Document:

Advisory Agreement between Registrant and Paladin Realty Advisors, LLC

 Exhibit 10.2 
  
 ADVISORY AGREEMENT 
  
 THIS ADVISORY AGREEMENT (this “Agreement”), dated as of
                    , 2004, is entered into between Paladin Realty Income Properties, Inc., a Maryland corporation (the
“Company”), Paladin Realty Income Properties, L.P. (the “Operating Partnership,” and collectively with the Company, the “Fund”), and Paladin Realty Advisors, LLC, a Delaware limited liability
company (the “Advisor”). 
  
 W I T N E S S E T
H: 
  
 WHEREAS, the Company has filed a registration
statement with the Securities and Exchange Commission relating to its proposed offering of shares of its common stock, par value $.01 per share, to the public; 
  

WHEREAS, the Company intends to qualify as a REIT (as defined below), and to invest, through the Operating Partnership, its funds in investments
permitted by the terms of the Articles (as defined below) and Sections 856 through 860 of the Code (as defined below); 
  
 WHEREAS, the Fund desires to avail itself of the experience, sources of information, advice and assistance of, and certain facilities available to,
the Advisor and to have the Advisor undertake the duties and responsibilities set forth herein on behalf of the Fund, subject to the supervision of the Board of Directors of the Company and the general partner of the Operating Partnership; and

  
 WHEREAS, the Advisor is willing to undertake to render
such services, subject to the supervision of the Board of Directors and the general partner of the Operating Partnership, on the terms and conditions set forth herein; 
  
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows: 
  
 1. Definitions. As used in this Agreement, the following terms have the definitions hereinafter indicated: 
  

“Acquisition Expenses” means any and all expenses incurred by the Company, the Advisor, the Operating Partnership, or any Affiliate
thereof in connection with the selection or acquisition of any Real Estate Asset, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not
acquired, accounting fees and expenses, title insurance premiums, and other closing and miscellaneous expenses related to selection and acquisition of Real Estate Assets, whether or not acquired. 
  
 “Acquisition Fee” means any and all fees and commissions,
exclusive of Acquisition Expenses, paid by any Person to any other Person (including the Paladin Acquisition Fee (as defined in Section 8(a)) and any other fees or commissions paid by or to any Affiliate of the 

 Fund or the Advisor) in connection with the making or investing in mortgage loans or the purchase, development or
construction of any property or other Real Estate Asset, including, without limitation, real estate commissions, Development Fees and Construction Fees (except as provided in the following sentence), selection fees, nonrecurring management fees,
loan fees, points, or any other fees or commissions of a similar nature. Excluded shall be all Development Fees or Construction Fees paid to any Person or entity not affiliated with the Sponsor or Advisor in connection with the actual development
and construction of any property or other Real Estate Asset. 
  
 “Advisor” means Paladin Realty Advisors, LLC, a Delaware corporation, any successor advisor to the Company, or any person or entity to which Paladin Realty Advisors, LLC or any successor advisor subcontracts substantially
all of its functions. 
  
 “Affiliate” means, (A)
any Person directly or indirectly owning, controlling, or holding, with power to vote, 10% or more of the outstanding voting securities of such other Person, (B) any Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held, with the power to vote, by such other Person, (C) any Person, directly or indirectly, controlling, controlled by, or under common control with such other Person, (D) any executive officer, director, trustee,
general partner or manager of such other person, or (E) any legal entity for which such Person acts as an executive officer, director, trustee, general partner or manager. 
  
 “Appraised Value” means value according to an appraisal made by an Independent Expert. 
  
 “Articles” means the Articles of Amendment and Restatement
of the Company dated as of                     , 2004, which comprise the articles of incorporation of the Company, as amended from time to
time. 
  
 “Asset Management Fee” means the fee
described in Section 8(b) hereof. 
  
 “Average Invested
Assets” means, for a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in equity interests in and loans secured by real estate, before reserves for depreciation or bad
debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period. 
  
 “Board” means the Board of Directors of the Company. 
  
 “Cause” means (i) any fraud, criminal conduct, willful misconduct or willful breach of fiduciary duty by
the Advisor, (ii) any material breach of this Agreement by the Advisor not cured by the Advisor within fifteen (15) days of the Advisor’s receipt of notice of such breach from the Fund, or (iii) the bankruptcy of the Advisor. 
  
 “Code” means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time. 
  

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 “Company” means Paladin Realty Income Properties, Inc., a corporation organized under
the laws of the State of Maryland. 
  
 “Competitive Real
Estate Commission” means a real estate or brokerage commission paid for the purchase or sale of property which is reasonable, customary, and competitive in light of the size, type, and location of the Real Estate Asset. 
  
 “Construction Fee” means a fee or other remuneration for
acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitation for a Real Estate Asset. 
  
 “Control” means, with respect to a Person, the possession
(directly or indirectly) of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. 
  
 “Contract Purchase Price” means the amount actually paid for
a Real Estate Asset or allocated to the purchase, development, construction or improvement of a property, exclusive of Acquisition Fees and Acquisition Expenses. 
  
 “Dealer Manager” means Prospect Financial Advisors, LLC or such other Person or entity selected by the
Board of Directors to act as the dealer manager for the offering of the Shares. Prospect Financial Advisors, LLC is a member of the National Association of Securities Dealers, Inc. 
  
 “Dealer Manager Fee” means the dealer manager fee paid to the Dealer Manager pursuant to that certain
Dealer Manager Agreement, dated                     , 2004, among the Company, the Operating Partnership and Prospect Financial Advisors, LLC,
or any similar fee paid to any other Dealer Manager in connection with an Offering. 
  
 “Development Fee” means a fee for the packaging of a Real Estate Asset, including the negotiation and approval of plans, and any undertaking to assist in obtaining zoning and necessary variances and
financing for a specific property, either initially or at a later date. 
  
 “Director” means a member of the Board of Directors of the Company. 
  
 “Dividends” means any dividends or other distributions of money or other property by the Company to the Stockholders, including distributions that may constitute a return of capital for federal income
tax purposes. 
  
 “8% Return” means, with respect
to the Stockholders, an amount calculated like simple interest at the rate of eight percent (8%) per annum calculated on the varying daily balances of Invested Capital during the period to which the 8% Return relates, and determined on the basis of
a 360-day year/30-day month, cumulative for the period for which such 8% Return is being determined. 
  

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 “Fund” means the Company and the Operating Partnership, collectively. 
  
 “Good Reason” means (i) any failure by the Company or the
Operating Partnership to obtain a satisfactory agreement from a successor entity to the Company or the Operating Partnership to assume and agree to perform the Fund’s obligations under this Agreement, or (ii) any material breach of this
Agreement by the Fund not cured by the Fund within fifteen (15) days of the Fund’s receipt of notice of such breach from the Advisor. 
  
 “Gross Proceeds” means the aggregate purchase price of all Shares sold for the account of the Company, without deduction for Selling
Commissions, volume discounts, marketing support fees, due diligence expense reimbursement, fees paid to the Dealer Manager or other Organization and Offering Expenses. For the purposes of computing Gross Proceeds, the purchase price of any Share
for which Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the offering price per Share. 
  
 “Independent Director” means a Director who is not, and
within the last two years has not been, directly or indirectly associated with the Advisor or Sponsor by virtue of (i) ownership of an interest in the Advisor, the Sponsor or any of their Affiliates, (ii) employment by the Advisor, the Sponsor or
any of their Affiliates, (iii) service as an officer, trust manager or director of the Advisor, the Sponsor or any of their Affiliates, (iv) performance of services, other than as a Director, for the Company, (v) service as a director, trust manager
or trustee of more than three real estate investment trusts advised by the Advisor or organized by the Sponsor, or (vi) maintenance of a material business or professional relationship with the Advisor, the Sponsor or any of their Affiliates. A
business or professional relationship is considered material if the gross revenue derived by the Director from the Advisor or Sponsor and their Affiliates exceeds five percent of either the Director’s annual gross revenue, derived from all
sources, during either of the last two years or the Director’s net worth on a fair market value basis. An indirect relationship shall include circumstances in which a Director’s spouse, parents, children, siblings, mothers- or
fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the Advisor or Sponsor or any of their Affiliates or the Company. 
  
