EXHIBIT 10.2
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT dated as of June 24, 2004, by and among DEL MAR INCOME
PARTNERS LTD., a Maryland corporation (the "Company"), and PORT FUNDING, LTD., a
Colorado corporation (the "Manager"), with respect to the following:
WITNESSETH:
WHEREAS, the Company intends to invest in mortgage loans and plans to
qualify to be taxed as a REIT; and
WHEREAS, the Company desires to retain the Manager to manage the Company's
loans and to perform certain administrative services for the Company in the
manner and on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Terms used but not defined herein shall have the
respective meanings assigned them below:
(a) "Affiliate" means, with respect to any person, another person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with such person.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Governing Instruments" means the certificate of incorporation or other
charter, as the case may be, and bylaws of the Company and its subsidiaries.
(e) "Mortgage loans" means loans secured by mortgages or deeds of trust on
real estate properties.
(f) "REIT" means Real Estate Investment Trust as defined under Section 856
of the Code.
(g) "REIT Provisions of the Code" means Sections 856 through 860 of the
Code.
(h) "Unaffiliated Directors" shall mean those members of the Board of
Directors of the Company who are not officers or employees of the Company nor
officers, directors or Affiliates of the Manager.
SECTION 2. GENERAL DUTIES OF THE MANAGER.
(a) Administrative Services Provided by the Manager. The Manager will be
responsible for the day-to-day operations of the Company and will perform such
services and activities relating to the assets and operations of the Company as
may be appropriate, including:
(i) representing the Company in connection with the origination or
purchase of Mortgage loans;
(ii) in accordance with the directions of the Board of Directors,
investing or reinvesting any money of the Company;
(iii) furnishing reports and statistical and economic research to the
Company regarding the Company's real estate lending activities and the
performance of its portfolio of mortgage loans;
(iv) administering the day-to-day operations of the Company and
performing administrative functions necessary in the management of the
Company, including the collection of revenues, the payment of the Company's
expenses, debts and obligations and the maintenance of appropriate computer
services to perform such administrative functions;
(v) counseling the Company in connection with policy decisions to be
made by the Board of Directors;
(vi) assisting the Company in its use of leverage to finance mortgage
loan acquisitions;
(vii) overseeing the servicing of the Company's mortgage loans;
(viii) establishing underwriting, appraisal and quality control
procedures for the mortgage loans of the Company;
(ix) conducting a legal document review of each mortgage loan acquired
to verify the accuracy and completeness of the information contained in the
mortgage loans, security instruments and other pertinent documents in the
mortgage file;
(x) providing the Company with data processing, legal and
administrative services to the extent required to implement the business
strategy of the Company;
(xi) providing all actions necessary for compliance by the Company
with all federal, state and local regulatory requirements applicable to the
Company in respect of its business activities, including preparing or
causing to be prepared all financial statements required under applicable
regulations and contractual undertakings;
(xii) providing all actions necessary to enable the Company to make
required federal, state and local tax filings and reports and generally
enable the Company to qualify and maintain its status as a REIT, including
soliciting stockholders for required information to the extent required by
the REIT Provisions of the Code;
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(xiii) communicating on behalf of the Company with the stockholders of
the Company as required to satisfy any reporting requirements and to
maintain effective relations with such stockholders; and
(xiv) performing such other services as may be required from time to
time for management and other activities relating to the assets of the
Company as the Board of Directors shall reasonably request or the Manager
shall deem appropriate under the particular circumstances.
(b) Administrative Services Provided by Subcontractors. The Manager may
enter into subcontracts with other parties to provide any such services to the
Company.
(c) Cooperation of the Company. The Company agrees to take all actions
reasonably required to permit the Manager to carry out its duties and
obligations hereunder.
SECTION 3. ADDITIONAL ACTIVITIES OF MANAGER. Nothing herein shall prevent
the Manager or any of its officers, directors, employees or Affiliates from
engaging in other businesses or from rendering services of any kind to any other
person or entity, including the purchase of, or advisory service to others
investing in, any type of real estate investment, including investments which
meet the principal investment objectives of the Company, except that the Manager
and its officers, directors and employees shall not provide any such service to
any mortgage REIT other than the Company. The Manager may participate with the
Company in making Mortgage loans if approved by a majority of the Unaffiliated
Directors. Directors, officers, employees and agents of the Manager or
Affiliates of the Manager may serve as trustees, directors, officers, employees,
agents, nominees or signatories for the Company or any subsidiary of the
Company, to the extent permitted by their Governing Instruments, as from time to
time amended, or by any resolutions duly adopted by the Board of Directors
pursuant to the Company's Governing Instruments.
