Investment trust adviser's contract.

 

Agreement, made as of _________[date] between _________[the "trust"] and _________[the "adviser"]

Recitals

1. The trust and the adviser entered into an advisory contract dated _________, which was subsequently amended, under which the adviser undertook to render certain services to the trust;

2. The trust desires to continue to avail itself of the experience, sources of information, advice, assistance and certain facilities available to the adviser and to have the adviser undertake the duties and responsibilities set forth below, on behalf of and subject to the supervision of the trustees of the trust, all as provided in this agreement;

3. The adviser is willing to continue to undertake to render such services, subject to the supervision of the trustees, on the terms and conditions set forth below; and

4. The trust and the adviser desire to terminate the existing advisory contract and enter into this agreement which provides new methods of compensating the adviser based on the actual services provided and the results attained.

Agreement

Therefore, in consideration of the premises and of the mutual covenants contained in this agreement, it is agreed as follows:

1. Duties of adviser. The adviser undertakes to use its best efforts to present to the trust a continuing and suitable investment program consistent with the investment policies and objectives of the trust, and, subject to the supervision of the trustees: (a) to serve as the trust's investment adviser, including recommending changes in the trust's investment policies when appropriate; (b) to originate, investigate and evaluate investment opportunities and recommend them to the trustees; (c) to manage the trust's short-term investments, including the acquisition and sale of money market instruments in accordance with the trust's policies; (d) to administer the day-to-day investment operations of the trust; (e) to investigate, select and conduct relations on behalf of the trust with borrowers, lenders, mortgage loan originators, builders, developers and other individuals, corporations and entities in furtherance of the investment activities of the trust; (f) to invest and reinvest any money of the trust; (g) to obtain for the trust such services as may be required for property management and other activities relating to the investment portfolio of the trust; (h) to advise the trust in connection with negotiations with investment banking firms, securities brokers or dealers or securities investors in connection with the public or private sale of securities of the trust; (i) to provide personnel, office space and office equipment, or the use of it, necessary or advisable to carry out its function as the adviser to the trust; and (j) to make reports to the trustees from time to time of its performance of the foregoing services.

Recommendations from the adviser as to investments by the trust will be generated through the adviser's mortgage loan department. In recommending investments or participations in them to the trust, the management of the adviser will select from the available investment opportunities those which it believes consistent with the trust's investment objectives; such investments will be generally representative of comparable investments of similar quality being made by the adviser for its own account. Neither the adviser nor any of its affiliates shall have any obligation to present to the trust any particular investment opportunity which comes to the adviser or such affiliate, even if the opportunity is such that, if presented to the trust, it could be taken by the trust.

Nothing contained in this agreement shall prevent the adviser or any affiliate of the adviser from engaging in other businesses or from acting as adviser to or as investment manager for any other person even though the adviser, any affiliate of the adviser or any such other person has or may have investment policies similar to the trust or interests in any particular investment which are or may be adverse to the interest of the trust in the same or any related investment. The adviser shall be free from any obligation to present to the trust any particular investment opportunity which comes to the adviser regardless of whether such opportunity is within the trust's investment policies; provided however, that the adviser shall act on a basis which is fair and reasonable to the trust and its shareholders in selecting from among the particular investment opportunities that come to the adviser those investment opportunities which it presents to the trust.

The adviser shall from time to time furnish the trust with information, on a confidential basis, as to any investment opportunity within the trust's investment policies which the adviser hereafter decides to accept for its own account or the account of an affiliate and, to the extent that the adviser deems it consistent with its obligations to its policyholders and legally permissible, if requested by the trust not later than the date of the second meeting of the investment committee of the trust which next follows the date on which the adviser informs the trust of such investment opportunity and of the adviser's decision to accept such investment opportunity for its own account and/or the account of an affiliate, shall grant to the trust a participation of equal terms in such investment opportunity to the extent of 10% of the aggregate amount invested in it by the trust and the adviser and/or an affiliate of the adviser; by mutual agreement of the trust and the adviser the trust's participation in such an investment may be greater than 10%. Upon the request of the trust, the adviser shall permit the trustees to review other investment opportunities within the trust's investment policy which are presented to the adviser's finance committee for investment by the adviser for its own account or the account of an affiliate of the adviser but not approved by such committee and, at the request of the trust, shall use its best efforts to make available any of such opportunities to the trust for investment.

