Exhibit 10.2

 

AGREEMENT

 

between

 

HPFM (BECKET HOUSE) LIMITED

 

and

 

HUNTER PROPERTY FUND MANAGEMENT LIMITED

 

Re: Asset Management of Becket House, London

 

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AGREEMENT

 

between

 

HPFM (BECKET HOUSE) LIMITED, a company incorporated in Guernsey under The
Companies (Guernsey) Laws 1994 and 1996 and having its registered office in
Guernsey at PO Box 141, La Tonelle House, Les Banques, St Sampson, Guernsey, GY1
3HS (the “Company”)

 

and

 

HUNTER PROPERTY FUND MANAGEMENT LIMITED, a company incorporated in Scotland
under the Companies Acts (company number SC 199327) and having its registered
office at 17 Rutland Street, Edinburgh EH1 2AE (the “Asset Manager”)

 

WHEREAS

 

(A) The Company is the proprietor of the leasehold interest in Becket House,
81-90 Cheapside / 36-37 Old Jewry, London, EC2.

 

(B) The Company wishes to appoint the Asset Manager to provide, and the Asset
Manager has agreed to provide, the Services (as hereinafter defined) to the
Company on the terms and conditions set out in this Agreement.

 

NOW THEREFORE IT IS HEREBY AGREED as follows:-

 

1              Interpretation

 

1.1           In this Agreement, unless the context otherwise requires, the
following words and expressions shall have the following meanings ascribed to
them:

 

“Accounting Period” shall mean the accounting period of the Company ending on 30
September and each subsequent date or such other date as the Company may
determine and notify the Asset Manager;

 

“Board” means the board of directors of the Company;

 

“Commencement Date” shall be 3 October 2007 notwithstanding the date of this
Agreement;

 

“First Hurdle Rate” an IRR of 20% per annum;

 

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“Force Majeure” means any cause affecting the performance of this Agreement
arising from or attributable to acts, events, non-happenings, omissions or
accidents beyond the reasonable control of the Asset Manager and, in particular,
but without limitation, shall include strikes, lock-outs or other industrial
action, civil commotion, riot, invasion, war, threat of or preparations for war,
fire, explosion, storm, flood, earthquake, subsidence, epidemic of other natural
physical disaster, acts and regulations of local government and parliamentary
authority, communication line failures and power failures or shortages;

 

“Investor” means a shareholder in the Company;

 

“IRR” means, as to the Company, the actual internal rate of return on the
investment in the Property made by the Company, as calculated by the Company on
a compounded annual basis taking into consideration the timing and amount of the
investments made by the Company in the Property, as well as the timing and
amount of all distributions received by the Company as a result of such
investment;

 

“Property” means the leasehold interest and other interests owned by the Company
in Becket House, 81-90 Cheapside/
36-37 Old Jewry, London, EC2;

 

“Return” means the return or distribution to shareholders of the Company of the
gross sum or sums actually received in respect of the Property before tax and
after deducting amounts of debt repaid in respect of the Property and any other
liability of the Company (excluding the Asset Managers Performance Fee (as
defined in clause 6)

 

“Second Hurdle Rate” an IRR of 25% per annum;

 

“Services” means the provision of the strategic property consultancy services
and advice set out in Clause 4 and such additional services and advice as may be
agreed between the Company and the Asset Manager from time to time; and

 

“Third Hurdle Rate” an IRR of 30% per annum;

 

“Working Day” means a day on which clearing banks are open for business in
Scotland.

 

1.2           Unless the context otherwise requires, words and expressions
defined in the Companies Act 1985 and the Companies Act 2006 (as amended) shall
have the same meanings herein as therein.

 

1.3           References herein to the parties and to Clauses and Schedule are
respectively to the parties and to the Clauses of, and the Schedule to, this
Agreement.

 

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1.4           Except where the context otherwise requires the singular herein
shall include the plural and reference to any gender shall include all other
genders.

