Exhibit 10.2

 

AMENDED AND RESTATED ADVISORY AGREEMENT

 

THIS AMENDED AND RESTATED ADVISORY AGREEMENT, dated as of September 28, 2012, is
among CORPORATE PROPERTY ASSOCIATES 16 - GLOBAL INCORPORATED, a Maryland
corporation (“CPA: 16”), CPA 16 LLC, a Delaware limited liability company of
which CPA: 16 is a managing member (the “Operating LLC”), and CAREY ASSET
MANAGEMENT CORP., a Delaware corporation and wholly-owned subsidiary of W. P.
Carey Inc. (the “Advisor”).

 

WITNESSETH:

 

WHEREAS, CPA: 16 intends to continue to qualify as a REIT (as defined below) for
U.S. federal income tax purposes;

 

WHEREAS, CPA: 16 and the Advisor are parties to an existing advisory agreement,
dated as of May 2, 2011;

 

WHEREAS, W. P. Carey Inc., the parent of the Advisor, has succeeded to the
business and operations of W. P. Carey & Co. LLC and Corporate Property
Associates 15 Incorporated as a result of a series of transactions contemplated
by the Agreement and Plan of Merger, dated as of February 21, 2012, by and among
W. P. Carey Inc., W. P. Carey & Co. LLC, Corporate Property Associates 15
Incorporated and the other parties thereto (the “Merger”);

 

WHEREAS, in connection with the Merger, CPA: 16, Operating LLC and the Advisor
desire to amend and restate the existing advisory agreement in order that CPA:
16 and its subsidiaries, including the Operating LLC, may continue to avail
themselves of the experience, sources of information, advice and assistance of,
and certain facilities available to, the Advisor and the Advisor may continue to
undertake the duties and responsibilities hereinafter set forth, on behalf of,
and subject to the supervision of the Board of Directors of CPA: 16, all as
provided herein; and

 

WHEREAS, the Advisor is willing to continue 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:

 

“2%/25% Guidelines.”  The requirement, as provided for in Section 13 hereof,
that, in the 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 Average Invested Assets during such 12-month
period or 25% of CPA: 16’s Adjusted Net Income over the same 12-month period.

 

“Acquisition Expenses.”  To the extent not paid or to be paid by the seller,
lessee, borrower or any other party involved in the transaction, those expenses,
including but not limited to travel and communications expenses, the cost of
appraisals, title insurance, nonrefundable option payments on Investments not
acquired, legal fees and expenses, accounting fees and expenses and
miscellaneous expenses, related to selection, acquisition and origination of
Investments, whether or not a particular Investment ultimately is made. 
Acquisition Expenses shall not include Acquisition Fees.

 

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“Acquisition Fees.”  Any fee or commission paid by CPA: 16 or its subsidiaries
to the Advisor, or, with respect to Section 9(d), by CPA: 16 or its subsidiaries
to any party, in connection with the making of Investments, including, without
limitation, the purchase, development or construction of Properties.  A
Development Fee or Construction Fee paid to a Person not affiliated with the
Sponsor in connection with the actual development or construction of a project
after acquisition of the Property by CPA: 16 shall not be deemed an Acquisition
Fee.  Included in the computation of such fees or commissions shall be any real
estate commission, selection fee, Development Fee or Construction Fee (other
than as described above), non-recurring management fees, loan fees, points or
any fee of a similar nature, however designated.  Acquisition Fees shall not
include Acquisition Expenses.

 

“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 Investments of CPA:16, 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.

 

“Adjusted Net Income.”  For any period, the total consolidated revenues
recognized in such period by CPA: 16, less the total consolidated expenses of
CPA: 16 recognized in such period, excluding additions to reserves for
depreciation and amortization, bad debts or other similar non-cash reserves;
provided, however, that Adjusted Net Income for purposes of calculating total
allowable Operating Expenses under the 2%/25% Guidelines shall exclude any gain,
losses or writedowns from the sale of CPA: 16’s assets.

 

“Advisor.”  Carey Asset Management Corp, a corporation organized under the laws
of the State of Delaware and wholly-owned by W. P. Carey Inc.

 

“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 Advisory 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, current market and
property conditions, any unique attributes of the Investment units operations,
current and anticipated income and expense trends, the terms and conditions of
any lease of a relevant property, the quality of any lessee’s, borrower’s or
other counter-party’s credit and the conditions of the credit markets.  The
Appraised Value of a Property may be greater than the construction cost or the
replacement cost of the Property.

 

“Asset Management Fee.”  The Asset Management Fee as defined in
Section 9(a) hereof.

 

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“Average Invested Assets.”  The average during any period of the aggregate book
value of CPA: 16’s Investments, before deducting reserves for depreciation, bad
debts, impairments, amortization and all other non-cash reserves, computed by
taking the average of such values at the end of each month during such period.

 

“Average Market Value.”  The Total Investment Cost paid by CPA: 16 for an
Investment, less Acquisition Fees, provided that, if a later Appraised Value is
obtained for the Investment, that later Appraised Value, adjusted for other net
assets and liabilities that have economic value and are associated with that
Investment, shall become the Average Market Value for the Investment .

 

“Board or Board of Directors.”  The Board of Directors of CPA: 16.

 

“Bylaws.”  The bylaws of CPA: 16, as amended from time to time.

 

“Cash from Financings.”  Net cash proceeds realized by CPA: 16 from the
financing of Investments or the refinancing of indebtedness from time to time.

 

“Cash from Sales.”  Net cash proceeds realized by CPA: 16 from the sale,
exchange or other disposition of any of its Investments 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 Advisor that, in each case, is determined by a majority of the Independent
Directors to be materially adverse to CPA: 16, or a breach of a material term or
condition of this Agreement or the Guidelines by the Advisor and the Advisor 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.

 

“Charter.”  The charter of CPA: 16, as amended from time to time, pursuant to
which CPA: 16 is organized.

 

“Closing Date.”  The first date on which Shares were issued pursuant to an
Offering.

 

“Code.”  Internal Revenue Code of 1986, as amended.

 

“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.

 

“Construction Fee.”  A fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitation on a Property.

 

“Contract Purchase Price.”  The amount actually paid for, or allocated to, the
purchase, development, construction or improvement of an Investment or, in the
case of an originated Loan, the principal amount of such Loan, exclusive, in
each case, of Acquisition Fees and Acquisition Expenses.

 

“Contract Sales Price.”  The total consideration received by CPA: 16 for the
sale of Investments.

 

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“CPA: 16.” Corporate Property Associates 16 — Global Incorporated together with
its consolidated subsidiaries, including the Operating LLC, unless in the
context of a particular reference, it is clear that such reference refers to
Corporate Property Associates 16 — Global Incorporated excluding its
consolidated subsidiaries.  Unless the context otherwise requires, any reference
to financial measures of CPA: 16 shall be calculated by reference to the
consolidated financial statements of CPA: 16 and its subsidiaries, including,
without limitation, the Operating LLC, prepared in accordance with GAAP.

 

“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 fraction
thereof) elapsed during such period.  Notwithstanding the foregoing, neither the
Shares received by the Advisor or its Affiliates for any consideration other
than cash, nor the Distributions in respect of such Shares, shall be included in
the foregoing calculation.

 

“Development Fee.”  A fee for the packaging of a Property including negotiating
and approving plans, and undertaking to assist in obtaining zoning and necessary
variances and necessary financing for the specific Property, either initially or
at a later date.

 

“Directors.”  The persons holding such office, as of any particular time, under
the Charter, 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 CPA: 16 or the
Operating LLC to assume and agree to perform CPA: 16’s or the Operating LLC’s,
as applicable, obligations under this Agreement; or (ii) any material breach of
this Agreement of any nature whatsoever by CPA: 16 or the Operating LLC;
provided that (a) such breach is of a material term or condition of this
Agreement and (b) CPA: 16  or the Operating LLC, as applicable, 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.

 

“Guidelines.”  means the Investment Allocation Guidelines set forth as Annex A.

 

“Independent Appraiser.”  A qualified appraiser of real estate as determined by
the Board, who has no material current or prior business or personal
relationship with, the Advisor or the Directors and who is engaged to a
substantial extent in the business of rendering opinions regarding the value of
real estate related investments.  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 (but not of independence).

 

“Independent Director.”  A Director of CPA: 16 who meets the criteria for an
Independent Director specified in the Charter and/or Bylaws.

 

“Individual.”  Any natural person and those organizations treated as natural
persons in Section 542(a) of the Code.

 

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“Initial Acquisition Fee.”  Any fee or commission (including any interest
thereon) paid by the Operating LLC to the Advisor or, with respect to
Section 9(c) or 9(a), by the Operating LLC to any party, in connection with the
making of an Investment or the development or construction of Properties by CPA:
16.  A Development Fee or a Construction Fee paid to a Person not affiliated
with the Sponsor in connection with the actual development or construction of a
project after acquisition of the Property by CPA: 16 shall not be deemed an
Initial Acquisition Fee.  Initial Acquisition Fees include, but are not limited
to, any real estate commission, selection fee, development fee or construction
fee (other than as described above), non-recurring management fees, loan fees,
points or any fee of a similar nature, however designated.  Initial Acquisition
Fees include Subordinated Acquisition Fees unless the context otherwise
requires.  Initial Acquisition Fees shall not include Acquisition Expenses.

