Exhibit 10.2

EXECUTION COPY

MANAGEMENT AGREEMENT

by and between

CARE INVESTMENT TRUST INC.

and

CIT HEALTHCARE LLC

Dated as of June 27, 2007

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Table of Contents

 

 

 

 

 

Page

Section 1.

 

Definitions

 

1

Section 2.

 

Appointment and Duties of the Manager

 

5

Section 3.

 

Additional Activities of the Manager

 

11

Section 4.

 

Bank Accounts

 

11

Section 5.

 

Records; Confidentiality

 

12

Section 6.

 

Compensation

 

13

Section 7.

 

Expenses of the Company

 

15

Section 8.

 

Limits of the Manager’s Responsibility

 

19

Section 9.

 

No Joint Venture

 

20

Section 10.

 

Term; Renewal

 

20

Section 11.

 

Assignments

 

22

Section 12.

 

Termination of the Manager for Cause

 

22

Section 13.

 

Action Upon Termination

 

23

Section 14.

 

Release of Money or Other Property Upon Written Request

 

24

Section 15.

 

Representations and Warranties

 

24

Section 16.

 

Miscellaneous

 

26

 

 

 

 

 

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MANAGEMENT AGREEMENT, dated as of June 27, 2007, by and between Care Investment
Trust Inc., a Maryland corporation (the “Company”) and CIT Healthcare LLC, a
Delaware limited liability company (the “Manager”).

W I T N E S S E T H:

WHEREAS, the Company is a newly formed corporation which intends to invest
primarily in a diversified portfolio of healthcare-related commercial mortgage
investments, commercial real estate and other related products and 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 desires to retain the Manager to manage the business and
investment affairs of the Company and its Subsidiaries and to perform services
for the Company in the manner and on the terms set forth herein and the Manager
wishes to be retained to provide such services.

NOW THEREFORE, in consideration of the premises and agreements hereinafter set
forth, the parties hereto hereby agree as follows:

 

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

“Affiliate” means (i) any Person directly or indirectly controlling, controlled
by, or under common control with such other Person, (ii) any executive officer
or general partner of such other Person, and (iii) any legal entity for which
such Person acts as an executive officer or general partner.

“Agreement” means this Management Agreement, as amended, supplemented or
otherwise modified from time to time.

“Automatic Renewal Term” has the meaning set forth in Section 10(b) hereof.

“Base Management Fee” means the base management fee, calculated and payable
monthly in arrears, in an amount equal to one-twelfth of 1.75% of Equity.

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

“Business Day” means any day except a Saturday, a Sunday or a day on which
banking institutions in New York, New York are not required to be open.

“Change in Control of the Manager” shall be deemed to have occurred: (a) if 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 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 CIT Group Inc. (“CIT
Group”) or an Affiliate of CIT

 

 

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Group, in a single transaction or in a related series of transactions, becomes
the beneficial owner, directly or indirectly, of securities of the Manager
representing more than 50% of the aggregate voting power of all classes of the
Manager’s then outstanding voting securities (provided, however, no change in
the ownership of CIT Group shall be deemed to be a “Change of Control” for
purposes of this Agreement) or (b) upon approval by all requisite parties of (i)
a plan of merger, consolidation, share exchange, business combination or similar
transaction between the Manager and an entity (other than an Affiliate of the
Manager that executes this Agreement and agrees to bound by the provisions
hereof), or (ii) a proposal with respect to the sale, lease, transfer, exchange
or other disposal of all, or substantially all, of the Manager’s assets to an
entity (other than an Affiliate of the Manager that executes this Agreement and
agrees to be bound by the provisions hereof).

“Claim” has the meaning set forth in Section 8(c) hereof.

“Closing Date” means the date of closing of the Initial Public Offering.

“Code” has the meaning set forth in the Recitals.

“Common Stock” means the common stock, par value $0.001, of the Company.

“Company Confidential Information” has meaning set forth in Section 5(b) hereof.

“Company Indemnified Party” has meaning set forth in Section 8(b) hereof.

“Company Permitted Disclosure Parties” has the meaning set forth in Section 5(b)
hereof.

“Conduct Policies” has the meaning set forth in Section 2(k) hereof.

“Confidential Information” has the meaning set forth in Section 5 hereof.

“Conflicts of Interest Policy” means the conflicts of interests policy for the
Company with respect to the Manager, a copy of which is attached hereto as
Exhibit A, as the same may be amended, restated, modified, supplemented or
waived by the Board of Directors as specified therein.

“Effective Termination Date” has the meaning set forth in Section 10(c) hereof.

“Equity” means, for purposes of calculating the Base Management Fee, the
month-end value, computed in accordance with GAAP, of the Company’s
stockholders’ equity (including common stock and preferred stock), adjusted to
exclude the effect of any unrealized gains, losses or other items that do not
affect realized net income.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Funds From Operations” means net income (computed in accordance with GAAP),
excluding gains (losses) from debt restructuring and gains (losses) from sales
of

 

 

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property, plus depreciation and amortization on real estate assets and non-cash
equity compensation expense, and after adjustments for unconsolidated
partnerships and joint ventures; provided, that, for the purposes of determining
the Incentive Fee, the foregoing calculation of Funds From Operations shall be
adjusted to exclude one-time events pursuant to changes in GAAP and may be
adjusted to exclude other non-cash charges after discussion between the Manager
and the Independent Directors and approval by the majority of the Independent
Directors in the case of non-cash charges.

“GAAP” means generally accepted accounting principles in effect in the United
States on the date such principles are applied.

“Governing Instruments” means, with regard to any entity, the articles of
incorporation or certificate of incorporation and bylaws in the case of a
corporation, the partnership agreement in the case of a general or limited
partnership or the certificate of formation and operating agreement in the case
of a limited liability company, the trust instrument in the case of a trust, or
similar governing documents in each case as amended.

“Incentive Fee” means an incentive management fee calculated and payable each
fiscal quarter in an amount, not less than zero, equal to the product of: (i)
25% of the dollar amount by which (a) Funds From Operations (after the Base
Management Fee and before the Incentive Fee) of the Company for such quarter per
share of Common Stock (based on the weighted average number of shares
outstanding for such quarter), (b) plus the amount by which any capital gains
realized during the quarter exceed any capital losses realized during the
quarter exceed (c) an amount equal to (1) the weighted average of the price per
share of Common Stock issued in the Initial Public Offering and the prices per
share of Common Stock issued in any subsequent offerings by the Company
multiplied by (2) the greater of (A) 2.25% and (B) 0.75% plus one-fourth of the
Ten-Year U.S. Treasury Rate for such quarter, multiplied by (ii) the weighted
average number of shares of Common Stock outstanding during such quarter.

“Incentive Fee Computation Notice” has the meaning set forth in Section 6(e)
hereof.

“Indemnified Party” has the meaning set forth in Section 8(b) hereof.

“Independent Director” means a member of the Board of Directors who is
“independent” in accordance with the Company’s Governing Instruments and the
rules of the NYSE or such other securities exchange on which the shares of
Common Stock are listed.

“Initial Public Offering” means the sale by the Company of shares in the initial
public offering of the Company registered with the SEC (Registration Statement
No. 333-141634).

“Initial Term” has the meaning set forth in Section 10(a) hereof.

“Investment Committee Charter” means the organizational document for the
Company’s Investment Committee.

 

 

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

“Investment Guidelines” means the Company’s investment guidelines, a copy of
which is attached hereto as Exhibit B, as the same may be amended, restated,
modified, supplemented or waived by the Board of Directors as specified therein.

“Last Appraiser” has the meaning set forth in Section 6(h) hereof.

“Losses” has the meaning set forth in Section 8(a) hereof.

“Management Fee Payment” has the meaning set forth in Section 6(d) hereof.

“Manager Indemnified Party” has the meaning set forth in Section 8(a) hereof.

“Manager Permitted Disclosure Parties” has the meaning set forth in Section 5(a)
hereof.

“Notice of Proposal to Negotiate” has the meaning set forth in Section 10(c)
hereof.

“NYSE” means the New York Stock Exchange, Inc.