 

1.5           The headings to this Agreement are for ease of reference only and
shall not affect the interpretation or construction of this Agreement.

 

2              Appointment and duration

 

2.1           The Company hereby appoints the Asset Manager to provide the
Services and the Asset Manager agrees to provide the Services to the Company on
the terms and conditions set out in this Agreement.

 

2.2           The Asset Manager shall provide the Services as from the
Commencement Date and the appointment shall continue until the appointment is
terminated pursuant to the provisions of Clause 9.

 

2.3           The Company undertakes to the Asset Manager that it shall
co-operate with the Asset Manager to enable the Asset Manager to provide the
Services in accordance with this Agreement.

 

3              Attention to business

 

3.1           The Asset Manager agrees to procure that its personnel shall
devote as much of their time and attention to the performance of its
responsibilities and duties hereunder as shall reasonably be required for the
proper provision of the Services.

 

3.2           In providing the Services, the Asset Manager shall procure that
its personnel shall exercise that degree of skill and care as could reasonably
be expected of a person skilled in the provision of the Services, provided that
neither the Asset Manager nor its directors, employees or other personnel shall,
in the absence of fraud, negligence, wilful misconduct or bad faith, be liable
for any act or omission in the course of, or in connection with, the provision
of the Services.

 

3.3           The Asset Manager shall perform or cause to be performed such
services and actions customarily performed or taken by asset managers for
properties of similar type, location and character as the Property, and shall,
in addition to and without limiting the foregoing, perform its responsibilities
and functions hereunder to a standard not less than that which the Asset Manager
itself, and in any event a prudent person with substantial experience in
professional real estate asset management of properties similar to the Property,
would conduct the asset management of its own real estate investments in similar
properties.

 

4              The Services

 

4.1           The Asset Manager shall provide the following services as and when
reasonably required by the Company:-

 

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4.1.1        assisting with the preparation of Board papers, and such other
papers as may be necessary for the Board from time to time;

 

4.1.2        preparing applicable property investment market reports for the
Board’s agenda papers;

 

4.1.3        advising on refurbishment and redevelopment works and
re-negotiations of lease terms in order to maximise the performance of the
Company’s investment;

 

4.1.4        negotiating all purchases and sales and co-ordinating and
supervising the due diligence reports of the appropriate advisers, the
preparation of their reports and the preparation of summary reports of
recommendation to the Board;

 

4.1.5        co-ordinating, supervising and reporting to the Board, in a format
and at such intervals as are approved by the Company from time to time, on the
strategic and day to day property management of the Company’s investment in the
Property, and providing the Board with asset management reports regarding the
financial performance of the Property in a format and at such intervals as
requested by the Company;

 

4.1.6        co-ordinating on behalf of the Company appropriate insurance
coverages and all replacements thereof, which insurance shall contain such
policy provisions acceptable to the Company and shall be placed in companies
approved by the Company;

 

4.1.7        assisting the Company in preparing and analysing a budget in
respect of the Property;

 

4.1.8        submitting copies of all material correspondence, memoranda, or
other documents relating to the Company or the Property, to the extent created
or received, within twenty (20) business days of creation or receipt;

 

4.1.9        providing such assistance as the Company may reasonably require in
connection with the Company’s bank finance arrangements; and

 

4.1.10      arranging independent valuations of the Company’s investment.

 

4.2           The Asset Manager may delegate (at the cost of the Asset Manager)
the performance of all or some of the rights and obligations on its part
contained in this Agreement to the extent only as permitted by the terms of this
Agreement with the approval of the Company. For the avoidance of doubt, the
Company shall not be liable in any respect for payment of the fees or costs of
or expenses incurred by such delegates. The Asset

 

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Manager shall remain liable in respect of the obligations of the Asset Manager
under this Agreement notwithstanding any such delegation.

 

4.3           For the avoidance of doubt, the cost of valuers, solicitors,
property management agents or other professional advisers appointed by the
Company or the Asset Manager to carry out tasks other than those of the Asset
Manager detailed in this Agreement shall be borne by the Company.

