Document:

Tonix Pharmaceuticals Holding Corp. 10-Q

 

Exhibit 10.03

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. THE OMISSIONS HAVE BEEN INDICATED BY “[***].”

 

	
EXCLUSIVE LICENSE AGREEMENT

	 

 

This Agreement is dated September 19, 2019 (the “Effective Date”), and is between THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK, a New York corporation (“Columbia”), and TONIX PHARMACEUTICALS, INC., a Delaware corporation (“Company” or “Tonix”).  Columbia and Company agree as follows:

 

	
 

	
1.

	
Definitions. In this Agreement, the following definitions apply:

 

a.             “Affiliate” means any corporation or other entity that directly or indirectly controls, is controlled by, or is under common control with, another corporation or entity.  Control means direct or indirect ownership of, or other beneficial interest in, fifty percent (50%) or more of the voting stock, other voting interest, or income of a corporation or other entity.

 

b.             “Cover” or “Covered By” means (i) infringes, in the case of a claim in an issued patent, or (ii) would infringe the claim if it existed in an issued patent, in the case of a claim in a pending application.

 

c.             “Designee” means a corporation or other entity that is employed by, under contract to, or in partnership with (i) Company, (ii) a Sublicensee, (iii) an Affiliate of Company or (iv) an Affiliate of a Sublicensee, wherein such corporation or other entity is granted the right to make, use, sell, promote, distribute, market, import, or export Products. 

 

d.             “FDA” shall mean the U.S. Food and Drug Administration, or any successor entity there to performing similar functions.

 

e.             “Field” means trefoil factors in all indications and uses in humans and/or animals. 

 

f.              “Indication” shall mean the diagnosis of a generally acknowledged disease or medical condition in humans as identified in an IND, NDA, or BLA for a Product.  For clarity, the treatment of the same medical condition in variants of a single disease shall be deemed hereunder as one and the same.

 

g.             “License Year” means the one-year period from the Effective Date of this Agreement or an anniversary thereof to the next anniversary of the Effective Date.

 

h.             “NDA or BLA” means an application submitted to the FDA in the United States or the equivalent in any foreign country for marketing approval of a product, including (a) a New Drug Application, Product License Application, or Biologics License Application, and (b) all supplements and amendments that may be filed with respect to the foregoing.  

 

     

     

    

 

i.              “Net Sales” means the greater of the gross invoice or contract price charged to Third Party customers for the Product or the actual consideration paid by Third Party customers for the Product less the following deductions, in each case to the extent actually allowed and/or taken by such Third Party customer in connection with such  Product (“Permitted Deductions”): (i) customary trade, quantity, or cash discounts and rebates to the extent actually taken or paid, as the case may be and administrative or other bona fide service fees  related to a Product paid to any pharmacy benefit manager, group purchasing organization, distributor, wholesaler or other Third Party; (ii) amounts repaid or credited by reason of rejection or return; (iii) sales, use or value added taxes or any other taxes or other governmental charges levied on the production, sale, rental, lease or other transfer, transportation, delivery, performance or use of a Product which is paid by or on behalf of Company, Sublicensees, Designees, or any Affiliate of the foregoing; (iv) outbound transportation costs prepaid or allowed, costs of packing, and costs of insurance in transit; (v) amounts written off as bad debt consistent with the requirements of GAAP, IFRS or any other applicable accounting standard in a given country in the Territory. The intent of this definition of Net Sales is to allow Columbia to derive a royalty on the end sale of a Product to the first Third Party. 

 

In the case of transfers of Products between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing, for subsequent sale, rental, lease or other transfer of such Products to Third Parties, Net Sales will be the greater of (i) the actual amount charged for the transfer of the Product between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing and (ii) the gross invoice or contract price charged to the Third Party customer for that Product in an arm’s-length transaction, subject, in each case to the Permitted Deductions.

 

At Columbia’s option, in the case of transfers of Products between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing, for use by Company, Sublicensees, Designees, and Affiliates of any of the foregoing such that the Product is consumed or used, and is not incorporated into a product or service subsequently sold to a Third Party customer, Net Sales  means the greater of the following:  (i) the actual amount charged for the transfer of the Product between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing, and (ii) what the fair market value of the Product would be in an arm’s-length transaction as determined by reference to the then prevailing sales price to Third Parties, subject in each case to the Permitted Deductions.

 

j.             
“Other Consideration”  means any and all consideration of any kind (e.g., cash or in-kind consideration)
received by Company from Sublicensees, their Designees or their Affiliates as full or partial consideration for the grant of any
sublicense (or any option or any right to negotiate for a sublicense) under Section 2b of this Agreement, including, without limitation,
licensing fees, lump sums, development based or non-development based milestone payments, debt and/or equity securities or instruments
purchased or obtained at a premium above fair market value, but excluding (i) any consideration received for royalties on Net
Sales of Products by Sublicensee (for clarity, royalties on Net Sales of Products by Sublicensees will be subject to the pass
through royalty set forth in Section 4(c)(i)), (ii) investments in Tonix equity to the extent such equity is purchased for fair
market value; (iii) funds that are paid for direct research and development expenses on Products incurred by Tonix after the actual
date of execution of the sublicense agreement and required to be incurred by Tonix under the sublicense; (iv) debt incurred by
Tonix on arm’s length terms; (v) fees payable to Tonix in connection with bona-fide services provided by Tonix to a Sublicensee,
Designee or an Affiliate at fair market value and (v) reimbursement of out-of-pocket patent prosecution or maintenance expenses
for the Patents. With respect to securities received by Tonix that would be considered “Other Consideration,” the
value of such securities will be set at the value of such securities on the date of the receipt by Tonix of the subject securities
and Tonix has the option to pay Columbia in cash or transfer the value in the form of shares the securities. 

 

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k.             “Other Product”  means any product or service (or component thereof), other than a Patent Product, the discovery, development, manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of which involves the use of or incorporation, in whole or in part, of Technical Information.

 

l.             
“Patent” or “Patents”  means the following:  (i) the United States and foreign
patents and/or patent applications listed in Exhibit A hereto; (ii) any non-provisional patent applications that claim priority
to any provisional patent applications listed in Exhibit A hereto;  (iii) any and all claims of continuation-in-part applications
that claim priority to the United States patent applications and/or patents listed in Exhibit A, but only where such claims are
directed to inventions disclosed in the manner provided in the first paragraph of 35 U.S.C. Section 112 in the United States patent
applications listed in Exhibit A, and such claims in any patents issuing from such continuation-in-part applications; (iv) any
and all foreign patent applications, foreign patents or related foreign patent documents that claim priority to the patents and/or
patent applications listed in Exhibit A; (v) any and all divisionals, continuations, reissues, re-examinations, renewals, substitutions,
and extensions, including Supplementary Protection Certificates, of the foregoing; and (vi) any and all patents issuing from the
foregoing.  Notwithstanding the preceding definition, Patent and Patents will not include any patent applications or issued
patents based on research conducted after the Effective Date, except as otherwise agreed in a separate writing.

 

m.            “Patent Product” means any product or service (or component thereof) the discovery, development, manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of which is Covered By a claim of a Patent.

 

n.             [***] 

 

o.             [***] 

 

p.             [***] 

 

q.             “Product” or “Products” means a Patent Product and/or an Other Product.

 

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r.             [***]

 

s.             “Sublicensee” means any third party to whom Company has granted a sublicense under this Agreement. An Affiliate of Company exercising rights hereunder shall not be considered a Sublicensee.

 

t.              “Technical Information”  means any know-how, technical information and data developed by Columbia by or under the direction of Dr. Timothy Wang and Dr. Jan Kitajewski before the Effective Date, which know-how, technical information and data are necessary or useful for the discovery, development, manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of a Product, including, without limitation, (i) any know-how, technical information and data disclosed in any Patent or (ii) any reports or disclosures concerning research or inventions provided or disclosed to, or otherwise received by Company.  Technical Information will include, but is not limited to, the information in Exhibit B hereto.

 

u.             “Territory” means worldwide.

 

v.             “Third Party” means any entity or person other than Company, Sublicensees, Designees, or their Affiliates.

 

	
 

	
2.

	
License Grant.

 

a.     
   Grant.  Columbia grants Company and each Affiliate thereof, upon and subject to all the terms of this
Agreement (including Section 3), the following:

 

(i)  an exclusive license under the Patents to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease Products in the Field and throughout the Territory; and

 

(ii)  an exclusive license to use Technical Information to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease Products in the Field and throughout the Territory, until such time as Technical Information is published or otherwise publicly distributed and thereafter, the license granted hereunder for such Technical Information which is published or otherwise publicly distributed and thereafter  shall automatically convert to a non-exclusive license, provided however, that Columbia and its faculty and employees shall have the right to publish, disseminate or otherwise disclose the Technical Information.

 

b.        Sublicense. 
Columbia grants to Company the right to grant sublicenses on the following conditions: (i) the Sublicensee agrees to abide by
and be subject to all the terms and provisions of this Agreement applicable to Company; (ii) the Sublicensee has no further
right to grant sublicenses under this Agreement; (iii) if any Sublicensee (or any entity or person acting on its behalf)
initiates any proceeding or otherwise asserts any claim challenging the validity or enforceability of any Patent in any
court, administrative agency or other forum, Company shall, upon written request by Columbia and to the extent permitted by
applicable law, forthwith terminate the sublicense agreement with such Sublicensee, and the sublicense agreement 
provides for such right of termination by Company; (iv) the sublicense agreement  provides that, in the event of any
inconsistency between the sublicense agreement and this Agreement, this Agreement  controls; (v) the Sublicensee 
submits quarterly reports to Company consistent with the reporting provision of Section 5a herein; (vi) Company remains fully
liable for the performance of its and its Sublicensee’s obligations hereunder; (vii) Company notifies Columbia of any
proposed grant of a sublicense and provides to Columbia, upon request, an unredacted copy of any proposed sublicense
agreement at least seven (7) business days before execution of the sublicense in the form such sublicense agreement exists at
such time, which for clarity, may be updated due to negotiation between Company and the relevant third party in the
intervening period; (viii) no such sublicense or attempt to obtain a sublicensee  relieves Company of its obligations
under Section 6 to exercise its own commercially reasonable efforts, directly or through a sublicense, to discover, develop
and market Products, nor relieve Company of its obligations to pay Columbia any and all license fees, royalties and other
payments due under the Agreement, including but not limited to under Sections 4, 5 and 11 of the Agreement; (ix) Columbia is
a third-party beneficiary of such sublicense, entitled to enforce it in accordance with its terms; and (x) Columbia has no
liability of any kind or manner to such sublicensee except as may be set forth in Section 16(d).

 

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c.         Government Rights.  All rights and licenses granted by Columbia to Company under this Agreement are subject to (i) any limitations imposed by the terms of any government grant, government contract or government cooperative agreement applicable to the technology that is the subject of this Agreement, and (ii) applicable requirements of 35 U.S.C. Sections 200 et seq., as amended, and implementing regulations and policies.  Without limitation of the foregoing, Company agrees that, to the extent required under 35 U.S.C. Section 204, any Product used, sold, distributed, rented or leased by Company, Sublicensees, Designees, and their Affiliates in the United States will be manufactured substantially in the United States.  In addition, Company agrees that, to the extent required under 35 U.S.C. Section 202(c)(4), the United States government is granted a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any Patent throughout the world.

 

d.         Reservation.  All rights not granted to Tonix herein are reserved to Columbia.  Except as expressly provided under this Section 2, no right or license (expressly or by implication or estoppel) is granted by Columbia to Company or its Affiliates or Sublicensees under any tangible or intellectual property, materials, patent, patent application, trademark, copyright, trade secret, know-how, technical information, data or other proprietary rights. 

 

e.             Global Social Responsibility.  During the term of this Agreement, Columbia and Company agree to take into consideration the principle of “Global Social Responsibility” in performing the various activities contemplated under this Agreement.  ”Global Social Responsibility” means facilitating the availability of Products in “Developing Countries” at locally affordable prices, under reasonable circumstances and terms to improve access to such Products in such countries.  “Developing Countries” means those countries listed by the World Bank as “Low-Income Economies,” as such list may change from time to time.  Solely by way of example, the Parties may mutually agree to revise royalty rates, adjust the fair market value, consider non-monetary consideration, and/or develop patent strategies in support of each party’s dedication to Global Social Responsibility. 

 

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f.              Technical Information. Within ten (10) business days of the Effective Date, Columbia will transfer or cause to be transferred to Company the Technical Information.

 

	
 

	
3.

	
Reservation of Rights for Research Purposes; Freedom of Publication.  

 

a.         Research Purposes.  Columbia reserves the right to practice the Patents, to the extent Patents are exclusively licensed hereunder, for academic research and educational purposes in the Field and to permit other entities or individuals to practice and use such Patents for academic research and educational purposes in the Field.  Columbia shall obtain from all entities or individuals who are given permission to practice and use such Patents an agreement in writing to limit such use to academic research and educational purposes.  Nothing in this Agreement will be interpreted to limit in any way the right of Columbia and its faculty or employees to practice and use such Patents for any purpose outside the Field or to license or permit such use outside the Field by Third Parties.

 

b.         Publication.  Company acknowledges that Columbia is dedicated to the free scholarly exchange and to public dissemination of the results of its scholarly activities.  Columbia and its faculty and employees may publish, disseminate or otherwise disclose any information relating to its research activities, including Technical Information.