SECTION 4. BANK ACCOUNTS. At the direction of the Board of Directors, the
Manager may establish and maintain one or more bank accounts in the name of the
Company or any subsidiary of the Company, and may collect and deposit into any
such account or accounts, and disburse funds from any such account or accounts,
under such terms and conditions as the Board of Directors may approve; and the
Manager shall from time to time render appropriate accountings of such
collections and payments to the Board of Directors and, upon request, to the
auditors of the Company or any subsidiary of the Company.
SECTION 5. RECORDS. The Manager shall maintain appropriate books of account
and records relating to services performed hereunder, and such books of account
and records shall be accessible for inspection by representatives of the Company
or any subsidiary of the Company at any time during normal business hours.
SECTION 6. COMPENSATION OF THE MANAGER.
(a) Management Fee. The Manager will receive a management fee consisting
of:
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(i) For Mortgage loans or the portion thereof purchased by the
Company, the Mortgage loan origination fees or points, usually charged to a
borrower for and upon the origination, extension or financing of a Mortgage
loan, up to 8% of the loan balance (calculated on an annualized basis) with
any additional fees or points paid to be allocated 50% to the Manager and
50% to the Company. For example, if the loan term were only six months and
the origination fee were 5% of the loan balance, which would equate to 10%
on an annualized basis, then 4% of the origination fee (being 8%
annualized) would be paid to the Manager and 50% of the balance of the
origination fee would be paid to the Manager and 50% of the balance would
be paid to the Company. The amount of this fee is determined by competitive
conditions, may vary and may have a direct effect on the interest rate a
borrower is willing to pay the Company.
(ii) An amount equal to 50% of all late payment charges and other
penalties from payments made by borrowers.
(iii) An amount equal to 50% of all regular (i.e., non-default)
payments made by borrowers in excess of the prime rate (as listed in The
Wall Street Journal calculated monthly) plus 500 basis points.
(iv) An amount equal to 50% of all default interest payments made
borrowers.
(v) An amount equal to 50% of all foreclosure proceeds (net of
applicable costs and the principal amount due on the loan). For example, if
foreclosure occurred involving (a) a loan with a principal amount of
$100,000, (b) accrued interest on the loan of $20,000, (c) costs of
foreclosure of $5,000 and (d) proceeds from the sale of the property of
$150,000, then the $45,000 net proceeds would be paid $22,500 to the
Manager and $22,500 to the Company.
(vi) An amount equal to 50% of all equity participations.
(b) Payment. The Manager's fee shall be calculated by the Manager within 15
days after the end of each month, and such calculation shall be promptly
delivered to the Company. Payment of the Manager's fee and any required
adjustments shall be paid by the Company within 15 days after the delivery of
the Manager's written computation to the Company.
SECTION 7. EXPENSES OF THE COMPANY.
(a) Expenses Borne by the Manager. Without regard to the compensation
received hereunder by the Manager, the Manager shall bear the following
expenses:
(i) Employment expenses of the personnel employed by the Manager,
including, but not limited to, salaries, wages, payroll taxes, and the cost
of employee benefit plans;
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(ii) Rent, telephone, utilities, office furniture, equipment and
machinery (including computers, to the extent utilized) and other office
expenses (such as asset/liability software, modeling software and other
software and hardware) of the Manager needed in order to perform its duties
as set forth herein;
(iii) Bookkeeping fees and expenses including any costs of computer
services, other than in connection with communications to security holders
of the Company;
(iv) Miscellaneous administrative expenses incurred in supervising and
monitoring the Company's investments or any subsidiary's investments or
relating to performance by the Manager of its functions hereunder;
(v) Fees and expenses paid to advisors and independent contractors,
consultants, managers, and other agents engaged by the Manager for the
account of the Company or any subsidiary of the Company;
(vi) Expenses connected with the acquisition of the Company's assets
and mortgage loans;
(vii) Expenses related to the servicing and subservicing of mortgage
loans; and
(viii) Travel and related expenses of personnel of the Manager when
attending meetings or performing other business activities which relate to
the real estate operating activities of the Company or any subsidiary of
the Company.
