Exhibit 10.1

 

 

MANAGEMENT AND ADVISORY AGREEMENT

dated as of May 15, 2013

among

NEW RESIDENTIAL INVESTMENT CORP.

and

FIG LLC

 

 

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TABLE OF CONTENTS

 

SECTION 1.

   DEFINITIONS.      1   

SECTION 2.

   APPOINTMENT AND DUTIES OF THE MANAGER.      2   

SECTION 3.

   DEVOTION OF TIME; ADDITIONAL ACTIVITIES.      7   

SECTION 4.

   AGENCY.      7   

SECTION 5.

   BANK ACCOUNTS.      8   

SECTION 6.

   RECORDS; CONFIDENTIALITY.      8   

SECTION 7.

   OBLIGATIONS OF MANAGER; RESTRICTIONS.      8   

SECTION 8.

   COMPENSATION.      9   

SECTION 9.

   EXPENSES OF THE COMPANY.      10   

SECTION 10.

   CALCULATIONS OF EXPENSES.      12   

SECTION 11.

   LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION.      12   

SECTION 12.

   NO JOINT VENTURE.      13   

SECTION 13.

   TERM; TERMINATION.      13   

SECTION 14.

   ASSIGNMENT.      14   

SECTION 15.

   TERMINATION FOR CAUSE.      15   

SECTION 16.

   ACTION UPON TERMINATION.      15   

SECTION 17.

   RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST.      16   

SECTION 18.

   NOTICES.      16   

SECTION 19.

   BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS.      17   

SECTION 20.

   ENTIRE AGREEMENT.      17   

SECTION 21.

   CONTROLLING LAW.      17   

SECTION 22.

   INDULGENCES, NOT WAIVERS.      17   

SECTION 23.

   TITLES NOT TO AFFECT INTERPRETATION.      18   

SECTION 24.

   EXECUTION IN COUNTERPARTS.      18   

SECTION 25.

   PROVISIONS SEPARABLE.      18   

SECTION 26.

   GENDER.      18   

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MANAGEMENT AND ADVISORY AGREEMENT

THIS MANAGEMENT AND ADVISORY AGREEMENT, is made as of May 15, 2013 (the
“Agreement”) by and among NEW RESIDENTIAL INVESTMENT CORP., a Delaware
corporation (the “Company”), and FIG LLC, a Delaware limited liability company
(together with its permitted assignees, the “Manager”).

W I T N E S S E T H :

WHEREAS, the Company desires to avail itself of the experience, sources of
information, advice, assistance and certain facilities of or available to the
Manager and to have the Manager undertake the duties and responsibilities
hereinafter set forth, on behalf of the Company, as provided in this Agreement;
and

WHEREAS, the Manager is willing to render such services on the terms and
conditions hereinafter set forth.

NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN SET FORTH, THE
PARTIES HERETO AGREE AS FOLLOWS:

SECTION 1. DEFINITIONS.

The following terms have the meanings assigned them:

(a) “Agreement” means this Management and Advisory Agreement, as amended from
time to time.

(b) “Board of Directors” means the Board of Directors of the Company.

(c) “Code” means the Internal Revenue Code of 1986, as amended.

(d) “Common Share” means a share of capital stock of the Company now or
hereafter authorized as common voting stock of the Company.

(e) “Distribution Date” means May 15, 2013.

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

(g) “Excess MSRs” means excess mortgage servicing rights.

(h) “Funds from Operations” is as defined by the National Association of Real
Estate Investment Trusts and means net income (computed in accordance with GAAP)
excluding gains (or losses) from debt restructuring and sales of property, plus
depreciation and amortization on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Funds from Operations will be
computed on an unconsolidated basis. The computation of Funds from Operations
may be adjusted at the direction of the Independent Directors based on changes
in, or certain applications of, GAAP.

 

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(i) “Governing Instruments” means, with regard to any entity, the articles of
incorporation and bylaws in the case of a corporation, certificate of limited
partnership (if applicable) and the partnership agreement in the case of a
general or limited partnership or the articles of formation and the operating
agreement in the case of a limited liability company.

(j) “Independent Directors” means the members of the Board of Directors who are
not officers or employees of the Manager.

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

(l) “Investments” means the investments of the Company.

(m) “Junior Share” means a share of capital stock of the Company now or
hereafter authorized or reclassified that has dividend rights, or rights upon
liquidation, winding up and dissolution, that are inferior or junior to the REIT
Shares.

(n) “Preferred Share” means a share of capital stock of the Company now or
hereafter authorized or reclassified that has dividend rights, or rights upon
liquidation, winding up and dissolution, that are superior or prior to the REIT
Shares.

(o) “REIT Share” means a share of the Company’s Common Shares, par value $0.01
per share. Where relevant in this Agreement, “REIT Shares” includes shares of
the Company’s Common Shares, par value $0.01 per share, issued upon conversion
of Preferred Shares or Junior Shares.

