Exhibit 10.1

 

 

 

MANAGEMENT AGREEMENT

by and between

Capital Trust, Inc.

and

[—]

 

 

 

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MANAGEMENT AGREEMENT, dated as of [—], 2012, by and between Capital Trust, Inc.,
a Maryland corporation, and [—], a [—] (the “Manager”).

W I T N E S S E T H:

WHEREAS, the Company was formed as a corporation which has elected to be treated
as a real estate investment trust for U.S. federal income tax purposes pursuant
to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the “Code”);

WHEREAS, the Company was previously internally managed by CT Investment
Management Co., LLC (“CTIMCO”), a wholly-owned subsidiary of the Company;

WHEREAS, pursuant to the Purchase and Sale Agreement, dated as of September 27,
2012 (as the same may be amended from time to time, the “Omnibus Purchase
Agreement”), by and between the Company and Huskies Acquisition LLC, a Delaware
limited liability company, has agreed to acquire CTIMCO’s investment management
business and certain related interests on the terms and conditions set forth
therein; and

WHEREAS, in connection therewith, the Company desires to retain the Manager to
serve as investment manager of the Company and provide various investment
management and other services with respect to the Company in the manner and on
the terms set forth herein, and the Manager desires to accept such appointment
and render such services to the Company in consideration of a management fee and
incentive fee as hereinafter set forth.

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 with respect to a Person (i) any Person directly or indirectly
controlling, controlled by, or under common control with such other Person,
(ii) any executive officer, employee or general partner of such Person,
(iii) any member of the board of directors or board of managers (or bodies
performing similar functions) of such Person, and (iv) any legal entity for
which such Person acts as an executive officer or general partner; provided,
that, for greater certainty, it is acknowledged and agreed that portfolio
entities of any Other Blackstone Funds shall not be deemed Affiliates of the
Manager.

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

“Allocation Policy” means the investment allocation policy and procedures of the
Manager and/or its Affiliates with respect to the allocation of investment
opportunities among the Company and one or more Other Blackstone Funds (as the
same may be amended, updated or revised from time to time).

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

“Blackstone” means, collectively, The Blackstone Group L.P., a Delaware limited
partnership, and any Affiliate thereof.

“Board” 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.

“Cause Event” means (i) a final judgment by any court or governmental body of
competent jurisdiction not stayed or vacated within thirty (30) days that the
Manager, its agents or its assignees has committed a felony or a material
violation of applicable securities laws that has a material adverse effect on
the business of the Company or the ability of the Manager to perform its duties
under the terms of this Agreement, (ii) an order for relief in an involuntary
bankruptcy case relating to the Manager or the Manager authorizing or filing a
voluntary bankruptcy petition, (iii) the dissolution of the Manager, or (iv) a
determination that the Manager has committed fraud against the Company,
misappropriates or embezzles funds of the Company, or has acted, or failed to
act, in a manner constituting bad faith, willful misconduct, gross negligence or
reckless disregard in the performance of its duties under this Agreement;
provided, however, that if any of the actions or omissions described in this
clause (iv) are caused by an employee and/or officer of the Manager or one of
its Affiliates and the Manager takes all necessary action against such person
and cures the damage caused by such actions or omissions within thirty (30) days
of such determination, then such event shall not constitute a Cause Event.

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

“Closing Date” means the Closing Date under the Omnibus Purchase Agreement.

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

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

“Company” means Capital Trust, Inc., a Maryland corporation, and, where the
context requires, its Subsidiaries and Affiliates.

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

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

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

“Core Earnings” means the net income (loss) attributable to the stockholders of
the Company, computed in accordance with GAAP, including realized losses not
otherwise included in GAAP net income (loss) and excluding (i) non-cash equity
compensation expense, (ii) the Incentive Compensation, (iii) depreciation and
amortization, (iv) any unrealized gains or losses or other similar non-cash
items that are

 

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included in net income for the applicable reporting period, regardless of
whether such items are included in other comprehensive income or loss, or in net
income, (v) one-time events pursuant to changes in GAAP and certain material
non-cash income or expense items, in each case after discussions between the
Manager and the Independent Directors and approved by a majority of the
Independent Directors, and (vi) net income (loss) related to the CT Legacy
Interests.

For the avoidance of doubt, the exclusion of depreciation and amortization from
the calculation of Core Earnings shall only apply to debt investments related to
real estate to the extent that the Company forecloses upon the property or
properties underlying such debt investments.

“CT Legacy CDOs” means Capital Trust RE CDO 2004-1 Ltd., a Cayman Islands
company, Capital Trust RE CDO 2005-1 Ltd, a Cayman Islands company, and CT CDO
IV Ltd., a Cayman Islands exempted company.

“CT Legacy REIT” means CT Legacy REIT Mezz Borrower, Inc., a Maryland
corporation.

“CT Legacy REIT Award Agreements” means those certain award agreements granted
under the Company’s 2007 Long-Term Incentive Plan related to distributions made
by CT Legacy REIT.

“CT Legacy Interests” means the Company’s interests in (i) CT Legacy REIT, net
of the Unit Secured Notes and payments made by the Company pursuant to the CT
Legacy REIT Award Agreements, (ii) the CTOPI Interest, net of the payments made
by the Company pursuant to the CTOPI Award Agreements and (iii) the CT Legacy
CDOs.

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

“CTOPI” means CT Opportunity Partners I, L.P., a Delaware limited partnership.

“CTOPI Award Agreements” means those certain award agreements related to carried
interest distributions made by CTOPI.

“CTOPI Interest” means the Company’s interest in CT OPI GP, LLC, a Delaware
limited liability company and general partner of CTOPI.

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

“Equity” means (a) the sum of (1) the net proceeds received by the Company from
all issuances of the Company’s Common Stock from and after the Closing Date
(allocated on a pro rata basis for such issuances during the fiscal quarter of
any such issuance), plus (2) the Company’s retained earnings at the end of the
most recently completed calendar quarter in respect of Core Earnings from and
after the Closing Date, plus (3) cash retained on the Company’s balance sheet as
of the Closing Date and cash retained upon realization of the CT Legacy
Interests, (b) less (1) any distributions to the Company’s stockholders in
excess of retained Core Earnings, (2) any amount that the

 

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Company or any of its Subsidiaries has paid to repurchase the Company’s Common
Stock since the Closing Date and (3) any Incentive Compensation paid following
the Closing Date.

