Document:

Exhibit 10.8 

 

UNITED COMMUNITY BANKS, INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS AGREEMENT (this “Agreement”), is made and entered into as of this ________ day of ________________ 20__, by and between UNITED COMMUNITY BANKS, INC., a Georgia corporation (the “Company”), and ______________________ (“Executive”).

 

WHEREAS, Executive is a key employee of the Company and an integral part of the Company’s management;

 

WHEREAS, the Company desires to assure both itself and its key employees of continuity of management and objective judgment in the event of any Change in Control of the Company, and to induce its key employees to remain employed by the Company; and

 

WHEREAS, the Company desires to provide certain compensation and benefits to Executive in the event of the termination of his employment under certain circumstances;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.             TERM OF AGREEMENT. This Agreement shall commence on the date hereof and shall terminate on the later of (i) Executive’s termination of employment without entitlement to any benefits hereunder and (ii) six (6) months after Executive’s termination of employment if there has been no Change in Control by that time; provided, however, this Agreement may be terminated by mutual written agreement of Executive and the Company. This Agreement shall not be considered an employment agreement and in no way guarantees Executive the right to continue in the employment of the Company. Executive’s employment is considered employment at will, subject to Executive’s right to receive payments and benefits upon certain terminations of employment as provided below.

 

2.             DEFINITIONS. For purposes of this Agreement, the following terms shall have the meanings specified below:

 

2.1           “Affiliate.” Any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code, except that, in making any such determination, fifty percent (50%) shall be substituted for eighty percent (80%) under such Code sections.

 

2.2           “Base Salary.” Executive’s annual salary in effect on his Date of Termination or, if greater, Executive’s highest rate of annual salary in effect during the six (6) month period prior to his Date of Termination.

 

2.3           “Board” or “Board of Directors.” The Board of Directors of the Company, or its successor.

 

2.4           “Cause.” The involuntary termination of Executive by the Company for the following reasons shall constitute a termination for Cause:

 

(a)           If termination shall have been the result of an act or acts by Executive which have been found in an applicable court of law to constitute a felony (other than traffic-related offenses);

 

(b)           If termination shall have been the result of an act or acts by Executive which are in the good faith judgment of the Board determined to be in violation of law or of policies of the 

 

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Company and which result in demonstrably material injury to the Company;

 

(c)           If termination shall have been the result of an act or acts of proven or undenied dishonesty by Executive resulting or intended to result directly or indirectly in significant gain or personal enrichment to Executive at the expense of the Company; or

 

(d)           Upon the willful and continued failure by Executive substantially to perform his duties with the Company (other than any such failure resulting from incapacity due to mental or physical illness whether or not constituting a Disability) for a period of thirty (30) days after a demand in writing for substantial performance is delivered by the Board or President, which demand specifically identifies the manner in which the Board or President believes that Executive has not substantially performed his duties, and such failure results in demonstrably material injury to the Company.

 

With respect to clauses (b), (c) or (d) above of this Section 2.4, Executive shall not be deemed to have been involuntarily terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board, finding that, in the good faith opinion of the Board, Executive was guilty of conduct set forth above in clauses (b), (c) or (d) and specifying the particulars thereof in detail. For purposes of this Agreement, no act or failure to act by Executive shall be deemed to be “willful” unless done or omitted to be done by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interests of the Company.

 

2.5           “Change in Control.” A Change in Control of the Company means any one of the following events:

 

(a)           The acquisition (other than from the Company) during the twelve (12) month period ending on the date of the most recent acquisition by any Person of Beneficial Ownership of thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities; provided, however, that for purposes of this definition, Person shall not include any person who as of the date hereof owned ten percent (10%) or more of the Company’s outstanding securities, and a Change in Control shall not be deemed to occur solely because thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one (1) or more employee benefit plans maintained by the Company or any of its subsidiaries, or (ii) any corporation, which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company in the same proportion as their ownership of stock in the Company immediately prior to such acquisition.

 

(b)           Approval by shareholders of the Company of (1) a merger or consolidation involving the Company if the shareholders of the Company, immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the corporation resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation (and provided no person acquires Beneficial Ownership of the Company’s then outstanding voting securities as described in (a) above), or (2) a complete liquidation or dissolution of the Company or an agreement for the sale or other disposition of all or substantially all of the assets of the Company.

 

(c)           A change in the composition of the Board during any twelve (12) month period such that the individuals who, as of the date hereof, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; 

 

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provided, however, for purposes of this definition that any individual who becomes a member of the Board subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, including any successor to such Rule), or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, shall not be so considered as a member of the Incumbent Board.

 

Notwithstanding the foregoing, a Change in Control shall only be deemed to have occurred if the Change in Control otherwise constitutes a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code and the regulations and rulings thereunder (“Section 409A”).

 

2.6           “CIC Severance Period.” A period equal to thirty-six (36) months following (i) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (ii) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

2.7           “Code.” The Internal Revenue Code of 1986, as it may be amended from time to time.

 

2.8           “Company.” United Community Banks, Inc., a Georgia corporation, or any successor to its business and/or assets, and all of its and their respective Affiliates.

 

2.9           “Company’s Business.” The business of operating a commercial or retail bank, savings association, mutual thrift, credit union, trust company, securities brokerage or insurance agency.

 

2.10         “Customers.” All Persons (i) provided products or services by the Company with whom Executive had material contact during the last two (2) years of Executive’s employment, or (ii) whose dealings with the Company were coordinated or supervised, in whole or in part, by Executive.

 

2.11         “Date of Termination.” The date specified in the Notice of Termination (which, unless otherwise required by this Agreement, may be immediate) on which Executive’s employment with the Company is to cease. In the case of termination by Executive for Good Reason, the Date of Termination shall not be less than thirty (30) days nor more than sixty (60) days from the date the notice of termination is given. For purposes of this Agreement, termination of employment shall mean a “separation from service” within the meaning of Section 409A where it is reasonably anticipated that no further services will be performed after such date or that the level of bona fide services Executive will perform after that date (whether as an employee or an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or, if lesser, Executive’s period of service).

 

2.12         “Disability.” Disability shall have the meaning ascribed to such term in the Company’s long-term disability plan covering Executive, or in the absence of such plan or Executive’s participation therein, a meaning consistent with Section 22(e)(3) of the Code.

 

2.13         “Good Reason.” A Good Reason for termination by Executive of Executive’s employment shall mean the occurrence (without Executive’s express written consent) during the six (6) month period prior to, or within the eighteen (18) month period following, the date of a Change in 

 

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Control of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraphs (a), (c), or (d) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

 

(a)           the substantial adverse change in Executive’s responsibilities at the Company from those in effect immediately prior to the Measurement Date;

 

(b)           the required relocation of Executive to a location outside of the market area of the Company on the Measurement Date;

 

(c)           a material reduction from those in effect on the Measurement Date in the levels of coverage of Executive under the Company’s director and officer liability insurance policy or indemnification commitments; or

 

(d)           after the Measurement Date, a reduction in Executive’s Base Salary, a reduction in his incentive compensation or the failure by the Company to continue to provide Executive with benefits substantially similar to those enjoyed by Executive under any of the Company’s pension, deferred compensation, life insurance, medical, health and accident or disability plans in which Executive was participating at the Measurement Date, the taking of any action by the Company which would directly or indirectly reduce any of such benefits or deprive Executive of any material fringe benefit enjoyed by Executive at the Measurement Date.

 

Executive’s right to terminate Executive’s employment for Good Reason shall not be affected by Executive’s incapacity due to physical or mental illness, except for a Disability. Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

 

2.14           “Measurement Date.” The date six (6) months prior to the date of a Change in Control.

 

2.15           “Notice of Termination.” A written notice from one party to the other party specifying the Date of Termination and which sets forth in reasonable detail the facts and circumstances relating to the basis for termination of Executive’s employment.

 

2.16           “Person.” Any individual, corporation, bank, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or other entity.

 

3.           SCOPE OF AGREEMENT. This Agreement provides for the payment of compensation and benefits to Executive in the event in connection with a Change in Control his employment is involuntarily terminated by the Company without Cause or if Executive terminates his employment for Good Reason. If Executive is terminated by the Company for Cause, dies, incurs a Disability or voluntarily terminates employment (other than for Good Reason), this Agreement shall terminate, and Executive shall be entitled to no payments of compensation or benefits pursuant to the terms of this Agreement; provided that in such event, Executive will be entitled to whatever benefits are payable pursuant to the terms of any health, life insurance, disability, welfare, retirement, deferred compensation, or other plan or program maintained by the Company, in which Executive participates, in accordance with the terms of such plans and programs.