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

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

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

“Securities Act” means the Securities Act of 1933, as amended.

“Subsidiary” means any subsidiary of the Company and any 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.

“Ten-Year U.S. Treasury Rate” means the arithmetic average of the weekly average
yield to maturity for actively traded current coupon U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of ten years)
published by the Federal Reserve Board in publication H.15, or any successor
publication, during a calendar quarter, or, if such rate is not published by the
Federal Reserve Board, any Federal Reserve Bank or agency or department of the
federal government selected by the Company. If the Company determines in good
faith that the Ten-Year U.S. Treasury Rate cannot be calculated as provided
above, then the rate shall be the arithmetic average of the per annum average
yields to maturities, based upon closing asked prices on each Business

 

 

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Day during a quarter, for each actively traded marketable U.S. Treasury fixed
interest rate security with a final maturity date not less than eight nor more
than twelve years from the date of the closing asked prices as chosen and quoted
for each Business Day in each such quarter in New York City by at least three
recognized dealers in U.S. government securities selected by the Company.

“Termination Fee” means a termination fee equal to the sum of the average annual
Base Management Fee and the average annual Incentive Fee, both as earned by the
Manager during the two years immediately preceding the most recently completed
fiscal quarter prior to the date of termination, multiplied by three (3).

“Termination Notice” has the meaning set forth in Section 10(c) hereof.

“Valuation Notice” has the meaning set forth in Section 6(h) hereof.

(b) As used herein, accounting terms relating to the Company and its
Subsidiaries, if any, 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 United States generally accepted accounting
principles.

(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.”

Section 2. Appointment and Duties of the Manager. (a) The Company hereby
appoints the Manager to manage the investments and day-to-day operations of the
Company and its Subsidiaries, subject at all times to the further terms and
conditions set forth in this Agreement and to the supervision and direction of,
and such further limitations or parameters as may be imposed from time to time
by, the Board of Directors. The Manager hereby agrees to use its commercially
reasonable efforts to perform each of the duties set forth herein, provided that
funds are made available by the Company for such purposes as set forth in
Section 7 hereof. In performing its duties hereunder, the Manager also herby
agrees to use its commercially reasonable efforts to comply, and to cause the
personnel providing services to the Company to comply, with the Conflicts of
Interest Policy, the Investment Guidelines and the Company’s Investment
Committee Charter. The appointment of the Manager shall be exclusive to the
Manager, except to the extent that the Manager elects, in its sole and absolute
discretion, in accordance with the terms of this Agreement, to cause the duties
of the Manager as set forth herein to be provided by third parties.

(b) The Manager, in its capacity as manager of the investments and the
day-to-day operations of the Company, at all times will be subject to the
supervision and direction of the Board of Directors and will have only such
functions and authority as the Board of Directors may delegate to it, including
the functions and authority identified herein

 

 

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and delegated to the Manager hereby. The Manager will be responsible for the
day-to-day operations of the Company and will perform (or cause to be performed)
such services and activities relating to the investments and operations of the
Company as may be appropriate:

(i) serving as the Company’s consultant with respect to the periodic review of
investment criteria and parameters for investments, borrowings and operations
(including the Investment Guidelines and Conflicts of Interest Policy, any
modifications to which shall be approved by a majority of the Independent
Directors) and other policies and recommendations with respect thereto for
approval by the Board of Directors;

(ii) making available to the Company the Manager’s knowledge and experience with
respect to mortgage loans, real estate, real estate securities, other real
estate-related assets and non-real estate related assets and real estate
operating companies in the healthcare industry and otherwise;

(iii) serving as the Company’s consultant with respect to the identification,
investigation, evaluation, analysis, selection, purchase, origination,
negotiation, structuring, monitoring and disposition of the Company’s
investments, including the accumulation of assets for securitization;

(iv) serving as the Company’s consultant with respect to decisions regarding any
financings, securitizations, hedging activities or borrowings undertaken by the
Company or its Subsidiaries, including (1) assisting the Company in developing
criteria for debt and equity financing that is specifically tailored to the
Company’s investment objectives, (2) advising the Company with respect to
obtaining appropriate warehouse or other financings for its investments and (3)
advising the Company with respect to and structuring long-term financing
vehicles for the Company’s investments, and advising the Company with respect to
offering and selling securities publicly or privately in connection with any
such structured financing;

(v) serving as the Company’s consultant with respect to arranging for the
issuance of mortgage backed securities from pools of mortgage loans or mortgage
backed securities owned by the Company;

(vi) representing and making recommendations to the Company in connection with
the purchase and finance and commitment to purchase and finance investments;

(vii) 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 behalf of the Company with real estate brokers, sellers and
purchasers and their respective agents, representatives and investment bankers
and owners of privately and publicly held real estate companies;

(viii) providing the Company with portfolio management, asset servicing and loan
servicing, including enforcing rights, exercising remedies, granting consents,
and taking other actions on behalf of the Company in respect of the Company’s
investments;

 

 

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(ix) conducting periodic on-site visits to properties to inspect the physical
condition of the properties and to evaluate the performance of a tenant or
operator of its duties;

(x) reviewing, analyzing and commenting upon the operating budgets, capital
budgets and leasing plans of properties;

(xi) engaging and supervising, on behalf of the Company and at the Company’s
expense, independent contractors that provide real estate, investment banking,
mortgage brokerage, securities brokerage, appraisal, engineering, environmental,
seismic, insurance, legal, accounting, transfer agent, registrar, leasing,
master servicing, special servicing, due diligence and such other services as
may be required relating to the Company’s operations or investments (or
potential investments);

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

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

(xiv) performing and supervising the performance of administrative functions
necessary in the management of the Company as may be agreed upon by the Manager
and the Board of Directors, including the services in respect of any of the
Company’s incentive plans, the collection of revenues and the payment of the
Company’s debts and obligations and maintenance of appropriate information
technology services to perform such administrative functions;

(xv) communicating on behalf of the Company with the holders of any equity or
debt securities of the Company as required to satisfy the reporting and other
requirements of any governmental bodies or agencies or trading exchanges or
markets and to maintain effective relations with such holders, including website
maintenance, logo design, analyst presentations, investor conferences and annual
meeting arrangements;

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

(xvii) evaluating and recommending to the Company hedging strategies and
engaging in hedging activities on behalf of the Company, consistent with such
strategies, as so modified from time to time, with the Company’s qualification
as a REIT and with the Investment Guidelines;

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

 

 

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(xix) counseling the Company regarding the maintenance of its exemption from
status as an investment company under the Investment Company Act and monitoring
compliance with the requirements for maintaining such exemption;

(xx) furnishing reports and statistical and economic research to the Company
regarding the activities and services performed for the Company or its
Subsidiaries, if any, by the Manager;

(xxi) monitoring the operating performance of the Company’s 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;

(xxii) investing and re-investing any monies and securities of the Company
(including in short-term investments, payment of fees, costs and expenses, or
payments of dividends or distributions to stockholders and partners of the
Company) and advising the Company as to its capital structure and
capital-raising activities;

(xxiii) causing the Company to retain qualified accountants and legal counsel,
as applicable, to (i) 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 applicable to REITs
and, if applicable, taxable REIT subsidiaries and (ii) conduct quarterly
compliance reviews with respect thereto;

(xxiv) causing the Company to qualify to do business in all jurisdictions in
which such qualification is required and to obtain and maintain all appropriate
licenses;

(xxv) assisting the Company in complying with all regulatory requirements
applicable to the Company in respect of its 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 or by
the NYSE;

(xxvi) taking all necessary actions to enable the Company and its Subsidiaries
to make required tax filings and reports, including soliciting stockholders for
required information to the extent necessary under the Code and Treasury
Regulations applicable to REITs;

(xxvii) 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 other than with the Manager or its
Affiliates;

(xxviii) arranging marketing materials, advertising, industry group activities
(such as conference participations and industry organization memberships) and
other promotional efforts designed to promote the business of the Company;

 

 

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(xxix) 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 Board of
Directors from time to time;

(xxx) performing such other services as may be required from time to time for
the 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

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

(c) The Manager may retain, for and on behalf, and at the sole cost and expense,
of the Company, such services of accountants, legal counsel, appraisers,
insurers (including title insurers), surveyors, engineering, environmental and
seismic consultants, insurance consultants and brokers, public relations and
marketing consultants, information technology consultants, investment relations
advisers, securities brokers, mortgage brokers, transfer agents, registrars,
financial printers, developers, investment banks, financial advisors, internal
audit service providers, banks and other lenders, consultants, agents,
contractors, vendors, advisors and others as the Manager deems necessary or
advisable in connection with the management and operations of the Company. In
performing its duties under this Section 2, the Manager shall be entitled to
rely reasonably 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. The Manager shall use 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 Board of Directors from time to
time.

