Exhibit 10.2

 

MANAGEMENT AGREEMENT

This MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of
November 26, 2019, by and among Alpine Income Property Trust, Inc., a Maryland
corporation (the “Company”), Alpine Income Property OP, LP, a Delaware limited
partnership (the “Operating Partnership”), and Alpine Income Property Manager,
LLC, a Delaware limited liability company (the “Manager” and, together with the
Company and the Operating Partnership, the “Parties” and each a “Party”).

RECITALS

WHEREAS, the Company is a Maryland corporation that focuses primarily on the
acquisition, ownership and leasing of single-tenant commercial properties;

WHEREAS, the Company owns its assets and conducts its operations through the
Operating Partnership and its other Subsidiaries (as defined herein);

WHEREAS, the Company intends to qualify as a real estate investment trust for
federal income tax purposes and will elect to receive the tax benefits accorded
by Sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the “Code”); and

WHEREAS, the Company and the Operating Partnership desire to retain the Manager
to manage the assets, operations and affairs of the Company pursuant to the
terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto agree as follows:

1.         Definitions.

(a)        The following terms shall have the meanings set forth in this
Section 1(a):

“Acquisition Expenses” means any and all third-party expenses incurred by the
Company, the Manager or any of their respective Affiliates in connection with
the selection, evaluation, acquisition, origination, making or development of
any Investment, whether or not acquired, including legal fees and expenses,
travel and communications expenses, property inspection expenses, brokerage or
finder’s fees, costs of appraisals, nonrefundable option payments on property
not acquired, accounting fees and expenses, title insurance premiums and
expenses, survey expenses, closing costs and the costs of performing due
diligence.

“Affiliate” means, with respect to a Person, a Person that controls, is
controlled by, or is under common control with such original Person. For
purposes of this definition, “control,” when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms “affiliated,” “controlling” and “controlled” have
meanings correlative to the foregoing.

 

“Agreement” has the meaning set forth in the Preamble.

“Annual Budget” has the meaning assigned in Section 2(g)(i).

“Automatic Renewal Term” has the meaning assigned in Section 13(a).

“Base Management Fee” means the base management fee in an amount equal to 1.50%
per annum (0.375% per fiscal quarter) of Total Equity, calculated and payable in
quarterly installments in arrears in cash.

“Board of Directors” means the Board of Directors of the Company.

“Cause Termination Notice” has the meaning assigned in Section 14(a).

“Code” has the meaning assigned to such term in the Recitals.

“Common Stock” means the common stock, par value $0.01 per share, of the
Company.

“Company” has the meaning set forth in the Preamble; provided that all
references herein to the Company shall, except as otherwise expressly provided
herein, be deemed to include any Subsidiaries.

“Company Account” has the meaning assigned in Section 5.

“Company Indemnified Party” has the meaning assigned in Section 11(c).

“Confidential Information” means all non-public information, written or oral,
obtained by the Manager or its Affiliates in connection with the services
rendered hereunder.

“CTO” means Consolidated-Tomoka Land Co., a Florida corporation and the sole
member of the Manager.

“Cumulative Hurdle” means an amount equal to an 8.00% cumulative annual return
on the High Water Price.

“Date of Termination” means the date on which this Agreement is terminated or
expires without renewal.

“Directors” means the members of the Board of Directors.

“Effective Termination Date” has the meaning assigned in Section 13(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Exclusivity and ROFO Agreement” means that certain Exclusivity and Right of
First Offer Agreement, of even date herewith, by and between the Company and
CTO.

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“Final Share Price” means, with respect to any Measurement Period, the volume
weighted average trading price for a share of Common Stock on the NYSE (or any
other securities exchange on which the Common Stock is principally traded) over
the ten consecutive trading days ending on the last trading day of such
Measurement Period.

“GAAP” means generally accepted accounting principles in effect in the U.S. on
the date such principles are applied consistently.

“Governing Instruments” means, with respect to any Person, the articles of
incorporation, certificate of incorporation or charter, as the case may be, and
bylaws in the case of a corporation, the certificate of limited partnership (if
applicable) and agreement of limited partnership or partnership agreement in the
case of a general or limited partnership or the articles or certificate of
formation and operating agreement in the case of a limited liability company, in
each case, as amended, restated or supplemented from time to time.

“High Water Price” means, with respect to any Measurement Period, the volume
weighted average trading price for a share of Common Stock on the NYSE (or any
other securities exchange on which the Common Stock is principally traded) over
the ten consecutive trading days ending on the last trading day immediately
prior to the beginning of such Measurement Period;  provided,  however, that the
High Water Price with respect to the first Measurement Period shall be the price
per share at which shares of the Common Stock are sold to the public in the
Initial Public Offering; provided further that the High Water Price for any
Measurement Period shall never be less than the highest High Water Price for any
preceding Measurement Period.

“Incentive Fee” means the incentive fee payable to the Manager, if any, which
shall be calculated and payable with respect to each Measurement Period (or part
thereof that this Agreement is in effect) in arrears in an amount equal to the
greater of (i) $0.00 and (ii) the product of (a) 15.00% multiplied by (b) the
Outperformance Amount multiplied by (c) the Weighted Average Shares.

“Indemnification Obligations” has the meaning assigned in Section 11(b).

“Indemnitee” has the meaning assigned in Section 11(d).

“Indemnitor” has the meaning assigned in Section 11(d).

“Independent Directors” means the directors serving on the Board of Directors
who have been deemed by the Board of Directors to satisfy the independence
standards applicable to companies listed on the NYSE.

“Initial Public Offering” means that certain underwritten public offering of
Common Stock completed on the date of this Agreement.

 “Initial Term” has the meaning assigned in Section 13(a).

“Internalization Price” means the price ultimately agreed upon by the Company
and the Manager, and paid by the Company to the Manager in connection with an
Internalization Transaction.

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“Internalization Transaction” means a transaction in which (i) the Manager
contributes to the Company, the Operating Partnership or another Subsidiary all
of the assets of the Manager, including, all furniture, fixtures, leasehold
improvements, contract rights, computer software, employment and customer
relationships, goodwill, going concern value, other identifiable intangible
assets and other business assets then owned by the Manager, (ii) CTO contributes
to the Company, the Operating Partnership or another Subsidiary 100% of the
outstanding equity interests in the Manager, or (iii) this Agreement is
terminated and, in the case of any transaction referred to in clause (i), (ii)
or (iii), the Company becomes internally managed by the officers and employees
of CTO or the Manager.

“Investments” means the investments of the Company.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Investment Guidelines” means the general criteria, parameters and policies
relating to Investments as established by the Board of Directors, as the same
may be modified from time-to-time.

“IPO Closing Date” has the meaning assigned in Section 13(a).

“Judicially Determined” has the meaning assigned in Section 11(a).

“Manager” has the meaning assigned in the Preamble.

“Manager Change of Control” means the occurrence of any of the following:
(i) the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all of the assets of the Manager, taken as a whole, to any
Person other than CTO or any of its Affiliates; (ii) the sale, lease or
transfer, in one or a series of related transactions, of all or substantially
all of the assets of CTO, taken as a whole, to any Person other than an
Affiliate of CTO; (iii) the acquisition by any Person or group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), including any group acting for the purpose of acquiring,
holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), other than the Company or any of its Affiliates, in a single
transaction or in a series of related transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 50% or more of the total voting power of the voting capital
interests of the Manager or CTO; or (iv) change in the composition of the board
of directors of CTO such that, during any 12-month period, the individuals who,
as of the beginning of such period, constitute the board of directors of CTO
cease for any reason to constitute more than 50% of the board of directors of
CTO; provided, however, that any individual becoming a member of the board of
directors of CTO subsequent to the beginning of such period whose election, or
nomination for election by CTO’s shareholders, was approved by a vote of at
least two-thirds of the directors immediately prior to the date of such
appointment or election will be considered as though such individual were a
member of the board of directors of CTO as of the beginning of such period.

“Manager Indemnified Party” has the meaning assigned in Section 11(a).