 “Independent Expert” means a Person or entity with no material current or prior business or personal
relationship with the Advisor or any of the Directors that is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Company. 
  
 “Invested Capital” means, with respect to the Stockholders,
as of any relevant date, an amount equal to the excess of (i) the aggregate amount of cash contributed or deemed contributed by the Company to the Operating Partnership from the gross proceeds of the issuance by the Company of Shares to the
Stockholders, over (ii) the sum of (A) the cumulative distributions of Net Sales Proceeds (as defined in the OP Partnership Agreement) made to the Company pursuant to Section 5.1(c) of the OP Partnership Agreement as of such date and distributed to
the Stockholders, and (B) the cumulative amounts paid to the Stockholders to repurchase Shares under the Company’s share redemption plan as of such date. 
  

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 “Joint Ventures” means the joint venture or general partnership arrangements in which
the Company or the Operating Partnership is a co-venturer or partner that are established to acquire Real Estate Assets. 
  
 “Listing” means the listing of Shares on a national securities exchange or quotation of the Common Shares on the National Market System
of the Nasdaq Stock Market. 
  
 “Listing Date”
means the date on which a Listing occurs. 
  
 “Net
Income” means for any period, the total revenues of the Fund applicable to such period, less the total expenses of the Fund applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash
reserves; provided, however, that Net Income for purposes of calculating total allowable Operating Expenses under Section 10 hereof shall exclude the gain from the sale of the Fund’s assets. 
  
 “Offering” means any public offering of Shares pursuant to a
Prospectus that is registered with the Securities and Exchange Commission. 
  
 “Operating Expenses” means, for purposes of Section 10 hereof, all costs and expenses incurred by the Fund, the Advisor or any of their respective Affiliates, as determined under generally accepted
accounting principles, which in any way are related to the operation of the Fund or to the Fund’s business, including advisory fees, but excluding (i) Organization and Offering Expenses, (ii) interest payments, (iii) taxes, (iv) non-cash
expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees payable to the Advisor, including the Subordinated Disposition Fee described in Section 8(c) hereof, (vi) the subordinated participation in net sales proceeds,
distribution upon listing and distribution upon termination to be received by the Advisor pursuant to the OP Partnership Agreement, (vii) Acquisition Fees and Acquisition Expenses, and (viii) real estate commissions on the resale of property and
other expenses connected with the acquisition, disposition and ownership of real estate interests, mortgage loans, or other property (such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of
property). 
  
 “Operating Partnership”
means Paladin Realty Income Properties, L.P., a Delaware limited partnership, and any successor thereof. 
  
 “OP Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as the same may
be amended from time to time. 
  
 “Organization and
Offering Expenses” means any and all costs and expenses, other than Selling Commissions and any Dealer Manager Fee, incurred by the Advisor or any of its Affiliates, including the Sponsor, in connection with the formation, qualification and
registration of the Company and the Operating Partnership and the marketing and distribution of the Shares, including, without limitation, the following: legal, accounting, underwriting, brokerage, listing, registration and escrow fees and expenses;
printing, amending, supplementing, mailing and distributing costs; filing, registration, Listing and qualification fees and taxes; telegraph and telephone costs; and all advertising and marketing expenses, including any payment or reimbursements to
the Dealer Manager or other broker-dealers of expenses associated with the Offering and all other costs related to investor and broker-dealer sales meetings. 
  

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 “Paladin Acquisition Fee” means the acquisition fee described in Section 8(a) hereof.

  
 “Person” means an individual, corporation,
partnership, limited partnership, limited liability company, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d) (3) of the
Securities Exchange Act of 1934, as amended. 
  
 “Prospectus” has the meaning set forth in Section 2(10) of the Securities Act of 1933, as amended (the “Securities Act”), including a preliminary Prospectus, an offering circular as described in Rule 256 of
the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling securities to the public. 
  
 “Real Estate Assets” means unimproved and improved real
property and Real Estate Related Investments or any direct and indirect interest therein (including, without limitation, fee or leasehold interests, options, leases, partnership and joint venture interests, equity and debt securities of entities
that own real property, first or second mortgages on real property, mezzanine loans directly or indirectly secured by real property, and other contractual rights in real estate). 
  
 “Real Estate Related Investments” means mortgage loans secured by, or preferred equity investments in
entities that own, real property (including first or second mortgages on real property and mezzanine loans directly or indirectly secured by real property). 
  
 “REIT” means a “real estate investment trust” as defined in Section 856 of the Code and applicable Treasury Regulations.

  
 “Sale” means, with respect to any Real Estate
Asset, any transaction or series of transactions whereby: 
  
 (a)
the Fund directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of any Real Estate Asset, including, without limitation, any event with respect to any Real
Estate Asset that gives rise to a significant amount of insurance proceeds or condemnation awards; or 
  
 (b) any Joint Venture directly or indirectly sells, grants, transfers, conveys, or relinquishes its ownership of any Real Estate Asset, including any
event with respect to any real property which gives rise to insurance proceeds or condemnation awards. 
  
 “Remaining Capital” means, with respect to the Stockholders, as of any relevant date, an amount equal to the excess of (i) the aggregate
amount of cash contributed or deemed 
  

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 contributed by the Company to the Operating Partnership from the gross proceeds of the issuance by the Company of Shares
to the Stockholders, over (ii) the cumulative amounts paid to the Stockholders to repurchase Shares under the Company’s share redemption plan as of such date. 
  
 “Securities” means the Shares or any other stock or other evidences of equity or beneficial or other
interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing. 
  
 “Selling Commissions” means any and all commissions payable
to underwriters, dealer managers, or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to the Dealer Manager. 
  
 “Shares” means the shares of the Company’s common stock, par value $.01 per share. 
  
 “Sponsor” means any Person directly or indirectly
instrumental in organizing, wholly or in part, the Company or any Person who will control, manage or participate in the management of the Company, and any Affiliate of such Person. Not included is any Person whose only relationship with the Company
is that of an independent property manager of Company assets, and whose only compensation is as such. Sponsor does not include wholly independent third parties such as attorneys, accountants, and underwriters whose only compensation is for
professional services. A Person may also be deemed a Sponsor of the Company by: 
  
 (i) taking the initiative, directly or indirectly, in founding or organizing the business or enterprise of the Company, either alone or in conjunction with one or more other Persons; 
  
 (ii) receiving a material participation in the Company in connection with the
founding or organizing of the business of the Company, in consideration of services or property, or both services and property; 
  
 (iii) having a substantial number of relationships and contacts with the Company; 
  
 (iv) possessing significant rights to control Company properties; 
  
 (v) receiving fees for providing services to the Company which are paid on a
basis that is not customary in the Company’s industry; or 
  
 (vi) providing goods or services to the Company on a basis which was not negotiated at arms length with the Company. 
  
 “Stockholders” means the holders of record of Shares maintained in the Company’s books and records. 
  

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 “Termination Date” means the date of termination of this Agreement pursuant to Section
14 hereof. 
  