 

“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 Advisor or its Affiliates for any consideration other
than cash.

 

“Investment.”  means an investment made by CPA: 16, directly or indirectly, in a
Property, Loan or Other Permitted Investment Asset.

 

“Investment Entities.”  has the meaning given to such term in Section 14.

 

“Loans.”  The notes and other evidences of indebtedness or obligations acquired,
originated or entered into, directly or indirectly, by CPA: 16 as lender,
noteholder, participant, note purchaser or other capacity, including but not
limited to first or subordinate mortgage loans, construction loans, development
loans, loan participations, B notes, 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 Netherlands company.

 

“Management Agreement.”  The Asset Management Agreement, dated as of July 1,
2008, between CPA: 16 and the Manager, as the same may be amended from time to
time.

 

“Market Value.”  The value calculated by multiplying the daily weighted average
number of outstanding Shares by the average closing price of the Shares, in each
case over the 30 trading days beginning 180 calendar days after the Shares are
first listed on a national securities exchange or included for quotation in an
electronic trading system.

 

“Nasdaq.”  The Nasdaq stock market.

 

“Offering.”  The offering of Shares pursuant to a Prospectus.

 

“Operating Expenses.”  All consolidated operating, general and administrative
expenses paid or incurred by CPA: 16, 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, Federal and foreign 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: 16’s Shares and Securities;
(iv) Acquisition Expenses, real estate commissions on resale of property and
other expenses connected

 

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with the acquisition, disposition, origination, ownership and operation of
Investments, including the costs of foreclosure, insurance premiums, legal
services, brokerage and sales commissions, and the maintenance, repair and
improvement of property; (v) Acquisition Fees or Subordinated Disposition Fees
payable to the Advisor under this Agreement and the corresponding fees payable
to the Manager under the Management Agreement, or any other party;
(vi) distributions paid by the Operating LLC to the Special General Partner
under the agreement of limited partnership of the Operating LLC 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 LLC; 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
LLC to the Special Member pursuant to the agreement of limited partnership of
the Operating LLC, other than distributions described in clauses (vi) and
(vii) of this definition.

 

“Operating LLC.”  CPA 16 LLC, a Delaware limited liability company.

 

“Organization and Offering Expenses.”  Those expenses payable by CPA: 16 and the
Operating LLC in connection with the formation, qualification and registration
of CPA: 16 and in marketing and distributing Shares, including, but not limited
to:  (i) the preparation, printing, filing and delivery of any registration
statement or Prospectus and the preparing and printing of contractual agreements
among CPA: 16, the Operating LLC and the Sales Agent and the Selected Dealers
(including copies thereof); (ii) the preparing and printing of the Charter and
Bylaws, solicitation material and related documents and the filing and/or
recording of such documents necessary to comply with the laws of the State of
Maryland for the formation of a corporation and thereafter for the continued
good standing of a corporation; (iii) the qualification or registration of the
Shares under state securities or “Blue Sky” laws; (iv) any escrow arrangements,
including any compensation to an escrow agent; (v) the filing fees payable to
the Securities and Exchange Commission and to the Financial Industry Regulatory
Authority; (vi) reimbursement for the reasonable and identifiable out-of-pocket
expenses of the Sales Agent and the Selected Dealers, including the cost of
their counsel; (vii) the fees of CPA: 16’s counsel and accountants; (viii) all
advertising expenses incurred in connection with an Offering, including the cost
of all sales literature and the costs related to investor and broker-dealer
sales and information meetings and marketing incentive programs; and
(ix) selling commissions, selected dealer fees, marketing fees, incentive fees,
due diligence fees and wholesaling fees incurred in connection with the sale of
the Shares.

 

“Original Issue Price.”  For any Share issued in an Offering, the price at which
such Share was initially offered to the public by CPA: 16, regardless of whether
selling commissions were paid in connection with the purchase of such Share from
CPA: 16.

 

“Other Permitted Investment Asset.”  An asset, other than cash, cash
equivalents, short term bonds, auction rate securities and similar short term
investments, acquired by CPA: 16 for investment purposes that is not a Loan or a
Property and is consistent with the investment objectives and policies of CPA:
16.

 

“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
Closing Date through the date as of which such amount is being calculated.

 

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“Property or Properties.”  CPA: 16’s partial or entire interest in real property
(including leasehold interests) and personal or mixed property connected
therewith.  An Investment which obligates CPA: 16 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 Properties acquired directly or
through foreclosure.

 

“Prospectus.”  Any prospectus pursuant to which CPA: 16 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.

 

“Sales Agent.”  Carey Financial Corporation.

 

“Securities.”  Any stock, shares (other than currently outstanding Shares and
subsequently issued Shares), other equity interests, 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).

 

“Selected Dealers.”  Broker-dealers who are members of the Financial Industry
Regulatory Authority and who have executed an agreement with the Sales Agent in
which the Selected Dealers agree to participate with the Sales Agent in the
Offering.

 

“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
CPA: 16.

 

“Shares.”  All of the shares of common stock of CPA: 16, $.001 par value, and
any other shares of common stock of CPA: 16.

 

“Special Member.”  Carey REIT III, Inc. and any permitted transferee of the
special membership interest under the operating agreement of the Operating LLC.

 

“Sponsor.”  W.P. Carey Inc. and any other Person directly or indirectly
instrumental in organizing, wholly or in part, CPA: 16 or any person who will
control, manage or participate in the management of CPA: 16, and any Affiliate
of any such person.  Sponsor does not include a person whose only relationship
to CPA: 16 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 in
Section 9(c) hereof.

 

“Subordinated Disposition Fee.”  The Subordinated Disposition Fee as defined in
Section 9(f) hereof.

 

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“Termination Date.”  The effective date of any termination of this Agreement.

 

“Total Investment Cost.”  With regard to any Investment, an amount equal to the
sum of the Contract Purchase Price of such Investment plus the Acquisition Fees
and Acquisition Expenses paid in connection with such Investment.

 

“Triggering Event.”  With regard to any Investment, the occurrence of any of the
following during the six months after the closing date of the Investment: 
(a) the failure by an obligor on an Investment to pay rent, interest or
principal, or other material payment, to CPA: 16 when due (after giving effect
to all applicable grace periods) or (b) the obligor on an Investment (including
a guarantor) (1) commences a voluntary case or proceeding under applicable
bankruptcy or reorganization law, (2) consents to the entry of a decree or order
for relief in an involuntary proceeding under applicable bankruptcy law,
(3) consents to the filing of a petition or the appointment of a custodian,
receiver or liquidator, (4) makes an assignment for the benefit of creditors,
(5) admits in writing its inability to pay its debts as they come due; or (6) is
the subject of a decree or order for relief entered by a court of competent
jurisdiction in respect of such obligor in an involuntary bankruptcy case or
proceeding, or a decree or order adjudging such obligor bankrupt or insolvent or
appointing a custodian, receiver or liquidator for the obligor.

 

2.     Appointment.  CPA: 16 hereby appoints the Advisor to serve as its advisor
on the terms and conditions set forth in this Agreement, and the Advisor hereby
accepts such appointment.

 

3.     Duties of the Advisor.  The Advisor undertakes to use its best efforts to
present to CPA: 16 potential investment opportunities and to provide a
continuing and suitable investment program consistent with the investment
objectives and policies of CPA: 16 as determined and adopted from time to time
by the Board.  The Advisor will follow the Guidelines when allocating Investment
opportunities among CPA: 16, other entities managed by the Advisor and its
Affiliates, and the Advisor and its Affiliates for their own account.  The
Guidelines shall not be amended without the prior approval of at least a
majority of the Independent Directors.

