Document:

Exhibit 10.37

 

AMENDED AND RESTATED

FUND II INVESTMENT MANAGEMENT AGREEMENT

 

Dated as of April 9,
2001

 

 

	
  ARTICLE I

  	
  RETENTION;
  SERVICES AND POWERS OF INVESTMENT MANAGER

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Retention of Investment
  Manager

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Services to be
  Performed by Investment Manager

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Presentation,
  Negotiation and Closing of Investment Opportunities

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Key Personnel

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Miscellaneous

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  COMPENSATION
  OF THE INVESTMENT MANAGER; FEES AND EXPENSES

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Investment Manager
  Compensation

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Investment Manager
  Expenses

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Fund Expenses

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  EXCULPATION
  AND INDEMNIFICATION

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Exculpation and
  Indemnification

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  MISCELLANEOUS

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Duration and
  Termination

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Status of Investment
  Manager as Independent Contractor

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Notices

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Governing Law

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Severability

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Entire Agreement

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Binding on Successors

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Headings

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Waiver

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Amendment

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.11

  	
  No Third-Party Rights

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.12

  	
  Counterparts

  	
  12

  
				

 

 

AMENDED AND RESTATED

FUND II INVESTMENT MANAGEMENT AGREEMENT

 

This AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT is entered into as of April 9, 2001 (this “Agreement”),
by and among CT Investment Management Co. LLC, a Delaware limited liability
company (the “Investment Manager”), CT MP II LLC, a Delaware limited liability
company (the “General Partner”), and, solely with respect to Sections 1.3(e) and
2.3 and Articles III and IV hereof,  CT
Mezzanine Partners II LP, a Delaware limited partnership (the “Fund”), and
amends and restates the Investment Management Agreement, entered into as of March 8,
2000 (the “Original Agreement”), by and among the Investment Manager, the
General Partner and the Fund.  All
definitions not expressly provided herein shall be those set forth in the
Limited Partnership Agreement of the Fund, as the same may be amended from time
to time (the “Fund Partnership Agreement”), and the Venture Agreement (as
defined below).

 

PRELIMINARY STATEMENT

 

A.                                   The
General Partner is the general partner of the Fund.  Pursuant to the general partner management
agreement, as the same may be amended from time to time (the “General Partner
Management Agreement”), by and between the General Partner and the Fund, the
Fund will pay a fund management fee to the General Partner (the “Fund
Management Fee”) in consideration of certain fund management services to be
provided by the General Partner to the Fund and any Vehicles.

 

B.                                     Pursuant
to the Original Agreement, the General Partner retained the Investment Manager
to provide certain investment management services, subject to the supervision
and direction of the General Partner’s management committee (the “Management
Committee”), as provided in the Fund Partnership Agreement.

 

C.                                     The
parties hereto wish to amend and restate the Original Agreement.

 

D.                                    Capital
Trust, Inc., a Maryland corporation (“CT”), CT-F1, LLC, a Delaware limited
liability company (“CT-F1”), CT-F2-GP, LLC, a Delaware limited liability company
(“CT-F2-GP”), CT-F2-LP, LLC, a Delaware limited liability company (“CT-F2-LP”)
and the Investment Manager (collectively, the “CT Parties”) and Travelers
Limited Real Estate Mezzanine Investments I, LLC, a Delaware limited liability
company (“Limited REMI I”), Travelers General Real Estate Mezzanine Investments
II, LLC, a Delaware limited liability company (“General REMI II”), Travelers
Limited Real Estate Mezzanine Investments II, LLC, a Delaware limited liability
company (“Limited REMI II”) (collectively, the “CIG Parties”) are parties to an
amended and restated  venture agreement,
dated as of                           ,
2001, as the same may be amended from time to time (the “Venture Agreement”).

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein contained, the
Investment Manager, the General Partner (in its individual capacity and not as
the general partner of the Fund) and the Fund agree as follows:

 

 

ARTICLE I

RETENTION; SERVICES AND POWERS

OF INVESTMENT MANAGER

 

1.1                                 Retention
of Investment Manager.  The General
Partner hereby appoints the Investment Manager (subject to the following
provisions of this Agreement) as the exclusive investment manager of the Fund
on behalf of the General Partner and to provide the services to the General
Partner described in Section 1.2 of this Agreement.

 

1.2                                 Services
to be Performed by Investment Manager. 
The Investment Manager shall be responsible for the day-to-day
management of the investments of the Fund, subject to the supervision and
direction of and any approval required by the Management Committee.  Services to be rendered by the Investment
Manager to the General Partner shall include the following:

 

(a)                                  The
Investment Manager shall identify, evaluate and negotiate investment
opportunities (“Investment Opportunities”) for presentation to the General
Partner on behalf of the Fund in accordance with and subject to the
restrictions and limitations contained in Section 1.3 hereof.

 

(b)                                 The
Investment Manager shall make investment recommendations to the General Partner
relating to the making of Investments.

 

(c)                                  The
Investment Manager shall monitor Investments on a day-to-day basis, including
arranging for the accounting, budgeting, safekeeping and administration of
Investments.

 

(d)                                 The
Investment Manager shall, on behalf of the General Partner, develop and
administer the Fund’s and any Vehicle’s financial and accounting reporting
functions, treasury and cash or management functions and internal control and
audit functions.

 

(e)                                  The
Investment Manager shall work together with the Management Committee to submit
to the Limited Partners of the Fund the following reports which, in the case of
the items described in clauses (i)(A) and (B) and (ii)(A), (B) and
(C) below, shall be prepared in accordance with GAAP:

 

(i)                                     within
sixty (60) days after the end of each fiscal quarter, unless such quarter is
the last fiscal quarter, an unaudited report setting forth as of the end of
such fiscal quarter:

 

(A)                              a
balance sheet of the Fund;

 

(B)                                an
income statement of the Fund for such fiscal quarter; and

 

(C)                                a
status report of the Fund’s Investments and activities during such fiscal
quarter, including summary descriptions

 

2

 

of Investments made and disposed of by the Fund during
such fiscal quarter.

 

(ii)                                  within
ninety (90) days after the end of each Partnership Year (as defined in the Fund
Partnership Agreement), an audited report setting forth as of the end of such
Partnership Year:

 

(A)                              a
balance sheet of the Fund;

 

(B)                                an
income statement of the Fund for such Partnership Year;

 

(C)                                a
statement of each Partner’s Capital Account (as defined in the Fund Partnership
Agreement); and

 

(D)                               a
status report of the Fund’s Investments and activities during such year,
including summary descriptions of Investments made and disposed of by the Fund
during such year.

 

(iii)                               An
unaudited quarterly report on operations which will include an income
statement, a balance sheet, a statement of cash flows, and statement of the
Fund’s equity.  The report will present
the income statement and statement of cash flows on both a quarterly basis and
a year-to-date basis.  The report also
will compare actual operations to those projected in the Annual Operating
Budget.  The report will be delivered to
members of the Management Committee within 30 business days after the last day
of each month.

 

(iv)                              Annual
audited financial statements certified to be in accordance with GAAP within 60
days of the fiscal year end.

 

(v)                                 Any
other reports the General Partner or the Investment Manager are required to
provide to the General Partner, the Fund or its Limited Partners pursuant to
the Fund Partnership Agreement.

 

(f)                                    The
Investment Manager shall obtain, at the expense of the General Partner,
director and officer/manager liability insurance, and other liability insurance
and business insurance customary for businesses like that of the Investment
Manager.  The liability  insurance coverages shall provide for full
tail coverage (on an occurrence basis during the term of the Fund) for a
minimum of three years following the date of the dissolution of the Fund.