 2. Appointment. The Fund
hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment. 
  
 3. Duties of the Advisor. The Advisor shall undertake to present to the Fund opportunities to invest in Real Estate Assets and to
provide a continuing and suitable investment program consistent with the investment objectives and policies of the Fund as determined and adopted from time to time by the Board. In performance of this undertaking, subject to the supervision of the
Board and consistent with the provisions of the Company’s Prospectus, dated as of                     , 2004 (and any supplements
thereto), the Articles, the Bylaws of the Company and the OP Partnership Agreement, the Advisor shall, either directly or by engaging an Affiliate: 
  
 a. serve as the Fund’s investment advisor; 
  

b. perform and supervise the various administrative functions reasonably necessary for the daily management of the Fund; 
  
 c. maintain and preserve the books and records of the
Company and the Operating Partnership; 
  
 d.
investigate, select, engage and conduct business with, on behalf of the Fund, such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to appraisers, consultants, accountants,
contractors, leasing agents, correspondents, lenders, technical advisors, attorneys, real estate brokers, broker-dealers, underwriters, corporate fiduciaries, escrow agents, transfer agents, depositaries, custodians, agents for collection, insurers,
insurance agents, banks, builders, developers, property managers, mortgagors, mortgage brokers, real estate research firms and any and all agents for any of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity
deemed by the Advisor necessary or desirable for the performance of any of the services described in this Section 3, including but not limited to entering into contracts in the name of the Company or the Operating Partnership with any of the
foregoing; 
  
 e. consult with the officers of
the Company and the Board and assist the Board in the formulation and implementation of the Company’s financial and investment policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of
investments consistent with the investment objectives and policies of the Fund and in connection with any borrowings proposed to be undertaken by the Fund; 
  
 f. subject to the provisions of Section 4 hereof, (i) locate, analyze and select potential investments in Real Estate Assets for the Fund,
(ii) structure and negotiate the 
  

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 terms and conditions of transactions pursuant to which investments in Real Estate Assets will be made by
the Fund; (iii) make investments in Real Estate Assets on behalf of the Fund in compliance with the investment objectives and policies of the Fund; (iv) arrange for financing and refinancing and make other changes in the asset or capital structure
of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with the Fund’s investments in, Real Estate Assets; (v) enter into leases and service contracts for Real Estate Assets; (vi) supervise property management, leasing,
development and construction services provided by third parties for the Fund’s Real Estate Assets; and (vii) to the extent necessary, perform all other operational functions for the maintenance and administration of Real Estate Assets held by
the Fund; 
  
 g. if and to the extent that the
Advisor deems appropriate, negotiate on behalf of the Fund with banks or lenders for loans to be made to the Fund or with respect to its Real Estate Assets, and negotiate on behalf of the Fund with investment banking firms and broker-dealers or
negotiate private sales of Partnership Units (as defined in the OP Partnership Agreement) or obtain loans for the Fund, but in no event in such a way so that the Advisor shall be acting as broker-dealer or underwriter; and provided, further, that
any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Fund; 
  
 h. provide the Fund with all necessary cash management services; 
  
 i. establish and maintain one or more bank accounts in its own name for the account of the Company and the
Operating Partnership or in the name of the Company and the Operating Partnership, and collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating
Partnership, as applicable; provided that no funds shall be commingled with the funds of the Advisor; and provided further that the Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and to
the auditors of the Fund; 
  
 j. provide the
Board with reports of the Advisor’s performance of services under this Agreement from time to time, or at any time reasonably requested by the Board; 
  
 k. obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of the Fund’s
investments in Real Estate Assets; 
  
 l. provide
the Board with periodic reports regarding prospective investments in Real Estate Assets; 
  
 m. deliver to or maintain on behalf of the Fund copies of all appraisals obtained in connection with the investments in Real Estate
Assets; 
  

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 n. to the extent that the approval of the Board or the Independent Directors is not
otherwise required, notify the Board of all proposed material transactions before they are completed; and 
  
 o. do all other things reasonably necessary to assure its ability to render the services described in this Agreement. 
  
 4. Authority of Advisor. 
  
 a. Pursuant to the terms of this Agreement (including the
restrictions included in this Section 4 and in Section 6 hereof), and subject to the continuing and exclusive authority of the Board over the management of the Company, the Company and the Operating Partnership hereby delegate to the Advisor the
authority to perform, on behalf of the Fund, the services described in Section 3 hereof. 
  
 b. The Advisor hereby acknowledges the authority of the Advisor under this Agreement is subject to the investment limitations described in
Article X of the Articles and the approvals required for certain transactions between the Advisor or its Affiliates and the Company as set forth in Article XI of the Articles. 
  
 c. If any transaction requires approval by the Board or the Independent Directors under the Articles, the
Advisor will deliver to the Independent Directors all documents required by them to properly evaluate the proposed transaction. 
  
 d. The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority set forth in this Section 4 on
behalf of the Company (including the Company in its capacity as general partner of the Operating Partnership). 
  
 5. Records; Access. The Advisor shall maintain appropriate records of all its activities hereunder and make such records available
for inspection by the Fund and by counsel, auditors and authorized agents of the Fund at any time or from time to time during normal business hours. The Advisor shall at all reasonable times have access to the books and records of the Company and
the Operating Partnership. 
  
 6. Limitations on
Activities. Notwithstanding anything else in this Agreement to the contrary, the Advisor shall refrain from taking any action which, in its sole judgment made in good faith, would (a) adversely affect the status of the Company as a REIT, (b)
subject the Company to regulation under the Investment Company Act of 1940, as amended, (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company (including federal and state
securities laws), or (d) otherwise not be permitted by the Articles, the Bylaws of the Company or the OP Partnership Agreement; except if such action shall be ordered by the Board, in which case the Advisor shall notify promptly the Board of the
Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in
accordance with the specific instructions of the Board so given. Notwithstanding the foregoing, the Advisor, its 
  

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 directors, officers, members, managers and employees and the directors, officers, managers, stockholders, members,
partners and employees of the Advisor’s Affiliates shall not be liable to the Company or the Operating Partnership for any act or omission by the Advisor, its directors, officers, members, managers, employees or Affiliates except as provided in
Sections 15 and 16 of this Agreement. 
  
 7.
Relationship with Directors. Directors, officers and employees of the Advisor or any Affiliate of the Advisor may serve as Directors and as officers of the Company; provided that, no director, officer or employee of the Advisor or
its Affiliates who also is a Director or officer of the Company shall receive any compensation from the Company for serving as a Director or officer of the Company other than reasonable reimbursement for travel and related expenses incurred in
attending meetings of the Board. 
  
 8. Fees.

  
 a. Acquisition Fees and
Expenses. Subject to the following sentence, the Fund shall pay to the Advisor, as compensation for services rendered by the Advisor in connection with the investigation, selection and acquisition (by purchase, investment or exchange) of
Real Estate Assets, a fee (the “Paladin Acquisition Fee”) in an amount equal to 2.75% of (i) for any Real Estate Asset acquired by the Fund directly or indirectly other than a Real Estate Related Investment, the Contract Purchase
Price of the underlying property, and (ii) for any Real Estate Related Investment acquired by the Fund directly or indirectly, the Appraised Value of the underlying property, in the case of this subsection (ii), not to exceed 5.5% of the funds
advanced by the Fund for the purchase of the Real Estate Related Investment. The total of all Acquisition Fees (including the Paladin Acquisition Fee) and any Acquisition Expenses incurred by the Advisor and reimbursed by the Company in accordance
with Section 9(a)(ii) hereof shall not exceed an amount equal to 6.0% of (i) for any Real Estate Asset acquired by the Fund directly or indirectly other than a Real Estate Related Investment, the Contract Purchase Price of the underlying property,
and (ii) for any Real Estate Related Investment acquired by the Fund directly or indirectly, 6.0% of the amount of the underlying loan or investment in preferred equity securities. The Paladin Acquisition Fee payable with respect to the acquisition
of any Real Estate Asset shall be paid to the Advisor by the Fund at the time of such acquisition. The Advisor may elect, in its sole discretion, to defer (without interest) payment of any Paladin Acquisition Fee by providing written notice of such
deferral to the Fund. 
  
 b. Asset
Management Fee. On the last day of each month, the Fund shall pay the Advisor an “Asset Management Fee” in an amount equal to one twelfth of 0.6% of (i) for any Real Estate Asset held by the Fund directly or indirectly as of
the last day of the preceding month other than a Real Estate Related Investment, the Contract Purchase Price of the underlying property, and (ii) for any Real Estate Related Investment held by the Fund directly or indirectly as of the last day of
the preceding month, the Appraised Value of the underlying property, in the case of this subsection (ii), not to exceed one twelfth of 1.2% of the funds advanced by the Fund for the purchase of the Real Estate Related Investment. The Advisor may
elect, in its sole discretion, to defer (without interest) payment of the Asset Management Fee in any month by providing written notice of such deferral to the Fund. 
  