 

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4.           BENEFITS UPON TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL. If a Change in Control occurs during the term of this Agreement and Executive’s employment is terminated within six (6) months prior to or eighteen (18) months following the date of the Change in Control, and if such termination is an involuntary termination by the Company without Cause (and does not arise as a result of Executive’s death or Disability) or a termination by Executive for Good Reason, Executive shall be entitled to the following compensation:

 

4.1           Base Salary. Executive shall continue to receive his Base Salary (subject to withholding of all applicable taxes) for the CIC Severance Period in accordance with the Company’s normal payroll practices (but no less frequently than monthly) beginning on (i) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (ii) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

4.2           Annual Bonus. Executive shall be entitled to bonus payments from the Company as follows:

 

(a)           Notwithstanding any terms of any applicable plan to the contrary, for the fiscal year that ended immediately prior to Executive’s Date of Termination, but for which no annual bonus payments have been paid as of his Date of Termination, Executive shall receive a bonus calculated using the actual results for all performance criteria for such fiscal year. Such amount shall be paid (subject to withholding of all applicable taxes) on (i) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (ii) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

(b)           For the fiscal year during which Executive’s Date of Termination occurs after June 30th of such fiscal year, Executive shall receive a prorated bonus (based on the number of days that he was employed during such fiscal year), calculated as if Executive’s target award level (including any personal performance component) under the Company’s annual incentive plan had been achieved for such year. Such amount shall be paid (subject to withholding of all applicable taxes) on (i) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (ii) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

(c)           In addition to the bonus payment payable under subsection (a) or (b) above, if any, Executive shall be entitled to an additional bonus amount equal to the average of the bonuses paid to him with respect to the two (2) fiscal years in which annual bonuses were paid to Executive most recently preceding the year in which his Date of Termination occurs (counting the bonus, if any, payable under subsection (a) above), multiplied by three (3). If a bonus was not paid to Executive in any two (2) such prior years, for purposes of calculating Executive’s average bonus, an amount equal to Executive’s potential bonus for the fiscal year during which Executive’s Date of Termination occurs, calculated as if Executive’s target award level (including any personal performance criteria) under the Company’s annual incentive plan had been achieved for such year, shall be used for any missing year(s). Such bonus amount shall be paid (subject to withholding of all applicable taxes) in thirty-six (36) equal monthly payments beginning on (i) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (ii) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

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4.3           Health and Life Insurance Coverages.

 

(a)           The group health care (including any executive medical plan) and group term life insurance benefits coverages provided to Executive at his Date of Termination shall be continued on a monthly basis during the CIC Severance Period at the same level as for active executives and in the same manner as if his employment under this Agreement had not terminated, beginning on (1) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (2) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control. Any additional coverage Executive had at termination, including dependent coverage, will also be continued on a monthly basis for such period on the same terms, to the extent permitted by the applicable policies or contracts. Any costs Executive was paying for such coverages at the time of termination shall be paid by Executive by separate check payable to the Company each month in advance. Executive will be required to pay the full cost for such coverages by separate check payable to the Company each month in advance for all such coverage from Executive’s Date of Termination until the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control. If the terms of any life insurance plan referred to in this Section 4.3, or the laws applicable to such plan, do not permit continued participation by Executive after Executive’s Date of Termination and for the full term contemplated herein, then the Company will arrange for other life insurance coverage(s) satisfactory to Executive at Company’s expense which provides substantially similar benefits or will pay Executive a lump sum amount equal to the cost of such coverage(s) for the CIC Severance Period within thirty (30) days following his Date of Termination.

 

If the terms of the health care plan referred to in this subsection (a) do not permit continued participation by Executive through the CIC Severance Period as required by this subsection or if the healthcare benefits to be provided to Executive and his dependents pursuant to this subsection (a) cannot be provided in a manner such that the benefit payments will be tax-free to Executive and his dependents, then the Company shall (i) pay to Executive within thirty (30) days after Executive’s Date of Termination a lump sum amount equal to the monthly rate for COBRA coverage at the date of Executive’s Date of Termination under the healthcare plan that is then being paid by former active employees for the level of coverage that applies to Executive and his dependents, minus the amount active employees are then paying for such coverage, multiplied by the number of months in the CIC Severance Period, and (ii) permit Executive and his dependents to elect to participate in the healthcare plan for the COBRA continuation period upon payment of the applicable rate for COBRA coverage during the COBRA continuation period.

 

(b)           For purposes of any individual executive life insurance policy (or policies) maintained by the Company for Executive, the Company shall continue to pay, on a monthly basis, the premiums for such policy or policies during the CIC Severance Period.

 

4.4           Retiree Medical Coverage. If Executive has satisfied the requirements for receiving Retiree Medical Coverage on his Date of Termination or would have satisfied such requirements prior to the last day of the CIC Severance Period had Executive’s employment not terminated, Executive (and his dependents) shall be covered by, and receive benefits under, the Company’s Retiree Medical Coverage program for executives at his level. Executive’s Retiree Medical Coverage shall commence on the date his group health care coverage terminates under Section 4.3 above, and shall continue for the life of Executive (and his dependents) (i.e., the coverage shall be vested and may not be terminated except as described below), subject only to such changes in the level of coverage that apply to executives at his level generally. Notwithstanding any provision of this Section 4.4, however, the Company expressly reserves the right to amend or terminate the Company’s Retiree Medical Coverage program to the extent set forth therein.

 

4.5           Profit Sharing Plan. Executive will be treated as if he continued to participate, consistent 

 

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with past practices, for the CIC Severance Period in the Profit Sharing Plan (or any successor or replacement plan) as in effect as of his Date of Termination. The compensation payable to Executive under Sections 4.1 and 4.2(c) above shall be treated (unless otherwise excluded) as compensation under the applicable plan as if it were paid on a monthly basis. Executive will be entitled to receive an amount equal to the Company’s contributions to the Profit Sharing Plan (or any successor or replacement plan), assuming Executive had participated in such plan for the CIC Severance Period at the maximum permissible contributions level. The Company shall pay to Executive or, if applicable, his beneficiary, the amount equal to the Present Value on the Date of Termination (calculated as provided in the applicable plan) of the excess of (i) the benefit Executive would have been paid under such plan if he had continued to be covered for the CIC Severance Period (less any amounts Executive would have been required to contribute), over (ii) the benefit actually payable under such plan. The Company shall pay such additional amount in a lump sum within thirty (30) days of (1) the date of the Change in Control if Executive’s employment is terminated within six (6) months prior to the Change in Control or (2) Executive’s Date of Termination if Executive’s employment is terminated on or within eighteen (18) months following the date of the Change in Control.

 

4.6           Automobile, Club Dues. Executive shall be provided for the CIC Severance Period at the Company’s expense with an automobile or automobile allowance (and reimbursement of related automobile expenses) commensurate with the practice in effect for executives at the date of the Change in Control, and reimbursement of club dues and assessments in accordance with the practice in effect for executives at the date of the Change in Control. The amount of reimbursable expenses under this Section 4.6 for one (1) calendar year shall not affect the amount of reimbursable expenses in any other calendar year and the reimbursement payment shall be made no later than thirty (30) days following the calendar year during which the expense is incurred.

 

4.7           Section 409A Compliance. This Agreement shall at all times be operated in accordance with the requirements of Section 409A. The Company shall have authority to take action, or refrain from taking any action, with respect to any payments and benefits under this Agreement that is reasonably necessary to comply with Section 409A. Notwithstanding any of the provisions of this Agreement, it is intended that any payment which is provided pursuant to or in connection with this Agreement which is considered to be non-qualified deferred compensation subject to Section 409A shall be provided and paid in a manner, and at such time, as complies with the applicable requirements of Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. For purposes of this Agreement, all rights to payments shall be treated as rights to receive a series of separate payments to the fullest extent permitted by Section 409A. If Executive is a key employee (as defined in Section 416(i) without regard to paragraph (5) thereof), and any of the Company’s stock is publicly traded on an established securities market or otherwise, then payment of any amount under this Agreement which is considered non-qualified deferred compensation subject to Section 409A shall be deferred for six (6) months after Executive’s Date of Termination or, if earlier, Executive’s death, as and to the extent required by Section 409A (the “409A Deferral Period”). In the event such payments are otherwise due to be made in installments or periodically during the 409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled.

 

4.8           Other Benefits. Except as expressly provided herein, all other benefits provided to Executive as an active employee of the Company (e.g., long-term disability, AD&D, etc.), shall cease on his Date of Termination, provided that any conversion or extension rights applicable to such benefits shall be made available to Executive at his Date of Termination or when such coverages otherwise cease in accordance with the terms of the applicable plans or programs, including, with respect to any options, restricted stock units or other awards granted under any equity compensation plan, the terms of such plan and any applicable award agreement.

 

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5.             LIMITATION ON BENEFITS.

 

5.1          If any payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right, restricted stock unit or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

 

5.2          The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to Executive’s total Parachute Payments.

 

5.3          The Accounting Firm will next determine the largest amount of payments that may be made to Executive without subjecting Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

 

5.4          Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides Executive with the higher Net After Tax Amount; if reductions are necessary, then the total Payments will be adjusted by first reducing, on a pro rata basis, the amount of any cash benefits under this Agreement, then cash benefits under any other plan, agreement or arrangement, then any noncash payments under this Agreement and finally any noncash payments under any other plan agreement or arrangement. The Accounting Firm will notify Executive and the Company if it determines that the Parachute Payments must be reduced and will send Executive and the Company a copy of its detailed calculations supporting that determination.

 

5.5          Section 6 of this Agreement provides certain non-compete terms in which the Executive agrees to refrain from certain activities deemed harmful to the Company for a set period of time in exchange for the promises contained herein. If Executive is deemed eligible to receive benefits under Section 4 of this Agreement, the Company shall seek a valuation from the Accounting Firm to determine the value, if any, of the non-compete arrangement contained in Section 6.1 and such amount shall be allocated to the non-compete arrangement and be excluded from treatment as a Parachute Payment. For the avoidance of doubt, it is the intention of this Agreement that the value assigned to the non-compete contained in Section 6 by the Accounting Firm not be considered a Parachute Payment for purposes of this Section 5.