 

1.3                                 Presentation,
Negotiation and Closing of Investment Opportunities.  During the period beginning on the date
hereof and ending on the date of the expiration of the Investment Period, the
Investment Manager shall take the following actions with respect to each
Investment Opportunity; provided, however, that the Investment
Manager may take all or some of the following actions solely with respect to
Follow-on Investments after the expiration of the Investment Period:

 

3

 

(a)                                  Originations.  The Investment Manager shall use its best
efforts to originate, and present to the General Partner on behalf of the Fund,
Investment Opportunities.

 

(b)                                 Investment
Opportunity Reports.  For each
Investment Opportunity, the Investment Manager will prepare and deliver to the
General Partner a report regarding such Investment Opportunity, substantially
in the form of the sample report attached as Exhibit A hereto (an “Investment
Opportunity Report”).

 

(c)                                  Fund
Commitments.  For each Investment
Opportunity that the Investment Manager presents to the General Partner, the
Investment Manager shall, upon not less than three business days prior written
notice to each member of the Management Committee, schedule a meeting
between the Investment Manager and such members regarding such Investment
Opportunity (an “Investment Opportunity Meeting”). Within two business days prior
to each Investment Opportunity Meeting, the Investment Manager shall deliver to
each such member a copy of the Investment Opportunity Report and each other
report regarding the related Investment Opportunity.  Following an Investment Opportunity Meeting,
the General Partner shall notify the Investment Manager of its determination to
either cause the Fund, either directly or through a Vehicle, to acquire an
Investment in such Investment Opportunity or cause the Fund to decline to
acquire an Investment in such Investment Opportunity.  In the event that the General Partner has
approved the acquisition by the Fund of an Investment in an Investment
Opportunity, the General Partner shall deliver to the Investment Manager a
written commitment for the Fund to acquire such Investment, in a form
acceptable to the General Partner and the Investment Manager, which commitment
shall state the terms and conditions upon which the General Partner has
committed to cause the Fund to acquire such Investment (a “Fund Commitment”).  Each Fund Commitment shall require that the
proposed borrower related to the applicable Investment Opportunity certify that
such proposed borrower is not an affiliate of Capital Trust, Inc. or
Citigroup Inc. (a “Non-Affiliate Certification”).  The General Partner shall be deemed to have
declined to cause the Fund to acquire an Investment in an Investment
Opportunity if the General Partner fails to promptly notify the Investment
Manager following an Investment Opportunity 
Meeting of the General Partner’s determination to cause the Fund to
either acquire an Investment in an Investment Opportunity or decline to acquire
such an Investment.

 

(d)                                 Investment
Manager Commitments.  Upon its
receipt of a Fund Commitment, the Investment Manager may issue its own funding
commitment, on the same terms and conditions as such Fund Commitment, to the
related proposed borrower (an “Investment Manager Commitment”).  The Investment Manager shall obtain an
executed Investment Manager Commitment and Non-Affiliate Certification from
such borrower.

 

(e)                                  Closings.  The Investment Manager shall close each
Investment Opportunity for which all of the conditions of the related
Investment Manager Commitment and Fund Commitment have been satisfied by
utilizing documentation acceptable to the General Partner (the “Documents”).  The 
Investment Manager may, in its reasonable discretion, but in no event
contrary to the terms of the related Fund Commitment,  negotiate with a proposed borrower regarding
the terms of the Documents and make modifications to such Documents provided
that such Documents as so modified do not materially differ from the form of
the

 

4

 

Documents
approved in the Fund Commitment.  In
connection with each such closing, the Investment Manager may retain counsel of
its own choice.

 

(f)                                    Indemnification.  In accordance with the terms of Section 3.1(b) hereof,
and provided that the Investment Manager is in material compliance with the
provisions of Sections 1.3(d) and (e) hereof, the Fund shall
indemnify, defend and hold the Investment Manager harmless against any Damages
(as defined in Section 3.1(a)) that any Indemnified Party (as defined in Section 3.1(a))
may suffer in the event that the Fund does not acquire an Investment in an
Investment Opportunity (i) for which the Fund has issued a Fund
Commitment, (ii) for which the Investment Manager has issued an Investment
Manager  Commitment, and (iii) for
which all of the closing conditions in such Fund Commitment and Investment
Manager Commitment  have been satisfied.

 

1.4                                 Key
Personnel.  The Investment Manager
shall cause at least one ‘Key Individual’ and one ‘Senior Manager’ (as from
time to time designated by the Investment Manager and reasonably acceptable to
General REMI II) to devote a substantial portion of their time and energy to
the performance of the Investment Manager’s duties under this Agreement.  The Investment Manager has initially
designated John R. Klopp as a Key Individual and each of Stephen D. Plavin and
Edward L. Shugrue as a Senior Manager and General REMI II hereby accepts each
such designation.

 

1.5                                 Miscellaneous.  To the extent that the performance of the
duties set forth in this Agreement places any affirmative regulatory
obligations upon the Investment Manager, the Investment Manager shall not be
deemed to have accepted such duties unless and until it complies with any and
all applicable laws and regulations.  The
Investment Manager, in its performance of its duties hereunder, shall act in
conformity with the instructions and directions of the General Partner and the
Management Committee and comply with and conform to the requirements of all
applicable federal and state laws, regulations and rulings.

 

ARTICLE II

COMPENSATION OF THE INVESTMENT MANAGER; FEES AND EXPENSES

 

2.1                                 Investment
Manager Compensation.  As
compensation for its services hereunder, the General Partner shall pay to the
Investment Manager a management fee which shall be equal to the Investment
Management Fee in accordance with Section 2.11 of the Venture
Agreement.  The Investment Management Fee
shall accrue and be payable quarterly in advance in the manner and at the times
set forth in Section 2.11 of the Venture Agreement (which is incorporated
herein by reference). Within 90 days of the end of each calendar year, the
General Partner and the Investment Manager shall jointly calculate and
determine the aggregate Investment Management Fee that accrued to the
Investment Manager for such year.  As
provided in the Venture Agreement, to the extent the amount of Investment
Management Fee payments actually received by the Investment Manager during such
year exceeded the calculated amount, such excess shall be applied to the
Investment Management Fee payments to be made to the Investment Manager in the
next quarter(s) until recouped; provided, however, that if upon
termination of this Agreement any portion of such excess amount remains unpaid,
the Investment Manager shall pay the General Partner such remaining excess
amount in full as promptly as practicable after such

 

5

 

termination.  As provided in the Venture Agreement, to the
extent the calculated amount exceeds the amount of Investment Management Fee
payments actually received by the Investment Manager, the General Partner shall
pay the Investment Manager the difference between such amounts.  The General Partner shall fund the payment of
the Investment Management Fee from funds obtained on account of the Fund
Management Fee (as well as from its General Partner Incentive Amount as
contemplated by the Limited Partnership Agreement) received from the Fund as
promptly as practicable after the calculation of such excess amount. In the
event that the Fund or any Vehicle acquires or pursues an Investment in which
the related borrower with respect to such Investment pays any transaction fees
which are directly related to the activities or operations of the Fund and any
Vehicles, including origination, acquisition, disposition, financing, break-up
or other similar fees, and any such fees are received by the General Partner,
the Investment Manager or any Affiliate of the General Partner or the
Investment Manager,  the General Partner
shall apply such fees in the following manner: (a) first, to
reimburse the General Partner and the Investment Manager for any
Non-Consummated Investment Expenses (as defined in Section 2.2 hereof)
incurred by such parties and not otherwise reimbursed, (b) second,
to reimburse the General Partner and the Investment Manager for any Operating
Expenses (as defined in Section 2.3 hereof) incurred by such parties and not
otherwise reimbursed and (c) third, to pay or prepay the Investment
Management Fee payable hereunder.

