Exhibit 10.2

 

EXECUTION COPY

 

REAL ESTATE CAPITAL MARKETS ADVISORY AGREEMENT

 

THIS ADVISORY AGREEMENT (this “Agreement”), dated as of March 15, 2019 is made
by and between Ladder Capital Finance LLC, a Delaware limited liability company
(“LCF”) and Item Six Capital LLC (“Advisor”).

 

WHEREAS, for purposes of this Agreement, the term “Ladder Companies” shall mean,
collectively, Ladder Capital Corp, a Delaware corporation (“LCC”), Ladder
Capital Finance Holdings LLLP, a Delaware limited liability limited partnership
(“Holdings”), LCF and the direct or indirect subsidiaries of any of LCC,
Holdings and/or LCF, whether currently existing or hereafter acquired or formed;

 

WHEREAS, as of the date hereof, LCF is an indirect wholly-owned subsidiary of
Holdings; and

 

WHEREAS, LCF and Advisor desire to set forth in writing the terms and conditions
of their agreements and understandings with respect to Advisor’s provision of
the Advisory Services (as defined below).

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows.

 

1.                                      Advisory Services.

 

(a)                                 Term.  The term of this Agreement (the
“Term”) shall be the period beginning on March 16, 2019 (the “Commencement
Date”) and ending on the Termination Date (as herein defined).  For purposes of
this Agreement, the term “Termination Date” shall mean the earliest to occur of
(i) the resignation date specified in a written notice of resignation given at
any time after the Commencement Date by Advisor to LCF (which termination date
shall be no earlier than the date 30 days after the date such written notice of
termination is delivered to LCF; provided that from and after such a delivery by
Advisor of such a written notice of termination to LCF, LCF may elect to have
the Termination Date be any date after such delivery that is prior to the
termination date specified by Advisor in such written notice of termination),
(ii) the termination date specified in a written notice of termination given at
any time after the Commencement Date by LCF to Advisor (which termination date
shall be no earlier than the date 30 days after the date such written notice of
termination is delivered to Advisor) and (iii) the date on which Thomas M.
Harney (“Tom Harney”) ceases to owns all of the outstanding ownership interests
of Advisor, or ceases to be an employee of Advisor.

 

(b)                                 Ownership of Advisor; Tom Harney.  Advisor
hereby represents and warrants to LCF that Tom Harney owns all of the
outstanding ownership interests of Advisor.  Advisor hereby agrees that at all
times during the Term, (i) the only owner of outstanding ownership interests of
Advisor will be Tom Harney, (ii) Tom Harney will be an employee of Advisor and
(iii) Advisor will cause Tom Harney to provide the Advisory Services (as herein
defined) on behalf of Advisor.

 

(c)                                  Description of Advisory Services.  During
the Term, Advisor shall be an advisor to LCF and shall provide the following
advisory services (collectively, the “Advisory Services”): (i) advisory services
as requested from time to time by LCF regarding key investor relations, capital
markets transactions, strategic acquisition or disposition transactions, and the
investment advisory business, including the mutual fund known as “Ladder Select
Bond Fund”, all of which will generally entail Advisor providing capital market
related assistance to LCF and the other Ladder Companies in such manner as, and

 

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only as, may be reasonably requested from time to time by any of LCF’s Chief
Executive Officer, President, Chief Financial Officer or Chief Administrative
Officer and (ii) as and when reasonably requested by LCF and reasonably
scheduled in conjunction with Tom Harney, (A) attending up to six key investor
meetings or calls that have been arranged by LCF, (B) attending up to four
investor conferences of LCF per year, (C) attending LCC’s quarterly earnings and
equity analysts calls and (D) participating in preparation meetings and
discussions with members of the management team of LCC in advance of LCC’s
quarterly board meetings and LCC’s quarterly earnings and equity analysts
calls.  During the Term and without in any way limiting the terms of this
Section 1(c), Advisor and LCF may describe Advisor’s or Tom Harney’s position
with LCF as a “Senior Real Estate Capital Markets Advisor”.  Nothing herein may
be construed as authorizing or requiring Advisory Services to be performed by
Advisor if such Advisory Services would require a broker-dealer registration
with the Securities and Exchange Commission or any state regulatory authority.