2. Servicing functions. The adviser undertakes by this agreement to provide the requisite servicing of the trust's mortgage loans and real property investments. Such servicing functions may be performed directly by the adviser or by others, but the adviser shall, in any event, be responsible for the supervision of such servicing performed by others. The servicing functions shall include the review of appraisal reports and title opinions or reports from independent counsel for the trust, the collection of all payments when due, the supervision of the payment of taxes, special assessments, fire and other insurance premiums and any other required payments, to the extent of funds collected, and the remission to the trust of the balance. In the event of a default on an investment, the adviser shall advise the trust and supervise foreclosure or other remedies upon the direction of the trustees.

3. Compliance with REIT qualifications and the declaration of trust. Anything else in this agreement to the contrary notwithstanding, the adviser shall refrain from any action which, in its sole judgment made in good faith, or in the judgment of the trustees (of which the adviser has notice), (i) would adversely affect the status of the trust as a real estate investment trust as defined and limited in Sections 856–858 of the Internal Revenue Code, as amended, and the regulations promulgated under it, or (ii) would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the trust or would otherwise not be permitted by the declaration of trust.

4. Records. The adviser shall maintain appropriate books of account and records relating to services performed under this agreement, which books of account and records shall be accessible for inspection by the trust at any time during ordinary business hours.

5. Bank accounts. The adviser may establish and maintain one or more bank accounts in its own name, and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the trust, under such terms and conditions as the trustees may approve, and the adviser shall from time to time render appropriate accounting of such collections and payments to the trustees and to the auditors of the trust.

6. Bond. The adviser shall maintain such fidelity bond with a responsible surety company and in such amount (not less than $1,000,000 per person) as may be required by the trust from time to time, covering all officers and employees of the adviser handling funds of the trust and any investment documents or papers, which bond shall inure to the benefit of the trust in respect of losses of any such property from acts of such officers and employees through theft, embezzlement, fraud, negligence in act, error, or omission or otherwise, the premium for the bond to be at the expense of the trust.

7. Information furnished adviser. The trustees shall at all times keep the adviser fully informed with regard to the investment policy of the trust, the capitalization policy of the trust, and generally their then current intentions as to the future of the trust. In particular, the trustees shall notify the adviser promptly of their intention to sell or otherwise dispose of any of the trust's investments, or to make any new investment. The trust shall furnish the adviser with a copy of all financial statements, a signed copy of each report or opinion prepared by independent public accountants, and such other information with regard to its affairs as the adviser may from time to time reasonably request.

8. Trustees, officers and employees of the adviser. Trustees, officers and employees of the adviser or of affiliates of the adviser may serve as trustees, officers, agents, nominees or signatories for the trust. When executing documents or otherwise acting in such capacities for the trust, such persons shall use their respective titles in the trust. Such persons who are officers or employees of the adviser shall not receive compensation from the trust for their services to the trust in any such capacities.

9. Definitions. As used in this agreement, the following terms have the meanings set forth below:

(a). "Advisory compensation" shall mean for a fiscal year an amount determined by multiplying the shareholder benefit index for such fiscal year by the advisory compensation for the immediately preceding fiscal year and shall mean for a part of a fiscal year an amount determined by multiplying the shareholder benefit index for such part of a fiscal year by that portion of the advisory compensation for the immediately preceding entire fiscal year which such part of a fiscal year bears to a whole fiscal year; solely for the purposes of this computation advisory compensation for the fiscal year ended March 31, _________[year], shall be deemed to be $1,000,000.

(b). "Affiliate" shall mean, as to any corporation, partnership or trust any person who (i) holds beneficially, directly or indirectly, 1% or more of the outstanding capital stock, shares or equity interests of such corporation, partnership or trust; (ii) is an officer, director, employee, partner or trustee of such corporation, partnership or trust, or of any person which controls, is controlled by, or under common control with, such corporation, partnership or trust; or (iii) controls, is controlled by, or under common control with, such corporation, partnership or trust.

(c). "Book value" of an asset or assets shall mean the value of such asset or assets on the books of the trust, reduced by provision for amortization, depreciation or depletion but before deducting any indebtedness or other liability in respect of it. Depreciable assets shall be included at the lesser of fair market value (in the judgment of the trustees) or cost less depreciation. Depreciation shall be computed on a straight-line basis.

(d). "Declaration of trust" shall mean the trust's declaration of trust dated _________, as amended and restated _________[date] and as amended from time to time thereafter.