 

2.2                                 Investment
Manager Expenses.  The Investment
Manager shall bear the following ordinary day-to-day expenses incidental to the
performance by the Investment Manager of its obligations hereunder:  (i) all costs and expenses of the office
space, facilities, utility service, supplies and necessary administrative and
clerical functions connected with the Investment Manager’s operations, (ii) all
costs and expenses incurred in developing, negotiating, structuring or
otherwise dealing with proposed Investments which are not consummated by the
Fund, including, without limitation, any investment banking, engineering,
appraisal, environmental, travel, legal and accounting expenses and other fees
and out-of-pocket costs related thereto (all such expenses, collectively, the “Non-Consummated
Investment Expenses”), and (iii) compensation of all employees who are
engaged in the operation or management of the Investment Manager’s business
(collectively, “Administrative Expenses”).

 

2.3                                 Fund
Expenses.  Without limiting the
provisions of Section 2.2 above, the Investment Manager shall not bear nor
be charged with any costs or expenses of the Fund’s or any Vehicle’s activities
and operations, all of which shall be borne by or otherwise charged to the Fund
and such Vehicles, including costs and expenses arising from activities and
operations prior to the date of this Agreement and including, without
limitation, to the extent directly related to the Fund, any Vehicles and their
Investments: (i) all costs and expenses, incurred in developing,
negotiating, structuring, acquiring, financing, disposing, or otherwise dealing
with consummated Investments, including, without limitation, any investment
banking, engineering, appraisal, environmental, travel, legal and accounting
expenses and other fees and out-of-pocket costs related thereto, and the costs
of rendering financial assistance to or arranging for financing for any assets
or businesses constituting Investments or for working capital or other
Partnership purposes; (ii) all costs and expenses, if any, incurred in
monitoring Investments, including, without limitation, any engineering,
environmental, travel, third-party payment processing, legal and accounting
expenses and other fees and out-of-pocket costs related thereto; (iii) all
costs and expenses, if any, incurred in disposing of or otherwise dealing with
Investments, including, without limitation, any investment banking,
engineering, appraisal, environmental, travel, legal

 

6

 

and
accounting expenses and other fees and out-of-pocket costs related thereto, and
the costs of rendering financial assistance to or arranging for financing for
any assets or businesses constituting Investments; (iv) taxes of the Fund
and any Vehicles, fees of auditors, counsel and other advisors of the Fund and
any Vehicles, insurance costs of the Fund and any Vehicles and costs related to
litigation and threatened litigation involving the Fund and any Vehicles; (v) expenses
associated with third party accountants, attorneys and tax advisors with
respect to the Fund and any Vehicles and their activities, including the
preparation and auditing of financial reports and statements and other similar
matters, and costs associated with the distribution of financial and other
reports and capital call notices to the Partners in the Fund and costs
associated with Fund meetings and any meetings of shareholders, partners,
members or directors of any Vehicles; (vi) brokerage commissions and other
investment costs incurred by or on behalf of the Fund and any Vehicles and paid
to third parties; (vii) all costs and expenses associated with  obtaining and maintaining insurance for the
Fund and its assets, other than the costs and expenses of the insurance
contemplated by Section 1.2(f) hereof; (viii) fees incurred in
connection with the maintenance of bank or custodian accounts; (ix) all
expenses incurred in connection with the registration of the Fund’s and any
Vehicles’ securities under applicable securities laws or regulations; and (x)
all expenses of the Fund and any Vehicles that are not normally recurring
operating expenses (all such expenses, collectively, the “Operating Expenses”).  To the extent that any Operating Expenses are
paid by the General Partner or the Investment Manager, the General Partner and
the Investment Manager, in accordance with the provisions of Section 2.1
hereof, may apply the fees described in such Section towards the
reimbursement of such Operating Expenses and, to the extent not so reimbursed,
such Operating Expenses shall be reimbursed by the Fund or any Vehicle; provided,
however, that the Fund and any Vehicles shall be obligated to reimburse
the Investment Manager for Operating Expenses only to the extent that such
Operating Expenses are incurred on behalf of the Fund or any Vehicle.  The amount of Operating Expenses to be borne
by the Fund or any Vehicle is not subject to any maximum amount.

 

ARTICLE III

EXCULPATION AND INDEMNIFICATION

 

3.1                                 Exculpation
and Indemnification.  (a)  Neither
the Investment Manager nor any of its partners, affiliates, directors, officers,
employees, shareholders, members and other agents (each, an “Indemnified Party”)
shall be liable to the General Partner, the Fund, any Vehicle or to the
Partners of the Fund for monetary damages for any losses, claims, damages or
liabilities (“Damages”) arising from any act performed or omitted by such
parties arising out of or in connection with the performance by Investment
Manager of its services under this Agreement or the Fund’s or any Vehicle’s
business or affairs, including, without limitation, all activities of the type
or character disclosed in the Fund’s confidential private placement memorandum,
as it may have been supplemented or amended (such disclosure being incorporated
herein by reference), except to the extent that any such Damages are primarily
attributable to the gross negligence or willful misconduct of such Indemnified
Party.

 

(b)                                 (1)                                  The
Fund shall, to the fullest extent permitted by applicable law, indemnify,
defend and hold harmless the Indemnified Parties against any Damages to which
the Indemnified Party may become subject in connection with any matter arising

 

7

 

out of or in
connection with the performance by Investment Manager of its services under
this Agreement or the Fund’s business or affairs, except, with respect to any
Indemnified Party to the extent that any such Damages are primarily
attributable to the gross negligence or willful misconduct of such Indemnified
Party.  If the Indemnified Party becomes
involved in any capacity in any action, proceeding or investigation in
connection with any matter arising out of or in connection with the performance
by Investment Manager of its services under this Agreement or the Fund’s
business or affairs, the Fund shall reimburse the Indemnified Party for its
reasonable legal and other expenses (including the cost of any investigation
and preparation) as they are incurred in connection therewith; provided
that the Indemnified Party shall promptly repay to the Fund the amount of any
such reimbursed expenses paid to it if it shall ultimately be finally
determined that the Indemnified Party was not entitled to be indemnified by the
Fund in connection with such action, proceeding or investigation.  If for any reason (other than by reason of the
exclusions from indemnification hereinabove set forth) the foregoing
indemnification is unavailable to the Indemnified Party, or insufficient to
hold it harmless, then the Fund shall contribute to the amount paid or payable
by the Indemnified Party as a result of such loss, claim, damage, liability or
expense in such proportion as is appropriate to reflect the relative benefits
received by the Fund on the one hand and the Indemnified Party on the other
hand or, if such allocation is not permitted by applicable law, to reflect not
only the relative benefits referred to above but also any other relevant
equitable considerations.