(b) Expenses Borne by the Company. The Company or any subsidiary of the
Company shall pay all of its expenses except those which are the specific
responsibility of the Manager pursuant to this Agreement; and, without limiting
the generality of the foregoing, it is specifically agreed that the following
expenses of the Company or any subsidiary of the Company shall not be paid by
the Manager:
(i) The cost of any borrowed money;
(ii) All taxes applicable to the Company or any subsidiary of the
Company including interest and penalties thereon;
(iii) Legal, accounting and auditing fees and expenses relating to the
Company's or any subsidiary's operations;
(iv) Expenses relating to any office or office facilities maintained
by the Company or any subsidiary of the Company exclusive of the office of
the Manager;
(v) Expenses connected with the ownership and disposition of the
Company's or any subsidiary's assets, including, but not limited to, costs
of foreclosure, maintenance, repair and improvement of property and
premiums for insurance on property owned by the Company or any subsidiary
of the Company;
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(vi) Legal, audit, accounting, underwriting, brokerage, listing,
rating agency, registration and other fees, printing, engraving and other
expenses and taxes incurred in connection with the issuance, distribution,
transfer, registration and stock listing of the Company's or any
subsidiary's equity securities or debt securities;
(vii) The expenses of organizing, modifying or dissolving the Company
or any subsidiary of the Company;
(viii) All insurance costs incurred in connection with the Company or
any subsidiary of the Company;
(ix) Expenses connected with payments of dividends or interest or
distributions in any other form made or caused to be made by the Board of
Directors to holders of the securities of the Company or any subsidiary of
the Company;
(x) Expenses connected with the structuring of the issuance of
mortgage securities by the Company or any subsidiary of the Company,
including but not limited to trustee's fees, insurance premiums, and costs
of required credit enhancements;
(xi) Travel and related expenses of the directors of the Company when
attending meetings or performing other business activities which relate to
the Company;
(xii) All expenses of third parties connected with communications to
holders of equity securities or debt securities of the Company or any
subsidiary of the Company and the other bookkeeping and clerical work
necessary in maintaining relations with holders of such securities and in
complying with the continuous reporting and other requirements of
governmental bodies or agencies, including any costs of computer services
in connection with this function, the cost of printing and mailing
certificates for such securities and proxy solicitation materials and
reports to holders of the Company's or any subsidiary's securities and
reports to third parties required under any indenture to which the Company
or any subsidiary of the Company is a party;
(xiii) Transfer agent's and registrar's fees and charges;
(xiv) Fees and expenses paid to directors of the Company or any
subsidiary of the Company, the cost of director and officer liability
insurance and premiums for fidelity and errors and omissions insurance;
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(xv) Any judgment rendered against the Company or any subsidiary of
the Company, or against any trustee or director of the Company or any
subsidiary of the Company in his capacity as such for which the Company or
any subsidiary of the Company is required to indemnify such trustee or
director, or any court or governmental agency; and
(xvi) Other miscellaneous expenses of the Company or any subsidiary of
the Company which are not specified expenses of the Manager under this
Agreement.
SECTION 8. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION. The Manager
assumes no responsibility under this Agreement other than to render the services
called for hereunder in good faith and shall not be responsible for any action
of the Board of Directors in following or declining to follow any advice or
recommendations of the Manager. The Manager, its directors, officers,
stockholders and employees will not be liable to the Company, any subsidiary of
the Company, its subsidiary's stockholders or the Unaffiliated Directors for any
acts or omissions by the Manager, its directors, officers, stockholders or
employees under or in connection with this Agreement, except by reason of acts
or omissions constituting bad faith, willful misconduct, gross negligence or
reckless disregard of their duties under this Agreement. The Company and its
subsidiaries shall reimburse, indemnify and hold harmless the Manager, its
directors, officers, stockholders and employees of and from any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever (including, without limitation, attorneys' fees) in respect of
or arising from any acts or omissions of the Manager, its stockholders,
directors, officers and employees made in good faith in the performance of the
Manager's duties under this Agreement and not constituting bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.
SECTION 9. TERM; TERMINATION FEE.
(a) This Agreement shall commence on the date hereof and shall continue in
force until the fifth anniversary of such date, and thereafter it shall be
renewed automatically for successive five-year periods unless a notice of
non-renewal is timely delivered as described below.
(b) In addition to such further liability or obligation of either party to
the other due upon termination of this Agreement, if this Agreement is
terminated without cause (as "cause" is defined below), the Company shall pay
the Manager a termination fee in an amount equal to the greater of (i) the fair
market value of this Agreement determined by an independent appraisal or (ii)
four percent (4%) of the mortgage loan portfolio of the Company. Such appraisal
shall be conducted by a nationally recognized appraisal firm mutually agreed
upon by the parties and the costs of such appraisal shall be borne equally by
the parties. If the parties are unable to agree upon such appraisal firm within
30 days following delivery of the notice of non-renewal, then each party shall,
as soon as reasonably practicable, but in no event more than 45 days following
delivery of the notice of non-renewal, choose a nationally-recognized
independent appraisal firm to conduct an appraisal. In such event, (i) the fair
market value amount shall be deemed to be the average of the appraisals as
conducted by each party's chosen appraiser and (ii) each party shall pay the
costs of its appraiser so chosen. Any appraisal conducted hereunder shall be
performed no later than 45 days following selection of the appraiser or
appraisers. The termination fee payable by the Company shall be paid within 30
days following receipt of the final appraisal to be obtained hereunder.
