You are here: Agreements > Management Facility Services Agreement > MANAGEMENT SERVICES AGREEMENT

SITE SEARCH
AGREEMENTS / CONTRACTS
(optional)
(optional)
Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Management Services Agreement

Management Facility Services Agreement

Legal Documents
You are currently viewing:

 This Management Facility Services Agreement involves

KINGSWAY FINANCIAL SERVICES INC | DGI-BNSF Corp | TRT LeaseCo, LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
 

Title: MANAGEMENT SERVICES AGREEMENT
Governing Law: New York     Date: 7/20/2016
Industry: Insurance (Prop. and Casualty)     Law Firm: McDermott Will     Sector: Financial

join now
50 of the Top 250 law firms use our Products every day

Exhibit 10.2

 

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (this “ Agreement ”) is entered into as of July 14, 2016 by and between TRT LeaseCo, LLC, a Delaware limited liability (the “ Company ”) and DGI-BNSF Corp., a Delaware corporation (the “ Service Provider ”). The Company and the Service Provider are sometimes referred to collectively herein as the “ Parties ” and individually as a “ Party ”.

PRELIMINARY STATEMENT

The Company desires to receive certain financial and management services from the Service Provider, and the Service Provider desires to perform such services for the Company, in each case on the terms and subject to the conditions set forth in this Agreement.

AGREEMENTS

Intending to be legally bound, the Parties hereby agree as follows:

1. Appointment of the Service Provider.   On the terms and conditions set forth in this Agreement, the Company hereby appoints the Service Provider, and the Service Provider hereby accepts its appointment, as a provider of certain financial and management services to the Company as described herein.

 

2. Scope of Services.   The Service Provider will render or cause to be rendered (either directly or by or through an Affiliate of Service Provider) the following financial and management services to the Company Group (as hereinafter defined): (i) the Service Provider will provide certain financial protections (the “ Guarantor Services ”) for the benefit of the Company Group by causing Terracap Management Inc. (“ Terracap ”) to act as the “Indemnitor” under that certain Indemnity and Guaranty Agreement, dated March 12, 2015, from Terracap in favor of Wells Fargo Bank Northwest, N.A., as trustee (the “ Indemnity and Guaranty Agreement ”), subject to Section 7 hereof; (ii) the Service Provider will provide personnel to serve as certain executive officers of CMC (as hereinafter defined) and its subsidiaries (including the Company) (the “ Executive Officer Services ”); (iii) the Service Provider will provide not less than two (2) individuals to serve as directors on the Company’s board of directors (the “ Director Services ”); and (iv) the Service Provider will provide asset management services to the Company Group as the Company may reasonably request from time to time, which services shall include, without limitation, day-to-day communication with the tenant and mortgage lender of the Subject Property (as hereinafter defined), management of the Subject Property, obtaining offers for and negotiating the sale or refinancing of the Subject Property, and obtaining agreement of tenants as to and negotiating restructuring or extension of leases relating to the Subject Property (the “ Asset Management Services ” and, collectively with the Guarantor Services, Executive Officer Services and Director Services, the “ Services ”). The Service Provider will use its reasonable best efforts to cause its employees and agents to provide the Company Group with the benefit of their special knowledge, skill and business expertise to the extent relevant to the business and affairs of the Company Group. The Service Provider and its officers, directors, managers, Affiliates, employees, controlling Persons, agents and representatives will devote so much of their time and efforts as reasonably necessary and appropriate to perform the Services.

 

3. Compensation; Defined Terms.   During the term of this Agreement and in consideration for the Services, the Company shall pay the Service Provider the fees set forth in this Section 3 (collectively, the “ Service Fees ”), which shall accrue interest free and shall be payable in full to the Service Provider upon, but not before, a Sale Transaction, Refinance Transaction, Lease Transaction or BNSF Transaction (as applicable). The following Services Fees will be paid to the Service provider from the Applicable Fee Amount (and solely from the Applicable Fee Amount) with respect to the Sale Transaction, Refinance Transaction, Lease Transaction or BNSF Transaction, as applicable:

 

(a)With respect to the Guarantor Services, an amount per calendar year equal to (x) 0.0025 multiplied by (y) the amount representing the average monthly balance of the Note (as defined below) outstanding as of the last calendar day of each month in such calendar year for so long as the Service Provider is rendering the Guarantor Services;

 

(b)With respect to the Executive Officer Services, an amount per calendar year equal to $1.00.