(d) The Manager shall refrain from any action that, in its sole judgment made in
good faith, (i) would adversely affect the qualification of the Company as a
REIT under the Code or the Company’s status as an entity exempted from
investment company status under the Investment Company Act, or (ii) would
violate any law, rule or regulation of any governmental body or agency having
jurisdiction over the Company or of any exchange on which the securities of the
Company may be listed or that would otherwise not be permitted by the Company’s
Governing Instruments. If the Manager is ordered to take any action by the Board
of Directors, the Manager shall promptly notify the Board of Directors if it is
the Manager’s judgment that such action would adversely affect such status or
violate any such law, rule or regulation or the Governing Instruments.
Notwithstanding the foregoing, the Manager, its directors, officers,
stockholders and employees shall not be liable to the Company, the Board of
Directors, or the Company’s stockholders for any act or omission by the Manager,
its directors, officers, stockholders or employees except as provided in Section
8 of this Agreement.

(e) The Company (including the Board of Directors) agrees to take all actions
reasonably required to permit and enable the Manager to carry out its duties and
obligations under this Agreement, including all steps reasonably necessary to
allow the

 

 

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Manager to file any registration statement or other filing required to be made
under the Securities Act, Exchange Act, NYSE, Code or other applicable law, rule
or regulation on behalf of the Company in a timely manner. The Company further
agrees to use commercially reasonable efforts to make available to the Manager
all resources, information and materials reasonably requested by the Manager to
enable the Manager to satisfy its obligations hereunder, including its
obligations to deliver financial statements and any other information or reports
with respect to the Company. If the Manager is not able to provide a service, or
in the reasonable judgment of the Manager it is not prudent to provide a
service, without the approval of the Board of Directors, as applicable, then the
Manager shall be excused from providing such service (and shall not be in breach
of this Agreement) until the applicable approval has been obtained.

(f) Reporting Requirements. (i) As frequently as the Manager may deem reasonably
necessary or advisable, or at the direction of the Board of Directors, the
Manager shall prepare, or, at the sole cost and expense of the Company, cause to
be prepared, with respect to any investment, reports and other information with
respect to such investment as may be reasonably requested by the Company.

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

(iii) The Manager shall prepare, or, at the sole cost and expense to the
Company, cause to be prepared, regular reports for the Board of Directors to
enable the Board of Directors to review the Company’s investments, portfolio
composition and characteristics, credit quality, performance and compliance with
the Investment Guidelines and policies approved by the Board of Directors,
including reports on investments rejected by the Company’s investment committee
that provide the reason for the rejection and whether the Manager has determined
to make such investment.

(g) Directors, officers, employees and agents of the Manager or Affiliates of
the Manager may serve as directors, officers, agents, nominees or signatories
for the Company, to the extent permitted by their Governing Instruments, as from
time to time amended, or by any resolutions duly 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, such Persons
shall indicate in what capacity they are executing on behalf of the Company.
Without limiting the foregoing, but subject to Section 12 below, the Manager
will provide the Company with a management team, including a Chief Executive
Officer, Chief Financial Officer and Chief Investment Officer or similar
positions, along with appropriate support personnel to provide the management
services to be provided by the Manager to the Company hereunder, who shall
devote such of their time to the management of

 

 

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the Company as necessary and appropriate, commensurate with the level of
activity of the Company from time to time.

(h) The Manager shall provide personnel for service on an investment or similar
type of committee.

(i) The Manager shall maintain reasonable and customary “errors and omissions”
insurance coverage and other customary insurance coverage.

(j) The Manager shall provide such internal audit, compliance and control
services as may be required for the Company to comply with applicable law
(including the Securities Act and Exchange Act), regulation (including SEC
regulations) and the rules and requirements of the NYSE and as otherwise
reasonably requested by the Company or its Board of Directors from time to time.

(k) The Manager acknowledges receipt of the Company’s Code of Business Conduct
and Ethics, Policy on Insider Trading and Communications Policy (collectively,
the “Conduct Policies”) and agrees to require its employees who provide services
to the Company to comply with such Conduct Policies in the performance of such
services hereunder or such comparable policies as shall in substance hold
employees of the Manager to at least the standards of conduct set forth in the
Conduct Policies.

Section 3. Additional Activities of the Manager. Except as provided in the last
sentence of this Section 3 and subject to the provisions of Section 12(iii), the
Conflicts of Interest Policy, the Investment Guidelines and the Investment
Committee Charter, nothing in this Agreement shall (i) prevent the Manager or
any of its Affiliates, officers, directors or employees, from engaging in other
businesses or from rendering services of any kind to any other Person or entity,
whether or not the investment objectives or policies of any such other Person or
entity are similar to those of the Company or (ii) in any way bind or restrict
the Manager or any of its Affiliates, officers, directors or employees from
buying, selling or trading any securities or commodities for their own accounts
or for the account of others for whom the Manager or any of its Affiliates,
officers, directors or employees may be acting. While information and
recommendations supplied to the Company shall, in the Manager’s reasonable and
good faith judgment, be appropriate under the circumstances and in light of the
investment objectives and policies of the Company, they may be different from
the information and recommendations supplied by the Manager or any Affiliate of
the Manager to others. The Company shall be entitled to equitable treatment
under the circumstances in receiving information, recommendations and any other
services, but the Company recognizes that it is not entitled to receive
preferential treatment as compared with the treatment given by the Manager or
any Affiliate of the Manager to others. The Company shall have the benefit of
the Manager’s best judgment and effort in rendering services hereunder and, in
furtherance of the foregoing, the Manager shall not undertake activities that,
in its good faith judgment, will adversely affect the performance of its
obligations under this Agreement.

Section 4. Bank Accounts. At the direction of the Board of Directors, the
Manager may establish and maintain one or more bank accounts in the name of the
Company or any Subsidiary, and may collect and deposit into any such account or
accounts, and disburse funds from any such account or accounts, under such terms
and conditions as the Board of Directors

 

 

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may approve; and 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 the Company or any Subsidiary.

Section 5. Records; Confidentiality. (a) The Manager shall maintain appropriate
books of accounts and records relating to services performed hereunder, and such
books of account and records shall be accessible for inspection by
representatives of the Company or any Subsidiary at any time during normal
business hours. The Manager shall keep confidential any and all non-public
information, written or oral, obtained by it in connection with the services
rendered hereunder (“Confidential Information”) and shall not use Confidential
Information except in furtherance of its duties under this Agreement or disclose
Confidential Information, in whole or in part, to any Person other than (i) to
its Affiliates, officers, directors, employees, agents, representatives or
advisors who need to know such Confidential Information for the purpose of
rendering services hereunder, (ii) to appraisers, financing sources, advisors
and others in the ordinary course of the Company’s business ((i) and (ii)
collectively, “Manager Permitted Disclosure Parties”) , (iii) in connection with
any governmental or regulatory filings of the Company or disclosure or
presentations to Company investors, (iv) to governmental officials having
jurisdiction over the Company, (v) as requested by law or legal process to which
the Manager or any Person to whom disclosure is permitted hereunder is a party,
or (vi) with the consent of the Company. The Manager agrees to inform each of
its Manager Permitted Disclosure Parties of the non-public nature of the
Confidential Information and to direct such Persons to treat such Confidential
Information in accordance with the terms hereof. Nothing herein shall prevent
the Manager from disclosing Confidential Information (i) upon the order of any
court or administrative agency, (ii) upon the request or demand of any
regulatory agency or authority, or pursuant to any law or regulation, (iii) to
the extent reasonably required in connection with the exercise of any remedy
hereunder, or (iv) to its legal counsel or independent auditors; provided,
however that with respect to clauses (i) and (ii), it is agreed that the Manager
will provide the Company with prompt written notice of such order, request or
demand so that the Company may seek an appropriate protective order and/or waive
the Manager’s compliance with the provisions of this Agreement. 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 is legally required without liability hereunder; provided, that the
Manager agrees to exercise its best 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
available to the public from a source other than the Manager, (B) is released in
writing by the Company to the public or to persons who are not under similar
obligation of confidentiality to the Company, or (C) is obtained by the Manager
from a third-party without breach by such third-party of an obligation of
confidence with respect to the Confidential Information disclosed. The
provisions of this Agreement shall survive the expiration or earlier termination
of this Agreement for a period of one year.

