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Exhibit 10.1
ASSET MANAGEMENT AGREEMENT
THIS
ASSET MANAGEMENT AGREEMENT, dated as of September 2, 2008, is
between
CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED, a Maryland
corporation (the
"Company"), and W.P. CAREY & Co. B.V., a Netherlands company
(the "Manager").
W I T N E S S E T H:
WHEREAS, the Company intends to qualify as a REIT (as defined
below), and
to invest its funds in investments permitted by the terms of any
prospectus
pursuant to which it raised equity capital and Sections 856 through
860 of the
Code (as defined below);
WHEREAS, the Company desires to avail itself of the experience,
sources of
information, and assistance of, and certain facilities available
to, the Manager
with respect to disposition opportunities and asset management, for
properties
located outside of the United States, and to have the Manager
undertake the
duties and responsibilities hereinafter set forth, on behalf of,
and subject to
the supervision of the Board of Directors of the Company, all as
provided
herein; and
WHEREAS, the Manager is willing to render such services, subject to
the
supervision of the Board of Directors, on the terms and conditions
hereinafter
set forth;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree
as follows:
1.
DEFINITIONS.
As used in this
Agreement, the following terms have the
definitions hereinafter indicated:
Acquisition Expense.
Acquisition Expense as defined under the
Advisory Agreement.
Acquisition Fee. The
Acquisition Fee as defined under the Advisory
Agreement.
Adjusted Invested Assets. The average during any period of
the
aggregate historical cost, or to the extent available for a
particular
asset, the most recent Appraised Value, of the Investment Assets of
the
Company, before accumulated reserves for depreciation or bad
debt
allowances or other similar non-cash reserves, computed (unless
otherwise
specified) by taking the average of such values at the end of each
month
during such period.
Adjusted Investor Capital. As of any date, the Initial
Investor
Capital reduced by any Redemptions, other than Redemptions intended
to
qualify as a liquidity event for purposes of this Agreement, and by
any
other Distributions on or prior to such date determined by the
Board to be
from
Cash from Sales and Financings.
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Adjusted Net Income.
For any period, the total revenues recognized in
such
period, less the total expenses recognized in such period
excluding
additions to reserves for depreciation and amortization, bad debts
or other
similar non-cash reserves, provided, however, if the Advisor
receives a
Subordinated Incentive Fee, Adjusted Net Income for purposes of
calculating
total allowable Operating Expenses shall exclude any gain, losses
or
writedowns from the sale of the Company's assets that gave rise to
such
Subordinated Incentive Fee.
Advisor. The Company's
external advisor. As
of the date of this
Agreement, the Advisor is Carey Asset Management Corp.
Advisory Agreement.
The Advisory Agreement, dated as of September 30,
2007, between the Company and the Advisor, as the same may be
amended,
supplemented, extended and renewed, and any successor advisory
agreement.
Affiliate. An
Affiliate of another Person shall include any of the
following: (i) any Person directly or indirectly owning,
controlling, or
holding, with power to vote ten percent or more of the outstanding
voting
securities of such other Person; (ii) any Person ten percent or
more of
whose outstanding voting securities are directly or indirectly
owned,
controlled, or held, with power to vote, by such other Person;
(iii) any
Person directly or indirectly controlling, controlled by, or under
common
control with such other Person; (iv) any executive officer,
director,
trustee or general partner of such other Person; or (v) any legal
entity
for
which such Person acts as an executive officer, director, trustee
or
general partner.
Agreement. This Asset
Management Agreement.
Appraised Value. Value
according to an appraisal made by an
Independent Appraiser, which may take into consideration any factor
deemed
appropriate by such Independent Appraiser, including, but not
limited to,
the
terms and conditions of any lease of the relevant property, the
quality
of
any lessee's credit and the conditions of the credit markets.
The
Appraised Value may be greater than the construction cost or
the
replacement cost of the property. For purposes of the definition
of
Adjusted Invested Assets, Appraised Value shall not include the
initial
appraisal of any property in connection with the acquisition of
that
property.