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

SECTION 2. APPOINTMENT AND DUTIES OF THE MANAGER.

(a) The Company hereby appoints the Manager to manage the assets of the Company
subject to the further terms and conditions set forth in this Agreement and the
Manager hereby agrees to use its commercially reasonable efforts to perform each
of the duties set forth herein. The appointment of the Manager shall be
exclusive to the Manager except to the extent that the Manager otherwise agrees,
in its sole and absolute discretion, and except to the extent that the Manager
elects, pursuant to the terms of this Agreement, to cause the duties of the
Manager hereunder to be provided by third parties.

 

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(b) The Manager, in its capacity as manager of the assets and the day-to-day
operations of the Company, at all times will be subject to the supervision of
the Company’s Board of Directors and will have only such functions and authority
as the Company may delegate to it including, without limitation, the functions
and authority identified herein and delegated to the Manager hereby. The Manager
will be responsible for the day-to-day operations of the Company and will
perform (or cause to be performed) such services and activities relating to the
assets and operations of the Company as may be appropriate, including, without
limitation:

(i) serving as the Company’s consultant with respect to the periodic review of
the investment criteria and parameters for Investments, borrowings and
operations, any modifications to which shall be approved by a majority of the
Independent Directors (such policy guidelines as are in effect on the date
hereof, as the same may be modified with such approval, the “Guidelines”) and
other policies for approval by the Board of Directors;

(ii) investigation, analysis, valuation and selection of investment
opportunities;

(iii) with respect to prospective Investments by the Company and dispositions of
Investments, conducting negotiations with real estate brokers, sellers and
purchasers and their respective agents and representatives, investment bankers
and owners of privately and publicly held real estate companies;

(iv) engaging and supervising, on behalf of the Company and at the Company’s
expense, independent contractors which provide real estate brokerage, investment
banking, leasing services, mortgage servicing, mortgage brokerage, securities
brokerage and other financial services and such other services as may be
required relating to the Investments;

(v) negotiating on behalf of the Company for the sale, exchange or other
disposition of any 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) coordinating and supervising, on behalf of the Company and at the
Company’s expense, all property managers, leasing agents and developers for the
administration, leasing, management and/or development of any of the
Investments;

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

(ix) administering the day-to-day operations of the Company and performing and
supervising the performance of such other administrative functions necessary in
the management of the Company as may be agreed upon by the Manager and the Board
of Directors, 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;

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

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

 

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(xii) evaluating and recommending to the Board of Directors modifications to the
hedging strategies in effect on the date hereof and engaging in hedging
activities on behalf of the Company, consistent with such strategies, as so
modified from time to time, with the Company’s status as a real estate
investment trust, and with the Guidelines;

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

(xiv) counseling the Company regarding the maintenance of its exemption from the
Investment Company Act and monitoring compliance with the requirements for
maintaining an exemption from that Act;

(xv) assisting the Company in developing criteria that are specifically tailored
to the Company’s investment objectives and making available to the Company its
knowledge and experience with respect to its target assets;

(xvi) representing and making recommendations to the Company in connection with
the purchase and finance, and commitment to purchase and finance, of its target
assets, and in connection with the sale and commitment to sell such assets;

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

(xviii) investing and re-investing any moneys and securities of the Company
(including investing in short-term Investments pending investment in
Investments, payment of fees, costs and expenses, or payments of dividends or
distributions to stockholders and partners of the Company) and advising the
Company as to its capital structure and capital raising;

(xix) causing the Company to retain qualified accountants and legal counsel, as
applicable, to assist in developing appropriate accounting procedures,
compliance procedures and testing systems with respect to financial reporting
obligations and compliance with the provisions of the Code applicable to real
estate investment trusts and to conduct quarterly compliance reviews with
respect thereto;

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

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

(xxii) taking all necessary actions to enable the Company to make required tax
filings and reports, including soliciting stockholders for required information
to the extent provided by the provisions of the Code applicable to real estate
investment trusts;

 

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

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

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

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

Without limiting the foregoing, the Manager will perform portfolio management
services (the “Portfolio Management Services”) on behalf of the Company with
respect to the Investments. Such services will include, but not be limited to,
consulting with the Company on the purchase and sale of, and other investment
opportunities in connection with, the Company’s portfolio of assets; the
collection of information and the submission of reports pertaining to the
Company’s assets, interest rates and general economic conditions; periodic
review and evaluation of the performance of the Company’s portfolio of assets;
acting as liaison between the Company and banking, mortgage banking, investment
banking and other parties with respect to the purchase, financing and
disposition of assets; and other customary functions related to portfolio
management. Additionally, the Manager will perform monitoring services (the
“Monitoring Services”) on behalf of the Company with respect to any loan
servicing activities provided by third parties. Such Monitoring Services will
include, but not be limited to, negotiating servicing agreements; acting as a
liaison between the servicers of the assets and the Company; review of
servicers’ delinquency, foreclosure and other reports on assets; supervising
claims filed under any insurance policies; and enforcing the obligation of any
servicer to repurchase assets.

