Exhibit 10.6
AMENDMENT NO. 1 TO ADVISORY AGREEMENT
THIS AMENDMENT NO. 1 (the "Amendment"), dated as of July 1, 2008, to the
Advisory Agreement of Corporate Property Associates 17-Global Incorporated
- --------- ("CPA:17"), is among CPA: 17, CPA 17 Limited Partnership (the
"Operating Partnership") and Carey Asset Management Corp. (the "Advisor").
WITNESSETH:
WHEREAS, CPA: 17, the Operating Partnership and the Advisor are parties to the
Advisory Agreement, dated as of November 12, 2007 (the "Advisory Agreement");
WHEREAS, W.P. Carey & 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, CPA: 17 desires to retain the services of the Manager with respect to
CPA: 17's real properties and real estate-related assets located outside the
United States;
WHEREAS, on the date hereof, CPA: 17 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 CPA: 17 and the Advisor to amend the Advisory Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, CPA: 17 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 for 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 CPA: 17's Average Invested
Assets during such 12-month period or 25% of CPA: 17's Adjusted Net Income over
the same 12-month period.
"Operating Expenses." All consolidated operating, general and
administrative expenses paid or incurred by CPA: 17, 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 CPA: 17's Shares and
Securities; (iv) Acquisition Expenses, real estate commissions on resale of
property and other expenses connected with the acquisition, disposition,
origination, ownership and operation of Investments, including the costs of
foreclosure, insurance premiums, legal services, brokerage and sales
commissions, maintenance, repair and improvement of property; (v) Acquisition
Fees payable to the Advisor or any other party; (vi) Subordinated Disposition
Fees payable to the Advisor or any other party under this Agreement and the
corresponding fees payable to the Manager under the Management Agreement or to
any other party; (vi) distributions paid by the Operating Partnership to the
Special General Partner under the agreement of
limited partnership of the Operating Partnership in respect of gains realized on
dispositions of Investments; (vii) amounts paid to effect a redemption or
repurchase of the special general partner interest held by the Special General
Partner pursuant to the agreement of limited partnership of the Operating
Partnership; and (viii) non-cash items, such as depreciation, amortization,
depletion, and additions to reserves for depreciation, amortization, depletion,
losses and bad debts. Notwithstanding anything herein to the contrary, Operating
Expenses shall include the Asset Management Fee and any Loan Refinancing Fee
and, solely for the purposes of determining compliance with the 2%/25%
Guidelines, distributions of profits and cash flow made by the Operating
Partnership to the Special General Partner pursuant to the agreement of limited
partnership of the Operating Partnership, other than distributions described in
clauses (vi) and (vii) of this definition.
(b) The following definitions are hereby added to the Advisory Agreement:
"Manager." W.P. Carey & Co. B.V., a Netherlands company.
"Management Agreement." The Asset Management Agreement, dated as of
July 1, 2008, between CPA: 17 and the Manager, as the same may be
amended from time to time.
2. Duties of the Advisor.
(a) CPA: 17 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
CPA: 17 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 CPA: 17 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(f) 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, CPA: 17 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 CPA: 17 under this
Agreement and the Management Agreement during the 12-month period
ending on the last day of any fiscal quarter of CPA: 17 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 CPA: 17
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 neither the Operating Partnership nor CPA: 17 shall be
liable for payment therefor. CPA: 17 may defer the payment or
distribution to the Advisor and the Special General Partner of fees,
expenses and distributions that would, if paid or distributed, cause
Operating Expenses during such 12-month period to exceed the foregoing
limitations; provided, however, that in determining which items shall
be paid and which may be deferred, priority will be given to the
payment of distributions to the Special General Partner over the
payment to the Advisor of amounts due under this Agreement.
(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 CPA: 17 for
any amounts expended by CPA: 17 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 CPA: 17 is reimbursed for such excess
expenses by the Manager, CPA: 17 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 17-GLOBAL
INCORPORATED
By: /s/ Thomas E. Zacharias
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CPA: 17 LIMITED PARTNERSHIP
By Corporate Property Associates
17-Global Limited, its general partner
By: /s/ Thomas E. Zacharias
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CAREY ASSET MANAGEMENT CORP.
By: /s/ Gordon F. DuGan
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