 

(2)                                  The
provisions of this Section 3.1(b) shall survive for a period of three
years from the date of dissolution of the Fund; provided that if at the
end of such period there are any actions, proceedings or investigations then
pending, the Indemnified Party shall notify the General Partner and the General
Partner shall so notify the Fund and the Partners of the Fund at such time (which
notice shall include a brief description of each such action, proceeding or
investigation and the liabilities asserted therein) and the provisions of this Section 3.1(b) shall
survive with respect to each such action, proceeding or investigation set forth
in such notice (or any related action, proceeding or investigation based upon
the same or similar claim) until the date that such action, proceeding or
investigation is finally resolved; and provided, further, that
the obligations of the Fund under this Section 3.1(b) shall be
satisfied solely out of Fund assets, subject to the right of the liquidator of
the Fund to establish reserves, pursuant to the Fund Partnership Agreement for
contingent obligations under this Section 3.1(b).

 

(c)                                  No
member of the General Partner or Partner of the Fund shall have any obligation
to the Fund or any other Partner of the Fund to bring or join in any action in
defense of an Indemnified Party pursuant to Section 3.1 (a) or
(b).  Nothing contained in this Section 3.1
shall be construed as any waiver of insurance claims or recoveries by the Fund
or an Indemnified Party.

 

(d)                                 The
remedies of an Indemnified Party under this Article III shall be
non-exclusive and, without duplication, each such Indemnified Party may pursue
any other remedy provided in law or equity.

 

8

 

(e)                                  The
provisions of this Article III shall inure to the benefit of the
Indemnified Parties, and any successors, assigns, heirs and personal
representatives of such Indemnified Parties.

 

(f)                                    The
Fund covenants and agrees to call for Capital Contributions from its Partners,
to the extent permitted in the Fund Partnership Agreement, to satisfy the Fund’s
obligations under this Article III.

 

ARTICLE IV

MISCELLANEOUS

 

4.1                                 Duration
and Termination.  If (a) any of
the following events shall occur (each an “Investment Manager Removal Event”): (i) a
Bankruptcy or an event specified in Section 17-402(a)(8) of the Act
occurs with respect to the Investment Manager; (ii) the Investment Manager
is grossly negligent or commits willful misconduct in the performance of its
material duties under this Agreement, resulting in material damages to the
General Partner and/or the Fund; (iii) the Investment Manager commits an
act of fraud involving the General Partner and/or the Fund (which results in
material damages to the General Partner and/or the Fund), or intentionally
misappropriates significant funds of the General Partner and/or the Fund; (iv) the
termination or liquidation of the Fund; (v) the Investment Manager
materially breaches this Agreement and such breach is not remedied in all
material respects within 30 days after the Investment Manager’s receipt of
written notice from General REMI II; (vi) upon the occurrence of an Event of
Default as a result of a Default by CT-F2-GP (as such terms are defined in Section 11.1
of the Limited Liability Company Agreement of CT MP II LLC (the “GP Agreement”))
and the election by General REMI II to pursue a remedy pursuant to Section 11.2
of the GP Agreement; and (vii) upon the occurrence of an event of default
as a result of a default by CT-F2-LP under the Fund Partnership Agreement where
such default is not remedied in all material respects within the cure period
provided in the Fund Partnership Agreement and (b) General REMI II, on
behalf of CT MP II LLC, elects to pursue a remedy as provided by the Fund
Partnership Agreement; then General REMI II may deliver a written notice
to the Investment Manager and the General Partner (the “Investment Manager
Removal Notice”) stating that the Investment Manager shall be removed as
Investment Manager under this Agreement and setting forth a description of the
relevant Investment Manager Removal Event(s).  The Investment Manager shall be deemed to be
removed on the date of the Investment Manager Removal Notice or, if such
removal is pursuant to clause (iv), upon the end of the liquidation of the
Fund.  Upon the removal of the Investment
Manager pursuant to this Section, General REMI II shall automatically succeed
the Investment Manager as the interim investment manager to the Fund (the “Interim
Successor Manager”) on the same terms and conditions contained herein (other
than Section 1.4 hereof) and shall, together with its designees (as
determined by General REMI II in its discretion), perform the services of the
Investment Manager as provided herein. 
Within ninety (90) days after the date of the removal of the Investment
Manager in accordance with the terms hereof, the Interim Successor Manager shall
propose to the Partners of the Fund a permanent successor manager (which may be
the Interim Successor Manager) to succeed the Interim Investment Manager as the
investment manager to the Fund.  The
affirmative vote of the holders of a majority of the Interests in the Fund (the
Interests of the General Partner and its Affiliates in the Fund shall not be
counted for the purposes of performing this calculation) shall

 

9

 

be
required to appoint any proposed permanent successor manager as the permanent
successor investment manager to the Fund (the “Permanent Successor Manager”).  In the event that the successor manager
proposed by the Interim Successor Manager to the Partners of the Fund is not so
appointed by such holders, then the Interim Successor Manager shall propose
other successor managers to the Partners of the Fund until one such proposed
successor manager is so appointed by such holders.

 

Without limiting the foregoing, this Agreement shall
terminate upon the removal of the General Partner as general partner of the
Fund pursuant to the Fund Partnership Agreement.

 

Any dispute which arises under this Agreement shall be
resolved pursuant to Section 4.2 of the Venture Agreement.

 

4.2                                 Status
of Investment Manager as Independent Contractor.  The Investment Manager shall, for all
purposes herein, be deemed to be an independent contractor of the General
Partner and shall, unless otherwise authorized by the General Partner from time
to time, have no authority to bind, act for or represent the General Partner or
the Fund in any way or otherwise be deemed an agent of the General Partner or
the Fund. The Investment Manager may provide services similar to the services
contemplated herein or otherwise to parties other than the General Partner or
the Fund and may transact any other business with any such third parties on
such terms as the Investment Manager determines in its sole discretion.

 

4.3                                 Notices.  Any notices required hereunder shall be in
writing and shall be deemed given when delivered in person or by courier or
when sent by first-class registered or certified mail or by national prepaid
overnight delivery service to the parties at such addresses as any party may
from time to time specify by notice.

 

	
  If to the
  General Partner, at:

  
	
   

  
	
  CT
  MP II LLC

  
	
  c/o CT-F2-GP, LLC

  
	
  c/o
  Capital Trust, Inc.

  
	
  410
  Park Avenue, 14th Floor

  
	
  New
  York, NY 10022

  
	
  Attn:  Edward L. Shugrue III

  
	
   

  
	
  And

  
	
   

  
	
  CT
  MP II LLC

  
	
  c/o
  Travelers General Real Estate

  
	
  Mezzanine
  Investments II LLC

  
	
  205
  Columbus Boulevard, 9PB

  
	
  Hartford,
  CT  06183-2030

  
	
  Attn:  Duane Nelson, Esq.

  
	
  Real
  Estate Investment Number:  12833

  

 

10

 

	
  with a copy to:

  
	
   

  
	
  Paul,
  Hastings, Janofsky & Walker LLP

  
	
  399
  Park Avenue

  
	
  New
  York, NY 10022

  
	
  Attn:  Thomas E. Kruger, Esq.

  
	
   

  
	
  And

  
	
   

  
	
  Loeb &
  Loeb LLP

  
	
  345
  Park Avenue

  
	
  New
  York, NY  10154

  
	
  Attn:  Stanley M. Johnson, Esq.

  
	
   

  
	
  If to the Fund,
  at:

  
	
   

  
	
  CT
  Mezzanine Partners II LP

  
	
  c/o
  Travelers General Real Estate

  
	
     Mezzanine Investments II, LLC

  
	
  205
  Columbus Boulevard, 9PB

  
	
  Hartford,
  CT  06183-2030

  
	
  Attn:  Duane Nelson, Esq.