 

5.6          As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes its determinations under this Section 5, it is possible that Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that 

 

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Overpayment may, at Executive’s discretion, be treated for all purposes as a loan ab initio that Executive must repay to the Company immediately together with interest at the applicable Federal rate under Section 7872 of the Code; provided, however, that no loan will be deemed to have been made and no amount will be payable by Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code and Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify Executive and the Company of that determination and the amount of that Underpayment will be paid to Executive promptly by the Company after such determination.

 

5.7       For purposes of this Section 5, the following terms shall have their respective meanings:

 

 (a)           “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by Executive; and

 

 (b)           “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101 (b) and 4999 of the Code and any State or local income taxes applicable to Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

 

 (c)           “Parachute Payment” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G of the Code and the regulations promulgated or proposed thereunder.

 

5.8       The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

 

5.9           The Company and Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the Company and Executive.

 

6.           CANCELLATION OF BENEFIT; RETURN OF PREVIOUS PAYMENTS.

 

  6.1            After Executive’s Date of Termination and until the expiration of the CIC Severance Period, if Executive is entitled to any payment or benefit under this Agreement, Executive will not directly or indirectly, individually, or on behalf of any Person (except on behalf of or with the prior written consent of the Company):

 

(a)            solicit, divert or appropriate or attempt to solicit, divert or appropriate, any business from any of the Company’s Customers, including prospective Customers actively sought by the Company, for purposes of providing products or services that are competitive with those provided by the Company;

 

(b)            solicit, recruit or hire away or attempt to solicit, recruit or hire away, any employee 

 

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of the Company, whether or not such employment is pursuant to a written contract with the Company is at will; or

 

(c)            knowingly or intentionally damage or destroy the goodwill and esteem of the Company or the Company’s Business.

 

   6.2           Executive agrees that the restrictive covenants set forth in Section 6.1 of this Agreement are of the essence of this Agreement; that each of the covenants is reasonable and necessary to protect the business, interests and properties of the Company, and that irreparable loss and damage will be suffered by the Company should Executive breach any of such covenants. Therefore, if at any time after Executive’s Date of Termination and until the expiration of the CIC Severance Period, Executive violates the restrictive covenants set forth in Section 6.1, then notwithstanding any other provision in this Agreement to the contrary, (i) Executive shall immediately forfeit any payment that is or may become due under Section 4 and all such payments shall immediately terminate, and (ii) Executive shall immediately return to the Company the gross amount of any previous payments made to Executive pursuant to Section 4. In addition, Executive agrees and consents that the Company shall be entitled to a temporary restraining order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of such covenants. The Company and Executive agree that all remedies shall be cumulative.

 

   6.3            If any term of this Section 6 shall be held to be illegal, invalid or unenforceable by a court of competent jurisdiction, the remaining terms shall remain in full force and effect. If any court of competent jurisdiction shall determine that the restrictions set forth in any provision of this Section 6 are overbroad or unreasonable as applied to Executive, the parties hereto acknowledge their mutual intention and agreement that those restrictions be enforced to the fullest extent the court deems reasonable, and this Agreement shall be modified to that extent.

 

7.             MISCELLANEOUS.

 

7.1           No Obligation to Mitigate. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer after the Date of Termination or otherwise.

 

7.2           Contract Non-Assignable. The parties acknowledge that this Agreement has been entered into due to, among other things, the special skills and knowledge of Executive, and agree that this Agreement may not be assigned or transferred by Executive.

 

7.3           Successors; Binding Agreement.

 

(a)           In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or that acquires a controlling stock interest in the Company to expressly assume and agree to perform this Agreement, in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effective date of such succession shall be a breach of this Agreement and shall entitle Executive to terminate his employment for Good Reason as described above.

 

(b)           This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representative, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amount is still payable to Executive hereunder (other than 

 

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amounts which, by their terms, terminate upon the death of Executive), all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of Executive’s estate.

 

7.4           Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or seven (7) days after mailing if mailed first class, certified mail, postage prepaid, addressed as follows:

 

	 	 	 	 
	 	If to the Company:	United Community Banks, Inc.
	 	 	
Attention: Secretary

	 	 	
125 Highway 515 East

	 	 	
Blairsville, GA 30512

	 	 	 	 
	 	If to Executive:	 	 
	 	 	 	 
	 	 	 	 

 

Any party may change the address to which notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein.

 

7.5           Provisions Severable. If any provision or covenant, or any part thereof, of this Agreement should be held by any court to be invalid, illegal or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, of this Agreement, all of which shall remain in full force and effect.

 

7.6           Waiver. Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making the waiver.

 

7.7           Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to this Agreement.

 

7.8           Governing Law. The validity and effect of this Agreement shall be governed by and be construed and enforced in accordance with the laws of the State of Georgia.

 

7.9           Disputes. All claims by Executive for compensation and benefits under this Agreement shall be in writing and shall be directed to and be determined by the Board. Any denial by the Board of a claim for benefits under this Agreement shall be provided in writing to Executive within thirty (30) days of such decision and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to Executive for a review of its decision denying a claim and shall further allow Executive to appeal in writing to the Board a decision of the Board within sixty (60) days after notification by the Board that Executive’s claim has been denied. To the extent permitted by applicable law, any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Atlanta, Georgia, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

7.10           Legal Fees. If, in connection with a Change in Control, Executive terminates his 

 

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employment for Good Reason or if the Company involuntarily terminates Executive without Cause, then, in the event Executive incurs legal fees and other expenses in seeking to obtain or to enforce any rights or benefits provided by this Agreement and is successful, in whole or in part, in obtaining or enforcing any such rights or benefits through settlement, mediation, arbitration or otherwise, the Company shall pay Executive’s reasonable legal fees and expenses and related costs incurred in enforcing this Agreement including, without limitation, attorneys fees and expenses, experts fees and expenses, investigative fees, and travel expenses. The legal fees, expenses and related costs payable to Executive under this Section 6.9(b) shall be paid within sixty (60) days after such amounts are determined to be payable pursuant to this Section 6.9(b). Except to the extent provided in the preceding sentences, each party shall pay its own legal fees and other expenses associated with any dispute under this Agreement.

 

7.11           Indemnification. During the Term of this Agreement and after Executive’s termination, the Company shall indemnify Executive and hold Executive harmless from and against any claim, performance as an officer, director or employee of the Company or any of its subsidiaries or other affiliates or in any other capacity, including any fiduciary capacity, in which Executive serves at the Company’s request, in each case to the maximum extent permitted by law and under the Company’s Articles of Incorporation and By-Laws (the “Governing Documents”), provided that in no event shall the protection afforded to Executive hereunder be less than that afforded under the Governing Documents as in effect on the date of this Agreement except from changes mandated by law.

 

[Signature continued on next page]

 

    	12

    	 

    
 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.      

	 	 	 
	 	EXECUTIVE
	 	 	 
	 	By:	 
	 	Name:	 
	 	 	 

	 	 	 
	 	

UNITED COMMUNITY BANKS, INC.

	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:exhibit101.htm - Generated by SEC Publisher for SEC Filing

Exhibit 10.1

ADMINISTRATIVE SERVICES AGREEMENT

THIS ADMINISTRATIVE SERVICES AGREEMENT is made
as of [●], 2014 to be effective as of [●], 2014 by and among the
SERIES A-1 (the "A-1 Series") of ETRE REIT, LLC, a Delaware series
limited liability company (the "Company"), ETRE PROPERTY A-1, LLC,
a Delaware limited liability company and a wholly-owned subsidiary of the A-1
Series (the "Property LLC"), and ETRE aSSET Management, LLC, a Delaware limited liability
company (together with its permitted assignees, the "Administrative Agent"). 

WHEREAS, the Company is a Delaware series
limited liability company;

WHEREAS, the A-1 Series is a separate series of
the Company that intends to elect and qualify to be taxed as a REIT for federal
income tax purposes; and

WHEREAS, the A-1 Series and the Property LLC
desire to retain the Administrative Agent to
provide administrative services to them on the terms and conditions hereinafter
set forth, and the Administrative Agent wishes
to be retained to provide such services.

NOW THEREFORE, in consideration of the mutual
agreements herein set forth, the parties hereto agree as follows:

Section 1.                
Definitions.  The following terms have the following
meanings assigned to them:

(a)               
"A-1 Series" shall have the meaning set forth in
the introductory paragraph of this Agreement.

(b)              
"A-1 Series Account" shall have the meaning set
forth in Section 5 of this Agreement.

(c)               
"Administrative Agent"
shall have the meaning set forth in the introductory paragraph of this
Agreement.

(d)              
"Administrative Agent
Indemnified Party" shall have the meaning set forth in Section
11(a) of this Agreement. 

(e)               
"Administrative Sale Fee" means a fee equal to
1.00% of the A-1 Series' Total Capitalization at the end of the month
immediately preceding a Property Sale, payable (in cash) upon the consummation
of such Property Sale.

(f)               
"Administrative Services" shall have the meaning
set forth in Section 2(d)  of this Agreement.

(g)               
"Agreement" means this Administrative Services Agreement,
as amended, restated or supplemented from time to time.

(h)              
"Affiliate" means a Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.

(i)                
"Bankruptcy" means, with respect to any Person,
(a) the filing by such Person of a voluntary petition seeking liquidation,
reorganization, arrangement or readjustment, in any form, of its debts under
Title 11 of the United States Code or any other federal, state or foreign
insolvency law, or such Person's filing an answer
consenting to or acquiescing in any such petition, (b) the making by such
Person of any assignment for the benefit of its creditors, (c) the
expiration of 60 days after the filing of an involuntary petition under Title
11 of the Unites States Code, an application for the appointment of a receiver
for a material portion of the assets of such Person, or an involuntary petition
seeking liquidation, reorganization, arrangement or readjustment of its debts
under any other federal, state or foreign insolvency law, provided  that
the same shall not have been vacated, set aside or stayed within such 60‐day
period or (d) the entry against it of a final and non-appealable order for
relief under any bankruptcy, insolvency or similar law now or hereinafter in
effect.