 

5              Management Fees

 

5.1           The management fees payable for each Accounting Period to the
Asset Manager by the Company for the provision of the Services hereunder shall
be a sum equivalent to 0.5 per cent of the valuation of the Company’s property
assets.

 

5.2           The management fees shall be due and payable quarterly in arrears
on 31 March, 30 June, 30 September and 31 December and the Asset Manager shall
invoice the Company quarterly for a sum which represents the amount due under
Clause 5.1.

 

5.3           The management fees shall be payable and paid within 10 Working
Days of receipt of the relevant invoice by the Company by way of telegraphic
transfer, made payable to the Asset Manager and transferred to such bank and
such account as the Asset Manager shall direct and intimate in writing to the
Company from time to time.

 

5.4           In the event of default by the Company in paying any monies due
under this Agreement, the Company shall pay interest on the outstanding sums
(and all interest accruing thereon) from the date of default until the actual
date of payment at the rate of 3 per cent per annum above the base rate for the
time being of the Royal Bank of Scotland, whether before or after judgment.

 

6              Asset Manager’s Performance Fee

 

6.1           Following the Company’s disposal of the Property there shall be
paid or payable if due to the Asset Manager a performance fee (the “Asset
Manager’s Performance Fee”).

 

6.2           The Asset Manager’s Performance Fee shall be calculated on the
following basis:-

 

6.1.1                        where the Returns to shareholders of the Company
exceed the First Hurdle Rate, the Asset Manager’s Performance Fee shall equal
20% of the Returns in excess of the First Hurdle Rate;and

 

6.1.2                        where the Returns to shareholders of the Company
exceed the Second Hurdle Rate, the Asset Manager’s Performance Fee shall equal
25% of the Returns in excess of the Second Hurdle Rate; and

 

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6.1.3                        where the Returns to shareholders of the Company
exceed the Third Hurdle Rate, the Asset Manager’s Performance Fee shall equal
30% of the Returns in excess of the Third Hurdle Rate.

 

6.3           The Asset Manager’s Performance Fee shall be payable at the same
time as any distribution is made to shareholders by the Company.

 

6.4           Unpaid balances (if any) of the Asset Manager’s Performance Fee
shall be paid on the earlier of the date on which the Company is dissolved, or
the date of resignation or termination of the Asset Manager’s appointment.

 

6.5           The Asset Manager shall invoice the Company for all amounts due
(including payments on account) in respect of the Asset Manager’s Performance
Fee as and when such amounts become payable hereunder.

 

7              Value Added Tax

 

All sums referred to in this Agreement shall be deemed to be referred to
exclusive of value added tax and if the supplies in respect of which such sums
are payable shall be subject to the payment of value added tax the amount
payable in respect of those supplies shall be increased by value added tax
thereon at the appropriate rate.

 

8              Expenses

 

The Company shall reimburse the Asset Manager (against production of vouchers
and receipts) all travel, accommodation and entertaining expenses properly
incurred by the Asset Manager (or its directors or employees or other personnel)
in fulfilling its/their responsibilities and duties under this Agreement
(provided such expenses shall not exceed the annual budget agreed with the
Company, save with the Company’s prior consent).

 

9              Duration and Termination

 

9.1           This Agreement may be terminated at any time by mutual written
agreement of both parties.

 

9.2           Subject to clause 9.5, the Asset Manager may only terminate this
Agreement on the expiry of six (6) months’ written notice to the Company (or
such shorter period as may be agreed with the Company).

 

9.3           The Company may terminate this Agreement on the expiry of three
months’ written notice to the Asset Manager where the Asset Manager is in
material breach of the terms of this Agreement and (if such breach is
remediable) fails to remedy that breach within 30 days of being notified of the
breach by the Company.