(b) The Company shall keep confidential any and all non-public information
regarding the Manager, written or oral, obtained by it in connection with its
relationship with the Manager (the “Company Confidential Information”) and shall
not use

 

 

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Confidential Information except in furtherance of the terms of this Agreement or
disclose Confidential Information, in whole or in part, to any Person other than
(i) to its Affiliates, officers, directors, agents, representatives or advisors
who need to know such Confidential Information (collectively, “Company Permitted
Disclosure Parties”), (ii) as requested by law or legal process to which the
Company or any Person to whom disclosure is permitted hereunder is a party, or
(iii) with the consent of the Manager. The Company agrees to (i) inform each of
its Company Permitted Disclosure Parties of the non-public nature of the
Confidential Information and to direct such Persons to treat such Confidential
Information in accordance with the terms hereof and (ii) not disclose any
Confidential Information to its Company Permitted Disclosure Parties after the
termination or nonrenewal of this Agreement in accordance with Section 10.
Nothing herein shall prevent the Company from disclosing Confidential
Information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of any regulatory agency or authority, or pursuant to any
law or regulation, (iii) to the extent reasonably required in connection with
the exercise of any remedy hereunder, or (iv) to its legal counsel or
independent auditors; provided, however that with respect to clauses (i) and
(ii), it is agreed that the Company will provide the Manager with prompt written
notice of such order, request or demand so that the Manager may seek an
appropriate protective order and/or waive the Company’s compliance with the
provisions of this Agreement. If, failing the entry of a protective order or the
receipt of a waiver hereunder, the Company is, in the opinion of counsel,
required to disclose Confidential Information, the Company may disclose only
that portion of such information that its counsel advises is legally required
without liability hereunder; provided, that the Company agrees to exercise its
best 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 available to the public from a source other
than the Company, (B) is released in writing by the Manager to the public or to
persons who are not under similar obligation of confidentiality to the Manager,
or (C) is obtained by the Company from a third-party without breach by such
third-party of an obligation of confidence with respect to the Confidential
Information disclosed. For the avoidance of doubt, information about the
systems, employees, policies, procedures and investment portfolio (other than
investments in which the Company and Manager have co-invested) of the Manager
shall be deemed to be included within the meaning of “Confidential Information”
for purposes of the Company’s obligations pursuant to this Section 5(b).

Section 6. Compensation. (a) For the services rendered under this Agreement, the
Company shall pay to the Manager the Base Management Fee and the Incentive Fee.

(b) The parties acknowledge that the Base Management Fee is intended to
compensate the Manager for the costs and expenses of its executive officers and
employees (and certain related overhead not otherwise reimbursable under Section
7 below) incurred in providing to the Company the investment advisory services
and certain general management services rendered under this Agreement.

(c) The Manager will not receive any compensation for the period prior to the
Closing Date other than expenses incurred and reimbursed pursuant to the
provisions of Section 7 hereunder.

 

 

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(d) The Base Management Fee shall be payable in arrears in cash, in monthly
installments commencing with the month in which this Agreement was executed
(with such initial payment pro-rated based on the number of days during such
month that this Agreement was in effect), and the Manager shall calculate each
installment thereof, and deliver such calculation to the Board of Directors,
within fifteen (15) Business Days following the last day of each calendar month.
The Company shall pay the Manager each installment of the Base Management Fee
(each, a “Management Fee Payment”) within five (5) Business Days after the date
of delivery to the Board of Directors of such computations.

(e) The Manager shall compute each installment of the Incentive Fee within 45
days after the end of the calendar quarter with respect to which such
installment is payable. A copy of the computations made by the Manager to
calculate such installment (the “Incentive Fee Computation Notice”) shall
thereafter promptly be delivered to the Board of Directors and, upon such
delivery, payment of such installment of the Incentive Fee shown therein shall
be due and payable within ten (10) Business Days after the date of delivery to
the Board of Directors of such computations.

(f) The Manager may elect in the Incentive Fee Computation Notice to receive all
or a portion of the Incentive Fee (subject to restrictions under securities laws
and the NYSE and to the remaining provisions of this Section 6(f) and the
provisions of Sections 6(g) and 6(h)) in shares of Common Stock and the
remainder thereof shall be paid in cash. For purposes of this computation,
Common Stock includes shares issued and outstanding (whether vested or unvested
or forfeiture or non-forfeitable) and shares to be issued upon exercise of
outstanding stock options (whether such options are exercisable or
nonexercisable). The Manager’s receipt of shares of Common Stock in accordance
herewith shall be subject to all applicable securities exchange rules and
securities laws (including prohibitions on insider trading). All shares of
Common Stock paid to the Manager as Incentive Fee will be fully vested upon
issuance; provided, that the Manager agrees not to sell such shares of Common
Stock for a period of one (1) year from the date the Incentive Fee being paid in
Common Stock became due and payable. Notwithstanding such restriction and
subject to compliance with all applicable securities laws (including
prohibitions on insider trading), the Manager shall have the right to allocate
such shares in its sole and absolute discretion to its officers, employees and
other individuals who provide services to it at any time. In addition, the
foregoing restrictions regarding the sale of such shares shall terminate upon
termination or non-renewal of this Agreement.

(g) Shares of Common Stock payable as the Incentive Fee shall be valued as
follows:

(i) if such shares are traded on a securities exchange, the value shall be
deemed to be the closing price of the shares on such exchange on the Business
Day prior to the issuance of such shares;

(ii) if such shares are actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sales price, as applicable, on
the Business Day prior to the issuance of such shares; and

 

 

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(iii) if there is no active public market for such shares, the value shall be
the fair market value thereof, as reasonably determined in good faith by the
Board of Directors (including a majority of the Independent Directors) of the
Company.

(h) If at any time the Manager shall, in connection with a determination of fair
market value made by the Board of Directors, (i) dispute such determination in
good faith by more than five percent (5%), and (ii) such dispute cannot be
resolved between the Independent Directors and the Manager within ten (10)
Business Days after the Manager provides written notice to the Company of such
dispute (the “Valuation Notice”), then the matter shall be resolved by an
independent appraiser of recognized standing selected jointly by the Independent
Directors and the Manager within not more than twenty (20) days after the
Valuation Notice. In the event the Independent Directors and the Manager cannot
agree with respect to such selection within the aforesaid twenty (20) day
time-frame, the Independent Directors shall select one such independent
appraiser and the Manager shall select one independent appraiser within five (5)
Business Days after the expiration of the twenty (20) day period, with one
additional such appraiser (the “Last Appraiser”) to be selected by the
appraisers so designated within five (5) Business Days after their selection.
Any valuation decision made by the Last Appraiser shall be deemed final and
binding upon the Board of Directors and the Manager and shall be delivered to
the Manager and the Company within not more than fifteen (15) days after the
selection of the Last Appraiser. The expenses of the appraisal shall be paid by
the party with the estimate which deviated the furthest from the final valuation
decision made by the appraisers.

Section 7.Expenses of the Company. (a) The Manager shall be responsible for
employment expenses of the Manager’s employees (including the officers and
directors of the Company who are also employees of the Manager), including
salaries, bonus and other wages, payroll taxes and the cost of employee benefit
plans of such personnel.