(c) The Manager may enter into agreements with other parties, including its
affiliates, for the purpose of engaging one or more property and/or asset
managers for and on behalf, and at the sole cost and expense, of the Company to
provide property management, asset management, leasing, mortgage servicing,
development and/or similar services to the Company (including, without
limitation, Portfolio Management Services and Monitoring Services) with respect
to the Investments, pursuant to property management agreement(s) and/or asset
management agreement(s) with terms which are then customary for agreements
regarding the management or servicing of assets similar in type, quality and
value to the assets of the Company; provided, that (i) any such agreements
entered into with affiliates of the Manager shall be (A) on terms no more
favorable to such affiliate then would be obtained from a third party on an
arms’-length basis and (B) to the extent the same do not fall within the
provisions of the Guidelines, approved by a majority of the Independent
Directors, (ii) with respect to Portfolio Management Services, (A) any such
agreements shall be subject to the Company’s prior written approval and

 

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(B) the Manager shall remain liable for the performance of such Portfolio
Management Services, and (iii) with respect to Monitoring Services, any such
agreements shall be subject to the Company’s prior written approval.

(d) The Manager may retain, for and on behalf, and at the sole cost and expense,
of the Company, such services of accountants, legal counsel, appraisers,
insurers, brokers, transfer agents, registrars, developers, investment banks,
financial advisors, banks and other lenders and others as the Manager deems
necessary or advisable in connection with the management and operations of the
Company. Notwithstanding anything contained herein to the contrary, the Manager
shall have the right to cause any such services to be rendered by its employees
or affiliates. The Company shall pay or reimburse the Manager or its affiliates
performing such services for the cost thereof; provided, that such costs and
reimbursements are no greater than those which would be payable to outside
professionals or consultants engaged to perform such services pursuant to
agreements negotiated on an arm’s-length basis; and provided, further, that such
costs shall not be reimbursed in excess of $500,000 per annum.

(e) As frequently as the Manager may deem necessary or advisable, or at the
direction of the Board of Directors, the Manager shall, at the sole cost and
expense of the Company, prepare, or cause to be prepared, with respect to any
Investment (i) an appraisal prepared by an independent real estate appraiser,
(ii) reports and information on the Company’s operations and asset performance
and (iii) other information reasonably requested by the Company.

(f) The Manager shall prepare, or cause to be prepared, at the sole cost and
expense of the Company, all reports, financial or otherwise, with respect to the
Company reasonably required by the Board of Directors in order for the Company
to comply with its Governing Instruments or any other materials required to be
filed with any governmental body or agency, and shall prepare, or 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.

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

(h) Notwithstanding anything contained in this Agreement to the contrary, except
to the extent that the payment of additional moneys is proven by the Company to
have been required as a direct result of the Manager’s acts or omissions which
result in the right of the Company to terminate this Agreement pursuant to
Section 15 of this Agreement, the Manager shall not be required to expend money
(“Excess Funds”) in excess of that contained in any applicable Company Account
(as herein defined) or otherwise made available by the Company to be expended by
the Manager hereunder. Failure of the Manager to expend Excess Funds
out-of-pocket shall not give rise or be a contributing factor to the right of
the Company under Section 13(a) of this Agreement to terminate this Agreement
due to the Manager’s unsatisfactory performance.

 

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(i) In performing its duties under this Section 2, the Manager shall be entitled
to rely reasonably on qualified experts hired by the Manager.

SECTION 3. DEVOTION OF TIME; ADDITIONAL ACTIVITIES.

(a) The Manager will provide a management team, including a Chief Executive
Officer, a Chief Financial Officer and a Chief Accounting Officer of the
Company, to provide the management services to be provided by the Manager to the
Company hereunder. The members of such team shall devote such of their time to
the management of the Company as the Board of Directors reasonably deems
necessary and appropriate, commensurate with the level of activity of the
Company from time to time.

(b) Except to the extent set forth in clause (a) above, nothing herein shall
prevent the Manager or any of its affiliates or any of the officers and
employees of any of the foregoing from engaging in other businesses or from
rendering services of any kind to any other person or entity, including
investment in, or advisory service to others investing in, any type of real
estate or real estate related investment, including investments which meet the
principal investment objectives of the Company.

(c) Managers, members, partners, officers, employees and agents of the Manager
or affiliates of the Manager may serve as directors, officers, employees,
agents, nominees or signatories for the Company or any Subsidiary, to the extent
permitted by their Governing Instruments, as from time to time amended, or by
any resolutions duly adopted by the Board of Directors pursuant to the Company’s
Governing Instruments. When executing documents or otherwise acting in such
capacities for the Company, such persons shall use their respective titles in
the Company.