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

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

“Governing Agreements” means, with regard to any entity, the articles of
incorporation or certificate of incorporation and bylaws in the case of a
corporation, the certificate of limited partnership (if applicable) and the
partnership agreement in the case of a general or limited partnership, the
certificate of formation and limited liability company 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 Compensation” means the incentive fee calculated and payable with
respect to each calendar quarter following the Closing Date (or part thereof
that this Agreement is in effect) in arrears in an amount, not less than zero,
equal to:

(i) for the first full calendar quarter following the Closing Date, the product
of (a) 20% and (b) the difference between (i) Core Earnings of the Company for
such calendar quarter, and (ii) the product of (A) the Company’s Equity as of
the end of such calendar quarter, and (B) 7%;

(ii) for each of the second, third and fourth full calendar quarters following
the Closing Date, the difference between (1) the product of (a) 20% and (b) the
difference between (i) Core Earnings of the Company for the previous calendar
quarter, and (ii) the product of (A) the Company’s Equity in the previous
calendar quarter, and (B) 7%, and (2) the sum of any Incentive Compensation paid
to the Manager with respect to the prior calendar quarter(s) following the
Closing Date, as applicable; and

(iii) for each calendar quarter thereafter, the difference between (1) the
product of (a) 20% and (b) the difference between (i) Core Earnings of the
Company for the previous 12-month period, and (ii) the product of (A) the
Company’s Equity in the previous 12-month period, and (B) 7%, and (2) the sum of
any Incentive Compensation paid to the Manager with respect to the first three
calendar quarters of such previous 12-month period; provided, however, that no
Incentive Compensation shall be payable with respect to any calendar quarter
unless Core Earnings for the 12 most recently completed calendar quarters (or
such lesser number of completed calendar quarters from the date of the first
offering of Common Stock following the Closing Date) is greater than zero.

Incentive Compensation shall be pro rated for partial periods, to the extent
necessary, based on the number of days elapsed or remaining in such period, as
the case may be (including any calendar quarter during which the Closing Date
occurs and any calendar quarter during which any Effective Termination Date
occurs).

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

 

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

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

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

“Investment Guidelines” means the investment guidelines of the Company approved
by the Board, as may be amended, restated, modified, supplemented or waived
pursuant to the approval of a majority of the Board (which must include a
majority of the Independent Directors) from time to time. As of the date hereof,
such investment guidelines are listed on Exhibit A.

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

“Management Fee” means the management fee, without duplication, payable
quarterly in arrears with respect to each calendar quarter following the Closing
Date, in an amount equal to the greater of:

(i) $250,000 per annum ($62,500 per quarter); and

(ii) 1.50% per annum (0.375% per quarter) of the Company’s Equity.

The Management Fee shall be pro rated for partial periods, to the extent
necessary, as described more fully elsewhere herein.

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

“Manager Expenses” has the meaning set forth in Section 7(a) 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.

“Omnibus Purchase Agreement” has the meaning set forth in the Recitals.

“Other Blackstone Funds” means, collectively, any other investment funds,
vehicles, accounts, products and/or other similar arrangements sponsored,
advised and/or managed by Blackstone, whether currently in existence or
subsequently established, in each case, including any related successor funds,
alternative vehicles, supplemental capital vehicles, co-investment vehicles and
other entities formed in connection with Blackstone’s side-by-side or additional
general partner investments with respect thereto.

 

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“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.

“Regulation FD” means Regulation FD as promulgated by the SEC.

“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 a corporation, limited liability company, partnership, joint
venture or other entity or organization of which: (a) the Company or any other
subsidiary of the Company is a general partner or managing member, or (b) voting
power to elect a majority of the board of directors, trustees or other Persons
performing similar functions with respect to such entity or organization is held
by the Company or by any one or more of the Company’s subsidiaries.

“Termination Fee” means a termination fee equal to three (3) times the sum of
(i) the average annual Management Fee, and (ii) average annual Incentive
Compensation, in each case earned by the Manager during the 24-month period
immediately preceding the most recently completed calendar quarter prior to the
Effective Termination Date.

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

“Termination Without Cause” has the meaning set forth in Section 10(b) hereof.

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

“Unit Secured Notes” means, collectively, the Series 1 Unit Secured Notes issued
by CT Legacy Series 1 Note Issuer, LLC, a Delaware limited liability company,
and the Series 2 Unit Secured Notes issued by CT Legacy Series 2 Note Issuer,
LLC, a Delaware limited liability company, issued prior to the date 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 GAAP. As used herein, “calendar quarters” shall
mean the period from January 1 to March 31, April 1 to June 30, July 1 to
September 30 and October 1 to December 31 of the applicable year.

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

 

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(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, as agent, to manage the investments
and day-to-day business and affairs 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 of the Board. Except as otherwise provided in this Agreement,
the Manager hereby agrees to use its commercially reasonable efforts to perform
each of the duties set forth herein, provided that the Company reimburses the
Manager for costs and expenses in accordance with Section 7 hereof. 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, subject to
the terms of this Agreement, to cause the duties of the Manager as set forth
herein to be provided by third parties and/or its Affiliates.

(b) The Manager, in its capacity as manager of the investments and the
operations of the Company, at all times will be subject to the supervision and
direction of the Board and will have only such functions and authority as the
Board may delegate to it, including, without limitation, managing the Company’s
investment activities and other business affairs in conformity with the
Investment Guidelines and other policies that are approved and monitored by the
Board. The Company and the Manager hereby acknowledge the recommendation by the
Manager and the approval by the Board of the Investment Guidelines.

(c) Subject to the oversight of the Board and the terms and conditions of this
Agreement (including the Investment Guidelines), the Manager will have plenary
authority with respect to the management of the business and affairs of the
Company and will be responsible for the day-to-day management of the Company.
The Manager will perform (or cause to be performed through one or more of its
Affiliates or Subsidiaries) such services and activities relating to the
investments and business and affairs of the Company as may be appropriate or
otherwise mutually agreed from time to time, which may include, without
limitation:

(i) serving as an advisor to the Company with respect to the establishment and
periodic review of the Investment Guidelines and other parameters for the
Company’s investments, financing activities and operations, any modifications to
which will be approved by a majority of the Board (which must include a majority
of the Independent Directors);

(ii) identifying, investigating, analyzing, and selecting possible investment
opportunities and originating, negotiating, acquiring, consummating, monitoring,
financing, retaining, selling, negotiating for prepayment, restructuring,
refinancing, hypothecating, pledging or otherwise disposing of investments
consistent in all material respects with the Investment Guidelines;

 

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(iii) with respect to prospective purchases, sales, exchanges or other
dispositions of investments, conducting negotiations on the Company’s behalf
with sellers, purchasers, and other counterparties and, if applicable, their
respective agents, advisors and representatives;

(iv) negotiating and entering into, on the Company’s behalf, repurchase
agreements, interest rate or currency swap agreements, hedging arrangements,
financing arrangements (including one or more credit facilities), foreign
exchange transactions, derivative transactions, and other agreements and
instruments required or appropriate in connection with the Company’s activities;

(v) engaging and supervising, on the Company’s behalf and at the Company’s
expense, independent contractors, advisors, consultants, attorneys, accountants,
auditors, and other service providers (which may include Affiliates of the
Manager) that provide various services with respect to the Company, including,
without limitation, investment banking, securities brokerage, mortgage
brokerage, credit analysis, risk management services, asset management services,
loan servicing, other financial, legal or accounting services, due diligence
services, underwriting review services, and all other services (including
transfer agent and registrar services) as may be required relating to the
Company’s activities or investments (or potential investments);