 

(d)                                 Performance of Advisory Services.  Advisor
agrees that, during the Term, Advisor shall (i) provide the Advisory Services to
the best of Advisor’s and Tom Harney’s ability and in compliance with the
written rules, regulations, policies and procedures of the Ladder Companies as
shall be in effect from time to time, (ii) as and when reasonably requested by
LCF, participate in periodic strategic planning sessions held by the Ladder
Companies, (iii) interact from time to time with senior management of the Ladder
Companies and (iv) perform the other Advisory Services described in
Section 1(c) hereof.  Advisor agrees that Advisor shall cause Tom Harney to
provide a reasonable amount of time during the Term providing Advisory Services
(which is expected to be approximately 30 to 40 days per annum); provided that
the times during which Advisor provides the Advisory Services to the Ladder
Companies shall be set by Advisor; provided further that, as and when reasonably
requested by LCF and with Advisor’s approval (not to be unreasonably withheld or
delayed), certain Advisory Services are to be provided at LCF’s New York office
(with such a request by LCF being for matters such as attendance at certain
in-person meetings of the type described above that are held at LCF’s New York
office).  As a point of clarity, during the Term, LCF shall not be required to
have office space available for Advisor or Tom Harney at LCF’s New York office. 
With respect to Advisor being an advisor to the Company, and in performing the
Advisory Services, Advisor and Tom Harney will each comply with all applicable
policies and procedures of the Ladder Companies, as in effect from time to time.

 

(e)                                  Limits on Authority.  Each of Advisor and
Tom Harney is not authorized to assume or create any obligation or
responsibility on behalf of or in the name of any of the Ladder Companies and
shall not misrepresent his or its status or authority.  Without limiting the
generality of the foregoing, by acceptance of this Agreement, Advisor hereby
acknowledges and agrees that each of Advisor and Tom Harney does not have
authority to act on behalf of, or otherwise bind, LCF or any other Ladder
Company.  Accordingly, each of Advisor and Tom Harney may not enter into any
agreements on behalf of or purport to bind LCF or any other Ladder Company, or
represent to any person that Advisor or Tom Harney has the power to create any
obligation, express or implied, on behalf of any Ladder Company.

 

(f)                                   Annual Fee.  In consideration of Advisor’s
provision of the Advisory Services, LCF shall pay to Advisor a fee of $250,000
per annum (the “Annual Fee”) during the Term.  The Annual Fee shall be paid by
LCF, bi-weekly, in arrears, during the Term; provided, that with respect to the
payment of the Annual Fee to be made with respect to any bi-weekly period in
which the Term is not in effect for the entire bi-weekly period, such payment
shall be pro-rated based on the number of days in such bi-weekly period during
which the Term was in effect.  If the Term ends for any reason, Advisor shall be
entitled only to (i) the accrued but unpaid portion of the Annual Fee as of the
Termination Date and (ii) all accrued but unreimbursed expenses of Advisor that
are subject to reimbursement by LCF pursuant to Section 1(h) through the
Termination Date, but shall not be entitled to any further Annual Fee or any
other compensation of any kind, nature or amount.

 

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(g)                                  Success Fee.  In addition to the Annual
Fee, if the Termination Date has not occurred on or prior to the last day of a
calendar year during which the Term remains in effect, then LCF may determine,
in its sole discretion, that the Advisory Services performed by Advisor during
such calendar year have been of such a nature that Advisor should be paid a
success fee with respect to such calendar year of an amount, if any, to be
determined by LCF, in its sole discretion (a “Success Fee”), which would be paid
to Advisor by no later than 60 days after the end of such calendar year;
provided that Advisor hereby acknowledges and agrees that Advisor has no right
to receive any Success Fee, as the payment of any Success Fee (including the
amount thereof, if any) shall be as determined by LCF, in its sole discretion.