 

c.         Improvements.  Columbia will use reasonable efforts to promptly notify the Company of any Improvements to the Patents in the Field reported to Columbia Technology Ventures by Dr. Timothy Wang and Dr. Jan Kitajewski, or those working under their direction, within 2 years of the Effective Date and agrees to enter into good faith discussions with Company about the possibility of exclusively licensing such Improvements subject to the following:  (i) any commitments or obligations to any third party undertaken by Columbia, whether undertaken before or after the Effective Date; (ii) any limitations imposed by law, rule or regulation or by the terms of any government grant, contract or cooperative agreement; (iii) 35 U.S.C Section 200 et seq. and implementing regulations and policies; (iv) any limitations imposed by rules, negotiations, policies, statues or charters of Columbia or other relevant institution; (v) the consent of all investigators of such Improvements, unless Columbia in its sole discretion chooses to waive this subclause (v); and (vi) any requirements imposed on Columbia to maintain any particular tax status, standing or exemption.  For purposes of this Section 3(c), “Improvements” means any discovery, development, invention, enhancement or modification that is patentable over the Patents, includes all of the same inventors listed on the Patents, and whose manufacture, use, or sale would infringe a claim of a Patent.

 

	
 

	
4.

	
Fees, Royalties, and Payment.

 

 a.            Importance of Technical Information.  Company has requested, and Columbia has agreed, to grant certain rights to Technical Information.  Company requires these rights to develop and commercialize the technology licensed hereunder.  Because of the importance of Technical Information, Company has agreed to pay certain royalties to Columbia on Other Products, as specified below, even if such Other Product is not Covered By a Patent, to obtain rights to Technical Information.  Company has agreed to these payments because of the commercial value of Technical Information, separate and distinct from the commercial value of the Patents.  Company acknowledges that it would not have entered into this Agreement without receiving the rights to the Technical Information specified in Section 2.  Company further acknowledges that licenses to Technical Information and each patent and application within the definition of Patents were separately available from a license to the Patents and that, for convenience and because of the preference of Company, the parties executed a combined license to the Patents and Technical Information.

 

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b.      
   Consideration.  In consideration of the licenses granted under Section 2a of this Agreement, Company
shall pay to Columbia as follows:

 

(i)  License Fee:  A nonrefundable, non-recoverable and non-creditable license fee in the sum of $[***], payable thirty (30) days after receipt of an invoice concurrently with or after the execution of this Agreement; and

 

(ii)  Royalties:

 

(A)          With respect to sales of Products by Company, its Designees or their Affiliates (but not Sublicensees or their Designees, which are contemplated by (c) below), in the Territory, a nonrefundable and non-recoverable royalty of the following:

 

	
 

	
(1)

	
[***]% of Net Sales of Patent Products; and

 

	
 

	
(2)

	
[***]% of Net Sales of Other Products.

 

(B)           In the event Company or its Affiliate enters into a license agreement with a Third Party for intellectual property rights which are necessary for the practice of the intellectual property licensed to Tonix hereunder, including but not limited to, in connection with the manufacture or sale of Products (the “Third Party Licensed Rights”), then Company may deduct from the royalties due to Columbia on Products, fifty percent (50%) of royalties actually paid to such Third Parties during a given calendar quarter as consideration solely for any such Third Party Licensed Rights, provided that in no event shall the royalties for Products due to Columbia for a given calendar quarter be reduced to less than [***]%  of Net Sales on  Patent Products and 0.5% of Net Sales on Other Products.

 

c.         Sublicense Consideration.  In consideration of Company’s right to sublicense Third Parties granted under Section 2b of this Agreement, Company shall pay to Columbia the following nonrefundable, non-recoverable and non-creditable amounts:

 

(i)  Royalties: With respect to sales of Products by Sublicensees, their Designees or their Affiliates, in the Territory, a nonrefundable and non-recoverable royalty of (A) [***]% on Net Sales of Patent Products and (B) [***]% on Net Sales of Other Products.

 

(ii)  Other Payments: [***]% of Other Consideration.

 

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d.         Development Milestone Payments.  If Company, Sublicensees, or their Affiliates (collectively “Developer”) develops a Product for potential commercial sale in the Territory, Company shall pay Columbia within forty-five days of the occurrence of any of the following events the following nonrefundable, non-recoverable and non-creditable milestone payments with respect to each and every such Product as follows:

 

(1)   [***]

 

(2)   [***]

 

(3)   [***]

 

(4)   [***]; and

 

(5)   [***].

 

Each milestone above shall be payable only once upon the first achievement of the relevant Product milestone. For clarity, milestones will only be payable in connection with the first and, to the extent specifically provided above, the second Indication for humans (as opposed to animals).

 

e.             Duration of Other Product Royalties.  Royalties on each particular Other Product are payable on a country-by-country and product-by-product basis until fifteen (15) years after the first bona fide commercial sale of such particular Other Product in such country.

 

f.              Highest Royalty Due.  If a Product is covered by both the definition of Patent Product and Other Product, Company shall pay Columbia the Patent Product royalty rate on the Product.  Company will not be obligated to pay Columbia more than one royalty payment on the same Product sale under Section 4.  To the extent that a Product ceases being a Patent Product but is still an Other Product, Company shall pay Columbia the Other Product royalty rate on the Product, but only for such time as specified in Section 4e.    By way of example, but not by way of limitation, if the manufacture of a Product is Covered by the claim of a Patent, and the manufacture of that Product also incorporates in part Technical Information, Company must pay the royalty specified in Section 4b(ii)(A)(1).  If, after some period of time (for example, five years) of paying the royalties specified in Section 4b(ii)(A)(1) on the Product, the Product ceases to be a Patent Product, Company shall continue to pay royalties on the Product under Section 4b(ii)(A)(2) for the duration specified in Section 4e measured from the first bona fide commercial sale of the Patent Product on a country-by-country and product-by-product basis.

 

g.          No Non-Monetary Consideration.  Without Columbia’s prior written consent, Company, Sublicensees, Designees, and Affiliates of the foregoing, shall not solicit or accept any consideration for the sale of any Product other than as will be accurately reflected in Net Sales.  Furthermore, Company shall not enter into any transaction with any Affiliate that would circumvent its monetary or other obligations under this Agreement.

 

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h.

	
Rate Adjustment on Challenge; Payment of Costs and Expenses.   

 

(i)            If Company (or any entity or person acting on its behalf or at its direction) initiates any proceeding or otherwise asserts any claim challenging the validity or enforceability of any Patent in any court, administrative agency or other forum (“Challenge”), all royalty rates, minimum royalties, and other payment rates in Sections 4b(iii) and 4c are automatically doubled on and after the date of such challenge for the remaining term of this Agreement.

 

(ii)           Company shall pay all costs and expenses incurred by Columbia (including actual attorneys’ fees) in connection with defending a Challenge.  Columbia may bill Company on a quarterly basis with respect to such costs and expenses, and Company shall make payment no later than thirty (30) days after receiving an invoice from Columbia.

 

(iii)          If at least one claim of a Patent that is subject to a Challenge survives the Challenge by not being found invalid or unenforceable, regardless of whether the claim is amended as part of the Challenge, all royalty rates, minimum royalties, and other payment rates in Sections 4b(iii) and 4c are automatically trebled on and after the date of such finding for the remaining term of this Agreement.

 

Company acknowledges and agrees that the provisions in this Section 4h reasonably reflect the value derived from the Agreement by Company in the event of a Challenge.  In addition, Company acknowledges and agrees that any payments made under this Section 4h are nonrefundable and non-recoverable for any reason whatsoever.

 

i.              Sale Below Fair Market Value.  If  Company, Sublicensees, Designees or their Affiliates sell Product to a Third Party to whom it also sells other products, Company shall not sell the Product such that Net Sales is below fair market value with the intent of increasing market share for other products sold by Company, Sublicensees, Designees or their Affiliates to such Third Party for the purpose of reducing the amount of royalties payable on the Net Sales of Product.  If the sale of Product under such circumstances results in Net Sales below the fair market value of Product, then the Net Sales of Product in such transaction is deemed to be the fair market value (as determined in accordance with the last paragraph of the definition of “Net Sales”) for purposes of calculating payments owed to Columbia under this Agreement.  

 

	
 

	
5.

	
Reports and Payments.

 

a.         Reports.  No later than thirty (30) days after the first business day of each calendar quarter of each License Year of this Agreement after the first commercial sale of a Patent Product and/or Other Product, as applicable Company shall submit to Columbia a written report with respect to the preceding calendar quarter (the “Payment Report”) that includes the following:

 

(i)            Gross and Net Sales of Products by Company, Sublicensees, Designees and their Affiliates during such quarter, together with detailed information sufficient to permit Columbia to verify the accuracy of reported Net Sales, including Product names, country where manufactured, country where sold, actual selling price, units sold, an identification of all Patent claims that any Patent Product is Covered By, and an identification of Technical Information used or incorporated in the discovery, development, manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of any Other Product;

 

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(ii)           Amounts accruing to, and amounts received by, Company from its Sublicensees during such quarter together with the respective payment reports received by Company from any Sublicensees;

 

(iii)          A calculation under Section 4 of the amounts due to Columbia, making reference to the applicable subsection thereof;

 

(iv)          The exact date of the first commercial sale of a Product in the first Payment Report for such Product; and

 

(v)          An unredacted copy of each report any Sublicensee has sent to Company that is pertinent to any royalties or other sums owing to Company for the preceding quarter.

 

b.         Payments.  Simultaneously with the submission of each Payment Report, Company shall make payments to Columbia of the amounts due for the calendar quarter covered by the Payment Report.  Company shall pay by check payable to The Trustees of Columbia University in the City of New York and sent to the following address:

 

The Trustees of Columbia University in the City of New York

Columbia Technology Ventures

P.O. Box 1394

New York, NY 10008-1394

 

or to such other address as Columbia may specify by notice hereunder, or if requested by Columbia, by wire transfer of immediately available funds by Company to:

 

Wells Fargo

375 Park Avenue, 6th Floor

MAC J0127-063

New York, NY 10152

(This is the bank’s address, not Columbia University’s.

Do not use this address for correspondence to Columbia University.)

Routing #: [***]

Swift #: WFBIUS6S 

Columbia Account #: [***] 

Beneficiary:  Columbia University FBO Tech Ventures, Finance

Other identifying info:  include invoice #, contract #

 

or to such other bank and account identified by notice to Company by Columbia.  Company shall pay for all bank charges for the wire transfer of funds for payments to Columbia and shall not the deduct bank charges from the total amount due to Columbia.  Company shall send the quarterly royalty statement whether or not royalty payments are due. 

 

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c.         Final Payment.  No later than ninety (90) days after the date of termination or expiration of this Agreement, Company shall pay Columbia any and all amounts that are due under this Agreement as of the date of such termination or expiration, together with a Payment Report for such payment in accordance with this Section 5, except that such Payment Report will cover the period from the end of the last calendar quarter before termination or expiration to the date of termination or expiration.  Nothing in the foregoing is deemed to satisfy any of Company’s other obligations under this Agreement upon termination or expiration.

 

d.         Intentionally Omitted.

 

e.         Foreign Revenue.  With respect to revenues obtained by Company in foreign countries, Company shall make royalty payments to Columbia in the United States in United States Dollars.  For royalty payments for transactions outside the United States, Company shall first determine the royalties in the currency of the country in which they are earned, and then converted that currency to United States dollars using the buying rates of exchange quoted by The Wall Street Journal (or its successor) in New York, New York for the last business day of the calendar quarter in which the royalties were earned.  Company shall pay any and all loss of exchange value, taxes, or other expenses incurred in the transfer or conversion of foreign currency into U.S. dollars, and any income, remittance, or other taxes on such royalties required to be withheld at the source, and shall not decrease the amount of royalties due to Columbia thereby.  Royalty statements will show sales both in the local currency and US dollars, with the exchange rate used clearly stated. 

 

f.          Records.  Company shall maintain at its principal office usual books of account and records showing its actions under this Agreement, and sufficient to determine Company’s compliance with its obligations hereunder.  Upon reasonable notice, but not more than once per calendar year during regular business hours, Columbia may have a certified public accountant or auditor, and an attorney (each as to whom Company has no reasonable objection and each of which has executed a non-disclosure agreement in a form reasonably acceptable to Company) inspect and copy such books and records for purposes of verifying the accuracy of the amounts paid under this Agreement.  The review may cover a period of not more than three (3) years before the first day of the calendar quarter in which the review is requested. Any year that has been audited under this Section cannot subsequently be re-audited.  If such a review shows Company has underpaid by five percent (5%) or more concerning any calendar quarter then Company shall pay, no later than ten days after a demand by Columbia, the reasonable and documented costs and expenses of such review (including the reasonable and documented fees charged by Columbia’s accountant and attorney involved in the review), in addition to the amount of any underpayment and any interest thereon.  Company agrees to reasonably cooperate with Columbia’s accountant or auditor and attorney in connection with any such review.  During the review, Company shall provide Columbia’s accountant or auditor and attorney with all information reasonably requested to allow the accountant or auditor and attorney to audit and test for compliance with Company’s obligations, including without limitation, information relating to sales, inventory, manufacturing, purchasing, transfer records, customer lists, invoices, purchase orders, sales orders, shipping documentation, third-party royalty reports, cost information, pricing policies, and agreements with third parties (including to the extent in Company’s possession and control, the Sublicensees, the Designees, the Affiliates of Company, the Sublicensees and the Designees, and the customers).  Notwithstanding anything to the contrary in this Agreement (including Section 15b), and without limiting any of Columbia’s rights and remedies hereunder, if any payment required hereunder that is made late (including unpaid portions of amounts due), it bears interest, compounded monthly, either at the rate of 6% per year, or in Columbia’s sole discretion, at the U.S. prime rate plus 2% as published by the Wall Street Journal on the last day of the applicable billing period.  If any interest charged or paid in excess of the maximum rate permitted by applicable New York State Law, the excess is hereby deemed the result of a mistake and Columbia shall credit or refund (at Company’s option) to Company the interest paid in excess of the maximum rate. 