 

9.4           In the event of either (a) a bona fide arm’s length sale and
transfer of the Property to a third party (including a sale in foreclosure or
deed in lieu

 

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thereof); or (b) a bona fide sale and transfer of all the shares in the Company
to a third party, this Agreement shall automatically terminate, without penalty,
effective upon the closing of the transfer. Upon any such termination, the
Company shall pay to the Asset Manager any earned but unpaid fees and other
reimbursable expenses incurred by the Asset Manager and payable by the Company
hereunder through to such termination date.

 

9.4           The Company shall be entitled to terminate this Agreement
immediately by notice in writing to the Asset Manager if:

 

9.4.1                the Asset Manager is dissolved, terminated or wound-up
(otherwise than for the purpose of reconstruction or amalgamation without
insolvency) or becomes insolvent or is otherwise unable to discharge its debts,
liabilities or obligations; or

 

9.4.2                the Asset Manager becomes unable to pay its debts for the
purposes of section 123(1) (excluding sub-section (1)(a) thereof) of the
Insolvency Act 1986; or

 

9.4.3                the Asset Manager is declared bankrupt, or commits an act
of bankruptcy or calls a meeting of its creditors or makes any arrangement with
or compounds with its creditors; or

 

9.4.4                any encumbrancer takes possession of, or an administrator,
an administrative receiver, a receiver, a trustee, a liquidator or other similar
official is appointed over the whole or any material part of the undertaking,
property or assets of the Asset Manager from time to time; or

 

9.4.5                there is a presentation of a petition or the passing of an
effective resolution for the winding-up of the Asset Manager (otherwise than for
the purpose of reconstruction or amalgamation without insolvency); or

 

9.4.6                the Asset Manager or any of its directors, employees or
other personnel commits any act of wilful misconduct, bad faith, fraud or
negligence in the provision of the Services; or

 

9.4.7                the Asset Manager that is a shareholder in the Company as
of the Commencement Date ceases to be a shareholder in the Company.

 

9.4.8                the Asset Manager or any affiliate of the Asset Manager
becomes a “Delinquent member” as such term is defined in the Articles of
Association of the Company.

 

9.5           The Asset Manager shall be entitled to terminate this Agreement
immediately by notice in writing to the Company if:

 

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9.5.1                the Company is dissolved, terminated or wound-up or becomes
insolvent or is otherwise unable to discharge its debts, liabilities or
obligations; or

 

9.5.2                the Company becomes unable to pay its debts for the
purposes of section 123(1) (excluding sub-section (l)(a) thereof) of the
Insolvency Act 1986; or

 

9.5.3                any encumbrancer takes possession of, or an administrator,
an administrative receiver, a receiver, a trustee, a liquidator or other similar
official is appointed over the whole or any material part of the undertaking,
property or assets of the Company from time to time; or

 

9.5.4                there is a presentation of a petition or the passing of an
effective resolution for the winding-up of the Company (otherwise than for the
purpose of reconstruction or amalgamation without insolvency).

 

9.6           The termination of this Agreement shall be without prejudice to
any fees then due and payable to the Asset Manager hereunder.

 

9.7           Upon termination (for any reason) of this Agreement, the Asset
Manager shall immediately deliver to the Company all records, documents and
similar materials maintained by the Asset Manager with respect to the Property
and its duties hereunder. For a period of sixty (60) days after such
termination, the Asset Manager shall make itself available to consult with and
advise the Company or any other person or persons designated by the Company
regarding the operation and maintenance of the Property and to the extent
directed by the Company, continue to manage the Property to ensure an orderly
transition between asset management teams; provided, however, that in the event
the Asset Manager performs management and/or consulting services for the benefit
of the Company, the Asset Manager shall be entitled to reasonable reimbursement
of any direct costs (including salary and travel expenses) incurred by the Asset
Manager in furtherance of its obligations pursuant to this Clause and for this
period Asset Manager shall receive the fee as determined in Clause 5.1. Upon and
following such termination, the Asset Manager shall cooperate with the Company
or its designee in effecting an orderly transition of the Asset Manager’s
responsibilities hereunder.