  
	
  Real
  Estate Investment Number:  12833

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Loeb &
  Loeb LLP

  
	
  345
  Park Avenue

  
	
  New
  York, NY  10154

  
	
  Attn:  Stanley M. Johnson, Esq.

  
	
   

  
	
  If to the
  Investment Manager, at:

  
	
   

  
	
  CT
  Investment Management Co. LLC

  
	
  c/o
  Capital Trust, Inc.

  
	
  410
  Park Avenue, 14th Floor

  
	
  New
  York, NY 10022

  
	
  Attn:  Edward L. Shugrue III

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Paul,
  Hastings, Janofsky & Walker LLP

  
	
  399
  Park Avenue

  
	
  New
  York, NY 10022

  
	
  Attn:  Thomas E. Kruger, Esq.

  

 

11

 

4.4                                 Governing
Law.  This Agreement shall be
governed, construed, administered and regulated in all respects under the laws
of the State of New York (without regard to the principles thereof regarding
conflicts of laws) to the extent such laws are not preempted or superseded by
the laws of the United States.

 

4.5                                 Severability.
If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall be held to be contrary to any express provision of law or
contrary to policy of express law, though not expressly prohibited, or to be
against public policy, or shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement.

 

4.6                                 Entire
Agreement.  This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof, and supersedes any prior agreement or understanding
among the parties hereto with respect to the subject matter hereof.

 

4.7                                 Binding
on Successors.  This Agreement shall
be binding upon the Fund, the General Partner, the Investment Manager and their
respective successors and assigns. 
However, no assignment of this Agreement shall be made without the prior
written consent of the Fund.

 

4.8                                 Headings.  The headings used in this Agreement are
inserted for reference purposes only and shall not be deemed to limit or affect
in any way the meaning or interpretation of any of the terms or provisions
herein.

 

4.9                                 Waiver.  Any failure of any party to comply with any
obligation or agreement herein may be waived in writing by the other party but
such waiver or failure to insist upon strict compliance with such obligation or
agreement shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

 

4.10                           Amendment.  This Agreement may be amended, modified, or
supplemented only by written agreement of the parties hereto.

 

4.11                           No
Third-Party Rights.  Nothing in this
Agreement shall be deemed to create any right in any person not a party hereto
(other than the permitted successors and assigns of a party hereto) and this
Agreement shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third party (except as aforesaid).

 

4.12                           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument.

 

[SIGNATURE
PAGE FOLLOWS]

 

12

 

IN WITNESS WHEREOF, this
Agreement is hereby executed as of the date first hereinabove written.

 

	
  CT INVESTMENT
  MANAGEMENT CO.

  LLC

  	
  CT MP II LLC

  
	
   

  	
  By:

  	
  /s/ Michael
  Watson

  	
   

  
	
  By:

  	
  Capital
  Trust, Inc., as sole Member

  	
  Name:

  	
  Michael Watson

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
  By:

  	
  /s/ Edward L.
  Shugrue, III

  	
   

  	
   

  
	
   

  	
   

  	
  Name:    Edward
  L. Shugrue, III

  	
  CT MEZZANINE
  PARTNERS II L.P.

  
	
   

  	
   

  	
  Title:      CFO

  	
   

  
	
   

  	
  By:

  	
  CT MP II LLC, as
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael
  Watson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Watson

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
								

 

 

Exhibit A

 

Sample Investment
Opportunity Report

 

[Attached]Exhibit 10(i)

 

STOCK UNIT PLAN FOR DIRECTORS

 

OF THE
EMPIRE DISTRICT ELECTRIC COMPANY

 

AS AMENDED AND RESTATED

 

EFFECTIVE JANUARY 1, 2005

 

 

 

STOCK UNIT PLAN FOR DIRECTORS

OF THE EMPIRE DISTRICT ELECTRIC COMPANY

 

 

1.                     Purpose. The
Empire District Electric Company (the “Company”) has adopted this Stock Unit
Plan for Directors of The Empire District Electric Company (the “Plan”) in
order to enhance the Company’s ability to attract and retain competent and
experienced persons to serve as Directors and to recognize the service of
Directors of the Company by providing a stock-based compensation program for Directors
that will foster a strong incentive to put forth maximum effort for the
continued growth and success of the Company.

 

2.                     Effective Date. This Plan is effective as of August 1, 1998.

 

3.                     Definitions.

 

(a)           “Account” means an account
established for each Eligible Director on the books of the Company that will be
credited with Stock Units.

 

(b)           “Annual Retainer Fees” means
the annual rate of Board retainer fees (excluding meeting and committee fees)
established by the Board as in effect at the applicable time.

 

(c)           “Board” means the Board of
Directors of the Company.

 

(d)           “Cash Retirement Plan” means
the Retirement Plan for Directors of The Empire District Electric Company, as
said plan may be amended from time to time.

 

(e)           “Committee” means the
Compensation Committee of the Board.

 

(f)            “Common Stock” means common
stock, $1.00 par value, of the Company, or any substituted class of common
stock, provided such stock is the primary publicly traded equity issue of the
Company.

 

(g)           “Company” means The Empire
District Electric Company and its successors.

 

(h)           “Effective Date” means August
1, 1998.

 

(i)            “Elected Payment Date” means
the date elected by the Eligible Director or otherwise determined pursuant to
Section 8(h) with respect to the applicable Stock Units credited after December
31, 2005, which shall be his or her Payment Date with respect to such Stock
Units unless (i) the Eligible Director’s death occurs before the Payment Date
so elected or otherwise determined pursuant to Section 8(h) or (ii) in the case
of an Eligible Director who has not elected a later Elected Payment Date
pursuant to the next to last sentence of Section 8(h) with respect to the applicable
Stock Units, the Eligible Director’s Retirement Date occurs before the Payment
Date so elected or otherwise determined pursuant to Section 8(h).

 

 

 

(j)            “Eligible Director” means an
Eligible Existing Director or an Eligible New Director.

 

(k)           “Eligible Existing Director”
means any Director of the Company who (i) is serving on the Board on the
Effective Date, (ii) has never been an officer of the Company and (iii) has
elected to participate in this Plan pursuant to Section 6(b).

 

(l)            “Eligible New Director” means
any Director of the Company who is a Director on or after the Effective Date
but who is not an officer of the Company at the applicable time or an Eligible
Existing Director.

 

(m)          “Fair Market Value” means with
respect to the Common Stock the mean between the high and low prices of Common
Stock on the New York Stock Exchange Composite Tape on the day of the required
calculation or, if there should be no sale on that date, on the next preceding
day on which there was a sale.

 

(n)           “Initial Election Date” means
(i) with respect to Stock Units credited on a January 1st pursuant to Section
7(c) (and any dividend credits attributable thereto), the December 31st
immediately preceding such January 1st, and (ii) with respect to Stock Units
credited pursuant to Section 7(d) (and any dividend credits attributable
thereto), the day before the day on which the Eligible New Director first
becomes eligible to participate in the Plan.

 

(o)           “Payment Date” means:

 

(i) in the case of Stock
Units credited before January 1, 2006 (and any dividend credits attributable
thereto), the earlier to occur of the following dates: (A) the Eligible
Director’s Retirement Date or (ii) the Eligible Director’s death; and

 

(ii) in the case of Stock
Units credited on or after January 1, 2006 (other than Stock Units representing
dividend credits attributable to Stock Units credited before January 1, 2006),
the earliest to occur of the following dates: (A) the Eligible Director’s
Elected Payment Date with respect to the applicable Stock Units, (B) the
Eligible Director’s Retirement Date, or (C) the Eligible Director’s death;
provided, however, that clause (B) shall not apply in the case of an Eligible
Director who has elected a later Elected Payment Date pursuant to the next to
last sentence of Section 8(h) with respect to the applicable Stock Units.