 

	
   

  	
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(j)                
"Board of Directors" means the board of directors
of the Company; provided, however, that, if the Company's
Governing Instruments designate a specific director to be associated with one
or more series of the Company but not the A-1 Series, such director shall not
be deemed to be a part of the Board of Directors for purposes of this
Agreement.

(k)              
"Code" means the Internal Revenue Code of 1986,
as amended.

(l)                
"Company" shall have the meaning set forth in
the introductory paragraph of this Agreement.

(m)            
"Company Indemnified Party" shall have the meaning set forth in Section 11(b) of this Agreement.

(n)              
"Director" means a member of the Board of
Directors; provided, however, that, if the Company's Governing
Instruments designate a specific director to be associated with a series of the
Company other than the A-1 Series, such director shall not be deemed to be a
Director for purposes of this Agreement.

(o)              
"ETRE Financial" shall have the meaning set
forth in Section 2(b) of this Agreement;

(p)              
"Excess Funds" shall have the meaning set forth
in ‎Section 2(k) of
this Agreement.

(q)              
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.

(r)                
"Expenses" shall have the meaning set forth in ‎Section 9 of this
Agreement.

(s)               
"GAAP" means generally accepted accounting
principles, as applied in the United States.

(t)                
"Governing Instruments" means the certificate of
formation, the limited liability company agreement and the bylaws (if
applicable) in the case of a limited liability company, the certificate of
incorporation and bylaws in the case of a corporation, the certificate of
limited partnership (if applicable) and the partnership agreement in the case
of a general or limited partnership, the trust instrument in the case of a
trust, or similar governing documents, in each case as amended from time to
time.

(u)              
"Indemnitee" means any Administrative Agent Indemnified Party or
Company Indemnified Party.

(v)              
"Indemnitor" shall have the meaning set forth in ‎Section 11(c) of this Agreement.

2

 

 

 

(w)             
"Independent Directors" means the members of the
Board of Directors who are not officers, personnel or employees of the Administrative Agent or any Person directly or
indirectly controlling or controlled by the Administrative
Agent, and who are otherwise "independent" in accordance with
the Company's Governing Instruments and, if applicable, the rules of any
national securities exchange on which the Series A-1 Common Shares are listed.

(x)              
"Initial Administrative Services Fee" means a one-time
fee equal to $800,000, payable (in cash) upon the effective date of this
Agreement.

(y)              
"Initial Public Offering" means the initial
public offering of the Series A-1 Common Shares.

(z)               
"Inter-Series Policy" means any inter-series
relationship, conflicts of interest and opportunity allocation policy of the
Company adopted by the Company in accordance with the Company's Governing
Instruments.

(aa)           
"Investment Company Act" means the Investment
Company Act of 1940, as amended.

(bb)          
"Lender" means Morgan Stanley Mortgage Capital
Holdings, LLC, a New York limited liability company. 

(cc)           
"Loan Agreement" means that certain Loan
Agreement dated April [•], 2014 by and between the Lender and the Property LLC.

(dd)          
"Loan Documents" means "Loan
Documents" as defined in the Loan Agreement. 

(ee)           
"Monitoring Services" shall have the meaning set
forth in Section 2(d)  of this Agreement.

(ff)            
"NASDAQ" means the NASDAQ Capital Market.

(gg)           
"Net Operating Income" means the A-1 Series' net
income during the applicable fiscal quarter (as determined in accordance with
GAAP), plus (i) total depreciation and amortization, net interest expense and
marketing, general and administrative expenses during such fiscal quarter, and
(ii) one-time events pursuant to changes in GAAP and certain non-cash items
during such fiscal quarter with the approval of a majority of the Independent
Directors.

(hh)          
"Officer" means an officer of the Company; provided,
however, that, if the Company's Governing Instruments designate a
specific officer to be associated with one or more series of the Company but
not the A-1 Series, such officer shall not be deemed to be an Officer for
purposes of this Agreement.

(ii)              
"Property" means the real property located at 1201
Connecticut Avenue, NW, Washington, D.C. 20036, together with the improvements
thereon.

(jj)              
"Property LLC" shall have the meaning set forth
in the introductory paragraph of this Agreement.

(kk)          
"Property Manager" shall mean Jones Lang LaSalle
Americas, Inc., a Maryland corporation.

3

 

 

 

(ll)              
"Property Management Agreement" means the
Property Management and Leasing Agreement dated as of April [●], 2014 by
and between the Property Manager and the Property LLC.

(mm)      
"Property Sale" means either (a) a distribution
to holders of, or redemption of, outstanding Series A-1 Common Shares in
connection with a disposition of all or substantially all of the A-1 Series'
interest in the Property LLC or the Property LLC's interest in the Property in
accordance with the Company's Governing Instruments or (b) a redemption of
outstanding Series A-1 Common Shares in accordance with the Company's Governing
Instruments and pursuant to the Company's Tender Offer Policy.

(nn)          
"Person" means any individual, corporation,
partnership, joint venture, limited liability company, estate, trust,
unincorporated association, any federal, state, county or municipal government
or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

(oo)          
"Quarterly Administrative Services Fee" means a
fee equal to $50,000 per quarter plus 2.0% of the A-1 Series' Net Operating
Income during the prior fiscal quarter, calculated and paid (in cash) quarterly
in arrears.

(pp)          
"Redemption" means a redemption of all
outstanding Series A-1 Common Shares in exchange for equity interests in the Property
LLC in accordance with the Company's Governing Instruments, other than a
redemption pursuant to the Company's Tender Offer Policy.

(qq)          
"REIT" means a "real estate investment
trust", as defined under the Code.

(rr)             
"SEC" means the Securities and Exchange
Commission.

(ss)            
"Securities Act" means the Securities Act of
1933, as amended.

(tt)              
"Series A-1 Common Shares" means the Company's A-1
Series common shares of limited liability company interest that represent
ownership interests in the A-1 Series.  

(uu)          
"Services" shall have the meaning set forth in Section 2(c) 
of this Agreement.

(vv)          
"Subsidiary" means any subsidiary of the A-1
Series, including, without limitation, the Property LLC; any partnership, the general partner of which is
the A-1 Series or any subsidiary of the A-1 Series; any limited liability company, the managing member of which is the A-1
Series or any subsidiary of the A-1
Series; and any corporation or other entity of which a majority of (i) the voting power of the voting equity securities
or (ii) the outstanding equity interests is owned, directly or indirectly, by the A-1
Series or any subsidiary of the A-1
Series.   

(ww)       
"Tender Offer Policy" means any tender offer
policy as to Series A-1 Common Shares adopted by the Company.

(xx)          
"Total Capitalization" means the sum of the A-1
Series' total debt, members' capital, retained earnings and noncontrolling
interests in the Property LLC.

4

 

 

 

Section 2.                
Appointment and Duties of the Administrative
Agent. 

(a)               
Each of the A-1 Series and the Property LLC hereby appoints the Administrative Agent to provide administrative
services to the A-1 Series and the Property LLC on the terms, and subject to
the conditions, set forth in this Agreement.  The Administrative
Agent hereby agrees to use its commercially reasonable efforts to
perform its duties as specified in this Agreement.  The appointment of the Administrative Agent shall be exclusive to the Administrative Agent except to the extent that the
Administrative Agent otherwise agrees, and
except to the extent that the Administrative Agent
elects, pursuant to the terms of this Agreement, to cause the duties of the Administrative Agent hereunder to be provided by
third parties.

(b)              
The parties acknowledge that (i) the Administrative
Agent is a special purpose vehicle formed for the principal purpose of providing
administrative services to the series of the Company and their respective
subsidiaries; (ii) the Administrative Agent
is an affiliate of ETRE Financial, LLC, a Delaware limited liability company ("ETRE
Financial"); (iii) the Administrative
Agent performs its services for the A-1 Series and the Property LLC
through the personnel and facilities of ETRE Financial; (iv) the Administrative Agent has no, and will have no,
employees or other persons acting on its behalf other than (A) officers, managers
and employees of ETRE Financial, or (B) other persons who are subject to the
supervision and control of ETRE Financial; and (v) the Administrative Agent has
been delegated the authority to interpret, make determinations under and
oversee the implementation of the policies set forth in the Inter-Series Policy.