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SECTION 10. TERMINATION BY COMPANY FOR CAUSE. At the option of the Company,
this Agreement shall be and become terminated upon written notice of termination
to the Manager if any of the following events shall occur (termination for any
of such events shall constitute termination for "cause"):
(a) if a majority of the Unaffiliated Directors reasonably determines that
the Manager has violated this Agreement in any material respect and, after
notice of such violation, the Manager has failed to cure such violation within
60 days; or
(b) there is entered an order for relief or similar decree or order with
respect to the Manager by a court having competent jurisdiction in an
involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or the Manager (i) ceases, or admits in writing its
inability, to pay its debts as they become due and payable, or makes a general
assignment for the benefit of, or enters into any composition or arrangement
with, creditors; (ii) applies for, or consents (by admission of material
allegations of a petition or otherwise) to the appointment of a receiver,
trustee, assignee, custodian, liquidator or sequestrator (or other similar
official) of the Manager or of any substantial part of its properties or assets,
or authorizes such an application or consent, or proceedings seeking such
appointment are commenced without such authorization, consent or application
against the Manager and continue undismissed for 60 days; (iii) authorizes or
files a voluntary petition in bankruptcy, or applies for or consents (by
admission of material allegations of a petition or otherwise) to the application
of any bankruptcy, reorganization, arrangement, readjustment of debt,
insolvency, dissolution, liquidation or other similar law of any jurisdiction,
or authorizes such application or consent, or proceedings to such end are
instituted against the Manager without such authorization, application or
consent and are approved as properly instituted and remain undismissed for 60
days or result in adjudication of bankruptcy or insolvency; or (iv) permits or
suffers all or any substantial part of its properties or assets to be
sequestered or attached by court order and the order remains undismissed for 60
days. If any of the events specified above shall occur, the Manager shall give
prompt written notice thereof to the Board of Directors upon the happening of
such event.
SECTION 11. ACTION UPON TERMINATION. From and after the effective date of
termination of this Agreement, except as otherwise specified in of this
Agreement, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination,. Upon such termination, the Manager shall forthwith:
(a) after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or any subsidiary
of the Company all money collected and held for the account of the Company or
any subsidiary of the Company pursuant to this Agreement;
(b) deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board of Directors with respect to the Company or any subsidiary of the
Company; and
(c) deliver to the Board of Directors all property and documents of the
Company or any subsidiary of the Company then in the custody of the Manager.
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SECTION 12. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST. The
Manager agrees that any money or other property of the Company or any subsidiary
of the Company held by the Manager under this Agreement shall be held by the
Manager as custodian for the Company or such subsidiary, and the Manager's
records shall be appropriately marked clearly to reflect the ownership of such
money or other property by the Company or such subsidiary. Upon the receipt by
the Manager of a written request signed by a duly authorized officer of the
Company requesting the Manager to release to the Company or any subsidiary of
the Company any money or other property then held by the Manager for the account
of the Company or any subsidiary of the Company under this Agreement, the
Manager shall release such money or other property to the Company or such
subsidiary of the Company within a reasonable period of time, but in no event
later than the later to occur of (i) 30 days following such request and (ii) the
earliest time following such request that remittance will not cause the Manager
to violate any law or breach any agreement to which it or the Company is a
party. The Manager shall not be liable to the Company, any subsidiaries of the
Company, the unaffiliated Directors, or the Company's or its subsidiaries'
stockholders for any acts performed or omissions to act by the Company or any
subsidiary of the Company in connection with the money or other property
released to the Company or any subsidiary of the Company and not constituting
bad faith, willful misconduct, gross negligence or reckless disregard of its
duties. The Company and any subsidiary of the Company shall indemnify the
Manager, its directors, officers, stockholders and employees against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, which arise in connection with the Manager's release of such
money or other property to the Company or any subsidiary of the Company unless
such expenses, losses, damages, liabilities, demands, charges and claims arise
in connection with acts or omissions which constitute bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.
Indemnification pursuant to this provision shall be in addition to any right of
the Manager to indemnification under this Agreement.
SECTION 13. REPRESENTATIONS AND WARRANTIES.