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“Measurement Period” means each period beginning on January 1 after the last
Measurement Period with respect to which the Incentive Fee shall have been
payable (January 1, 2020 with respect to the first Measurement Period) and
ending on December 31 of the applicable calendar year, provided that if this
Agreement is terminated or expires without renewal other than on December 31,
the last Measurement Period will end on the last complete trading day for the
Common Stock on the NYSE (or any other securities exchange on which the Common
Stock is principally traded) prior to such termination or expiration.

“Notice of Proposal to Negotiate” has the meaning assigned in Section 13(c).

“NYSE” means the New York Stock Exchange.

“OP units” means common units of limited partnership interest in the Operating
Partnership.

“Operating Partnership” has the meaning assigned in the Preamble.

“Outperformance Amount” means, with respect to any Measurement Period, (i)
Total Stockholder Return with respect to such Measurement Period, minus (ii) the
Cumulative Hurdle.

“Party” or “Parties” has the meaning assigned in the Preamble.

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal,
state, county or municipal government or any bureau, department or agency
thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

“Records” has the meaning assigned in Section 6(a).

“REIT” means a “real estate investment trust” as defined under the Code.

“Representatives” means collectively the Manager’s Affiliates, officers,
directors, employees, agents and representatives.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Subsidiary” means any subsidiary of the Company, any partnership (including the
Operating Partnership), the general partner of which is the Company or any
subsidiary of the Company, and any limited liability company, the managing
member of which is the Company or any subsidiary of the Company.

“Tax Preparer” has the meaning assigned in Section 7(f).

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“Termination Fee” means, with respect to any termination or non-renewal of this
Agreement under Section 13, a fee equal to three times the sum of (i) the
average annual Base Management Fee earned by the Manager during the 24-month
period immediately preceding the most recently completed calendar quarter prior
to the Effective Termination Date and (ii) the average annual Incentive Fee
earned by the Manager during the two most recently completed Measurement Periods
prior to the Effective Termination Date.

“Termination Notice” has the meaning assigned in Section 13(b).

“Termination Without Cause” has the meaning assigned in Section 13(b).

“Total Equity” means, as of a particular date, (i) the sum of the net cash
proceeds and the value of non-cash consideration from all issuances of equity
securities by the Company or the Operating Partnership since the Company’s
inception, including OP units (calculated on a daily weighted average basis),
less (ii) any amount that the Company or the Operating Partnership has paid to
repurchase shares of Common Stock or OP units, as applicable, since the
Company’s inception. Total Equity may be adjusted to exclude one-time events
pursuant to changes in GAAP and certain non-cash items after discussions between
the Manager and the Independent Directors and approval in advance by a majority
of the Independent Directors.  As a result, Total Equity, for purposes of
calculating the Base Management Fee, could be greater than or less than the
amount of the Company’s stockholders’ equity calculated in accordance with GAAP
and shown on the face of the Company’s consolidated balance sheets.

“Total Stockholder Return” means, with respect to any Measurement Period, an
amount equal to (i) the Final Share Price, plus (ii) all dividends with respect
to a share of Common Stock paid since the beginning of such Measurement Period
(whether paid in cash or a distribution in kind), minus (iii) the High Water
Price.

“Treasury Regulations” means the Procedures and Administration Regulations
promulgated by the U.S. Department of Treasury under the Code, as amended.

“Weighted Average Shares” means, with respect to any Measurement Period, the
weighted average fully diluted number of shares of Common Stock issued and
outstanding during such Measurement Period, as determined in accordance with
GAAP.

(b)        As used herein, accounting terms relating to the Company not defined
in Section 1(a) and accounting terms partly defined in Section 1(a), to the
extent not defined, shall have the respective meanings given to them under GAAP.
As used herein, “fiscal quarters” shall mean the period from January 1 to March
31, April 1 to June 30, July 1 to September 30 and October 1 to December 31 of
the applicable year.

(c)        The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section references are to
this Agreement unless otherwise specified.

(d)        The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The words
include, includes and including shall be deemed to be followed by the phrase
“without limitation.”

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2.         Appointment and Duties of the Manager.

(a)        Appointment.  The Company and the Operating Partnership hereby
appoint the Manager to manage, operate and administer the assets, operations and
affairs of the Company subject to the further terms and conditions set forth in
this Agreement, and the Manager hereby agrees to use its commercially reasonable
efforts to perform each of the duties set forth herein in accordance with the
provisions of this Agreement.

(b)        Duties.  The Manager shall manage, operate and administer the
day-to-day operations, business and affairs of the Company, subject to the
direction and supervision of the Board of Directors, and shall have only such
functions and authority as the Board of Directors may delegate to it, including
the authority identified and delegated to the Manager herein. Without limiting
the foregoing, the Manager shall oversee and conduct the investment activities
of the Company in accordance with the Investment Guidelines attached hereto as
Exhibit A, as amended from time to time, and other policies adopted and
implemented and monitored by the Board of Directors. Subject to the foregoing,
the Manager will use its commercially reasonable efforts to perform (or cause to
be performed) such services and activities relating to the management, operation
and administration of the assets, liabilities and business of the Company as is
appropriate, including:

(i)       serving as the Company’s consultant with respect to the periodic
review of the Investment Guidelines and other policies and criteria for the
other borrowings and the operations of the Company;

(ii)      investigating, analyzing and selecting possible Investment
opportunities and originating, acquiring, structuring, financing, retaining,
selling, negotiating for prepayment, restructuring or disposing of Investments
consistent with the Investment Guidelines and making representations and
warranties in connection therewith;

(iii)     with respect to any prospective Investment by the Company and any
sale, exchange or other disposition of any Investment by the Company, conducting
negotiations on the Company’s behalf with sellers and purchasers and their
respective agents, representatives and investment bankers and owners of
privately and publicly held real estate companies;

(iv)     engaging and supervising, on the Company’s behalf and at the Company’s
sole cost and expense, third-party service providers who provide legal,
accounting, due diligence, transfer agent, registrar, property management and
maintenance services, leasing services, master servicing, special servicing,
banking, investment banking, mortgage brokerage, real estate brokerage,
securities brokerage and other financial services and such other services as may
be required relating to the Investments or potential Investments and to the
Company’s other business and operations;

(v)      coordinating and supervising, on behalf of the Company and at the
Company’s sole cost and expense, other third-party service providers to the
Company;

(vi)     coordinating and managing operations of any joint venture or
co-investment interests held by the Company and conducting all matters with any
joint venture or co-investment partners;

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(vii)    providing executive and administrative personnel, office space and
office services required in rendering services to the Company;

(viii)   administering the Company’s day-to-day operations and performing and
supervising the performance of such other administrative functions necessary to
the Company’s management as may be agreed upon by the Manager and the Board of
Directors, including the collection of revenues and the payment of the Company’s
debts and obligations;

(ix)     in connection with the Company’s subsequent, on-going obligations under
the Sarbanes-Oxley Act of 2002, as amended, and the Exchange Act, engaging and
supervising, on the Company’s behalf and at the Company’s sole cost and expense,
third-party consultants and other service providers to assist the Company in
complying with the requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the Exchange Act;

(x)      communicating on the Company’s behalf with the holders of any of the
Company’s equity or debt securities as required to satisfy the reporting and
other requirements of any governmental bodies or agencies or trading markets and
to maintain effective relations with such holders;

(xi)     counseling the Company in connection with policy decisions to be made
by the Board of Directors;

(xii)    counseling the Company, and when appropriate, evaluating and making
recommendations to the Board of Directors regarding hedging and financing
strategies and engaging in hedging, financing and borrowing activities on the
Company’s behalf, consistent with the Investment Guidelines;

(xiii)   counseling the Company regarding the qualification and maintenance of
its status as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and the Treasury
Regulations;

(xiv)   counseling the Company regarding the maintenance of the Company’s
exclusion from status as an investment company under the Investment Company Act
and monitoring compliance with the requirements for maintaining such exclusion
and using commercially reasonable efforts to cause the Company to maintain such
exclusion from status as an investment company under the Investment Company Act;

(xv)    assisting the Company in developing criteria for asset purchase
commitments that are specifically tailored to the Company’s investment
objectives and making available to the Company its knowledge and experience with
respect to single-tenant commercial real estate and operations;