(c)               
The Administrative Agent, in
its capacity as administrative agent, at all
times will be subject to the supervision of the Board of Directors and will
have only such functions and authority as the A-1 Series may delegate to it
including, without limitation, the functions and authority identified herein
and delegated to the Administrative Agent
hereby.  The Administrative Agent will be
responsible for the day-to-day operations of the A-1 Series and the Subsidiaries
and will perform (or cause to be performed) such services and activities
relating to the assets and operations of the A-1 Series and the Subsidiaries as
may be appropriate (such services and activities, together with the
Administrative Services, the Monitoring Services, and any and all other services
contemplated to be performed by the Administrative Agent hereunder, collectively,
the "Services"), including, without limitation:

(i)                
providing daily management for the A-1 Series and the Subsidiaries
and performing and supervising the various administrative functions necessary
for the day-to-day management of the operations of the A-1 Series and the Subsidiaries;

(ii)              
investigating, selecting and, on behalf of the A-1 Series and the
Subsidiaries, engaging and conducting business with and supervising the performance
of such persons as the Administrative Agent deems necessary to the proper
performance of its obligations under this Agreement (including consultants,
accountants, correspondents, lenders, technical advisors, attorneys, brokers,
underwriters, corporate fiduciaries, escrow agents, depositaries, custodians,
agents for collection, insurers, insurance agents, banks, builders, developers,
property owners, real estate management companies, real estate operating
companies, securities investment advisors, mortgagors, the registrar and the
transfer agent and any and all agents for any of the foregoing), including
affiliates of the Administrative Agent and persons acting in any other capacity
deemed by the Administrative Agent to be necessary or desirable for the
performance of any of the Services (including entering into contracts in the
name of the A-1 Series and the Subsidiaries relating to any of the foregoing);

(iii)            
consulting with the Officers and Directors and assisting the Directors
in the formulation and implementation of the A-1 Series' financial policies
and, as necessary, furnishing the Board of Directors with advice and
recommendations with respect to the investment objectives and policies of the A-1 Series and in connection with any
borrowings (or refinancing of borrowings) proposed to be undertaken by the A-1
Series or the Subsidiaries;

5

 

 

 

(iv)            
(A) subject to any applicable restrictions in the Company's Governing
Instruments related to debt financing and cross-subsidiary guarantees,
arranging for financing and refinancing and making other changes in the asset
or capital structure of the A-1 Series and the Subsidiaries; (B) entering into
leases and service contracts for the A-1 Series and the Subsidiaries and, to
the extent necessary, performing all other operational functions for the
maintenance and administration of the A-1 Series and the Subsidiaries; (C) actively
overseeing and managing the A-1 Series for purposes of meeting the A-1 Series'
investment objectives; (D) overseeing, supervising and evaluating affiliated
and non-affiliated property managers who perform services for the A-1 Series
and the Subsidiaries; (E) overseeing affiliated and non-affiliated persons with
whom the Administrative Agent contracts to perform certain of the Services; and
(F) managing accounting and other recordkeeping functions for the A-1
Series and the Subsidiaries, including reviewing and analyzing the capital and
operating budgets and generating an annual budget for the A-1 Series;

(v)              
subject to the restrictions in the Company's Governing
Instruments related to debt financing and cross-subsidiary guarantees,
negotiating on behalf of the A-1 Series and the Subsidiaries with banks or
other lenders for loans to be made to the A-1 Series or the Subsidiaries, and
negotiating with investment banking firms and broker-dealers on behalf the A-1
Series and the Subsidiaries, or negotiating private sales of the Series A-1
Common Shares or obtaining loans for the A-1 Series and the Subsidiaries, but
in no event in such a manner that the Administrative Agent shall be acting as
broker-dealer or underwriter; provided, however, that any fees
and costs payable to third parties incurred by the Administrative Agent in
connection with the foregoing shall be the responsibility of the A-1 Series and
the Subsidiaries;

(vi)            
from time to time, or at any time reasonably requested by the Board
of Directors, making reports to the Board of Directors on its performance of the
Services, including reports with respect to potential conflicts of interest
involving the Administrative Agent or any of its affiliates;

(vii)          
providing the A-1 Series and the Subsidiaries with all necessary
cash management services;

(viii)        
performing investor relations and shareholder communications
functions for the A-1 Series;

(ix)            
rendering such services as may be reasonably determined by the Board
of Directors consistent with the terms and conditions hereof;

(x)              
maintaining the A-1 Series' and the Subsidiaries' accounting and
other records and assisting the A-1 Series in preparing, reviewing and filing
all reports required to be filed by it or the Company with the SEC, NASDAQ, the
Internal Revenue Service and other regulatory agencies or self-regulatory
organizations; 

(xi)            
doing all things reasonably necessary to assure its ability to
render the Services; and

(xii)          
making recommendations to the Board of Directors with respect to
follow-on offerings, tender offers in respect of the Series A-1 Common Shares,
dispositions of the Property and other significant transactions.

6

 

 

 

(d)              
Without limiting the foregoing, the Administrative
Agent will perform administrative services (the "Administrative Services")
on behalf of the A-1 Series and the Subsidiaries with respect to their business,
assets and operations.  Such services will include, but not be limited to,
consulting with the Directors and Officers on sale, leasing and other
opportunities related to the Property; the collection of information and the
submission of reports pertaining to the Property, interest rates and general
economic conditions; periodic review and evaluation of the performance of the Property;
acting as liaison between the A-1 Series and the Subsidiaries and banking,
mortgage banking, investment banking and other parties with respect to the
financing and disposition of the Property; and other customary functions
related to administrative services.  Additionally, the Administrative
Agent will perform monitoring services (the "Monitoring Services")
on behalf of the A-1 Series and the Subsidiaries with respect to any supplies
or services provided by third parties.  Such Monitoring Services will include,
but not be limited to, negotiating supply agreements and service agreements;
acting as a liaison between suppliers and service providers (including the
Property Manager) and the A-1 Series and the Subsidiaries; supervising claims filed
under any insurance policies; and enforcing the obligations of suppliers and
service providers as necessary to protect the interests of the A-1 Series and
the Subsidiaries.

(e)               
For the period and on the terms and conditions set forth in this
Agreement, each of the A-1 Series and the Property LLC hereby appoint and
authorize the Administrative Agent as its
true and lawful agent and attorney-in-fact, in its name, place and stead, to
negotiate, execute, deliver and enter into such agreements, instruments and authorizations
on their behalf, on such terms and conditions as the Administrative
Agent, in its discretion, deems necessary or appropriate.  This power of
attorney is deemed to be coupled with an interest and, as a result, is
irrevocable and will survive events of Bankruptcy of the A-1 Series or the
Property LLC.

(f)               
The Administrative Agent may
enter into agreements with other parties, including its Affiliates, for the
purpose of engaging one or more parties for and on behalf, and at the sole cost
and expense, of the A-1 Series and the Subsidiaries to provide property
management, leasing and other services to the A-1 Series and the Subsidiaries (including
Administrative Services and Monitoring Services) pursuant to agreement(s) with
terms which are then customary for agreements regarding the provision of
services to companies that have assets similar in type, quality and value to
the Property; provided  that (i) any such agreements entered into
with Affiliates of the Administrative Agent
shall be on terms no more favorable to such Affiliate than would be obtained
from a third party on an arm's-length basis and approved by a majority of the
Independent Directors, (ii) with respect to Administrative Services, any such
agreements shall be subject to the A-1 Series' prior approval and the Administrative Agent shall remain liable for the
performance of such Administrative Services and (iii) with respect to Monitoring
Services, any such agreements shall be subject to the A-1 Series' prior
approval.

(g)               
In addition, to the extent that the Administrative
Agent deems necessary or advisable, the Administrative
Agent may, from time to time, propose to retain one or more additional
entities for the provision of supporting services to the Administrative Agent in order to enable the Administrative Agent to provide the Services to
the A-1 Series and the Subsidiaries specified by this Agreement; provided 
that any such agreement (i) shall be on terms and conditions substantially
identical to the terms and conditions of this Agreement or otherwise not
adverse to the A-1 Series and the Subsidiaries, and (ii) shall be approved
by the Independent Directors of the Company.

(h)              
The Administrative Agent may
retain, for and on behalf and at the sole cost and expense of the A-1 Series
and the Subsidiaries, such services of accountants, legal counsel, appraisers,
insurers, brokers, transfer agents, registrars, developers, investment banks, valuation
firms, financial advisors, due diligence firms, underwriting review firms,
banks and other lenders and others as the Administrative
Agent deems necessary or advisable in connection with the management and
operations of the A-1 Series and the Subsidiaries.  Notwithstanding anything
contained herein to the contrary, the Administrative Agent shall have the right to cause
any such services to be rendered by its personnel or Affiliates.  Except as
otherwise provided herein, the A-1 Series and the Subsidiaries shall pay or
reimburse the Administrative Agent or its Affiliates
performing such services for the cost thereof; provided  that, subject to
‎Section 9 of
this Agreement, such costs and reimbursements are no greater than those which
would be payable to outside professionals or consultants engaged to perform
such services pursuant to agreements negotiated on an arm's-length basis.

7

 

 

 

(i)                
As frequently as the Administrative
Agent may deem necessary or advisable, or at the direction of the Board
of Directors, the Administrative Agent
shall, at the sole cost and expense of the A-1 Series and the Subsidiaries,
prepare, or cause to be prepared, with respect to the Property, reports and
other information with respect to the Property as may be reasonably requested
by the Board of Directors or any Officer.

(j)                
The Administrative Agent shall
prepare, or cause to be prepared, all reports, financial or otherwise, with
respect to the A-1 Series and the Subsidiaries reasonably required by the Board
of Directors in order for the A-1 Series and the Subsidiaries to comply with their
Governing Instruments or any other materials required to be filed with any
governmental body or agency or with the NASDAQ (or other principal securities
exchange on which the Series A-1 Common Shares are then listed), and shall
prepare, or cause to be prepared, all materials and data necessary to complete
such reports and other materials including, without limitation, an annual audit
of the Company's, the A-1 Series' and the Subsidiaries' books of account by a
nationally recognized registered independent public accounting firm.  The cost
and expense of such reports shall be allocated between the parties as provided
in Section 9. 