(vi) 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;

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

(viii) administering the day-to-day operations and performing and supervising
the performance of such other administrative functions necessary to the
Company’s management as may be agreed upon by the Manager and the Board,
including, without limitation, the collection of revenues and the payment of the
Company’s debts and obligations and maintenance of appropriate computer services
to perform such administrative functions;

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

(x) advising the Company in connection with policy decisions to be made by the
Board;

(xi) engaging one or more subadvisors with respect to the management of the
Company, including, where appropriate, Affiliates of the Manager;

 

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(xii) evaluating and recommending to the Board hedging strategies and engaging
in hedging activities on the Company’s behalf, consistent with the Company’s
qualification as a REIT and with the Investment Guidelines;

(xiii) advising the Company regarding the maintenance of the Company’s
qualification as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and Treasury Regulations
thereunder and using commercially reasonable efforts to cause the Company to
qualify for taxation as a REIT;

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

(xv) furnishing reports to the Company regarding the Company’s activities and
services performed for the Company by the Manager and its Affiliates;

(xvi) monitoring the operating performance of the Company’s investments and
providing periodic reports with respect thereto to the Board, including
comparative information with respect to such operating performance and budgeted
or projected operating results;

(xvii) investing and reinvesting any moneys and securities of the Company
(including investing in short-term investments pending investment in other
investments, payment of fees, costs and expenses, or payments of dividends or
distributions to the Company’s stockholders and partners) and advising the
Company as to the Company’s capital structure and capital raising;

(xviii) causing the Company to retain a qualified independent public accounting
firm and legal counsel, as applicable, to assist in developing appropriate
accounting procedures and systems, internal controls and other compliance
procedures and systems with respect to financial reporting obligations and
compliance with the provisions of the Code applicable to REITs and to conduct
periodic compliance reviews with respect thereto;

(xix) assisting the Company in qualifying to do business in all applicable
jurisdictions and to obtain and maintain all appropriate licenses;

(xx) assisting the Company in complying with all regulatory requirements
applicable to the Company in respect of the Company’s business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act or the Securities Act, or by
the NYSE, and facilitating compliance with the Sarbanes-Oxley Act of 2002, the
listing rules of the NYSE, and the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010;

 

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(xxi) assisting the Company in taking all necessary action to enable the Company
to make required tax filings and reports, including soliciting stockholders for
all information required to the extent provided by the provisions of the Code
and Treasury Regulations applicable to REITs;

(xxii) placing, or arranging for the placement of, all orders pursuant to the
Manager’s investment determinations for the Company either directly with the
issuer or with a broker or dealer (including any affiliated broker or dealer);

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

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

(xxv) advising the Company with respect to and structuring long-term financing
vehicles for the Company’s portfolio of assets, and offering and selling
securities publicly or privately in connection with any such structured
financing;

(xxvi) serving as the Company’s advisor with respect to decisions regarding any
of the Company’s financings, hedging activities or borrowings undertaken by the
Company, including (1) assisting the Company in developing criteria for debt and
equity financing that is specifically tailored to the Company’s investment
objectives, and (2) advising the Company with respect to obtaining appropriate
financing for the Company’s investments (which, in accordance with applicable
law and the terms and conditions of this Agreement and the Company’s Governing
Agreements may include financing by the Manager or its Affiliates);

(xxvii) providing the Company with portfolio management and other related
services;

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

(xxix) performing such other services from time to time in connection with the
management of the business and affairs of the Company and its investment
activities as the Board shall reasonably request and/or the Manager shall deem
appropriate under the particular circumstances.

 

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(d) For the period and on the terms and conditions set forth in this Agreement,
the Company and each of its Subsidiaries hereby constitutes, appoints and
authorizes the Manager, and any officer of the Manager acting on its behalf from
time to time, as the Company’s true and lawful agent and attorney-in-fact, in
its name, place and stead, to negotiate, execute, deliver and enter into any
certificates, instruments, agreements, authorizations and other documentation in
the name and on behalf of the Company as the Manager, in its sole discretion,
deems necessary or appropriate in connection with the performance of its
services hereunder. This power of attorney is deemed to be coupled with an
interest. In performing such services, as an agent of the Company, the Manager
shall have the right to exercise all powers and authority which are reasonably
necessary and customary to perform its obligations under this Agreement,
including, the following powers, subject in each case to the terms and
conditions of this Agreement, including, without limitation, the Investment
Guidelines:

(i) to purchase, exchange or otherwise acquire and to sell, exchange or
otherwise dispose of, any investment at public or private sale;

(ii) to borrow and, for the purpose of securing the repayment thereof, to
pledge, mortgage or otherwise encumber investments and enter into agreements in
connection therewith, including, without limitation, repurchase agreements,
master repurchase agreements, International Swap Dealer Association swap, caps
and other agreements and annexes thereto and other futures and
forward agreements;

(iii) to purchase, take and hold investments subject to mortgages or other
liens;

(iv) to extend the time of payment of any liens or encumbrances which may at any
time be encumbrances upon any investment, irrespective of by whom the same were
made;

(v) to foreclose, to reduce the rate of interest on, and to consent to the
modification and extension of the maturity or other terms of any investments, or
to accept a deed in lieu of foreclosure;

(vi) to join in a voluntary partition of any investment;

(vii) to cause to be demolished any structures on any real estate investment;

(viii) to cause renovations and capital improvements to be made to any real
estate investment;

(ix) to abandon any real estate investment deemed to be worthless;

(x) to enter into joint ventures or otherwise participate in investment vehicles
investing in investments;

(xi) to cause any real estate investment to be leased, operated, developed,
constructed or exploited;

 

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(xii) to obtain and maintain insurance in such amounts and against such risks as
are prudent in accordance with customary and sound business practices in the
appropriate geographic area;

(xiii) to cause any property to be maintained in good state of repair and
upkeep; and to pay the taxes, upkeep, repairs, carrying charges, maintenance and
premiums for insurance;

(xiv) to use the personnel and resources of its Affiliates in performing the
services specified in this Agreement;

(xv) to designate and engage all professionals, consultants and other service
providers subject to and in accordance with, as applicable, Section 2(e), to
perform services (directly or indirectly) on behalf of the Company and its
Subsidiaries, including, without limitation, accountants, legal counsel and
engineers; and

(xvi) to take any and all other actions as are necessary or appropriate in
connection with the Company’s investments.