 

(p)           “Plan” means the Stock Unit
Plan for Directors of The Empire District Electric Company as it may be amended
from time to time.

 

(q)           “Retirement Date” means the
date on which the Director ceases to be a Director other than by reason of
death.

 

(r)            “Stock Unit” means a measure
of value, expressed as a share of Common Stock, credited to the Eligible
Director’s Account, and payable in Common Stock upon a Payment Date, as
provided in this Plan.

 

4.     Limitations on Issuance of Stock. The total number of
shares of the Company’s Common Stock reserved for issuance under this Plan
shall be ____ shares (subject to adjustment as provided in Section 9 of this
Plan).

 

 

5.     Administration. This Plan shall be administered by the
Committee. The Committee shall have full authority and absolute discretion (i)
to construe and interpret the Plan, reconcile inconsistencies thereunder and
supply omissions therefrom, and (ii) to make all determinations and take all
other actions necessary or advisable for the proper administration of the Plan.
Any decision or action taken by the Committee in the exercise of such powers or
otherwise, arising out of or in connection with the construction,
administration, interpretation and effect of the Plan and of its rules and
regulations, shall be conclusive and binding upon all persons.

 

6.     Eligibility.

 

(a)           Eligible New Directors. An
Eligible New Director (other than an Eligible New Director who was previously
an officer of the Company) shall become eligible to participate in this Plan on
the date on which he or she first is elected to the Board. An Eligible New
Director who was previously an officer of the Company shall become eligible to
participate in this Plan on the latest of: (i) January 1, 2006, (ii) the date
on which he or she first is elected to the Board, or (iii) the date on which he
or she ceased to be an officer of the Company.

 

(b)           Eligible Existing Directors. Each
Director who is serving on the Board on the Effective Date and who is
participating in the Cash Retirement Plan shall have the right to elect whether
(i) to participate in this Plan effective as of the Effective Date in lieu of
continued accruals under the Cash Retirement Plan or (ii) to continue accruals under
the Cash Retirement Plan. Such election shall be made by filing a prescribed
form with the Committee during an election period prescribed by the Committee. If
such a Director fails to elect to participate in this Plan within such election
period, such Director shall not have the right thereafter to elect to
participate and shall not be an Eligible Director.

 

7.     Crediting of Stock Units.

 

(a)           Account. Stock Units shall be
credited to each Eligible Director’s Account in accordance with this Section 7.

 

(b)           Credits as of Effective Date. There
shall be credited to the Account of each person who is an Eligible Director on
the Effective Date a number (calculated to three decimal points) of Stock Units
Stock Units equal to:

 

(i)            five-twelfths of the amount of the
Annual Retainer Fees as in effect on the Effective Date,

 

divided
by

 

(ii)                                  the Fair Market Value of a share of
Common Stock on the Effective Date.

 

(c)           Annual Credits. As of January
1st of each calendar year beginning with 1999, there shall be credited to the
Account of each person who is an Eligible Director on such January 1st a number
(calculated to three decimal points) of Stock Units equal to:

 

 

  (i)          the Director’s Annual Retainer Fees as
in effect on such January 1st or, if the Committee establishes a fixed amount
for the Annual Credit for the applicable calendar year, such fixed amount,

 

divided
by

 

  (ii)         the Fair Market Value of a share of
Common Stock on such January 1st.

 

(d)     Credits to New Directors. There shall
be credited to the Account of each Eligible New Director as of the date on
which such person first becomes eligible to participate in the Plan a number
(calculated to three decimal points) of Stock Units equal to:

 

  (i)          the amount of the Eligible New
Director’s Retainer Fees (excluding meeting and committee fees) for the balance
of the calendar year after he or she becomes eligible to participate (computed
as a percentage of the Annual Retainer Fees as in effect on the date on which
he or she becomes eligible) or, if the Committee establishes a fixed amount for
the Annual Credit for that calendar year pursuant to Section 7(c)(i) above, the
amount of the Annual Credit set by the Committee divided by twelve and
multiplied by the number of whole months remaining for the balance of such
year,

 

divided by

 

  (iii)        the Fair Market Value of a share of
Common Stock on the date on which the Eligible New Director becomes eligible to
participate in the Plan.

 

This subsection (d) shall
not apply if the date on which the Eligible New Director first becomes eligible
to participate in the Plan is January 1st.

(e)     Election of Eligible Existing Directors to
Convert Cash Benefit to Stock Units. Eligible Existing Directors shall have
the right to elect, with respect to previously accrued benefits under the Cash
Retirement Plan, whether to: (i) retain their retirement benefits under the
Cash Retirement Plan for years of service on the Board prior to the Effective
Date and to receive benefits under this Plan only with respect to service on or
after the Effective Date, or (ii) convert accrued benefits under the Cash
Retirement Plan into Stock Units under this Plan (“Converting Directors”) as
hereinafter set forth. Such election shall be made by filing a prescribed form
with the Committee during an election period prescribed by the Committee. Converting
Directors shall have credited to their Accounts under this Plan as of the
Effective Date or such later conversion date as may be established by the
Committee (the “Conversion Date”), a number (calculated to three decimal
points) of Stock Units equal to:

 

  (i)          the product of (A) the Annual Retainer
Fees as in effect on the Conversion Date, times (B) the total number of
years of service accrued by the Converting Director under the Cash Retirement
Plan as of the Effective Date (with
credit being given for any period of less than a full
year of service at the rate of one-twelfth of a year of service for each full
month of service),

 

divided by

 

 

 

 (ii)          the Fair Market Value of a share of
Common Stock on the Conversion Date.

 

 (f)           Dividends.
Until fully paid out in accordance with the terms of this Plan, the Company
shall credit to each Eligible Director’s Account, on each day that the Company
pays a declared cash dividend to the stockholders of its Common Stock, a number
(calculated to three decimal places) of Stock Units that is equal to (i) the
product of the total number of Stock Units in the Eligible Director’s Account
on the record date established for such dividend, multiplied by the cash
dividend per share of Common Stock, divided by (ii) the Fair Market Value of a
share of Common Stock on the record date.

 

8.             Payout of Accounts.

 

 (a)          General
Payout Terms. Unless installment payments are elected pursuant to
subsection (b), (c), (d) or (e) of this Section 8, within 30 days after the
Payment Date applicable with respect to any Stock Units, the Company shall
cause to be delivered to the Eligible Director (or, in the event of his or her
death, the Eligible Director’s beneficiary determined pursuant to subsection
(f) of this Section 8) the number of shares of Common Stock equal to the whole
number of Stock Units having that Payment Date in his or her Account plus cash
for any fractional unit having that Payment Date credited to his or her Account
(such cash amount to be calculated based on the applicable fraction of the Fair
Market Value of a share of Common Stock on the Payment Date).