(k)              
Notwithstanding anything contained in this Agreement to the
contrary, except to the extent that the payment of additional moneys is proven
by the A-1 Series to have been required as a direct result of the Administrative Agent's acts or omissions which
result in the right of the A-1 Series and the Subsidiaries to terminate this
Agreement pursuant to ‎Section
15 of this Agreement, the Administrative Agent
shall not be required to expend money ("Excess Funds") in
connection with any expenses that are required to be paid for or reimbursed by
the A-1 Series and the Subsidiaries pursuant to ‎Section 9 in excess of
that contained in any applicable A-1 Series Account or otherwise made available
by the A-1 Series and the Subsidiaries to be expended by the Administrative Agent hereunder.

(l)                
In performing its duties under this ‎Section 2, the Administrative Agent shall be entitled to rely
reasonably on qualified experts and professionals (including, without
limitation, accountants, legal counsel and other service providers) hired by
the Administrative Agent. 

Section 3.                
Devotion of Time; Additional Activities. 

(a)               
The Administrative Agent and
its Affiliates will provide the A-1 Series and the Subsidiaries with
appropriate support personnel.  The Administrative
Agent is not obligated to dedicate any of its personnel exclusively to
the A-1 Series, nor is the Administrative Agent
or its personnel obligated to dedicate any specific portion of its or their
time to the A-1 Series.

(b)              
The Administrative Agent agrees to offer the A-1 Series and the
Subsidiaries sale, financing, leasing and other business opportunities in
accordance with the Inter-Series Policy.  Nothing in this Agreement shall
(i) prevent the Administrative Agent or
any of its Affiliates, officers, directors, employees or personnel, from
engaging in other businesses or from rendering services of any kind to any
other series of the Company or any other Person, including investing in, or
rendering administrative services to any other series of the Company or others
investing in, any type of business, whether or not the objectives or policies
of any such series, other Person or entity are similar to those of the A-1 Series or the Property LLC or (ii) in any way
bind or restrict the Administrative Agent or
any of its Affiliates, officers, directors, employees or personnel from buying,
selling or trading any securities or assets for their own accounts or for the
account of others for whom the Administrative Agent
or any of its Affiliates, officers, directors, employees or personnel may be
acting.  When making decisions where a conflict of interest may arise between
the A-1 Series and any other series of the Company, the Administrative Agent will allocate sale, financing, leasing and
other business opportunities in accordance with the Inter-Series Policy.  In
the event the Administrative Agent believes that a matter may involve a
conflict of interest that is not otherwise addressed by the Inter-Series
Policy, the Administrative Agent shall submit such decision to, and shall be
required to follow the decision taken by, the nominating and corporate
governance committee of the Board of Directors (the "Nominating and
Corporate Governance Committee") with respect to such matter.  
The Administrative Agent shall not have liability hereunder if it follows any
such decision taken or direction given by the Nominating and Corporate
Governance Committee. 

8

 

 

 

(c)               
Managers, partners, officers,
employees, personnel and agents of the Administrative
Agent or Affiliates of the Administrative
Agent may serve as directors, officers, employees, personnel, agents,
nominees or signatories for the Company, the A-1 Series and/or any Subsidiary,
to the extent permitted by their Governing Instruments or by any resolutions
duly adopted by the Board of Directors pursuant to the Company's or such
Subsidiary's Governing Instruments.  When executing documents or otherwise
acting in such capacities for the Company, the A-1 Series or the Subsidiaries,
such persons shall use, as applicable, their respective titles in the Company,
the A-1 Series or the Subsidiaries.

Section 4.                
Agency.  The Administrative
Agent shall act as agent of the A-1 Series and the Subsidiaries in leasing,
financing and disposing of the Property, disbursing and collecting the funds of
the A-1 Series and the Subsidiaries, paying the debts and fulfilling the
obligations of the A-1 Series and the Subsidiaries, supervising the performance
of professionals engaged by or on behalf of the A-1 Series and the Subsidiaries
and handling, prosecuting and settling any claims of or against the A-1 Series
and the Subsidiaries, the Board of Directors, holders of the Company's
securities associated with the A-1 Series or representatives or property of the
A-1 Series and the Subsidiaries.

Section 5.                
Bank Accounts.  At the direction of the Board of
Directors, the Administrative Agent may
establish and maintain one or more bank accounts in the name of the A-1 Series or
any Subsidiary (any such account, an "A-1 Series Account"),
and may collect and deposit funds into any such A-1 Series Account or A-1
Series Accounts, and disburse funds from any such A-1 Series Account or A-1
Series Accounts, under such terms and conditions as the Board of Directors may
approve, subject to and in accordance with the terms of the Loan Documents and
the Property Management Agreement; and the Administrative
Agent 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, the A-1 Series or any Subsidiary.

Section 6.                
Records; Confidentiality.  The Administrative
Agent shall maintain appropriate books of accounts and records relating
to the Services, and such books of account and records shall be accessible for
inspection by representatives of the Company, the A-1 Series or any Subsidiary at
any time during normal business hours upon reasonable advance notice.  The Administrative Agent shall keep confidential any
and all information obtained in connection with the Services and shall not
disclose any such information (or use the same except in furtherance of its
duties under this Agreement) to unaffiliated third parties except (i) with
the prior written consent of the Board of Directors; (ii) to legal
counsel, accountants and other professional advisors engaged to provide
services to the A-1 Series or the Subsidiaries; (iii) to appraisers,
financing sources and others in the ordinary course of the A-1 Series' or the
Subsidiaries' business; (iv) to governmental officials having jurisdiction
over the Company, the A-1 Series or any Subsidiary;
(v) in connection with any governmental or regulatory filings of the
Company, the A-1 Series or any Subsidiary or disclosure or presentations to the
Company's shareholders or prospective shareholders; (vi) as required by
law or legal process to which the Administrative
Agent or any Person to whom disclosure is permitted hereunder is a
party; or (vii) to the extent such information is otherwise publicly
available.  The foregoing shall not apply to information which has previously
become publicly available through the actions of a Person other than the Administrative Agent not resulting from the Administrative Agent's violation of this Section 6. 
The provisions of this Section 6  shall survive the expiration or
earlier termination of this Agreement for a period of one year.

9

 

 

 

Section 7.                
Obligations of Administrative
Agent; Restrictions. 

(a)               
The Administrative Agent shall
take such action as it deems necessary or appropriate with regard to the
protection of the Property.

(b)              
The Administrative Agent shall
refrain from any action that, in its sole judgment made in good faith, (i) is
not in compliance with the Inter-Series Policy, (ii) would adversely and
materially affect the status of the A-1 Series as a REIT under the Code, (iii) would
adversely and materially affect the Company's or any Subsidiary's status as an
entity intended to be exempted or excluded from investment company status under
the Investment Company Act or (iv) would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Company, the A‐1 Series or any Subsidiary or that would otherwise not be
permitted by the Company's Governing Instruments.  If the Administrative Agent is ordered to take any such
action by the Board of Directors, the Administrative
Agent shall promptly notify the Board of Directors of the Administrative Agent's judgment that such action
would adversely and materially affect such status or violate any such law, rule
or regulation or the Governing Instruments.  Notwithstanding the foregoing, the
Administrative Agent, its directors,
members, officers, stockholders, managers,
personnel, employees and any Person controlling or controlled by the Administrative Agent and any Person providing supporting
services to the Administrative Agent shall
not be liable to the A-1 Series or any Subsidiary, the Board of Directors, or
the Company's or any Subsidiary's shareholders, members or partners, for any
act or omission by the Administrative Agent,
its directors, officers, stockholders, personnel or employees except as
provided in Section 11  of this Agreement.

(c)               
The Administrative Agent shall
at all times during the term of this Agreement maintain "errors and
omissions" insurance coverage and other insurance coverage which is
customarily carried by administrative agents performing functions similar to
those of the Administrative Agent under this
Agreement with respect to properties similar to the Property, in an amount
which is comparable to that customarily maintained by other administrative agents of similar properties.

Section 8.                
Compensation. 

(a)               
The A-1 Series and the Property LLC shall be jointly responsible
for paying the Administrative Agent the Initial Administrative Services Fee
upon the effective date of this Agreement.

(b)              
The A-1 Series and the Property LLC shall be jointly responsible
for paying the Administrative Agent the Quarterly
Administrative Services Fee quarterly in arrears commencing with the fiscal quarter
in which this Agreement was executed (with such initial payment pro-rated based
on the number of days during such quarter that this Agreement was in effect).

(c)               
The Administrative Agent shall
compute each installment of the Quarterly Administrative Services Fee within 45
days after the end of the fiscal quarter with respect to which such installment
is payable.  A copy of the computations made by the Administrative
Agent to calculate such installment shall
thereafter promptly be delivered to the Board of Directors and, upon such
delivery, payment of such installment of the Quarterly Administrative Services
Fee shown therein shall be due and payable in cash no later than the date which
is five business days after the date of delivery of such computations to the
Board of Directors.

10

 

 

 

(d)              
Following a Property Sale, the A-1 Series and the Property LLC,
jointly and severally, shall pay the Administrative Agent the Administrative
Sale Fee; provided, however, that no Administrative Sale Fee
shall be payable to the Administrative Agent in respect of any Property Sale
that occurs during the first year following the effective date of this
Agreement if the total consideration paid by the purchaser (including any
indebtedness assumed by the purchaser) in connection with a Property Sale is
less than the aggregate purchase price paid by the Property LLC in connection
with the acquisition of the Property.

