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Exhibit
10.2
Execution
Copy
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this “ Management
Agreement ”) is dated as of August 10, 2007 and
entered into by and between Net Lease Strategic Assets Fund L.P., a
Delaware limited partnership (the “
Partnership ”), and Lexington Realty
Advisors, Inc., a Delaware corporation (the “ Asset
Manager ”).
WHEREAS, the Partnership owns or will own net-leased real
estate assets in the United States of America (collectively, the
“ Qualified Assets ”);
and
WHEREAS, the Partnership desires to have the Asset Manager
undertake the duties and responsibilities hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the
Partnership and the Asset Manager agree as follows:
1.
Definitions . Unless otherwise defined
herein, capitalized terms used in this Management Agreement
shall have the meanings ascribed to such terms in that certain
Limited Partnership Agreement of the Partnership dated as of
even date herewith among The Lexington Master Limited
Partnership, a Delaware limited partnership (“
LMLP ”), as a limited partner of the
Partnership, LMLP GP LLC, a Delaware limited liability company
(“ LMLP GP ”, and together with
LMLP, collectively, the “ LMLP Partners
”), as a general partner of the Partnership, Inland
American (Net Lease) Sub, LLC, a Delaware limited liability
company (“ Inland ”), as a
limited partner of the Partnership (as such limited
partnership agreement may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the
terms thereof, the “ Partnership
Agreement ”).
2.
Obligations of the Asset Manager . The Asset
Manager shall perform on behalf of the Partnership those
duties and responsibilities of the General Partner in respect
of the evaluation of Proposed Qualified Assets and the
acquisition of Approved Qualified Assets as contemplated by
Section 3.6 of the Partnership Agreement, and in respect of
the management of the Qualified Assets that may be delegated
to the Asset Manager pursuant to Section 3.1(c) of the
Partnership Agreement. With respect to the
management of the Qualified Assets, the Asset Manager shall
perform the duties and responsibilities described in
Appendix 1 attached hereto and made a part
hereof. In performing its duties and
responsibilities, the Asset Manager shall not, and shall have
no power or authority to, (i) bind the Partnership, or to
enter into any contract or other agreement in the name of or
on behalf of the Partnership, unless specifically authorized
in writing to do so by the Partnership, (ii) amend, cancel or
alter any of the organizational documents of the Partnership,
or (iii) do any act not authorized pursuant to this Management
Agreement, unless specifically authorized to do so in writing
by the Partnership or specifically authorized to do so by the
Partnership Agreement.
3.
No Partnership or Joint Venture . The
Partnership and the Asset Manager are not partners or joint
venturers with each other and the terms of this Management
Agreement shall not be construed so as to make them such
partners or joint venturers or impose any liability as such on
either of them.
4.
Limitation on the Asset Manager’s Liability
. The Asset Manager and its directors, officers and
employees shall not be liable, responsible or accountable in
damages or otherwise to the Partnership or either Partner for
(a) any loss or liability arising out of any act or omission
by the Asset Manager so long as any such act or omission did
not constitute (i) a breach of this Management Agreement or of
the Partnership Agreement and, if capable of cure, is not
cured within fifteen (15) days after notice thereof is
delivered to the Asset Manager by the Partnership, (ii) gross
negligence or willful misconduct or (iii) fraud or bad faith
on the part of the Asset Manager or (b) any acts or omissions
by third parties selected by the Asset Manager in good faith
and with reasonable care to perform services for the
Partnership.
5.
Partnership’s Professional Services
. The Partnership may independently retain legal
counsel and accountants to provide such legal and accounting
advice and services as the Partnership shall deem necessary or
appropriate.
6. Expenses
of the Asset Manager and the Partnership.
(a) The
Asset Manager shall pay, without reimbursement by the
Partnership (i) the salaries of all of its officers and
regular employees and all employment expenses related thereto,
(ii) general overhead expenses, (iii) record-keeping expenses,
(iv) the costs of the office space and facilities which it
requires, (v) the costs of such office space and facilities as
the Partnership reasonably requires, (vi) all out of pocket
costs and expenses incurred in connection with the management
of the Qualified Assets and the Partnership (other than
reasonable and customary costs and expenses of Third Parties
retained in connection with the management of the Qualified
Assets and the Partnership) and (vii) costs and expenses
relating to Acquisition Activities as set forth in and limited
by Section 3.6(f) of the Agreement.
(b) The
Asset Manager shall either pay directly from a Partnership
account or pay from its own account and be reimbursed by the
Partnership for the following Partnership costs and expenses
that are incurred by the Partnership or by the Asset Manager
in the performance of its duties under this Management
Agreement or the Partnership Agreement:
(i) Permitted
Expenses;
(ii) subject
to Section 3.6(f) of the Partnership Agreement, all reasonable
and customary costs and expenses relating to Third Parties
retained in connection with a Proposed Qualified Asset or an
Approved Qualified Asset as provided in Section 3.6(f) of the
Partnership Agreement.