 

(h)                                 Reimbursement of Expenses.  LCF shall
reimburse Advisor for all reasonable, documented travel and other out-of-pocket
expenses (including for entertainment) that Advisor may incur in regard to
Advisor’s provision of the Advisory Services during the Term; provided that any
travel or entertainment related expense that would be for an amount in excess of
$500 individually, and any expense reimbursement that would result of in excess
of $5,000 of aggregate expense reimbursement during any calendar year, will
require prior written approval of LCF in order for such expense to be
reimbursable pursuant to this Section 1(h).  Such expenses shall be reimbursed
as soon as practicable following receipt by LCF of documentation from Advisor
evidencing such expenses, consistent with LCF’s policies relating to expense
reimbursement as in effect from time to time.

 

(i)                                     Other Compensation.  Except as expressly
provided in Section 1(f), each of Advisor and Tom Harney is not entitled to any
compensation in connection with the provision of the Advisory Services.

 

(j)                                    No Right to Continue to be a Advisor. 
Advisor acknowledges and agrees that Advisor may be terminated as an advisor to
LCF at any time for any reason.  Nothing in this Agreement creates any
obligation on the part of LCF or any other Ladder Company to continue Advisor’s
position as an advisor to LCF.

 

(k)                                 Taxes/Benefits.  Advisor shall bear sole
responsibility for payment on behalf of Advisor of any federal, state,
provincial and local income tax withholding, social security taxes, workers’
compensation coverage, unemployment insurance, liability insurance, health
and/or disability insurance, retirement benefits or other welfare or pension
benefits, and/or other payments and expenses (“Charges”) related to amounts paid
hereunder.  Advisor understands and agrees that, unless otherwise agreed with
LCF in writing, with respect to Advisor being engaged as an advisor to LCF
pursuant to this Agreement, each of Advisor and Tom Harney is not eligible for,
and each of Advisor and Tom Harney hereby waives any claim to, wages,
compensation incentives, profit sharing participation, stock options/grants,
health coverage, disability benefits, unemployment benefits or any other
benefits provided to employees of any of the Ladder Companies.  Advisor agrees
to indemnify and hold LCF harmless from and against any losses and expenses
(including without limitation, court costs and reasonable attorneys’ fees),
taxes, interest and/or penalties incurred by any of the Ladder Companies as a
result of the failure of Advisor to timely pay any Charges properly owed by
Advisor.

 

2.                                      Conflict of Interest; Securities Law
Obligations.

 

(a)                                 Conflict of Interest.  During the Term, with
respect to any transaction, potential transaction or other matter that is
considered by LCF or any other Ladder Company in which Advisor has, or is
reasonably likely to have a conflict of interest, Advisor shall promptly
disclose to LCF’s Chief Executive Officer and LCF’s President, in reasonable
detail, the nature of such conflict of interest.

 

(b)                                 Securities Law Obligations.  Advisor and Tom
Harney understand and agree that they are each aware that, under certain
circumstances, the federal and state securities laws prohibit any

 

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person who has material, non-public information about a company from purchasing
or selling securities of such a company or from communicating such information
to any other person under circumstances in which it is reasonably foreseeable
that such person is likely to purchase or sell those securities, and that in no
event will Advisor or Tom Harney purchase or sell any securities of LCC or any
other Ladder Company at a time when Advisor or Tom Harney has material,
non-public information about any Ladder Company, and in no event will Advisor or
Tom Harney communication any such material, non-public information to any person
under circumstances in which it is reasonably foreseeable that such person is
likely to purchase or sell any securities of LCC or any other Ladder Company.