 

In performance of the foregoing undertakings, subject to the supervision of the
Board and consistent with the provisions of the Charter and Bylaws of CPA: 16
and any Prospectus pursuant to which Shares are offered, the Advisor shall,
either directly or by engaging an Affiliate:

 

(a)   serve as CPA: 16’s investment and financial advisor and provide research
and economic and statistical data in connection with CPA: 16’s assets and
investment policies;

 

(b)   provide the daily management of CPA: 16 and perform and supervise the
various administrative functions reasonably necessary for the management of CPA:
16;

 

(c)   investigate, select, and, on behalf of CPA: 16, engage and conduct
business with such Persons as the Advisor deems necessary to the proper
performance of its obligations hereunder, including but not limited to
consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, corporate fiduciaries, escrow agents,
depositaries, custodians, agents for collection, insurers, insurance agents,
banks, builders, developers, property owners, mortgagors, and any and all agents
for any of the foregoing, including Affiliates of the Advisor, and Persons
acting in any other capacity deemed by the Advisor necessary or desirable for
the performance of any of the foregoing services, including but not limited to
entering into contracts in the name of CPA: 16 with any of the foregoing;

 

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(d)   consult with Directors of CPA: 16 and assist the Board in the formulation
and implementation of CPA: 16’s policies, and furnish the Board with such
information, advice and recommendations as they may request or as otherwise may
be necessary to enable them to discharge their fiduciary duties with respect to
matters coming before the Board;

 

(e)   subject to the provisions of this Agreement and the Guidelines: 
(1) locate, analyze and select potential Investments; (2) structure and
negotiate the terms and conditions of transactions pursuant to which Investments
will be made, purchased or acquired by CPA: 16; (3) make Investments on behalf
of CPA: 16; (4) arrange for financing and refinancing of, make other changes in
the asset or capital structure of, dispose of, reinvest the proceeds from the
sale of, or otherwise deal with the Investments; and (5) enter into leases and
service contracts for Properties and, to the extent necessary, perform all other
operational functions for the maintenance and administration of such Properties;

 

(f)    provide the Board with periodic reports regarding prospective Investments
and with periodic reports, no less than quarterly, of (1) the occurrence of any
Triggering Event during the prior fiscal quarter; and (2) the amounts of “dead
deal” costs incurred by CPA: 16 during the prior fiscal quarter;

 

(g)   assist the Board in its evaluation of potential liquidity transactions for
CPA: 16 and take such actions as may be requested by the Board or as may
otherwise be necessary or desirable to execute any liquidity transaction
approved by the Board;

 

(h)   obtain the prior approval of the Board (including a majority of the
Independent Directors) for any and all investments in Property which do not meet
all of the requirements set forth in Section 4(b) hereof;

 

(i)    negotiate on behalf of CPA: 16 with banks or lenders for loans to be made
to CPA: 16, and negotiate on behalf of CPA: 16 with investment banking firms and
broker-dealers or negotiate private sales of Shares and Securities or obtain
loans for CPA: 16, but in no event in such a way so that the Advisor shall be
acting as broker-dealer or underwriter; and provided, further, that any fees and
costs payable to third parties incurred by the Advisor in connection with the
foregoing shall be the responsibility of CPA: 16;

 

(j)    obtain reports (which may be prepared by the Advisor or its Affiliates),
where appropriate, concerning the value of Investments or contemplated
Investments;

 

(k)   obtain for, or provide to, CPA: 16 such services as may be required in
acquiring, managing and disposing of Investments, including, but not limited
to:  (i) the negotiation, making and servicing of Investments; (ii) the
disbursement and collection of monies; (iii) the payment of debts of and
fulfillment of the obligations of CPA: 16; and (iv) the handling, prosecuting
and settling of any claims of or against CPA: 16, including, but not limited to,
foreclosing and otherwise enforcing mortgages and other liens securing Loans;

 

(l)    from time to time, or at any time reasonably requested by the Board, make
reports to the Board of its performance of services to CPA: 16 under this
Agreement;

 

(m)  communicate on behalf of CPA: 16 with Shareholders as required to satisfy
the reporting and other requirements of any governmental bodies or agencies to
Shareholders and third parties and otherwise as requested by CPA: 16;

 

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(n)   provide or arrange for administrative services and items, legal and other
services, office space, office furnishings, personnel and other overhead items
necessary and incidental to CPA: 16’s business and operations;

 

(o)   provide CPA: 16 with such accounting data and any other information
requested by CPA: 16 concerning the investment activities of CPA: 16 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;

 

(p)   maintain the books and records of CPA: 16;

 

(q)   supervise the performance of such ministerial and administrative functions
as may be necessary in connection with the daily operations of the Investments;

 

(r)    provide CPA: 16 with all necessary cash management services;

 

(s)    do all things necessary to assure its ability to render the services
described in this Agreement;

 

(t)    perform such other services as may be required from time to time for
management and other activities relating to the assets of CPA: 16 as the Advisor
shall deem advisable under the particular circumstances;

 

(u)   arrange to obtain on behalf of CPA: 16 as requested by the Board, and
deliver to or maintain on behalf of CPA: 16 copies of, all appraisals obtained
in connection with investments in Properties and Loans;

 

(v)   if a transaction, proposed transaction or other matter requires approval
by the Board or by the Independent Directors, deliver to the Board or the
Independent Directors, as the case may be, all documentation reasonably
requested by them to properly evaluate such transaction, proposed transaction or
other matter;

 

(w)  monitor the performance by the Manager of its duties under the Management
Agreement; and

 

(x)   on an annual basis, no later than 90 days prior to the end of each term of
this Agreement, provide the Independent Directors with a report on (1) the
Advisor’s performance during the past year, (2) the compensation paid to the
Advisor during such year and (3) any proposed changes to the compensation to be
paid to the Advisor during the upcoming year if the Agreement is renewed.  The
Advisor’s report shall address, among other things, (a) those matters identified
in CPA: 16’s organizational documents as matters which the Independent Directors
must review each year with respect to the Advisor’s performance and
compensation; (b) whether any Triggering Event occurred with respect to an
Investment made during the past year; and (c) the “dead deal” costs incurred by
CPA: 16 during the past year.  If a Triggering Event has occurred, the
Independent Directors may consider whether, after taking account of the overall
performance of the Advisor during the past year, they wish to request that the
Advisor refund all or a portion of the Initial Acquisition Fee paid by CPA: 16
in respect of such Investment, and if the Independent Directors make that
request, the Advisor shall refund such amount to CPA: 16 within 60 days after
receipt of such request.  In addition, the Independent Directors may request
that the Advisor refund certain of the dead deal costs incurred by CPA: 16 if,
in light of the

 

10

 

 

circumstances under which such costs were incurred, the Independent Directors
determine that CPA: 16 should not bear such costs.

 

4.     Authority of Advisor.

 

(a)   Pursuant to the terms of this Agreement (and subject to the restrictions
included in Paragraphs (b), (c) and (d) of this Section 4 and in Section 7
hereof and in the Guidelines), and subject to the continuing and exclusive
authority of the Board over the management of CPA: 16, the Board hereby
delegates to the Advisor the authority to:  (1) locate, analyze and select
Investment opportunities; (2) structure the terms and conditions of transactions
pursuant to which Investments will be made or acquired for CPA: 16; (3) make or
acquire Investments in compliance with the investment objectives and policies of
CPA: 16; (4) arrange for financing or refinancing, or make changes in the asset
or capital structure of, and dispose of or otherwise deal with, Investments;
(5) enter into leases and service contracts for Properties, and perform other
property level operations; (6) oversee non-affiliated property managers and
other non-affiliated Persons who perform services for CPA: 16; and (7) undertake
accounting and other record-keeping functions at the Investment level.

 

(b)   The consideration paid for an Investment acquired by CPA: 16 shall
ordinarily be based on the fair market value thereof.  Consistent with the
foregoing provision, the Advisor may, without further approval by the Board
(except with respect to transactions subject to paragraphs (c) and (d)) invest
on behalf of CPA: 16 in an Investment so long as, in the Advisor’s good faith
judgment, (i) the Total Investment Cost of such Investment does not exceed the
fair market value thereof, and in the case of an Investment that is a Property,
shall in no event exceed the Appraised Value of such Property and (ii) the
Investment, in conjunction with CPA: 16’s other investments and proposed
investments, at the time CPA: 16 is committed to purchase or originate the
Investment, is reasonably expected to fulfill CPA: 16’s investment objectives
and policies as established by the Board and then in effect.  For purposes of
the foregoing, Total Investment Cost shall be measured at the date the
Investment is made and shall exclude future commitments to fund improvements. 
Investments not meeting the foregoing criteria must be approved in advance by
the Board.

 

(c)   Notwithstanding anything to the contrary contained in this Agreement, the
Advisor shall not cause CPA: 16 to make Investments that do not comply with
Article VIII (Restrictions on Investments and Activities) and related sections
of the Bylaws.

 

(d)   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) Investments made through co-investment or joint
venture arrangements with the Sponsor, the Advisor or any of their Affiliates;
(ii) Investments which are not contemplated by the terms of a Prospectus;
(iii) transactions that present issues which involve potential conflicts of
interest for the Advisor or an Affiliate (other than potential conflicts
involving the payment of fees or the reimbursement of expenses and other than
allocations of Investments made in accordance with the Guidelines); (iv) the
lease of assets to the Sponsor, any Director, the Advisor or any Affiliate of
the Advisor; (v) any purchase or sale of an Investment from or to the Advisor or
an Affiliate; and (vi) the retention of any Affiliate of the Advisor to provide
services to CPA: 16 not expressly contemplated by this Agreement and the terms
of such services by such Affiliate.  In addition, the Advisor shall comply with
any further approval requirements set forth in the Bylaws.