(b) The Company shall pay all of its costs and expenses and shall reimburse the
Manager or its Affiliates for expenses of the Manager and its Affiliates
incurred on behalf of the Company, excepting only those expenses that are
specifically the responsibility of the Manager pursuant to Section 7(a) of this
Agreement. Without limiting the generality of the foregoing, it is specifically
agreed that the following costs and expenses of the Company or any Subsidiary
shall be paid by the Company and shall not be paid by the Manager or Affiliates
of the Manager:

(i) all costs and expenses associated with the Company’s formation and capital
raising activities of the Company and its Subsidiaries, if any, including the
costs and expenses of the preparation of the Company’s registration statements,
any and all costs and expenses of the Initial Public Offering of the Company,
any subsequent offerings and any filing fees and costs of being a public
company, including filings with the SEC, the National Association of Securities
Dealers, Inc. and the NYSE (and any other exchange or over-the-counter market),
among other such entities;

(ii) all costs and expenses in connection with the acquisition, disposition,
development, protection, maintenance, financing, hedging, administration and
ownership of the Company’s or any Subsidiary’s investment assets, including
costs and expenses

 

 

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incurred in contracting with third parties, including Affiliates of the Manager,
to provide such services, such as legal fees, accounting fees, consulting fees,
trustee fees, appraisal fees, insurance premiums, commitment fees, brokerage
fees, guaranty fees, ad valorem taxes, costs of foreclosure, maintenance, repair
and improvement of property and premiums for insurance on property owned or
leased by the Company or any Subsidiary;

(iii) all legal, audit, accounting, consulting, underwriting, brokerage,
listing, filing, custodian, transfer agent, rating agency, registration and
other fees and charges, printing, engraving and other expenses and taxes
incurred in connection with the issuance, distribution, transfer, registration
and stock exchange listing of the Company’s or any Subsidiary’s equity
securities or debt securities;

(iv) all costs and expenses in connection with legal, accounting, due diligence,
asset management, securitization, property management, leasing tasks and other
services that outside professionals or outside consultants perform on behalf of
the Company;

(v) all expenses relating to communications to holders of equity securities or
debt securities issued by the Company or any Subsidiary and the other third
party services utilized in maintaining relations with holders of such securities
and in complying with the continuous reporting and other requirements of
governmental bodies or agencies (including the SEC), including any costs of
computer services in connection with this function, the cost of printing and
mailing certificates for such securities and proxy solicitation materials and
reports to holders of the Company’s or any Subsidiary’s securities and the cost
of any reports to third parties required under any indenture to which the
Company or any Subsidiary is a party;

(vi) all costs and expenses of money borrowed by the Company or its
Subsidiaries, if any, including principal, interest and the costs associated
with the establishment and maintenance of any credit facilities, warehouse
loans, repurchase facilities and other indebtedness of the Company and its
Subsidiaries, if any (including commitment fees, legal fees, closing and other
costs);

(vii) all taxes and license fees applicable to the Company or any Subsidiary,
including interest and penalties thereon;

(viii) all fees paid to and expenses of third-party advisors and independent
contractors, consultants, managers and other agents engaged by the Company or
any Subsidiary or by the Manager for the account of the Company or any
Subsidiary;

(ix) all insurance costs incurred by the Company or any Subsidiary, including
any costs to obtain liability or other insurance to indemnify the Manager and
underwriters of any securities of the Company;

(x) all costs and expenses relating to the acquisition of, and maintenance and
upgrades to, the Company’s portfolio accounting systems;

 

 

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(xi) all compensation and fees paid to directors of the Company or any
Subsidiary (excluding those directors who are also officers or employees of the
Manager), all expenses of directors of the Company or any Subsidiary (including
those directors who are also employees of the Manager), the cost of directors
and officers liability insurance and premiums for errors and omissions
insurance, and any other insurance deemed necessary or advisable by the Board of
Directors for the benefit of the Company and its directors and officers
(including those directors who are also employees of the Manager);

(xii) all third-party legal, accounting and auditing fees and expenses and other
similar services relating to the Company’s or any Subsidiary’s operations
(including all quarterly and annual audit or tax fees and expenses);

(xiii) all third-party legal, expert and other fees and expenses relating to any
actions, proceedings, lawsuits, demands, causes of action and claims, whether
actual or threatened, made by or against the Company, or which the Company is
authorized or obligated to pay under applicable law or its Governing Instruments
or by the Board of Directors;

(xiv) subject to Section 8 below, any judgment or settlement of pending or
threatened proceedings (whether civil, criminal or otherwise) against the
Company or any Subsidiary, or against any director or officer of the Company or
any Subsidiary in his capacity as such for which the Company or any Subsidiary
is required to indemnify such director or officer by any court or governmental
agency, or settlement of pending or threatened proceedings;

(xv) all travel and related expenses of the Company’s directors and officers and
the Manager’s employees incurred in connection with attending meetings of the
Board of Directors or holders of securities of the Company or any Subsidiary or
performing other business activities that relate to the Company or any
Subsidiary, including travel and expenses incurred in connection with the
purchase, consideration for purchase, financing, refinancing, sale or other
disposition of any investment or potential investment of the Company; provided,
however, that the Company shall only be responsible for a proportionate share of
such expenses, as determined by the Manager in good faith, where such expenses
were not incurred solely for the benefit of the Company;

(xvi) all expenses of organizing, modifying or dissolving the Company or any
Subsidiary and costs preparatory to entering into a business or activity, or of
winding up or disposing of a business activity of the Company or its
Subsidiaries, if any;

(xvii) all expenses relating to payments of dividends or interest or
distributions in cash or any other form made or caused to be made by the Board
of Directors to or on account of holders of the securities of the Company or any
Subsidiary, including in connection with any dividend reinvestment plan;

 

 

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(xviii) all costs and expenses related to the design and maintenance of the
Company’s web site or sites and associated with any computer software, hardware
or information technology services that is used primarily for the Company;

(xix) costs and expenses incurred with respect to market information systems and
publications, research publications and materials, and settlement, clearing and
custodial fees and expenses; provided, however, that the Company shall only be
responsible for a proportionate share of such expenses, as determined by the
Manager in good faith, where such expenses were not incurred solely for the
benefit of the Company;

(xx) all expenses incurred on behalf of the Company in connection with servicing
problem or delinquent loans, or special servicing;

(xxi) the costs and expenses incurred with respect to administering the
Company’s incentive plans;

(xxii) all other expenses actually incurred by the Manager or its Affiliates or
their respective officers, employees, representatives or agents, or any
Affiliates thereof, which are reasonably necessary for the performance by the
Manager of its duties and functions under this Agreement (including any fees or
expenses relating to the Company’s compliance with all governmental and
regulatory matters);

(xxiii) rent (including disaster recovery facilities costs and expenses),
telephone, utilities, office furniture, equipment, machinery and other office,
internal and overhead expenses of the Manager and its Affiliates required for
the Company’s operations; provided, however, that the Company shall only be
responsible for a proportionate share of such expenses, as determined by the
Manager in good faith, where such expenses were not incurred solely for the
benefit of the Company; and

(xxiv) all other expenses of the Company or any Subsidiary relating to the
Company’s business and investment operations, including the costs and expenses
of acquiring, owning, protecting, maintaining, developing and disposing of
investments, that are not the responsibility of the Manager under Section 8(a)
of this Agreement.

(c) Costs and expenses incurred by the Manager on behalf of the Company shall be
reimbursed monthly to the Manager. The Manager shall prepare a written statement
in reasonable detail documenting the costs and expenses of the Company and those
incurred by the Manager on behalf of the Company during each month, and shall
deliver such written statement to the Company within thirty (30) days after the
end of each month. The Company shall pay all amounts payable to the Manager
pursuant to this Section 7(c) within ten (10) days after the receipt of the
written statement without demand, deduction, offset or delay. Cost and expense
reimbursement to the Manager shall be subject to adjustment at the end of each
calendar year in connection with the annual audit of the Company. The
Independent Directors shall, on an annual basis, review and approve the
allocation of shared expenses between the Company and the Manager. The
provisions of this Section 7 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.

