Document:

Exhibit 10.2

 

AMENDMENT

 

TO

 

AMENDED AND RESTATED

ADVISORY AGREEMENT (2019)

among

INDUSTRIAL PROPERTY TRUST INC.,

INDUSTRIAL PROPERTY OPERATING PARTNERSHIP LP

and

INDUSTRIAL PROPERTY ADVISORS LLC

 

This amendment (this “Amendment”), dated and effective as of October 7, 2019 (the “Effective Date”), is made to the Amended and Restated Advisory Agreement (2019) dated as of June 12, 2019, among the Parties (as defined below) (the “Advisory Agreement”), and this Amendment is made by and among each of Industrial Property Trust Inc., a Maryland corporation (“IPT”), Industrial Property Advisors LLC, a Delaware limited liability company (the “Advisor”) and Industrial Property Operating Partnership, a Delaware limited partnership (the “Operating Partnership”). IPT, Advisor and Operating Partnership are collectively referred to herein as the “Parties” and each of them are referred to as a “Party.”

 

WHEREAS, the Parties are parties to that certain Advisory Agreement, which is being amended hereby;

 

WHEREAS, on August 20, 2019, IPT, Prologis, L.P., a Delaware limited partnership (“PLD”), and Rockies Acquisition LLC, a Delaware limited liability company and a wholly-owned subsidiary of PLD, entered into an Amended and Restated Agreement and Plan of Merger (“Merger Agreement”) pursuant to which IPT has elected to engage in an asset sale with PLD and its affiliates, rather than a merger of Rockies Acquisition LLC with and into IPT, and the board of directors of IPT has unanimously approved the PLD Disposition (as defined below), the Merger Agreement and the other transactions contemplated by the Merger Agreement;

 

WHEREAS, the Merger Agreement provides for the sale of substantially all of IPT’s assets to PLD through (i) two mergers (each, a “Merger” and collectively the “Mergers”) of Rockies Acquisition LLC or newly formed Delaware limited liability companies that are wholly owned subsidiaries of PLD or an affiliate of PLD with and into newly formed, wholly owned subsidiaries of IPT Real Estate Holdco LLC, a Delaware limited liability company and indirect subsidiary of IPT, with each such applicable newly formed, wholly owned subsidiary of IPT Real Estate Holdco LLC surviving each Merger as a wholly owned subsidiary of PLD or an affiliate of PLD upon the terms and subject to the conditions set forth in the Merger Agreement, and (ii) the sale (each such asset transfer, together with the Mergers, the “PLD Disposition”) by IPT Real Estate Holdco LLC of up to ten to-be-formed Delaware limited liability companies that are wholly owned subsidiaries of IPT Real Estate Holdco LLC to PLD or an affiliate of PLD;

 

WHEREAS, in connection with the PLD Disposition, IPT has agreed to sell all of its subsidiaries in which it has an ownership interest (excluding the Operating Partnership, IPT Real Estate Holdco LLC and its subsidiaries that hold IPT’s collective interests in Build-to-Core Industrial Partnership I LP, a Delaware limited partnership, and Build-to-Core Industrial Partnership II LP, a Delaware limited partnership (together, the “BTC Portfolio”); and potentially excluding IPT Acquisition, IPT Property Management, and IPT Services) to affiliates of PLD by way of the PLD Disposition, causing IPT to continue to exist and for its remaining assets to primarily consist of its interests in the BTC Portfolio, and resulting in all holders of IPT’s common stock continuing to hold their respective shares of common stock in IPT;

 

1

 

WHEREAS, if and when the PLD Disposition is completed, all holders of IPT’s common stock will then be entitled to receive a special distribution from IPT in cash equal to such stockholder’s pro rata share of the net total consideration for the PLD Disposition, as more fully described in IPT’s preliminary proxy statement in connection with the Mergers and PLD Disposition as filed with the U.S. Securities and Exchange Commission on September 12, 2019; WHEREAS, the Parties have, as of the Effective Date, hereby agreed to enter into this Amendment to generate a reduction in total, combined Asset Management Fees payable to the Advisor under the Advisory Agreement in connection with the PLD Disposition or the consummation of any other Disposition of the Wholly-Owned Portfolio (as defined below);

 