Section 9.                
Expenses.   

(a)               
Subject to and in accordance with the terms of the Loan Agreement
and other Loan Documents, the A-1 Series and the Property LLC, jointly and
severally, shall pay all property-level fees, costs and expenses of the
Company, the A-1 Series and the Subsidiaries (other than those specifically
required to be borne by the Administrative Agent under this Agreement) ("Expenses"). 
Expenses shall include, but not be limited to:

(i)                
the actual cost of goods and services used by the A-1 Series and
any of the Subsidiaries, obtained from entities that are not Affiliates of the
Administrative Agent;

(ii)              
fees, costs and expenses of property managers performing property
management and leasing services for the Property, including the fees, costs and
expenses of the Property Manager pursuant to the Property Management Agreement;

(iii)            
costs associated with property-level insurance required in
connection with the business of the A-1 Series;

(iv)            
expenses associated with the listing of the Series A-1 Common
Shares (or any other securities of the Company associated with the A-1 Series
or of any Subsidiary) on the NASDAQ or other national securities exchange;

(v)              
expenses associated with the formation of the A-1 Series and any of
the Subsidiaries;

(vi)            
expenses associated with the offering, issuance and distribution
of Series A-1 Common Shares (or any other any other securities of the Company
associated with the A-1 Series or of any Subsidiary), such as selling
commissions and fees, advertising expenses, taxes, legal and accounting fees,
listing and registration fees;

(vii)          
expenses of organizing, revising, amending, converting, modifying
or terminating the A-1 Series and any Subsidiary;

(viii)        
expenses related to the preparation, printing and mailing of any
proxy statements or other SEC filings in connection with any shareholder
proposal, disposition, tender offer or redemption relating to the Property, the
Property LLC or the A-1 Series;

11

 

 

 

(ix)            
expenses related to the preparation, printing and mailing of
other property-level reports required by governmental entities;

(x)              
property-level service expenses, including all costs and expenses
incurred by the Administrative Agent or its Affiliates in fulfilling its duties
hereunder at the property level, including reasonable salaries and wages,
benefits and overhead of all employees directly involved in the performance of
such services; provided, however, that no reimbursement shall be
made for costs of such employees of the Administrative Agent or its Affiliates
to the extent that such employees perform services for which the Administrative
Agent receives compensation in accordance with the terms of this Agreement; and

(xi)            
property-level accounting and legal fees.

(b)              
To the extent the Administrative Agent advances any Expenses, the
A-1 Series and the Property LLC shall, jointly and severally, reimburse the
Administrative Agent for all documented Expenses incurred on behalf of the A-1
Series and/or the Subsidiaries in accordance with Section 10 hereof.

(c)               
To the extent any Expenses are allocable to both the A-1 Series
and any other series of the Company, such Expenses shall be allocated to the
A-1 Series and such other series in accordance with the Inter-Series Policy.

(d)              
The Administrative Agent may,
at its option, elect not to seek reimbursement for certain Expenses during a
given month, which determination shall not be deemed to construe a waiver of
reimbursement for similar Expenses in future periods.  

(e)               
Notwithstanding anything to the contrary in Section 9(a)
or Section 9(b), the A-1 Series and the Property LLC shall not pay, and
shall not be obligated to reimburse, the Administrative Agent for certain
non-property level expenses of the Company, and the Administrative Agent will
pay such non-property level expenses on behalf of the Company, including (i)
accounting and other expenses related to the administration of
non-property-level audits; (ii) except as set forth above in Section 9(a),
the preparation, printing and mailing of all filings made by the Company under
the Exchange Act, including Forms 10-K, 10-Q and 8-K, and proxy statements; 
and (iii) insurance for the Company's directors and officers (unless any such
director or officer of the Company is associated solely with the A-1 Series).

(f)               
The provisions of this Section 9  shall survive the
expiration or earlier termination of this Agreement to the extent such Expenses
have previously been incurred or are incurred in connection with such
expiration or termination.

Section 10.            
Calculation and Reimbursement of Expenses.  The Administrative Agent shall prepare a statement
documenting the Expenses of the A-1 Series and the Subsidiaries and the Expenses
incurred by the Administrative Agent on
behalf of the A-1 Series and the Subsidiaries during each month, and shall
deliver such statement to the Company and the Property LLC within 45 days after
the end of each month.  Expenses incurred by the Administrative
Agent on behalf of the A-1 Series and the Subsidiaries, including
expenses allocated to the A-1 Series and the Property LLC pursuant to Section
9 above, shall be reimbursed by the A-1 Series and the Property LLC to the Administrative Agent on the fifth business day
immediately following the date of delivery of such statement; provided, however,
that such reimbursements may be offset by the Administrative
Agent against amounts due to the A-1 Series and the Subsidiaries.  The
provisions of this Section 10  shall survive the expiration or
earlier termination of this Agreement.

12

 

 

 

Section 11.            
Limits of Administrative Agent
Responsibility; Indemnification. 

(a)               
The Administrative Agent
assumes no responsibility under this Agreement other than to render the Services
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 Administrative Agent, including as set forth in ‎Section 7(b) of this
Agreement.  The Administrative Agent, its
officers, stockholders, members, managers, directors, employees, consultants, personnel,
any Person controlling or controlled by the Administrative
Agent and any of such Person's officers, stockholders, members, managers, directors, employees, consultants and
personnel, and any Person providing supporting services to the Administrative Agent (each an "Administrative Agent Indemnified Party")
will not be liable to the Company, the A-1 Series or any Subsidiary, to the
Board of Directors, or the Company's or any Subsidiary's shareholders, members
or partners for any acts or omissions by any such Person, pursuant to or in
accordance with this Agreement, except by reason of acts or omissions constituting
bad faith, willful misconduct, gross negligence or reckless disregard of the Administrative Agent's duties under this
Agreement, as determined by a final non-appealable order of a court of
competent jurisdiction.  The A-1 Series and the Property LLC shall, jointly and
severally, to the full extent lawful, reimburse, indemnify and hold each Administrative Agent Indemnified Party harmless of
and from any and all expenses, losses, damages, liabilities, demands, charges
and claims of any nature whatsoever (including attorneys' fees) in respect of
or arising from any acts or omissions of such Administrative
Agent Indemnified Party made in good faith in the performance of the Administrative Agent's duties under this Agreement
and not constituting such Administrative Agent
Indemnified Party's bad faith, willful misconduct, gross negligence or reckless
disregard of the Administrative Agent's
duties under this Agreement.

(b)              
The Administrative Agent
shall, to the full extent lawful, reimburse, indemnify and hold the Company,
the A-1 Series, any Subsidiary, the shareholders, directors and officers of the
Company and any Subsidiary and each other Person, if any, controlling the
Company (each, a "Company Indemnified Party") harmless of and
from any and all expenses, losses, damages, liabilities, demands, charges and
claims of any nature whatsoever (including attorneys' fees) in respect of or
arising from the Administrative Agent's bad
faith, willful misconduct, gross negligence or reckless disregard of its duties
under this Agreement, as determined by a final non-appealable order of a court
of competent jurisdiction, or any claims by ETRE Financial's personnel relating
to the terms and conditions of their employment by the Administrative
Agent or ETRE Finanical, as applicable. 

(c)               
An Indemnitee will promptly notify the party against whom
indemnity is claimed (the "Indemnitor") of any claim for which
it seeks indemnification; provided, however, that the failure to
so notify the Indemnitor will not relieve the Indemnitor from any liability
which it may have hereunder, except to the extent such failure actually
prejudices the Indemnitor.  The Indemnitor shall have the right to assume the
defense and settlement of such claim; provided, that the Indemnitor
notifies the Indemnitee of its election to assume such defense and settlement
within 30 days after the Indemnitee gives the Indemnitor notice of the claim. 
In such case, the Indemnitee will not settle or compromise such claim, and the
Indemnitor will not be liable for any such settlement made without its prior
written consent.  If the Indemnitor is entitled to, and does, assume such
defense by delivering the aforementioned notice to the Indemnitee, the
Indemnitee will (i) have the right to approve the Indemnitor's counsel
(which approval will not be unreasonably withheld, delayed or conditioned),
(ii) be obligated to cooperate in furnishing evidence and testimony and in
any other manner in which the Indemnitor may reasonably request and
(iii) be entitled to participate in (but not control) the defense of any
such action, with its own counsel and at its own expense.

Section 12.            
No Joint Venture.  Nothing in this Agreement shall be
construed to make the A-1 Series, the Property LLC and the Administrative Agent partners or joint venturers
or impose any liability as such on any of them.  

13

 

 

 

Section 13.            
Term; Termination. 

(a)               
This Agreement shall have an indefinite term; provided, however,
that this Agreement may be terminated as provided in Section 13(b) below
and in Section 15.  

(b)              
In the event of a Property Sale, this Agreement shall terminate
upon payment in full of the applicable Administrative Sale Fee.  In the event
of a Redemption, the Administrative Agent may terminate this Agreement, with
such termination deemed to have occurred upon the consummation of such redemption.

(c)               
If this Agreement is terminated pursuant to this ‎Section 13 or ‎Section 15, such
termination shall be without any further liability or obligation of either
party to the other, except as provided in ‎Section 6, ‎Section 9, ‎Section 10 and ‎Section 13(b) of this
Agreement.  In addition, ‎Section
11 and ‎Section
21 of this Agreement shall survive termination of this Agreement.

Section 14.            
Assignment. 