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

(e) The Manager may retain, for and on behalf, and at the sole cost and expense,
of the Company, such services of the persons and firms referred to in
Section 7(b) hereof as the Manager deems necessary or advisable in connection
with the management and operations of the Company, which may include Affiliates
of the Manager; provided, that any such services may only be provided by
Affiliates to the extent (i) such services are on arm’s length terms and
competitive market rates in relation to terms that are then customary for
agreements regarding the provision of such services to companies that have
assets similar in type, quality and value to the assets of the Company and its
Subsidiaries, or (ii) such services are approved by a majority of the
Independent Directors. In performing its duties under this Section 2, the
Manager shall be entitled to rely reasonably on qualified experts and
professionals (including, without limitation, accountants, legal counsel and
other professional service providers) hired by the Manager at the Company’s sole
cost and expense. The Manager shall keep the Board reasonably informed on a
periodic basis as to any services provided by Affiliates of the Manager not
approved by a majority of the Independent Directors.

(f) The Manager shall refrain from any action that, in its sole judgment made in
good faith, (i) is not in compliance with the Investment Guidelines, (ii) would
adversely and materially affect the qualification of the Company as a REIT under
the Code or the Company’s and its Subsidiaries’ status as entities excluded from
investment company status under the Investment Company Act, or (iii) would
materially violate the Conduct Policies, any law, rule or regulation of any
governmental body or agency having jurisdiction over the Company and its
Subsidiaries or of any exchange on which the securities of the Company may be
listed or that would otherwise not be permitted by the applicable Governing
Agreements. If the Manager is ordered to take any action by the Board, the
Manager shall seek to promptly notify the Board if it is the Manager’s
reasonable judgment that such action would adversely and materially affect

 

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such status or violate any such law, rule or regulation or Governing Agreements.
Notwithstanding the foregoing, neither the Manager nor any of its Affiliates
shall be liable to the Company, the Board, or the Company’s stockholders for any
act or omission by the Manager or any of its Affiliates, except as provided in
Section 8 of this Agreement.

(g) The Company (including the Board) agrees to take all actions reasonably
required to permit and enable the Manager to carry out its duties and
obligations under this Agreement, including, without limitation, all steps
reasonably necessary to allow the Manager to make any filing required to be made
under the Securities Act, Exchange Act, the NYSE’s Listed Company Manual, 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.

(h) As frequently as the Manager may deem reasonably necessary or advisable, or
at the direction of the Board, the Manager shall prepare, or, at the sole cost
and expense of the Company, cause to be prepared, (i) reports and other
information on the Company’s operations and (ii) other information relating to
any proposed or consummated investment as may be reasonably requested by the
Company.

(i) The Manager shall prepare, or, at the sole cost and expense of the Company,
cause to be prepared, all periodic reports and financial statements with respect
to the Company reasonably required by the Board in order for the Company to
comply with its Governing Agreements, or any other materials required to be
filed with any governmental body or agency, including but not limited to the
SEC, 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, without limitation, an annual audit of the Company’s
books of account by a nationally recognized independent accounting firm.

(j) The Manager shall prepare, or, at the sole cost and expense to the Company,
cause to be prepared, regular reports for the Board to enable the Board to
review the Company’s acquisitions, portfolio composition and characteristics,
credit quality, performance, asset performance and compliance with the
Investment Guidelines, and policies approved by the Board.

(k) Officers, employees and agents of the Manager and its Affiliates may serve
as directors, officers, employees, agents, nominees or signatories for the
Company or any of its Subsidiaries, to the extent permitted by their Governing
Agreements, by any resolutions duly adopted by the Board. When executing
documents or otherwise acting in such capacities for the Company or any of its
Subsidiaries, such Persons shall indicate in what capacity they are executing on
behalf of the Company or any of its Subsidiaries. Without limiting the
foregoing, while this Agreement is in effect, the Manager will provide the
Company with a management team, including a Chief Executive Officer and
President, Chief Financial 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 the Company as necessary and appropriate, commensurate with the
level of activity of the Company from time to time.

 

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(l) At all times during the term of this Agreement, the Manager, at its sole
cost and expense, shall maintain “errors and omissions” insurance coverage and
other insurance coverage that is customarily carried by asset and investment
managers performing functions similar to those of the Manager under this
Agreement with respect to assets similar to the assets of the Company and the
Subsidiaries.

(m) The Manager, at its sole cost and expense, shall provide or otherwise cause
to be provided, 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 from time to time.

(n) The Manager agrees to be bound by the Company’s Code of Business Conduct and
Ethics, Corporate Governance Guidelines and Policy on Insider Trading and other
compliance and governance policies and procedures required under the Exchange
Act, the Securities Act, or by the NYSE or other securities exchange, if any
(collectively, the “Conduct Policies”), and to take, or cause to be taken, all
actions reasonably required to cause its officers, directors, members, managers
and employees, and any principals, officers or employees of its Affiliates
(including Blackstone) who are involved in the business and affairs of the
Company, to be bound by the Conduct Policies to the extent applicable to such
Persons.

Section 3. Additional Activities of the Manager; Allocation of Investment
Opportunities; Non-Solicitation; Restrictions.

(a) 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, including, without limitation, the sponsoring,
closing and/or managing of any Other Blackstone Funds that employ investment
objectives or strategies that overlap, in whole or in part, with the Investment
Guidelines of the Company, (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, or (iii) prevent the Manager or any of its Affiliates
from receiving fees or other compensation or profits from such activities
described in this Section 3(a) which shall be for the Manager’s (and/or its
Affiliates’) sole benefit. 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 in certain material respects
from the information and recommendations supplied by the Manager or any
Affiliate of the Manager to others (including, for greater certainty, the Other
Blackstone Funds and their investors, as described more fully in Section 3(b)).
The Manager and the Company acknowledge and agree that, notwithstanding anything
to the contrary contained herein, (i) Affiliates of the Manager sponsor, advise
and/or manage one or more Other Blackstone Funds and may in the future

 

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sponsor, advise and/or manage additional Other Blackstone Funds, and (ii) the
Manager will allocate investment opportunities that overlap with the Investment
Guidelines of the Company and such Other Blackstone Funds in accordance with the
Allocation Policy.

(b) In connection with the services of the Manager hereunder, the Company and
the Board acknowledge and/or agree that (i) as part of Blackstone’s regular
businesses, personnel of the Manager and its Affiliates may from time-to-time
work on other projects and matters (including with respect to one or more Other
Blackstone Funds), and that conflicts may arise with respect to the allocation
of personnel between the Company and one or more Other Blackstone Funds and/or
the Manager and such other Affiliates, (ii) there may be circumstances where
investments that are consistent with the Company’s Investment Guidelines may be
shared with or allocated to one or more Other Blackstone Funds (in lieu of the
Company) in accordance with the Allocation Policy, (iii) Other Blackstone Funds
may invest, from time-to-time, in investments in which the Company may also
invest (including at a different level of an issuer’s capital structure (e.g.,
an investment by an Other Blackstone Fund in an equity or mezzanine interest
with respect to the same portfolio entity in which the Company owns a debt
interest or vice versa) or in a different tranche of fundraising with respect to
an issuer in which the Company has an interest) and while Blackstone will seek
to resolve any such conflicts in a fair and equitable manner in accordance with
the Allocation Policy, such transactions shall not be required to be presented
to the Board for approval, and there can be no assurance that any such conflicts
will be resolved in favor of the Company, (iv) the Manager and its Affiliates
may from time-to-time receive fees from portfolio entities or other issuers for
the arranging, underwriting, syndication or refinancing of investments or other
additional fees, including acquisition fees, loan servicing fees, special
servicing fees and administrative fees and fees or advisory or asset management
fees, including with respect to Other Blackstone Funds and related portfolio
entities, and while such fees may give rise to conflicts of interest the Company
will not receive the benefit of any such fees, and (v) the terms and conditions
of the governing agreements of such Other Blackstone Funds (including with
respect to the economic, reporting, and other rights afforded to investors in
such Other Blackstone Funds) are materially different from the terms and
conditions applicable to the Company and its stockholders, and neither the
Company nor any such stockholders (in such capacity) shall have the right to
receive the benefit of any such different terms applicable to investors in such
Other Blackstone Funds as a result of an investment in the Company or otherwise.
The Manager shall keep the Board reasonably informed on a periodic basis in
connection with the foregoing, including with respect to any transactions that
present conflicts contemplated by clause (iii) of this Section 3(b) and shall
provide the Board quarterly updates in respect of such matters.