(e). "Development loans" shall mean mortgage loans made to finance the development of land into a site or sites suitable for the construction of improvements on them or suitable for other residential, recreational, commercial, industrial or public uses and may include the financing of all or part of the cost of the acquisition of such land or leasehold interests in them.

(f). "Fiscal year" shall mean a twelve-month period ending on March 31.

(g). "Invested assets" shall mean the trust's total assets (without deduction of any liabilities), but excluding good will and other intangible assets, cash, cash items and obligations of municipal, state and federal governments and governmental agencies. As so defined, the term shall not include the undisbursed commitments of the trust in respect of closed loans or investments. "Invested assets" shall include obligations secured by a lien on real property owned, or to be acquired, by such governments or governmental agencies and securities of the Federal Housing Administration, the Federal National Mortgage Administration, and other governmental agencies issuing securities backed by a pool of mortgages.

(h). "Long-term and net lease investments" shall mean mortgage loans (other than development loans) with an initial term of more than five years and real property which is under lease to one tenant who is required to pay directly all of the property taxes, costs and expenses of maintaining the property and who pays rent to the trust net of all such taxes, costs and expenses.

(i). "Month-end average invested assets" of the trust for a fiscal year shall mean the average of the amounts reflected in the computations at the end of each month during such fiscal year of invested assets.

(j). "Month-end average net invested assets" of the trust for a fiscal year shall mean the month-end average invested assets of the trust for such fiscal year minus the arithmetic average of the liabilities of the trust at the end of each month during such fiscal year.

(k). "Mortgage loans" shall mean notes, debentures, bonds, and other evidences of indebtedness or obligations, which are negotiable or nonnegotiable and which are secured or collateralized by mortgages, deeds of trust, or other security interests in real property.

(l). "Net income" for a fiscal year shall mean the net income of the trust for such fiscal year computed on the basis of its results of operations for such year plus the amount of any deductions for compensation paid to the adviser under Sections 10, 11 and 12 of this agreement which were deducted in determining such net income and excluding extraordinary items and gains and losses from the disposition of assets, all as certified by the trust's independent public accountants.

(m). "Operating expenses" shall mean for any fiscal year the aggregate annual operating expenses of every character, other than the expenses set forth in clauses (a) through (n) inclusive of Section 15 of this agreement, and any other expenses properly regarded as relating to the maintenance of the trust.

(n). "Other investments" shall mean mortgage loans and real property investments other than long-term and net lease investments.

(o). "Person" shall mean and include individuals, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other organizations whether or not legal entities and governments and agencies and political subdivisions of them.

(p). "Real property" shall mean land, ownership or other rights or interests in land (including leasehold interests as lessee or lessor), and any buildings, structures, improvements and fixtures located on or used in connection with land and rights in land, or interests in it, but does not include mortgage loans or interests in it.

(q). "Shareholder benefit" shall mean the trust's fully diluted earnings per share determined in the manner set forth in Opinion No. 15 issued by the Accounting Principles Board of the American Institute of Certified Public Accountants based on an accrual method of accounting in accordance with generally accepted accounting principles consistently applied, adjusted (i) by the addition of any depreciation and any increase in the allowance for possible loan losses (however denominated) which were deducted in determining such earnings per share, and (ii) by the subtraction of a fully diluted per share basis of any losses (except any losses caused by an act or acts of God) experienced by and recorded on the books of the trust. Notwithstanding the foregoing, shareholder benefit shall not include any amount which would result in the adviser's receiving any compensation under this agreement the receipt of which under any applicable law would be prohibited or would render this agreement unenforceable.

(r). "Shareholder benefit index" shall mean for a fiscal year the quotient obtained by dividing the amount of shareholder benefit for such fiscal year by the amount of shareholder benefit for the immediately preceding fiscal year and shall mean for a part of a fiscal year the quotient obtained by dividing the amount of shareholder benefit for such part of a fiscal year by that portion of the shareholder benefit for the immediately preceding entire fiscal year which such part of a fiscal year bears to a whole fiscal year.