SECTION 4. AGENCY.

The Manager shall act as agent of the Company in making, acquiring, financing
and disposing of Investments, disbursing and collecting the Company’s funds,
paying the debts and fulfilling the obligations of the Company, supervising the
performance of professionals engaged by or on behalf of the Company and
handling, prosecuting and settling any claims of or against the Company, the
Board of Directors, holders of the Company’s securities or the Company’s
representatives or properties.

 

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SECTION 5. BANK ACCOUNTS.

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

SECTION 6. RECORDS; CONFIDENTIALITY.

The Manager shall maintain appropriate books of accounts and records relating to
services performed under this Agreement, and such books of account and records
shall be accessible for inspection by representatives of the Company or any
Subsidiary at any time during normal business hours upon one (1) business day’s
advance written notice. The Manager shall keep confidential any and all
information obtained in connection with the services rendered under this
Agreement and shall not disclose any such information to nonaffiliated third
parties except with the prior written consent of the Board of Directors.

SECTION 7. OBLIGATIONS OF MANAGER; RESTRICTIONS.

(a) The Manager shall require each seller or transferor of investment assets to
the Company to make such representations and warranties regarding such assets as
may, in the judgment of the Manager, be necessary and appropriate. In addition,
the Manager shall take such other action as it deems necessary or appropriate
with regard to the protection of the Investments.

(b) The Manager shall refrain from any action that, in its sole judgment made in
good faith, (i) is not in compliance with the Guidelines or (ii) would adversely
affect the status of the Company as a real estate investment trust under the
Code or that, in its sole judgment made in good faith, would violate any law,
rule or regulation of any governmental body or agency having jurisdiction over
the Company or any Subsidiary or that would otherwise not be permitted by such
entity’s Governing Instruments. If the Manager is ordered to take any such
action by the Board of Directors, the Manager shall promptly notify the Board of
Directors of the Manager’s judgment that such action would adversely affect such
status or violate any such law, rule or regulation or the Governing Instruments.
Notwithstanding the foregoing, the Manager, its directors, officers,
stockholders and employees shall not be liable to the Company or any Subsidiary,
the Board of Directors, or the Company’s or any Subsidiary’s stockholders or
partners for any act or omission by the Manager, its directors, officers,
stockholders or employees except as provided in Section 11 of this Agreement.

(c) The Manager shall not (i) consummate any transaction which would involve the
acquisition by the Company of property in which the Manager or any affiliate
thereof has an ownership interest or the sale by the Company of property to the
Manager or any affiliate thereof, or (ii) under circumstances where the Manager
is subject to an actual or potential conflict of interest because it manages
both the Company and another Person (not an Affiliate of the Company) with which
the Company has a contractual relationship, take any action

 

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constituting the granting to such Person of a waiver, forebearance or other
relief, or the enforcement against such Person of remedies, under or with
respect to the applicable contract, unless such transaction or action, as the
case may be and in each case, is approved by a majority of the Independent
Directors.

(d) The Board of Directors periodically reviews the Guidelines and the Company’s
portfolio of Investments. If a majority of the Independent Directors determine
in their periodic review of transactions that a particular transaction does not
comply with the Guidelines, then a majority of the Independent Directors will
consider what corrective action, if any, can be taken. If the transaction
involved the acquisition of an asset from the Manager or an affiliate of the
Manager that was not approved in advance by a majority of the Independent
Directors, then the Manager may be required to repurchase the asset at the
purchase price (plus closing costs) to the Company.

(e) The Manager shall at all times during the term of this Agreement (including
the Initial Term and any renewal term) maintain a tangible net worth equal to or
greater than $1,000,000. Additionally, during such period the Manager shall
maintain “errors and omissions” insurance coverage and other insurance coverage
which is customarily carried by property and 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, in an amount which is
comparable to that customarily maintained by other managers or servicers of
similar assets.

SECTION 8. COMPENSATION.

(a) During the term of this Agreement, as the same may be extended from time to
time, the Manager will receive an annual management fee (the “Management Fee”)
equal to 1.50% of the Company’s “Gross Equity.” The Management Fee shall be
calculated and paid monthly in arrears based upon the weighted daily average of
the Gross Equity of the Company for such month. The term “Gross Equity” for any
period means (A) the sum of (i) the “Total Equity,” plus (ii) the value of
contributions made by partners other than the Company, from time to time, to the
capital of any Subsidiary (reduced proportionately in the case of a Subsidiary
to the extent that the Company owns, directly or indirectly, less than 100% of
the equity interests in such Subsidiary), less (B) any capital dividends or
capital distributions made by the Company to its stockholders or, without
duplication, by any Subsidiary to its stockholders, partners or other equity
holders. As used herein, the term “Total Equity” shall mean (i) the equity
transferred by Newcastle Investment Corp. on the Distribution Date, plus
(ii) the total net proceeds to the Company from any common or preferred equity
capital heretofore or hereafter raised by the Company or any Subsidiary of the
Company (exclusive, with respect to any Subsidiary, of capital of such
Subsidiary consisting of a capital contribution or other form of capital
investment made by the Company or another Subsidiary of the Company).