 

(e)   The Board may, at any time upon the giving of notice to the Advisor,
modify or revoke the authority set forth in this Section 4.  If and to the
extent the Board so modifies or

 

11

 

revokes the authority contained herein, the Advisor shall henceforth comply with
such modification or revocation, provided however, that such modification or
revocation shall be effective upon receipt by the Advisor and shall not be
applicable to investment transactions to which the Advisor has committed CPA: 16
prior to the date of receipt by the Advisor of such notification.

 

5.     Bank Accounts.  The Advisor may establish and maintain one or more bank
accounts in its own name for the account of CPA: 16 or in the name of CPA: 16
and may collect and deposit into any such account or accounts, and disburse from
any such account or accounts, any money on behalf of CPA: 16, provided that no
funds shall be commingled with the funds of the Advisor; and the Advisor shall
from time to time render appropriate accountings of such collections and
payments to the Board and to the auditors of CPA: 16.

 

6.     Records; Access.  The Advisor shall maintain appropriate records of all
its activities hereunder and make such records available for inspection by the
Board and by counsel, auditors and authorized agents of CPA: 16, at any time or
from time to time during normal business hours.  The Advisor shall at all
reasonable times have access to the books and records of CPA: 16.

 

7.     Limitations on Activities.  Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would adversely affect the
status of CPA: 16 as a REIT or of the Operating LLC as a partnership for Federal
income tax purposes, subject CPA: 16 or the Operating LLC to regulation under
the Investment Company Act of 1940, would violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
CPA: 16, its Shares or its Securities, or otherwise not be permitted by the
Charter or Bylaws or agreement of limited partnership of the Operating LLC,
except if such action shall be ordered by the Board, in which case the Advisor
shall notify promptly the Board of the Advisor’s judgment of the potential
impact of such action and shall refrain from taking such action until it
receives further clarification or instructions from the Board.  In such event
the Advisor shall have no liability for acting in accordance with the specific
instructions of the Board so given.

 

(a)           Notwithstanding the foregoing, CPA: 16 shall indemnify and hold
harmless the Advisor, its shareholders, members, directors, officers and
employees, and partners, shareholders, directors and officers of the Advisor’s
shareholders and Affiliates of any of them, for any loss or liability suffered
by them, and none of the foregoing shall be liable to CPA: 16, the Operating LLC
or to the Directors or Shareholders for any act or omission by the Advisor, its
shareholders, directors, officers and employees, or partners, shareholders,
directors or officers of the Advisor’s shareholders and Affiliates of any of
them, in each case if the following conditions are met:

 

(i)            The Advisor, its shareholders, members, directors, officers and
employees, and partners, shareholders, directors and officers of the Advisor’s
shareholders and Affiliates of any of them have determined, in good faith, that
the course of conduct which caused the loss or liability was in the best
interests of CPA: 16;

 

(ii)           The Advisor, its shareholders, members, directors, officers and
employees, and partners, shareholders, members, directors and officers of the
Advisor’s shareholders and Affiliates of any of them were acting on behalf of or
performing services for CPA: 16; and

 

(iii)          Such liability or loss was not the result of negligence or
misconduct by the Advisor, its shareholders, directors, officers and employees,
and partners,

 

12

 

shareholders, directors and officers of the Advisor’s shareholders or Affiliates
of any of them.

 

(b)   Notwithstanding the foregoing, the Advisor and its Affiliates shall not be
indemnified by CPA: 16 or the Operating LLC for any losses, liabilities or
expenses arising from or out of the alleged violation of federal or state
securities laws unless one or more of the following conditions are met:

 

(i)            There has been a successful adjudication on the merits of each
count involving alleged securities law violations as to the particular
indemnitee;

 

(ii)           Such claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the particular indemnitee; or

 

(iii)          A court of competent jurisdiction approves a settlement of the
claims against a particular indemnitee and finds that indemnification of the
settlement and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the Securities
and Exchange Commission and of the published position of any state securities
regulatory authority in which securities of CPA: 16 were offered or sold as to
indemnification for violation of securities laws.

 

(c)   CPA: 16 and the Operating LLC shall advance funds to the Advisor or its
Affiliates for legal expenses and other costs incurred as a result of any legal
action for which indemnification is being sought only if all of the following
conditions are satisfied:

 

(i)            The legal action relates to acts or omissions with respect to the
performance of duties or services on behalf of CPA: 16;

 

(ii)           The Advisor or the Affiliate has provided CPA: 16 or the
Operating LLC with a written affirmation of his, her or its good faith belief
that the standard of conduct necessary for indemnification has been met;

 

(iii)          The legal action is initiated by a third party who is not a
Shareholder or the legal action is initiated by a Shareholder acting in his or
her capacity as such and a court of competent jurisdiction specifically approves
such advancement; and

 

(iv)          The Advisor or the Affiliate undertakes to repay the advanced
funds to CPA: 16, together with the applicable legal rate of interest thereon,
in cases in which such Advisor or Affiliate is found not to be entitled to
indemnification.

 

(d)   Notwithstanding the foregoing, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 7 for any activity
which the Advisor shall be required to indemnify or hold harmless CPA: 16
pursuant to Section 22.

 

(e)   Any amounts paid pursuant to this Section 7 shall be recoverable or paid
only out the net assets of CPA: 16 and not from Shareholders.

 

8.     Relationship with Directors.  There shall be no limitation on any
shareholder, director, officer, employee or Affiliate of the Advisor serving as
a Director or an officer of CPA: 16, except that no employee of the Advisor or
its Affiliates who also is a Director or officer of CPA: 16 shall receive any
compensation from CPA: 16 for serving as a Director or officer other than for
reasonable reimbursement

 

13

 

for travel and related expenses incurred in attending meetings of the Board; for
the avoidance of doubt, the limitations of this Section 8 shall not apply to any
compensation paid by the Advisor or any Affiliate for which CPA: 16 reimbursed
the Advisor or Affiliate in accordance with Section 10 hereof.

 

9.     Fees.

 

(a)   Asset Management Fee.  (i)  The Operating LLC shall pay to the Advisor as
compensation for the advisory services rendered hereunder an annual asset
management fee (the “Asset Management Fee”) in an amount equal to 0.50% of the
Adjusted Invested Assets:

 

(ii)           The Asset Management Fee will be calculated monthly on the basis
of one twelfth of 0.5% of the Adjusted Invested Assets for that month, and, for
Investments not owned during the entire month, shall be pro rated for the number
of days during a month that CPA: 16 owns such Investments.  The aggregate Asset
Management Fees calculated with respect to each month shall be payable on the
first business day following such month.

 

(b)   Initial Acquisition Fee.  The Advisor may receive as partial compensation
for services rendered in connection with the investigation, selection,
acquisition or origination (by purchase, investment or exchange) of any
Investment, an initial acquisition fee (an “Initial Acquisition Fee”) payable by
the Operating LLC in an amount equal to 2.5% of the aggregate Total Investment
Cost of the Investment.  The Initial Acquisition Fee payable to the Advisor in
respect of an Investment shall be payable at the time such Investment is
acquired.

 

(c)   Subordinated Acquisition Fee.  (i) In addition to the Initial Acquisition
Fee described in Section 9(b) above, the Advisor may receive additional
compensation in connection with the investigation, selection, acquisition or
origination (by purchase, investment or exchange) of Investments, payable by the
Operating LLC to the Advisor or its Affiliates in an amount equal to 2.0% of the
aggregate Total Investment Cost of the Investment (the “Subordinated Acquisition
Fee”).

 

(ii)           Except as may otherwise be approved by the Independent Directors,
the Subordinated Acquisition Fee shall be payable in three equal annual
installments on the first business day of the fiscal quarter immediately
following the fiscal quarter in which the Investment is made and the first
business day of the corresponding fiscal quarter in each of the subsequent two
fiscal years.  It is understood that the Independent Directors may determine
that under certain limited circumstances, it will be in CPA: 16’s best interests
to pay the Subordinated Acquisition Fee at the time the Investment is made
rather than on an installment basis, even if the Preferred Return has not yet
been satisfied.  Any unpaid portion of the Subordinated Acquisition Fee with
respect to an Investment will bear interest at the rate of 5% per annum from the
date of acquisition of the Investment until the portion of the Subordinated
Acquisition Fee is paid.  The accrued interest is payable on the date of each
annual installment of the fees.  The Subordinated Acquisition Fee payable in any
year, and accrued interest thereon, will be subordinated to the Preferred Return
and only paid if the Preferred Return has been achieved through the end of the
prior fiscal quarter.  Any portion of the Subordinated Acquisition Fee, and
accrued interest thereon, not paid due to CPA: 16’s failure to meet the
Preferred Return through any fiscal quarter end shall be paid by CPA: 16 on the
first business day of the fiscal quarter next following the fiscal quarter end
through which the Preferred Return has been met.