WHEREAS, the Parties have, as of the Effective Date, hereby agreed that the Advisor will receive (i) an increased promote interest in the Operating Partnership, which shall be effective after the first to occur of the closing of the PLD Disposition or the consummation of any other Disposition of the Wholly-Owned Portfolio; and, after the closing of the PLD Disposition or the consummation of any other Disposition of the Wholly-Owned Portfolio, (ii) the issuance to an affiliate of Advisor of a preferred equity capital interest in the Operating Partnership in exchange for an in-kind capital contribution of certain intellectual property rights by that affiliate of Advisor to the Operating Partnership;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1. Section 9(b) of the Advisory Agreement is hereby amended by deleting clause (iii)(y) in the penultimate sentence thereof and replacing it with the following:

 

“(y) 2.5% of the Contract Sales Price upon the occurrence of any other Disposition; provided, however, that solely with respect to any Disposition involving the Properties owned 100% by the Operating Partnership (the “Wholly-Owned Portfolio”) (which Disposition shall for the avoidance of doubt include the PLD Disposition), the total aggregate Asset Management Fee otherwise duly owed to the Advisor under this Agreement with respect to any such Disposition of the Wholly-Owned Portfolio shall be reduced to 0.6203% of the Contract Price.”

 

2. Section 17(a) of the Advisory Agreement is hereby amended by adding the following to the first sentence thereof:

 

“provided, that if a Disposition of the Wholly-Owned Portfolio is consummated pursuant to one or more definitive agreements entered into during the term of the Advisory Agreement, the fees payable to the Advisor with respect to the Disposition of the Wholly-Owned Portfolio (which Disposition shall for the avoidance of doubt include the PLD Disposition), shall be deemed earned notwithstanding any termination of the Advisor without Cause prior to the closing of such Disposition, whether by the Corporation or by a majority of the Independent Directors of the Corporation.”

 

3. Except as set forth in this Amendment, all of the provisions of the Advisory Agreement shall continue in full force and effect in accordance with their terms.

 

[signature page follows]

 

2

 

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

 

	
 
    	
INDUSTRIAL   PROPERTY TRUST INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas McGonagle
    
	
 
    	
Name:
    	
Thomas McGonagle
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL   PROPERTY ADVISORS LLC
    
	
 
    	
 
    
	
 
    	
By: INDUSTRIAL PROPERTY   ADVISORS GROUP LLC, its Sole Member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Evan H. Zucker
    
	
 
    	
Name:
    	
Evan H. Zucker
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL   PROPERTY OPERATING PARTNERSHIP LP
    
	
 
    	
 
    
	
 
    	
By: INDUSTRIAL PROPERTY   TRUST INC., its Sole General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas McGonagle
    
	
 
    	
Name:
    	
Thomas McGonagle
    
	
 
    	
Title:
    	
Chief Financial Officer
    
				

 

3Exhibit 10.3

 

AMENDMENT TO

 

SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

 

OF

 

INDUSTRIAL PROPERTY OPERATING PARTNERSHIP LP

 

A DELAWARE LIMITED PARTNERSHIP

 

THIS AMENDMENT (this “Amendment”) to the Second Amended and Restated Limited Partnership Agreement of Industrial Property Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”), is entered into on or about October 7, 2019, but shall be effective as of January 1, 2019 (the “Effective Date”), by and among (a) Industrial Property Trust, Inc., a Maryland corporation (“General Partner”), (b) the Operating Partnership and (c) Industrial Property Advisors Group LLC, a Delaware limited liability company (“Special OP Unitholder”). The General Partner, Operating Partnership and the Special OP Unitholder are collectively referred to herein as the “Parties” and each a “Party.”

 

W I T N E S S E T H

 

WHEREAS, the Parties are parties to that certain Second Amended and Restated Limited Partnership Agreement of Industrial Property Operating Partnership LP dated August 14, 2015 (the “Agreement”), which is amended hereby;

 

WHEREAS, on August 20, 2019, General Partner, Prologis, L.P., a Delaware limited partnership (“PLD”), and Rockies Acquisition LLC, a Delaware limited liability company and a wholly-owned subsidiary of PLD, entered into an Amended and Restated Agreement and Plan of Merger (“Merger Agreement”) pursuant to which General Partner has elected to engage in an asset sale with PLD and its affiliates, rather than a merger of Rockies Acquisition LLC with and into General Partner, and the board of directors of General Partner has unanimously approved the Asset Sale (as defined below), the Merger Agreement and the other transactions contemplated by the Merger Agreement;

 