(b) The Manager shall compute each installment of the Management Fee within 15
days after the end of the calendar month with respect to which such installment
is payable. A

 

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copy of the computations made by the Manager to calculate such installment shall
thereafter, for informational purposes only and subject in any event to
Section 13(a) of this Agreement, promptly be delivered to the Board of Directors
and, upon such delivery, payment of such installment of the Management Fee shown
therein shall be due and payable no later than the earlier to occur of (i) the
date which is 20 days after the end of the calendar month with respect to which
such installment is payable and (ii) the date which is two (2) business days
after the date of delivery to the Board of Directors of such computations.

(c) The Management Fee is subject to adjustment pursuant to and in accordance
with the provisions of Section 13(a) of this Agreement.

(d) The Board of Directors may, by written notice to the Manager delivered ten
(10) days prior to the date on which any payment of the Incentive Compensation
is payable, request that the Manager accept all or a portion of such payment in
the form of issued Common Shares, which notice shall specify the amount of the
payment of the Incentive Compensation, the amount thereof which the Company
intends to pay in cash, if any, and the amount thereof which the Company intends
to pay in the form of such Common Shares in the number of such shares as
determined by the Board of Directors. Within five (5) days following receipt of
said notice, the Manager shall notify the Company in writing, such election to
be made by the Manager in its sole discretion, whether it will accept such
portion of such payment in the form of such shares and in such number of such
shares.

(e) In addition to the Management Fee otherwise payable hereunder, the Company
shall pay the Manager annual incentive compensation on a cumulative, but not
compounding, basis, in an amount equal to the product of (A) 25% of the dollar
amount by which (1)(a) the Funds from Operations (before such payment) of the
Company, per REIT Share (based on the weighted average number of REIT Shares
outstanding), plus (b) gains (or losses) from debt restructuring and gains (or
losses) from sales of property per REIT Share (based on the weighted average
number of REIT Shares outstanding), exceed (2) an amount equal to (a) the
weighted average of the book value per REIT Share of the equity transferred by
Newcastle Investment Corp. on the Distribution Date and the prices per REIT
Share at any subsequent offerings by the Company (adjusted for any prior capital
dividends or capital distributions) multiplied by (b) a simple interest rate of
ten percent (10%) per annum multiplied by (B) the weighted average number of
REIT Shares outstanding during such period. The obligation of the Company to pay
the Incentive Compensation shall survive the expiration or earlier termination
of this Agreement, subject to Section 16(b).

SECTION 9. EXPENSES OF THE COMPANY.

The Company shall pay all of its expenses and shall reimburse the Manager for
documented expenses of the Manager incurred on its behalf (collectively, the
“Expenses”). Expenses include all costs and expenses which are expressly
designated elsewhere in this Agreement as the Company’s, together with the
following:

(a) expenses in connection with the issuance and transaction costs incident to
the acquisitions, disposition and financing of Investments;

 

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(b) travel and other out-of-pocket expenses incurred by managers, officers,
employees and agents of the Manager in connection with the purchase, financing,
refinancing, sale or other disposition of an Investment;

(c) costs of legal, accounting, tax, auditing, administrative and other similar
services rendered for the Company by providers retained by the Manager or, if
provided by the Manager’s employees, in amounts which are no greater than those
which would be payable to outside professionals or consultants engaged to
perform such services pursuant to agreements negotiated on an arm’s-length
basis;

(d) the compensation and expenses of the Independent Directors and the cost of
liability insurance to indemnify the Company’s directors and officers;

(e) compensation and expenses of the Company’s custodian and transfer agent, if
any;

(f) costs associated with the establishment and maintenance of any credit
facilities and other indebtedness of the Company (including commitment fees,
legal fees, closing and other costs) or any securities offerings of the Company;

(g) costs associated with any computer software or hardware that is used solely
for the Company;

(h) costs and expenses incurred in contracting with third parties, including
affiliates of the Manager, for the servicing and special servicing of assets of
the Company;

(i) 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;

(j) 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 employees;

(k) expenses relating to any office or office facilities maintained for the
Company or Investments separate from the office or offices of the Manager;

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

(m) expenses connected with communications to holders of securities of the
Company or its Subsidiaries and other bookkeeping and clerical work necessary in
maintaining relations with holders of such securities and in complying with the
continuous reporting and other requirements of governmental bodies or agencies,
including, without limitation, all costs of preparing and filing required
reports with the Securities and Exchange Commission, the costs payable by the
Company to any transfer agent and registrar in connection with the listing
and/or

 

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trading of the Company’s stock on any exchange, the fees payable by the Company
to any such exchange in connection with its listing, costs of preparing,
printing and mailing the Company’s annual report to its shareholders and proxy
materials with respect to any meeting of the shareholders of the Company; and

(n) all other expenses actually incurred by the Manager which are reasonably
necessary for the performance by the Manager of its duties and functions under
this Agreement.