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 c. Subordinated Disposition Fee. 
  
 i. If the Advisor or one of its Affiliates provides a
substantial amount of services (as determined by a majority of the Independent Directors) in connection with the Sale of one or more Real Estate Assets, the Fund shall pay to the Advisor or such Affiliate a “Subordinated Disposition Fee”
equal to the lesser of (A) one-half of a Competitive Real Estate Commission, and (B) 3.0% of the proceeds of the Sale of such Real Estate Asset. The Subordinated Disposition Fee will be payable only if the following condition (the
“Subordination Condition”) has been satisfied as of the date of payment (or, for purposes of Sections 8(c)(iii) and (iv), the Termination Date or the Listing Date, respectively): the Stockholders must have received Dividends in an
amount equal to their Remaining Capital plus their 8.0% Return. To the extent that Subordinated Disposition Fees are not payable by the Fund at the time of the Sale of a Real Estate Asset because the Subordination Condition has not been satisfied,
any unpaid fees will be paid at such time as the Subordination Condition has been satisfied. The Subordinated Disposition Fee may be paid in addition to real estate commissions paid to non-Affiliates in connection with any Sale of a Real Estate
Asset; provided that the total real estate commissions paid to all Persons by the Fund shall not exceed an amount equal to the lesser of (X) 6.0% of the proceeds of the Sale of such Real Estate Asset, and (Y) the Competitive Real Estate Commission
with respect to the Sale of such Real Estate Asset. 
  
 ii. The Advisor may elect, in its sole discretion, to defer (without interest) payment of any Subordinated Disposition Fee payable to the Advisor by providing written notice of such deferral to the Fund. 
  
 iii. Upon the termination of this Agreement, if any
Subordinated Disposition Fees have accrued but not been paid to the Advisor or any of its Affiliates because the Subordination Condition has not been satisfied prior to the Termination Date, an appraisal of the Real Estate Assets then held by the
Fund shall be made. For purposes of determining whether the Stockholders have received aggregate Dividends as of the Termination Date in an amount equal to their Remaining Capital plus their 8.0% Return, the Stockholders will be deemed to have
received, in addition to any Dividends paid to the Stockholders prior to the Termination Date, Dividends as of the Termination Date in an amount equal to (A) the Appraised Value of the Real Estate Assets then owned by the Fund, less (B) the amount
of any indebtedness owed by the Fund. If, based on the calculation set forth in this Section 8(c)(iii), the Subordination Condition has been satisfied as of the Termination Date, then the Fund shall pay promptly to the Advisor any accrued but unpaid
Subordinated Disposition Fees. 
  

 - 12 - 

 iv. On the Listing Date, if any Subordinated Disposition Fees have accrued but not been
paid to the Advisor or any of its Affiliates because the Subordination Condition has not been satisfied prior to the Listing Date, then for purposes of determining whether the Stockholders have received aggregate Dividends in an amount equal to
their Remaining Capital plus their 8.0% Return, the Stockholders will be deemed to have received, in addition to any Dividends paid to the Stockholders prior to the Listing Date, Dividends as of the Listing Date in an amount equal to the product of
(A) the total number of Shares outstanding as of the date of the Listing and (B) the average closing price of the Shares over a period of 30 days during which the stock is traded, with such period beginning 180 days after Listing. If, based on the
calculation set forth in this Section 8(c)(iv), the Subordination Condition has been satisfied as of the Listing Date, then the Fund, promptly following the 30-day period described in this Section 8(c)(iv), shall pay to the Advisor any accrued but
unpaid Subordinated Disposition Fees. 
  
 9.
Expenses. 
  
 a. Subject to
Section 10 hereof, in addition to the compensation paid to the Advisor pursuant to Section 8 hereof, the Fund shall pay directly or reimburse the Advisor and its Affiliates for all of the costs and expenses paid or incurred by the Advisor or such
Affiliates that are in any way related to the operation of the Fund or to the Fund’s business, including, but not limited to: 
  
 i. the Organization and Offering Expenses; provided, however, that within 60 days after the end of the month in which an Offering
terminates, the Advisor shall reimburse the Company for any Organization and Offering Expenses reimbursement received by the Advisor pursuant to this Section 9 to the extent that such reimbursement of expenses associated with the Offering exceeds
3.0% of the Gross Proceeds. The Advisor shall be responsible for the payment of all such Organization and Offering Expenses in excess of 3.0% of the Gross Proceeds; 
  
 ii. subject to Section 8(a), all Acquisition Expenses incurred in connection with the investigation,
selection and acquisition of a Real Estate Asset in an amount equal to up to 0.5% of (A) for any Real Estate Asset acquired by the Fund directly or indirectly other than a Real Estate Related Investment, the Contract Purchase Price of the underlying
property, and (B) for any Real Estate Related Investment acquired by the Fund directly or indirectly, the Appraised Value of the underlying property, in the case of this subsection (B), not to exceed 1.0% of the funds advanced by the Fund for the
acquisition of the Real Estate Asset; 
  
 iii.
the actual cost of goods and services used by the Fund and obtained from entities not affiliated with the Advisor, other than Acquisition Expenses, including, but not limited to, fees of appraisers, consulting fees, 
  

 - 13 - 

 accounting fees, legal fees, brokerage fees and underwriting fees paid in connection with the purchase
and sale of securities, fees paid to escrow agents, transfer agents, corporate fiduciaries and custodians, collection agent fees, depositary fees, loan fees, mortgagor fees and other banking fees, insurance premiums and fees to builders, developers,
contractors, property managers and leasing agents; 
  
 iv. interest and other costs for the Fund’s indebtedness, including discounts, loan fees, points and other similar fees; 
  
 v. taxes and assessments on income or property of the Fund and taxes as an expense of doing business; 
  
 vi. costs associated with insurance required in connection
with the business of the Fund (including directors’ and officers’ liability insurance); 
  
 vii. expenses of managing and operating Real Estate Assets owned by the Fund, whether or not payable to an Affiliate of the Fund or the
Advisor, including the costs of maintaining, repairing and improving any property; 
  
 viii. expenses associated with the disposition of Real Estate Assets, including, subject to Section 8(c), real estate commissions;

  
 ix. all expenses in connection with payments
to the Directors and meetings of the Board and the Stockholders; 
  
 x. expenses associated with Listing or with the issuance and distribution of Shares and Securities, such as selling commissions and fees, advertising expenses, taxes, legal and accounting fees, Listing and
registration fees; 
  
 xi. expenses connected
with payments of Dividends in cash or otherwise made or caused to be made by the Company to the Stockholders; 
  
 xii. expenses of maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and
other Stockholder reports, proxy statements and other reports required by governmental entities; 
  
 xiii. administrative service, accounting, finance, internal audit or investor relations expenses (including personnel costs for the
provision of all services under this Agreement; provided, however, that no reimbursement shall be made for costs of personnel to the extent that such personnel perform services in transactions for which the Advisor receives a separate fee);

  

 - 14 - 

 xiv. audit, accounting and legal fees relating to the operations of the Fund; and

  
 xv. all other costs and expenses in any way
relating to the operation of the Fund or the Fund’s business (other than any fees payable to the Advisor or its Affiliates by the Fund). 
  
 b. Subject to Section 10 hereof, expenses incurred by the Advisor or its Affiliates on behalf of the Fund and payable pursuant to this
Section 9 shall be reimbursed to the Advisor or such Affiliates no less than quarterly by the Fund within 60 days after the end of each quarter. The Advisor shall prepare a statement documenting the expenses of the Fund during each quarter, and
shall deliver such statement to the Fund within 45 days after the end of each quarter. The Advisor may elect, in its sole discretion, to defer (without interest) any reimbursement of expenses payable pursuant to this Section 9 for any quarter by
providing written notice of such deferral to the Fund. 
  