(a)               
Except as set forth in ‎Section 14(b) of this
Agreement, this Agreement may not be assigned, in whole or in part, by the Administrative Agent, unless such assignment is
consented to in writing by the A-1 Series and the Property LLC with the
approval of a majority of the Independent Directors.  Any such permitted
assignment shall bind the assignee under this Agreement in the same manner as
the Administrative Agent is bound.  In
addition, the assignee shall execute and deliver to the A-1 Series and the
Property LLC a counterpart of this Agreement naming such assignee as Administrative Agent.  Except as set forth in Section
14(c) of this Agreement, this Agreement shall not be assigned by the A-1
Series or the Property LLC without the prior written consent of the Administrative Agent, except in the case of
assignment by the A-1 Series or the Property LLC to another entity which is a
successor (by merger, consolidation, purchase of assets, or similar
transaction) to the A-1 Series or the Property LLC, as applicable, in which
case such successor entity shall be bound under this Agreement and by the terms
of such assignment in the same manner as the A-1 Series or the Property LLC, as
applicable, is bound under this Agreement.

(b)              
Notwithstanding any provision of this Agreement, the Administrative Agent may subcontract and assign
any or all of its responsibilities under ‎Section 2(c), ‎Section 2(e) and ‎Section 2(f) of this
Agreement to any of its Affiliates in accordance with the terms of this
Agreement applicable to any such subcontract or assignment, and each of the A-1
Series and the Property LLC hereby consents to any such assignment and
subcontracting.  In addition, provided  that the Administrative
Agent provides prior written notice to the A-1 Series for informational
purposes only, nothing contained in this Agreement shall preclude any pledge,
hypothecation or other transfer of any amounts payable to the Administrative Agent under this Agreement.  In
addition, the Administrative Agent may
assign this Agreement to any of its Affiliates without the approval of the Independent
Directors.

(c)               
In connection with a Redemption, all rights and obligations of
the A-1 Series under this Agreement shall be automatically assigned to the Property
LLC, unless the Administrative Agent elects to terminate this Agreement in
connection with such redemption.  

Section 15.            
Termination for Cause. 

(a)               
The A-1 Series and the Property LLC may terminate this Agreement
effective upon 30 days' prior written notice of termination from the Board of
Directors to the Administrative Agent if
(i) the Administrative Agent or its
agents or its assignees materially breaches any provision of this Agreement and
such breach shall continue for a period of 30 days after written notice thereof
specifying such breach and requesting that the same be
remedied in such 30‐day period, unless (a) such material breach, by
its nature, is not capable of being cured within such 30-day period and (b) within
such 30-day period, the Administrative Agent commences to cure such material
breach and thereafter diligently pursues the cure of such material breach and (c)
the Administrative Agent causes such material breach to be cured within a
reasonable period time thereafter, (ii) the Administrative
Agent engages in any act of fraud, misappropriation of funds, or
embezzlement against any series of the Company or their respective subsidiaries,
(iii) there is an event of any gross negligence on the part of the Administrative Agent in the performance of its
duties under this Agreement, (iv) there is a commencement of any
proceeding relating to the Administrative Agent's
Bankruptcy, (v) the Administrative Agent
is convicted (including a plea of nolo contendere) of a felony, or (vi) there
is a dissolution of the Administrative Agent; provided,
however, that unsatisfactory financial performance of the Property shall in
no event constitute Cause under this Agreement. 

14

 

 

 

(b)              
The Administrative Agent may
terminate this Agreement effective upon 60 days’ prior written notice of
termination to the A-1 Series in the event that the A-1 Series or the Property
LLC shall default in the performance or observance of any material term,
condition or covenant contained in this Agreement and such default shall
continue for a period of 30 days after written notice thereof specifying such
default and requesting that the same be remedied in such 30-day period, unless
(a) such material breach, by its nature, is not capable of being cured
within such 30-day period and (b) within such 30-day period, the A-1
Series or the Property LLC commences to cure such material breach and
thereafter diligently pursues the cure of such material breach and (c) the A-1
Series or the Property LLC causes such material breach to be cured within a
reasonable period time thereafter.

(c)               
The Administrative Agent may
terminate this Agreement in the event the Company becomes regulated as an "investment
company" under the Investment Company Act, with such termination deemed to
have occurred immediately prior to such event.

Section 16.            
Action Upon Termination.  From and after the effective
date of termination of this Agreement, pursuant to ‎Section 13 or ‎Section 15 of this
Agreement, the Administrative Agent shall
not be entitled to compensation for further services under this Agreement, but
shall be paid all compensation accruing to the date of termination.  Upon such
termination, the Administrative Agent shall
forthwith:

(a)               
after deducting any accrued compensation and reimbursement for
its expenses to which it is then entitled, pay over to the A-1 Series or a
Subsidiary all money collected and held for the account of the A-1 Series or a
Subsidiary 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 A-1 Series or a
Subsidiary; and

(c)               
deliver to the Board of Directors all property and documents of
the A-1 Series or any Subsidiary then in the custody of the Administrative Agent. 

Section 17.            
Release of Money or Other Property Upon Written Request.  The
Administrative Agent agrees that any money
or other property of the A-1 Series or any Subsidiary held by the Administrative Agent under this Agreement shall be
held by the Administrative Agent as
custodian for the A-1 Series or Subsidiary, and the Administrative
Agent's records shall be appropriately marked clearly to reflect the
ownership of such money or other property by the A-1 Series or such Subsidiary.
 Upon the receipt by the Administrative Agent
of a written request signed by a duly authorized Officer requesting
the Administrative Agent to release to the A-1
Series or any Subsidiary any money or other property then held by the Administrative Agent for the account of the A-1
Series or any Subsidiary under this Agreement, the Administrative
Agent shall release such money or other property to the A-1 Series or
any Subsidiary within a reasonable period of time, but in no event later than
30 days following such request.  The Administrative
Agent shall not be liable to the Company, the A-1 Series, any
Subsidiary, the Board of Directors, or the Company's or a Subsidiary's members,
shareholders or partners or their respective Affiliates for any acts performed
or omissions to act by the A-1 Series or any Subsidiary in connection with the
money or other property released to the A-1 Series or any Subsidiary in
accordance with the second sentence of this ‎Section 17.  The A-1
Series, the Property LLC and any other Subsidiary shall, jointly and severally,
indemnify the Administrative Agent and its
officers, directors, personnel, agents, and
officers and against any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever, which arise in connection
with the Administrative Agent's release of
such money or other property to the A-1 Series or any Subsidiary in accordance
with the terms of this ‎Section
17.  Indemnification pursuant to this provision shall be in addition to any
right of the Administrative Agent Indemnified
Parties to indemnification under ‎Section
11 of this Agreement.

15

 

 

 

Section 18.            
Amendment.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
the party waiving compliance. 

Section 19.            
Notices.  Unless expressly provided otherwise in this
Agreement, 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 delivered against receipt or upon
actual receipt of (i) personal delivery, (ii) delivery by reputable
overnight courier, (iii) delivery by facsimile transmission with
telephonic confirmation or (iv) delivery by registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:

(a)               
If to the A-1 Series:

ETRE REIT, LLC, Series A-1

44
Wall Street 

New York, New York 10005

Tel (212) 596-7225

 

with a copy to:

 

Jay L.
Bernstein, Esq. 

Clifford Chance US LLP 

31 West 52nd Street 

New York, NY 10019 

212 878-8527 (tele.) 

(212) 878-8375 (fax)

(b)              
If to the Property LLC:

 ETRE Property A-1, LLC

44
Wall Street 

New York, New York 10005

Tel (212)
596-7225

with a copy to:

16

 

 

 

 

Jay L.
Bernstein, Esq. 

Clifford Chance US LLP 

31 West 52nd Street 

New York, NY 10019 

212 878-8527 (tele.) 

(212) 878-8375 (fax)

(c)               
If to the Administrative Agent: 

ETRE Asset Management, LLC

44
Wall Street 

New York, New York 10005

Tel (212) 596-7225

 

with a copy to:

 

Jay L.
Bernstein, Esq. 

Clifford Chance US LLP 

31 West 52nd Street 

New York, NY 10019 

212 878-8527 (tele.) 

(212) 878-8375 (fax)

Any party may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity
with the provisions of this ‎Section
18 for the giving of notice.

Section 20.            
Binding Nature of Agreement; Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and permitted assigns
as provided in this Agreement.

Section 21.            
Entire Agreement.  This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter of this Agreement, 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 of
this Agreement.  The express terms of this Agreement control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms of this Agreement.  This Agreement may not be modified or amended other
than by an agreement in writing signed by the parties hereto.

Section 22.            
GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES TO THE CONTRARY.

Section 23.            
No Waiver; Cumulative Remedies.  No failure to exercise
and no delay in exercising, on the part of any party hereto, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.  No waiver of any provision hereunder shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

17

 

 

 

Section 24.            
Headings.  The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
part of this Agreement.

Section 25.            
Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts of this Agreement, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.

Section 26.            
Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

Section 27.            
Gender.  Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires.

[SIGNATURE
PAGE FOLLOWS]

18

 

 

                                                                                                                                                             

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above.

SERIES A-1 of ETRE REIT,
LLC

 

By:                                                                    

Name:  

Title: 

 

ETRE PROPERTY A-1, LLC, a Delaware limited liability company

 

By:                                                                    

Name: 

Title: 

 

ETRE ASSET MANAGEMENT, LLC, a Delaware limited liability
company

 

By: ___________________________________

Name: 

Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}]]