(o) Without regard to the amount of compensation received under this Agreement
by the Manager, the Manager shall bear the following expenses: (i) wages and
salaries of the Manager’s officers and employees; (ii) rent attributable to the
space occupied by the Manager; and (iii) all other “overhead” expenses of the
Manager.

SECTION 10. CALCULATIONS OF EXPENSES.

The Manager shall prepare a statement documenting the Expenses of the Company
and the Expenses incurred by the Manager on behalf of the Company during each
calendar month, and shall deliver such statement to the Company within 20 days
after the end of each calendar month. Expenses incurred by the Manager on behalf
of the Company shall be reimbursed monthly to the Manager on the first business
day of the month immediately following the date of delivery of such statement.

SECTION 11. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION.

(a) The Manager assumes no responsibility under this Agreement other than to
render the services called for under this Agreement in good faith and shall not
be responsible for any action of the Board of Directors in following or
declining to follow any advice or recommendations of the Manager, including as
set forth in Section 7(b) of this Agreement. The Manager, its members, managers,
officers and employees will not be liable to the Company or any Subsidiary, to
the Board of Directors, or the Company’s or any Subsidiary’s stockholders or
partners for any acts or omissions by the Manager, its members, managers,
officers or employees, pursuant to or in accordance with this Agreement, except
by reason of acts constituting bad faith, willful misconduct, gross negligence
or reckless disregard of the Manager’s duties under this Agreement. The Company
shall, to the full extent lawful, reimburse, indemnify and hold the Manager, its
members, managers, officers and employees and each other Person, if any,
controlling the Manager (each, an “Indemnified Party”), harmless of and from any
and all expenses, losses, damages, liabilities, demands, charges and claims of
any nature whatsoever (including attorneys’ fees) in respect of or arising from
any acts or omissions of such Indemnified Party made in good faith in the
performance of the Manager’s duties under this Agreement and not constituting
such Indemnified Party’s bad faith, willful misconduct, gross negligence or
reckless disregard of the Manager’s duties under this Agreement.

(b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold
the Company, its shareholders, directors, officers and employees and each other
Person, if any, controlling the Company (each, a “Company Indemnified Party”),
harmless of and from any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever (including attorneys’ fees)
in respect of or arising from the Manager’s bad faith, willful misconduct, gross
negligence or reckless disregard of its duties under this Agreement.

 

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SECTION 12. NO JOINT VENTURE.

Nothing in this Agreement shall be construed to make the Company and the Manager
partners or joint venturers or impose any liability as such on either of them.

SECTION 13. TERM; TERMINATION.

(a) Until this Agreement is terminated in accordance with its terms, this
Agreement shall be in effect until the date that is one (1) year after the date
hereof, and thereafter on each anniversary of such date be deemed renewed
automatically each year for an additional one-year period unless (i) a majority
consisting of at least two-thirds of the Independent Directors or a simple
majority of the holders of outstanding Common Shares, agree that there has been
unsatisfactory performance that is materially detrimental to the Company or
(ii) a simple majority of the Independent Directors agree that the Management
Fee payable to the Manager is unfair; provided, that the Company shall not have
the right to terminate this Agreement under clause (ii) foregoing if the Manager
agrees to continue to provide the services under this Agreement at a fee that
the Independent Directors have determined to be fair. If the Company elects not
to renew this Agreement at the expiration of the original term or any such
one-year extension term as set forth above, the Company shall deliver to the
Manager prior written notice (the “Termination Notice”) of the Company’s
intention not to renew this Agreement based upon the terms set forth in this
Section 13(a) of this Agreement not less than 60 days prior to the expiration of
the then existing term. If the Company so elects not to renew this Agreement,
the Company shall designate the date (the “Effective Termination Date”), not
less than 60 days from the date of the notice, on which the Manager shall cease
to provide services under this Agreement and this Agreement shall terminate on
such date; provided, however, that in the event that such Termination Notice is
given in connection with a determination that the compensation payable to the
Manager is unfair, the Manager shall have the right to renegotiate the
Management Fee by delivering to the Company, no fewer than forty-five (45) days
prior to the prospective Effective Termination Date, written notice (any such
notice, a “Notice of Proposal to Negotiate”) of its intention to renegotiate its
compensation under this Agreement. Thereupon, the Company and the Manager shall
endeavor to negotiate in good faith the revised compensation payable to the
Manager under this Agreement. Provided that the Manager and the Company agree to
a revised Management Fee (or other compensation structure) within 45 days
following the receipt of the Notice of Proposal to Negotiate, the Termination
Notice shall be deemed of no force and effect and this Agreement shall continue
in full force and effect on the terms stated in this Agreement, except that the
Management Fee shall be the revised Management Fee (or other compensation
structure) then agreed upon by the parties to this Agreement. The Company and
the Manager agree to execute and deliver an amendment to this Agreement setting
forth such revised Management Fee 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 during such 45 day period, this Agreement shall
terminate, such termination to be effective on the date which is the later of
(A) ten (10) days following the end of such 45 day period and (B) the Effective
Termination Date originally set forth in the Termination Notice.