 

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g.         Late Payment.  Notwithstanding anything to the contrary in this Agreement (including Section 15b), and without limiting any of Columbia’s rights and remedies in this Agreement, if any payment required in this Agreement is not made within five (5) business days of Company’s receipt of a written notice of late payment, Company shall pay interest at the rate of 5% per year,.  If any interest is charged or paid in excess of the maximum rate permitted by New York State Law, the excess is hereby deemed the result of a mistake and Columbia shall credit or refund (at Company’s option) to Company the interest paid in excess of the maximum rate.

 

h.         Collection Costs.  Company shall reimburse Columbia for any costs and expenses incurred in connection with collecting on any arrears of Company with respect to its payment and reimbursement obligations under this Agreement (such as Section 11b of this Agreement), including the costs of engaging any collection agency for such purpose.

 

i.          Forecast.  Company shall submit to Columbia annual non-binding forecasts on the first business day following January 1 for annual sales of Products by Company, Sublicensees, Designees and their Affiliates to Columbia for its internal budget purposes. 

 

	
 

	
6.

	
Diligence.

 

a.             Diligence.  Company shall use its Commercially Reasonable Efforts to research, discover, develop and market Products for commercial sale and distribution in the Territory.  Company shall be deemed to meet such “Commercially Reasonable Efforts” in the event it achieves all of the due diligence milestones set forth in this Article 6.  Company shall achieve the following due diligence milestones (“Milestones”) by the dates (Achievement Dates”) as set forth below:

 

(to be negotiated) 

 

    12 

     

    
 

	
 

	
(i)

	
Due Diligence Milestones. 

 

	
Milestone

	
Achievement Date

	
[***]

	
[***]

	
[***]

	
[***]

	
[***]

	
[***]

 

For purposes of this Agreement, “IND” shall mean an Investigational New Drug Application (as described in 21 C.F.R. § 312) that is filed with the FDA to initiate the conduct of human clinical trials with a drug/biologic (or an equivalent filing in a jurisdiction outside of the United States filed with the appropriate regulatory agency).

 

(ii) The applicable Achievement Date for each Milestone set forth above will be tolled in the event that, despite Company’s commercially reasonable efforts to achieve such Milestone by the applicable Achievement Date, there is a regulatory, scientific or other technical delay in achieving such Milestone that is beyond the reasonable control of Company (a “Tolling Event”); provided that, Company will provide Columbia with notice of any such anticipated delay as soon as reasonably practicable after becoming aware that such a delay is likely and that Company uses its commercially reasonable efforts to overcome such delay during its pendency. Company will not be deemed to have failed to meet a required Achievement Date during the pendency of any delay contemplated by the prior sentence. Following resolution of any Tolling Event or in the event a Tolling Event does not occur, if Licensee believes that it will be unable to achieve a particular Milestone by the relevant Achievement Date, Licensee may extend such Achievement Date by a period of up to twelve (12) months upon the payment of a fee (the “Extension Fee”) equal to $10,000, which extension Company must exercise no later than thirty (30) days before such Achievement Date.  Licensee may extend each Milestone as set forth above only once. For clarity, in the event that the FDA requires Company to redo development work on the Product that was previously performed by a third party due to a change in formulation or for any other reason, such requirement will be deemed to be a Tolling Event and Company’s obligation to meet the requirements of this Section 6 will be adjusted accordingly.

 

(iii) For purposes of this Agreement, “Commercially Reasonable Efforts” means, with respect to the efforts to be expended by Tonix with respect to any objective, the level of reasonable, diligent, good faith efforts that similarly situated Pharmaceutical Companies typically devote to products owned by them that are at a similar stage in their development or product life and are of similar market potential taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, the likelihood of regulatory approval, the profitability of the product, and other relevant factors.  As used in this definition, “Pharmaceutical Companies” means companies in the pharmaceutical industry of a size and stage of development similar to that of Tonix, including having human pharmaceutical product candidates or products in a similar stage of development to the Products and having access to similar funding. 

 

    13 

     

    
 

Commercially Reasonable Efforts will be determined on a market-by-market and Product-by-Product basis, and it is anticipated that the level of effort will be different for different markets, and will change over time, reflecting changes in the status of the Product and the market(s) involved. 

 

Notwithstanding any other provisions of this Agreement, if Company fails to comply with its obligations as required by this Section 6, Columbia may terminate all of the licenses granted under Section 2 in accordance with Section 16 of this Agreement, or Columbia may convert any or all of such exclusive licenses to non-exclusive licenses with no further right to sublicense and no right to initiate legal proceedings under Section 11.        

 

b.         Reports.  No less often than every twelve (12) months after the Effective Date of this Agreement, Company shall report in writing to Columbia on progress made toward the diligence objectives set forth above, using Exhibit C to this Agreement or an equivalent to Exhibit C to make the report. 

 

	
 

	
7.

	
Confidentiality.  

 

a.         Except in accordance with Section 7c or 7d or to the extent reasonably necessary or beneficial to discover, develop, manufacture, use, sell, have sold, distribute, rent or lease Products in the Field, Company shall treat as confidential the Patents and Technical Information disclosed hereunder, and shall not disclose or distribute them to any third party without Columbia’s written permission. Except in accordance with Section 7c and 7d, Columbia will keep confidential all information related to the development, manufacturing, commercialization or other exploitation of Products received from Company or from anyone providing information on behalf of Company, including, but not limited to, in accordance with Company’s reporting obligations and/or Columbia’s audit rights under this Agreement.

 

b.         The Parties shall keep confidential the business terms of this Agreement and any financial information disclosed by one Party to the other under this Agreement (“Confidential Financial Information”).

 

c.         Notwithstanding the above, the following are exceptions to keeping information confidential:

 

i) Company may disclose confidential information (including, but not limited to this Agreement, or the terms of this Agreement) to actual or potential investors, partners, acquirers (of the Product or Company), sublicensees, in connection with regulatory requirements of  agencies like the FDA and SEC or the rules of any exchange on which Company’s shares are traded,  and to the extent reasonably necessary to meet its obligations under this Agreement, to its Affiliates, agents, representatives and employees;

 

ii) Columbia may disclose Confidential Financial Information to regulatory agencies such as the NIH and to U.S. or foreign courts or administrative tribunals, and to recipients that share in the license revenue generated under this Agreement, and, to the extent the following parties have an obligation to maintain the confidentiality of the subject information substantially in accordance with the terms hereof, to (A) third-party supporters of the research that led to the development of the intellectual property licensed hereunder to Company, and (B) to potential investors in the equity or royalty stream due to Columbia under this Agreement, and

 

    14 

     

    
 

 

iii) Columbia may publicly disclose Confidential Financial Information on the condition that such disclosure is done in a manner so that a third party would not be able to attribute such Confidential Financial Information to Company or this Agreement.

 

d.         The obligations of confidentiality under this Section 7 do not apply to any Patents or Technical Information that Company can demonstrate to be the following:

 

(i)  was known to Company before receipt thereof from Columbia;

 

(ii)  was or becomes a matter of public information or publicly available through no act or failure to act on the part of Company;

 

(iii)  is acquired by Company from a third party entitled to disclose it to  Company;

 

(iv) is required or requested by a court, agency or other governmental authority (but solely with respect to disclosure to such authority); or

 

(v)  Company discovers, develops independently without reference to or use of such Patents or Technical Information, as evidenced by contemporaneous written records.

 

e.        
Defend Trade Secrets Act.  Notwithstanding the foregoing, under 18 U.S.C. §1833(b), “An individual shall
not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that
(A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney;
and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under seal.”  Nothing in this Agreement or
any Columbia policy is intended to conflict with this statutory protection, and no Columbia trustee, director, officer, or member
of management has the authority to impose any practice to the contrary.

 

	
 

	
8.

	
Disclaimer of Warranty; Limitations of Liability.  

 

a.         To the actual knowledge of the officers of Columbia’s office of Technology Ventures, as of the Effective Date, Columbia hereby represents and warrants to Company that: (i) all of the named inventors on the Patents filed with any patent office have assigned or have an obligation to assign all of their right, title and interest in and to such inventions claimed in the Patents to Columbia; (ii) it has the power and authority to grant the licenses provided for herein to Company; (iii) Columbia is not in receipt of written notification of any claim, action, case, suit, litigation, arbitration, inquiry or proceeding  pending or threatened by any Third Party, that seeks to challenge Columbia’s ownership of Patents or the ability of Columbia to grant the licenses hereunder; and (iv) it has not entered into any agreement, and will not knowingly enter into any agreement, that materially conflicts with the rights granted to Company herein.

 

    15 

     

    

 

b.        
Disclaimer.  Except as specifically set forth in this Agreement, Columbia is licensing the Patents, Technical Information,
and the subject of any other license under this Agreement, on an “as is” basis.  Columbia makes no warranties
either express or implied of any kind, and hereby expressly disclaims any warranties, representations or guarantees of any kind
as to the Patents, Technical Information, Products and/or anything discovered, developed, manufactured, used, sold, offered for
sale, imported, exported, distributed, rented, leased or otherwise disposed of under any license granted hereunder, including
but not limited to the following:  any warranties of merchantability, title, fitness, adequacy or suitability for a particular
purpose, use or result;  any warranties as to the validity of any patent; and any warranties of freedom from infringement
of any domestic or foreign patents, copyrights, trade secrets or other proprietary rights of any party.

 

c.            
Limits of Liability.  In no event will Columbia, or its trustees, officers, faculty members, students, employees and
agents, have any liability to Company, Sublicensees, Designees, or Affiliates of the foregoing, or any Third Party arising out
of the use, operation or application of the Patents, Technical Information, Products, or anything discovered, developed, manufactured,
used, sold, offered for sale, imported, exported, distributed, rented, leased or otherwise disposed of under any license granted
hereunder by Company, Sublicensees, Designees or Affiliates of the foregoing, or any Third Party for any reason, including but
not limited to, the unmerchantability, inadequacy or unsuitability of the Patents, Technical Information, Products and/or anything
discovered, developed, manufactured, used, sold, offered for sale, imported, exported, distributed, rented, leased or otherwise
disposed of under any license granted hereunder for any particular purpose or to produce any particular result, or for any latent
defects therein.

 

d.        
Damages.  Except in connection with Company’s indemnification obligations under Section 12a, in no event will
(i) Columbia, Institutions, or their trustees, officers, faculty members, students, employees and agents, be liable to Company,
Sublicensees, Designees or Affiliates of the foregoing, or any Third Party, or (ii) will Company, its Affiliates, Designees, Sublicensees,
employees, agents or representatives be liable to Columbia or Institutions, or their trustees, officers, faculty members, students,
employees and agents,  for any consequential, incidental, special or indirect damages (including, but not limited to, from
any destruction to property or from any loss of use, revenue, profit, time or goodwill) based on activity arising out of or related
to this Agreement, whether in accordance with a claim for breach of contract or any other claim of any type.

 

    16 

     

    
 

e.         Liability
Limit.  In no event will Columbia’s liability to Company exceed the payments made to Columbia by Company under
this Agreement.

 

f.         
Essentiality.  The parties hereto acknowledge that the limitations and exclusions of liability and disclaimers of
warranty in this Agreement form an essential basis of the bargain between the parties.

 

	 

	9.

	Prohibition Against
Use of Columbia’s Name.  

 

Company shall not use the name, insignia, or symbols of Columbia, its faculties or departments, or any variation or combination thereof, or the name of any trustee, faculty member, any other employee, or student of Columbia for any purpose whatsoever without Columbia’s prior written consent; provided that, Company may disclose Columbia’s name in a factual manner only, without implication of endorsement or affiliation, to identify Columbia as the owner of the Patents and as licensor under this Agreement, in connection with any disclosure required by a regulatory agency, such as the FDA or the SEC or the rules of any exchange on which Company’s shares are traded.

 

	 

	10.

	Compliance with
Governmental Obligations.

 

a.        
Regulations.  Notwithstanding any provision in this Agreement, Columbia disclaims any obligation or liability arising
under the license provisions of this Agreement if Company or its Affiliates is charged in a governmental action for not complying
with or fails to comply with governmental regulations in the course of taking steps to bring any Product to a point of practical
application.

 

b.        
Request.  Company and its Affiliates shall comply upon reasonable notice from Columbia with all governmental requests
directed to either Columbia or Company or its Affiliates and provide all information and assistance necessary to comply with the
governmental requests.

 

c.        
Compliance.  Company and its Affiliates shall ensure that research, development, manufacturing and marketing under
this Agreement complies with all government regulations in effect including, but not limited to, Federal, state, and municipal
legislation.

 

	 

	11.

	Patent Prosecution
and Maintenance; Litigation.