Articles of Incorporation. Articles of Incorporation of the
Company
under the General Corporation Law of Maryland, as amended from time
to
time, pursuant to which the Company is organized.
Asset Management Fee.
The Asset Management Fee as defined in Section
9(a)
hereof.
Average Invested Assets. The average during any period of
the
aggregate book value of the assets of the Company invested,
directly or
indirectly, in Properties and in Loans, before deducting reserves
for
depreciation, bad debts, impairments, amortization and all other
similar
non-cash reserves, computed by taking the average of such values at
the end
of
each month during such period.
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Board or Board of Directors. The Board of Directors of the
Company.
Bylaws. The bylaws of
the Company.
Cash from Financings. Net cash proceeds realized by the Company
from
the
financing of Investment Assets or the refinancing of any
Company
indebtedness secured by real estate located outside the United
States.
Cash from Sales. Net cash proceeds realized by the Company from
the
sale, exchange or other disposition of any of its assets located
outside
the
United States after deduction of all expenses incurred in
connection
therewith. Cash from Sales shall not include Cash from
Financings.
Cash from Sales and Financings. The total sum of Cash from Sales
and
Cash
from Financings.
Cause. With respect to the termination of this Agreement,
fraud,
criminal conduct, willful misconduct or willful or negligent breach
of
fiduciary duty by the Manager that, in each case, is determined by
a
majority of the Independent Directors to be materially adverse to
the
Company, or a breach of a material term or condition of this
Agreement by
the
Manager and the Manager has not cured such breach within 30 days
of
written notice thereof or, in the case of any breach that cannot be
cured
within 30 days by reasonable effort, has not taken all necessary
action
within a reasonable time period to cure such breach.
Code. Internal Revenue
Code of 1986, as amended.
Company. Corporate
Property Associates 14 Incorporated, a corporation
organized under the laws of the State of Maryland.
Competitive Real Estate Commission. The real estate or
brokerage
commission paid for the purchase or sale of a property that is
reasonable,
customary and competitive in light of the size, type and location
of the
property.
Contract Sales Price.
The total consideration received by the Company
for
the sale of Properties and Loans.
Cumulative Return. For the period for which the calculation is
being
made, the percentage resulting from dividing (A) the total
Distributions
for
such period (not including Distributions out of Cash from Sales
and
Financings), by (B) the product of (i) the average Adjusted
Investor
Capital for such period (calculated on a daily basis), and (ii) the
number
of
years (including fractions thereof) elapsed during such period.
Notwithstanding the foregoing, neither the Shares received by the
Manager
or
its Affiliates for any consideration other than cash, nor the
Distributions in respect of such Shares, shall be included in the
foregoing
calculation.
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Directors. The persons holding such office, as of any particular
time,
under the Articles of Incorporation, whether they be the directors
named
therein or additional or successor directors.
Distributions.
Distributions declared by the Board.
GAAP. Generally
accepted accounting principles in the United States.
Good Reason. With respect to the termination of this Agreement,
(i)
any
failure to obtain a satisfactory agreement from any successor to
the
Company to assume and agree to perform the Company's obligations
under this
Agreement; or (ii) any material breach of this Agreement of any
nature
whatsoever by the Company; provided that such breach (a) is of a
material
term
or condition of this Agreement and (b) the Company has not cured
such
breach within 30 days of written notice thereof or, in the case of
any
breach that cannot be cured within 30 days by reasonable effort,
has not
taken all necessary action within a reasonable time period to cure
such
breach.
Gross Offering Proceeds. The aggregate purchase price of
Shares sold
in
any Offering.
Independent Appraiser. A qualified appraiser of real estate as
determined by the Board, who is not affiliated, directly or
indirectly,
with
the Company, the Manager or their respective Affiliates. Membership
in
a
nationally recognized appraisal society such as the American
Institute of
Real
Estate Appraisers or the Society of Real Estate Appraisers shall
be
conclusive evidence of such qualification.