 10.
Operating Expenses. The Fund shall not reimburse the Advisor for Operating Expenses that in the fiscal year then ended exceed the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Rule”)
for such year. Within 60 days after the end of each fiscal quarter, the Advisor will reimburse the Fund for any amounts by which the Operating Expenses exceeded the 2%/25% Rule for the 12 months then ended, unless a majority of the Independent
Directors determine, based on such unusual and non-recurring factors which they deem sufficient, that such excess was justified. Any such determination by the Independent Directors and the reasons supporting such determination shall be reflected in
the minutes of the meetings of the Board of Directors. Within 60 days after the end of any fiscal quarter of the Fund for which Operating Expenses (for the 12 months just ended) exceed the 2%/25% Rule, the Advisor shall send a written disclosure of
such fact to the Stockholders, together with an explanation of the factors the Independent Directors considered in arriving at the conclusion that such higher Operating Expenses were justified, if applicable. 
  
 11. Other Services. Should the Fund request that the
Advisor or any director, officer or employee thereof render services for the Fund other than set forth in Section 3, such services shall be separately compensated at such rates and in such amounts as are approved by the Independent Directors,
subject to the limitations contained in the Articles, and shall not be deemed to be services pursuant to the terms of this Agreement. 
  
 12. Other Activities of the Advisor. Nothing in this Agreement shall prevent the Advisor and its Affiliates from engaging in other
activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates. The Advisor, however, will devote
sufficient resources to the management of the Fund to discharge its duties under Section 3 hereof. This Agreement shall not limit or restrict the right of any director, officer, manager, member or employee of the Advisor or its Affiliates to engage
in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Fund is a participant, also render advice and service to each and every other participant therein. If the
Sponsor, the Advisor, or any Director, or Affiliates thereof, 
  

 - 15 - 

 have sponsored other investment programs with similar investment objectives which have investment funds available at the
same time as the Fund, it shall be the duty of the Board (including the Independent Directors) to adopt the method set forth in the Company’s registration statement on Form S-11 filed with the Securities and Exchange Commission or another
reasonable method by which investments are to be allocated to the competing investment entities and to use their best efforts to apply such method fairly to the Fund. 
  
 13. Relationship of the Advisor and the Fund. Nothing in this Agreement shall be construed to make the
Fund and the Advisor partners or joint venturers or impose any liability as such on either of them. 
  
 14. Term; Termination of Agreement. 
  
 a. Unless terminated in accordance with Section 14(b) hereof, this Agreement shall continue in force until the first anniversary of the
date hereof. Thereafter, this Agreement may be renewed for an unlimited number of successive one-year terms upon the mutual agreement of the parties. Prior to the Company agreeing to renew this Agreement for any additional one-year term, the Board
shall evaluate the performance of the Advisor in accordance with Section 9.1 of the Articles. Each such renewal shall be for a term of no more than one year. The failure of the parties to renew this agreement prior to the expiration of its term
shall constitute a termination of this Agreement.  
  
 b. This Agreement will automatically terminate upon Listing. This agreement also may be terminated: 
  
 i. for any reason by the Company or the Advisor, upon 60 days written notice to the other party; provided that, if termination is by the
Company, then such termination must be approved by a majority of the Independent Directors; 
  
 ii. by the Company or the Operating Partnership at any time for Cause; or 
  
 iii. by the Advisor at any time for Good Reason. 
  
 c. Upon termination, the Fund shall promptly pay to the
Advisor any fees then due and payable and any reimbursable expenses incurred as of the Termination Date. Notwithstanding the termination of this Agreement, Sections 8, 9, 10 and 11 shall continue in full force and effect until all amounts payable
thereunder to the Advisor are paid in full. 
  
 d. The Advisor shall promptly upon termination: 
  
 i. pay over to the Fund all money collected and held for the account of the Fund pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled;

  
 ii. deliver to the Board a full accounting,
including a statement showing all payments collected by it and a statement of all money held by the Advisor, covering the period following the date of the last accounting furnished to the Board; 
  

 - 16 - 

 iii. deliver to the Fund all assets, including all Real Estate Assets, and documents of
the Fund then in the custody of the Advisor; and 
  
 iv. cooperate with the Fund to provide an orderly management transition. 
  
 15. Indemnification by the Company. The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective officers, directors, manager, stockholders, partners,
members and employees, to the fullest extent permitted by the laws of the State of Maryland and the Articles, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees. Notwithstanding the foregoing, the Advisor shall not be entitled to indemnification or be held harmless pursuant to this Section 15 for any activity which the Advisor shall be required to indemnify or hold harmless
the Company pursuant to Section 16. Any indemnification of the Advisor may be paid only out of the net assets of the Company and not by Stockholders. 
  
 16. Indemnification by Advisor. The Advisor shall indemnify and hold harmless the Company from contract or other liability, claims,
damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the
Advisor’s bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of its duties, but the Advisor shall not be held responsible for any action of the Board in following or declining to follow any
advice or recommendation given by the Advisor. 
  
 17.
Voting of Shares and Partnership Units. The Advisor shall not vote any Shares or Partnership Units (as defined in the OP Partnership Agreement) it now owns, or hereafter acquires, in any vote of the Stockholders for the election of
Directors or in any vote of the Stockholders or the Limited Partners (as defined in the OP Partnership Agreement) regarding the approval or termination of any contract with the Advisor or any of its Affiliates, including this Agreement. 

 
 18. Notices. Any notice required or permitted to be
given or made to a party under this Agreement shall be in writing and shall be deemed given or made when delivered if delivered in person, sent by first class United States mail, by overnight delivery or via facsimile to such party at the address of
such party set forth below or such other address of which such party shall notify the other parties in writing. Notwithstanding the foregoing, a party may elect to deliver any such notice by E-mail, or by any other electronic means, in which case
such communication shall be deemed given or made one day after being sent. 
  

			
	 To the Company, the Operating
	  	 
	 Partnership, or the Board:
	  	Paladin Realty Income Properties, Inc.
	 	  	10990 Wilshire Blvd.

  

 - 17 - 

  

			
	 	  	Suite 500
	 	  	Los Angeles, CA 90024
		
	 To the Advisor:
	  	Paladin Realty Advisors, LLC
	 	  	10990 Wilshire Blvd.
	 	  	Suite 500
	 	  	 Los Angeles, CA 90024

  
 19.
Assignment to an Affiliate. This Agreement may be assigned by the Advisor to an Affiliate of the Advisor only with the approval of a majority of the Board (including a majority of the Independent Directors). The Advisor may assign
any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company or the Operating Partnership without the consent of the Advisor, except in the case of
an assignment by the Company or the Operating Partnership to a successor to all of the assets, rights and obligations of the Company or the Operating Partnership, respectively, in which case such successor shall be bound hereunder and by the terms
of said assignment in the same manner as the Company and the Operating Partnership are bound by this Agreement. 
  
 20. Modification. This Agreement shall not be changed, modified, terminated or discharged, in whole or in part, except by an
instrument in writing signed by each of the parties hereto, or their respective successors or assigns. 
  
 21. Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 
  
 22. Construction. The provisions of this Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of California without regard to the principles of conflicts of laws thereof. 
  