 

a.         Prosecution.  Columbia, by counsel it selects and which Company has approved, in consultation with Company and any counsel appointed by Company, shall prepare, file, prosecute and maintain all Patents in Columbia’s name and in countries designated by Company, at its sole discretion.  Columbia shall instruct its patent counsel (i) to copy  Company on all correspondence related to Patents (including copies of each patent application, office action, response to office action, request for terminal disclaimer, and request for reissue or reexamination of any patent or patent application) and (ii) as requested by Company, to provide an update as to the current status of all Patents. The parties intend that consultation between the parties relating to the Patents under this Section 11 will be in accordance with a common interest in the validity, enforceability and scope of the Patents.  Each party shall treat such consultation, along with any information disclosed by each party in connection therewith (including any information concerning patent expenses), on a confidential basis, and shall not disclose such consultation or information to any party without the other party’s prior written consent. As part of Columbia and Company’s mutual interest in consultation relating to the Patents, Columbia shall use reasonable efforts to provide Company with drafts of proposed responses no less than ten (10) business days before such response is due to the relevant patent office without penalty to allow the opportunity to review and provide comment regarding communications with any patent office. If Company seeks to challenge the validity, enforceability or scope of any Patent, Columbia’s consultation obligation under this Section 11a terminates; any such termination will not affect Company’s confidentiality and nondisclosure obligations with respect to consultation or disclosure of information before such termination, and will not affect any other provisions of this Agreement (including Company’s reimbursement obligation under Section 11b). 

 

    17 

     

    

 

b.        
Reimbursement.  Company shall reimburse Columbia for patent expenses as follows:

 

(i)           
Company shall reimburse Columbia for the actual fees, costs, and expenses Columbia has incurred before, on and after the Effective
Date in preparing, filing, prosecuting and maintaining the Patents (and those patents and patent applications to which Patents
claim priority), including without limitation, attorneys’ fees, the costs of any interference proceedings, oppositions,
reexaminations, or any other ex parte or inter partes administrative proceeding before patent offices, taxes, annuities,
issue fees, working fees, maintenance fees and renewal charges, plus a five percent processing fee (collectively “Patent
Expenses”). 

 

(ii)          
Unreimbursed Patent Expenses that Columbia incurred before August 31, 2019, are “Past Patent Expenses.” 

 

(iii)        
Columbia, using reasonable efforts, estimates that Past Patent Expenses incurred through  August 31, 2019 are $[***]
(“Estimated Past Patent Expenses”), and Company shall reimburse Columbia in full for the Estimated Past Patent
Expenses no later than thirty (30) days of receipt of an invoice along with reasonable supporting documentation. 

 

(iv)         Company will pay any additional unreimbursed Past Patent Expenses within 30 days after receiving an invoice from Columbia for such additional Past Patent Expenses. 

 

(v)      
   Company will reimburse Columbia for unreimbursed Patent Expenses incurred by Columbia after the Past Patent Expenses (“Future
Patent Expenses”) no later than thirty (30) days after receiving Columbia’s invoice. 

 

(vi)        
At Columbia’s election, Columbia may require advance payment of a reasonable estimate of Future Patent Expenses (“Estimated
Future Patent Expense”), and Columbia may require Company to make such payment up to three months before the date Columbia
has chosen for the legal work to be completed.  In any event, Columbia shall give at least 14 days’ notice to Company
before the date the advance payment is due.   (Any unused balance, if any, will be credited towards future Patent Expenses,
or upon Company’s written request, returned to Company.)   No later than thirty (30) days after receiving an
invoice from Columbia for any Patent Expenses incurred in excess of the reasonable estimate, Company shall reimburse Columbia
for such excess amount. 

 

    18 

     

    

 

(vii)         Upon failure of Company to pay Patenting Expenses for any Patent(s) as required by this Section 11b, Columbia may in its discretion and upon providing notice to Company take any of the following actions:

 

(A)        abandon any or all Patent(s),

 

(B)         convert the license for any or all Patent(s) to non-exclusive, or

 

(C)         continue to prosecute any or all of the Patent(s) at its own expense, in which case Company will have no further rights to such patent(s) under this agreement.   

 

c.        
Litigation.  Subject to Sections 11d and 11f, Columbia may initiate, control, defend and settle any proceedings involving
the validity, enforceability or infringement of any Patents when in its judgment such action may be necessary, proper, and justified.  
Columbia will use its reasonable efforts to coordinate such activities with Company and provide Company with updates as it reasonably
requests.

 

d.        
Upon written notice to Columbia, Company may request that Columbia take steps to stop a third party who is selling a product that
does or will compete with a Product sold or being developed by Company or any of its Affiliates (but not a Sublicensee, or Sublicensee
Affiliate) (“Third-Party Infringer”) from infringing an issued patent falling within the definition of Patents
by providing Columbia with written evidence demonstrating prima facie infringement of specific claims of such Patent. 
Company may initiate legal proceedings against any such Third-Party Infringer in its own name and at Company’s sole expense,
unless Columbia, not later than ninety (90) days after receipt of such notice, either (i) causes such infringement to cease or
(ii) initiates legal proceedings against the Third-Party Infringer.  Company shall provide all assistance reasonably requested
by Columbia and shall not make any admission or assert any position in any legal or administrative proceeding that is inconsistent
with or adverse to any position asserted by Columbia in any proceedings against the Third-Party Infringer, without Columbia’s
prior written consent.  Notwithstanding the foregoing, Columbia has no obligation to assert more than one Patent in one jurisdiction
against the Third-Party Infringer.  Any proposed disposition or settlement of a legal proceeding filed by Company to enforce
any issued patent falling within the definition of Patents against any Third-Party Infringer is subject to Columbia’s prior
written approval, and Columbia shall not unreasonably withhold or delay its approval.  Notwithstanding the foregoing, Company’s
rights under this Section 11d apply only to claims of Patents that are exclusively licensed to Company under this Agreement and
only in the Field and Territory that are exclusively licensed to Company under this Agreement.

 

    19 

     

    
 

e.         Under a legal proceeding initiated in accordance with Section 11d, the initiating party shall first use any recovery, whether by way of settlement or judgment, from a third party to reimburse itself for its actual fees, costs and expenses incurred in connection with such proceeding.   The initiating party shall divide any remaining amounts from any such settlement or judgment as follows:  (i) Columbia shall retain or receive, as applicable, the royalty that it would have received under Section 4b(ii) had such activities been performed by Company, and  (ii)  all other remaining amounts (including any punitive or exemplary damages)  shall be divided 75% to the party who initiated or carried on the proceedings and 25% to the other party.

 

f.          If a party initiates or defends a legal proceeding concerning any Patent under this Section 11, the other party shall cooperate fully with and supply all assistance reasonably requested by the party initiating such proceeding, including without limitation, joining the proceeding as a party if requested.  The party that institutes any legal proceeding concerning any Patent under this Section 11 shall have sole control of that proceeding.

 

	 

	12.

	Indemnity and
Insurance.

 

a.            
Indemnity.  Company shall indemnify, defend, and hold harmless Columbia, its trustees, officers, faculty, employees,
students and agents, from and against any and all actions, suits, claims, demands, prosecutions, liabilities, costs, expenses,
damages, deficiencies, losses or obligations (including attorneys’ fees) based on, arising out of, or relating to third
party claims arising in connection with this Agreement to the extent arising out of: (i) the discovery, development, manufacture,
packaging, use, sale, offering for sale, importation, exportation, distribution, rental or lease of Products, even if altered
for use for a purpose not intended; (ii) the use of Patents or Technical Information by Company, Sublicensees, Designees, or their
Affiliates or customers; (iii) any representation made or warranty given by Company, Sublicensees, Designees, or their Affiliates
with respect to Products, Patents, or Technical Information; (iv) any infringement claims relating to Products, Patents, or Technical
Information; and (v) any asserted violation of the Export Laws (as defined in Section 14) by Company, Sublicensees, Designees,
or their Affiliates.  Company shall reimburse Columbia for the actual fees, costs, and expenses (including reasonable and
documented attorneys’ fees) that it may incur in enforcing this provision. Notwithstanding the foregoing, Company shall
have no obligation to indemnify, defend or hold harmless any person or entity, to the extent a subject claim or loss arises in
connection with the negligence, fraud, or willful misconduct by Columbia or any person or entity acting (or failing to act) on
its behalf, as determined by a court of competent jurisdiction.

 

b.            
Insurance.  Company shall maintain commercial general liability insurance (including product liability and contractual
liability insurance applicable to Company’s indemnity obligations under Section 12a) with reputable and financially secure
insurance carriers reasonably acceptable to Columbia to cover the activities of Company, Sublicensees, Designees, and their Affiliates,
for minimum limits of $5,000,000 combined single limit for bodily injury and property damage per occurrence and in the aggregate.
 Company shall contract for such insurance to include the Columbia, its trustees, faculty, officers, employees and agents
as additional insureds.  Company shall furnish a certificate of insurance evidencing such coverage, with thirty days’
written notice to Columbia of cancellation or material change in coverage.  The minimum amounts of insurance coverage required
herein are deemed not to be construed as creating any limitation on Company’s indemnity obligation under Section 12a of
this Agreement.

 

    20 

     

    
 

c.            
Primacy.  Company’s insurance is primary coverage; any insurance Columbia may purchase is excess and noncontributory. 
Company shall contract for its insurance to be written to cover claims incurred, discovered, manifested, or made during or after
the expiration of this Agreement.

 

d.            
Compliance.  Company shall comply with all statutory workers’ compensation and employers’ liability
requirements covering its employees concerning activities performed under this Agreement.

 

	
 

	
13.

	
Marking.  

 

Before the issuance of patents falling within the definition of Patents, Company shall mark all Patent Products made, sold, offered for sale, imported, or otherwise disposed of by Company under the license granted in this Agreement with the words “Patent Pending,” and following the issuance of one or more patents, with the numbers of such patents.  Company shall cause its Affiliates, and its Sublicensees and Designees and their Affiliates, to comply with the marking requirements of this Section 13.

 

	
 

	
14.

	
Export Control Laws.

 

a.        
Compliance.  Company agrees to comply with U.S. export laws and regulations pertaining to the export of technical
data, services and commodities, including the International Traffic in Arms Regulations (22 C.F.R. § 120 et seq.), the Export
Administration Regulations (15 C.F.R. § 730 et seq.), the regulations administered by the Treasury Department’s Office
of Foreign Assets Control (31 C.F.R. § 500, et seq.), and the Anti-Boycott Regulations (15 C.F.R. § 760) (individually
and collectively, “Export Laws”).  The parties shall cooperate with each other to facilitate compliance with
these laws and regulations.

 

b.        
Non-U.S. Persons.  Company understands that sharing controlled technical data with non-U.S. persons is an export to
that person’s country of citizenship that is subject to U.S. export laws and regulations, even if the transfer occurs in
the United States.  Company shall obtain any necessary U.S. government license or other authorization required under the
U.S. export control laws and regulations for the export or re-export of any commodity, service or technical data covered by this
Agreement, including technical data acquired from Columbia under this Agreement and products created as a result of that data.

 

    21 

     

    

 

	 

	15.

	Breach and Cure.

 

a.            
Breach.  Either party may terminate this Agreement upon written notice of a material breach that is not cured as contemplated
by subsection (b) below. Company is deemed to be in material breach of this Agreement if it should commit any of the following: 
(i) failure to pay fully and promptly amounts due under Section 4 (including without limitation, any payments required under subsection
h thereof) and payable under Section 5; (ii) failure of Company to meet any of its obligations under Section 6 of this Agreement;
(iii) failure to comply with governmental requests directed to Columbia or Company under Section 10b; (iv) failure to reimburse
Columbia for or pay fully and promptly the costs of prosecuting and maintaining Patents under Section 11; (v) failure to obtain
and maintain insurance in the amount and of the type provided for in Section 12; and (vi) failure to comply with the Export Laws
under Section 14.

 

b.            
Cure.  Either party may cure its material breach.  The right to cure shall expire if not effected within a reasonable
period of time but in no event later than sixty (60) days after notice of any breach given by the non-breaching party.

 

c.             In the event an allegedly breaching party, in good faith, disputes a breach, the dispute shall be discussed by the parties in good faith for a period of no less than thirty (30) days from the date of notification of breach. In the event such a dispute between the parties is not settled within thirty (30) days, the issue shall be escalated to the Executive Director of Columbia Technology Ventures, or his/her designee at Columbia and the Chief Executive Officer of Company, or his/her designee, to try to resolve such dispute in good faith.  If the parties are unable to resolve the dispute within ninety (90) days of such escalation, then either party may initiate dispute resolution procedures pursuant to Section 25.

 

	 

	16.

	Term of Agreement.

 

a.            
Company Technical Information and Company Patents.  This Agreement is effective as of the Effective Date and continues
in full effect until its expiration or termination in accordance with this Section 16.  In addition, upon any termination
of this Agreement under Section 16c(i) or 16(c)(ii), (i) Columbia will have the option, exercisable by written notice to Company
within sixty (60) days of such termination, to enter into good faith negotiations for a worldwide, royalty-bearing license on
commercially reasonable terms with respect to (i) all know-how, technical information and data developed by Company (“Company
Technical Information”) during the term of this Agreement, and before its termination, to the extent such Company Technical
Information is related to Company’s efforts to develop Products; (ii) all Company filed patent applications or Company
obtained patents, solely and exclusively related to any addition, development, modification and/or improvement of Products (“Company
Patents”); and (ii) Company transfer to Columbia of regulatory filings or other regulatory materials made by Company
(including, for clarity, any NDA) with respect to Products during the term of this Agreement.