(c) Subject to Section 3(b), the Board will periodically review the Investment
Guidelines and the Company’s investment portfolio when and as determined in its
discretion, but will not review each proposed investment; provided, that the
Manager shall not consummate on behalf of the Company any transaction that
involves (i) the sale of any investment to or (ii) the acquisition of any
investment from, Blackstone, any Other Blackstone Fund or any of their
Affiliates unless such transaction (A) is on terms no less favorable to the
Company than could have been obtained on an arm’s length basis from an unrelated
third party and (B) has been approved in advance by a majority of the
Independent Directors. In connection with the foregoing, it is understood and/or
agreed for greater certainty that while conflicts of interests may arise from
time-to-time in connection with the investment activities of the Company,

 

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Blackstone and the Other Blackstone Funds (including as more fully described in
Section 3(b) above) and that the Manager will seek to resolve any such conflicts
of interest in a fair and equitable manner in accordance with the Allocation
Policy and its prevailing policies and procedures with respect to conflicts
resolution among Other Blackstone Funds generally, only those transactions set
forth above shall be required to be presented for approval to the Independent
Directors; provided, that the foregoing shall not limit the ability of the
Manager, in its discretion, to present additional matters involving the Company
to the Independent Directors from time-to-time for review, advice and/or
approval to the extent the Manager reasonably determines that doing so is
appropriate under the circumstances (including, without limitation, as a result
of a determination that such matters give rise to material conflicts of interest
that are appropriate to be reviewed and/or approved by the Independent
Directors).

(d) In the event of a Termination Without Cause of this Agreement by the Company
pursuant to Section 10(b) hereof, for two (2) years after such termination of
this Agreement, the Company shall not, without the consent of the Manager,
employ or otherwise retain any employee of the Manager or any of its Affiliates
or any person who has been employed by the Manager or any of its Affiliates at
any time within the two (2) year period immediately preceding the date on which
such person commences employment with or is otherwise retained by the Company.
The Company acknowledges and agrees that, in addition to any damages, the
Manager may be entitled to equitable relief for any violation of this
Section 3(d) by the Company, including, without limitation, injunctive relief.

(e) At the reasonable request of the Board, the Manager shall review the
Allocation Policy with the Board and respond to reasonable questions regarding
the Allocation Policy as it relates to services under the Agreement. The Manager
shall promptly provide the Board with a description of any material amendments,
updates and revisions to the Allocation Policy.

Section 4. Bank Accounts. At the direction of the Board, the Manager may
establish and maintain, as agent on behalf of the Company, 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 may approve;
and the Manager shall from time to time render appropriate accountings of such
collections and payments to the Board and, upon request, to the auditors of the
Company or any Subsidiary.

Section 5. Records; Confidentiality.

The Manager shall maintain appropriate books of account, records and files
relating to services performed hereunder, and such books of account, records and
files shall be accessible for inspection by representatives of the Company or
any Subsidiary at any time during normal business hours upon advance written
notice. The Manager shall have full responsibility for the maintenance, care and
safekeeping of all such books of account, records and files (it being understood
that services may be provided with respect to the Company by service providers
(e.g., administrators, prime brokers and custodians) and so long as such service
providers are monitored by the Manager with due care, the Manager shall be in
compliance with the foregoing). The Manager shall keep confidential any and all
non-public information, written

 

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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 officers,
directors, employees, agents, representatives, advisors of the Manager or its
Affiliates who need to know such Confidential Information for the purpose of
rendering services hereunder, (ii) to appraisers, lenders or other financing
sources, co-originators, custodians, administrators, brokers, commercial
counterparties or any similar entity 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 (including, if required by law, any filings made by Blackstone as a
result of its status as a public company) or disclosure or presentations to
Company investors (subject to compliance with Regulation FD), (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, (vi) to existing or prospective investors in
Other Blackstone Funds and their advisors to the extent such persons reasonably
request such information, subject to an undertaking of confidentiality,
non-disclosure and nonuse, or (vii) otherwise 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. 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, or
pursuant to any law or regulation to, any regulatory agency or authority,
(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,
so long as not legally prohibited, the Manager will provide the Company with
written notice within a reasonable period of time of such order, request or
demand so that the Company may seek, at its sole expense, 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 required to disclose Confidential Information,
the Manager may disclose only that portion of such information that is legally
required without liability hereunder; provided, that the Manager agrees to
exercise its reasonable 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 by
the Company to the public (except to the extent exempt under Regulation FD) 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 which, to the best
of the Manager’s knowledge, does not constitute a 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.

Section 6. Compensation.

(a) For the services rendered under this Agreement, the Company shall pay the
Management Fee and the Incentive Compensation to the Manager. The Manager will
not receive any compensation for the period prior to the Closing Date.

 

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(b) The parties acknowledge that the Management Fee is intended in part to
compensate the Manager and its Affiliates for the costs and expenses they will
incur hereunder and pursuant to any subadvisory agreement, as well as certain
expenses not otherwise reimbursable under Section 7 below, in order for the
Manager to provide the Company the investment advisory services and certain
general management services rendered under this Agreement. The fee paid by the
Manager under a subadvisory agreement (if any) shall not constitute an expense
reimbursable by the Company under this Agreement or otherwise.

(c) The Management Fee shall be payable in arrears in cash, in quarterly
installments commencing with the quarter in which this Agreement is executed. If
applicable, the initial and final installments of the Management Fee shall be
pro-rated based on the number of days during the initial and final quarter,
respectively, that this Agreement is in effect. The Manager shall calculate each
quarterly installment of the Management Fee, and deliver such calculation to the
Company, within thirty (30) days following the last day of each calendar
quarter. The Company shall pay the Manager each installment of the Management
Fee within five (5) Business Days after the date of delivery to the Company of
such computations.