WHEREAS, the Merger Agreement provides for the sale of substantially all of General Partner’s assets to PLD through (i) two mergers (each, a “Merger” and collectively the “Mergers”) of Rockies Acquisition LLC or newly formed Delaware limited liability companies that are wholly owned subsidiaries of PLD or an affiliate of PLD with and into newly formed, wholly owned subsidiaries of IPT Real Estate Holdco LLC, a Delaware limited liability company and indirect subsidiary of General Partner, with each such applicable newly formed, wholly owned subsidiary of IPT Real Estate Holdco LLC surviving each Merger as a wholly owned subsidiary of PLD or an affiliate of PLD upon the terms and subject to the conditions set forth in the Merger Agreement, and (ii) the sale (each such asset transfer, together with the Mergers, the “Asset Sale”) by IPT Real Estate Holdco LLC of up to ten to-be-formed Delaware limited liability companies that are wholly owned subsidiaries of IPT Real Estate Holdco LLC to PLD or an affiliate of PLD;

 

WHEREAS, in connection with the Asset Sale, General Partner has agreed to sell all of its subsidiaries in which it has an ownership interest (excluding the Operating Partnership, IPT Real Estate Holdco LLC and its subsidiaries that hold General Partner’s collective interests in Build-to-Core Industrial Partnership I LP, a Delaware limited partnership, and Build-to-Core Industrial Partnership II LP, a Delaware limited partnership (the “BTC Portfolio”); and potentially excluding IPT Acquisition, IPT Property Management, and IPT Services) to affiliates of PLD by way of the Asset Sale, causing General Partner to continue to exist and for its remaining assets to primarily consist of the BTC Portfolio, and resulting in all holders of General Partner’s common stock to continue to hold their respective shares of common stock in General Partner;

 

WHEREAS, if and when the Asset Sale is completed, all holders of General Partner’s common stock will then be entitled to receive a special distribution from General Partner in cash equal to such stockholder’s pro rata share of the net total consideration for the Asset Sale, as more fully described in General Partner’s preliminary proxy

 

 

statement in connection with the Mergers and Asset Sale as filed with the U.S. Securities and Exchange Commission on September 12, 2019;

 

WHEREAS, the Parties have, as of the Effective Date, hereby agreed to generate a reduction in total, combined fees payable to Industrial Property Advisors LLC, a Delaware limited liability company (the “Advisor”) under that certain Amended and Restated Advisory Agreement (2019) dated as of June 12, 2019, in connection with the Asset Sale or any other Sale (as defined in the Agreement) of the Wholly-Owned Portfolio (as defined below);

 

WHEREAS, the Parties have, as of the Effective Date, hereby agreed that the Advisor will receive an increased promote interest in the Operating Partnership to the Special OP Unitholder and shall subsequently transfer its Special Partnership Units to an affiliate of the Advisor, which increased promote interest shall (with limited exceptions described in the final sentence of Section 2 below) not apply to the Asset Sale or any other Sale of the Wholly-Owned Portfolio, and which aforementioned increased promote interest to the Special OP Unitholder is to be effected by this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.                                      Article I.

 

a.                                      The defined term “Distribution Hurdle Requirement” is hereby inserted, in alphabetical order, under Article I (DEFINED TERMS) and shall read as follows: “‘DISTRIBUTION HURDLE REQUIREMENT’ has the meaning provided in Section 5.2(b)(i)(1)(A) hereof.”

 

b.                                      The defined term “Wholly-Owned Portfolio” is hereby inserted, in alphabetical order, under Article I (DEFINED TERMS) and shall read as follows: “‘WHOLLY-OWNED PORTFOLIO’ has the meaning provided in Section 5.2(b)(i) hereof.”

 

2.                                      Section 5.2 (DISTRIBUTION OF CASH).  Sections 5.2(b)(i) and 5.2(b)(ii) are hereby deleted in their entirety and replaced with:

 

(i)                                     Distributions of Net Sales Proceeds shall be made as follows:

 