10. Compensation for advisory functions. The trust shall pay to the adviser as compensation for all services rendered to the trust under this agreement (except for generating and servicing investments for which compensation is to be paid under Sections 11 and 12) for each fiscal year advisory compensation as determined under Section 9(a). Within seven business days after the end of each month of a fiscal year, the trust shall pay to the adviser an amount equal to the difference between the advisory compensation for such fiscal year to the end of such month and the aggregate amount of payments under this section previously made by the trust to and not refunded by the adviser for such fiscal year. If at the end of any quarter of a fiscal year the aggregate amount of payments under this section for such fiscal year made by the trust to and not refunded by the adviser exceeds the advisory compensation payable under this agreement for such fiscal year to the end of such quarter, the excess shall be refunded by the adviser to the trust within five business days of the date that the adviser is notified by the trust of the overpayment. All of the foregoing payments may be based on unaudited financial statements. The amount of advisory compensation payable under this agreement for any fiscal year shall be finally determined after the close of such fiscal year by independent accountants satisfactory to the trust and the adviser based on audited financial statements. Any payment by the trust or repayment by the adviser which shall be indicated to be necessary in accordance with them shall be made promptly after the completion of the audit.

11. Compensation for investment generation functions.

(a). The trust shall pay to the adviser as compensation for investment generation functions described in Section 1 of this agreement a fee as to any one investment approved by the investment committee of the trust or the trustees during the term of this agreement based on the principal amount (which includes, in the case of real property, the principal amount of any mortgage loan on such property) of such investment, which fee shall be in the amount of 1% of the first $5 million of it and ½ of 1% of the amount, if any, in excess of $5 million. For the purposes of this subsection (a), in the case of an investment which the trust shares with the adviser and/or an affiliate of the adviser the aggregate amount of the investments made by all such persons shall be used to determine the amount of the adviser's fee, but the adviser shall be entitled to a fee under this agreement only in regard to the trust's portion of an investment. Notwithstanding the foregoing provisions of this subsection, for any loan as to which at the time the trust is first committed to make the loan the borrower has a firm commitment from any person (including the trust, the adviser or an affiliate of the adviser) to make a loan to, or purchase the property from, the borrower, on or before the maturity of the trust's loan so that the proceeds of such loan or purchase are to be used to repay the trust's loan, the fee to which the adviser is entitled shall be one-half of the fee as determined above.

(b). Such a fee shall be paid to the adviser when the principal amount of the investment is disbursed by the trust. However, if the principal amount of an investment is disbursed by the trust in more than one installment, the trust shall pay to the adviser each time the trust makes a disbursement of the principal amount of the investment the appropriate percentage, as provided in subsection (a), of the amount of principal then disbursed.

(c). The trust and the adviser shall share equally in any fees received by the trust from and not refunded to an actual or prospective borrower or seller in regard to any investment opportunity originated by the adviser pursuant to this agreement as to which the trust has a right to retain such fees because all or part of the funds committed by the trust were not disbursed to such a borrower or seller; the trust shall deliver to the adviser its share of such fees immediately upon termination of the trust's obligation to refund the fees to such a borrower or seller.

12. Compensation for servicing functions. On the last business day of each calendar month, the trust shall pay to the adviser, as compensation for any servicing functions described in Section 2 of this agreement which the adviser or any affiliate of the adviser has performed or undertaken to perform, a fee based on the book value of all mortgage loans and real property assets of the trust, in each case as at the beginning of the month, in respect of which the adviser or any affiliate of the adviser has performed or undertaken to perform such services. The fee shall be equal to 1/12 of the sum of the amounts obtained by multiplying the total amount of each investment by the appropriate percentage as set forth below:

Types of Investments

Fee

Long-term and net lease investments:    
Book value of $5,000,000 or less

1/8 of 1%

Book value, if any, in excess of $5,000,000

1/16 of 1%

Other investments

¼ of 1%

 

For the purpose of this Section 12, in the case of a long-term and net lease investment which the trust shares with the adviser and/or an affiliate of the adviser the aggregate amount of the investments made by all such persons shall be used to determine the amount of the compensation payable to the adviser, but the adviser shall be entitled to compensation under this agreement only in regard to the trust's portion of an investment. No servicing compensation shall be payable to the adviser under this section with respect to any mortgage loan or real property investment with respect to which the trust is paying servicing compensation to any other person.

13. Compensation for additional services. As and to the extent that the adviser or any affiliate of the adviser shall render any services for the trust other than those required to be rendered by the adviser pursuant to the provisions of this agreement, such additional services and activities will be compensated for separately on terms to be agreed upon between such party and the trust from time to time.