 

 

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Section 8. Limits of the Manager’s Responsibility. (a) The Manager assumes no
responsibility under this Agreement other than to render the services called for
hereunder in good faith and shall not be responsible for any action of the Board
of Directors in following or declining to follow any advice or recommendations
of the Manager, including as set forth in the Conflicts of Interest Policy, the
Investment Guidelines and the Investment Committee Charter. The Manager and its
Affiliates, and the directors, officers, employees and stockholders of the
Manager and its Affiliates, will not be liable to the Company, any Subsidiary of
the Company, the Board of Directors, or the Company’s stockholders for any acts
or omissions by the Manager, its officers, employees or its Affiliates,
performed in accordance with and pursuant to this Agreement, except by reason of
acts constituting bad faith, willful misconduct, gross negligence or reckless
disregard of their respective duties under this Agreement. The Company shall, to
the full extent lawful, reimburse, indemnify and hold harmless the Manager, its
Affiliates, and the directors, officers, employees and stockholders of the
Manager and its Affiliates (each, a “Manager Indemnified Party”), of and from
any and all expenses, losses, damages, liabilities, demands, charges and claims
of any nature whatsoever (including reasonable attorneys’ fees) (collectively
“Losses”), in respect of or arising from any acts or omissions of such Manager
Indemnified Party performed in good faith under this Agreement and, in respect
of any such Manager Indemnified Party, not constituting bad faith, willful
misconduct, gross negligence or reckless disregard of duties of such Manager
Indemnified Party under this Agreement.

(b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold
harmless the Company, and the directors, officers and stockholders of the
Company and each Person, if any, controlling the Company (each, a “Company
Indemnified Party”; a Manager Indemnified Party and a Company Indemnified Party
are each sometimes hereinafter referred to as an “Indemnified Party”) of and
from any and all Losses in respect of or arising from (i) any acts or omissions
of the Manager constituting bad faith, willful misconduct, gross negligence or
reckless disregard of duties of the Manager under this Agreement or (ii) any
claims by the Manager’s employees relating to the terms and conditions of their
employment by the Manager.

(c) In case any such claim, suit, action or proceeding (a “Claim”) is brought
against any Indemnified Party in respect of which indemnification may be sought
by such Indemnified Party pursuant hereto, the Indemnified Party shall give
prompt written notice thereof to the indemnifying party, which notice shall
include all documents and information in the possession of or under the control
of such Indemnified Party reasonably necessary for the evaluation and/or defense
of such Claim and shall specifically state that indemnification for such Claim
is being sought under this Section; provided, however, that the failure of the
Indemnified Party to so notify the indemnifying party shall not limit or affect
such Indemnified Party’s rights to be indemnified pursuant to this Section. Upon
receipt of such notice of Claim (together with such documents and information
from such Indemnified Party), the indemnifying party shall, at its sole cost and
expense, in good faith defend any such Claim with counsel reasonably
satisfactory to such Indemnified Party, which counsel may, without limiting the
rights of such Indemnified Party pursuant to the next succeeding sentence of
this Section, also represent the indemnifying party in such investigation,
action or proceeding. In the alternative, such Indemnified Party may elect to
conduct the defense of the Claim, if (i) such Indemnified Party reasonably
determines that the conduct of its defense by the

 

 

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indemnifying party could be materially prejudicial to its interests, (ii) the
indemnifying party refuses to defend (or fails to give written notice to the
Indemnified Party within ten (10) days of receipt of a notice of Claim that the
indemnifying party assumes such defense), or (iii) the indemnifying party shall
have failed, in such Indemnified Party’s reasonable judgment, to defend the
Claim in good faith. The indemnifying party may settle any Claim against such
Indemnified Party without such Indemnified Party’s consent, provided (i) such
settlement is without any Losses whatsoever to such Indemnified Party, (ii) the
settlement does not include or require any admission of liability or culpability
by such Indemnified Party and (iii) the indemnifying party obtains an effective
written release of liability for such Indemnified Party from the party to the
Claim with whom such settlement is being made, which release must be reasonably
acceptable to such Indemnified Party, and a dismissal with prejudice with
respect to all claims made by the party against such Indemnified Party in
connection with such Claim. The applicable Indemnified Party shall reasonably
cooperate with the indemnifying party, at the indemnifying party’s sole cost and
expense, in connection with the defense or settlement of any Claim in accordance
with the terms hereof. If such Indemnified Party is entitled pursuant to this
Section to elect to defend such Claim by counsel of its own choosing and so
elects, then the indemnifying party shall be responsible for any good faith
settlement of such Claim entered into by such Indemnified Party. Except as
provided in the immediately preceding sentence, no Indemnified Party may pay or
settle any Claim and seek reimbursement therefor under this Section.

(d) The provisions of this Section 8 shall survive the expiration or earlier
termination of this Agreement.

Section 9. No Joint Venture. The Company and the Manager are not partners or
joint venturers with each other and nothing herein shall be construed to make
them such partners or joint venturers or impose any liability as such on either
of them.

Section 10. Term; Renewal.

(a) Initial Term. This Agreement shall become effective on the Closing Date and
shall continue in operation, unless terminated in accordance with the terms
hereof, until June 30, 2010 (the “Initial Term”).

(b) Automatic Renewal Terms. 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 this Section 10.

(c) Nonrenewal of the Manager. Notwithstanding any other provision of this
Agreement to the contrary, the Company may, in connection with the expiration of
the Initial Term or any Automatic Renewal Term, decline to renew this Agreement
upon the vote of at least a majority of the Independent Directors. If the
Company elects not to renew this Agreement at the expiration of the Initial Term
or any Automatic Renewal Term, the Company shall deliver to the Manager prior
written notice (the “Termination Notice”) of the Company’s intention not to
renew this Agreement based upon the terms set forth in this Section 10(c) not
less than one hundred eighty (180) days prior to the expiration of the then
existing term. If the

 

 

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Company so elects not to renew this Agreement, the Company shall designate the
date (the “Effective Termination Date”), not less than one hundred eighty (180)
days from the date of the notice, on which the Manager shall cease to provide
services under this Agreement and this Agreement shall expire on such date. If
the Company issues the Termination Notice, the Company shall be obligated to pay
the Manager the Termination Fee within ninety (90) days of the Effective
Termination Date. Notwithstanding the foregoing, if the Termination Notice
specifies that the reason for termination arises from a decision made by a
majority vote of the Independent Directors that the compensation payable to the
Manager is unfair, the Manager shall have the right to renegotiate the
compensation payable to Manager under this Agreement by delivering to the
Company, not less than one hundred twenty (120) days prior to the pending
Effective Termination Date, written notice (a “Notice of Proposal to Negotiate”)
of its intention to renegotiate the compensation payable to Manager under this
Agreement. Thereupon, the Company (represented by the Independent Directors) and
the Manager shall endeavor to negotiate the compensation payable to the Manager
under this Agreement in good faith. Provided that the Company and the Manager
agree to the revised compensation payable to the Manager within sixty (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 compensation payable to Manager under this Agreement
shall be the revised compensation structure 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 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 compensation structure
during such sixty (60) day period, this Agreement shall expire on the Effective
Termination Date and the Company shall be obligated to pay the Manager the
Termination Fee within ninety (90) days of the Effective Termination Date.

(d) No later than one hundred eighty (180) days prior to the expiration of the
Initial Term or any 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 expire effective upon expiration of the then current term. In
the event that the Manager declines to renew this Agreement, no Termination Fee
shall be paid.

(e) In the event of expiration or nonrenewal of this Agreement pursuant to this
Section 10, the parties shall be without any further liability or obligation of
each other, except as provided in Section 13 of this Agreement and except for
such obligations as expressly survive the expiration or termination of this
Agreement.

