FIRST AMENDMENT TO ADVISORY MANAGEMENT AGREEMENT
Exhibit
10.1
FIRST
AMENDMENT
TO
This
FIRST AMENDMENT TO THE AMENDED AND RESTATED ADVISORY AGREEMENT (the “Amendment”)
is made and entered into as of the 10th day of March, 2009 by and between
CORNERSTONE CORE PROPERTIES REIT, INC., a Maryland corporation (the “ Company
”), and CORNERSTONE REALTY ADVISORS, LLC, a California limited liability company
(the “ Advisor ”).
WHEREAS,
the Company and the Advisor previously entered into that certain Amended and
Restated Advisory Agreement dated December 31, 2005 which has been renewed for
successive one-year periods through December 31, 2009 (the
“Agreement”);
WHEREAS,
the Company and the Advisor desire to amend the Agreement to revise the timing
and method of payment of the Subordinated Performance Fee Due Upon
Termination.
NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Amendment to Section
1. Section 1 of the Agreement is hereby amended by deleting
the definition of “Subordinated Performance Fee Due Upon Termination” in its
entirety and replacing it with the following:
Subordinated
Performance Fee Due Upon Termination means a fee payable in the form of a
non-interest bearing promissory note (the “Performance Fee Note”) in a principal
amount equal to:
(a) if
(i) the sum of Company Value plus the total Dividends paid to Stockholders
through the Termination Date exceeds (ii) the sum of the aggregate Invested
Capital plus the total Dividends required to be paid to the Stockholders in
order to pay the Stockholders' 10% Return through the Termination Date, a fee
equal to 15% of such excess amount;
(b) if
the requirements of paragraph (a) above are not met, and (i) the sum of the
Company Value plus the total Dividends paid to Stockholders through the
Termination Date exceeds (ii) the sum of the aggregate Invested Capital plus the
total Dividends required to be paid to the Stockholders in order to pay the
Stockholders' 8% Return through the Termination Date, a fee equal to 10% of such
excess amount; and
(c) if
the requirements of paragraph (a) and (b) above are not met, and (i) the sum of
Company Value plus the total Dividends paid to Stockholders through the
Termination Date exceeds (ii) the sum of the aggregate Invested Capital plus the
total Dividends required to be paid to the Stockholders in order to pay the
Stockholders' 6% Return through the Termination Date, a fee equal to 5% of such
excess amount.
The
Company shall repay the Performance Fee Note at such time as the Company
completes the first Sale of a Property after the Termination Date using Cash
from Sales. If the Cash from Sales from the first Sale after the Termination
Date is insufficient to pay the Performance Fee Note in full, then the
Performance Fee Note shall be paid in part from the Cash from Sales from the
first Sale, and in part from the Cash from Sales from each successive Sale until
the Performance Fee Note is repaid in full. If the Performance Fee Note has not
been paid in full within five years from the Termination Date, then the holder
of the Performance Fee Note, its successors or assigns, may elect to convert the
balance of the fee into Common Stock at a price per share equal to the average
closing price of the shares of Common Stock over the ten trading days
immediately preceding the date of such election if the Common Stock is Listed at
such time. If the Common Stock is not Listed at such time, the holder of the
Performance Fee Note, its successors or assigns, may elect to convert the
balance of the fee into shares of Common Stock at a price per share equal to the
fair market value for such shares as determined by the Board of Directors based
upon the Appraised Value of Company’s Properties, net of any debt thereon, on
the date of election.
2.
Continuing
Effect. Except as otherwise set forth in this Amendment, the
terms of the Agreement shall continue in full force and effect and shall not be
deemed to have otherwise been amended, modified, revised or
altered.
3.
Counterparts. The
parties agree that this Amendment has been or may be executed in several
counterparts, each of which shall be deemed an original, and all counterparts
shall together constitute one and the same instrument.
[Signature
page follows.]
1
IN
WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the
date first written above.
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx X. Xxxxxxx
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Title:
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President
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CORNERSTONE
REALTY ADVISORS, LLC
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx X. Xxxxxxx
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Title:
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President
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