14. Expenses of the adviser. Without regard to the amount of compensation received under this agreement by the adviser, the adviser shall bear the following expenses:

(a) employment expenses of the personnel employed by the adviser (other than fees paid to the trustees, officers and employees of the trust who are not officers or employees of the adviser, and reimbursement of expenses made to the trustees, officers and employees of the trust, and fees and reimbursements of expenses made to independent advisers, independent contractors, mortgage servicers, consultants, managers and other agents employed by or on behalf of the trust), including, but not limited to, salaries, wages, payroll taxes, and the cost of employee benefit plans and temporary help expenses;

(b) expenses of servicing investments serviced by the adviser;

(c) advertising expenses incurred in seeking investments for the trust;

(d) rent, telephone, utilities, office furniture, equipment and machinery (including computers to the extent utilized) and other office expenses of the adviser and the trust, except as any of such expenses relate to an office maintained by the trust separate from the office of the adviser; and

(e) miscellaneous administrative expenses relating to performance by the adviser of its functions under this agreement.

15. Expenses of the trust. Except as expressly otherwise provided in this agreement, the trust shall pay all its expenses not assumed by the adviser, and without limiting the generality of the foregoing it is specifically agreed that the following expenses of the trust shall be paid by the trust and shall not be paid by the adviser:

(a) the cost of borrowed money;

(b) taxes on income, taxes and assessments on real property and other taxes applicable to the trust;

(c) legal, auditing, accounting, underwriting, brokerage, listing, registration (including all blue sky applications) and other fees, the printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of the securities of the trust;

(d) expenses connected with the acquisition, disposition and ownership of real property, mortgage loans or other property (including the cost of foreclosures, insurance premiums, legal services, architectural and engineering fees, mortgage taxes, appraisal and inspection fees, title and abstract expenses, brokerage, sale and leasing commissions, maintenance, repairs and improvements of property);

(e) fees and expenses paid to independent contractors, consultants, managers and other independent agents employed directly by the trust in connection with the acquisition, operation, maintenance, protection and disposition of trust properties (other than mortgage and property servicing), including but not limited to salaries, wages, payroll taxes, and cost of employee benefit plans and temporary help expenses;

(f) expenses of maintaining and managing real property interests or other investment assets owned by the trust;

(g) insurance as required by the trust, other than the cost of trustees', shareholders' and advisers' liability insurance;

(h) expenses of organizing or terminating the trust;

(i) expenses connected with payments of dividends or interest or distributions in cash or any other form made by the trust to holders of securities of the trust;

(j) all expenses connected with communications to holders of securities of the trust and the other bookkeeping and clerical work necessary in maintaining relations with holders of securities, including the cost of printing and mailing certificates for securities and proxy solicitation materials and reports to such holders and the cost of holding meetings of holders of the trust's securities;

(k) transfer agents', registrars', authenticating agents', paying agents', and indenture trustees' fees and charges;

(l) losses and provisions for them on disposition of assets;

(m) all provisions for depletion, depreciation and amortization;

(n) the cost of the fidelity bond or bonds obtained by the adviser as required by this agreement;

(o) the fees and expenses paid to trustees, and appraisers, contractors, consultants, managers, officers, employees and others employed by or on behalf of the trust;

(p) to the extent not paid by borrowers from the trust, loan administration and mortgage and property servicing fees;

(q) the cost of trustees', shareholders' and advisers' liability insurance;

(r) the expenses of revising, amending, converting or modifying the trust;

(s) legal, accounting and auditing fees;

(t) the cost of any accounting, statistical, or bookkeeping equipment necessary for the maintenance of the books and records of the trust; and

(u) rent, telephone, utilities, office furniture, equipment and machinery (including computers to the extent utilized) and other office expenses of the trust, except as any of such expenses relate to an office maintained by the trust together with the office maintained by the adviser.

16. Refund by adviser. Within 120 days after the end of each fiscal year the adviser will refund to the trust the amount, if any, by which the operating expenses of the trust during such fiscal year exceeded the lesser of (a) 1½% of the trust's month-end average invested assets for such fiscal year (or a proportionately lesser percentage with respect to a fiscal year of less than 12 months) or (b) the greater of (i) 1½% of the month-end average net invested assets of the trust for such fiscal year (or a proportionately lesser percentage with respect to a fiscal year of less than 12 months) or (ii) 25% of the net income of the trust for such fiscal year; provided, however, that the adviser shall not be obligated to refund an amount which exceeds the aggregate of the compensation payable to it under Sections 10, 11 and 12 for such fiscal year.