Independent Director.
A Director of the Company who meets the
criteria for an Independent Director specified in the Bylaws.
Individual. Any
natural person and those organizations treated as
natural persons in Section 542(a) of the Code.
Initial Closing Date.
The first date on which Shares were issued
pursuant to an Offering.
Initial Investor Capital. The total amount of capital invested
from
time
to time by Shareholders (computed at the Original Issue Price
per
Share), excluding any Shares received by the Manager, the Advisor
or their
respective Affiliates for any consideration other than cash.
Investment Asset. Any
Property, Loan or, subject to Section 4(b)
Other Permitted Investment Asset.
Loan Refinancing Fee.
The Loan Refinancing Fee as defined in Section
9(b)
hereof.
Loans. The notes and
other evidences of indebtedness or obligations
acquired or entered into by the Company as lender which are secured
or
collateralized by personal
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property, or fee or leasehold interests in real estate or other
assets, in
each
case located outside the United States, including but not limited
to
first or subordinate mortgage loans, construction loans,
development loans,
loans secured by capital stock or any other assets or form of
equity
interest and any other type of loan or financial arrangement, such
as
providing or arranging for letters of credit, providing guarantees
of
obligations to third parties, or providing commitments for loans.
The term
"Loans" shall not include leases, which are not recognized as
leases for
Federal income tax reporting purposes.
Manager. W.P. Carey
& Co. B.V., a company organized under the laws of
The
Netherlands.
Market Value. The value calculated by multiplying the total number
of
outstanding Shares by the average closing price of the Shares over
the 30
trading days beginning 180 calendar days after the Shares are first
listed
on a
national security exchange or included for quotation on Nasdaq, as
the
case
may be.
Nasdaq. The national
automated quotation system operated by the
National Association of Securities Dealers, Inc.
Offering. The offering
of Shares pursuant to a Prospectus.
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 Advisor under the Advisory Agreement, or to any
other party;
(vii) non-cash items, such as depreciation, amortization,
depletion, and
additions to reserves for depreciation, amortization, depletion,
losses and
bad
debts; (viii) Termination Fees; (ix) Subordinated Incentive Fees;
(x)
Asset Management Fees payable under this Agreement and the
corresponding
fees
payable under the Advisory Agreement and (xi) Loan Refinancing
Fees
payable under this Agreement and the corresponding fees payable
under the
Advisory Agreement.
Organization and Offering Expenses. Organization and Offering
Expenses as defined under the Advisory Agreement.
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Original Issue Price. For any share issued in an Offering, the
price
at
which such Share was initially offered to the public by the
Company,
regardless of whether selling commissions were paid in connection
with the
purchase of such Shares from the Company.
Other Permitted Investment Asset. An asset, other than cash,
cash
equivalents, short term bonds, auction rate securities and similar
short
term
investments, acquired by the Company for investment purposes that
is
not
a Loan or a Property but that is attributable to an investment
or
activities of the Company outside the United States and is
consistent with
the
investment objectives and policies of the Company.
Person. An Individual, corporation, partnership, joint venture,
association, company, trust, bank, or other entity, or government
or any
agency or political subdivision of a government.
Preferred Return. A Cumulative Return of six percent computed from
the
Initial Closing Date through the date as of which such amount is
being
calculated.
Property or Properties. The Company's partial or entire interest
in
real
property (including leasehold interests) located outside the
United
States and personal or mixed property connected therewith. An
investment
which obligates the Company to acquire a Property will be treated
as a
Property for purposes of this Agreement.
Property Management Fee. A fee for property management services
rendered by the Advisor or its Affiliates in connection with assets
of the
Company acquired directly or through foreclosure.
Prospectus. Any prospectus pursuant to which the Company offers
Shares
in a
public offering, as the same may at any time and from time to time
be
amended or supplemented after the effective date of the
registration
statement in which it is included.
Redemptions. An amount
determined by multiplying the number of Shares
redeemed by the Original Issue Price.