(xvi)   furnishing such reports to the Company or the Board of Directors that
the Manager reasonably determines to be responsive to reasonable requests for
information from the Company or the Board of Directors regarding the Company’s
activities and services performed for the Company by the Manager;

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(xvii)  monitoring the operating performance of the Investments and providing
periodic reports with respect thereto to the Board of Directors, including
comparative information with respect to such operating performance and budgeted
or projected operating results;

(xviii) purchasing assets (including investing in short-term investments pending
the purchase of other Investments, payment of fees, costs and expenses, or
distributions to the Company’s stockholders), and advising the Company as to the
Company’s capital structure and capital raising;

(xix)   causing the Company to retain, at the sole cost and expense of the
Company, qualified independent accountants and legal counsel, as applicable, to
assist in developing appropriate accounting procedures, compliance procedures
and testing systems with respect to financial reporting obligations and
compliance with the provisions of the Code and the Treasury Regulations
applicable to REITs and taxable REIT subsidiaries, and conducting quarterly
compliance reviews with respect thereto;

(xx)    causing the Company to qualify to do business in all applicable
jurisdictions and to obtain and maintain all appropriate licenses;

(xxi)   assisting the Company in complying with all regulatory requirements
applicable to the Company in respect of the Company’s business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act and the Securities Act;

(xxii)  taking all necessary actions to cause the Company to make required tax
filings and reports and maintain compliance with the provisions of the Code and
Treasury Regulations applicable to the Company, including the provisions
applicable to the Company’s qualification as a REIT for U.S. federal income tax
purposes;

(xxiii)  handling and resolving all claims, disputes or controversies (including
all litigation, arbitration, settlement or other proceedings or negotiations) in
which the Company may be involved or to which the Company may be subject arising
out of the Company’s day-to-day operations, subject to such limitations or
parameters as may be imposed from time to time by the Independent Directors;

(xxiv)  using commercially reasonable efforts to cause expenses incurred by or
on behalf of the Company to be commercially reasonable or commercially customary
and within any budgeted parameters or expense guidelines set by the Independent
Directors from time to time;

(xxv)  advising on, and obtaining on behalf of the Company, appropriate credit
facilities or other financings for the Investments consistent with the
Investment Guidelines;

(xxvi)  advising the Company with respect to offering and selling securities
publicly or privately in connection with the Company’s financing strategy and
capital requirements;

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(xxvii)         performing such other services as may be required from time to
time for management and other activities relating to the assets of the Company
as the Board of Directors shall reasonably request or the Manager shall deem
appropriate under the particular circumstances; and

(xxviii)        using commercially reasonable efforts to cause the Company to
comply with all applicable laws.

(c)        Service Providers.  The Manager may engage Persons who are
non-Affiliates, for and on behalf, and at the sole cost and expense, of the
Company to provide to the Company sourcing, acquisition, disposition, asset
management, property management, leasing, financing, development, disposition of
real estate and/or similar services customarily provided in connection with the
management, operation and administration of a business similar to the business
of the Company, pursuant to agreement(s) that provide for market rates and
contain standard market terms.

(d)        Reporting Requirements.

(i)       As frequently as the Manager may deem necessary or advisable, or at
the direction of the Board of Directors, the Manager shall prepare, or cause to
be prepared, with respect to any Investment (A) reports and information on the
Company’s operations and asset performance and (B) other information reasonably
requested by the Board of Directors.

(ii)      The Manager shall prepare, or cause to be prepared, all reports,
financial or otherwise, with respect to the Company reasonably required in order
for the Company to comply with its Governing Instruments or any other materials
required to be filed with any governmental entity or agency, and shall prepare,
or cause to be prepared, all materials and data necessary to complete such
reports and other materials including at the sole cost and expense of the
Company, an annual audit of the Company’s books of account by a nationally
recognized independent accounting firm.

(iii)     The Manager shall prepare regular reports for the Board of Directors
to enable the Board of Directors to review the Company’s acquisitions, portfolio
composition and characteristics, credit quality, performance and compliance with
the Investment Guidelines and policies approved by the Board of Directors.

(e)        Reliance by Manager.  In performing its duties under this Section 2,
the Manager shall be entitled to rely on qualified experts and professionals
(including accountants, legal counsel and other professional service providers)
hired by the Manager at the Company’s sole cost and expense.

(f)        Payment and Reimbursement of Expenses.  On a quarterly basis,
following the end of each quarter, the Company shall pay in cash all expenses,
and reimburse the Manager for the Manager’s expenses incurred on behalf of the
Company, in connection with any such services to the extent such expenses are
payable or reimbursable by the Company to the Manager pursuant to Section 9.

(g)        Matters Requiring Approval of Independent Directors.

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(i) Beginning with fiscal year 2021, the Manager shall prepare an annual
operating and capital expenditure budget covering each of the Company’s fiscal
years (the “Annual Budget”), and will deliver such Annual Budget to the
Independent Directors no later than 45 days prior to the first day of the fiscal
year covered by such Annual Budget. Each Annual Budget must be approved by a
majority of the Independent Directors. Any alteration, supplement, amendment or
other modification to or variation from the Annual Budget in excess of 5.0% of
the budgeted amount for such items must be approved by a majority of the
Independent Directors.

(ii) The terms of any new or the non-contractual renewal of a lease that
contributed more than the lesser of $5.0 million or 5.0% of the Company’s
annualized base rent as of the date the lease is entered into or the expiration
of the lease, as applicable, must be approved by a majority of the Independent
Directors.

(iii) All acquisitions of single-tenant, net leased properties from CTO or any
of its Affiliates must be approved by a majority of the Independent Directors.

3.         Dedication; Other Activities.

(a)        Devotion of Time.  The Manager shall devote sufficient resources to
the administration of the Company to discharge the Manager’s duties under this
Agreement. The Manager, directly or indirectly through its Affiliates, will
provide a management team (including a President and Chief Executive Officer, a
Chief Financial Officer, and a General Counsel and Corporate Secretary) along
with appropriate support personnel, to deliver the management services to the
Company hereunder.  The members of such management team shall devote such of
their working time and efforts to the management of the Company as the Manager
deems reasonably necessary and appropriate for the proper performance of all of
the Manager’s duties hereunder, commensurate with the level of activity of the
Company from time to time.  The Company shall have the benefit of the Manager’s
reasonable judgment and effort in rendering services and, in furtherance of the
foregoing, the Manager shall not undertake activities which, in its reasonable
judgment, will materially adversely affect the performance of its obligations
under this Agreement.

(b)        Other Activities.  Subject to Section 3(a) above and the Exclusivity
and ROFO Agreement, nothing herein shall prevent CTO, the Manager or any of
their Affiliates or any of the officers, directors, employees or personnel of
any of the foregoing, from engaging in other businesses or from rendering
services of any kind to any other Person, including investing in, or rendering
advisory services to others investing in, any type of real estate, real
estate-related investment or non-real estate-related investment or in any way
bind or restrict CTO, the Manager or any of their Affiliates or any of the
officers, directors, employees or personnel of any of the foregoing from buying,
selling or trading any assets, securities or commodities for their own accounts
or for the account of others for whom CTO, the Manager or any of their
Affiliates or any of the officers, directors, employees or personnel of any of
the foregoing may be acting.

(c)        Officers, Employees, Etc.  The members, partners, officers,
employees, personnel and agents of CTO, the Manager and their Affiliates may
serve as directors, officers, employees, agents, nominees or signatories for the
Company or any Subsidiary, to the extent permitted by their Governing
Instruments, as may be amended from time to time, or by any resolutions duly

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adopted by the Board of Directors pursuant to the Company’s Governing
Instruments. When executing documents or otherwise acting in such capacities for
the Company or such other Subsidiary, such Persons shall use their respective
titles with respect to the Company or such Subsidiary.

(d)        Exclusivity and ROFO Agreement. On the date hereof, the Company and
CTO have entered into the Exclusivity and ROFO Agreement, which, among other
things, governs the circumstances under which CTO and its Affiliates must offer
to the Company the opportunity to acquire a ROFO Property (as defined in the
Exclusivity and ROFO Agreement).

