Exhibit 10.2
AMENDMENT NO. 1 TO ADVISORY AGREEMENT
THIS AMENDMENT NO. 1 (the "Amendment"), dated as of July 1, 2008, to the Amended
and Restated Advisory Agreement of Corporate Property Associates 15 Incorporated
(the "Company"), is between the Company and Xxxxx Asset Management Corp. (the
"Advisor").
WITNESSETH:
WHEREAS, the Company and the Advisor are parties to the Amended and Restated
Advisory Agreement of the Company, dated as of September 30, 2007 (the "Advisory
Agreement");
WHEREAS, W.P. Xxxxx & Co. B.V., a Netherlands company (the "Manager"), has been
formed and has established an office in The Netherlands for the purpose of
providing asset management and related services with respect to real properties
and other real estate-related assets located outside the United States;
WHEREAS, the Company desires to retain the services of the Manager with respect
to the Company's real properties and real estate-related assets located outside
the United States;
WHEREAS, on the date hereof, the Company is entering into a management agreement
with the Manager; and
WHEREAS, in order to give effect to the new management agreement, it is
necessary for the Company and the Advisor to amend the Advisory Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the Company and the Advisor agree as follows:
1. Definitions. (a) The following defined terms in the Advisory Agreement
shall be amended and restated in their entirety to read as follows:
"2%/25% Guidelines." The requirement, as provided in Section 13
hereof, that, in any 12-month period ending on the last day of any fiscal
quarter, Operating Expenses under this Agreement and the Management Agreement
not exceed the greater of two percent of the Company's Average Invested Assets
during such 12-month period or 25% of the Company's Adjusted Net Income over the
same 12-month period.
"Operating Expenses." All operating, general and administrative
expenses paid or incurred by the Company, as determined under GAAP, except the
following (insofar as they would otherwise be considered operating, general and
administrative expenses under GAAP): (i) interest and discounts and other cost
of borrowed money; (ii) taxes (including state and Federal income tax, property
taxes and assessments, franchise taxes and taxes of any other nature); (iii)
expenses of raising capital, including Organization and Offering Expenses,
printing, engraving, and other expenses, and taxes incurred in connection with
the issuance and distribution of the Company's Shares and Securities; (iv)
Acquisition Expenses, real estate commissions on resale of real estate interests
and other expenses connected with the acquisition, disposition, origination,
ownership and operation of real estate interests, mortgage loans, or other
property, including the costs of foreclosure, insurance premiums, legal
services, brokerage and sales commissions, maintenance, repair and improvement
of property; (v) Acquisition Fees; (vi) Subordinated Disposition Fees payable
under this Agreement and the corresponding fees payable to the Manager under the
Management Agreement or to any other party; (vi) non-cash items,
such as depreciation, amortization, depletion, and additions to reserves for
depreciation, amortization, depletion, losses and bad debts; (vii) Termination
Fees; (viii) Subordinated Incentive Fees; (ix) Asset Management Fees payable
under this Agreement and the corresponding fees payable under the Management
Agreement and (x) Loan Refinancing Fees payable under this Agreement and the
corresponding fees payable under the Management Agreement.
(b) The following definitions are hereby added to the Advisory Agreement:
"Manager." W.P. Xxxxx & Co. B.V., a Netherlands company.
"Management Agreement." The Asset Management Agreement, dated as
of July 1, 2008, between the Company and the Manager, as the same
may be amended from time to time.
2. Duties of the Advisor.
(a) The Company and the Advisor acknowledge and agree that, pursuant to
the Management Agreement, the Manager will have the day-to-day
responsibility to provide asset management and disposition services to
the Company with respect to Properties located outside the United
States and Loans secured by collateral located outside the United
States.
(b) The following shall be added as a new subsection (v) in Section 3 of
the Advisory Agreement:
"(v) Monitor the performance by the Manager of its duties under
the Management Agreement."
3. Authority of Advisor. The Advisor and the Company acknowledge and agree
that, for so long as the Manager adequately performs its obligation under
the Management Agreement, the Manager shall have the day-to-day authority
to provide the asset management and disposition services contemplated by
the Management Agreement with respect to non-U.S. Properties and Loans and
the Advisor shall not have such authority. However, if for any reason the
Manager is unable or unwilling to perform, or fails to perform, its
obligations under the Management Agreement, the Advisor shall be authorized
to perform such obligations.
4. Fees.
(a) During the term of the Management Agreement, no Asset Management Fees
shall be paid to the Advisor under Section 9(a) of the Advisory
Agreement with respect to Properties located outside the United States
and Loans secured by collateral outside the United States.
(b) During the term of the Management Agreement, no Subordinated
Disposition Fees shall be paid to the Advisor under Section 9(g) of
the Advisory Agreement with respect to Properties located outside the
United States and Loans secured by collateral outside the United
States.
5. Expenses. During the term of the Management Agreement, the Company shall
have no obligation to reimburse the Advisor under Section 10 of the
Advisory Agreement for any expenses related to the management and
disposition of Properties located outside the United States and Loans
secured by collateral outside the United States.
6. Limitation on Expenses.
(a) Subsection 13(a) of the Advisory Agreement shall be amended and
restated in its entirety as follows:
(a) If the aggregate Operating Expenses of the Company under
this Agreement and the Management Agreement during the 12-month period
ending on the last day of any fiscal quarter of the Company exceed the
greater of (i) two percent of the Average Invested Assets during the
same 12-month period or (ii) 25% of the Adjusted Net Income of the
Company during the same 12-month period, then subject to paragraph (b)
of this Section 13, such excess amount shall be the sole
responsibility of the Advisor and the Company shall not be liable for
payment therefor.
(b) Subsection 13(c) of the Advisory Agreement shall be amended and
restated in its entirety as follows:
(c) Within 60 days after the end of any twelve-month period
referred to in paragraph (a), the Advisor shall reimburse the Company
for any amounts expended by the Company in such twelve-month period
that exceeds the limitations provided in paragraph (a) unless the
Independent Directors determine that such excess expenses are
justified, as provided in paragraph (b), and provided the aggregate
Operating Expenses under this Agreement and the Management Agreement
for such later quarter would not thereby exceed the Two Percent/25%
Guidelines. To the extent the Company is reimbursed for such excess
expenses by the Manager, the Company shall not also be entitled to
reimbursement for such excess from the Advisor.
7. Effect of Amendment
This Amendment shall be effective and the Advisory Agreement shall be deemed to
be modified and amended in accordance herewith upon the receipt by the parties
hereto of counterparts hereof executed and delivered on behalf of each of the
parties hereto. Except as provided in this Amendment, the Advisory Agreement
shall remain in full force and effect in accordance with its terms.
8. Governing Law.
THIS AMENDMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISIONS OR RULES THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION.
9. Counterparts.
This Amendment may be executed by the parties hereto in separate counterparts
(including by means of facsimile), each of which counterparts will for all
purposes be deemed to be an original, but all of which counterparts shall
together constitute one and the same instrument.
10. Capitalized Terms.
Capitalized terms used but not defined in this Amendment shall have the meanings
given to them in the Advisory Agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first
written above.
CORPORATE PROPERTY ASSOCIATES 15
INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxx
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XXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxx X. XxXxx
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