(d) The Incentive Compensation shall be payable in arrears in cash, in quarterly
installments commencing with the quarter in which this Agreement is executed.
The Manager shall compute each quarterly installment of the Incentive
Compensation within forty-five (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 shall thereafter promptly be
delivered to the Board and, upon such delivery, payment of such installment of
the Incentive Compensation shown therein shall be due and payable no later than
the date which is five (5) Business Days after the date of delivery to the Board
of such computations.

Section 7. Expenses of the Company.

(a) Subject to Section 7(b), the Manager shall be responsible for the expenses
related to any and all personnel of the Manager and its Affiliates who provide
services to the Company pursuant to this Agreement or otherwise (including,
without limitation, each of the officers of the Company and any directors of the
Company who are also directors, officers or employees of the Manager or any of
its Affiliates), including, without limitation, salaries, bonus and other wages,
payroll taxes and the cost of employee benefit plans of such personnel, and
costs of insurance with respect to such personnel (“Manager Expenses”).

(b) The Company shall pay all of its costs and expenses and shall reimburse the
Manager or its Affiliates for documented costs and expenses of the Manager and
its Affiliates incurred on behalf of the Company, other than Manager Expenses.
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) fees, costs and expenses in connection with the issuance and transaction
costs incident to the acquisition, negotiation, structuring, trading, settling,
disposition and financing of the investments of the Company and its Subsidiaries
(whether or not

 

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consummated), including brokerage commissions, hedging costs, prime brokerage
fees, custodial expenses, clearing and settlement charges, forfeited deposits,
and other investment costs fees and expenses actually incurred in connection
with the pursuit, making, holding, settling, monitoring or disposing of actual
or potential investments;

(ii) fees costs, and expenses of legal, tax, accounting, consulting, auditing,
finance, administrative, investment banking, capital market and other similar
services rendered to the Company (including, where the context requires, through
one or more third parties and/or Affiliates of the Manager) or, if provided by
the Manager’s personnel, in accordance with Section 2(e) hereof;

(iii) the compensation and expenses of the Company’s directors (excluding those
directors who are officers of the Manager) and the cost of liability insurance
to indemnify the Company’s directors and officers;

(iv) interest and fees and expenses arising out of borrowings made by the
Company, including, but not limited to, costs associated with the establishment
and maintenance of any of the Company’s credit facilities, other financing
arrangements, or other indebtedness of the Company (including commitment fees,
accounting fees, legal fees, closing and other similar costs) or any of the
Company’s securities offerings;

(v) expenses connected with communications to holders of the Company’s
securities or securities of the Subsidiaries and other bookkeeping and clerical
work necessary in maintaining relations with holders of such securities and in
complying with the continuous reporting and other requirements of governmental
bodies or agencies, including, without limitation, all costs of preparing and
filing required reports with the SEC, the costs payable by the Company to any
transfer agent and registrar in connection with the listing and/or trading of
the Company’s securities on any exchange, the fees payable by the Company to any
such exchange in connection with its listing, costs of preparing, printing and
mailing the Company’s annual report to the Company’s stockholders and proxy
materials with respect to any meeting of the Company’s stockholders and any
other reports or related statements;

(vi) the Company’s allocable share of costs associated with technology-related
expenses, including without limitation, any computer software or hardware,
electronic equipment or purchased information technology services from
third-party vendors or Affiliates of the Manager that is used solely for the
Company, technology service providers and related software/hardware utilized in
connection with the Company’s investment and operational activities;

(vii) the Company’s allocable share of expenses incurred by managers, officers,
personnel and agents of the Manager for travel on the Company’s behalf and other
out-of-pocket expenses incurred by them in connection with the purchase,
financing, refinancing, sale or other disposition of an investment or the
establishment and maintenance of any of the Company’s securitizations or any of
the Company’s securities offerings;

 

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(viii) the Company’s allocable share of costs and expenses incurred with respect
to market information systems and publications, research publications and
materials, including, without limitation, news research and quotation equipment
and services;

(ix) the costs and expenses relating to ongoing regulatory compliance matters
and regulatory reporting obligations relating to the Company’s activities;

(x) the costs of any litigation involving the Company or its assets and the
amount of any judgments or settlements paid in connection therewith, directors
and officers, liability or other insurance and indemnification or extraordinary
expense or liability relating to the affairs of the Company;

(xi) all taxes and license fees;

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

(xiii) the Company’s allocable share of costs and expenses incurred in
contracting with third parties, in whole or in part, on the Company’s behalf;

(xiv) all other costs and expenses relating to the Company’s business and
investment operations, including, without limitation, the costs and expenses of
acquiring, owning, protecting, maintaining, developing and disposing of
investments, including appraisal, reporting, audit and legal fees;

(xv) expenses relating to any office(s) or office facilities, including, but not
limited to, disaster backup recovery sites and facilities, maintained for the
Company or the investments of the Company and its Subsidiaries separate from the
office or offices of the Manager;

(xvi) expenses connected with the payments of interest, dividends or
distributions in cash or any other form authorized or caused to be made by the
Board to or on account of holders of the Company’s securities or of the
Subsidiaries, including, without limitation, in connection with any dividend
reinvestment plan;

(xvii) any judgment or settlement of pending or threatened proceedings (whether
civil, criminal or otherwise) against the Company or any Subsidiary, or against
any trustee, director, partner, member or officer of the Company or of any
Subsidiary in his capacity as such for which the Company or any Subsidiary is
required to indemnify such trustee, director, partner, member or officer by any
court or governmental agency; and

(xviii) all other expenses actually incurred by the Manager (except as otherwise
specifically excluded herein) which are reasonably necessary for the performance
by the Manager of its duties and functions under this Agreement.

 

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(c) The Manager may, at its option, elect not to seek reimbursement for certain
expenses during a given quarterly period, which determination shall not be
deemed to construe a waiver of reimbursement for similar expenses in future
periods.

(d) The Manager shall prepare a written expense statement in reasonable detail
documenting the costs and expenses of the Company incurred during each fiscal
quarter to be reimbursed by the Company, and shall use commercially reasonable
efforts to deliver the same to the Company within forty-five (45) days following
the end of the applicable fiscal quarter (subject to reasonable delays resulting
from delays in the receipt of information). The amounts payable for such cost
and expense reimbursement shall be paid by the Company within ten (10) days
following delivery of the expense statement by the Manager; provided, that such
payments may be offset by the Manager against amounts due to the Company from
the Manager. 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.

(e) 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.

Section 8. Limits of the Manager’s Responsibility; Indemnification

(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 in following or declining to follow any
advice or recommendations of the Manager, including as set forth in the
Investment Guidelines. To the fullest extent permitted by law, 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,
the Board, the Company’s stockholders or any Subsidiary’s stockholders or
partners for any acts or omissions by the Manager or its officers, employees or
Affiliates performed in accordance with and pursuant to this Agreement, except
by reason of acts or omission 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 not constituting bad faith, willful misconduct,
gross negligence or reckless disregard of duties of such Manager Indemnified
Party under this Agreement. In addition, the Manager will not be liable for
trade errors that may result from ordinary negligence, including, without
limitation, errors in the investment decision making process and/or in the trade
process.