 23. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 
  
 24. Waivers. Neither the failure nor any delay on the
part of a party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise
of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 
  

 - 18 - 

 25. Number and 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. 
  
 26. Headings The headings contained in this Agreement are for convenience only, do not form a part of
this Agreement and are not to be used in the construction or interpretation hereof. 
  
 27. Execution in 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. 
  
 28. Name. Paladin Realty Partners, LLC, an Affiliate of the Advisor, has a proprietary interest in the name “Paladin.” Accordingly, and in recognition of this right, if at any time the Fund ceases to retain
the Advisor or one of its Affiliates to perform the services of the Advisor under this Agreement, the Fund will cease to conduct business under or use the name “Paladin” or any variation or diminutive thereof and each of the Company and
the Operating Partnership shall use its best efforts to change their respective names (and the names of any of their subsidiaries) to a name that does not contain the name “Paladin” or any other word or words that might, in the sole
discretion of the Advisor, be susceptible of indication of some form of relationship between the Fund and the Advisor or any Affiliate thereof. Consistent with the foregoing, the parties acknowledge and agree that the Advisor or one or more of its
Affiliates has organized or sponsored, and intends to continue to organize and sponsor, other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “Paladin” as a part of
their name, all without the need for any consent (and without the right to object thereto) by the Company or the Operating Partnership. 
  

 - 19 - 

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

					
	 PALADIN REALTY INCOME
 PROPERTIES,
INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	 PALADIN REALTY INCOME
 PROPERTIES,
L.P.

		
	 By:
	 	 Paladin Realty Income Properties, Inc.,
 its general partner

			
	 	 	By:	 	  

			
	 	 	Name:	 	  

			
	 	 	Title:	 	  

	
	PALADIN REALTY ADVISORS, LLC
		
	 By:
	 	  

	 Name:
	 	  

	 Title:Employment Agreement

 EXHIBIT 10.6 
  
 CONTRACT FOR EMPLOYMENT 
  
 FOR 
  
 ORC INTERNATIONAL LTD. 
  
 (the “Company”) 
  
 Angel Corner House 
  
 1 Islington High Street

  
 London, England 
  

	1.	Parties 

  
 This agreement is made between the Company and Richard Cornelius, 3 Mayfield, Forty Foot Road, Leatherhead, Surrey, KT228RS 
  

	2.	State Date and Duration 

  
 This agreement is made this 12th day of December, 2001. Your employment shall continue indefinitely subject to termination in accordance with Clauses 11, 17 and 18 of this agreement. November 7, 1983 will be used as the date to determine continuity of service.

  

	3.	Job Title and Responsibilities 

  
 Your job title is Deputy Managing Director, O.R.C. International Ltd. You are also a member of the Company’s “Worldwide Managing Board”.
Your duties and this appointment may be performed by you solely or jointly with whomsoever the Company may appoint. Your current duties are the growth and profitability of O.R.C. International Ltd. You are responsible to Managing Director or his
designee from time to time. Unless otherwise expressly stated in this agreement all consents and authorizations which you are required to obtain from the Company shall be given by the Managing Director on behalf of the Company or such other person
as the Company may specify or the Managing Director may delegate to from time to time. 
  
 The Company is fast growing and flexibility is important. You shall therefore be required to undertake such other duties as the Company specifies and which are consistent with your position within the Company.

  
 The Company reserves the right to require that you do not
perform any duties or attend the Company’s premises during any period of suspension or whilst you are under notice of termination of your employment provided that you continue to be paid the salary and benefits to which you are entitled under
this agreement. 

	4.	Normal Place of Work 

  
 Your primary place of work will be at Angel Corner House, 1 Islington High Street, London, England. The Company reserves the right to change your normal
place of work to any place within the North and South Circular Road of London. You will be given at least one month’s notice of any such change. 
  
 Your duties will involve travel to clients’ locations. You may be required to travel anywhere within the UK, Europe and the US as is necessary for
the proper performance of your duties. Should it prove necessary that you work outside the UK for more than one month, the terms of this agreement will be reviewed. 
  

	5.	Whole Time and Attention 

  
 During your employment with the Company you shall devote your best efforts to promoting the Company’s business and may not, without the prior written
consent of the Company which will normally not be given and subject to any terms and conditions the Company may reasonably impose, engage whether directly or indirectly in any other business or employment. 
  
 During your normal hours of work you shall devote your whole time and
attention to your duties for the Company and shall not be engaged in any other activities without the Company’s prior written consent. 
  
 Notwithstanding the above, you may hold units of an unauthorized unit trust up to 5% of the issued securities of any class of shares in any company whose
shares are listed on a recognized stock exchange including shares in respect of which dealing takes place in the Alternative Investment Market or the International Stock Exchange of the UK and Republic of Ireland Limited. 
  

	6.	Confidential Information 

  
 During the course of your employment with the Company you are likely to have access to secret or confidential information regarding the affairs of the
Company. Group companies (“Group” company being as defined in section 53(i) of the Companies Act of 1989) and its or their clients, customers and business associates, including without limitation, information concerning the Company’s
survey methodology, survey plans, products, market surveys or reports, technical operations, inventions, processes, compilations of names and addresses of clients, methods of distribution, customers, trade secrets, business budgets and financial
status (“Confidential Information”). 
  
 During the
course of your employment and after its termination you shall not use (save for the benefit of the Company or any Group company and in the proper performance of your duties) and you shall not disclose, divulge or communicate directly or indirectly
to any third party any Confidential Information without the Company’s prior written consent. 
  

 2 

 The term Confidential Information shall not include information which is already in the public domain
otherwise than by unauthorized disclosure or which you are ordered to disclose by a Court of competent jurisdiction. 
  

	7.	Normal Working Hours 

  
 You are required to work a minimum of 36 1⁄4 hours per week. Your normal hours of work are between 9:15 a.m. and 5:30 p.m. Monday to Friday inclusive
of a one hour unpaid break for lunch. 
  
 The nature of your
position is such that you are required to work such additional hours as are necessary for the proper performance of your duties without additional pay. 
  
 You hereby agree to opt out of Regulation 4(1) of the Working Time Regulations 1998, although you may terminate such opt out at any time by giving the
Company not less than three months written notice. 
  

	8.	Salary 

  
 Your salary is £91,000 (ninety one thousand pounds) sterling gross per year which will accrue on a daily basis. This will be paid at the end of each
month, after deduction of tax, social security contributions and agreed deductions in equal installments in arrears in accordance with the Company’s procedures from time to time. 
  
 Your salary will be reviewed upwards in accordance with the Company’s procedures from time to time. Currently salaries
are reviewed annually each January. Any such change will be notified to you in writing by no later than the first salary payment at the higher rate. You are also eligible to participate in any incentive compensation program that may be developed for
the Company. 
  

	9.	Expenses 

  
 The Company shall reimburse you for all expenses reasonably and properly incurred by you in the proper performance of your duties in accordance with the
Company’s expenses policy as amended from time to time. Such reimbursement will be made within one month of such expenses being incurred provided that such vouchers, receipts or other evidence of such expenses having been incurred are produced
as the Company may from time to time reasonably require. 
  
 If
the Company advances to you any sums in respect of expenses to be incurred such sums are the property of the Company. You are required to repay the outstanding balance of any such advance against which expenses claims have 
  

 3 

 not been properly submitted within one month of the date on which such sums are advanced to you. If you
do not repay such outstanding sums, the Company is hereby irrevocably authorized to deduct the same from any payment of salary due to you under Clause 8 above, or any money owed to you by the Company on or after termination of your employment.

  

	10.	Holiday 

  
 (a) Entitlement 
  
 The Company’s holiday year is the calendar year. In addition to Statutory and Bank Holidays (currently New Year’s Day, Good Friday, Easter
Monday, May Day, Spring Bank Holiday, Summer Bank Holiday, Christmas Day and Boxing Day) your holiday entitlement per year is 30 days. 
  
