Exhibit 10.5 (i)
AMENDMENT TO MANAGEMENT AGREEMENT
AMENDMENT as of January 1, 1996 to the Management Agreement dated as of
January 1, 1995, between ASSET INVESTORS CORPORATION, a Maryland corporation
(the "Company"), and FINANCIAL ASSET MANAGEMENT CORPORATION, a Delaware
corporation (the "Manager").
RECITALS
A. The Company and the Manager entered into the Management Agreement
pursuant to which the Manager performs the duties and responsibilities set forth
in the Management Agreement, subject to the supervision of the Company's Board
of Directors; and
B. The Company desires to engage the Manager to perform the duties
and responsibilities set forth in the Management Agreement on the terms set
forth in the Management Agreement and this Amendment and the Manager desires
to be so engaged for an additional one-year term.
NOW, THEREFORE, in consideration for the mutual agreements herein set
forth, the parties hereto agree as follows:
1. Section 9(b) of the Management Agreement is amended
and restated hereby as follows:
(b) Incentive Compensation. The Company shall pay the Manager
as incentive compensation a yearly fee, in an amount equal to 20% of
the dollar amount, if any, by which the Company's GAAP Net Income for
each fiscal year, exceeds an amount equal to the Stockholders Equity
multiplied by the Ten Year U.S. Treasury Rate plus one percentage
point. If the GAAP Net Income of the Company is less than the amount
equal to the Stockholders Equity multiplied by the Ten Year U.S.
Treasury Rate plus one percentage point, the Manager shall refund to
the Company the net year-to-date incentive compensation previously paid
to the Manager during the current fiscal year, if any.
The quarterly payment of such amount by the Company to the
Manager, or refund to the Company from the Manager in the event the
incentive compensation for any year-to-date period is less than the
incentive compensation computed and paid to the Manager as of the
previous year-to-date period, shall be computed each fiscal quarter on
a cumulative year-to-date basis in an amount equal to (A) 20% of the
dollar amount, if any, by which the year-to-date GAAP Net Income of the
Company applicable to such fiscal quarter, exceeds an amount equal to
the Stockholders Equity for such year-to-date period multiplied by the
year-to-date Ten Year U.S. Treasury Rate plus one percentage point
multiplied by the number of quarters during such year-to-date period
divided by four; and (B) minus the year-to-
date incentive compensation for the prior fiscal quarter. If the
year-to-date incentive compensation computed through such fiscal
quarter of the Company is less than the net year-to-date incentive
compensation computed for the previous year-to-date fiscal quarter,
the Manager shall refund to the Company the lesser of (i) the
difference between the net year-to-date incentive compensation
computed for the previous year-to-date fiscal quarter and the net
year-to-date incentive compensation computed for the current fiscal
quarter or (ii) the net year-to-date incentive compensation
computed for the previous year-to-date fiscal quarter, if any. Such
quarterly payment shall be paid to the Manager, or refunded to the
Company, as provided by, and subject to adjustment under,
Section 9(e) of this Agreement. A sample calculation of the incentive
compensation is shown in Exhibit A.
2. The first paragraph of Section 9(d)((iii) of the
Management Agreement is amended and restated hereby as follows:
(iii) for each Series of Non-Agency MBS Bonds issued or owned
by the Company or any subsidiary of the Company with respect to the
first class of such Series, the lesser of (A) $3,500 annually and
(B) an amount equal to $3,500 multiplied by the percentage ownership
of the Company or such subsidiary of the Company in such Non-Agency MBS
Bonds, and for each additional class of such Series (C) $625 annually
and (D) an annual amount equal to $625 multiplied by the percentage
ownership of the Company or such subsidiary of the Company in such
Non-Agency MBS Bond.
3. Section 9(f) is hereby added as follows:
(f) Certain Expenses. If the Company requests any
third party to render services to the Company or provide the Company
with any data or information, other than those services and data
required to be rendered and delivered by the Manager hereunder, such
costs and expenses charged by such third parties, shall be paid by the
Company.
4. Section 16 of the Management Agreement is amended and
restated hereby as follows:
"This Agreement shall continue in force until December 31,
1996 unless otherwise renewed or extended."
5. Except as amended hereby, the Management Agreement shall
remain in full force and effect. In the event of a conflict between this
Amendment and the Management Agreement, the terms of this Amendment shall
control.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
[CORPORATE SEAL] ASSET INVESTORS CORPORATION
ATTEST:
By:
---------------------------
Name: Spencer I. Browne
- -------------------------- Title: President and Chief
Daniel S. Japha, Secretary Executive Officer
FINANCIAL ASSET MANAGEMENT
CORPORATION
By:
---------------------------
Name: Kevin J. Nystrom
Title: Vice President and Chief
Accounting Officer
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