(b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold
harmless the Company, its Subsidiaries and the directors, officers, employees
and stockholders of the Company and its Subsidiaries 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

 

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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 other than pursuant to this Section unless the
failure to provide such notice results in material prejudice to the indemnifying
party. Subject to any applicable insurance policy’s terms and conditions, 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 indemnifying party could be
materially prejudicial to its interests, (ii) the indemnifying party refuses to
assume such defense (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,
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 8 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) Any Indemnified Party entitled to indemnification hereunder shall first seek
recovery from any other indemnity then available with respect to portfolio
entities and/or any applicable insurance policies by which such Indemnified
Party is indemnified or covered prior to seeking recovery hereunder and shall
obtain the written consent of the Company or Manager (as applicable) prior to
entering into any compromise or settlement which would result

 

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in an obligation of the Company or Manager (as applicable) to indemnify such
Indemnified Party. If such Indemnified Party shall actually recover any amounts
under any applicable insurance policies or other indemnity then available, it
shall offset the net proceeds so received against any amounts owed by the
Company or Manager (as applicable) by reason of the indemnity provided hereunder
or, if all such amounts shall have been paid by the Company or Manager (as
applicable) in full prior to the actual receipt of such net insurance proceeds,
it shall pay over such proceeds (up to the amount of indemnification paid by the
Company or Manager (as applicable) to such Indemnified Party) to the Company or
Manager (as applicable). If the amounts in respect of which indemnification is
sought arise out of the conduct of the business and affairs of the Company or
Manager and also of any other Person or entity for which the Indemnified Party
hereunder was then acting in a similar capacity, the amount of the
indemnification to be provided by the Company or Manager (as applicable) may be
limited to the Company’s or Manager’s (as applicable) allocable share thereof if
so determined by the Company or Manager (as applicable) in good faith.
Notwithstanding anything to the contrary in this Section 8 and for greater
certainty it is understood and/or agreed that, to the extent that an Indemnified
Party is also entitled to be indemnified by one or more portfolio entities, it
is intended that (i) such portfolio entities shall be the indemnitors of first
resort, (ii) the Company’s or Manager’s (as applicable) obligation, if any, to
indemnify any Indemnified Party shall be reduced by any amount that such
Indemnified Party shall collect as indemnification from such entity and from any
then available insurance policies, which the Indemnified Party shall have an
obligation to seek payment from prior to seeking payment from the Company or
Manager in respect of such Claims, and (iii) if the Company or Manager pays or
causes to be paid any amounts that should have been paid by such portfolio
entity or under such insurance policies, then (x) the Company or Manager (as
applicable) shall be fully subrogated to all rights of the relevant Indemnified
Party with respect to such payment, and (y) each relevant Indemnified Party
shall assign to the Company or Manager (as applicable) all of the Indemnified
Party’s rights to indemnification from or with respect to such entity’s
indemnification.

(e) 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; Termination Without Cause.

(a) This Agreement shall become effective on the Closing Date and shall continue
in operation, unless terminated in accordance with the terms hereof, until the
third anniversary of the Closing Date (the “Initial Term”). After the Initial
Term, this Agreement shall be deemed renewed automatically each year for an
additional one-year period (an “Automatic Renewal Term”) unless the Company or
the Manager elects not to renew this Agreement in accordance with Section 10(b)
or Section 10(d), respectively.

(b) Notwithstanding any other provision of this Agreement to the contrary, upon
the expiration of the Initial Term or any Automatic Renewal Term and upon one
hundred eighty (180) days’ prior written notice to the Manager (the “Termination
Notice”), the Company

 

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may, without cause, in connection with the expiration of the Initial Term or the
then current Automatic Renewal Term, decline to renew this Agreement (any such
nonrenewal, a “Termination Without Cause”) upon the affirmative vote of at least
two-thirds (2/3) of the Independent Directors that (1) there has been
unsatisfactory performance by the Manager that is materially detrimental to the
Company and its Subsidiaries taken as a whole or (2) the Management Fee and
Incentive Compensation payable to the Manager are not fair, subject to
Section 10(c) below. In the event of a Termination Without Cause, the Company
shall pay the Manager the Termination Fee before or on the last day of the
Initial Term or such Automatic Renewal Term, as the case may be (the “Effective
Termination Date”). The Company may terminate this Agreement for cause pursuant
to Section 12 hereof even after a Termination Notice and, in such case, no
Termination Fee shall be payable.

(c) Notwithstanding the provisions of subsection (b) above, if the reason for
nonrenewal specified in the Company’s Termination Notice is that two-thirds
(2/3) of the Independent Directors have determined that the Management Fee or
the Incentive Compensation payable to the Manager is unfair, the Company shall
not have the foregoing nonrenewal right in the event the Manager agrees that it
will continue to perform its duties hereunder during the Automatic Renewal Term
that would commence upon the expiration of the Initial Term or then current
Automatic Renewal Term at a fee that at least two thirds of the Independent
Directors determine to be fair; provided, however, the Manager shall have the
right to renegotiate the Management Fee and/or the Incentive Compensation, by
delivering to the Company, not less than 120 days prior to the pending Effective
Termination Date, written notice (a “Notice of Proposal to Negotiate”) of its
intention to renegotiate the Management Fee and/or the Incentive Compensation.
Thereupon, the Company and the Manager shall endeavor to negotiate the
Management Fee and/or the Incentive Compensation in good faith. Provided that
the Company and the Manager agree to a revised Management Fee, Incentive
Compensation or other compensation structure 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 Management Fee, the Incentive Compensation or other compensation
structure shall be the revised Management Fee, Incentive Compensation or other
compensation structure as then agreed upon by the Company and the Manager. The
Company and the Manager agree to execute and deliver an amendment to this
Agreement setting forth such revised Management Fee, Incentive Compensation, or
other compensation structure promptly upon reaching an agreement regarding same.
In the event that the Company and the Manager are unable to agree to a revised
Management Fee, Incentive Compensation, or other compensation structure during
such sixty (60) day period, this Agreement shall terminate on the Effective
Termination Date and the Company shall be obligated to pay the Manager the
Termination Fee upon the Effective Termination Date.

(d) No later than one hundred eighty (180) days prior to the expiration of the
Initial Term or the then current Automatic Renewal Term, the Manager may deliver
written notice to the Company informing it of the Manager’s intention to decline
to renew this Agreement, whereupon this Agreement shall not be renewed and
extended and this Agreement shall terminate effective on the anniversary date of
this Agreement next following the delivery of such notice. The Company is not
required to pay to the Manager the Termination Fee if the Manager terminates
this Agreement pursuant to this Section 10(d).