 

 (b)          Payout
on Retirement (Pre-2006 Stock Units). This Section 8(b) applies to Stock
Units credited prior to January 1, 2006 (and any dividend credits attributable
thereto). With respect to a payout by reason of an Eligible Director’s
termination of service on a Retirement Date, such Eligible Director may elect,
at any time prior to the date which is twelve months before such Retirement
Date, to receive, in lieu of a lump sum distribution, distributions in annual
installments over a period of years selected by the Eligible Director but not
to exceed ten years. Such election shall be made by filing a prescribed form
with the Committee. If no such election of installment payments is received by
the Committee, the Eligible Director’s Account shall be paid out in a lump sum
in accordance with subsection (a) of this Section 8. If the Eligible
Director timely files with the Committee such an election to receive
installment payments, there shall be distributed to the Eligible Director in
January of each year beginning with the January coinciding with or next
following the month in which the Eligible Director’s Retirement Date falls the
whole number of shares of Common Stock equal to the quotient (rounded to the
next lowest whole number) obtained by dividing (i) the number of Stock Units
credited to the Eligible Director’s Account as of the December 31st preceding
the month of payment (after reduction for Stock Units previously paid out in
prior installments and any dividend credits pursuant to Section 7(f) on the
remaining balance), by (ii) the number of installments remaining to be paid. The
final installment payment shall consist of the number of shares of Common Stock
equal to the remaining whole number of Stock Units in the Eligible Director’s
Account as of the December 31st preceding the month of payment plus cash for
any fractional unit in his or her Account as of such December 31st (such cash
amount to be calculated based on the applicable fraction of the Fair Market
Value of a share of Common Stock on such December 31st). In the event of the
death of an Eligible Director who has elected installment payments prior to his
or her receipt of all such installment payments, the remaining installment
payments shall be paid to the Eligible Director’s beneficiary as determined
pursuant to subsection (f) of this Section 8

 

 

 

at the time that they would otherwise have been paid
to the Eligible Director; provided, however, that the Eligible Director may
instead elect (by filing a prescribed form with the Committee) that, upon his
or her death prior to receiving all installment payments, the remaining balance
in the Eligible Director’s Account as of the date of the Eligible Director’s
death (after reduction for Stock Units previously paid out in prior
installments and any dividend credits pursuant to Section 7(f) on the remaining
balance) shall be distributed to the Eligible Director’s beneficiary determined
pursuant to subsection (f) of this Section 8 in a lump sum pursuant to
subsection (a) of this Section 8 as if the date of the Eligible Director’s
death were the Payment Date. Anything in this Section 8(b) to the contrary
notwithstanding, with respect to any Stock Units credited during calendar year
2005 pursuant to Section 7(c) or 7(d) (and any dividend credits attributable
thereto), any election of form of payment must be made by the Eligible Director
no later than December 31, 2005.

 

(c)           Payout on Death While in Service
(Pre-2006 Stock Units). This Section 8(c) applies to Stock Units credited
prior to January 1, 2006 (and any dividend credits attributable thereto). In
the event of the death of an Eligible Director prior to his or her Retirement
Date, the Eligible Director’s beneficiary determined pursuant to subsection (f)
of this Section 8 shall receive a lump sum distribution within 30 days
after such death in accordance with subsection (a) of this Section 8
unless prior to such death such Eligible Director has elected that benefits be
paid to his or her beneficiary in annual installments over a period of years
selected by the Eligible Director but not to exceed ten years. Such election
shall be made by filing a prescribed form with the Committee. If the Eligible
Director so elects that installment payments be made to his or her beneficiary,
such installment payments shall be determined in the same manner as installment
payments pursuant to subsection (b) of this Section 8 except the Eligible
Director’s date of death shall be substituted for the Retirement Date and the
payments will be made to the beneficiary rather than to the Eligible Director. Anything
in this Section 8(c) to the contrary notwithstanding, with respect to any Stock
Units credited during calendar year 2005 pursuant to Section 7(c) or 7(d) (and
any dividend credits attributable thereto), any election of form of payment
must be made by the Eligible Director no later than December 31, 2005.

 

(d)           Payout on Retirement or Elected
Payment Date (Post-2005 Stock Units). This Section 8(d) applies to Stock
Units credited on or after January 1, 2006 (other than Stock Units representing
dividend credits attributable to Stock Units credited before January 1, 2006). With
respect to a payout following an Elected Payment Date or by reason of an
Eligible Director’s termination of service on a Retirement Date, such Eligible
Director may elect to receive, in lieu of a lump sum distribution,
distributions in annual installments over a period of years selected by the
Eligible Director but not to exceed ten years. Such election shall be made by
filing a prescribed form with the Committee on or before the Initial Election
Date with respect to the applicable Stock Units. If no such election of
installment payments is received by the Committee on or before the Initial
Election Date with respect to the applicable Stock Units, the Eligible Director’s
Account attributable to such Stock Units shall be paid out in a lump sum in
accordance with subsection (a) of this Section 8. If the Eligible
Director timely files with the Committee such an election to receive
installment payments with respect to the applicable Stock Units, there shall be
distributed to the Eligible Director in January of each year beginning with the
January coinciding with or next following the month in which the Eligible
Director’s Elected Payment Date or Retirement Date (whichever is applicable)
falls the whole number of shares of Common Stock equal to the quotient

 

 

(rounded to the next lowest whole number) obtained by
dividing (i) the number of Stock Units having the applicable Payment Date
credited to the Eligible Director’s Account as of the December 31st preceding
the month of payment (after reduction for Stock Units having that Payment Date
previously paid out in prior installments and any dividend credits pursuant to
Section 7(f) on the remaining balance of Stock Units having that Payment Date),
by (ii) the number of installments remaining to be paid. The final installment
payment with respect to the applicable Stock Units shall consist of the number
of shares of Common Stock equal to the remaining whole number of Stock Units
having the applicable Payment Date in the Eligible Director’s Account as of the
December 31st preceding the month of payment plus cash for any fractional unit
having the applicable Payment Date in his or her Account as of such December
31st (such cash amount to be calculated based on the applicable fraction of the
Fair Market Value of a share of Common Stock on such December 31st). In the
event of the death of an Eligible Director who has elected installment payments
prior to his or her receipt of all such installment payments, the remaining
installment payments shall be paid to the Eligible Director’s beneficiary as
determined pursuant to subsection (f) of this Section 8 at the time
that they would otherwise have been paid to the Eligible Director; provided,
however, that the Eligible Director may instead elect (by filing a prescribed
form with the Committee on or before the Initial Election Date with respect to
the applicable Stock Units) that, upon his or her death prior to receiving all
installment payments, the remaining balance in the Eligible Director’s Account
attributable to the applicable Stock Units as of the date of the Eligible
Director’s death (after reduction for Stock Units previously paid out in prior
installments and any dividend credits pursuant to Section 7(f) on the remaining
balance) shall be distributed to the Eligible Director’s beneficiary determined
pursuant to subsection (f) of this Section 8 in a lump sum pursuant to
subsection (a) of this Section 8 as if the date of the Eligible Director’s
death were the Payment Date.

 

(e)           Payout on Death While in Service
(Post-2005 Stock Units). This Section 8(e) applies to Stock Units credited
on or after January 1, 2006 (other than Stock Units representing dividend
credits attributable to Stock Units credited before January 1, 2006). In the
event of the death of an Eligible Director prior to his or her Elected Payment
Date with respect to the applicable Stock Units or (in the case of an Eligible
Director who has not elected a later Elected Payment Date pursuant to Section
8(h) with respect to the applicable Stock Units) his or her Retirement Date, if
earlier, the Eligible Director’s beneficiary determined pursuant to subsection
(f) of this Section 8 shall receive a lump sum distribution within 30 days
after such death in accordance with subsection (a) of this Section 8 unless
such Eligible Director has elected that benefits be paid to his or her
beneficiary in annual installments over a period of years selected by the
Eligible Director but not to exceed ten years. Such election shall be made by
filing a prescribed form with the Committee on or before the Initial Election
Date with respect to the applicable Stock Units. If the Eligible Director so
elects that installment payments be made to his or her beneficiary, such
installment payments shall be determined in the same manner as installment
payments pursuant to subsection (d) of this Section 8 except the Eligible
Director’s date of death shall be substituted for the Retirement Date and the
payments will be made to the beneficiary rather than to the Eligible Director.