(a) The Company hereby represents and warrants to the Manager as follows:
(i) The Company is duly organized, validly existing and in good
standing under the laws of Maryland, has the power to own its assets and to
transact the business in which it is now engaged and is duly qualified and
in good standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such
qualification, except for failures to be so qualified, authorized or
licensed that could not in the aggregate have a material adverse effect on
the business operations, assets or financial condition of the Company and
its subsidiaries, taken as a whole. The Company does not do business under
any fictitious business name.
(ii) The Company has the power and authority to execute, deliver and
perform this Agreement and all obligations required hereunder and has taken
all necessary action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. Except as shall have been
obtained, no consent of any other person including, without limitation,
stockholders and creditors of the Company, and no license, permit, approval
or authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required by the
Company in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each
instrument or document required hereunder will be, executed and delivered
by a duly authorized officer of the Company, and this Agreement
constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the legally valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms.
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(iii) The execution, delivery and performance of this Agreement and
the documents or instruments required hereunder will not violate any
provision of any existing law or regulation binding on the Company, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Company, or the governing instruments of, or any
securities issued by, the Company or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the Company
is a party or by which the Company or any of its assets may be bound, the
violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Company and its
subsidiaries, taken as a whole, and will not result in, or require, the
creation or imposition of any lien on any of its property, assets or
revenues pursuant to the provisions of any such mortgage, indenture, lease,
contract or other agreement, instrument or undertaking .
(b) The Manager hereby represents and warrants to the Company as follows:
(i) The Manager is duly organized, validly existing and in good
standing under the laws of Colorado, has the corporate power to own its
assets and to transact the business in which it is now engaged and is duly
qualified to do business and is in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except for failures to be so
qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Manager and its subsidiaries, taken as a whole. The
Manager does not do business under any fictitious business name.
(ii) The Manager has the corporate power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder
and has taken all necessary corporate action to authorize this Agreement on
the terms and conditions hereof and the execution, delivery and performance
of this Agreement and all obligations required hereunder. Except as shall
have been obtained, no consent of any other person including, without
limitation, stockholders and creditors of the Manager, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by the Manager in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been and each instrument
or document required hereunder will be executed and delivered by a duly
authorized officer of the Manager, and this Agreement constitutes, and each
instrument or document required hereunder when executed and delivered
hereunder will constitute, the legally valid and binding obligation of the
Manager enforceable against the Manager in accordance with its terms.
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(iii) The execution, delivery and performance of this Agreement and
the documents or instruments required hereunder, will not violate any
provision of any existing law or regulation binding on the Manager, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Manager, or the governing instruments of, or any
securities issued by, the Manager or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the Manager
is a party or by which the Manager or any of its assets may be bound, the
violation of which would have a material adverse effect on the business
operations, assets, or financial condition of the Manager and its
subsidiaries, taken as a whole, and will not result in, or require, the
creation or imposition of any lien on any of its property, assets or
revenues pursuant to the provisions of any such mortgage indenture, lease,
contract or other agreement, instrument or undertaking.
SECTION 14. NOTICES. Unless expressly provided otherwise herein, all
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when (1) delivered by hand, (2) otherwise delivered against
receipt therefore or (3) upon actual receipt of registered or certified mail,
postage prepaid. The parties may deliver to each other notice by electronically
transmitted facsimile copies ("FAX") provided that such FAX notice is followed
within twenty-four (24) hours by any type of notice otherwise provided for in
this paragraph. Any notice shall be duly addressed to the parties as follows:
(a) If to the Company:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Board of Directors
Del Mar Income Partners Ltd.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Manager:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Port Funding, Ltd.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address.
SECTION 15. ASSIGNMENTS. Except as set forth in this section, this
Agreement shall terminate automatically in the event of its assignment, in whole
or in part, by the Manager, unless such assignment is consented to in writing by
the Company as evidenced by the consent of a majority of the Unaffiliated
Directors. Any such assignment shall bind the assignee hereunder in the same
manner as the Manager is bound. In addition, the assignee shall execute and
deliver to the Company a counterpart of this Agreement naming such assignee as
Manager. This Agreement shall not be assigned by the Company without the prior
written consent of the Manager, except in the case of assignment by the Company
to a REIT or other organization which is a successor (by merger, consolidation
or purchase of assets) to the Company, in which case such successor organization
shall be bound hereunder and by the terms of such assignment in the same manner
as the Company is bound hereunder.
SECTION 16. ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
SECTION 17. CONTROLLING LAW. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the State
of Colorado.
SECTION 18. WAIVERS. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
SECTION 19. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts.
SECTION 20. PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
DEL MAR INCOME PARTNERS LTD. PORT FUNDING, LTD.
By: By:
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President President
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