 

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(e) Except as set forth in this Section 10, a nonrenewal of this Agreement
pursuant to this Section 10 shall be without any further liability or obligation
of either party to the other, except as provided in Section 3(b), Section 5,
Section 7, Section 8 and Section 14 of this Agreement.

(f) The Manager shall cooperate, at the Company’s expense, with the Company in
executing an orderly transition of the management of the Company’s consolidated
assets to a new manager.

Section 11. Assignments.

(a) Assignments by the Manager. 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, and the Manager shall be liable to the
Company for all acts or omissions of the assignee under any such assignment. 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, without the approval of the Company’s Independent
Directors, (i) assign this Agreement to one or more Affiliates of the Manager
and (ii) delegate to one or more of its Affiliates, including subadvisors where
applicable, the performance of any of its responsibilities hereunder so long as
it remains liable for any such Affiliate’s performance, in each case so long as
assignment or delegation does not require the Company’s approval under the
Investment Company Act (but if such approval is required, the Company shall not
unreasonably withhold, condition or delay its consent). Nothing contained in
this Agreement shall preclude any pledge, hypothecation or other transfer of any
amounts payable to the Manager under this Agreement.

(b) Assignments by the Company. This Agreement shall not be assigned by the
Company without the prior written consent of the Manager, except in the case of
assignment by the Company to another REIT or other organization which is a
successor (by merger, consolidation, purchase of assets, or other transaction)
to the Company, in which case such successor organization shall be bound under
this Agreement and by the terms of such assignment in the same manner as the
Company is bound under this Agreement.

Section 12. Termination for Cause.

(a) The Company may terminate this Agreement effective upon thirty (30) days’
prior written notice of termination from the Company to the Manager, without
payment of any Termination Fee, upon the occurrence of a Cause Event.

(b) The Manager may terminate this Agreement effective upon sixty (60) days’
prior written notice of termination to the Company in the event that the Company
shall default in the performance or observance of any material term, condition
or covenant contained in this Agreement and such default shall continue for a
period of thirty (30) days after written notice thereof specifying such default
and requesting that the same be remedied in such 30-day period. The Company is
required to pay to the Manager the Termination Fee if the termination of this
Agreement is made pursuant to this Section 12(b).

 

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

Section 13. Action Upon Termination. From and after the effective date of
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 terminated pursuant to Section 12(b) hereof or not renewed
pursuant to Section 10(b) hereof (subject to Section 10(c) hereof), 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;

(b) deliver to the Board 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 with
respect to the Company and any Subsidiaries; and

(c) deliver to the Board all property and documents of the Company and any
Subsidiaries then in the custody of the Manager, provided that the Manager shall
be permitted to retain copies of such documents for its records, and if so
retained, the Manager shall continue to be bound by the confidentiality
obligations and other obligations set forth in Section 5 hereof with respect to
the retained documents.

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 thirty (30) 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, 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 Losses which arise in connection with the Manager’s proper release of
such money or other

 

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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 the State 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 obligations required hereunder. No consent of any other Person
that has not already been obtained, 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 Agreements 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.

 

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(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 the State of Delaware, has the limited liability company power and
authority and the legal right 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 limited liability company 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
obligation 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 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 Agreements 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.

 

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Section 16. Miscellaneous.

(a) Notices. Any notices that may or are required to be given hereunder by any
party to another shall be deemed to have been duly given if (i) personally
delivered or delivered by facsimile, when received, (ii) sent by U.S. Express
Mail or recognized overnight courier, on the second following Business Day (or
third following Business Day if mailed outside the United States),
(iii) delivered by electronic mail, when received or (iv) posted on a password
protected website maintained by the Manager and for which the Company has
received access instructions by electronic mail, when posted:

 

The Company:      Capital Trust, Inc.      410 Park Avenue, 14th Floor      New
York, New York 10022      Attention: Chief Financial Officer      Fax: (212)
655-0044      Email: splavin@capitaltrust.com with a copy to:      Paul Hastings
LLP      75 East 55th Street      New York, NY 10022      Attention: Michael L.
Zuppone, Esq.      Fax: (212) 230-7752      Email:
michaelzuppone@paulhastings.com The Manager:      [—]      c/o The Blackstone
Group L.P.      345 Park Avenue      New York, New York 10154      Attention:
Michael Nash; Randall Rothschild      Email: nash@blackstone.com;
Rothschild@blackstone.com with a required copy to:           Simpson Thacher &
Bartlett LLP      425 Lexington Avenue      New York, New York 10017     
Attention: Patrick Naughton, Esq.; Brian Stadler, Esq.;      Email:
pnaughton@stblaw.com; bstadler@stblaw.com

(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 permitted assigns as provided
herein.

(c) 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 (including, without
limitation, any prior agreements between the Company and CTIMCO),
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.

(d) Amendments. This Agreement, nor any terms hereof, may not be amended,
supplemented or modified except in an instrument in writing executed by the
parties hereto.

 

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(e) 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 THE
CONFLICT OF LAWS PROVISIONS THEREOF. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY 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.

(f) 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.

(g) Survival of Representations and Warranties. All representations and
warranties made hereunder, and in any document, certificate or statement
delivered pursuant hereto or in connection herewith, shall survive the execution
and delivery of this Agreement.

(h) 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.

(i) Costs and Expenses. Each party hereto shall bear its own costs and expenses
(including the fees and disbursements of counsel and accountants) incurred in
connection with the negotiations and preparation of and the closing under this
Agreement, and all matters incident thereto.

(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.

 

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(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 has executed this Management
Agreement as of the date first written above.

 

Capital Trust, Inc. By:  

/s/

  Name:   Title: [—]   By:  

/s/

  Name:   Title:

 

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Exhibit A

Investment Guidelines

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

2. No investment shall be made that would cause the Company or any of its
Subsidiaries to be regulated as an investment company under the Investment
Company Act.

3. The Manager shall seek to invest the capital of the Company in a broad range
of investments in or relating to public and/or private debt, non-controlling
equity, loans and/or other interests (including “mezzanine” interests and/or
options or derivatives related thereto) relating to real estate assets
(including pools thereof), real estate companies and/or real estate-related
holdings.

4. Prior to the deployment of capital into investments, the Manager may cause
the capital of the Company to be invested in any short-term investments in money
market funds, bank accounts, overnight repurchase agreements with primary
federal reserve bank dealers collateralized by direct U.S. government
obligations and other instruments or investments reasonably determined by the
Manager to be of high quality.

5. Not more than 25% of Equity will be invested in any individual investment
without the approval of a majority of the Independent Directors (it being
understood, however, that for purposes of the foregoing concentration limit, in
the case of any investment that is comprised (whether through a structured
investment vehicle or other arrangement) of securities, instruments or assets of
multiple portfolio issuers, such investment for purposes of the foregoing
limitation shall be deemed to be multiple investments in such underlying
securities, instruments and assets and not such particular vehicle, product or
other arrangement in which they are aggregated).

6. Any investment in excess of $150 million shall require the approval of a
majority of the Independent Directors.

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