4.         Agency; Authority

(a)        The Manager shall act as the agent of the Company in originating,
developing, acquiring, structuring, financing, managing, renovating, leasing and
disposing of Investments, disbursing and collecting the Company’s funds, paying
the debts and fulfilling the obligations of the Company, supervising the
performance of professionals engaged by or on behalf of the Company and
handling, prosecuting and settling any claims of or against the Company, the
Board of Directors, holders of the Company’s securities or the Company’s
representatives or assets.

(b)        In performing the services set forth in this Agreement, as an agent
of the Company, the Manager shall have the right to exercise all powers and
authority which are reasonably necessary and customary to perform its
obligations under this Agreement, including the following powers, subject in
each case to the terms and conditions of this Agreement, including the
Investment Guidelines: to purchase, exchange or otherwise acquire and to sell,
exchange or otherwise dispose of, any Investment in a public or private sale; to
borrow and, for the purpose of securing the repayment thereof, to pledge,
mortgage or otherwise encumber Investments; to purchase, take and hold
Investments subject to mortgages, liens or other encumbrances; to extend the
time of payment of any liens or encumbrances which may at any time be
encumbrances upon any Investment, irrespective of by whom the same were made; to
foreclose, to reduce the rate of interest on, and to consent to the modification
and extension of the maturity of any Investments, or to accept a deed in lieu of
foreclosure; to join in a voluntary partition of any Investment; to cause to be
demolished any structures on any real estate Investment; to cause renovations
and capital improvements to be made to any real estate Investment; to abandon
any Investment deemed to be worthless; to enter into joint ventures or otherwise
participate in investment vehicles investing in Investments; to cause any real
estate Investment to be leased, operated, developed, constructed or exploited;
to cause the Company to indemnify third parties in connection with contractual
arrangements between the Company and such third parties; to obtain and maintain
insurance in such amounts and against such risks as are prudent in accordance
with customary and sound business practices in the appropriate geographic area;
to cause any property to be maintained in good state of repair and upkeep; to
pay the taxes, upkeep, repairs, carrying charges, maintenance and premiums for
insurance; to use the personnel and resources of its Affiliates in performing
the services specified in this Agreement without any additional costs or charges
to the Company; to hire third-party service providers subject to and in
accordance with Section 2; to designate and engage all third-party professionals
and consultants to perform services (directly or indirectly) on behalf of the
Company, including accountants, legal counsel and engineers; and to take any and
all other actions as are necessary or appropriate in connection with the
Investments.

12

 

(c)        The Manager shall be authorized to represent to third parties that it
has the power to perform the actions which it is authorized to perform under
this Agreement.

5.         Bank Accounts.

At the direction of the Board of Directors, the Manager may establish and
maintain as an agent on behalf of the Company one or more bank accounts in the
name of the Company or any other Subsidiary (any such account, a “Company
Account”), collect and deposit funds into any such Company Account and disburse
funds from any such Company Account, under such terms and conditions as the
Board of Directors may approve. The Manager shall from time-to-time render
appropriate accountings of such collections and payments to the Board of
Directors and, upon request, to the auditors of Company.

6.         Books and Records; Confidentiality.

(a)        Books and Records.  The Manager shall maintain appropriate books of
account, records, data and files (including computerized material)
(collectively, “Records”) relating to the Company and the Investments generated
or obtained by the Manager in performing its obligations under this Agreement,
and such Records shall be accessible for inspection by representatives of the
Company or any Subsidiary at any time during normal business hours upon one
business day’s advance written notice.  The Manager shall have full
responsibility for the maintenance, care and safekeeping of all Records.  The
Manager agrees that the Records are the property of the Company, and the Manager
agrees to deliver the Records to the Company upon the written request of the
Company as directed by a majority of the Independent Directors.

(b)        Confidentiality.  The Manager shall keep confidential any and all
non-public information, written or oral, obtained by it in connection with the
services rendered hereunder and shall not disclose Confidential Information, in
whole or in part, to any Person other than to CTO and its officers, employees,
agents or representatives who need to know such Confidential Information for the
purpose of rendering services hereunder or with the consent of the Company,
except: (i) in accordance with any advisory agreement contemplated by
Section 2(c); (ii) with the prior written consent of a majority of the
Independent Directors; (iii) to legal counsel, accountants, financial advisors
and other professional advisors; (iv) to appraisers, creditors, financing
sources, trading counterparties, other counterparties, third-party service
providers to the Company and others (in each case, both those actually doing
business with the Company and those with whom the Company seeks to do business)
in the ordinary course of the Company’s business; (v) to governmental or
regulatory officials having jurisdiction over the Company; (vi) in connection
with any governmental or regulatory filings of the Company or disclosure or
presentations to Company investors; or (vii) to respond to requests from
judicial or regulatory or self-regulatory organizations and as required by law
or legal process to which the Manager or any Person to whom disclosure is
permitted hereunder is a party. If, failing the entry of a protective order or
the receipt of a waiver hereunder, the Manager is, in the opinion of counsel,
required to disclose Confidential Information, the Manager may disclose only
that portion of such information that its counsel advises in writing is legally
required without liability hereunder; provided, that the Manager agrees to
exercise commercially reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information. Notwithstanding
anything herein to the contrary, each of the following shall be deemed to be
excluded from provisions hereof: any Confidential Information that (A) is

13

 

available to the public from a source other than the Manager not resulting from
the Manager’s violation of this Section 6, (B) is released in writing by the
Company to the public, or (C) is obtained by the Manager from a third party not
known by the Manager to be in breach of an obligation of confidence with respect
to the Confidential Information disclosed. The Manager agrees (1) to inform each
of its Representatives of the non-public nature of the Confidential Information,
(2) to direct such Persons to treat such Confidential Information in accordance
with the terms hereof and (3) to be responsible for any breaches of this Section
6 by any of its Representatives. The provisions of this Section 6 shall survive
the expiration or earlier termination of this Agreement for a period of one
year.

7.         Obligations of Manager; Restrictions.

(a)        Internal Control.  The Manager shall (i) establish and maintain a
system of internal accounting and financial controls designed to provide
reasonable assurance of the reliability of financial reporting, the
effectiveness and efficiency of operations and compliance with applicable laws,
(ii) maintain records for each Investment on a GAAP basis, (iii) develop
accounting entries and reports required by the Company to meet its reporting
requirements under applicable laws, (iv) consult with the Company with respect
to proposed or new accounting/reporting rules identified by the Manager and
(v) prepare quarterly and annual financial statements as soon as practicable
after the end of each such period as may be reasonably requested and general
ledger journal entries and other information necessary for the Company’s
compliance with applicable laws and in accordance with GAAP and cooperate with
the Company’s independent accounting firm in connection with the auditing or
review of such financial statements, the cost of any such audit or review to be
paid by the Company.

(b)        Restrictions.

(i)       The Manager acknowledges that the Company intends to conduct its
operations so as (A) to maintain its qualification as a REIT for U.S. federal
income tax purposes, and (B) not to become regulated as an investment company
under the Investment Company Act, and agrees to use commercially reasonable
efforts to cooperate with the Company’s efforts to conduct its operations so as
to maintain its REIT qualification and not to become regulated as an investment
company under the Investment Company Act. The Manager shall refrain from any
action or Investment that (a) is not in compliance with the Investment
Guidelines, (b) would cause the Company to fail to qualify or maintain its
qualification as a REIT, (c) would cause the Company or any Subsidiary to be
required to be registered as an investment company under the Investment Company
Act, or (d) would violate any law, rule or regulation of any governmental body
or agency having jurisdiction over the Company or that would otherwise not be
permitted by the Company’s Governing Instruments. If the Manager is ordered to
take any such action by the Board of Directors, the Manager shall promptly
notify the Independent Directors of the Manager’s judgment that such action
would adversely affect such status or violate any such law, rule or regulation
or the Company’s Governing Instruments.

(ii)      The Manager shall require each seller or transferor of investment
assets to the Company to make such representations and warranties regarding such
assets as may, in the reasonable judgment of the Manager, be necessary and
appropriate and consistent with standard industry practice.  In addition, the
Manager shall take such other action as it deems

14

 

necessary or appropriate and consistent with standard industry practice with
regard to the protection of the Investments.