 

14

 

(d)   Six Percent Limitation.  The total amount of all Initial Acquisition Fees
plus Subordinated Acquisition Fees, including interest thereon, whether payable
to the Advisor or a third party, and Acquisition Expenses payable by the
Operating LLC may not exceed 6% of the aggregate Contract Purchase Price of all
Investments, measured for the period beginning with the initial acquisition of
an Investment and ending on each December 31 thereafter, unless a majority of
the Directors (including a majority of the Independent Directors) not otherwise
interested in any transaction approves the excess as being commercially
competitive, fair and reasonable to CPA: 16.

 

(e)   Loan Refinancing Fee.  The Operating LLC shall pay to the Advisor for all
qualifying loan refinancings of Properties a loan refinancing fee in the amount
up to one percent of the principal amount of the loan obtained as the result of
such refinancing (the “Loan Refinancing Fee”).  Any Loan Refinancing Fee shall
be due and payable upon the funding of the related loan or as soon thereafter as
is reasonably practicable.  A refinancing will qualify for a Loan Refinancing
Fee only if the loan obtained as the result of such refinancing is secured by
Property and (i) the maturity date of the loan that is being refinanced (which
must have had an original term of five years or more) is less than one year from
the date of the refinancing; or (ii) the terms of the new loan represent, in the
judgment of a majority of the Independent Directors, an improvement over the
terms of the refinanced loan; or (iii) the new loan is approved by the Board,
including a majority of the Independent Directors and, in each case, the
refinancing is found, in the judgment of a majority of the Independent
Directors, to be in the best interest of CPA: 16.

 

(f)            Subordinated Disposition Fee.  (i) If the Advisor or an Affiliate
provides a substantial amount of services in the sale of an Investment, the
Advisor or such Affiliate shall be entitled to receive a subordinated
disposition fee (the “Subordinated Disposition Fee”) at the time of such
disposition, in an amount equal to the lesser of (1) 50% of the Competitive Real
Estate Commission (if applicable) and (2) 3.0% of the Contract Sales Price of
the Investment.

 

(ii)           The Subordinated Disposition Fee will be paid only if
Shareholders have received in the aggregate a return of 100% of Initial Investor
Capital (through liquidity or Distributions) plus a Preferred Return through the
end of the fiscal quarter immediately preceding the date the Subordination
Disposition Fee is paid.  The return requirement will be deemed satisfied if the
total Distributions paid by CPA:16 have satisfied the Preferred Return
requirement and the Market Value of CPA:16 equals or exceeds Adjusted Investor
Capital. To the extent that Subordinated Disposition Fees are not paid by CPA:16
on a current basis due to the foregoing limitation, the unpaid fees will be due
and paid at such time as the limitation has been satisfied. The Subordinated
Disposition Fee may be paid in addition to real estate commissions paid to
non-Affiliates, provided that the total of all real estate commissions in
respect of a Property paid to all Persons by CPA:16 and the Subordinated
Disposition Fee shall not exceed an amount equal to the lesser of:  (i) six
percent of the Contract Sales Price of such Property or (ii) the Competitive
Real Estate Commission. The Advisor shall present to the Independent Directors
such information as they may reasonably request to review the level of services
provided by the Advisor in connection with a disposition and the basis for the
calculation of the amount of the accrued Subordinated Disposition Fees on an
annual basis.  The amount of any accrued Subordinated Disposition Fee shall be
deemed conclusively established once it has been approved by the Independent
Directors, absent a subsequent finding of error. No payment of Subordinated
Disposition Fees shall be made prior to review and approval of such information
by the Independent Directors.  If this Agreement is terminated prior to such
time as the Shareholders have received (through liquidity or Distributions) a
return of

 

15

 

100% of Initial Investor Capital plus a Preferred Return through the date of
termination of this Agreement, an appraisal of the Properties then owned by
CPA:16 shall be made and any unpaid Subordinated Disposition Fee on Properties
sold prior to the date of termination will be payable if the Appraised Value of
the Properties then owned by CPA: 16 plus Distributions to Shareholders prior to
the date of termination of this Agreement (through liquidity or Distributions)
is equal to or greater than 100% of Initial Investor Capital plus an amount
sufficient to pay a Preferred Return through the date of termination of this
Agreement.  If CPA:16’s Shares are listed on a national securities exchange or
included for quotation in an electronic trading system and, at the time of such
listing, the Advisor has provided a substantial amount of services in the sale
of Property, for purposes of determining whether the subordination conditions
for the payment of the Subordinated Disposition Fee have been satisfied,
Shareholders will be deemed to have received a Distribution in an amount equal
to the Market Value of CPA:16.

 

(g)   Loans From Affiliates.  CPA: 16 shall not borrow funds from the Advisor or
its Affiliates unless (A) the transaction is approved by a majority of the
Independent Directors and a majority of the Directors who are not interested in
the transaction as being fair, competitive and commercially reasonable, (B) the
interest and other financing charges or fees received by the Advisor or its
Affiliates do not exceed the amount which would be charged by non-affiliated
lending institutions and (C) the terms are not less favorable than those
prevailing for comparable arm’s-length loans for the same purpose.  CPA: 16 will
not borrow on a long-term basis from the Advisor or its Affiliates unless it is
to provide the debt portion of a particular investment and CPA: 16 is unable to
obtain a permanent loan at that time or in the judgment of the Board, it is not
in CPA: 16’s best interest to obtain a permanent loan at the interest rates then
prevailing and the Board has reason to believe that CPA: 16 will be able to
obtain a permanent loan on or prior to the end of the loan term provided by the
Advisor or its Affiliates.

 

(h)   Changes To Fee Structure.  In the event the Shares are listed on a
national securities exchange or are included for quotation on Nasdaq, CPA: 16
and the Advisor shall negotiate in good faith to establish a fee structure
appropriate for an entity with a perpetual life.  A majority of the Independent
Directors must approve the new fee structure negotiated with the Advisor.  In
negotiating a new fee structure, the Independent Directors may consider any of
the factors they deem relevant, including but not limited to:  (a) the size of
the Advisory Fee in relation to the size, composition and profitability of CPA:
16’s portfolio; (b) the success of the Advisor in generating opportunities that
meet the investment objectives of CPA: 16; (c) the rates charged to other REITs
and to investors other than REITs by Advisors performing similar services;
(d) additional revenues realized by the Advisor and its Affiliates through their
relationship with CPA: 16, including loan administration, underwriting or broker
commissions, servicing, engineering, inspection and other fees, whether paid by
CPA: 16 or by others with whom CPA: 16 does business; (e) the quality and extent
of service and advice furnished by the Advisor; (f) the performance of the
investment portfolio of CPA: 16, including income, conservation or appreciation
of capital, frequency of problem investments and competence in dealing with
distress situations; and (g) the quality of the portfolio of CPA: 16 in
relationship to the investments generated by the Advisor for the account of
other clients.  The Independent Directors shall not approve any new fee
structure that is in their judgment more favorable (taken as a whole) to the
Advisor than the current fee structure.

 

(i)    Payment.  Compensation payable to the Advisor pursuant to this Section 9
shall be paid in cash; provided, however, that any fee payable pursuant to
Section 9 may be paid, at the option of the Advisor, in the form of:  (i) cash,
(ii) restricted stock of CPA: 16, or (iii) a

 

16

 

combination of cash and restricted stock.  The Advisor shall notify CPA: 16 in
writing annually of the form in which the fee shall be paid.  Such notice shall
be provided no later than January 15 of each year.  If no such notice is
provided, the fee shall be paid in cash.  For purposes of the payment of
compensation to the Advisor in the form of stock, the value of each share of
restricted stock shall be:  (i) the Net Asset Value per Share as determined
based on the most recent appraisal of CPA: 16’s assets performed by an
Independent Appraiser, or (ii) if an appraisal has not yet been performed, $10
per share.  If shares are being offered to the public at the time a fee is paid
with stock, the value shall be the price of the stock without commissions.  The
Net Asset Value determined on the basis of such appraisal may be adjusted on a
quarterly or other basis by the Board to account for significant capital
transactions.  Stock issued by CPA: 16 to the Advisor in payment of fees
hereunder shall be governed by the terms set forth in Schedule B hereto, or such
other terms as the Advisor and CPA: 16 may from time to time agree.

 

(j)    During the term of the Management Agreement, no Asset Management Fees
shall be paid to the Advisor under Section 9(a) of this Agreement with respect
to Properties located outside the United States and Loans secured by collateral
outside the United States.

 

(k)   During the term of the Management Agreement, no Subordinated Disposition
Fees shall be paid to the Advisor under Section 9(f) of this Agreement with
respect to Properties located outside the United States and Loans secured by
collateral outside the United States.

