agreement except to the extent that
such losses, claims, damages or liabilities (or actions in
respect thereof) are a direct result of the gross negligence,
willful misconduct or fraud of the Consultant. The Partnership
will reimburse the Consultant for any legal or other expenses
reasonably incurred by the Consultant in connection with
investigating or defending against any such loss, claim, damage,
liability or action; provided, however, that if the Partnership
has specifically agreed to pay any settlement or judgment in
respect of such action or claim, has made all such reimbursements
of such expenses to such date and can reasonably demonstrate the
continuing financial ability to comply with the terms of this
Section 7(a), it shall not be required to indemnify the
Consultant for any payment made by the Consultant to any claimant
in settlement of any suit or claim unless such payment is
approved by the Partnership (which approval shall not be
unreasonably withheld) or by a court having jurisdiction of the
controversy. This Section 7(a) shall remain in full force and
effect notwithstanding any investigation made by the Consultant
or on behalf of the Consultant, shall survive termination of this
Agreement, and shall be in addition to any liability which the
Partnership may otherwise have.
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(b) The Consultant agrees to indemnify and hold harmless the
Partnership and the General Partner, and any person which
controls either of them, against any losses, claims, damages or
liabilities, joint or several, to which the Partnership or the
General Partner or such controlling person may become subject,
under this Agreement, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any breach or alleged breach of this Agreement by the
Consultant. The Consultant will reimburse the Partnership and the
General Partner for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
against any such loss, claim, damage, liability or action;
provided, however, that if the Consultant has specifically agreed
to pay any settlement or judgment in respect of such action or
claim, has made all such reimbursements of such expenses to such
date and can reasonably demonstrate the continuing financial
ability to comply with the terms of this Section 7(b), the
Consultant shall not be required to indemnify the Partnership or
the General Partner for any payment made to any claimant in
settlement of any suit or claim unless such payment is approved
by the Consultant (which approval shall not be unreasonably
withheld), or by a court having jurisdiction of the controversy;
and provided further that the Consultant shall not be liable
under this Section 7(b) for any losses, claims, damages or
liabilities arising out of any act or failure to act on the part
of any other person, but shall be liable only with respect to the
Consultant's own acts or failures to act. This indemnity shall
remain in full force and effect notwithstanding any investigation
made by or on behalf of the Partnership or the General Partner,
shall survive any termination of this Agreement, and shall be in
addition to any liability which the Consultant may otherwise
have.
(c) No indemnifying party shall be liable under the indemnity
provisions contained in Sections 7(a) and 7(b) unless the
indemnified party shall have notified such indemnifying party in
writing promptly after the first written notice or the summons or
other first legal process giving information of the nature of the
claim or of the commencement of the action shall have been
delivered to or served upon the indemnified party (but failure to
notify an indemnifying party of any such claim shall not relieve
it from any liability otherwise than on account of its indemnity
rights contained in Sections 7(a) or 7(b) which it may have to
the indemnified party against whom action is brought). In case
any claim is made or any action is brought against any
indemnified party upon any claim as to which such indemnified
party claims indemnity pursuant to Sections 7(a) or 7(b) or
otherwise, the indemnifying party shall be entitled to
participate at its own expense in the defense, or, if it so
elects, in accordance with arrangements satisfactory to any other
indemnifying party or parties similarly notified, to assume the
defense thereof, with counsel who shall be satisfactory to such
indemnified party and any other indemnified parties who are
defendants in such action; and after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof and the retaining of such counsel by the
indemnifying party, the indemnifying party shall not be liable to
such indemnified party under Sections 7(a) or 7(b) or otherwise
for any legal or other expenses subsequently incurred by such
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indemnified party in connection with the defense thereof, other
than the reasonable costs of investigation. Notwithstanding the
election of an indemnifying party to assume the defense of any
such action, if (i) the indemnifying party shall not have
employed counsel to have charge of the defense of such action or
proceeding or (ii) such indemnified party shall have reasonably
concluded that there may be defenses available to it which are
different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall
not have the right to direct the defense of such action or
proceeding on behalf of the indemnified party), then in either of
such events the indemnifying party shall bear all legal or other
expenses incurred by the indemnified party in connection with the
defense of such action.
8. Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to that term or any other term of
this Agreement.
9. Entire Agreement. This Agreement supersedes all previous contracts or
agreements among the parties with respect to the subject matter hereof and
constitutes the entire Agreement among the parties with respect thereto.
10. Amendments. This Agreement may be amended only be an instrument in
writing signed in the manner provided in Section 12 below, effective as of the
date stipulated therein.
11. Invalidity of Particular Provisions. If any term or provisions of this
Agreement, or any application thereof to any person or circumstance shall to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such 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
enforceable to the fullest extent allowable by law.
12. Execution. This Agreement and any amendments hereto shall be executed
in no fewer than two counterparts by a duly authorized officer or agent of each
party hereto. Each counterpart so executed shall be deemed an original, but all
original counterparts shall together constitute one and the same instrument.
13. Further Actions. Each of the parties agrees that it shall hereafter
execute and deliver such further instruments and do such further acts and things
as may be reasonably required or useful to carry out the intent and purpose of
this Agreement and as are not inconsistent with the terms hereof.
14. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Consultant, the General Partner, the Partnership and
their respective successors and assigns. This Agreement may not be assigned by
the General Partner or the Partnership without the prior written consent of the
Consultant. This Agreement may not be assigned by the Consultant without the
prior written consent of the General Partner.
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15. Notices. All demands, notices and other communications under this
Agreement shall be in writing shall be personally delivered or sent by
registered mail, telecopy or overnight courier, shall be deemed to have been
duly given when received, and shall be addressed as follows:
To the General Partner or the Partnership:
P.I. Associates
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
with a copy to:
Xxxxxxxx X. Xxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Fax:(000)000-0000
To the Consultant:
Manufactured Housing Services, Inc. Attention: Xx.
Xxxxxx X. Xxxxxx,
President 00 Xxxxxxxx Xxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Fax:(000)000-0000
with a copy to:
Dechert LLP
Attn. Xxxxx X. Xxxxx, Esq.
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax:(000)000-0000
or at such address as may hereafter be furnished in writing by any party to the
others.
16. Defined Terms. Capitalized terms defined in the Partnership Agreement
but not defined herein shall have the same meanings as are provided therefor in
the Partnership Agreement.
17. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of New York.
18. Remedies. In the case of any disputes arising under this Agreement, the
prevailing party shall be entitled to recover reasonable legal fees and costs
from the adverse party.
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first above written.
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UNIPROP MANUFACTURED HOUSING
COMMUNITIES INCOME FUND,
a Michigan Limited Partnership
By: P.I. Associates, a Michigan Limited
Partnership, General Partner
By: /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX, VICE PRESIDENT
P.I. ASSOCIATES,
a Michigan Limited Partnership
By: /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX, VICE PRESIDENT
MANUFACTURED HOUSING SERVICES, INC.
By:
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UNIPROP MANUFACTURED HOUSING
COMMUNITIES INCOME FUND,
a Michigan Limited Partnership
By: P.I. Associates, a Michigan Limited
Partnership, General Partner
By:
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P.I. ASSOCIATES,
a Michigan Limited Partnership
By:
----------------------------------------
MANUFACTURED HOUSING SERVICES, INC
By: /s/
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