 During your first and last calendar years of employment with the Company your holiday entitlement will be calculated at the rate of one twelfth of your
annual entitlement for each complete calendar month of employment with the Company in the calendar year. 
  
 (b) Procedures 
  
 You must give at least two weeks notice of proposed holidays to the Company. You may not take holidays without the prior approval of the Company.

  
 (c) Termination of Employment 
  
 The Company will compensate you for any accrued but untaken holiday
entitlement outstanding on termination of your employment at the rate of 1/365th of your gross annual basic salary
for each accrued but untaken day of holiday. 
  
 If you have
taken in excess of your accrued holiday entitlement on termination of your employment you must repay to the Company the excess holiday pay paid to you at the rate of 1/365th of your gross annual basic salary for each day’s holiday taken in excess of your entitlement. If you do not repay such excess holiday pay the Company is
hereby irrevocably authorized to deduct such amount from any money owed to you by the Company on or about termination of your employment. 
  

	11.	Sickness 

  
 (a) Notification 
  
 If you are absent from work due to sickness or injury you must inform your Manager as soon as possible on your first day of absence. You must keep your
Manager regularly informed of the reasons for and expected duration of your absence. 
  

 4 

 If you are absent for more than 7 consecutive days (including weekends and holidays) you must provide
your Manager with a medical certification on the 8th day and thereafter weekly. 
  
 Immediately following your return to work after any period of absence due to
sickness or injury you will be required to complete a self certification form. This information is required to calculate your entitlement to Statutory Sick Pay (“SSP”) and such self certification forms will be retained in the
Company’s records. 
  
 Any unauthorized absence must be
explained and failure to do so may be treated as a disciplinary matter. 
  
 (b) Sick Pay 
  
 If you are
absent from work due to sickness or injury and comply with the requirements of Sub clause 11(a) above regarding notification you will be paid SSP and/or Company Sick Pay (“CSP”) as set out below. 
  

	 	(i)	Statutory Sick Pay 

  
 You will be paid SSP in accordance with the provisions of the Social Security contributions and Benefits Act 1992 as amended from time to time. For SSP
purposes your qualifying days are Monday to Friday inclusive. 
  

	 	(ii)	Company Sick Pay 

  
 The Company reserves the right to require you to be examined at any time by an independent doctor of its choice and at its expense and to cease payment of
your basic salary forthwith if it is advised by that doctor that you are fit to return to work. Failure to attend any examination without reasonable cause shall entitle the Company to cease payment of your basic salary forthwith. 
  
 If you are absent from work due to ill health for a period or periods
exceeding six months in any period of twelve months the Company is entitled to terminate your employment by giving you your statutory minimum notice save that where the Company has provided you with permanent health insurance benefit no termination
will be effected pending a decision from insurers in respect of the benefit or if benefit is being provided by insurers and the insurers confirm that termination will not affect the provision of benefit. You shall have no claim for damages or
otherwise against the Company in respect of such termination. 
  
 If your absence is due to injury or actionable nuisance or negligence caused by a third party or third parties all payments made to you under this clause by the Company to the extent that compensation is recoverable from any third party (or
would be but for this clause) constitute a loan to you from the Company and shall be repaid by you when and to the extent that the Company requests such repayment. 
  

 5 

	12.	Pension and Retirement 

  
 You are eligible to participate in the Company’s pension scheme, subject to the terms of such scheme as amended from time to time. These are personal
portable pensions run by Norwich Union. Currently the Company makes monthly contributions at the rate of 5% of your gross basic monthly salary into the Company pension scheme. 
  
 There is no contracting out certification (issued under the Pension Schemes Act 1993) in force in respect of your
employment. 
  
 The normal retirement age for your employment is
65 years. The Company reserves the right to depart from this retirement age if the Company considers that this is appropriate. 
  

	13.	Private Medical Insurance 

  
 You are currently entitled at your request within seven days from your starting date to participate in the Company’s Private Medical Insurance scheme
in accordance with the Company’s policy as amended time to time. The Company reserves the right to vary, amend or remove this benefit at its sole discretion. This program is fully paid for by the Company and covers the Employee, Employee’s
spouse and family members. 
  

	14.	Life Insurance 

  
 The Company will provide you with life insurance coverage in accordance with the Company’s policy as amended from time to time. The Company reserves
the right to vary, amend or remove this benefit at its sole discretion. The death-in-service benefit equals four times salary. 
  

	15.	Company Car 

  

	 	(a)	The Company shall provide the Employee with the use of a motor car (“the Company car”) in accordance with the Company’s car policy. The annual car allowance is
£6,300 (car or cash equivalent). The Company car shall be replaced by the Company in accordance with the Company’s car policy from time to time. The Company shall be responsible for payment of the insurance and road fund tax and all fuel
(except fuel used outside the UK), running and maintenance expense in respect of the Company car (“the standing and running costs”). The Employee shall be responsible for ensuring that the Company car is at all times kept in good condition
and shall report any accident and any endorsement to his license within 7 days of occurrence. 

  

	 	(b)	The Company car shall at all times be the property of the Company (subject to any hire, purchase hiring, leasing, lease purchase or other similar agreement which the Company may
have entered into in respect of 

  

 6 

	 	    	the Company car) and shall be registered in the name of the Company and shall be returned to the Company forthwith upon the termination of the Employee’s employment.

  

	 	(c)	The Employer shall be entitled to require the Employee to return the Company car to the Employer if the Employee is prevented from working by reason of illness or injury or similar
incapacity or by industrial action for a period exceeding 28 days. 

  

	16.	Intellectual Property 

  
 (a) Copyright 
  
 The Copyright, Designs and Patents Act 1988 governs the ownership of copyright in literary, artistic and other works created by you in the course of your
employment. In relation to all such copyright the Company (as your employer) is the owner. 
  
 If during your employment you at any time (whether alone or with any other person, whether during the course of your normal duties or other duties specifically assigned to you, and whether or not during normal working
hours) originate any design (whether registrable or not) or other work in which copyright may subsist, you shall immediately disclose it to the Company and, at the request and expense of the Company, you shall do all things necessary and desirable
to substantiate the rights of the Company in relation to that design. 
  
 (b) Inventions 
  
 The Patents Act 1977 provides that,
subject to certain conditions, an invention made by you (as the Company’s employee) will belong to the Company if it is made in the course of your normal duties or in the course of other duties specifically assigned to you. 
  
 If at any time during your employment (whether or not whilst engaged in the
performance of your duties) you discover, make or conceive, either alone or in conjunction with others, any invention, discovery or design which relates to the business of the Company (an “Invention”) you shall: 
  

	 	(i)	immediately communicate or explain in writing full particulars of the invention to the Company, whether you consider the Invention to be, by virtue of Section 39 of the Patents Act
1977, your own property or the property of the Company; and 

  

	 	(ii)	where the Invention is the property of the Company, at the request and expense of the Company, supply all such information, data and drawings as may be necessary to enable the
Company to exploit the Invention to its best advantage and shall execute and do all such documents and things as may be necessary or desirable for 

  

 7 

	 	    	obtaining patent or similar protection for the same in such part or parts of the world as may be specified by the Company and for vesting the same in the Company or as it may
direct. 

  
 (c) Moral Rights 
  
 You hereby irrevocably waive any rights you may have under Chapter IV of
Part I of the Copyright Designs and Patents Act 1988 (“Moral Rights”) any foreign law assigning corresponding rights in respect of any acts of the Company or done with the Company’s authority in relation to all copyright material
generated by you. 
  
 Rights and obligations under this Clause 16
in respect of all intellectual property (including any copyright, Inventions, or Moral Rights) shall continue in force after the termination of your employment and shall be binding upon your representatives. 
  