 

10.  Expenses.

 

(a)   Subject to the limitations set forth in Section 9(d), to the extent
applicable, in addition to the compensation paid to the Advisor pursuant to
Section 9 hereof, the Operating LLC shall pay directly or reimburse the Advisor
for the following expenses:

 

(i)            Organization and Offering Expenses; provided however, that within
60 days after the end of the quarter in which any Offering terminates, the
Advisor shall reimburse the Operating LLC for any Organization and Offering
Expense reimbursements received by the Advisor pursuant to this Section 10 to
the extent that such reimbursements, when added to the balance of the
Organization and Offering Expenses (excluding selling commissions, the selected
dealer fee and the wholesaling fee) paid directly by the Operating LLC, exceed
four percent of the Gross Offering Proceeds; provided further, that the Advisor
shall be responsible for the payment of all Organization and Offering Expenses
(excluding such commissions and such fees and expense reimbursements) in excess
of four percent of the Gross Offering Proceeds;

 

(ii)           all Acquisition Expenses;

 

(iii)          to the extent not included in Acquisition Expenses, all expenses
of whatever nature reasonably incurred and directly connected with the proposed
acquisition of any Investment that does not result in the actual acquisition of
the Investment, including, without limitation, personnel costs;

 

(iv)          expenses other than Acquisition Expenses incurred in connection
with the investment of the funds of CPA: 16, including, without limitation,
costs of retaining industry or economic consultants and finder’s fees and
similar payments, to the extent not paid by the seller of the Investment or
another third party, regardless of whether such expenses were incurred in
transactions where a fee is not payable to the Advisor;

 

17

 

(v)           interest and other costs for borrowed money, including discounts,
points and other similar fees;

 

(vi)          taxes and assessments on income of CPA: 16, to the extent paid or
advanced by the Advisor, or on Investments and taxes as an expense of doing
business;

 

(vii)         costs associated with insurance required in connection with the
business of CPA: 16 or by the Directors;

 

(viii)        expenses of managing and operating Investments owned by CPA: 16,
whether payable to an Affiliate of the Advisor or a non-affiliated Person;

 

(ix)          fees and expenses of legal counsel for CPA: 16;

 

(x)           fees and expense of auditors and accountants for CPA: 16;

 

(xi)          all expenses in connection with payments to the Directors and
meetings of the Directors and Shareholders;

 

(xii)         expenses associated with listing the Shares and Securities on a
securities exchange or Nasdaq if requested by the Board;

 

(xiii)        expenses connected with payments of Distributions in cash or
otherwise made or caused to be made by the Board to the Shareholders;

 

(xiv)        expenses of organizing, revising, amending, converting, modifying,
or terminating CPA: 16, the Operating LLC or their respective governing
instruments;

 

(xv)         expenses of maintaining communications with Shareholders, including
the cost of preparation, printing and mailing annual reports and other
Shareholder reports, proxy statements and other reports required by governmental
entities; and

 

(xvi)        all other expenses the Advisor incurs in connection with providing
services to CPA: 16, including reimbursement to the Advisor or its Affiliates
for the cost of rent, goods, materials and personnel incurred by them based upon
the compensation of the Persons involved and an appropriate share of overhead
allocable to those Persons.

 

(b)   Expenses described in clause (xvi) of Section 10(a) and any other expenses
described in Section 10(a) that are shared expenses of CPA: 16, other entities
managed by the Advisor and its Affiliates and W. P. Carey Inc. and its
Affiliates (for their own account) shall be allocated among such entities based
upon the percentage that CPA: 16’s total revenues for the most recently
completed four fiscal quarters represent of the combined total revenues for such
period of CPA: 16, W. P. Carey Inc. and each REIT or other entity managed by the
Advisor and its Affiliates (provided that if any such entity has not been in
operation for the full four quarter period, the period for which such entity has
been in operation shall be annualized), or such other methodology as may be
approved by the Board (including a majority of the Independent Directors).  No
reimbursement shall be made for the cost of personnel to the extent that such
personnel are used in transactions for which the Advisor receives a separate
fee.

 

(c)   Expenses incurred by the Advisor on behalf of CPA: 16 and payable pursuant
to this Section 10 shall be reimbursed quarterly to the Advisor within 60 days
after the end of each

 

18

 

quarter, subject to the provisions of Section 13 hereof.  The Advisor shall
prepare a statement documenting the Operating Expenses of CPA: 16 within 45 days
after the end of each quarter.

 

(d)   During the term of the Management Agreement, CPA: 16 shall have no
obligation to reimburse the Advisor under Section 10 of this 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.

 

11.  Other Services.  Should the Board request that the Advisor or any
Affiliate, shareholder or employee thereof render services for CPA: 16 other
than as set forth in Section 3 hereof, such services shall be separately
compensated and shall not be deemed to be services pursuant to the terms of this
Agreement.

 

12.  Fidelity Bond.  The Advisor shall maintain a fidelity bond for the benefit
of CPA: 16 which bond shall insure CPA: 16 from losses of up to $5,000,000 and
shall be of the type customarily purchased by entities performing services
similar to those provided to CPA: 16 by the Advisor.

 

13.  Limitation on Expenses.

 

(a)   If Operating Expenses under this Agreement and the Management Agreement
during the 12-month period ending on the last day of any fiscal quarter of CPA:
16 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: 16
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 LLC nor CPA: 16 shall be liable for payment therefor. 
CPA: 16 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)   Notwithstanding the foregoing, to the extent that the Advisor becomes
responsible for any excess amount as provided in paragraph (a), if a majority of
the Independent Directors finds such excess amount or a portion thereof
justified based on such unusual and non-recurring factors as they deem
sufficient, the Operating LLC shall reimburse the Advisor in future quarters for
the full amount of such excess, or any portion thereof, but only to the extent
such reimbursement would not cause the Operating Expenses to exceed the 2%/25%
Guidelines in the 12-month period ending on the last day of such quarter.  In no
event shall the Operating Expenses payable by the Operating LLC in any 12-month
period ending at the end of a fiscal quarter exceed the 2%/25% Guidelines.

 

(c)   Within 60 days after the end of any twelve-month period referred to in
paragraph (a), the Advisor shall reimburse CPA: 16 for any amounts expended by
CPA: 16 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 Operating
Expenses under this Agreement and the Management Agreement for such later
quarter would not thereby exceed the 2%/25% Guidelines.

 

19

 

(d)   All computations made under paragraphs (a) and (b) of this Section 13
shall be determined in accordance with generally accepted accounting principles
applied on a consistent basis.

 

(e)   If the Special General Partner receives distributions pursuant to the
agreement of limited partnership of the Operating LLC in respect of realized
gains on the disposition of an Investment, Adjusted Net Income, for purposes of
calculating the Operating Expenses, shall exclude the gain from the disposition
of such Investment.

 

14.  Investment Allocation and Other Activities of the Advisor.  Except as
provided in the Guidelines, nothing herein contained shall prevent the Advisor
from engaging in other activities, including without limitation direct
investment by the Advisor and its Affiliates in assets that would be suitable
for CPA: 16, the rendering of advice to other investors (including other REITs)
and the management of other programs advised, sponsored or organized by the
Advisor or its Affiliates; nor shall this Agreement limit or restrict the right
of the Advisor or any of its Affiliates or of any director, officer, employee or
shareholder of the Advisor or its Affiliates to engage in any other business or
to render services of any kind to any other partnership, corporation, firm,
individual, trust or association.  The Advisor may, with respect to any
investment in which CPA: 16 is a participant, also render advice and service to
each other participant therein.  Without limiting the generality of the
foregoing, CPA 16 acknowledges that the Advisor provides or will provide
services to other CPA REIT funds and other entities, whether now in existence or
formed hereafter, and that the Advisor and its Affiliates will invest for their
own account.  If the Sponsor, Advisor, Director or Affiliates thereof has or
have sponsored, or will sponsor in the future, other investment programs with
similar investment objectives which have investment funds available at the same
time as CPA: 16, or if the Advisor and its Affiliates intend to make investments
for their own account that fit CPA: 16’s investment objectives, it shall be the
duty of the Advisor to allocate Investments among the competing investment
entities and the Advisor and its Affiliates in a fair and equitable manner and
in accordance with the Guidelines.

 

The Advisor shall be required to use its best efforts to present a continuing
and suitable investment program to CPA: 16 that is consistent with the
investment policies and objectives of CPA: 16, but subject to the last sentence
of the preceding paragraph, neither the Advisor nor any Affiliate of the Advisor
shall be obligated generally to present any particular investment opportunity to
CPA: 16 even if the opportunity is of character which, if presented to CPA: 16,
could be taken by CPA: 16.

 

Once each quarter, senior representatives of the Advisor will meet with at least
a majority of the Independent Directors for the purpose of reviewing the
Advisor’s compliance with the Guidelines with respect to all Investments
allocated among W. P. Carey Inc., CPA: 16 and each other CPA REIT and investment
program managed by an Affiliate of W.P. Carey Inc. (each, together with its
Affiliates, an “Investment Entity,” and collectively, the “Investment Entities”)
during the most recently completed fiscal quarter.  The quarterly review will
take place at the regularly scheduled quarterly meeting of the Board of
Directors, or at another time and place that are mutually determined by the
Advisor and the Independent Directors, and may include representatives of other
Investment Entities.  The Advisor will use its best efforts to distribute a
report reasonably in advance of each quarterly review meeting containing a list
of all Investments allocated to the Investment Entities the particular
Investment Entity to which each Investment was allocated, a brief description of
the Investment, the purchase price of each Investment and acquisition fees (if
any) paid to the Advisor and its Affiliates in connection with each Investment. 
Representatives of the Advisor shall be prepared to discuss each Investment and
the reasons for its allocation to particular Investment Entities at the
quarterly review meeting.