The
Asset Manager shall not pay or be reimbursed by the
Partnership for any other cost or expense.
(c) Except
as expressly otherwise provided in this Management Agreement
or the Partnership Agreement, the Partnership shall directly
pay all of its own expenses, and without limiting the
generality of the foregoing, it is specifically agreed that
the following expenses shall be borne directly by the
Partnership and not be paid by the Asset Manager:
(i) interest,
principal or any other cost of money borrowed by the
Partnership;
(ii) fees
and expenses paid to independent contractors, appraisers,
consultants and other agents retained by or on behalf of the
Partnership and expenses directly connected with the
financing, refinancing and disposition of real estate
interests or other assets (including insurance premiums, legal
services, brokerage and sales commissions, maintenance, repair
and improvement costs and expenses related to the Qualified
Assets); and
(iii) insurance
as required by the Partnership.
7.
Indemnification by the Partnership . The Partnership
shall indemnify, defend and hold harmless the Asset Manager
and its directors, officers and employees (the “
Asset Manager Indemnitees ”) by reason
of any act or omission or alleged act or omission arising out
of the Asset Manager’s activities as the Asset Manager
on behalf of the Partnership, against personal liability,
claims, losses, damages and expenses for which the Asset
Manager Indemnitees have not otherwise been reimbursed by
insurance proceeds or otherwise (including attorneys’
fees, judgments, fines and amounts paid in settlement)
actually and reasonably incurred by the Asset Manager
Indemnitees in connection with such action, suit or proceeding
and any appeal therefrom, unless the Asset Manager Indemnitees
(A) acted fraudulently, in bad faith or with gross negligence
or willful misconduct or (B) by such act or failure to act
breached any covenant contained in this Management Agreement
and, if capable of cure, is not cured within fifteen (15) days
after notice thereof from the Partnership. The
indemnification provided under this Section 7 shall (x)
be in addition to, and shall not limit or diminish, the
coverage of the Asset Manager under any insurance maintained
by the Partnership and (y) apply to any legal action, suit or
proceeding commenced by a Partner or in the right of a Partner
or the Partnership. The indemnification provided under this
Section 7 shall be a contract right and shall include
the right to be reimbursed for reasonable expenses incurred by
the Asset Manager within thirty (30) days after such expenses
are incurred.
8.
Terms and Termination . This Management
Agreement shall remain in force until terminated in accordance
herewith. This Management Agreement may be
terminated by the Partnership at any time and for any reason
immediately upon written notice of termination from the
Partnership to the Asset Manager. This Management
Agreement shall automatically expire upon (i) the removal of
LMLP GP as the General Partner of the Partnership or (ii) the
completion of dissolution or winding up of the Partnership
pursuant to Section 9.2 of the Partnership
Agreement. This Management Agreement shall also
terminate upon any of the following:
(a) The
Asset Manager shall be adjudged bankrupt or insolvent by a
court of competent jurisdiction or an order shall be made by a
court of competent jurisdiction for the appointment of a
receiver, liquidator or trustee of the Asset Manager or of all
or substantially all of its assets by reason of the foregoing,
or approving any petition filed against the Asset Manager for
reorganization, and such adjudication or order shall remain in
force and unstayed for a period of 30 days.
(b) The
Asset Manager shall institute proceedings for voluntary
bankruptcy or shall file a petition seeking reorganization
under the Federal Bankruptcy Code, for relief under any law
for relief of debtors, or shall consent to the appointment of
a receiver for
itself
or for all or substantially all of its assets, or shall make a
general assignment for the benefit of its creditors, or shall
admit in writing its inability to pay its debts generally as
they become due.
(c) With
respect to any Qualified Asset, upon the sale or disposition
thereof.
9.
Action Upon Termination . After the
expiration or termination of this Management Agreement, the
Asset Manager shall:
(a) Promptly
pay to the Partnership or any person legally entitled thereto
all monies collected and held for the account of the
Partnership pursuant to this Management Agreement, after
deducting any compensation and reimbursement for its expenses
which it is then entitled to receive pursuant to the terms of
this Management Agreement.
(b) Within
90 days deliver to the Partnership a full account, including a
statement showing all amounts collected by the Asset Manager
and a statement of all monies disbursed by it, covering the
period following the date of the last accounting furnished to
the Partnership.
(c) Within
ten (10) days deliver to the Partnership all assets and
documents of the Partnership then in the custody of the Asset
Manager.
Upon
termination of this Management Agreement, the Asset Manager
shall be entitled to receive payment for any expenses and fees
(including without limitation the Property Management Fee and
the Partnership Management Fee which shall be prorated on a
daily basis) as to which at the time of termination it has not
yet received payment or reimbursement, as applicable, pursuant
to Section 6 and Section 10 hereof, less any
damages to the Partnership caused by the Asset
Manager.