 

    22 

     

    

 

b.            
Term. Unless terminated earlier under any provision of this Agreement, the term of the licenses granted hereunder and the
obligation to make royalty payments on Products extend on a country-by-country and Product-by-Product basis, until the latest
of (i) the date of expiration of the last valid claim in the last to expire of the issued patents falling within the definition
of Patents and (ii) fifteen (15) years after the first bona fide commercial sale of a Product in the country in question.

 

c.            
(i) Termination by Columbia.  The licenses granted under this Agreement may be terminated by Columbia or, at Columbia’s
option, Columbia has the right to convert any or all of such exclusive licenses granted under this Agreement to non-exclusive
licenses, with no further right to sublicense, and no right to initiate legal proceedings under Section 11, as follows: (A) 
thirty (30) days after Company’s receipt of written notice of Company’s breach if Columbia elects to terminate in
accordance with Section 6a; (B) upon written notice to Company for Company’s material breach of the Agreement and Company’s
failure to cure such material breach in accordance with Section 15b; (C) if Company files for bankruptcy protection; (D) if Company
ceases to conduct business as a going concern; and (E) if Company (or any entity or person acting on its behalf) initiates any
proceeding or otherwise asserts any claim challenging the validity or enforceability of any Patent in any court, administrative
agency or other forum.  Termination under (B) – (E) is effective upon the date the notice is sent under Section 17.

 

(ii) Termination by Company. 
Company has the right to terminate this Agreement on a country-by-country and a Product-by-Product basis as follows: (A) upon
written notice to Columbia for Columbia’s material breach of the Agreement and Columbia’s failure to cure such material
breach in accordance with Section 15b or (B) at its discretion, upon six (6) months’ written notice to Columbia.

 

d.            
Assignment of Sublicenses Upon Termination.  Upon any termination of this Agreement under Section 16c, all sublicenses
granted by Company under it shall survive provided that such Sublicensee is not in breach of the sublicense, and Columbia may,
in its sole discretion enter into a direct license with such Sublicensee, provided that Columbia’s obligations under such
sublicense are consistent with and not exceed Columbia’s obligations to Company under this Agreement and on the condition
that such sublicense agrees in a writing sent to Columbia to assume all obligations of this Agreement for the benefit of Columbia,
including the obligations to make all payments due under this Agreement, including but not limited to those specified in Section
4b, 4c, 4d, 4h and 11b.

 

e.            
Survival.  Sections 4h (Challenge), 5c (Final Payment), 5f (Records), 5g (Late Payment), 5h (Collection
Costs), 7 (Confidentiality), 8 (Disclaimer), 9 (Use of Name), 10 (Compliance), 12 (Indemnity
and Insurance), 14 (Export Laws), 16d (Assignment), 16e (Survival), 16f (Accrued Rights and Obligations),
16g (Inventory), 16h (Manufactured), 17 (Notices), 19 (Remedies), 22 (Entire Agreement),
23 (Severability), and 25 (Governing Law) will survive any termination or expiration of this Agreement.

 

f.             
Accrued Rights and Obligations.  Any termination of this Agreement does not adversely affect any rights or obligations
that may have accrued to either party before the date of termination, including without limitation, Company’s obligation
to pay all amounts due and payable under Sections 4 (including any payments required under subsection 4h), 5 and 11.

 

    23 

     

    
 

g.            
Sales of Inventory.  Upon any termination of this Agreement for any reason other than the expiration of this Agreement
under Section 16b or Company’s failure to cure a material breach of this Agreement under Section 16c(ii), Company, Sublicensees,
Designees, and their Affiliates  have the right, for one year or such longer period as the parties may reasonably agree,
to dispose of Products or substantially completed Products then on hand, and to complete orders for Products then on hand (the
“Inventory”), and shall pay royalties to Columbia with respect to such Inventory as though this Agreement had not
terminated. Within 30 days after termination, Company shall provide Columbia with an Inventory report. If this Agreement expires
under Section 16b, then Company is free after that to use the Technical Information without any further obligation to Columbia. 
For clarity, in the event of an expiration of this Agreement under Section 16(b) and after application of Section 16(h), all licenses
granted under this Agreement will be deemed fully paid-up and Company, Sublicensees, Designees, and their Affiliates may continue
to sell Inventory without any obligation to pay royalties to Columbia, Institutions or any Third Party.

 

h.            
Manufactured under Patent.  Notwithstanding anything to the contrary in the Agreement, to the extent the manufacture
of a Product is Covered By an issued patent within the definition of Patents and occurs before the expiration of such issued patent,
the sale of that Product after the expiration date of the issued patent still constitutes a royalty-bearing sale under Section
4. 

 

17.         
Notices.  Any notice required or permitted to be given under this Agreement is sufficient if in writing and is considered
given (a) when mailed by certified mail (return receipt requested), postage prepaid, or (b) on the date of actual delivery by
hand or overnight delivery, with receipt acknowledged, as follows:

 

	
if to Columbia, to:

	
Executive Director

	
 

	
Columbia Technology Ventures

	
 

	
Columbia University

	
 

	
80 Claremont Avenue, #4F, Mail Code 9606

	
 

	
New York, NY  10027-5712

 

	
copy to:

	
General Counsel

	
 

	
Columbia University

	
 

	
412 Low Memorial Library

	
 

	
535 West 116th Street, Mail Code 4308

	
 

	
New York, New York 10027

 

	
if to Company, to:

	
Tonix Pharmaceuticals, Inc..

	
 

	
509 Madison Avenue

	
 

	
Suite 1608

	
 

	
New York, NY 10022

	
 

	
Attn: Seth Lederman

 

    24 

     

    

 

	
copy to (which shall not constitute notice):

	
Lowenstein Sandler LLP

	
 

	
One Lowenstein Drive

	
 

	
Roseland, New Jersey 07068

	
 

	
Attn: Michael J. Lerner, Esq.

 

provided, further, except for notices of breach, Columbia may send correspondence related to the Patents in accordance with Section 11 to the following email address:

 

	
 

	
jessica.morris@tonixpharma.com;

 

or to such other address as a party may specify by notice under this Agreement.

 

18.         
Assignment.  This Agreement and all rights and obligations hereunder may not be assigned by either party without the
written consent of the other party; provided that, Tonix may assign this Agreement to an Affiliate or in connection with a merger,
consolidation, sale, or transfer of all or substantially all its assets or all or substantially all of its assets associated with
its business related to the Product. Any permitted assignee will be required to assume all obligations under this Agreement in
writing in connection with the permitted assignment.   Company shall provide Columbia with written notice of any such
assignment.  Any attempt to assign without compliance with this provision will be void.

 

19.         
Waiver and Election of Remedies.  The failure of any party to insist upon strict adherence to any term of this Agreement
on any occasion will not be considered a waiver or deprive that party thereafter of the right to insist upon strict adherence
to that term or any other term of this Agreement.  All waivers must be in writing and signed by an authorized representative
of the party against which such waiver is being sought.  The pursuit by either party of any remedy to which it is entitled
at any time or continuation of the Agreement despite a breach by the other will not be deemed an election of remedies or waiver
of the right to pursue any other remedies to which it may be entitled.

 

20.         
Binding on Successors.  This Agreement is binding upon and inures to the benefit of the parties and their respective
successors and assigns to the extent assignment is permitted under this Agreement.

 

21.         
Independent Contractors.  It is the express intention of the parties that the relationship between Columbia and Company
is that of independent contractors and is not that of agents, partners, or joint venturers.  Nothing in this Agreement is
intended or will be construed to permit or authorize either party to incur or represent that it has the power to incur any obligation
or liability on behalf of the other party.

 

    25 

     

    

 

22.         
Entire Agreement; Amendment.  This Agreement, together with the Exhibits, sets forth the entire agreement between
the parties concerning the subject matter hereof and supersedes all previous agreements, written or oral, concerning such subject
matter.  This Agreement may be amended only by a written agreement duly executed by the parties.

 

23.         
Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable
because it is invalid, illegal or unenforceable, the validity of the remaining provisions will not be affected, and the rights
and obligations of the parties will be construed and enforced as if the Agreement did not contain the particular provisions held
to be unenforceable, unless such construction would materially alter the meaning of this Agreement.  By way of example, but
not by way of limitation, Sections 4h(i), 4h(ii) and 4h(iii) are intended by Company and Columbia to be severable from each other,
such that if one clause is found to be unenforceable, the other clauses remain operative and in effect.

 

24.         
No Third-Party Beneficiaries. Except as expressly set forth herein, the parties hereto agree that there are no third-party
beneficiaries of any kind to this Agreement.

 

25.         
Governing Law.  This Agreement is be governed and construed in accordance with the internal substantive laws of the
State of New York applicable to agreements made and wholly performed within the State of New York and without reference to the
conflict or choice of laws principles of any jurisdiction.  Unless otherwise separately agreed in writing, the parties agree
that any and all claims arising under or related to this Agreement will be heard and determined only in either the United States
District Court for the Southern District of New York or in the courts of the State of New York located in the City and County
of New York, and the parties irrevocably agree to submit themselves to the exclusive and personal jurisdiction of those courts
and irrevocably waive any and all rights that any such party may now or hereafter have to object to such jurisdiction or the convenience
of the forum.

 

26.         
Execution in Counterparts; Facsimile or Electronic Transmission.  This Agreement may be executed in counterparts,
and by facsimile or electronic transmission.  This Agreement is not binding on the parties until it has been signed below
on behalf of each party.

 

    26 

     

    

 

IN WITNESS WHEREOF, Columbia and Company have caused this Agreement to be executed by their duly authorized representatives as of the day and year that is first written above.

 

	
 

	
THE TRUSTEES OF COLUMBIA

	
 

	
UNIVERSITY IN THE CITY OF NEW YORK

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
Executive Director,

	
 

	
 

	
Columbia Technology Ventures

	
 

	
 

	
 

	
 

	
 

	
TTS#_54339

 

	
 

	
TONIX PHARMACEUTICALS, INC.

	
 

	
 

	
 

	
 

	
By:

	
/s/ Seth Lederman

	
 

	
 

	
 

	
 

	
Title:

	
Chief Executive Officer

 

    27 

     

    
 

EXHIBIT A

 

[***]

 

    28 

     

    
 

Exhibit B

 

Technical Information described in [***]

 

    29 

     

    
 

EXHIBIT C

 

Annual Commercialization Report

 

As per the terms of the License Agreement between Columbia University and [name of Company], Licensee is required to deliver an annual commercialization report.  This report should be true and accurate, certified by an officer of the Licensee, and should describe Licensee’s, Affiliates’, and Sublicensees’ efforts to diligently commercialize Products and Services during the past contract year and for the next contract year.  For convenience, Columbia Technology Ventures (CTV) is providing the following outline to enable Licensee to report the required information. 

 

Instructions: 

	
 

	
●

	
For Yes/No questions, please place an “X” between the appropriate brackets.  

 

	Licensee
    Name and Current Address:	 

         

         

	Name
    of Primary Contact:	 
	CTV
    Agreement Number: 	 
	Effective
    Date of Original Agreement:	 
	Dates
    of any License Amendments:	 
	Report
    Period Beginning:	 
	Report
    Period Ending:	 

  

	 

	1.

	Sales:

 

Is the Licensee currently marketing or selling one or more products which incorporated the licensed technology?

 

[_] NO – Please provide
a progress report on commercialization efforts (skip to Q:3).

[_] YES – Please provide Company’s most recent sales forecasts and/or commercialization plan for each product.

 

	 

	2.

	Accounting Methodologies:

 

Have you changed the accounting methodologies used in the sales reports you currently provide to Columbia in the last year?

 

[_] NO – Accounting methodologies
have not changed.

[_] YES – Please explain:

 

	 

	3.

	Affiliates and
Sublicensees:

 

Have there been any new Affiliates or Sublicensees not previously reported?

 

    30 

     

    
 

[_] NO – No new Affiliates or Sublicensees.

[_] YES – Please list names of all Affiliates/Sublicensees:

 

(Attach copies of Affiliate/Sublicensee agreements)

 

	
 

 

 

	 

	4.

	Contractual Diligence
or Sales Milestones:

 

Please complete the table below (if not applicable, leave blank):

 

	
Milestone per agreement terms

	
Contractual 

Deadline

	
Met?

(Y/N)

	
Achievement Date

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

Comments or notes relating to these milestones:  ________________________

 

I certify that the information above is true and correct to the best of my knowledge.

 

	By	 	 	Date	 	 
	 	Signature of authorized representative	 		 	 

 

Printed Name:

 

Title:

 

CTV Contact Information:

	
Reporting:

	
(Electronic delivery is preferred)

Stephen Lewis

Business Manager, Accounts Receivable

Columbia Technology Ventures

51 Audubon Avenue, 2nd Floor

New York, NY  10035

Phone: 212-342-1176

E-mail: ctvfinance@columbia.edu

 

    31 

     

    

 

	 

 

    32Exhibit

Exhibit Number 10.1

	
	
	 

 

AMENDED AND RESTATED
MANAGEMENT AGREEMENT

by and among

Colony Credit Real Estate, Inc.,

Credit RE Operating Company, LLC

and

CLNC Manager, LLC
 

 

     
        
     
         
   
   
     
 

This AMENDED AND RESTATED MANAGEMENT AGREEMENT, effective November 6, 2019, is made and entered into by and among Colony Credit Real Estate, Inc., a Maryland corporation (the “Company”), Credit RE Operating Company, LLC, a Delaware limited liability company (“Operating Company”), and CLNC Manager, LLC, a Delaware limited liability company (the “Manager”).
 