 

(c)With respect to the Director Services, an amount per calendar year equal to $1.00.

 

(d)With respect to the Asset Management Services, an amount equal to the remaining Applicable Fee Amount for the Sale Transaction, Refinance Transaction, Lease Transaction or BNSF Transaction (as applicable), after giving effect to the payments set forth in Sections 3(a) through 3(c) of this Agreement.

 

 


Exhibit 10.2

 

Services Fees for Asset Management Services with respect to any Sale Transaction shall be payable at the closing of such Sale Transaction. Services Fees for Asset Management Services with respect to any Refinance Transaction, Lease Transaction or BNSF Transaction shall be payable on a periodic basis (but not less than quarterly) following the closing of such Refinance Transaction, Lease Transaction or BNSF Transaction (as the case may be).

For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, in no event shall the aggregate amount of Service Fees due or payable hereunder exceed the total Applicable Fee Amount in respect of all Sale Transactions, Refinance Transactions, Lease Transactions and/or BNSF Transactions.

For purposes of this Agreement, the following terms shall have the following meanings:

Affiliate ” means, with respect to any Person, (a) any other Person that controls, is controlled by, or is under common control with such Person, and (b) any officer, director or shareholder of such Person. For purposes of this definition, the term “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Applicable Fee Amount ” shall mean either (i) in the case of a Sale Transaction, a one-time fee in an amount equal to: (w) 0.40 multiplied by (x) the Sale Amount less the Threshold Amount; (ii) in the case of a Refinance Transaction or a Lease Transaction, a periodic fee in an amount equal to: (y) 0.40 multiplied by (z) the Net Excess Cash Amount as of the date such fee is payable; or (iii) in the case of a BNSF Transaction, a periodic fee in an amount equal to: (y) the applicable BNSF Factor multiplied by (z) the Net Excess Cash Amount as of the date such fee is payable; provided , however , that the Applicable Fee Amount payable under each of the foregoing clauses (i), (ii) and (iii) shall be increased by any Loaned Amount (as defined in the Stockholders’ Agreement) if CRIC TRT Acquisition LLC has properly exercised its rights in Section 15(b) of the Stockholders’ Agreement.

BNSF Factor ” shall mean (a) 0.80 in the case of any BNSF Transaction that closes on or prior to the third (3 rd ) anniversary of the date hereof, (b) 0.60 in the case of any BNSF Transaction that closes on or prior to the fifth (5 th ) anniversary of the date hereof (but after the third (3 rd ) anniversary of the date hereof) or (c) 0.40 in the case of any BNSF Transaction that closes after the fifth (5 th ) anniversary of the date hereof. For purposes of this definition, a BNSF Transaction shall be deemed to have “closed” on the date on which the definitive document effectuating the applicable restructuring, modification or amendment is duly executed and delivered by all parties thereto and becomes effective.

BNSF Transaction ” shall mean any restructuring, modification or amendment of that certain Lease dated as of June 1, 2014, between the Company, as landlord, and BNSF Railway Company (f/k/a The Burlington Northern and Santa Fe Railway Company), as tenant, as the same has been amended, modified and supplemented.

CMC ” shall mean CMC Industries, Inc., a Texas corporation.

Company Group ” shall mean the Company, CMC and each subsidiary of CMC, collectively.

Company Group Responsible Party ” shall mean any of (i) KFS, (ii) any subsidiary of KFS other than members of the Company Group, and (iii) any director, manager or executive officer of KFS or any of its subsidiaries (including, without limitation, the Company Group); provided , however , that “Company Group Responsible Party” shall not include (A) any independent director or independent manager of any of the foregoing, (B) Leo Schwartz or Larry Krauss or (C) any Person appointed by Leo Schwartz or Larry Krauss.