(iii)     The Company shall not invest in joint ventures with the Manager or any
Affiliate of the Manager, unless (a) such Investment is made in accordance with
the Investment Guidelines and (b) such Investment is approved in advance by a
majority of the Independent Directors.

(c)        Board of Directors Review and Approval.  The Board of Directors will
periodically review the Investment Guidelines and the Company’s portfolio of
Investments but will not be required to review each proposed Investment;
provided, that the Company may not, and the Manager may not cause the Company
to, acquire any Investment, sell any Investment or engage in any co-investment
that requires the approval of a majority of the Independent Directors unless
such transaction has been so approved. If a majority of the Independent
Directors determines that a particular transaction does not comply with the
Investment Guidelines, then a majority of the Independent Directors will
consider what corrective action, if any, is appropriate.  The Manager shall have
the authority to take, or cause the Company to take, any such corrective action
specified by a majority of the Independent Directors. The Manager shall be
permitted to rely upon the direction of the Corporate Secretary of the Company
to evidence approval of the Independent Directors with respect to a proposed
Investment that requires approval of the Independent Directors.

(d)        [Intentionally Omitted.]

(e)        Insurance.  The Manager shall maintain “errors and omissions”
insurance coverage and such other insurance coverage which is customarily
carried by managers performing functions similar to those of the Manager under
this Agreement with respect to assets similar to the assets of the Company, in
an amount which is comparable to that customarily maintained by other managers
or servicers of similar assets.  The Manager shall, on behalf and at the expense
of the Company, with the assistance of an experienced and reputable insurance
broker, obtain and maintain customary directors’ and officers’ liability
insurance for the Company’s directors and officers and shall report to the Board
of Directors regarding the scope and cost of such coverage and, at the request
of the Independent Directors, shall modify or expand such coverage with the
assistance of an experienced and reputable insurance broker.

(f)        Tax Filings.  The Manager shall (i) assemble, maintain and provide to
the firm designated by the Company to prepare tax returns on behalf of the
Company and its subsidiaries (the “Tax Preparer”) information and data required
for the preparation of federal, state, local and foreign tax returns, any
audits, examinations or administrative or legal proceedings related thereto or
any contractual tax indemnity rights or obligations of the Company and its
subsidiaries and supervise the preparation and filing of such tax returns, the
conduct of such audits, examinations or proceedings and the prosecution or
defense of such rights, (ii) provide factual data reasonably requested by the
Tax Preparer or the Company with respect to tax matters, (iii) assemble, record,
organize and report to the Company data and information with respect to the
Investments relative to taxes and tax returns in such form as may be reasonably
requested by the Company, and (iv) supervise the Tax Preparer in connection with
the preparation, filing or delivery to appropriate persons, of applicable tax
information reporting forms with respect to the Investments and the

15

 

Common Stock (including information reporting forms, whether on Form 1099 or
otherwise with respect to sales, interest received, interest paid, dividends
paid and other relevant transactions); it being understood that, in the context
of the foregoing, the Company shall rely on its own tax advisers in the
preparation of its tax returns and the conduct of any audits, examinations or
administrative or legal proceedings related thereto and that, without limiting
the Manager’s obligation to provide the information, data, reports and other
supervision and assistance provided herein, the Manager will not be responsible
for the preparation of such returns or the conduct of such audits, examinations
or other proceedings.

8.         Compensation.

(a)        For the services rendered under this Agreement, the Company shall pay
the Base Management Fee and the Incentive Fee to the Manager.

(b)        The Base Management Fee shall be payable in arrears in cash, in
quarterly installments commencing with the fiscal quarter in which this
Agreement is executed.  If applicable, the initial and final installments of the
Base Management Fee shall be pro-rated based on the number of days during the
initial and final fiscal quarter, respectively, that this Agreement is in
effect.  The Manager shall calculate each installment of the Base Management Fee
within 30 days after the end of the fiscal quarter with respect to which such
installment is payable. A copy of such calculation made by the Manager shall
thereafter promptly (but in any event within 30 days of the date that the
Manager has made the calculation) be delivered to the Board of Directors and,
upon such delivery, payment of such installment of the Base Management Fee shown
therein shall be due and payable in cash no later than the date which is five
business days after the date of delivery to the Board of Directors of the
written statement from the Manager setting forth the computation of the Base
Management Fee for such fiscal quarter;  provided, however, that such Base
Management Fee may be offset by the Company against amounts due to the Company
by the Manager.

(c)        As soon as practicable after the end of each Measurement Period, the
Manager shall prepare a statement setting forth the Manager’s calculation of any
Incentive Fee payable by the Company to the Manager with respect to such
Measurement Period, and the Manager shall deliver such statement to the Board of
Directors. The Company shall pay any such Incentive Fee in cash promptly (but in
any event within 15 business days) after delivery to the Board of Directors of
the statement setting forth the Manager’s calculation of the Incentive Fee,
which the Manager shall provide no later than 30 days following the end of the
Measurement Period.

(d)        Additional Consideration.  It is expressly understood by the Parties
that this Agreement is drafted and entered into in consideration of the
obligations and benefits contained in this Agreement.  It is also recognized
that the Manager was instrumental in creating the Company, developing and
implementing its business plan, and providing initial financing and resources.

9.         Expenses.

(a)        The Company shall bear all of its operating expenses, except those
specifically required to be borne by the Manager under this Agreement.  The
expenses required to be borne by the Company include, but are not limited to:

16

 

(i)       Acquisition Expenses incurred in connection with the selection and
acquisition of Investments;

(ii)      fees, commissions and expenses incurred in connection with the
issuance of the Company’s securities, any financing transaction and other costs
incident to the acquisition, development, redevelopment, construction,
repositioning, leasing, disposition and financing of Investments;

(iii)     costs of legal, tax, accounting, consulting, auditing and other
similar services rendered for the Company by third-party service providers
retained by the Manager;

(iv)     the compensation and expenses of Directors and the cost of liability
insurance to indemnify the Company, Directors and officers;

(v)      costs associated with the establishment and maintenance of any credit
facilities, other financing arrangements or indebtedness or any securities
offerings of the Company (including, in either case, commitment fees,
third-party accounting  fees, third-party legal fees, closing costs and other
customary costs);

(vi)     expenses connected with communications to holders of securities of the
Company or any of its Subsidiaries and other bookkeeping and clerical work
necessary in maintaining relations with holders of such securities and in
complying with the continuous reporting and other requirements of governmental
bodies or agencies, including all costs of preparing and filing required reports
with the SEC, the costs payable by the Company to any transfer agent and
registrar in connection with the listing and/or trading of the Company’s stock
on any exchange, the fees payable by the Company to any such exchange in
connection with its listing, costs of preparing, printing and mailing the
Company’s annual report to the Company’s stockholders or the Operating
Partnership’s partners, as applicable, and proxy materials with respect to any
meeting of the Company’s stockholders or the Operating Partnership’s partners,
as applicable;

(vii)    transfer agent, registrar and exchange listing fees;

(viii)   the cost of printing and mailing proxies, reports and other materials
to the Company’s stockholders;

(ix)     costs associated with any computer software or hardware, electronic
equipment or purchased information technology services from third-party vendors
that is used for the Company;

(x)      expenses incurred by managers, officers, personnel and agents of the
Manager for travel on the Company’s behalf and other out-of-pocket expenses
incurred by managers, officers, personnel and agents of the Manager in
connection with the purchase, development, redevelopment, construction,
repositioning, leasing, financing, refinancing, sale or other disposition of an
Investment or in connection with any of the Company’s securities offerings, or
in connection with any financing transaction;

17

 

(xi)     costs and expenses incurred with respect to market information systems
and publications, research publications and materials and settlement, clearing
and custodial fees and expenses;

(xii)    compensation and expenses of a transfer agent for the Company;

(xiii)   the costs of maintaining compliance with all federal, state and local
rules and regulations or any other regulatory agency;

(xiv)   all taxes and license fees;

(xv)    all insurance costs incurred in connection with the operation of the
Company’s business except for the costs attributable to the insurance for the
personnel of the Manager or CTO that the Manager or CTO elects to carry for
itself;