 

 

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Section 11. Assignments. (a) This Agreement shall terminate automatically
without payment of the Termination Fee in the event of its assignment, in whole
or in part, by the Manager, unless such assignment is consented to in writing by
the Company with the consent of a majority of the Independent Directors. Any
such permitted assignment shall bind the assignee under this Agreement in the
same manner as the Manager is bound. In addition, the assignee shall execute and
deliver to the Company a counterpart of this Agreement naming such assignee as
the Manager. Notwithstanding the foregoing, the Manager may (i) assign this
Agreement to an Affiliate of the Manager that is a successor to the Manager by
reason of a restructuring or other internal reorganization among the Manager and
any one or more of its Affiliates without the consent of a majority of the
Independent Directors and (ii) delegate to one or more of its Affiliates the
performance of any of its responsibilities hereunder so long as it remains
liable for any such Affiliate’s performance. Nothing contained in this Agreement
shall preclude any pledge, hypothecation or other transfer of any amounts
payable to the Manager under this Agreement.

(b) The Company shall not assign this Agreement, in whole or in part, unless
such assignment is consented to in writing by the Manager. Any such permitted
assignment shall bind the assignee under this Agreement in the same manner as
the Company is bound. In addition, the assignee shall execute and deliver to the
Manager a counterpart of this Agreement.

Section 12. Termination of the Manager for Cause. At the option of the Company
and at any time during the term of this Agreement, this Agreement shall be and
become terminated upon sixty (60) days’ written notice of termination from the
Board of Directors to the Manager, without payment of the Termination Fee, if
any of the following events shall occur, which shall be determined by a majority
of the Board of Directors (including a majority of the Independent Directors):

(i) the Manager shall commit any act of fraud, misappropriation of funds, or
embezzlement against the Company in its corporate capacity (as distinguished
from the acts of any employees of the Manager which are taken without the
complicity of the board of directors or executive officers of the Manager) or
shall be grossly negligent in the performance of its duties under this Agreement
(including such action or inaction by the Manager which materially impairs the
Company’s ability to conduct its business, but not including acts of any
employees of the Manager which are taken without the knowledge of the Board of
Directors or any of the Manager’s executive officers);

(ii) the Manager shall commit a material breach of any provision of this
Agreement (including the failure of the Manager to use commercially reasonable
efforts to comply with the Company’s Conflicts of Interest Policy, Investment
Guidelines and Investment Committee Charter); provided, that such default has
continued uncured for a period of sixty (60) days after written notice thereof,
which notice shall contain a request that the same be remedied;

(iii) the Manager raises, sponsors, forms or advises any new investment fund,
company or vehicle, including any REIT, that invests primarily in
healthcare-related commercial mortgage loans or other commercial
healthcare-related real estate loans, such

 

 

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as mezzanine loans (but specifically excluding commercial mortgage-backed
securities and other similar pass through securities) in the United States or
healthcare-related properties in the United States;

(iv) (A) the Manager shall commence any case, proceeding or other action (1)
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (2) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Manager shall make a general assignment
for the benefit of its creditors; or (B) there shall be commenced against the
Manager any case, proceeding or other action of a nature referred to in clause
(A) above which (1) results in the entry of an order for relief or any such
adjudication or appointment or (2) remains undismissed, undischarged or unbonded
for a period of ninety (90) days; or (C) the Manager shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (A) or (B) above; or (D) the Manager shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;

(v) upon the conviction (including a plea of nolo contendere) of the Manager of
a felony or the entry of any order or consent decree by any state or federal
regulatory agency or authority, or the settlement by the Manager with any such
regulatory agency or authority, whether or not such order, consent decree or
settlement involves the admission or denial of liability, with respect to or
arising out of any regulatory proceeding where the subject matter of the
regulatory proceeding involves conduct of the Manager in the course of
conducting its business as contemplated by this Agreement;

(vi) upon a Change of Control in the Manager, provided that the Company
exercises its right to terminate this Agreement within the six (6) months
following such Change of Control; or

(vii) upon the dissolution of the Manager.

If any of the events specified above shall occur, the Manager shall give prompt
written notice thereof to the Board of Directors.

Section 13. Action Upon Termination. From and after the effective date of
expiration or termination of this Agreement pursuant to Sections 10, 11, or 12
of this Agreement, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination and, if this Agreement is not renewed pursuant to Section 10, the
Termination Fee. Upon any such termination, the Manager shall forthwith:

(a) after deducting any accrued compensation and reimbursement for its expenses
to which it is then entitled, pay over to the Company or a Subsidiary all money
collected and held for the account of the Company or a Subsidiary pursuant to
this Agreement;

 

 

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

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

Section 14. Release of Money or Other Property Upon Written Request.

The Manager agrees that any money or other property of the Company (which such
term, for the purposes of this Section, shall be deemed to include any and all
of its Subsidiaries, if any) held by the Manager shall be held by the Manager as
custodian for the Company, and the Manager’s records shall be appropriately and
clearly 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 60 days following such request. Upon delivery of such money or other
property to the Company, the Manager shall not be liable to the Company, the
Board of Directors, or the Company’s stockholders 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 this Section. The Company shall indemnify the
Manager, its directors, officers, stockholders, employees and agents 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 14. Indemnification pursuant to this provision shall be in addition to
any right of the Manager to indemnification under Section 8 of this Agreement.

Section 15. Representations and Warranties. (a) The Company hereby represents
and warrants to the Manager as follows:

(i) The Company is duly organized, validly existing and in good standing under
the laws of Maryland, has the corporate power and authority and the legal right
to own and operate its assets, to lease any property it may operate as lessee
and to conduct the business in which it is now engaged and is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except for failures to be so qualified, authorized or
licensed that could not in the aggregate have a material adverse effect on the
business operations, assets or financial condition of the Company and its
Subsidiaries, if any, taken as a whole.

(ii) The Company has the corporate power and authority and the legal right to
make, deliver and perform this Agreement and all obligations required hereunder
and has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all

 

 

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obligations required hereunder. No consent of any other Person, including
stockholders and creditors of the Company, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority, is required by the Company in
connection with this Agreement or the execution, delivery, performance, validity
or enforceability of this Agreement and all obligations required hereunder. This
Agreement has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized officer of the Company, and this
Agreement constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the legally valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.

(iii) The execution, delivery and performance of this Agreement and the
documents or instruments required hereunder will not violate any provision of
any existing law or regulation binding on the Company, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
the Company, or the Governing Instruments of, or any securities issued by the
Company or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company is a party or by which the
Company or any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries, if any, taken as a whole, and
will not result in, or require, the creation or imposition of any lien or any of
its property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.

(b) The Manager hereby represents and warrants to the Company as follows:

(i) The Manager is duly organized, validly existing and in good standing under
the laws of Delaware, has the corporate power and authority and the legal right
to own and operate its assets, to lease the property it operates as lessee and
to conduct the business in which it is now engaged and is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except for failures to be so qualified, authorized or
licensed that could not in the aggregate have a material adverse effect on the
business operations, assets or financial condition of the Manager.

(ii) The Manager has the corporate power and authority and the legal right to
make, deliver and perform this Agreement and all obligations required hereunder
and has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other
Person, including members and creditors of the Manager, and no license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority, is
required by the Manager in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each instrument or
document required

 

 

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hereunder will be, executed and delivered by a duly authorized officer of the
Manager, and this Agreement constitutes, and each instrument or document
required hereunder when executed and delivered hereunder will constitute, the
legally valid and binding obligation of the Manager enforceable against the
Manager in accordance with its terms.

(iii) The execution, delivery and performance of this Agreement and the
documents or instruments required hereunder will not violate any provision of
any existing law or regulation binding on the Manager, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
the Manager, or the Governing Instruments of, or any securities issued by the
Manager or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Manager is a party or by which the
Manager or any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Manager, and will not result in, or require, the creation or
imposition of any lien or any of its property, assets or revenues pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

Section 16. Miscellaneous. (a) Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered against receipt or upon
actual receipt of (i) personal delivery, (ii) delivery by reputable overnight
courier, (iii) delivery by facsimile transmission with telephonic confirmation
or (iv) delivery by registered or certified mail, postage prepaid, return
receipt requested, addressed as set forth below (or to such other address as may
be hereafter notified by the respective parties hereto in accordance with this
Section 16):

 

The Company:

 

Care Investment Trust Inc.
c/o CIT Healthcare LLC
505 Fifth Avenue
New York, New York 10017
Attention: Chief Executive Officer
Fax: (212) 771-9317

 

 

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Attention: David J. Goldschmidt, Esq.
Fax: (917) 777-3574

 

 

 

The Manager:

 

CIT Healthcare LLC
505 Fifth Avenue
New York, New York 10017
Attention: Chief Executive Officer
Fax: (212) 771-9317

 

 

 

 

 

 

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with a copy to:

 

CIT Healthcare LLC

505 Fifth Avenue
New York, New York 10017
Attention: Chief Legal Officer
Fax: (212) 771-9317

(b) 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 assigns as provided herein.