	17.	Notice of Termination of Employment 

  
 Unless previously terminated in accordance with clause 18 your employment shall continue until terminated by either party giving to the other not less
than twelve months notice in writing. 
  
 Your employment will
terminate automatically on your 65th birthday which is the normal retirement date for the employees of the Company.

  
 The Company reserves the right in its sole and absolute
discretion to terminate your employment with immediate effect at any time by making a payment in lieu of notice equivalent to salary for the notice period or, where notice has been given for the balance of the notice period. The payment shall
consist solely of an amount equivalent to salary in lieu of notice, and shall not include any payment in respect of any bonus or other contractual benefits. For the purposes of this clause salary shall be calculated at the rate in force at the date
of termination. 
  
 Any payment in lieu of notice paid pursuant
to clause 17.3 will be paid less tax and National Insurance as required by law. 
  

	18.	Termination of Employment without Notice 

  
 Notwithstanding any other provision of this agreement the Company shall (without prejudice to the other rights and remedies of the Company) be entitled to
terminate your employment without notice and without pay in lieu of notice in appropriate circumstances including where you: 
  

	 	(a)	commit any serious or persistent breach of your obligations under this agreement; or 

  

	 	(b)	refuse or neglect to comply with any lawful order or direction given by the Company; or 

  

 8 

	 	(c)	refuse or neglect to comply or give the Company reasonable grounds for believing you have refused or neglected to comply with the Company’s policies on sexual harassment and
drink and drugs; 

  

	 	(d)	are guilty or the Company has reasonable grounds to believe you are guilty of any gross negligence, default or misconduct in connection with or affecting the business of the Company
or any Group company; or 

  

	 	(e)	conduct yourself in a manner prejudicial to the Company or any Group company; or 

  

	 	(f)	are convicted of an offense or give the Company reasonable grounds for believing you are guilty of an offense (other than an offense which in the opinion of the Company does not
affect your position within the Company); or 

  

	 	(g)	become of unsound mind pursuant to any statute relating to mental health. 

  
 You shall have no claim against the Company for damages by reason of termination of your employment by the Company in accordance with these Sub clauses.

  

	19.	Garden Leave 

  
 At any time after you or the Company has given notice to the other to terminate the employment in accordance with the terms of this Agreement or after you
have purported to terminate the employment without giving full notice and the Company does not accept such resignation on such terms, the Company may require that during any such notice period or any part or parts of such notice period you do not
enter or attend the premises of the Company (“Garden Leave”), and during any period of garden leave you must not do any of the following: 
  

	 	(a)	undertake any work for any third party whether paid or unpaid and whether as an employee or otherwise; 

  

	 	(b)	have any contact or communication with any client, customer or supplier of the Company; 

  

	 	(c)	have any contact or communication with any employee, officer, director, agent or consult of the Company; 

  
 During any period of Garden Leave the Company may require you to do any of the following: 
  

	 	(a)	perform special projects or perform duties not within your normal duties or perform some but not all of your normal duties; 

  

 9 

	 	(b)	keep the Company informed of your whereabouts so that you can be contacted if the need arises for you to perform any duties under the Clause above. 

  
 During any period of Garden Leave you will remain an employee of the Company
and the employment shall continue (notwithstanding that you have resigned as a board director or from any offices of the Company and you are not entitled to become employed or engaged by any other company, partnership, person or entity in any
capacity (whether paid or unpaid). You will continue to be paid salary and be provided with contractual benefits during any period of Garden Leave in the usual way (save that you will not be entitled to receive any bonus or commission during or in
respect of such periods). 
  

	20.	Restrictive Covenants 

  
 20.1 You hereby agree that for a period of 6 months following termination of your employment you will not directly or indirectly whether on your own
account or jointly in association with or on behalf of any third party: in the Restricted Area and in competition with the Company or any relevant Group company: 
  

	 	(a)	solicit, canvas or endeavor to obtain business relating to the market research business from any person, firm or corporation who was a client or customer or potential client of the
Company or any Group company at the date of termination of your employment and with whom you were in the habit or dealing in the 12 months preceding termination of your employment; 

  

	 	(b)	deal with, accept orders or business relating to the market research business from any person, firm or corporation who was a client or customer or potential client or customer of
the Company or any Group company at the date of termination of your employment and with whom you were in the habit of dealing in the 12 months preceding termination of your employment; 

  

	 	(c)	solicit or entice away or procure employment for, or endeavour to solicit or entice away or procure employment for, any employee of the Company or any Group company in an executive,
managerial, or sales capacity employed by the Company or any Group company at the date of termination of your employment and with whom you had material contact by virtue of your employment; 

  

	 	(d)	use, recollect or seek to duplicate any customer base or subscription based used by the Company or any Group company. 

  

 10 

	 	20.2	At any time after termination represent yourself as being in any way connected with or interested in the business of the Company or any Relevant Group company.

  

	 	20.3	Each of the obligations contained in clause 20.1 above is an entirely separate and independent restriction on you, despite the fact that it may be contained in the same phrase or
sub-clause, and if any part is found to be unenforceable the remainder will remain valid and enforceable. The restrictions are considered by you and the Company to be reasonable, but in the event that any such restriction is held to be void or
ineffective but would be valid and effective if some part thereof were deleted such restriction shall apply with such modification as may be necessary to make it valid and effective. 

  

	 	20.4	For the purposes of this clause the following definitions apply: 

  

	 	    	“Restricted Area” means (insert area covered by the business) (anywhere in [the world][Europe][United Kingdom] in which the Company undertakes [or is planning to
undertake] a significant business operation [or is planning to undertake] a significant business operation at the date of termination [anywhere within a [insert number] mile radius of any office of the Company; 

  

	 	    	“Relevant Group Company” means any group company for which you have worked or performed services or in which you have held office during the twelve months immediately
prior to the termination (and if applicable their predecessors in business during such twelve month period); 

  

	 	    	“Termination” means the termination of employment. 

  

	21.	Service of Notice 

  
 Any notice required to be given under this agreement shall be in writing and shall be deemed served if it is personally delivered to or sent by first
class registered post to the last known address of the other party. Any notice so posted shall be deemed served upon the second day following that on which it was posted. 
  
 These provisions are considered reasonable by the parties in all circumstances at date hereof. 
  

 11 

	22.	Return of Company Property 

  
 Upon termination of your employment you shall immediately return to the Company any and property including without limitation any Confidential Information
(as defined in Clause 6 of this Agreement) files, reports, analyses, charts, records, materials, drawings, computer hardware or software, keys, credit cards, petrol cards, etc. and any copies of the same, belonging or relating to the Company or any
Group company or its or their business associates which you made or received during the course of your employment with the Company and which are in your possession or under your control. 
  

	23.	Disciplinary Procedure 

  
 You are referred to the Company’s Disciplinary Policy as set out in the Company’s staff handbook as amended from time to time, the terms of
which do not form part of your contract of employment. 
  

	24.	Grievance Procedure 

  
 If you have a grievance relating to your employment you should raise the matter initially with your manager. When stating any grievance you may be
accompanied by a fellow employee of your choice. You may be required to put any such grievance in writing. 
  

	25.	Collective Agreements 

  
 There are no collective agreements which directly affect the terms and conditions of your employment. 
  

	26.	Whole Agreement 

  
 This agreement constitutes the whole agreement between you and the Company and supersedes and cancels any prior agreement between you and the Company.

  

	27.	Governing Laws 

  
 This agreement shall be governed by the laws of England and Wales. 
  

 12 

 In witness whereof the Parties hereto have signed this agreement the day and year written. 
  

					
	 Signed by, for and on behalf
 Of O.R.C. International Ltd.
	  	 /s/ John F. Short

	 	 12/12/01

			
	 Signed by the Employee
	  	 /s/ Richard I. Cornelius

	 	 12/12/01

			
	 In the presence of
	  	 /s/ James C. Burke

	 	 12/12/01

  

 13

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