 

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(b) In the event that this Agreement is terminated in accordance with the
provisions of Section 13(a) of this Agreement, the Company shall pay to the
Manager, on the date on which such termination is effective, a termination fee
(the “Termination Fee”) equal to the amount of the Management Fee earned by the
Manager during the period consisting of the twelve (12) full, consecutive
calendar months immediately preceding such termination. The obligation of the
Company to pay the Termination Fee shall survive the termination of this
Agreement.

(c) No later than sixty (60) days prior to the anniversary date of this
Agreement of any year during the Term, the Manager may deliver written notice to
the Company informing it of the Manager’s intention not to renew the Term,
whereupon the Term of this Agreement shall not be renewed and extended and this
Agreement shall terminate effective on the anniversary of the Closing Date next
following the delivery of such notice.

(d) If this Agreement is terminated pursuant to this Section 13, such
termination shall be without any further liability or obligation of either party
to the other, except as provided in Section 13(b) and Section 16 of this
Agreement. In addition, Section 11 of this Agreement shall survive termination
of this Agreement.

SECTION 14. ASSIGNMENT.

(a) Except as set forth in Section 14(b) of this Agreement, this Agreement shall
terminate automatically 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; provided, however,
that no such consent shall be required in the case of an assignment by the
Manager to an entity whose day-to-day business and operations are managed and
supervised by Messrs. Wesley R. Edens and Randal A. Nardone (collectively, the
“Principals”), provided, further, that such transaction is determined at the
time not to be an “assignment” for purposes of Section 205 of the Investment
Advisers Act of 1940, as amended, and the rules and regulations promulgated
under such act and the interpretations thereof issued by the Securities and
Exchange Commission. 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 errors 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 Manager. 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 real
estate investment trust or other organization which is a successor (by merger,
consolidation or purchase of assets) 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.

(b) Notwithstanding any provision of this Agreement, the Manager may subcontract
and assign any or all of its responsibilities under Sections 2(b), 2(c) and 2(d)
of this Agreement to any of its affiliates in accordance with the terms of this
Agreement applicable to any such subcontract or assignment, and the Company
hereby consents to any such assignment and subcontracting. In addition, provided
that the Manager provides prior written notice to the Company for informational
purposes only, nothing contained in this Agreement shall preclude any pledge,
hypothecation or other transfer of any amounts payable to the Manager under this
Agreement.

 

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SECTION 15. TERMINATION FOR CAUSE.

(a) The Company may terminate this Agreement effective upon sixty (60) days
prior written notice of termination from the Company to the Manager, without
payment of any Termination Fee, if any act of fraud, misappropriation of funds,
or embezzlement against the Company or other willful violation of this Agreement
by the Manager in its corporate capacity (as distinguished from the acts of any
employees of the Manager which are taken without the complicity of any of the
Principals) under this Agreement or in the event of any gross negligence on the
part of the Manager in the performance of its duties under this Agreement.

(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 30 days after written notice thereof specifying such default and
requesting that the same be remedied in such 30 day period.

SECTION 16. ACTION UPON TERMINATION.

(a) (a) From and after the effective date of termination of this Agreement,
pursuant to Sections 13, 14, or 15 of this Agreement, the Manager shall not be
entitled to compensation for further services under this Agreement, but shall be
paid all compensation accruing to the date of termination and, if terminated
pursuant to Section 13 or Section 15(b), the applicable Termination Fee. Upon
such termination, the Manager shall forthwith:

(i) 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;

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

(iii) deliver to the Board of Directors all property and documents of the
Company or any Subsidiary then in the custody of the Manager.