17. Origination and brokerage fees. Any remuneration or brokerage fees received and retained by the adviser for services rendered in connection with the origination of a mortgage loan or real property investment acquired by the trust shall be credited against compensation payable to the adviser by the trust pursuant to Section 11 of this agreement.

18. Designation of trustees. During the term of this agreement, the trustees shall use their best efforts to cause the nomination of persons designated by the adviser (but not more than 49% of the number of trustees) to act as trustees.

19. Adviser's participation in investments. The adviser agrees that:

(a) during continuation of this agreement and subject to legal investment requirements applicable to it, it will, if requested by the trust, (i) participate on equal terms with the trust in any investment recommended to the trust by the adviser to the extent of 10% of the aggregate amount invested in it by the trust and the adviser, provided that such request by the trust is made within 30 days after the trust acts on such recommendation, and (ii) retain a participation of at least 10% in any mortgage loan (other than a federally insured or guaranteed mortgage loan) sold to the trust by the adviser; and

(b) if the trust makes an investment, as a consequence of a recommendation made by the adviser, in connection with which the adviser or any of its affiliates is engaged to perform any service for a fee (other than services performed pursuant to this agreement), the adviser shall, or shall cause any other person to, acquire, on the same terms as the trust, an interest in the investment at least as large as the trust's interest.

The simultaneous acquisition by the trust and the adviser or any affiliate of the adviser of participations in a loan or other investment shall not be deemed to constitute a purchase or a sale of property by one of them to the other, provided that the terms, other than the size of the participation, are not less favorable to the trust than to such other person.

20. Servicing of investments upon termination of agreement. In the event this agreement shall terminate for any reason, all investments of the trust in which the adviser had purchased or committed to purchase a participation shall, for so long as the adviser's investment therein remains unpaid, continue to be serviced by the adviser or its designee on the same terms which existed prior to the termination of this agreement.

21. Term; termination of agreement. (a) This agreement shall continue in force for a period of one year from this date and it may be extended from year to year by the affirmative vote of a majority of the trustees who are not affiliates of the adviser, as provided in Section _________ of the declaration of trust. Notice of renewal shall be given in writing by the trust to the adviser not less than three months before the expiration of this agreement or of any extension of it.

(b). Notwithstanding any other provision to the contrary, this agreement may be terminated for any reason upon 60 days' written notice by the adviser or upon like notice by the trust, upon vote of a majority of the trustees who are not affiliates of the adviser or upon vote of the holders of a majority of the outstanding shares of the trust.

(c). This agreement shall not be assignable by the adviser without the consent of the trust or by the trust without the consent of the adviser, except in the case of assignment by the trust to a corporation, trust or other organization which is a successor to the trust. Such successor shall be bound under this agreement and by the terms of said assignment in the same manner as the trust is bound under this agreement.

(d). At the option solely of the trustees this agreement shall be and become terminated immediately upon written notice of termination from the trustees to the adviser if any of the following events shall occur:

(i) If the adviser shall violate any provision of this agreement, and after notice of such violation shall not cure such violation within thirty days; or

(ii) If the adviser shall be adjudged bankrupt or insolvent by a court of competent jurisdiction, or an order shall be made by a court of competent jurisdiction for the appointment of a receiver, liquidator or trustee of the adviser, or of all or substantially all of its property by reason of the foregoing, or approving any petition filed against the adviser for its reorganization, and such adjudication or order shall remain in force or unstayed for a period of thirty days; or

(iii) If the adviser shall institute proceedings for voluntary bankruptcy or shall file a petition seeking reorganization under the federal bankruptcy laws, or for relief under any law for the relief of debtors, or shall consent to the appointment of a receiver of itself or of all or substantially all of its property, or shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts generally, as they become due.

The adviser agrees that if any of the events specified in subparagraphs (ii) and (iii) of this subsection (d) shall occur, it will give written notice of the fact to the trustees within seven days after the occurrence of such event.

(e). From and after the effective date of termination of this agreement pursuant to subsections (a), (b), (c) and (d) of this section, the adviser shall not (subject to Section _________ of this agreement) be entitled to compensation for further services hereunder but shall be paid all compensation accruing to the date of termination. The adviser shall be entitled to compensation under Section 11 hereof for any investment approved by the investment committee of the trust or the trustees prior to such termination without regard to whether any portion of the principal amount of such investment was disbursed prior to such termination. Upon such termination the adviser shall:

(i) pay over to the trust all moneys collected and held for the account of the trust pursuant to this agreement, after deducting any compensation then payable and reimbursement for its expenses to which it is then entitled;

(ii) as soon as possible deliver to the trustees a full accounting, including a statement showing all payments collected by it and a statement of all moneys held by it, covering the period following the date of the last accounting furnished to the trustees; and

(iii) deliver to the trustees all property and documents of the trust then in the custody of the adviser.