 

3.                                      Confidentiality.  Advisor acknowledges
and agrees that the non-public information and data obtained by Advisor
concerning the business or affairs of the Ladder Companies (“Confidential
Information”) are the property of the Ladder Companies.  Therefore, except as
may be otherwise required by law or legal process, Advisor agrees that, during
the Term and at all times thereafter, without the prior consent of LCF, Advisor
shall not disclose to any person or use for Advisor’s own or any third-party’s
purposes any Confidential Information without the prior written consent of LCF
other than in a good faith effort during the Term to promote the interests of
the Ladder Companies in connection with providing the Advisory Services. 
Advisor shall deliver to LCF, at any time LCF may request, all memoranda, notes,
plans, records, reports, computer files and related back-ups, printouts,
software, and other documents and data (and copies thereof) relating to the
Confidential Information, or the business of any Ladder Company and any other
property of any Ladder Company, in each case, that Advisor may then possess or
have under Advisor’s control.  Notwithstanding anything to the contrary in this
Section 3, Confidential Information shall not include: (i) information to the
extent that it is or becomes generally available to the public (other than as a
result of a disclosure by Advisor) and (ii) information to the extent that it is
disclosed to Advisor by a party or person that is not under any obligation to
keep such information confidential.  If Advisor is required to disclose or
discuss Confidential Information by order of a court of competent jurisdiction,
Advisor may disclose such Confidential Information (provided that in such case,
Advisor shall promptly inform LCF of such order and shall only disclose
Confidential Information to the extent necessary to comply with any such court
order). Ladder will provide Tom Harney with the opportunity to review and
comment on any language relating to this Agreement included in any press release
and public filing by Ladder Companies.

 

4.                                      No Employment Relationship.  Nothing in
this Agreement is intended or shall be deemed to create any employment,
partnership, agency or joint venture relationship between the parties.  The
parties specifically acknowledge that Advisor is an independent contractor and
not an employee of LCF, and that Tom Harney is not any employee of LCF.

 

5.                                      Representations and Warranties of
Advisor.  Advisor represents and warrants to LCF that, neither Advisor nor Tom
Harney is a party to any agreement containing a noncompetition provision or
other restriction which could restrict the ability of Advisor to perform any of
the Advisory Services which Advisor is reasonably expected to perform or conduct
for LCF (or any other Ladder Company) under this Agreement.

 

6.                                      Intellectual Property.  All
copyrightable works that Advisor creates shall be considered “work made for
hire” as such term is defined in 17 U.S.C. Section 101.  Advisor hereby waives
any so-called “moral rights of authors” in connection with all copyrights,
patents, trade secrets or other intellectual property rights associated with any
ideas, concepts, techniques, inventions, processes or works of authorship
developed or created by Advisor during his course of dealings with LCF in
connection with the Advisory Services (“Work Product”). In addition, Advisor
hereby acknowledges and agrees that LCF may use, exploit, distribute, reproduce,
advertise, promote, publicize, alter, modify or edit the Work Product or combine
the Work Product with other works, in LCF’s sole discretion, in any format or
medium hereafter

 

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devised.  Advisor further waives any and all rights to seek or obtain any
injunctive or equitable relief in connection with the Work Product.

 

7.                                      Other Activities During the Term.

 

(a)                                 During the Term, neither Tom Harney, Advisor
nor any other affiliate of Tom Harney will for himself, itself or on behalf of
or in conjunction with any other person, persons, company, partnership,
corporation, business or other entity of whatever nature, engage in any respect,
whether as an officer, director, employee, independent contractor, advisor,
sales representative, consultant, shareholder, owner, partner, manager or in any
other capacity, in the lending business (other than a Ladder Company) of any
Ladder Company, including any business that provides commercial mortgages,
mezzanine financing or any other similar types of financing to, or with respect
to, commercial real estate properties. During the Term and for two (2) years
following the Termination Date, neither Tom Harney, Advisor nor any other
affiliate of Tom Harney will for himself, itself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation,
business or other entity of whatever nature, solicit, hire, retain as an
employee or independent contractor, or interfere with any Ladder Company’s
relationship with any employee, investor, or customer of any Ladder Company (or
any person who was an employee, investor, or customer of any Ladder Company
within the past twelve months).  The restrictions set forth in this
Section 7(a) shall not prohibit or restrict Advisor or Tom Harney from directly
or indirectly owning less than 5% of the publicly traded securities of any
publicly traded company.