 

15.  Relationship of Advisor and CPA: 16.  CPA: 16 and the Advisor agree that
they have not created and do not intend to create by this Agreement a joint
venture or partnership relationship between

 

20

 

 

them and nothing in this Agreement shall be construed to make them partners or
joint venturers or impose any liability as partners or joint venturers on either
of them.

 

16.  Term; Termination of Agreement.  This Agreement, as amended and restated,
shall continue in force until September 30, 2013 or until 60 days after the date
on which the Independent Directors shall have notified the Advisor of their
determination either to renew this Agreement for an additional one-year period
or terminate this Agreement, as required by CPA:16’s Charter.

 

17.  Termination by CPA: 16.  At the sole option of the Board (including a
majority of the Independent Directors), this Agreement may be terminated
immediately by written notice of termination from CPA: 16 to the Advisor upon
the occurrence of events which would constitute Cause or if any of the following
events occur:

 

(a)   If the Advisor 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
Advisor, for all or substantially all of its property by reason of the
foregoing, or if a court of competent jurisdiction approves any petition filed
against the Advisor for reorganization, and such adjudication or order shall
remain in force or unstayed for a period of 30 days; or

 

(b)   If the Advisor shall institute proceedings for voluntary bankruptcy or
shall file a petition seeking reorganization under the federal bankruptcy laws,
or 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
property, 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.

 

Any notice of termination under Section 16 or 17 shall be effective on the date
specified in such notice, which may be the day on which such notice is given or
any date thereafter.  The Advisor agrees that if any of the events specified in
Section 17(b) or (c) shall occur, it shall give written notice thereof to the
Board within 15 days after the occurrence of such event.

 

18.  Termination by Either Party.  This Agreement may be terminated immediately
without penalty (but subject to the requirements of Section 20 hereof) by the
Advisor by written notice of termination to CPA: 16 upon the occurrence of
events which would constitute Good Reason or by CPA: 16 without cause or penalty
(but subject to the requirements of Section 20 hereof) by action of the
Directors, a majority of the Independent Directors or by action of a majority of
the Shareholders, in each case upon 60 days’ written notice.

 

19.  Assignment Prohibition.  This Agreement may not be assigned by the Advisor
without the approval of the Board (including a majority of the Independent
Directors); provided, however, that such approval shall not be required in the
case of an assignment to a corporation, partnership, association, trust or
organization which may take over the assets and carry on the affairs of the
Advisor, provided:  (i) that at the time of such assignment, such successor
organization shall be owned substantially by an entity directly or indirectly
controlled by the Sponsor and only if such entity has a net worth of at least
$5,000,000, and (ii) that the board of directors of the Advisor shall deliver to
the Board a statement in writing indicating the ownership structure and net
worth of the successor organization and a certification from the new Advisor as
to its net worth.  Such an assignment shall bind the assignees hereunder in the
same manner as the Advisor is bound by this Agreement.  The Advisor may assign
any rights to receive fees or other payments under this Agreement without
obtaining the approval of the Board.  This Agreement shall not be assigned by
CPA: 16 or the Operating LLC without the consent of the Advisor, except in the
case of an assignment by CPA: 16 or the Operating LLC to a corporation or other

 

21

 

organization which is a successor to CPA: 16 or the Operating LLC, in which case
such successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as CPA: 16 or the Operating LLC is bound by this
Agreement.

 

20.  Payments to and Duties of Advisor Upon Termination.

 

(a)   After the Termination Date, the Advisor shall not be entitled to
compensation for further services hereunder but shall be entitled to receive
from CPA: 16 the following:

 

(i)            all unpaid reimbursements of Organization and Offering Expenses
and of Operating Expenses payable to the Advisor;

 

(ii)           all earned but unpaid Asset Management Fees payable to the
Advisor prior to the Termination Date;

 

(iii)          all earned but unpaid Acquisition Fees and interest thereon, in
each case payable to the Advisor relating to the acquisition of any Property
prior to the Termination Date;

 

(iv)          all earned but unpaid Subordinated Disposition Fees and interest
thereon, payable to the Advisor relating to the sale of any Investment prior to
the Termination Date; and

 

(v)           all earned but unpaid Property Management Fees and Loan
Refinancing Fees, if any, payable to the Advisor or its Affiliates relating to
the management of any property prior to the termination of this Agreement.

 

(b)   Notwithstanding the foregoing, if this Agreement is terminated by CPA: 16
for Cause, or by the Advisor for other than Good Reason, the Advisor will not be
entitled to receive the sums in Section 20(a) (ii) through (v).

 

(c)   Any and all amounts payable to the Advisor pursuant to Section 20(a) that,
irrespective of the termination, were payable on a current basis prior to the
Termination Date either because they were not subordinated or all conditions to
their payment had been satisfied, shall be paid within 90 days after the
Termination Date.  All other amounts shall be paid in a manner determined by the
Board, but in no event on terms less favorable to the Advisor than those
represented by a note (i) maturing upon the liquidation of CPA: 16 or the
Operating LLC or three years from the Termination Date, whichever is earlier,
(ii) with no less than twelve equal quarterly installments and (iii) bearing a
fair, competitive and commercially reasonable interest rate (the “Note”).  The
Note, if any, may be prepaid by the Operating LLC at any time prior to maturity
with accrued interest to the date of payment but without premium or penalty. 
Notwithstanding the foregoing, any amounts that relate to Investments (i) shall
be an amount which provides compensation to the Advisor only for that portion of
the holding period for the respective Investments during which the Advisor
provided services to CPA: 16, (ii) shall not be due and payable until the
Investment to which such amount relates is sold or refinanced, and (iii) shall
not bear interest until the Investment to which such amount relates is sold or
refinanced.  A portion of the amount shall be paid as each Investment owned by
CPA: 16 on the Termination Date is sold.  The portion of such amount payable
upon each such sale shall be equal to (i) such amount multiplied by (ii) the
percentage calculated by dividing the fair value (at the Termination Date) of
the Investment sold by CPA: 16 divided by the total fair value (at the
Termination Date) of all Investments owned by CPA: 16 on the Termination Date.

 

22

 

(d)   The Advisor shall promptly upon termination.

 

(i)            pay over to the Operating LLC all money collected and held for
the account of CPA: 16 pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;

 

(ii)           deliver to the Board a full accounting, including a statement
showing all payments collected by it and a statement of all money held by it,
covering the period following the date of the last accounting furnished to the
Board;

 

(iii)          deliver to the Board all assets, including Properties and Loans,
and documents of CPA: 16 then in the custody of the Advisor; and

 

(iv)          cooperate with CPA: 16 to provide an orderly management
transition.

 

21.  Indemnification by CPA: 16 and the Operating LLC.  Neither CPA: 16 nor the
Operating LLC shall indemnify the Advisor or any of its Affiliates for any loss
or liability suffered by the Advisor or the Affiliate, or hold the Advisor or
the Affiliate harmless for any loss or liability suffered by CPA: 16 or the
Operating Partnership, except as permitted under Section 7.

 

22.  Indemnification by Advisor.  The Advisor shall indemnify and hold harmless
CPA: 16 and the Operating LLC from liability, claims, damages, taxes or losses
and related expenses including attorneys’ fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, willful misfeasance, misconduct, negligence or reckless disregard of its
duties.

 

23.  Joint and Several Obligations.  Any obligations of CPA: 16 shall be
construed as the joint and several obligations of CPA: 16 and the Operating LLC,
unless otherwise specifically provided in this Agreement.

 

24.  Notices.  Any notice, report or other communication required or permitted
to be given hereunder shall be in writing unless some other method of giving
such notice, report or other communication is accepted by the party to whom it
is given, and shall be given by being delivered by hand or by overnight mail or
other overnight delivery service to the addresses set forth herein:

 

23

 

 

 

To the Board and to CPA: 16:

Corporate Property Associates 16 — Global Incorporated
50 Rockefeller Plaza
New York, NY 10020
Attention: Chairman of the Audit Committee of the Board of Directors

 

 

 

 

To the Operating LLC:

CPA 16 LLC
c/o Corporate Property Associates 16 - Global Incorporated
50 Rockefeller Plaza
New York, NY 10020
Attention: Chairman of the Audit Committee of the Board of Directors

 

 

 

 

To the Advisor:

Carey Asset Management Corp.
50 Rockefeller Plaza
New York, NY 10020

 

Either party may at any time give notice in writing to the other party of a
change in its address for the purposes of this Section 24.