W I T N E S S E T H:
 
WHEREAS, the Company was formed as a corporation and intends to elect to be treated as a real estate investment trust (“REIT”) 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, Operating Company is a Subsidiary of the Company; and
WHEREAS, the Company, Operating Company and the Manager entered into that certain management agreement (the “Original Management Agreement”), effective January 31, 2018 (the “Effective Date”), pursuant to which the Manager provided certain management and advisory services as set forth therein; 
WHEREAS, the Company, Operating Company and the Manager desire to amend and restate the Original Management Agreement, pursuant to which the Manager shall provide certain management and advisory services on the terms and conditions hereinafter set forth, and the Manager desires to continue to provide such services upon the terms and conditions hereof.
NOW, THEREFORE, for the mutual promises made herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 
Section 1.Definitions. 
(a)    The following terms have the following meanings assigned to them: 
“Affiliate” means, with respect to any Person, (i) any other Person directly or indirectly controlling, controlled by, or under common control with such other Person, (ii) any executive officer, general partner, managing member, control person or employee 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, general partner, managing member or control person. 
“Agreement” means this Management Agreement, as amended, restated or supplemented from time to time. 

     
        
     
         
   
   
     
 

“Bankruptcy” means, with respect to any Person, (i) the filing by such Person of a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other federal, state or foreign insolvency law, or such Person’s filing an answer consenting to or acquiescing in any such petition, (ii) the making by such Person of any assignment for the benefit of its creditors, (iii) the expiration of ninety (90) days after the filing of an involuntary petition under Title 11 of the Unites States Code, an application for the appointment of a receiver for a material portion of the assets of such Person, or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal, state or foreign insolvency law; provided that the same shall not have been vacated, set aside or stayed within such ninety (90)-day period or (iv) the entry against it of a final and non-appealable order for relief under any bankruptcy, insolvency or similar law now or hereinafter in effect. 
“Base Management Fee” means a fee equal to one and one-half percent (1.50%) of Stockholders’ Equity per annum, calculated and payable quarterly in arrears in cash. 
“Board of Directors” means the Board of Directors of the Company. 
“Business Day” means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are not required to be open. 
“Business Opportunity” shall have the meaning set forth in Section 3(b) of this Agreement.
“Claim” shall have the meaning set forth in Section 13(d) of this Agreement.
“Code” shall have the meaning set forth in the recitals of this Agreement. 
“Common Equity” means:
(i)    the sum of: 
		
	(a)
	the net proceeds received by the Company (or, without duplication, the Company’s direct Subsidiaries, such as Operating Company) from all issuances of Common Stock or such Subsidiaries’ common equity securities since inception (allocated on a pro rata daily basis for such issuances during the calendar quarter of any such issuance); plus

		
	(b)
	cumulative Core Earnings from and after the Effective Date to the end of the most recently completed calendar quarter,

3
     
     
         
   
   
     

(ii)    less:
		
	(a)
	any distributions to the Company’s common stockholders (or owners of common equity of the Company’s direct Subsidiaries, such as Operating Company) (other than the Company or any of such Subsidiaries); 

		
	(b)
	any amount that the Company or any of the Company’s direct Subsidiaries (such as Operating Company) has paid to repurchase for cash the Common Stock or common equity securities of such Subsidiaries since the Effective Date; and

		
	(c)
	any Incentive Fee paid to the Manager following the Effective Date.

With respect to that portion of the period from and after the Effective Date that is used in the calculation of the Incentive Fee, all items in the foregoing calculation (other than clause (i)(b)) shall be calculated on a daily weighted average basis.  For the avoidance of doubt, Common Equity shall include any restricted shares of Common Stock or common equity of the Company’s direct Subsidiaries (such as Operating Company) and any other shares of Common Stock or common equity of such Subsidiaries underlying awards granted under one or more of the Company’s or such Subsidiaries’ equity incentive plans.  The amount of net proceeds received shall be subject to the determination of the Board of Directors to the extent such proceeds are other than cash.
“Common Stock” means the common stock, par value $0.01, of the Company.
“Company” shall have the meaning set forth in the preamble of this Agreement.
“Company Account” shall have the meaning set forth in Section 5 of this Agreement. 
“Company Covered Person” shall have the meaning set forth in Section 13(c) of this Agreement.
“Company Parties” means the Company, Operating Company and any other Subsidiaries.
 “Confidential Information” shall have the meaning set forth in Section 6(b) of this Agreement.
“Constellation” means Colony Capital, Inc., a Maryland corporation, or its successor(s). 

4
     
     
         
   
   
     

“Core Earnings” means the net income (loss) attributable to the common stockholders of the Company or, without duplication, owners of common equity of the Company’s direct Subsidiaries (such as Operating Company), computed in accordance with GAAP, and excluding (i) non-cash equity compensation expense, (ii) the expenses incurred in connection with the formation of the Company and the Initial Public Offering, if any, including the initial underwriting discounts and commissions, (iii) the Incentive Fee, (iv) acquisition costs from successful acquisitions, (v) depreciation and amortization, (vi) any unrealized gains or losses or other similar non-cash items that are included in net income for the current quarter, regardless of whether such items are included in other comprehensive income or loss, or in net income, (vii) one-time events pursuant to changes in GAAP and (viii) certain material non-cash income or expense items that in the judgment of management should not be included in Core Earnings.  For (a) unrealized provisions for loan losses and real estate impairments and (b) clauses (vii) and (viii), such exclusions shall only be applied after (x) discussions between the Manager and the Independent Directors and (y) approval by a majority of the Independent Directors. 
“Effective Date” shall have the meaning set forth in the recitals of this Agreement.
“Effective Termination Date” shall have the meaning set forth in Section 14(a) of this Agreement. 
“Excess Funds” shall have the meaning set forth in Section 2(l) of this Agreement. 
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
“Expenses” shall have the meaning set forth in Section 11(a) of this Agreement. 
“GAAP” means generally accepted accounting principles in effect in the United States on the date such principles are applied. 
“Governing Instruments” means, with regard to any entity, the articles of incorporation or certificate of incorporation and bylaws in the case of a corporation, the certificate of limited partnership (if applicable) and the partnership agreement in the case of a general or limited partnership, the articles of formation or certificate of formation and the limited liability company agreement or operating agreement in the case of a limited liability company, the trust instrument in the case of a trust, or similar governing documents, in each case as amended from time to time. 
“Incentive Fee” means the incentive management fee calculated and payable with respect to each calendar quarter (or part thereof) that this Agreement is in effect in arrears in an amount, not less than zero, equal to the difference between: 

5
     
     
         
   
   
     

(i)    the product of (a) twenty percent (20%) and (b) the difference between (1) Core Earnings for the most recent twelve (12)-month period (or if the Effective Date is less than twelve (12) months earlier, since the Effective Date), including the current quarter, and (2) the product of (A) the Common Equity  in the most recent twelve (12)-month period (or if the Effective Date is less than twelve (12) months earlier, since the Effective Date), including the current quarter, and (B) seven percent (7%) per annum, and 
(ii)    the sum of any Incentive Fee paid to the Manager with respect to the first three (3) calendar quarters of the most recent twelve (12)-month period (or if the Effective Date is less than twelve (12) months earlier, since the Effective Date); 
provided, however, that no Incentive Fee shall be payable with respect to any calendar quarter unless Core Earnings is greater than zero for the most recently completed twelve (12) calendar quarters (or if the Effective Date is less than twelve (12) calendar quarters earlier, since the Effective Date). 
For purposes of calculating the Incentive Fee prior to the completion of a twelve (12)-month period during the term of this Agreement, Core Earnings shall be calculated on the basis of the number of days that this Agreement has been in effect on an annualized basis. 
If the Effective Termination Date does not correspond to the end of a calendar quarter, the Manager’s Incentive Fee shall be calculated for the period beginning on the day after the end of the calendar quarter immediately preceding the Effective Termination Date and ending on the Effective Termination Date, which Incentive Fee shall be calculated using Core Earnings for the twelve (12)-month period ending on the Effective Termination Date. 
“Indemnified Party” shall have the meaning set forth in Section 13(c) of this Agreement.
“Indemnifying Party” shall have the meaning set forth in Section 13(d) of this Agreement.
“Independent Directors” means the members of the Board of Directors who are not officers or employees of the Manager or any Person directly or indirectly controlling or controlled by the Manager, and who are otherwise “independent” in accordance with the Company’s Governing Instruments and the rules of the applicable National Securities Exchange on which the Common Stock is listed. 
“Initial Public Offering” means the Company’s sale of Common Stock to the public through underwriters pursuant to the Company’s Registration Statement on Form S-11.

6
     
     
         
   
   
     

“Initial Term” shall have the meaning set forth in Section 14(a) of this Agreement. 
“Investment Allocation Policy” means the investment allocation policy and procedures of Colony Capital Investment Advisors, LLC, a registered investment advisor and an Affiliate of the Manager, in effect from time to time, with respect to the allocation of investment opportunities among the Company and one or more of its clients (as the same may be amended, updated or revised from time to time).  
“Investment Company Act” means the Investment Company Act of 1940, as amended. 
“Investment Guidelines” shall have the meaning set forth in Section 2(b)(i) of this Agreement. 
“Investments” means the investments of the Company and the Subsidiaries. 
“Losses” shall have the meaning set forth in Section 13(b) of this Agreement.
“Majority-Owned Affiliate” means an Affiliate of a Person (i) that is directly or indirectly controlled by such Person and (ii) in which such Person directly or indirectly owns securities representing more than fifty percent (50%) of the outstanding securities of any class of voting securities of such Affiliate.
“Manager” shall have the meaning set forth in the preamble of this Agreement.
“Manager Covered Person” shall have the meaning set forth in Section 13(b) of this Agreement.
“Monitoring Services” shall have the meaning set forth in Section 2(b) of this Agreement. 
“National Securities Exchange” means any national securities exchange or nationally recognized automated quotation system on which the shares of the Common Stock of the Company are listed, traded, exchanged or quoted.
“Notice of Proposal to Negotiate” shall have the meaning set forth in Section 14(a) of this Agreement.
“Operating Company” shall have the meaning set forth in the preamble of this Agreement.
“Original Management Agreement” shall have the meaning set forth in the recitals of this Agreement.

7
     
     
         
   
   
     

“Other Constellation Funds” means, collectively, any other investment funds, vehicles, accounts, products and/or other similar arrangements sponsored, branded, advised and/or managed by Constellation or any of its Affiliates, 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 Constellation’s side-by-side or additional general partner investments with respect thereto.
“Person” means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, 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 any of the foregoing. 
“Portfolio Management Services” shall have the meaning set forth in Section 2(b) of this Agreement. 
“Protected Opportunity” shall have the meaning set forth in Section 3(b)(ii) of this Agreement.
“REIT” shall have the meaning set forth in the recitals of this Agreement. 
“Renewal Term” shall have the meaning set forth in Section 14(a) of this Agreement. 
“SEC” means the U.S. Securities and Exchange Commission. 
“Securities Act” means the Securities Act of 1933, as amended. 
“Stockholders’ Equity” means: 
(i)    the sum of:
		
	(a)
	the net proceeds received by the Company (or, without duplication, the Company’s direct Subsidiaries, such as Operating Company) from all issuances of the Company’s or such Subsidiaries’ common and preferred equity securities since inception (allocated on a pro rata daily basis for such issuances during the calendar quarter of any such issuance); plus

		
	(b)
	cumulative Core Earnings from and after the Effective             Date to the end of the most recently completed calendar quarter,

(ii)    less:

8
     
     
         
   
   
     

		
	(a)
	any distributions to the Company’s common stockholders (or owners of common equity of the Company’s direct Subsidiaries, such as Operating Company) (other than the Company or any of such Subsidiaries); 

		
	(b)
	any amount that the Company or any of the Company’s direct Subsidiaries (such as Operating Company) has paid to (1) repurchase for cash the Common Stock or common equity securities of such Subsidiaries or (2) repurchase or redeem for cash preferred equity securities of the Company or such Subsidiaries, in each case since the Effective Date; and

		
	(c)
	any Incentive Fee paid to the Manager following the Effective Date. 

With respect to that portion of the period from and after the Effective Date that is used in the calculation of the Base Management Fee, all items in the foregoing calculation (other than clause (i)(b)) shall be calculated on a daily weighted average basis.  For the avoidance of doubt, Stockholders’ Equity shall include any restricted shares of Common Stock or common equity of the Company’s direct Subsidiaries (such as Operating Company) and any other shares of Common Stock or common equity of such Subsidiaries underlying awards granted under one or more of the Company’s or such Subsidiaries’ equity incentive plans.  The amount of net proceeds received shall be subject to the determination of the Board of Directors to the extent such proceeds are other than cash.   
“Subsidiary” means a corporation, limited liability company, partnership, joint venture or other entity or organization of which: (i) the Company or any other subsidiary of the Company is a general partner or managing member; or (ii) voting power to elect a majority of the board of directors, trustees or others 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” shall have the meaning set forth in Section 14(b) of this Agreement. 
“Termination Notice” shall have the meaning set forth in Section 14(a) of this Agreement. 
“Treasury Regulations” means the regulations promulgated under the Code, as amended from time to time. 
(b)    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. 