(c) No Third Party Beneficiaries. This Agreement is not intended to confer upon
any person other than the parties any rights or remedies.

(d) Integration. This Agreement contains the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.

(e) Amendments. Neither this Agreement nor any terms hereof may be amended,
supplemented, modified or waived except in an instrument in writing executed by
the parties hereto, which shall be approved by a majority of the Independent
Directors.

(F) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE 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 LAYING OF VENUE IN SUCH COURT.

(g) 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.

(h) Survival of Representations and Warranties. All representations and
warranties made hereunder, and in any document, certificate or statement
delivered

 

 

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pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement.

(i) No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of a party hereto, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

(j) Section Headings. The section and subsection headings in this Agreement are
for convenience in reference only and shall not be deemed to alter or affect the
interpretation of any provisions hereof.

(k) Counterparts. This Agreement may be executed by the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

(l) Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

 

 

CARE INVESTMENT TRUST INC.

 

By: 

/s/ F. Scott Kellman 

 

 

 

Name: F. Scott Kellman

 

 

 

Title:   Chief Executive Officer and President

 

 

 

CIT HEALTHCARE LLC

 

By: 

/s/ Flint D. Besecker 

 

 

 

Name: Flint D. Besecker

 

 

 

Title:   President

 

 

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Exhibit A

Conflicts of Interest Policy

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in that certain Management Agreement, dated as of June 27, 2007, as may
be amended from time to time (the “Management Agreement”), by and between Care
Investment Trust Inc. (the “Company”) and CIT Healthcare LLC (the “Manager”).

Special Provisions Relating to Allocation of Opportunities, Co-Investments and
Certain Shared Services:

1. The Company shall have the first right to invest in all assets originated by
or presented to the Manager with one or more of the following characteristics,
regardless of how such asset is originated or otherwise identified by the
Manager, unless otherwise specified below:

 

(a)

any mortgage loan, for 12 months following the Closing Date of the Initial
Public Offering and, thereafter, any mortgage loan with a total principal amount
over $75.0 million;

 

(b)

any investment opportunity which constitutes equity or preferred equity;

 

(c)

any investment opportunity which constitutes mezzanine loans or B Notes; and

 

(d)

any investment that the Manager originates and elects to syndicate.

2. The Company shall also have the right to invest in any other mortgage or real
estate related asset that the Manager elects not to invest in for any reason,
including failure to satisfy the Manager’s investment criteria or concentration
issues.

3. The Company shall not purchase from, or co-invest (i.e., co-originate or
co-purchase from an unaffiliated third party) with, the Manager unless (A) if
the co-investment is made on a pari passu basis, the economic terms (exclusive
of any administrative fees payable to the Manager as agent) shall be at least as
favorable to the Company as to the Manager and (B) if the co-investment results
in the Manager and the Company holding Debt Tranches (defined below) of
different priorities, the terms of the Company’s Debt Tranche (defined below)
comply with the following: (1) if purchased in the secondary market from an
unaffiliated third party, the Company’s investment shall be upon such terms as
are offered by such third party and (2) if purchased or part of a co-origination
with the Manager, (y) the Company’s investment shall, if there is one or more
third party participants in the Company’s Debt Tranche, be upon terms no less
favorable than the most favored third party participant in the Company’s Debt
Tranche and (z) the Company’s investment shall, if there are no other
participants in the Company’s Debt Tranche, be upon then current market terms
for similar investments purchased in arms length transactions as reasonably
determined by the Manager based upon third party bids received or published
market data; provided, however, in the event that third party bids or published
market

 

 

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data is not available to the Manager, the Company’s investment be approved by a
majority of the Independent Directors.

4. In the event that (i) the Company shall invest in a loan (or portion of a
loan) that is secured (directly or indirectly) by the same underlying real
estate asset that secures a loan (or tranche or other portion of a loan) of a
different priority held by the Manager or (ii) the Manager or the Company holds
a preferred equity interest in a real estate asset that (directly or indirectly)
secures a loan in which the other party hereto has an interest (each such loan,
loan tranche or other loan portion, or preferred equity interest being a “Debt
Tranche”), then, if each of the Manager and the Company holds a majority of its
respective Debt Tranche, a majority of the Independent Directors may, upon the
occurrence of (i) a material default in respect of the Debt Tranche in which the
Company holds an interest (the “Company’s Debt Tranche”) or (ii) any request to
amend, modify or waive any material term of the Company’s Debt Tranche in order
to avoid a pending material default, retain a reputable independent third party
special servicer or adviser to advise the Board of Directors with respect to all
material rights, remedies, enforcement actions, amendments and requests for
waivers or consents in respect of the Company’s Debt Tranche, and the cost of
such servicer or adviser shall be deducted from any Base Management Fee payable
to the Manager in respect of the Company’s Debt Tranche, provided, however, that
such costs shall not exceed the lesser of the special servicer fee and the Base
Management Fee allocable to the Equity allocable to such loan.

5. The Company shall not invest (i) in any loan secured (directly or indirectly)
by a real estate asset in which the Manager has an equity interest (other than
preferred equity) or (ii) in any equity interest (other than preferred equity)
in any real estate asset which secures (directly or indirectly) any loan held by
the Manager.

6. The legal department of the Manager shall provide legal services to the
Company such as advice as to corporate governance matters, regulatory
requirements, tax matters, litigation matters and such other matters as the
Company or the Board of Directors may from time to time reasonably request, and
in the provision of such legal services the Company, its officers and directors
shall, to the extent permitted by applicable law, be entitled to all
attorney-client privileges available under applicable law and all fiduciary
obligations owed by attorneys to their clients under applicable law.
Notwithstanding the foregoing, in order to mitigate possible conflicts of
interest, the Company shall retain separate external counsel (i) by action of
the Independent Directors, with respect to (1) any disputes between the Manager
and Company arising under this Agreement or any other agreement between the
Manager and Company, (2) any transaction of the kind described in Section 3, (3)
any investment for which a majority of the Independent Directors has retained a
special servicer or adviser in accordance with Section 4 and (4) any matter that
a majority of the Independent Directors identifies as a situation where the dual
representation of the Company and the Manager presents an actual or apparent
conflict of interest; and (ii) at the option of the Manager, Company or any
Independent Director, with respect to any other matter.

This Conflicts of Interest Policy may be amended, restated, modified,
supplemented or waived by the Manager and the Company (which approval must
include a majority of the Independent Directors) without the approval of the
Company’s stockholders.

 

 

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Exhibit B

Investment Guidelines

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in that certain Management Agreement, dated as of June 27, 2007, as may
be amended from time to time (the “Management Agreement”), by and between Care
Investment Trust Inc. (the “Company”) and CIT Healthcare 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 to be regulated as
an investment company under the Investment Company Act;

3. The Company shall not invest more than 20% of its Equity, determined as of
the date of such investment, in any single asset (except with respect to the
initial assets contributed by CIT Real Estate Holding Corporation to the Company
in connection with the Initial Public Offering) and the Company shall not invest
more than 40% of its Equity, determined as of the date of such investment, in
projects controlled by a single borrower or group of affiliated borrowers that
would form a consolidated group under GAAP;

4. The Company shall generally maintain leverage not exceeding 80% of the total
value of its investments;

5. The Company shall maintain a portfolio of assets that are geographically
diverse;

6. No investment shall be made that does not comply with the Conflicts of
Interest Policy; and

7. The Manager must seek the approval of a majority of the Independent Directors
before engaging in any transaction that is in contravention of these Investment
Guidelines.

These Investment Guidelines may be amended, restated, modified, supplemented or
waived by the Board of Directors (which must include a majority of the
Independent Directors) without the approval of the Company’s stockholders.

 

 

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