(xvi)   all other third-party costs and expenses relating to the Company’s
business and investment operations, including the costs and expenses of
acquiring, owning, protecting, maintaining, developing and disposing of
Investments, including appraisal, reporting, audit and legal fees;

(xvii)  expenses relating to any office(s) or office facilities, including
disaster backup recovery sites and facilities that the Independent Directors
elect to maintain for the Company separate from the office or offices of CTO and
the Manager;

(xviii) expenses connected with the payments of interest, dividends or
distributions in cash or any other form authorized or caused to be made by the
Board of Directors to or on account of holders of the Company’s securities and
the securities of any of the Subsidiaries, including in connection with any
dividend reinvestment plan;

(xix)   any judgment or settlement of pending or threatened proceedings (whether
civil, criminal or otherwise) against the Company or any Subsidiary, or against
any trustee, director, partner, member or officer of the Company or of any
Subsidiary in such person’s capacity as such for which the Company or any
Subsidiary is required to indemnify such person pursuant to the applicable
governing document or other instrument or agreement, or by any court or
governmental agency; and

(xx)    all other costs and expenses approved in advance by a majority of the
Independent Directors actually incurred by the Manager.

(b)        Other than as expressly provided above, the Company will not be
required to pay any portion of the rent, telephone, utilities, office furniture,
equipment, machinery and other office, internal and overhead expenses of the
Manager and its Affiliates.  In particular, the Manager is not entitled to be
reimbursed for wages, salaries and benefits of CTO’s officers and employees
provided to the Company through the Manager. The Manager or CTO shall be solely
responsible for all compensation costs and expenses related to the officers and
employees of CTO or the Manager that may perform services for the Company, and
the Company shall have no liability or responsibility therefor.

18

 

(c)        Subject to complying with any restrictions set forth herein, the
Manager may retain, for and on behalf, and at the sole cost and expense, of the
Company, such services of non-Affiliate third-party accountants, legal counsel,
appraisers, insurers, brokers, transfer agents, registrars, developers,
investment banks, financial advisors, banks and other lenders and others as the
Manager deems necessary or advisable in connection with the management and
operations of the Company. The provisions of this Section 9 shall survive the
expiration or earlier termination of this Agreement to the extent such expenses
have previously been incurred or are incurred in connection with such expiration
or termination.

10.       Expense Reports and Reimbursements.

The Manager shall prepare a statement documenting the operating expenses of the
Company incurred during each fiscal quarter, and deliver the same to the Board
of Directors within 40 days following the end of the applicable fiscal quarter.
Such expenses incurred by the Manager on behalf of the Company shall be
reimbursed by the Company within 30 days following delivery of the expense
statement by the Manager; provided, however, that such reimbursements may be
offset by the Manager against amounts due to the Company from the Manager.  The
provisions of this Section 10 shall survive the expiration or earlier
termination of this Agreement.

11.       Limits of Manager Responsibility; Indemnification.

(a)        Pursuant to this Agreement, the Manager will not assume any
responsibility other than to render the services called for hereunder in good
faith and will not be responsible for any action of the Board of Directors or
the Company in following or declining to follow the advice or recommendations of
the Manager.  The Manager, its Affiliates and the officers, directors, members,
shareholders, managers, employees, agents, personnel, successors and assigns of
any of them (each, a “Manager Indemnified Party”) shall not be liable to the
Company for any acts or omissions arising out of or in connection with the
Company, this Agreement or the performance of the Manager’s duties and
obligations hereunder, except by reason of acts or omissions found by a court of
competent jurisdiction upon entry of a final judgment rendered and unappealable
or not timely appealed (“Judicially Determined”) to be due to the bad faith,
gross negligence, willful misconduct or fraud of the Manager Indemnified
Party.  Notwithstanding any of the foregoing to the contrary, the provisions of
this Section 11 shall not be construed so as to provide for the exculpation of
any Manager Indemnified Party for any liability (including liability under
federal securities laws which, under certain circumstances, impose liability
even on Persons that act in good faith), to the extent (but only to the extent)
that such liability may not be waived, modified or limited under applicable law,
but shall be construed so as to effectuate the provisions of this Section 11 to
the fullest extent permitted by law.

(b)        To the fullest extent permitted by law, the Company shall indemnify,
defend and hold harmless each Manager Indemnified Party from and against any and
all costs, losses, claims, damages, liabilities, expenses (including reasonable
legal and other professional fees and disbursements), judgments, fines and
settlements (collectively, “Indemnification Obligations”) suffered or sustained
by such Manager Indemnified Party by reason of (i) any acts, omissions or
alleged acts or omissions arising out of or in connection with the Company or
this Agreement, or (ii) any and all claims, demands, actions, suits or
proceedings (civil, criminal, administrative or investigative), actual or
threatened, in which such Manager Indemnified Party may be involved,

19

 

as a party or otherwise, arising out of or in connection with such Manager
Indemnified Party’s service to or on behalf of, or management of the affairs or
assets of, the Company, or which relate to the Company; except to the extent
such Indemnification Obligations are Judicially Determined to be due to such
Manager Indemnified Party’s bad faith, gross negligence, willful misconduct or
fraud or to constitute a material breach or violation of the Manager’s duties
and obligations under this Agreement.  The termination of a proceeding by
settlement or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that such Manager Indemnified Party’s conduct
constituted bad faith, gross negligence, willful misconduct or fraud.  For the
avoidance of doubt, none of the Manager Indemnified Parties will be liable
for acts or omissions of any Manager Indemnified Party made or taken in
accordance with written advice provided to the Manager Indemnified Parties by
specialized, reputable, professional consultants selected, engaged or retained
by the Manager and its Affiliates with commercially reasonable care, including
counsel, accountants, investment bankers, financial advisers, and appraisers
(absent bad faith, gross negligence, willful misconduct or fraud by a Manager
Indemnified Party).  Notwithstanding the foregoing, no provision of this
Agreement will constitute a waiver or limitation of the Company’s rights under
federal or state securities laws.

(c)        The Manager hereby agrees to indemnify the Company and its
Subsidiaries and each of their respective directors and officers (each a
“Company Indemnified Party”) with respect to all Indemnification Obligations
suffered or sustained by such Company Indemnified Party by reason of (i) acts or
omissions or alleged acts or omissions of the Manager Judicially Determined to
be due to the bad faith, willful misconduct or gross negligence of the Manager,
its Affiliates or their respective officers or employees or the reckless
disregard of the Manager’s duties under this Agreement or (ii) claims by the
Manager’s or its Affiliates’ employees relating to the terms and conditions of
their employment with the Manager or its Affiliates.

(d)        The party seeking indemnity (“Indemnitee”) will promptly notify the
party against whom indemnity is claimed (“Indemnitor”) of any claim for which it
seeks indemnification; provided, however, that the failure to so notify the
Indemnitor will not relieve Indemnitor from any liability which it may have
hereunder, except to the extent such failure actually prejudices the
Indemnitor.  The Indemnitor shall have the right to assume the defense and
settlement of such claim; provided that, Indemnitor notifies Indemnitee of its
election to assume such defense and settlement within 30 days after the
Indemnitee gives the Indemnitor notice of the claim.  In such case the
Indemnitee will not settle or compromise such claim, and the Indemnitor will not
be liable for any such settlement made without its prior written consent.  If
Indemnitor is entitled to, and does, assume such defense by delivering the
aforementioned notice to Indemnitee, Indemnitee will (i) have the right to
approve Indemnitor’s counsel (which approval will not be unreasonably withheld
or delayed), (ii) be obligated to cooperate in furnishing evidence and testimony
and in any other manner in which Indemnitor may reasonably request and (iii) be
entitled to participate in (but not control) the defense of any such action,
with its own counsel and at its own expense.

(e)        Reasonable expenses (including attorney’s fees) incurred by an
Indemnitee in defense or settlement of a claim that may be subject to a right of
indemnification hereunder may be advanced by the Company to such Indemnitee as
such expenses are incurred prior to the final disposition of such claim;
provided that, Indemnitee undertakes to repay such amounts if it shall be
Judicially Determined that Indemnitee was not entitled to be indemnified
hereunder.