(b) In the event that this Agreement is terminated, the Company shall have the
option, to be exercised by written notice to the Manager within ten (10) days
following such termination, to purchase from the Manager the right of the
Manager to receive the Incentive Compensation. In exchange therefor the Company
will be obligated to pay the Manager a cash purchase price (the “Cash Price”)
equal to the amount of the Incentive Compensation that would be paid to the
Manager if all of the Company’s assets were sold for cash at their then current
fair market value (taking into account, among other things, expected future
performance of the underlying investments, the “Fair Market Value”). In the
event that the Company does not elect to exercise such option to purchase the
Incentive Compensation, the Manager shall have the right to require the Company
to do so at the Cash Price by delivering to the Company written notice within
twenty (20) days following such termination. The Fair Market Value shall be
determined by independent appraisal to be conducted by a nationally recognized
appraisal firm mutually agreed

 

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upon by the Company and the Manager. If the Company and the Manager are unable
to agree upon an appraisal firm, then each of the Company and the Manager shall
choose an independent appraisal firm to conduct an appraisal. In such event,
(i) if the appraisals prepared by the two appraisers so selected are the same or
differ by an amount that does not exceed 20% of the higher of the two
appraisals, the Fair Market Value will be deemed to be the average of such
appraisals, and (ii) if the two appraisals differ by more than 20% of the higher
of the two appraisals, the two appraisers together shall select a third
nationally recognized appraisal firm to conduct an appraisal. If the two
appraisers are unable to agree as to the identity of such third appraiser,
either of the Manager and the Company may request that the American Arbitration
Association (“AAA”) select the third appraiser, which shall then be selected by
the AAA. The Fair Market Value will then be deemed to be the amount determined
by such third appraiser, but in no event less than the lower or more than the
higher of the first two appraisals made under this Section 16(b).

SECTION 17. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST.

The Manager agrees that any money or other property of the Company or Subsidiary
held by the Manager under this Agreement shall be held by the Manager as
custodian for the Company or Subsidiary, and the Manager’s records shall be
appropriately marked clearly to reflect the ownership of such money or other
property by the Company or such Subsidiary. 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 or any Subsidiary any money or other
property then held by the Manager for the account of the Company or any
Subsidiary under this Agreement, the Manager shall release such money or other
property to the Company or any Subsidiary within a reasonable period of time,
but in no event later than sixty (60) days following such request. The Manager
shall not be liable to the Company, any Subsidiary, the Independent Directors,
or the Company’s or a Subsidiary’s stockholders or partners for any acts
performed or omissions to act by the Company or any Subsidiary in connection
with the money or other property released to the Company or any Subsidiary in
accordance with the first sentence of this Section 17. The Company and any
Subsidiary shall indemnify the Manager and its members, managers, officers and
employees against any and all expenses, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever, which arise in connection with the
Manager’s release of such money or other property to the Company or any
Subsidiary in accordance with the terms of this Section 17. Indemnification
pursuant to this provision shall be in addition to any right of the Manager to
indemnification under Section 11 of this Agreement.

SECTION 18. NOTICES.

Unless expressly provided otherwise in this Agreement, all notices, requests,
demands and other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given, made and
received when delivered against receipt or upon actual receipt of (i) personal
delivery, (ii) delivery by reputable overnight courier, (iii) delivery by
facsimile transmission or email against answerback, (iv) delivery by registered
or certified mail, postage prepaid, return receipt requested, addressed as set
forth below:

 

(a) If to the Company:    New Residential Investment Corp.    c/o FIG LLC   
1345 Avenue of the Americas    46th Floor    New York, New York 10105   
Attention: Mr. Cameron MacDougall

 

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(b) If to the Manager:    FIG LLC    1345 Avenue of the Americas    46th Floor
   New York, New York 10105    Attention: Mr. Randal A. Nardone

Either party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 18 for the giving of notice.

SECTION 19. BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS.

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

SECTION 20. ENTIRE AGREEMENT.

This Agreement contains the entire agreement and understanding among the parties
hereto with respect to the subject matter of this Agreement, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter of this Agreement. The express terms of this
Agreement control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms of this Agreement. This Agreement may
not be modified or amended other than by an agreement in writing.

SECTION 21. CONTROLLING LAW.

This Agreement and all questions relating to its validity, interpretation,
performance and enforcement shall be governed by and construed, interpreted and
enforced in accordance with the laws of the State of New York, notwithstanding
any New York or other conflict-of-law provisions to the contrary.

SECTION 22. INDULGENCES, NOT WAIVERS.

Neither the failure nor any delay on the part of a party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

 

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SECTION 23. TITLES NOT TO AFFECT INTERPRETATION.

The titles of paragraphs and subparagraphs contained in this Agreement are for
convenience only, and they neither form a part of this Agreement nor are they to
be used in the construction or interpretation of this Agreement.

SECTION 24. EXECUTION IN COUNTERPARTS.

This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts of this
Agreement, individually or taken together, shall bear the signatures of all of
the parties reflected hereon as the signatories.

SECTION 25. PROVISIONS SEPARABLE.

The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

SECTION 26. GENDER.

Words used herein regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context requires.

 

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

 

COMPANY:

NEW RESIDENTIAL INVESTMENT CORP.,

a Delaware corporation

By:  

/s/ Cameron MacDougall

  Name:   Cameron MacDougall   Title:   Secretary MANAGER: FIG LLC,
a Delaware limited liability company By:  

/s/ David N. Brooks

  Name:   David N. Brooks   Title   Secretary

 

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