 

10            Confidential Information; Inspection of Records

 

10.1         The Asset Manager shall during its appointment hereunder use all
reasonable endeavours to procure that its directors, employees and other
personnel shall not disclose to any person, firm or corporation or use to the
detriment of the Company any confidential information which may have come to its
or their knowledge concerning the affairs of the Company, unless required to do
so by law or by the regulations of any relevant stock exchange or other
regulatory body. The obligations contained in this Clause 10 shall not apply to
information which is in or

 

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comes into the public domain (otherwise than in breach of this Agreement).

 

10.2          The Asset Manager will keep at its principal office and will make
available to representatives and agents of the Company, for inspection and
copying (at the Company’s expense), at their request and during normal business
hours, copies of all documents and financial records which are relevant to the
Property and which are received or generated by the Asset Manager in connection
with the performance of its duties under this Agreement. If requested by the
Company or any shareholder of the Company, the Asset Manager shall promptly
furnish copies of such documents (at the Company’s sole expense) directly to the
Company or the requesting shareholder, as applicable.

 

11            Force Majeure

 

If the Asset Manager is totally or partially prevented or delayed in the
performance of any of its obligations under or pursuant to this Agreement by
Force Majeure and gives written notice within ten (10) business days after the
occurrence of the Force Majeure event specifying the matters constituting Force
Majeure together with such evidence as it reasonably can give thereof and
specifying the period for which it is reasonably estimated that such prevention
or delay will continue, the Asset Manager shall be excused such performance (and
have no liability for such non-performance) as from the date of the happening of
the Force Majeure for so long as such Force Majeure shall continue;

 

12            Notices

 

12.1         Any notice or other document required to be given or served under
this Agreement by either party hereto to the other shall be in writing and shall
be deemed to be validly given or served if served by:-

 

12.1.1              prepaid first class registered letter post addressed as set
out in Clause 12.3 or to such other address as may, from time to time, be
notified in writing to the other party for this purpose;

 

12.1.2              personal delivery by hand to such address; or

 

12.1.3              by facsimile to the number of the recipient set out in
Clause 12.3 or such other number as may, from time to time, be notified in
writing to all other parties for this purpose.

 

12.2         Any notice so served shall be deemed to have been served:

 

12.2.1              in the case of 12.1.1, at 10.00 am on the third Working Day
after it was posted;

 

12.2.2              in the case of 12.1.2, if delivered on a Working Day between
the hours of 9.00 am and 4.00 pm, at the time of delivery and, if not delivered
on a Working Day or out with the hours of

 

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9.00 am and 4.00 pm, at 10.00 am on the next following Working Day; and

 

12.2.3              in the case of 12.1.3, if sent before 3.00 pm on any Working
Day, at the time of transmission, and in any other case at 10.00 am on the
Working Day next following the date of dispatch.

 

In proving service, it shall be sufficient to prove that the envelope containing
the notice was properly addressed and posted as a prepaid first class registered
letter, or that delivery took place or that the facsimile message was addressed
to the recipient’s facsimile number and was properly transmitted, a complete
transmission report having been received (as the case may be).

 

12.3         Any notice posted, delivered or sent by facsimile in accordance
with Clause 12.1 shall be addressed as follows:-

 

12.3.1              to the Company:-

Marked for the attention of Ian Powell

Saffery Champness Management International Limited

La Tonelle House

Les Banques

St Sampson

Guernsey

GY1 3HS

Facsimile no: 01481 722046

 

12.3.2              to the Asset Manager:-

Marked for the attention of Andrew Winskell

Hunter Property Fund Management Limited

17 Rutland Street

Edinburgh

EH1 2AE

Facsimile no: 0131 228 3345

 

13            Entire agreement

 

13.1         This Agreement contains the entire agreement between the parties
relating to the transactions contemplated by this Agreement and supersedes all
previous proposals, statements, agreements and other communications whether
written, oral or otherwise, in relation to these transactions, save that neither
party shall be released from any liability which at the date of this Agreement
has already accrued to the other party.