20

 

(f)        The Manager Indemnified Parties shall remain entitled to exculpation
and indemnification from the Company pursuant to this Section 11 (subject to the
limitations set forth herein) with respect to any matter arising prior to the
termination of this Agreement and shall have no liability to the Company in
respect of any matter arising after such termination unless such matter arose
out of events or circumstances that occurred prior to such termination.

12.       No Joint Venture.

The Company and the Manager are not partners or joint venturers with each other
and nothing in this Agreement shall be construed to make the Company and the
Manager partners or joint venturers or impose any liability as such on either of
them.

13.       Term; Termination; Internalization.

(a)        This Agreement shall become effective on the closing date of the
Initial Public Offering (the “IPO Closing Date”) and shall continue in
operation, unless terminated in accordance with the terms hereof, until the
fifth anniversary of the IPO Closing Date (the “Initial Term”).  After the
Initial Term, this Agreement shall be deemed renewed automatically each year for
an additional one-year period (an “Automatic Renewal Term”) unless the Company
or the Manager elects not to renew this Agreement in accordance with Section
13(b) or 13(d), respectively.

(b)        Notwithstanding any other provision of this Agreement to the
contrary, upon the expiration of the Initial Term or any Automatic Renewal Term
and upon 120 days’ prior written notice to the Manager (the “Termination
Notice”), the Company may, without cause, in connection with the expiration of
the Initial Term or the then current Automatic Renewal Term, decline to renew
this Agreement (any such nonrenewal, a “Termination Without Cause”) upon the
affirmative vote of at least two-thirds of the Independent Directors or upon a
determination by the holders of a majority of the outstanding shares of Common
Stock, based upon (i) unsatisfactory performance by the Manager that is
materially detrimental to the Company or (ii) a determination that the Base
Management Fee and Incentive Fee payable to the Manager are not fair, subject to
Section 13(c).  In the event of a Termination Without Cause, the Company shall
pay the Manager the Termination Fee before or on the last day of the Initial
Term or such Automatic Renewal Term, as the case may be (the “Effective
Termination Date”).  The Company may terminate this Agreement for cause pursuant
to Section 14 even after a Termination Notice and, in such case, no Termination
Fee shall be payable.

(c)        Notwithstanding the provisions of subsection (b) above, if the reason
for nonrenewal specified in the Company’s Termination Notice is that two-thirds
of the Independent Directors or the holders of a majority of the outstanding
shares of Common Stock have determined that the Base Management Fee and
Incentive Fee payable to the Manager are not fair, the Company shall not have
the foregoing nonrenewal right in the event the Manager agrees that it will
continue to perform its duties hereunder during the Automatic Renewal Term that
would commence upon the expiration of the Initial Term or then current Automatic
Renewal Term at rates that at least two-thirds of the Independent Directors
determine to be fair;  provided,  however, the Manager shall have the right to
renegotiate the Base Management Fee and/or the Incentive Fee, by delivering to
the Company, not less than 90 days prior to the pending Effective Termination
Date, written notice

21

 

(a “Notice of Proposal to Negotiate”) of its intention to renegotiate the Base
Management Fee and/or the Incentive Fee.  Thereupon, the Company and the Manager
shall endeavor to negotiate the Base Management Fee and/or the Incentive Fee in
good faith.  Provided that the Company and the Manager agree to a revised Base
Management Fee, Incentive Fee or other compensation structure within 60 days
following the Company’s receipt of the Notice of Proposal to Negotiate, the
Termination Notice from the Company shall be deemed of no force and effect, and
this Agreement shall continue in full force and effect on the terms stated
herein, except that the Base Management Fee, the Incentive Fee or other
compensation structure shall be the revised Base Management Fee, Incentive Fee
or other compensation structure effective as of the date as then agreed upon by
the Company and the Manager.  The Company and the Manager agree to execute and
deliver an amendment to this Agreement setting forth such revised Base
Management Fee, Incentive Fee, or other compensation structure promptly upon
reaching an agreement regarding same.  In the event that the Company and the
Manager are unable to agree to a revised Base Management Fee, Incentive Fee, or
other compensation structure during such 60 day period, this Agreement shall
terminate on the Effective Termination Date and the Company shall be obligated
to pay the Manager the Termination Fee upon the Effective Termination Date as a
condition of such termination action being effective.

(d)        No later than 180 days prior to the expiration of the Initial Term or
the then current Automatic Renewal Term, the Manager may deliver written notice
to the Company informing it of the Manager’s intention to decline to renew this
Agreement, whereupon this Agreement shall not be renewed and extended and this
Agreement shall terminate effective upon the Effective Termination Date next
following the delivery of such notice.  The Company shall not be required to pay
to the Manager the Termination Fee if the Manager terminates this Agreement
pursuant to this Section 13(d).

(e)        Except as set forth in this Section 13, a nonrenewal of this
Agreement pursuant to this Section 13 shall be without any further liability or
obligation of either Party to the other, except as provided in Section 8,
 Section 9,  Section 11 and Section 15.

(f)        This Agreement may not be terminated by the Company for any reason
during the Initial Term, except pursuant to Section 14.

(g)        After expiration of the Initial Term, the Company and the Manager may
elect to consider an Internalization Transaction, including the negotiation of a
mutually acceptable  Internalization Price. In the event that the Company and
the Manager agree to an Internalization Transaction, the payment of the
Internalization Price to the Manager would be in lieu of the payment of any
 Termination Fee. Any such Internalization Price would be payable in cash,
shares of Common Stock or OP units, or a combination thereof, as determined by a
majority of the Independent Directors in their sole discretion.

14.       Termination for Cause.

(a)        The Company upon the direction of a majority of the Independent
Directors may terminate this Agreement effective upon 30 days’ prior written
notice of termination from the Board of Directors to the Manager (a “Cause
Termination Notice”), without payment of any Termination Fee, if (i) the
Manager, its agents or assignees breaches any material provision of this

22

 

Agreement and such breach shall continue for a period of 30 days after written
notice thereof specifying such breach and requesting that the same be remedied
in such 30-day period (or 45 days after written notice of such breach if the
Manager takes steps to cure such breach within 30 days of the written notice),
(ii) there is a commencement of any proceeding relating to the Manager’s
bankruptcy or insolvency, including an order for relief in an involuntary
bankruptcy case or the Manager authorizing or filing a voluntary bankruptcy
petition, (iii) there is a Manager Change of Control, (iv) the Manager commits
fraud against the Company, misappropriates or embezzles funds of the Company, or
acts, or fails to act, in a manner constituting bad faith, willful misconduct,
gross negligence or reckless disregard in the performance of the Manager’s
duties under this Agreement, or (v) the Manager is dissolved.

(b)        The Manager may terminate this Agreement effective upon 60 days’
prior written notice of termination to the Company in the event that the Company
shall default in the performance of any material term, condition or covenant
contained in this Agreement and such default shall continue for a period of 30
days after written notice thereof specifying such default and requesting that
the same be remedied in such 30-day period.  The Company is required to pay to
the Manager the Termination Fee if the termination of this Agreement is made
pursuant to this Section 14(b).

(c)        The Manager may terminate this Agreement if the Company becomes
required to register as an investment company under the Investment Company Act,
with such termination deemed to occur immediately before such event, in which
case the Company shall not be required to pay the Termination Fee.

15.       Action Upon Termination.

From and after the effective Date of Termination of this Agreement pursuant to
Sections 13 or 14, the Manager shall not be entitled to compensation for further
services hereunder other than payment of all compensation accruing for services
rendered to the effective Date of Termination; provided, that if this Agreement
is (x) terminated or not renewed pursuant to Sections 13(b) (subject to Section
13(c)) or Section 14(b), the Manager shall also be entitled to receive the
Termination Fee.  Upon any such termination, the Manager shall forthwith:

(a)        after deducting any accrued compensation and reimbursement for its
expenses that have been submitted to the Company prior to the effective Date of
Termination, pay over to the Company all money collected and held for the
account of the Company pursuant to this Agreement;

(b)        deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by the Manager and a statement of all
money held by the Manager, covering the period following the date of the last
accounting furnished to the Board of Directors with respect to the Company;

(c)        deliver to the Board of Directors all property and documents of the
Company then in the custody of the Manager; and

(d)        cooperate with the Company to provide an orderly management
transition, including the transition to a new manager of control of the assets
of the Company.