REIT. A real estate
investment trust, as defined in Sections 856-860
of
the Code.
Securities. Any stock, shares (other than currently outstanding
Shares
and
subsequently issued Shares), 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 certificate of interest,
shares or
participation in temporary or interim certificates for receipts
(or,
guarantees of, or warrants, options or rights to subscribe to,
purchase or
acquire any of the foregoing), which subsequently may be issued by
the
Company.
Shareholders. Those
Persons who at the time any calculation hereunder
is
to be made are shown as holders of record of Shares on the books
and
records of the Company.
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Shares. All of the
shares of common stock of the Company, $.001 par
value, and any other shares of common stock of the Company.
Sponsor. W.P. Carey & Co. LLC and any other 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 any such person. Sponsor does not
include a
person whose only relationship to the Company is that of an
independent
property manager and whose only compensation is as such. Sponsor
also does
not
include wholly independent third parties such as attorneys,
accountants
and
underwriters whose only compensation is for professional
services.
Subordinated Acquisition Fee. The Subordinated Acquisition Fee
as
defined under the Advisory Agreement.
Subordinated Disposition Fee. The Subordinated Disposition Fee
as
defined in Section 9(d) hereof.
Subordinated Incentive Fee. The Subordinated Incentive Fee as
defined
under the Advisory Agreement.
Termination Date. The
effective date of any termination of this
Agreement.
Termination Fee. The
Termination Fee as defined under the Advisory
Agreement.
Two Percent/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, aggregate Operating Expenses under this Agreement and the
Advisory
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.
2.
APPOINTMENT.
The Company hereby
appoints the Manager to serve as
its manager on the terms and conditions set forth in this
Agreement, and the
Manager hereby accepts such appointment.
3.
DUTIES OF THE
MANAGER. During the term of this Agreement, the Manager
agrees, for and in consideration of the compensation set forth
below, to
supervise and direct the management and operation of the Properties
on behalf of
the Company and for the account of the Company, in an efficient and
satisfactory
manner consistent with like quality properties and at all times
maintain or
contract for systems and personnel sufficient to enable it to carry
out all of
its duties, obligations and functions under this Agreement. In
performance of
this undertaking, subject to the supervision of the Board and
consistent with
the provisions of the Articles of Incorporation and Bylaws of the
Company and
any Prospectus pursuant to which Shares are offered, the Manager
shall, with
respect to the Properties, either directly or by engaging an
Affiliate:
(a) demand, collect and receive (i) all rents, utility charges,
common
area charges, insurance charges, VAT payments and real estate and
personal
property tax and assessment charges, (ii) all other pass-through or
bill-back
charges, sums, costs or expenses of
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any nature whatsoever payable by tenants under the terms of any or
all of
the leases and any other agreements relating to all or any portion
of the
Properties, and (iii) all other revenues, issues and profits
accruing from the
Properties and any covenant calculations and insurance
certificates;
(b) calculate and administer rent calculations; maintain and
review
tenant covenant calculations; calculate and submit lender covenant
calculations;
and maintain letters of credits and security deposit
information;
(c) serve as primary contact to all tenants, field inquiries
and
requests; process easements and landlord lien waivers; manage third
party asset
managers and coordinate loan closings with third party asset
managers; inspect
at-risk properties, oversee inspections by lenders and third-party
property
inspection firms, and coordinate site visits and reports; ascertain
necessary
repair and monitor deferred maintenance, and ensure tenant
compliance; schedule
and coordinate tenant improvement projects and leasing efforts;
create expense
budgets for vacant properties as needed and pro forma expense
budgets for
at-risk properties; assist in executing redevelopment strategies;
provide or
source technical expertise when necessary relating to building
issues;
formulate, structure and oversee redevelopment projects; and meet
with tenants
to discuss potential needs;
(d) assess residual risk and long term viability on all
Properties;
perform credit analysis of tenant businesses and economic analysis
of holding
and selling Properties; maximize returns for the Company through
early renewals
or sales of Properties; manage bankruptcy process and monitor
credit quality of