 

(b)                                 In the event of the breach by Tom Harney or
Advisor of any of the provisions of this Section 7, LCF shall be entitled, in
addition to all other available rights and remedies, to withhold any or all of
the amounts otherwise payable to Advisor hereunder.  If, at the time of
enforcement of this Section 7, a court shall hold that the duration or scope
restrictions stated herein are unreasonable under circumstances then existing,
the parties agree that the maximum duration or scope reasonable under such
circumstances shall be substituted for the stated duration or scope and that the
court shall be allowed to revise the restrictions contained herein to cover the
maximum period and scope permitted by law.

 

8.                                      Remedies.  In addition and supplementary
to other rights and remedies existing in its favor, LCF may apply to the court
of law or equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof, including Sections 3 and 7 hereof.

 

9.                                      Governing Law.  THE CONSTRUCTION AND
INTERPRETATION OF THIS AGREEMENT SHALL AT ALL TIMES AND IN ALL RESPECTS BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES OF
CONFLICTS OF LAWS.  ANY CLAIM, COMPLAINT, OR ACTION BROUGHT UNDER THIS AGREEMENT
SHALL BE BROUGHT IN A COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK,
WHOSE COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER CLAIMS, COMPLAINTS, OR
ACTIONS BROUGHT UNDER THIS AGREEMENT, AND COMPANY AND ADVISOR HEREBY AGREE AND
SUBMIT TO THE PERSONAL JURISDICTION AND VENUE THEREOF.

 

10.                               WAIVER OF JURY TRIAL.  EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT.

 

11.                               Counterparts; Signature Transmission.  This
Agreement may be executed on separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and

 

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the same agreement.  Signatures transmitted by facsimile or electronic mail
shall be binding as evidence of each party’s agreement to be bound by the terms
of this Agreement.

 

12.                               Burden and Benefit.  This Agreement shall be
binding upon LCF and Advisor, and shall inure to the benefit of LCF and Advisor,
and, in each case, their respective heirs, personal and legal representatives,
successors and permitted assigns.  Advisor’s rights and obligations under this
Agreement may not be assigned by Advisor and any such assignment shall be null
and void.

 

13.                               Severability.  The provisions of this
Agreement shall be deemed severable, and the invalidity or unenforceability of
any one or more of the provisions hereof shall not affect the validity or
enforceability of the other provisions of this Agreement.

 

14.                               Entire Agreement; Amendment.  This Agreement
contains the entire agreement and understanding by and between LCF and Advisor
with respect to the provision of the Advisory Services or any other matters
covered by this Agreement, and supersedes and preempts any prior understandings,
agreements or representations by or among the parties hereto, written or oral,
which may have related to the subject matter hereof in any way.

 

15.                               Waiver.  Failure to insist upon strict
compliance with any term, covenant, or condition of this Agreement shall not be
deemed a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power under this Agreement at any time or times
be deemed a waiver or relinquishment of such right or power at any other time or
times.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Advisory
Agreement effective for all purposes and in all respects as of the day and year
first above written.

 

 

LADDER CAPITAL FINANCE LLC

 

 

 

 

 

By:

/s/ Kelly Porcella

 

 

Name: Kelly Porcella

 

 

Title: General Counsel

 

 

 

 

 

ITEM SIX CAPITAL LLC

 

 

 

 

 

By:

/s/ Thomas M. Harney

 

 

Name: Thomas M. Harney

 

 

Title: Member

 

 

 

Acknowledged and agreed, including for purposes of Section 7 hereof:

 

 

 

 

 

/s/ Thomas M. Harney

 

Thomas M. Harney

 

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