 

(f)            Beneficiary Designation. Each
Eligible Director shall be entitled to designate a beneficiary or beneficiaries
(which may be an entity other than a natural person) who, following the
Eligible Director’s death, will be entitled to receive any payments to be made
under this Plan. At any time, and from time to time, any such

 

 

designation may be changed or canceled by the Eligible
Director without the consent of any beneficiary. Any designation, change, or
cancellation must be by written notice filed with the Company and shall not be
effective until received by the Company. If no beneficiary has been named by
the Eligible Director or if all designated beneficiaries predecease the
Eligible Director, payment shall be made to the Eligible Director’s estate.

 

(g)           Payout in Cash If Required. Anything
in this Plan to the contrary notwithstanding, if at the time a payment is due
under the Plan, distribution in the form of Common Stock may not be made to any
person due to requirements of applicable law, such payment shall not be made in
such form but shall instead be made in cash in an amount equal to the Fair
Market Value of the shares of Common Stock which would otherwise have been paid
out (such Fair Market Value to be computed as of the last day of the month
preceding the month in which the cash payment is made).

 

(h)           Elected Payment Date (Post-2005 Stock
Units). This Section 8(h) applies to Stock Units credited on or after January
1, 2006 (other than Stock Units representing dividend credits attributable to
Stock Units credited before January 1, 2006). Prior to January 1 of a calendar
year, each person who will be an Eligible Director on that January 1 shall have
the right to elect the date with respect to which payment of the Stock Units to
be credited to his or her Account for that calendar year pursuant to Section
7(c) (together with any Stock Units reflecting dividend credits attributable to
such Stock Units) will be made or commence pursuant to this Plan; provided,
however, that such Elected Payment Date may not be earlier than January of the
third calendar year following such calendar year. In the case of an Eligible
New Director entitled to a credit to his or her Account pursuant to Section
7(d), such Eligible New Director shall have the right to elect, prior to the
date on which he or she first becomes eligible to participate in the Plan, the
date with respect to which payment of the Stock Units to be credited to his or
her Account pursuant to Section 7(d) (together with any Stock Units reflecting
dividend credits attributable to such Stock Units) will be made or commence
pursuant to this Plan; provided, however, that such Elected Payment Date may
not be earlier than the third anniversary of the date on which such Eligible
New Director first became eligible to participate in the Plan. In the absence
of a timely election by an Eligible Director pursuant to this Section 8(h), the
Elected Payment Date shall be the earliest Elected Payment Date that the
Eligible Director could have elected with respect to the applicable Stock
Units. An Eligible Director may, at any time not later than twelve months
before an Elected Payment Date, elect a later Elected Payment Date with respect
to the applicable Stock Units which shall be no less than five years later than
such prior Elected Payment Date. Any election pursuant to this subsection (h)
of Section 8 shall be made by filing a prescribed form with the Committee.

 

9.             Change in Capitalization. In the event of any
change in the outstanding shares of the Company’s Common Stock by reason of any
stock dividend or split, recapitalization, merger, consolidation, spin-off,
reorganization, combination of shares or other similar corporate change, the
Board shall make such adjustments as it deems appropriate in the number of
Stock Units in the Eligible Director’s Account and in the kind of shares to
which the Stock Units relate, and in the number and kind of shares available
under this Plan.

 

10.           Unfunded Plan. No Eligible Director shall have any
property interest whatsoever in any specific assets of the Company by reason of
this Plan. The Eligible Director’s Account is not intended to be a trust
account or escrow account for the benefit of an Eligible

 

 

 

Director or any other person. The sole right of an
Eligible Director or his or her personal representative is a right as an
unsecured general creditor of the Company.

11.           Assignment and Alienation. The rights and benefits
of Eligible Directors under this Plan are personal to each Director and neither
the Director nor his or her beneficiary shall have the power or right to transfer, assign, anticipate, mortgage or otherwise
encumber any interest in the benefits to be paid under this Plan.

 

12.           Annual Report. No later than January 31st of each
year, the Company shall provide each Eligible Director with an annual report of
his or her Account balance.

 

13.           No Rights of Stockholder. An Eligible Director
shall have no rights as a stockholder of Common Stock with respect to the Stock
Units credited to his or her Account unless and until the shares of Common
Stock are issued to the Eligible Director by the Company pursuant to the terms
of the Plan.

 

14.           Amendment and Termination.

 

 (a)          General
Amendment and Termination Power. Subject to Sections 14(b) and 15(e), the
Board shall have the right to amend, suspend, or terminate this Plan in any
respect at any time. Subject to Section 15(e), no amendment, suspension or
termination of the Plan (other than through adjustment for changes in
capitalization or corporate transactions as herein provided) shall adversely
affect any previously accrued benefits hereunder unless the affected Eligible
Director consents thereto.

 

 b)           Stockholder
Approval. Any increase in the number of shares of the Company’s Common
Stock reserved for issuance under this Plan (except as contemplated by Section
9) and any other amendment or modification of the Plan for which stockholder
approval is required under any applicable law or applicable rule or regulation
of any governmental regulatory body or under the rules of any stock exchange on
which the Company’s Common Stock is listed shall be subject to approval of the
Company’s stockholders.

 

15.           Miscellaneous.

 

(a)      Not Contract. The adoption and
maintenance of this Plan shall not constitute a contract between the Company
and any Director for continued service as a Director. Nothing herein contained
shall be deemed to give any Director the right to be retained as a Director,
nor shall it interfere with the Director’s right to resign as a Director at any
time.

 

(b)      Governing Law. This instrument shall be
construed in accordance with and governed by the laws of the State of Kansas.

 

(c)      Benefit Payments and Expenses. The cost
of benefit payments from this Plan and the expenses of administering the Plan
shall be borne by the Company.

 

(d)      Other Benefits. The benefits herein contained
are in addition to all other awards, arrangements, contracts or benefits, if
any, that any Director may have by virtue of service for the Company, unless
and to the extent that this Plan or any such award, arrangement, contract or
benefit otherwise provides.

 

 

(e)      Compliance
with IRC Section 409A. It is intended that Stock Units credited prior to
January 1, 2005 satisfy the grandfather provisions applicable under Section
409A of the Internal Revenue Code of 1986, as amended, such that such Stock
Units (and dividend credits attributable thereto) will not be subject to
Section 409A. No amendment to this Plan after October 3, 2004 shall apply to
Stock Units credited prior to January 1, 2005 (or dividend credits attributable
thereto) unless the amendment specifically provides that it applies to such
Stock Units. It is intended that Stock Units credited on or after January 1,
2005 (other than Stock Units representing dividend credits attributable to
Stock Units credited before January 1, 2005) comply with Section 409A of the
Internal Revenue Code of 1986, as amended, and any regulations and guidelines
issued thereunder (including transitional rules), and the Plan shall be
interpreted consistently with this intent. The Board may amend the Plan in any
respect it deems necessary or desirable (including retroactively) in order to
preserve compliance with said Section 409A.

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