(A)       with respect to a Sale involving the Properties owned 100% by the Partnership (the “Wholly-Owned Portfolio”), all distributions of Net Sales Proceeds shall be made: (1) first, 100% to the OP Unitholders in accordance with their respective Percentage Interests on the Partnership Record Date provided that the aggregate distributions made hereunder to the Class T Unitholders shall be reduced by the aggregate Distribution Fee payable by the General Partner with respect to Class T REIT Shares with respect to such Record Date to the extent the aggregate reduction made under Section 5.2(b)(ii) below with respect to such Record Date is less than the Distribution Fee payable with respect to such date, until the General Partner (and its shareholders), have received cumulative distributions under this Section 5.2(b) (taking into account the aggregate distributions made pursuant to this Section 5.2(b)(i) and Section 5.2(b)(ii) below), equal to the aggregate Capital Contributions made by the General Partner (and its shareholders), to the Partnership plus a cumulative, non-compounded pre-tax rate of return thereon of 6.5% per annum (the “Distribution Hurdle Requirement”), determined by taking into account the dates on which all such Capital Contributions and distributions were made and (2) second, (I) 85% to the OP Unitholders, in accordance with their respective Percentage Interests on the Partnership Record Date and (II) 15% to the Special OP Unitholders in accordance with their respective Special Percentage Interests on the Partnership Record Date; and

 

(B)       thereafter, and assuming the Distribution Hurdle Requirement has been previously met, all other distributions of Net Sales Proceeds shall be made: (1) 65% to the OP Unitholders in accordance with their respective Percentage Interests on the Partnership Record Date, and (2) 35% to the Special OP Unitholders in accordance with their respective Special Percentage Interests on the Partnership Record Date;

 

(ii)                                  All distributions of cash other than Net Sales Proceeds shall be made as follows:

 

 

(A)       prior to a Sale of the Wholly-Owned Portfolio, to the OP Unitholders in accordance with their respective Percentage Interests on the Partnership Record Date, provided that the aggregate distribution made hereunder to Class T Unitholders shall be reduced by the aggregate Distribution Fee payable by the General Partner with respect to Class T REIT Shares with respect to such Record Date, and

 

(B)       thereafter: (1) 65% to the OP Unitholders in accordance with their respective Percentage Interests on the Partnership Record Date, provided that the aggregate distribution made hereunder to Class T Unitholders shall be reduced by the aggregate Distribution Fee payable by the General Partner with respect to Class T REIT Shares, and (2) 35% to the Special OP Unitholders in accordance with their respective Special Percentage Interests on the Partnership Record Date.

 

The foregoing assumes that a Sale of the Wholly-Owned Portfolio occurs prior to any distributions under Sections 5.2(b)(i)(B) or 5.2(b)(ii)(B).  If the Sale of the Wholly-Owned Portfolio occurs after any other Sale otherwise contemplated to be subject to the distribution priorities described in Section 5.2(b)(i)(B) (but for the fact that the Distribution Hurdle Requirement had not yet been met at the time of such other Sale), the General Partner shall have the authority to make distributions of Net Sales Proceeds from the Sale of the Wholly-Owned Portfolio in a manner reasonably designed to achieve a substantially similar outcome to what would have been obtained had the sale of the Wholly-Owned Portfolio occurred prior to such Sale contemplated in Section 5.2(b)(i)(B).”

 

3.                                      Entire Agreement.  The Agreement, as amended by this Amendment, constitutes the entire agreement between the Parties and supersedes any prior agreements or understandings between them with respect to the subject matter thereof.

 

4.                                      Full Force and Effect.  Except as expressly amended hereby, the Agreement shall remain in full force and effect.

 

5.                                      Further Action.  Each Party, upon the request of the General Partner, agrees to perform all further acts and execute, acknowledge and deliver any documents which may be reasonably necessary, appropriate or desirable to carry out the provisions of this Amendment.

 

6.                                      Counterpart Execution.  This Amendment may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.  This Amendment may be delivered by one or more parties by electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the Effective Date.

 

	
 
    	
GENERAL PARTNER:
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL PROPERTY TRUST INC., a
    
	
 
    	
 
    
	
 
    	
Maryland corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas McGonagle
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Thomas McGonagle
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
LIMITED PARTNER:
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL PROPERTY TRUST INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas McGonagle
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Thomas McGonagle
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
SPECIAL OP   UNITHOLDER:
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL PROPERTY ADVISORS GROUP LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Evan H. Zucker
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Evan H. Zucker
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Manager
    
	
 
    	
 
    
	
 
    	
PARTNERSHIP:
    
	
 
    	
 
    
	
 
    	
INDUSTRIAL PROPERTY OPERATING PARTNERSHIP LP
    
	
 
    	
 
    
	
 
    	
By:
    	
INDUSTRIAL PROPERTY TRUST INC., its Sole General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Thomas McGonagle
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Thomas McGonagle
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer

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