Contribution and Liability Satisfaction Amount ” shall mean $1,500,000.00 plus the aggregate amount of any and all (without duplication) (i) capital contributions made to the Company Group by KFS or any of its Affiliates on or after the date of this Agreement for payment of franchise taxes and organizational expenses applicable to the Company Group, (ii) capital contributions made to the Company Group by KFS or any of its Affiliates on or after the date of this Agreement for any other purposes, and (iii) debt, liabilities or other obligations of the Company Group (including any such debt, liabilities or other obligations owed to KFS or any of its Affiliates, whether pursuant to the Tax Allocation Agreement or otherwise), excluding the mortgage loan evidenced by the Note and any obligations thereunder. In the event that the Contribution and Liability Satisfaction Amount is used to calculate Applicable Fee Amounts paid to the Service Provider more frequently than once annually in connection with a Refinance Transaction, a Lease Transaction or a BNSF Transaction, the Contribution and Liability Satisfaction Amount with respect to payments made at times other than the end of a fiscal year of the Company may include an amount equal to estimated taxes to be paid by the Company Group for such fiscal year, and the Contribution and Liability Satisfaction Amount with respect to the payment made at the end of such fiscal year shall be adjusted to reflect the difference between the actual taxes paid by the Company Group at the end of such fiscal year as compared with such estimated taxes (with a credit to the benefit of the Service Provider in the event that the aggregate estimated tax amount used to calculate the Contribution and Liability Satisfaction Amount

 

 


Exhibit 10.2

 

for any previous periods within such fiscal year is greater than the actual taxes for such fiscal year, and with a deduction to the Service Fees payable to Service Provider in the event that the aggregate estimated tax amount used to calculate the Contribution and Liability Satisfaction Amount for any previous periods within such fiscal year is less than the actual taxes for such fiscal year).

Deed of Trust ” shall mean that certain Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing Statement, dated March 12, 2015, from TRT LeaseCo, LLC, a Delaware limited liability company, to Malcolm Morris (as Deed of Trust Trustee) for the benefit of Wells Fargo Bank Northwest, N.A., as trustee.

KFS ” shall mean Kingsway Financial Services Inc., an Ontario corporation.

Lease Transaction ” shall mean a restructuring, extension, modification or amendment of any existing lease of the Subject Property or any portion thereof, or any new lease of the Subject Property, other than a BNSF Transaction.

Net Excess Cash Amount ” shall mean, as to any Refinance Transaction, Lease Transaction or BNSF Transaction, as of any given date, (i) the excess cash (net of any estimated tax liabilities or other reasonably anticipated expenses or obligations of the Company Group) of the Company Group resulting from such Refinance Transaction, Lease Transaction or BNSF Transaction (as applicable), less (ii) (X) any taxes triggered or incurred in connection with such Refinance Transaction, Lease Transaction or BNSF Transaction (as applicable) and (Y) any closing costs or transaction expenses (including reasonable expenses of outside professional advisers) related to such Refinance Transaction, Lease Transaction or BNSF Transaction (as applicable) payable to parties other than the Company or any of its Affiliates, less (iii) the applicable Threshold Amount.

Note ” shall mean that certain 4.07% Senior Secured Note (No. R-1), Due May 15, 2034, with an initial principal face amount of $182,666,908.56, made by TRT LeaseCo, LLC, a Delaware limited liability company, in favor of Wells Fargo Bank Northwest, N.A., as trustee.

Note Satisfaction ” shall mean the full performance and satisfaction of any and all obligations of TRT LeaseCo, LLC under, and the termination of, the Note.

Note Satisfaction Amount ” shall mean, as of any given time, the aggregate amount required to be paid under the Note at such time in order to effectuate the Note Satisfaction.

Person ” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, other business entity, or governmental agency or authority.

Refinance Transaction ” shall mean a refinancing or restructuring of the mortgage loan evidenced by the Note and secured by the Deed of Trust after which the Company continues to own the Subject Property.

Sale Amount ” shall mean, with respect to any Sale Transaction, the actual proceeds of such sale, net of (i) any taxes triggered or incurred in connection therewith and (ii) any closing costs or transaction expenses (including reasonable expenses of outside professional advisers) related to such Sale Transaction payable to parties other than the Company or any of its Affiliates.

Sale Transaction ” shall mean a sale of the Subject Property or of the beneficial ownership interest therein.

Stockholders’ Agreement ” shall mean that certain Stockholders’ Agreement dated as of the date hereof, by and among CMC, CMC Acquisition, LLC, a Delaware limited liability company, CRIC TRT Acquisition LLC, a Delaware limited liability company, and each other Person tha


continue to document