Upon termination of this agreement by either party or by its terms, the trustees shall, upon request of the adviser, change the name of the trust to a name not containing the names _________ or _________(or any approximation or abbreviation of them) and sufficiently dissimilar to such names as to be unlikely to cause confusion with such names or any of them and shall not allude in any public statement or advertisement to the former association, except as otherwise required by law in which case a statement shall be made that the former association no longer continues.

Nothing in this agreement shall restrict or limit the right of the adviser or any subsidiary or affiliate of it to employ in any manner the names _________ or _________, or any approximation or abbreviation of them, whether or not in combination with any other names or designations. The trust agrees by this agreement that it shall not constitute a license to use such names in its business; provided, however, that until the termination of this agreement the trust may employ the words _________ as part of its name _________.

22. Effective date; termination of prior advisory contract. (a) This agreement shall be effective on _________[date]. The adviser shall be entitled to compensation as determined under Section _________ of this agreement in regard to any disbursements made on or after _________[date] of the principal amount of an investment approved by the investment committee of the trust or the trustees prior to said date.

(b). The advisory contract dated _________, between the trust and the adviser, as amended, is by this agreement terminated effective at midnight on _________[date]. All rights and obligations arising under the contract shall be settled between the trust and adviser in accordance with it except that the adviser shall not be required to deliver to the trust any money, documents or other property of the trust as to which the adviser undertakes any duties or responsibilities under this agreement.

23. Miscellaneous. (a) The adviser assumes no responsibility under this agreement other than to render the services called for under it in good faith, and shall not be responsible for any action of the trustees in following or declining to follow any advice or recommendations of the adviser. None of the adviser, its policyholders, trustees, officers or employees shall be liable to the trust, the trustees, the holders of securities of the trust except by reason of acts or to any successor or assign of the trust except by reason of acts constituting bad faith, willful misconduct or reckless disregard of their duties or their not having acted in good faith in the reasonable belief that their actions were in the best interests of the trust.

(b). The trust and the adviser are not partners or joint venturers with each other and nothing in this agreement shall be construed so as to make them partners or joint venturers or impose any liability as such on either of them. The adviser shall perform its duties under this agreement as an independent contractor and not as an agent of the trust or the trustees.

(c). Any notice, report or other communication required or permitted to be given under this agreement shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses of the parties to this agreement:

The trustees and/or the trust: _________

The adviser: _________

Either party may at any time give notice in writing to the other party of a change of its address for the purpose of this subsection (c).

(d). This agreement shall not be changed, modified, terminated or discharged in whole or in part except by an instrument in writing signed by both parties to this agreement, or their respective successors or assigns, or otherwise as provided in this agreement.

(e). The section headings of this agreement have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this agreement.

(f). The provisions of this agreement shall be construed and interpreted in accordance with the law of the State of _________ as at the time in effect.

(g). All calculations made pursuant to Sections 9, 10, 11 and 12 of this agreement shall be based on statements (which may be unaudited, except as provided in them prepared on an accrual basis in accordance with generally accepted accounting principles as approved by the independent public or certified accountants who shall regularly report on the financial statements of the trust, regardless of whether the trust may also prepare statements on a different basis.

(h). The name _________ is the designation of the trustees under a declaration of trust dated _________, as amended from time to time. The obligations under this agreement are not personally binding upon, nor shall resort be had to the private property of, any of the trustees, shareholders, officers, employees or agents of the trust, but the trust property only shall be bound.

In witness of which, _________, by its _________, and _________, by its _________, in each case duly authorized to do so, have signed these presents all as of the day and year first above written.

_________

_________

By _________[title]

By _________[title]



______________________________________________________________________________________

 

More Real Estate Forms

 

Browse Real Estate Forms & Mortgage Forms Alphabetically

 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

 



Home Courses Real Estate Forms Income Properties For Sale Forums Real Estate Articles   

Copyright © 2001 - 2006, Buy Income Properties, Inc. All Rights Reserved. Privacy Policy in Observance.