9
     
     
         
   
   
     

(c)    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”, unless such phrase otherwise appears. 
Section 2.    Appointment and Duties of the Manager. 
(a)    The Company, Operating Company and each of the other Subsidiaries hereby appoint the Manager to manage the assets and the day-to-day operations of the Company, Operating Company and the other Subsidiaries subject to the 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, except where a higher standard of care is specified in this Agreement, in which case such higher standard of care shall apply. 
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, in accordance with the terms of this Agreement, to cause the duties of the Manager hereunder to be provided by third parties. 
(b)    The Manager, in its capacity as manager of the assets and the day-to-day operations of the Company and the Subsidiaries, at all times will be subject to the supervision and direction of the Board of Directors, and the Manager will have only such functions and authority as the Company may delegate to it, including the functions and authority identified herein and delegated to the Manager hereby. Without limiting the power and authority granted to the Manager pursuant to Section 2(c), the Manager will be responsible for the day-to-day operations of the Company and the Subsidiaries and will perform (or cause to be performed) such services and activities relating to the assets and operations of the Company and the Subsidiaries as may be appropriate, including: 
(i)    serving as the Company’s and the Subsidiaries’ consultant with respect to the periodic review of the investment guidelines and other parameters for the Investments, financing activities and operations, which review shall occur no less often than annually, any modification to which shall be approved by a majority of the Independent Directors (such guidelines as initially approved and attached hereto as Exhibit A, as the same may be modified, supplemented or waived with such approval, the “Investment Guidelines”); 
(ii)    identifying, investigating, analyzing and selecting possible investment opportunities and acquiring, negotiating, monitoring, financing, retaining, selling, restructuring or disposing of Investments consistent in all material respects with the Investment Guidelines; 

10
     
     
         
   
   
     

(iii)    with respect to prospective purchases, sales or exchanges of Investments, conducting negotiations on behalf of the Company and the Subsidiaries with sellers, purchasers, trustees, primary dealers, custodians and brokers and, if applicable, their respective agents and representatives; 
(iv)    negotiating and entering into, on behalf of the Company and the Subsidiaries, bank credit facilities, repurchase agreements, interest rate swap agreements, agreements relating to borrowings under programs established by the U.S. Government and/or any agencies thereunder and other agreements and instruments required for the Company and the Subsidiaries to conduct their business; 
(v)    engaging and supervising, on behalf of the Company and the Subsidiaries and at the expense of Operating Company or its designee(s), independent contractors that provide investment banking, securities brokerage, mortgage brokerage, other financial services, due diligence services, underwriting review services, legal and accounting services, and all other services (including transfer agent and registrar services) as may be required relating to the Company’s and the Subsidiaries’ operations or Investments (or potential investments); 
(vi)    advising on, preparing, negotiating and entering into, on behalf of the Company and the Subsidiaries, applications and agreements relating to programs established by the U.S. Government and/or any agencies thereunder; 
(vii)    coordinating and managing operations of any joint venture or co-investment interests held by the Company and the Subsidiaries and conducting all matters with the joint venture or co-investment partners; 
(viii)    providing executive and administrative personnel, office space and office services required in rendering services to the Company and the Subsidiaries, including office space for any persons who are employed directly by the Company or its Subsidiaries and who are not simultaneously employed by the Manager or any of its Affiliates; 
(ix)    administering the day-to-day operations and performing and supervising the performance of such other administrative functions necessary to the management of the Company and the Subsidiaries as may be agreed upon by the Manager and the Board of Directors, including the services in respect of any equity incentive plans, the collection of revenues and the payment of the debts and obligations of the Company and the Subsidiaries and maintenance of appropriate computer services to perform such administrative functions; 

11
     
     
         
   
   
     

(x)    communicating on behalf of the Company and the Subsidiaries with the holders of any of their 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, including website maintenance, logo design, analyst presentations, investor conferences and annual meeting arrangements; 
(xi)    counseling the Company in connection with policy decisions to be made by the Board of Directors; 
(xii)    evaluating and recommending to the Board of Directors hedging strategies and engaging in hedging activities on behalf of the Company and the Subsidiaries, consistent with such strategies as modified from time to time, while maintaining the Company’s qualification as a REIT and within the Investment Guidelines; 
(xiii)    counseling the Company regarding the maintenance of its qualification as a REIT and monitoring compliance with the various REIT qualification tests and other rules set forth in the Code and Treasury Regulations thereunder and using commercially reasonable efforts to cause the Company to qualify as a REIT for tax purposes; 
(xiv)    counseling the Company and the Subsidiaries regarding the maintenance of their exemptions from the status of an investment company required to register under the Investment Company Act, monitoring compliance with the requirements for maintaining such exemptions and using commercially reasonable efforts to cause them to maintain such exemptions from such status; 
(xv)    furnishing reports and statistical and economic research to the Company and the Subsidiaries regarding their activities and services performed for the Company and the Subsidiaries by the Manager and its Affiliates; 
(xvi)    monitoring the operating performance of Investments and providing periodic reports with respect thereto to the Board of Directors, including comparative information with respect to such operating performance and budgeted or projected operating results; 

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(xvii)    investing and reinvesting on behalf of the Company and the Subsidiaries any money and securities of the Company and the Subsidiaries (including investing in short-term Investments pending investment in other Investments, payment of fees, costs and expenses and payment of dividends or other distributions to stockholders, members and partners of the Company and the Subsidiaries) and advising the Company and the Subsidiaries as to their capital structure and capital raising; 
(xviii)    causing the Company and the Subsidiaries to retain qualified accountants, tax professionals and legal counsel, as applicable, to assist in developing appropriate accounting procedures and systems, internal controls and other compliance procedures and testing systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to REITs and, if applicable, domestic taxable REIT subsidiaries, and to conduct quarterly compliance reviews with respect thereto; 
(xix)    assisting the Company and the Subsidiaries in qualifying to do business in all applicable jurisdictions and to obtain and maintain all appropriate licenses; 
(xx)    assisting the Company and the Subsidiaries in complying with all regulatory requirements applicable to them with respect to their 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, the Securities Act, or by the applicable National Securities Exchange on which the Common Stock is listed; 
(xxi)    assisting the Company and the Subsidiaries in taking all necessary actions to enable them to make required tax filings and reports, including soliciting stockholders for all information required 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 on behalf of the Company and the Subsidiaries, either directly with the issuer or with a broker or dealer (including any affiliated broker or dealer); 
(xxiii)    handling and resolving on behalf of the Company and the Subsidiaries all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company and/or the Subsidiaries may be involved or to which they may be subject arising out of their day-to-day operations (other than with the Manager or its Affiliates), subject to such reasonable 

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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 the Company and the Subsidiaries or on their behalf to be commercially reasonable or commercially customary and within any budgeted parameters or expense guidelines set by the Board of Directors from time to time; 
(xxv)    advising the Company and the Subsidiaries with respect to and structuring (1) long-term financing vehicles for their portfolio of assets and (2) the offering and selling of securities publicly or privately in connection with any such structured financing; 
(xxvi)    serving as the Company’s and the Subsidiaries’ consultant with respect to decisions regarding any financings, hedging activities or borrowings undertaken by the Company and/or the Subsidiaries, including (1) assisting the Company and/or the Subsidiaries in developing criteria for debt and equity financing that are specifically tailored to the Company’s and the Subsidiaries’ investment objectives, and (2) advising the Company and the Subsidiaries with respect to obtaining appropriate financing for the Investments; 
(xxvii)    arranging marketing materials, advertising, industry group activities (such as conference participations and industry organization memberships) and other promotional efforts designed to promote the Company’s and the Subsidiaries’ business; and
(xxviii)     performing such other services as may be required from time to time for the management of, and other activities relating to, the assets, business and operations of the Company and the Subsidiaries as the Board of Directors shall reasonably request or as the Manager shall deem appropriate under the particular circumstances. 
Without limiting the foregoing, the Manager will perform portfolio management services (the “Portfolio Management Services”) on behalf of the Company and the Subsidiaries with respect to the Investments. Such services will include, but not be limited to, consulting with the Company and the Subsidiaries on the purchase and sale of, and other investment opportunities in connection with, 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 and the Subsidiaries’ portfolio of assets; acting as a liaison between the Company and the Subsidiaries 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 and the Subsidiaries with respect 

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to any activities provided by third parties. Such Monitoring Services will include, but not be limited to, negotiating servicing agreements; acting as a liaison between servicer providers of the assets and the Company and the Subsidiaries; reviewing 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)    For the period and on the terms and conditions set forth in this Agreement, the Company, Operating Company and each of the other Subsidiaries hereby constitutes, appoints and authorizes the Manager, and any officer of the Manager acting on its behalf from time to time, as its true and lawful agent and attorney-in-fact, in its name, place and stead, to negotiate, execute, deliver and enter into such finance agreements and arrangements and securities repurchase and reverse repurchase agreements and arrangements, brokerage agreements, interest rate swap agreements, “to be announced” forward contracts, agreements relating to borrowings under programs established by the U.S. Government and/or any agencies thereunder and such other certificates, agreements, instruments and authorizations on their behalf, on such terms and conditions as the Manager, acting in its sole and absolute discretion, deems necessary or appropriate. This power of attorney is deemed to be coupled with an interest.  In performing such services, as an agent of the Company, Operating Company and each of the other Subsidiaries, the Manager shall have the right to exercise all powers and authority that 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 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 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 that may at any time be encumbrances upon any Investment, irrespective of by whom the same were made;

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(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;
(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; and
(xv)    to take any and all other actions as are necessary or appropriate in connection with the Investments.
The Manager shall be authorized to represent to third parties that it has the power to perform the actions that it is authorized to perform under this Agreement. 
(d)    The Manager may enter into agreements with other parties, including its Affiliates (in accordance with Section 11(a)), for the purpose of engaging one or more parties for and on behalf of the Company and the Subsidiaries, and, except as otherwise agreed, at the sole cost and expense of Operating Company or its designee(s), to provide credit analysis, risk management services, asset management and/or other services to the Company and the Subsidiaries (including Portfolio Management Services and Monitoring Services) pursuant to agreement(s) with terms that are then customary for agreements regarding the provision of services to companies that have assets similar in type, quality and value to the assets of the Company and the Subsidiaries; 

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provided that, with respect to Portfolio Management Services, the Manager shall remain liable for the performance of such Portfolio Management Services. 
(e)    To the extent that the Manager deems necessary or advisable, the Manager may, from time to time, and at the sole cost and expense of the Manager, propose to retain one or more additional entities for the provision of sub-advisory services to the Manager, in order to enable the Manager to provide the services to the Company and the Subsidiaries specified by this Agreement; provided that any agreements relating to such sub-advisory services shall (i) be on terms and conditions substantially identical to the terms and conditions of this Agreement or otherwise not adverse to the Company and the Subsidiaries and (ii) not result in an increased Base Management Fee or additional expenses payable hereunder. 
(f)    The Manager may designate, engage and retain, for and on behalf of the Company and the Subsidiaries and, at the sole cost and expense of Operating Company or its designee(s), such services of accountants, legal counsel, appraisers, insurers, brokers, transfer agents, registrars, investment banks, financial advisors, tax advisors, due diligence firms, engineers, banks and other lenders and other professionals, consultants and service providers as the Manager deems necessary or advisable in connection with the management and operations of the Company and the Subsidiaries, which may include Affiliates of the Manager (in accordance with Section 11(a)).
(g)    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 Operating Company or its designee(s), prepare, or cause to be prepared, with respect to any Investment, reports regarding the operating and asset performance and other information reasonably requested by the Company. 
(h)    The Manager shall prepare, or cause to be prepared, at the sole cost and expense of Operating Company or its designee(s), all reports, financial or otherwise, with respect to the Company and the Subsidiaries reasonably required by the Board of Directors in order for the Company and the Subsidiaries to comply with their Governing Instruments or any other materials required to be filed with any governmental body or agency, including the SEC, and shall prepare, or cause to be prepared, at the sole cost and expense of Operating Company or its designee(s), all materials and data necessary to complete such reports and other materials, including an annual audit of the Company’s and the Subsidiaries’ books of account by a nationally recognized registered independent public accounting firm. 
(i)    The Manager shall prepare, or cause to be prepared, at the sole cost and expense of Operating Company or its designee(s), regular reports for the Board of Directors to enable the Board of Directors to review the Company’s and the Subsidiaries’ acquisitions, portfolio composition and characteristics, credit quality, performance and compliance with the Investment Guidelines and other policies approved by the Board of Directors. 