 

13.2         Each of the parties acknowledges that in agreeing to enter into
this Agreement it has not relied upon any representation, warranty, undertaking,
commitment or other assurance (except those set out in this Agreement) made by
or on behalf of the other party before the execution of this Agreement and each
of the parties waives all rights and remedies which, but for this Clause 13,
might otherwise be available to it in respect of

 

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any such representation, warranty, undertaking, commitment or other assurance;
provided that nothing in this Clause 13 shall limit or exclude any liability for
fraud.

 

14            Variation

 

No variation of this Agreement shall be valid unless it is in writing and signed
by or on behalf of the parties hereto.

 

15            Invalidity

 

If a provision of this Agreement is held to be illegal, invalid or unenforceable
under any enactment or rule of law in any jurisdiction, such provision shall, to
that extent, be deemed not to form part of this Agreement and the legality,
validity and enforceability of the remainder of this Agreement shall not be
affected and shall continue in full force and effect.

 

16            Waiver

 

No failure to exercise, and no delay in exercising, any right or remedy in
connection with this Agreement shall operate as a waiver of that right or
remedy. No single or partial exercise of any right or remedy under this
Agreement shall preclude any other or further exercise of that right or remedy
or the exercise of any other right or remedy. A waiver of any breach of this
Agreement shall not be deemed to be a waiver of any subsequent breach. No waiver
by any party of any of the requirements hereof or of any of its rights hereunder
shall be effective unless given in writing and signed by or on behalf of that
party and no forbearance, delay or indulgence by any party in enforcing the
provisions of this Agreement shall prejudice or restrict the rights of that
party.

 

17            No partnership

 

Nothing herein shall be taken to constitute a partnership between the parties
nor the appointment of one of the parties as agent for the other.

 

18            Assignment and sub-contracting

 

18.1         Subject to Clause 18.2, neither party shall transfer, assign,
mortgage, charge, sub- contract or part with the whole or any part of its
rights, duties, liabilities or obligations whatsoever under this Agreement
without the prior written consent of the other party such consent not to be
unreasonably withheld.

 

18.2         The Asset Manager shall be entitled to sub-contract any of its
rights, duties, liabilities and obligations under this Agreement with the prior
written consent of the Company, provided that, unless the Company otherwise
agrees in writing, the Asset Manager shall remain responsible and liable to the
Company for any rights, duties, liabilities or obligations which are so
sub-contracted.

 

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18.3         The Asset Manager shall not be responsible or liable to the Company
for contractors and advisers appointed by the Company.

 

19            Governing Law

 

This Agreement and the rights of the parties hereto shall be governed by and
construed in accordance with the laws of Scotland and each of the parties hereby
submits to the non-exclusive jurisdiction of the Scottish Courts for all
purposes relating to this Agreement.

 

IN WITNESS WHEREOF this Agreement consisting of this and the preceding 12 pages
is executed in duplicate by the Parties as follows:

 

For and on behalf of HPFM (Becket House) Limited at St Sampson, Guernsey on the
23rd day of November 2007 by one of its directors, in the presence of:

 

 

 

/s/ William Ferry

 

/s/ Paul R Pengelley

(Witness)

(Director)

 

 

 

/s/ Mark W. LeRay

 

Paul R Pengelley

(Name)

(Director)

 

 

 

 

THE BROOK, RUE DES MARAIS,
VALE GUERNSEY GY6 8AU

(Address)

 

 

For and on behalf of Hunter Property Fund Management Limited at Edinburgh on the
27th day of November 2007 by one of its directors, in the presence of:

 

 

 

 

/s/ Bronagh Fennell

(Witness)

 

 

 

/s/ Andrew Winskell

 

Bronagh Fennell

(Name)

(Director)

 

 

 

 

c/o 17 Rutland Street

(Address)

 

 

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