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16.       Assignment.

The Manager may not assign its duties under this Agreement unless such
assignment is consented to in writing by a majority of the Independent
Directors. However, the Manager may assign to one or more of its Affiliates
performance of any of its responsibilities hereunder without the approval of the
Directors so long as the Manager remains liable for any such Affiliate’s
performance and such performance is at no additional cost or expense to the
Company.

17.       Release of Money or other Property Upon Written Request.

The Manager agrees that any money or other property of the Company held by the
Manager under this Agreement shall be held by the Manager as custodian for the
Company, and the Manager’s records shall be clearly and appropriately marked to
reflect the ownership of such money or other property by the Company. Upon the
receipt by the Manager of a written request signed by a duly authorized officer
of the Company requesting the Manager to release to the Company any money or
other property then held by the Manager for the account of the Company under
this Agreement, the Manager shall release such money or other property to the
Company within a reasonable period of time, but in no event later than 30 days
following such request. The Manager and its Affiliates, directors, officers,
managers and employees will not be liable to the Company, any Subsidiary, the
Manager or any of their directors, officers, shareholders, managers, employees,
owners or partners for any acts or omissions by the Company in connection with
the money or other property released to the Company in accordance with the terms
hereof. The Company shall indemnify the Manager and its Affiliates, officers,
directors, employees, agents and successors and assigns against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever which arise in connection with the Manager’s release of such
money or other property to the Company in accordance with the terms of this
Section 17. Indemnification pursuant to this Section 17 shall be in addition to
any right of the Manager to indemnification under Section 11.

18.       Representations and Warranties.

(a)        The Company hereby makes the following representations and warranties
to the Manager, all of which shall survive the execution and delivery of this
Agreement:

(i)       The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland.  The Company has all
power and authority required to execute and deliver this Agreement and to
perform all its duties and obligations hereunder.

(ii)      The execution, delivery, and performance of this Agreement by the
Company have been duly authorized by all necessary action on the part of the
Company.

(iii)     This Agreement constitutes a legal, valid, and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, receivership and similar laws from
time to time in effect and general principles of equity, including those
relating to the availability of specific performance.

24

 

(b)        The Manager hereby makes the following representations and warranties
to the Company, all of which shall survive the execution and delivery of this
Agreement:

(i)       The Manager is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware.  The
Manager has all power and authority required to execute and deliver this
Agreement and to perform all its duties and obligations hereunder, subject only
to its qualifying to do business and obtaining all requisite permits and
licenses required as a result of or relating to the nature or location of any
investments of the Company or any of its Affiliates (which it shall do promptly
after being required to do so).

(ii)      The execution, delivery, and performance of this Agreement by the
Manager have been duly authorized by all necessary action on the part of the
Manager.

(iii)     This Agreement constitutes a legal, valid, and binding agreement of
the Manager enforceable against the Manager in accordance with its terms, except
as limited by bankruptcy, insolvency, receivership and similar laws from time to
time in effect and general principles of equity, including those relating to the
availability of specific performance.

19.       Notices.

Unless expressly provided otherwise in this Agreement, all notices, requests,
demands and other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given, made and
received when delivered against receipt or upon actual receipt of (a) personal
delivery, (b) delivery by a reputable overnight courier, (c) delivery by email
but only if receipt of such transmission is confirmed, or (d) delivery by
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:

 

If to the Company or the Operating Partnership:

    

Alpine Income Property Trust, Inc.

1140 N. Williamson Blvd., Suite 140

Daytona Beach, FL 32114

Attn:  Daniel E. Smith, Senior Vice President, General Counsel and Corporate
Secretary

Email:  dsmith@ctlc.com

Phone:  (386) 274-2202

 

with a copy to:

 

Vinson & Elkins L.L.P.

666 Fifth Avenue, 26th Floor

New York, NY 10103

Attn:  David S. Freed

Email:  dfreed@velaw.com

Phone:  (212) 237-0196

 

25

 

If to the Manager:

    

Alpine Income Property Manager, LLC

c/o Consolidated-Tomoka Land Co.

1140 N. Williamson Blvd., Suite 140

Daytona Beach, FL 32114

Attn:  John P. Albright, President and Chief Executive Officer

Email:  jalbright@ctlc.com

Phone:  (386) 274-2202

 

Any party may change the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 19 for the giving of notice.

20.       Binding Nature of Agreement; Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
permitted assigns as provided in this Agreement.

21.       Entire Agreement; Amendments.

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 of this Agreement. The express terms of this Agreement control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms of this Agreement. This Agreement may not be modified or
amended other than by an agreement in writing signed by the parties hereto and,
with regard to the Company, approved by a majority of the Independent Directors.

22.       Governing Law; Jurisdiction.

This Agreement and all questions relating to its validity, interpretation,
performance and enforcement shall be governed by and construed, interpreted and
enforced in accordance with the laws of the State of New York. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of Florida and the United States District Court for the Middle
District of Florida for the purpose of any action or judgment relating to or
arising out of this Agreement or any of the transactions contemplated hereby and
to the lay of venue in such court.

23.       Waiver of Jury Trial.

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND,
THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

26

 

24.       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.

25.       Titles Not to Affect Interpretation.

The titles of sections, paragraphs and subparagraphs 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 of this Agreement.

26.       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 of this
Agreement, individually or taken together, shall bear the signatures of all of
the parties reflected hereon as the signatories.

27.       Severability.

The provisions of this Agreement are independent of and separable 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.

28.       Principles of Construction.

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. All
references to recitals, sections, paragraphs and schedules are to the recitals,
sections, paragraphs and schedules in or to this Agreement unless otherwise
specified.

[SIGNATURE PAGE FOLLOWS]

 

 

27

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

THE COMPANY:

 

 

 

 

ALPINE INCOME PROPERTY TRUST, INC.

 

 

 

 

By:

/s/ Daniel E. Smith

 

Name:

Daniel E. Smith

 

Title:

Senior Vice President, General Counsel and Corporate Secretary

 

 

 

 

THE OPERATING PARTNERSHIP

 

 

 

 

ALPINE INCOME PROPERTY OP, LP

 

 

 

 

By:

Alpine Income Property GP, LLC

 

 

its general partner

 

 

 

 

By

Alpine Income Property Trust, Inc.

 

 

its sole member

 

 

 

 

By:

/s/ Daniel E. Smith

 

Name:

Daniel E. Smith

 

Title:

Senior Vice President, General Counsel and Corporate Secretary

 

 

 

 

THE MANAGER:

 

 

 

 

ALPINE INCOME PROPERTY MANAGER, LLC

 

 

 

 

By:

Consolidated-Tomoka Land Co.,

 

 

its sole member

 

 

 

 

By:

/s/ Daniel E. Smith

 

Name:

Daniel E. Smith

 

Title:

Senior Vice President, General Counsel and Corporate Secretary

 

 

[Signature Page to Management Agreement]

 

Exhibit A

 

INVESTMENT GUIDELINES OF ALPINE INCOME PROPERTY TRUST, INC.

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in that certain Management Agreement, dated as of November 26, 2019, as
may be amended from time to time, by and among Alpine Income Property Trust,
Inc. (the “Company”), Alpine Income Property OP, LP, a Delaware limited
partnership (the “Operating Partnership”), and Alpine Income Property Manager,
LLC (the “Manager”).

1.         No investment shall be made that would cause the Company to fail to
qualify as a REIT under the Code.

2.         No investment shall be made that would cause the Company or any
Subsidiary to be required to be registered as an investment company under the
Investment Company Act.

3.         All acquisitions of single-tenant, net leased properties from CTO or
any of its Affiliates must be approved by a majority of the Independent
Directors.

From time to time, these investment guidelines may be amended, restated,
supplemented or waived without the approval of the Company’s stockholders, but
with the approval of a majority of the Independent Directors.