portfolios; restructure leases as necessary; execute opportunistic
mortgage
refinancing; coordinate with annual third party appraisers in
valuation process;
and assess and manage market risks and risks associated with legal,
tax, and
corporate structure;
(e) supervise the performance of such ministerial and
administrative
functions as may be necessary in connection with the daily
operations of the
Properties, including but not limited to, overseeing and training
for
international compliance functions and staffing; overseeing and
ensuring tax,
legal, and regulatory compliance; ensuring timely completion of all
obligations
by tenants; and ensuring smooth integration of new investments into
asset
management platform;
(f) from time to time, or at any time reasonably requested by
the
Board or management of the Company, make reports of its performance
of services
to the Company under this Agreement, including the State of the
Assets and bi-
weekly status reports to be provided to the Company's
management;
(g) provide the Company with such accounting data and any other
information requested by the Company concerning the investment
activities of the
Company as shall be required to prepare and to file all periodic
financial
reports and returns required to be filed with the Securities and
Exchange
Commission and any other regulatory agency, including annual
financial
statements;
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(h) perform corporate secretarial work including, but not limited
to,
tracking of dates of required filings and annual general meetings
for
subsidiaries of the Company; obtaining and coordinating all
relevant materials
needed for audit and/or statutory filing, including approvals of
financial
information, auditor's representation letters, and minutes and
resolutions;
preparing financial analyses of recurring payments; maintaining
information for
compliance reports; organizing, planning, and presenting
International State of
the Assets meetings; and preparing International Asset Operating
Committee
Memos;
(i) do all things necessary to assure its ability to render the
services described in this Agreement;
(j) obtain for, or provide to, the Company such services as may
be
required in disposing of Investment Assets;
Notwithstanding anything to the contrary in this Agreement, the
Company
acknowledges that the Manager does not have an office in the United
States and
intends to conduct its business in a manner that will not cause
Manager to be
deemed to be engaged in a United States trade or business or have a
permanent
establishment in the United States.
4.
AUTHORITY OF
MANAGER.
(a) Pursuant to the terms of this Agreement (and subject to the
restrictions included in Paragraphs (b) of this Section 4 and in
Section 7
hereof), and subject to the continuing and exclusive authority of
the Board over
the management of the Company, the Board hereby delegates to the
Manager the
authority to: (1) arrange for refinancing, or assess changes in the
asset or
capital structure of, and dispose of or otherwise deal with,
Properties; (2)
enter into leases and service contracts for Properties, and perform
other
property level operations; (3) oversee non-affiliated property
managers and
other non-affiliated Persons who perform services for the Company;
(4) undertake
accounting and other record-keeping functions at the Property
level; and (5)
perform its duties set forth in Section 3.
(b) The Manager shall be authorized to perform the services
contemplated by this Agreement with respect to Investment Assets
other than
Properties and Loans; provided, however, that if fees for such
services will be
different from the fees contemplated by Section 9 of this
Agreement, such fees
shall be approved in advance by a majority of the Independent
Directors.
(c) The prior approval of the Board, including a majority of
the
Independent Directors and a majority of the Directors not
interested in the
transaction will be required for: (i) transactions that present
issues which
involve conflicts of interest for the Manager or an Affiliate
(other than
conflicts involving the payment of fees or the reimbursement of
expenses); (ii)
the lease of assets to the Sponsor, any Director, the Manager or
any Affiliate
of the Manager; (iii) any purchase or sale of an Investment Asset
from or to the
Manager or an Affiliate; and (iv) the retention of any Affiliate of
the Manager
to provide services to the Company not expressly contemplated by
this Agreement
and the terms of such services by such Affiliate. In addition, the
Manager shall
comply with any further approval requirements set forth in the
Bylaws.
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(d) The Board may, at any time upon the giving of notice to the
Manager, modify or revoke the authority set forth in this Section
4. If and to
the extent the Board so modifies or revokes the authority contained
herein, the
Manager shall hen