10.
Management Fees .
(a)
Property Management Fee . For all services
hereunder (including leasing and leasing supervision), the
Partnership shall pay to the Asset Manager (or its designee)
an annual Property Management Fee (“ Property
Management Fee ”) equal to the sum of (x) three
percent (3%) of actual gross revenues for the fiscal year (or
applicable portion thereof) derived from Qualified Assets,
provided the lease encumbering the Qualified Asset provides
for full recovery of the Property Management Fee from the
tenant (“ Gross Revenues ”), plus
(y) on Qualified Assets where the lease does not provide for
full recovery of the Property Management Fee from the tenant,
the amount recoverable for the fiscal year (or applicable
portion thereof) from the tenants of such Qualified Assets for
property management expenses under such leases (“
Recoverable Amounts ”), payable
monthly.
(b)
Partnership Management Fee . The Partnership
shall pay to the Asset Manager an annual Partnership
Management Fee (“ Partnership Management
Fee ”) equal to Inland’s Percentage
Interest multiplied by three hundred seventy five thousandths
of a percent (0.375%) of the Equity Capital for a fiscal year
(pro rated for partial years), payable monthly and adjusted as
provided herein. Within thirty (30) days of the
Partnership’s receipt of
the
annual reports described in Section 4.3 of the
Partnership Agreement for a fiscal year, the Asset Manager
shall provide to the Partnership a written statement of
reconciliation setting forth (x) the Equity Capital for
such fiscal year (or partial year) and the Partnership
Management Fee payable to the Asset Manager in connection
therewith, pursuant to this Agreement, (y) the Partnership
Management Fee already paid by the Partnership to the Asset
Manager during such fiscal year (or partial year), and
(z) either the amount owed to the Asset Manager by the
Partnership (which shall be the excess, if any, of the
Partnership Management Fee payable to the Asset Manager for
such fiscal year (or partial year) pursuant to this Agreement
over the Partnership Management Fee actually paid by the
Partnership to the Asset Manager for such fiscal year (or
partial year)) or the amount owed to the Partnership by the
Asset Manager (which shall be the excess, if any, of the
Partnership Management Fee actually paid by the Partnership to
the Asset Manager for such fiscal year (or partial year) over
the Partnership Management Fee payable to the Asset Manager
for such fiscal year pursuant to this
Agreement). The Asset Manager or the Partnership,
as the case may be, shall pay to the other the amount owed
pursuant to clause (z) above within five (5) Business Days of
the receipt by Inland of the written statement of
reconciliation described in this Section 10
.
(c)
Acquisition Fees . Upon the acquisition of
any Approved Qualified Asset by the Partnership or by an SP
Subsidiary (including any Approved Qualified Asset contributed
in whole or in part by LMLP to the Partnership), Inland shall
pay the Asset Manager an acquisition fee equal to the sum of
the gross purchase price of such acquired Approved Qualified
Asset multiplied by 0.425%.
11.
Assignment . The Asset Manager may not
assign or delegate any of its rights or obligations hereunder,
except the Asset Manager may assign or delegate any of its
rights or obligations hereunder to Lexington Contributions
Inc., a Delaware corporation.
12.
Notices . Unless otherwise specifically
provided herein, any notice or other communication required
herein shall be given in accordance with the Partnership
Agreement.
13.
Amendments and Waivers . No amendment,
modification, termination or waiver of any provision of this
Management Agreement shall in any event be effective without
the written concurrence of the Partnership. Any
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was
given.
14.
Governing Law . THIS MANAGEMENT AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
15.
Entire Agreement . This Management Agreement
embodies the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior agreements,
written and oral, relating to the subject matter
hereof.
16.
Severability . In case any provision in or
obligation under this Management Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
17.
No Waiver, etc . No waiver by the
Partnership of any default hereunder shall be effective unless
such waiver is in writing and executed by the Partnership nor
shall any such written waiver operate as a waiver of any other
default or of the same default on a subsequent
occasion. Furthermore, the Partnership shall not,
by any act, delay, omission or otherwise, be deemed to have
waived any of its rights, privileges and/or remedies
hereunder, and the failure or forbearance of the Partnership
on one occasion shall not prejudice or be deemed or considered
to have prejudiced its right to demand such compliance on any
other occasion.
18.
No Third Party Beneficiary . The Asset
Manager is not a third party beneficiary of the Partnership
Agreement and shall have no rights or remedies thereunder, and
the parties to the Partnership Agreement can amend, modify or
terminate the Partnership Agreement at any time without the
Asset Manager’s consent and without any liability to the
Asset Manager.
19.
Jurisdiction; Venue . Each party hereto hereby
irrevocably and unconditionally (a) agrees that any action,
suit or other legal proceeding brought in connection with or
relating to this Agreement or any matter contemplated hereby
shall be brought exclusively in a court of competent
jurisdicti
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