 

25.  Modification.  This Agreement shall not be changed, modified, terminated,
or discharged, in whole or in part, except by an instrument in writing signed by
both parties hereto, or their respective successors or assignees.

 

26.  Severability.  The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

 

27.  Construction.  This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of New York.

 

28.  Entire Agreement.  This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof.  The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.  This Agreement may not be modified
or amended other than by an agreement in writing.

 

29.  Indulgences, Not Waivers.  Neither the failure nor any delay on the part of
a party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

 

30.  Gender.  Words used herein regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires.

 

24

 

31.  Titles Not to Affect Interpretation.  The titles of Sections and
subsections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

 

32.  Execution in Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.  This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the signatories.

 

33.  Name.  W.P. Carey Inc. has a proprietary interest in the name “Corporate
Property Associates” and “CPA®.”  Accordingly, and in recognition of this right,
if at any time CPA: 16 ceases to retain Carey Asset Management Corp., or an
Affiliate thereof to perform the services of Advisor, CPA: 16 will, promptly
after receipt of written request from Carey Asset Management Corp., cease to
conduct business under or use the name “Corporate Property Associates” or “CPA®”
or any diminutive thereof and CPA: 16 shall use its best efforts to change the
name of CPA: 16 to a name that does not contain the name “Corporate Property
Associates” or “CPA®” or any other word or words that might, in the sole
discretion of the Advisor, be susceptible of indication of some form of
relationship between CPA: 16 and the Advisor or any Affiliate thereof. 
Consistent with the foregoing, it is specifically recognized that the Advisor or
one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having “Corporate Property Associates” or “CPA®” as a part of their name, all
without the need for any consent (and without the right to object thereto) by
CPA: 16 or its Directors.

 

34.  Initial Investment.  The Advisor has contributed to CPA: 16 $200,000 in
exchange for 20,000 Shares (the “Initial Investment”).  The Advisor or its
Affiliates may not sell any of the Shares purchased with the Initial Investment
during the term of this Agreement.  The restrictions included above shall not
continue to apply to any Shares other than the Shares acquired through the
Initial Investment acquired by the Advisor or its Affiliates.  The Advisor shall
not vote any Shares it now owns or hereafter acquires in any vote for the
election of Directors or any vote regarding the approval or termination of any
contract with the Advisor or any of its Affiliates.

 

25

 

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Advisory Agreement as of the day and year first above written.

 

 

CORPORATE PROPERTY ASSOCIATES 16 —GLOBAL INCORPORATED

 

 

 

 

 

By:

/s/Mark J. DeCesaris

 

 

Name:

Mark J. DeCesaris

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

CAREY ASSET MANAGEMENT CORP.

 

 

 

 

 

By:

/s/ Thomas E. Zacharias

 

 

Name:

Thomas E. Zacharias

 

 

Title:

Chief Operating Officer

 

 

 

 

 

 

 

CPA 16 LLC

 

 

 

 

 

 

 

By:

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED, its managing member

 

 

 

 

 

 

 

By:

/s/Mark J. DeCesaris

 

 

Name:

Mark J. DeCesaris

 

 

Title:

Chief Financial Officer

 

 

SCHEDULE A

 

Investment Allocation Guidelines

 

CPA: 16 invests primarily in income-producing commercial real estate assets,
primarily consisting of properties that are leased to single tenants on a triple
net basis.  CPA: 16’s investment objectives and investment strategy are set
forth in its public filings with the Securities and Exchange Commission and are
subject to change from time to time with the approval of the Board.

 

The Advisor is a fiduciary to CPA: 16 and has agreed to allocate Investments
among CPA: 16 and other Investment Entities in a fair manner and in accordance
with these Guidelines.  In order to provide for a fair allocation of Investment
opportunities among Investment Entities, the Advisor agrees that if the Advisor
or any of its Affiliates is presented with a potential Investment which falls
within the investment objectives of one or more of the Investment Entities
(including CPA: 16), the Advisor shall consider the following factors, together
with such other factors as it deems relevant in the exercise of its reasonable
judgment, when deciding how to allocate such Investment among one or more
Investment Entities in a fair and equitable manner

 

·                  whether an Investment Entity is still in its fundraising and
acquisition stage, or has substantially invested the proceeds from its
fundraising stage;

 

·                  the amount of funds available for investment by an Investment
Entity and the length of time that such funds have been available for
investment;

 

·                  the effect of the Investment on the diversification of an
Investment Entity’s portfolio;

 

·                  the effect of the Investment on the profile of an Investment
Entity’s mortgage maturity profile;

 

·                  the ability of an Investment Entity to service any debt
associated with the Investment;

 

·                  the effect of the Investment on the ability of the Investment
Entity to comply with any restrictions on investments and indebtedness contained
in the Investment Entity’s governing documents and public SEC filings, in any
contract or in any law or regulation applicable to the Investment Entity;

 

·                  whether an Investment Entity was formed for the purpose of
making a particular type of investment;

 

·                  the financial attributes of the Investment;

 

·                  the effect of the Investment on the Investment Entity’s
intention to qualify as a REIT, partnership or other type of entity for tax
purposes; and

 

·                  the effect of the Investment on an Investment Entity’s
intention not to be subject to regulation under the Investment Company Act of
1940, as amended.

 

The Advisor agrees to make investment allocation decisions without regard to the
relative fees or other compensation that would be paid to the Advisor and its
Affiliates in connection with the applicable Investments.

 

A - 1

 

SCHEDULE B

 

This Schedule sets forth the terms governing any Shares issued by CPA: 16 to the
Advisor in payment of advisory fees set forth in the Agreement.

 

1.             Restrictions.  The Shares are subject to vesting over a five-year
period.  The Shares shall vest ratably over a five-year period with 20% of the
Shares paid in each payment vesting on each of the first through fifth
anniversary of the date hereof.  Prior to the vesting of the ownership of the
Shares in the Advisor, the Shares may not be transferred by the Advisor.

 

2.             Immediate Vesting.  Upon the expiration of the Agreement for any
reason other than a termination for Cause under paragraph 16 or upon a “Change
of Control” of CPA®:16 (as defined below), all Shares granted to the Advisor
hereunder shall vest immediately and all restrictions shall lapse.  For purposes
of this Schedule A, a “Change of Control” of CPA: 16 shall be deemed to have
occurred if there has been a change in the ownership of CPA: 16 of a nature that
would be required to be reported in response to the disclosure requirements of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as enacted and in force on the date
hereof, whether or not CPA: 16 is then subject to such reporting requirements;
provided, however, that, without limitation, a Change of Control shall be deemed
to have occurred if:

 

(i)            any “person,” as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than CPA: 16, any of its subsidiaries, any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan of CPA: 16 or any of its subsidiaries), together with all
“affiliates” and “associates” (as such terms are defined in Rule 14b-2 under the
Exchange Act) of such person, shall become the “beneficial owner” (as such term
is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of CPA: 16 representing 25% or more of either (A) the combined voting
power of CPA: 16’s then outstanding securities having the right to vote in an
election of the Board (“Voting Securities”) or (B) the then outstanding common
stock of CPA: 16 (in either such case other than as a result of acquisition of
securities directly from CPA: 16);

 

(ii)           persons who, as of the date hereof, constitute the Board (the
“Incumbent Directors”) cease for any reason, including without limitation, as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any person becoming a
director of CPA: 16 subsequent to the date hereof whose election or nomination
for election was approved by a vote of at least a majority of the Incumbent
Directors shall be considered an Incumbent Director; or

 

(iii)          the stockholders of CPA: 16 shall approve (A) any consolidation
or merger of CPA: 16 or any subsidiary where the stockholders of CPA: 16,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing
in the aggregate 50% or more of the voting equity of the entity issuing cash or
securities in the consolidation or merger (or of its ultimate parent entity, if
any), (B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of CPA: 16 or (C) any plan or proposal
for the liquidation or dissolution of CPA: 16.

 

B - 1

 

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by CPA: 16 which, by reducing the number of Shares of
Common Stock outstanding, increases (A) the proportionate number of Shares
beneficially owned by any person to 25% or more of the Shares then outstanding,
or (B) the proportionate voting power represented by the Shares beneficially
owned by any person to 25% or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if any person referred to
in clause (A) or (B) of this sentence shall thereafter become the beneficial
owner of any additional Shares or other Voting Securities (other than pursuant
to a Share split, Share dividend, or similar transaction), then a “Change of
Control” shall be deemed to have occurred for purposes of the foregoing clause
(i).

 

3.             Exception.  Notwithstanding anything else in this Agreement to
the contrary, the Shares shall continue to vest according to the vesting
schedule in Section 1 regardless of:  (a) the expiration of the Advisory
Agreement for any reason other than a termination by CPA: 16 for Cause or a
resignation by the Advisor for other than Good Reason, (b) the merger of CPA: 16
and an Affiliate of CPA: 16 or (c) any “Change of Control” of CPA: 16 in
connection with a merger with an Affiliate of CPA: 16.

 

B - 2