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(j)    If requested by the Company, the Manager shall provide, or cause to be provided, at the sole cost and expense of Operating Company or its designee(s), such internal audit, compliance and control services as may be required for the Company and the Subsidiaries to comply with applicable law (including the Securities Act and the Exchange Act), regulation (including SEC regulations) and the rules and requirements of the applicable National Securities Exchange on which the Common Stock is listed and as otherwise reasonably requested by the Company or the Board of Directors from time to time. 
(k)    Each year, the Manager shall prepare, or cause to be prepared, at the sole cost and expense of the Operating Company or its designee(s), an annual operating budget of the Company, which shall be subject to the approval of the Board of Directors.  In addition, any material changes to such annual operating budget shall be subject to the approval of the Board of Directors.
(l)    Notwithstanding anything contained in this Agreement to the contrary, except to the extent that the payment of additional money is proven by the Company to have been required as a direct result of the Manager’s acts or omissions that result in the right of the Company and the Subsidiaries to terminate this Agreement pursuant to Section 15 of this Agreement, the Manager shall not be required to expend money (“Excess Funds”) in connection with any expenses that are required to be paid for or reimbursed by Operating Company or its designee(s) pursuant to Section 11 in excess of that contained in any applicable Company Account or otherwise made available by Operating Company or its designee(s) 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 and the Subsidiaries under Section 14(a) of this Agreement to terminate this Agreement due to the Manager’s unsatisfactory performance. 
(m)    In performing its duties under this Section 2, the Manager shall be entitled to rely reasonably on qualified experts and professionals (including accountants, legal counsel and other service providers) hired by the Manager at Operating Company’s or Operating Company’s designee(s)’s sole cost and expense.
Section 3.    Devotion of Time; Additional Activities of the Manager; Allocation of Investment Opportunities; Non-Solicitation; Restrictions. 
(a)    The Manager and its Affiliates will provide the Company and the Subsidiaries with a management team, including a chief executive officer, president and chief financial officer (provided that each such executive officer shall be satisfactory to and approved by the Board of Directors), along with appropriate support personnel, to provide the management services to be provided by the Manager to the Company and the Subsidiaries hereunder, the members of which team shall devote such portion of their time to the management of the Company and the Subsidiaries as is necessary and appropriate to enable the Company to operate its business, commensurate with the Company’s level of activity. None of the officers or employees of the Manager will be dedicated exclusively to the Company and the Subsidiaries.  The Manager and Constellation shall provide 

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reasonable access to their respective investment professionals in order to support the day-to-day operations of the Company. 
(b)    Subject to the terms of the Investment Allocation Policy, none of Constellation or any of its Affiliates, including the Manager, or any of its or their officers, directors, employees or personnel, shall have any duty to refrain from directly or indirectly: 
(i)    engaging in any business opportunity, including business opportunities in the same or similar business activities or lines of business in which the Company or any of its Affiliates may, from time to time, be engaged or propose to engage (a “Business Opportunity”), including (x) investing in, or rendering advisory services to others investing in, any type of business (including investments that meet the principal investment objectives of the Company), whether or not the investment objectives or policies of any such other Person are similar to those of the Company, including the sponsoring, branding, advising and/or managing of any Other Constellation Funds that employ investment objectives or strategies that overlap, in whole or in part, with the Investment Guidelines of the Company, (y) buying, selling or trading any securities or investments for their own accounts or for the account of others for whom Constellation or any of its Affiliates, including the Manager, or any of its or their officers, directors, employees or personnel may be acting, and (z) receiving fees or other compensation or profits from such activities described in this Section 3(b)(i), which shall be for Constellation’s (and/or its Affiliates’) sole benefit; or 
(ii)    competing with the Company, and none of Constellation or any of its Affiliates, including the Manager, shall be liable to the Company for breach of any duty (statutory, contractual or otherwise (other than for breach by Constellation or any of its Affiliates, including the Manager, of any express restrictions on competition contained in any written contract between Constellation or any of its Affiliates, including the Manager, on the one hand, and the Company, on the other hand)) by reason of the fact Constellation or any of its Affiliates, including the Manager, engages in any such activities, and the doctrine of corporate opportunity or any similar doctrine applicable to the Company shall not apply to Constellation or any of its Affiliates, including the Manager. The Company hereby renounces any interest or expectancy in, or in being offered an opportunity to participate in, any Business Opportunity presented to Constellation or any of its Affiliates, including the Manager, unless such Business Opportunity is offered to an Affiliate of Constellation who is a director or officer of the Company and such Business Opportunity is expressly offered to such director or officer in his or her capacity as a director or officer of the Company (a “Protected Opportunity”). Except for a Protected Opportunity, in the event that Constellation or any of its Affiliates, including the Manager, acquires knowledge of a Business Opportunity, Constellation or its applicable Affiliate, as the case may be, shall have no duty to communicate or 

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offer such Business Opportunity to the Company or any of its Affiliates and shall not be liable to the Company by reason of the fact that Constellation or any of its Affiliates, including the Manager, pursues or acquires such Business Opportunity for itself, directs such Business Opportunity to another Person, or does not present such opportunity to the Company or its subsidiaries. 
(c)    While information and recommendations supplied to the Company and the Subsidiaries 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, such information and recommendations 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 Constellation Funds and their investors, including Other Constellation Funds in which the Manager or its Affiliates may have a beneficial interest, as described more fully in Section 3(d)).  The Manager and the Company acknowledge and agree that, notwithstanding anything to the contrary contained herein, (i) Affiliates of the Manager sponsor, brand, advise and/or manage one or more Other Constellation Funds and may in the future sponsor, brand, advise and/or manage additional Other Constellation Funds, (ii) the Manager will allocate investment opportunities that overlap with the Investment Guidelines of the Company and such Other Constellation Funds in accordance with the Investment Allocation Policy, to the extent applicable, and (iii) nothing in this Agreement shall prevent the Company and the Subsidiaries from entering into transactions that constitute co-investments with Other Constellation Funds; provided that any such transaction described in this clause (iii) is (1) permitted pursuant to the Investment Guidelines or (2) receives or has received the prior approval of the Board of Directors (including a majority of the Independent Directors).  The Investment Allocation Policy may not be materially amended in any manner that is reasonably likely to be adverse to the Company, unless such amendment has been approved by a majority of the Independent Directors.
(d)    In connection with the services of the Manager hereunder, the Company acknowledges and/or agrees that (i) as part of Constellation’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 Constellation Funds), and that conflicts may arise with respect to the allocation of personnel between the Company and the Subsidiaries and one or more Other Constellation 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 Constellation Funds (in lieu of the Company and the Subsidiaries) in accordance with the Investment Allocation Policy, to the extent applicable, (iii) 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 Constellation Funds and related portfolio entities, and while such fees may give rise to conflicts of interest, the Company and the Subsidiaries will not receive the benefit of any such fees, and (iv) the terms and conditions 

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of the Governing Instruments of such Other Constellation Funds (including with respect to the economic, reporting and other rights afforded to investors in such Other Constellation Funds) are materially different from the terms and conditions applicable to the Company and the Subsidiaries and their respective equityholders, and none of the Company, the Subsidiaries or any such equityholders (in such capacity) shall have the right to receive the benefit of any such different terms applicable to investors in such Other Constellation Funds as a result of an investment in the Company or the Subsidiaries or otherwise.  
(e)    Where investments that are consistent with the Company’s Investment Guidelines are shared with one or more Other Constellation Funds, the Manager may, but is not obligated to, aggregate sales and purchase orders of securities and other investments of the Company and the Subsidiaries with similar orders being made simultaneously for such Other Constellation Funds, if in the Manager’s judgment, such aggregation is likely to result generally in an overall economic benefit to the Company and the Subsidiaries.  The determination of such economic benefit to the Company and the Subsidiaries by the Manager is subjective and represents the Manager’s evaluation that the Company and the Subsidiaries are benefited by relatively better purchase or sales prices, lower commission expenses, increased access to investment opportunities, beneficial timing of transactions or a combination of these and other factors.
(f)    Managers, partners, officers, employees, personnel and agents of the Manager or Affiliates of the Manager may serve as directors, officers, employees, partners, personnel, agents, nominees or signatories for the Company and/or any Subsidiary, to the extent permitted by their Governing Instruments 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 or the Subsidiaries, such persons shall use their respective titles in the Company or the Subsidiaries. 
(g)    Subject to Section 2(d), the Manager is authorized, for and on behalf of the Company, and at the sole cost and expense of Operating Company or its designee(s), to employ securities dealers for the purchase and sale of Investments as the Manager deems necessary or appropriate, in its sole discretion. 

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(h)    The Company agrees to take, or cause to be taken, all actions reasonably required to permit and enable the Manager to carry out its duties and obligations under this Agreement, including all steps reasonably necessary to allow the Manager to make any filing or application, or provide any notice, required to be made or provided under the Securities Act, Exchange Act, Code, or other applicable law, rule or regulation, including the rules and regulations of the applicable National Securities Exchange on which the Common Stock is listed, 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 or any Subsidiary. 
(i)    In the event of a termination of this Agreement by the Company pursuant to Section 14(a), for two (2) years after such termination of this Agreement, the Company and the Subsidiaries shall not, and shall cause any successor to the Manager not to, 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, a Subsidiary or any successor to the Manager.  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(i) by the Company, the Subsidiaries or any successor to the Manager, including injunctive relief.
Section 4.    Agency. The Manager shall act as agent of the Company and the Subsidiaries in making, acquiring, financing and disposing of Investments, disbursing and collecting the funds of the Company and the Subsidiaries, paying the debts and fulfilling the obligations of the Company and the Subsidiaries, supervising the performance of professionals engaged by or on behalf of the Company and the Subsidiaries and handling, prosecuting and settling any claims of or against the Company and the Subsidiaries, the Board of Directors, holders of the Company’s securities or representatives or assets of the Company and the Subsidiaries.
Section 5.    Bank Accounts. At the direction of the Board of Directors, the Manager may establish and maintain as an agent on behalf of the Company, 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 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. 

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Section 6.    Records; Confidentiality. 
(a)    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. 
(b)    The Manager shall keep confidential any and all confidential, proprietary or non-public information of or concerning the performance, terms, business, operations, activities, personnel, training, finances, actual or potential investments, plans, compensation, clients or investors of the Company or the Subsidiaries, written or oral, obtained by the Manager in connection with the services rendered under this Agreement (“Confidential Information”) and shall not disclose any such Confidential Information (or use the same except in furtherance of its duties under this Agreement) to unaffiliated third parties, except: (i) to officers, directors, employees, agents, representatives or advisors of the Manager or its Affiliates who need to know such Confidential Information for the purpose of rendering services hereunder or in furtherance of Constellation’s asset management or capital markets businesses; (ii) with the prior written consent of the Board of Directors; (iii) to legal counsel, accountants and other professional advisors; (iv) to appraisers, lenders or other potential financing sources, co-originators, custodians, administrators, brokers, commercial counterparties or any similar entity and others in the ordinary course of the Company’s and the Subsidiaries’ business; (v) to governmental agencies or officials having jurisdiction over the Company or any Subsidiary; (vi) in connection with (1) any governmental or regulatory filings of the Company or any Subsidiary (including any filings made by Constellation) or (2) subject to an undertaking of confidentiality, non-disclosure and non-use, disclosure or presentations to investors of the Company or Constellation; (vii) to existing or prospective investors in Other Constellation Funds and their advisors to the extent such persons reasonably request such information, subject to an undertaking of confidentiality, non-disclosure and non-use; (viii) otherwise with the consent of the Company, including pursuant to a separate agreement entered into between the Manager and/or any Other Constellation Fund and the Company; (ix) as required by law or legal process to which the Manager or any person to whom disclosure is permitted hereunder is a party; or (x) to the extent reasonably required in connection with the exercise of any remedy hereunder; provided, however, that with respect to clause (ix), it is agreed that, to the extent practicable and so long as not legally prohibited, the Manager will (w) provide the Company with written notice within a reasonable period of time of the existence, terms and circumstances surrounding the law or legal process requiring disclosure of such Confidential Information, (x) consult with the Company on the advisability of taking steps to resist or narrow such disclosure obligation, (y) if disclosure of such Confidential Information is required, furnish only such portion of the Confidential Information as the Manager is advised by counsel is legally required to be disclosed, and (z) cooperate, at the Company’s expense, with any action reasonably requested by the Company in its efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such portion of the Confidential Information that is required to be disclosed. Notwithstanding the foregoing, Confidential Information shall not include information that (A) is in the public domain at the time it is received by the Manager, (B) becomes public other than by 

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reason of a disclosure by the Manager in breach of this Agreement, (C) was already in the possession of the Manager prior to the time it was received by the Manager from the Company or its Affiliates, (D) was obtained by the Manager from a third party and, to the Manager’s knowledge, was not disclosed in breach of an obligation of such third party not to disclose such information, or (E) was developed independently by the Manager without using or referring to any of the Confidential Information. The provisions of this Section 6(b) shall survive the expiration or earlier termination of this Agreement for a period of one (1) year. 
Section 7.    Obligations of Manager; Restrictions. 
(a)    The Manager shall require each seller or transferor of Investments to the Company and the Subsidiaries 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 Investment Guidelines; 
(ii)    would adversely and materially affect the qualification of the Company as a REIT under the Code; 
(iii)    would adversely and materially affect the Company’s or any Subsidiary’s status as an entity intended to be exempted or excluded from registration under the Investment Company Act; or 
(iv)    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 the Company’s Governing Instruments, code of conduct or other compliance or governance policies and procedures or those of the applicable National Securities Exchange on which the Common Stock is listed. 

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If the Manager is ordered to take any such action by the Board of Directors, the Manager shall promptly notify the Board of Directors if it is the Manager’s judgment that such action would adversely and materially affect the qualification of the Company as a REIT, the Company’s or any Subsidiary’s status as an entity intended to be exempted or excluded from registration under the Investment Company Act, or violate any such law, rule or regulation or the Governing Instruments. Notwithstanding the foregoing, the Manager and its officers, directors, members, managers and employees shall not be liable to the Company or any Subsidiary or to any director or stockholder of the Company or any Subsidiary for acts or omissions performed in accordance with and pursuant to this Agreement, except as provided in Section 13 of this Agreement. 
(c)    The Board of Directors may periodically review the Investment Guidelines and the Company’s and the Subsidiaries’ portfolio of Investments, but is not required to review each proposed investment; provided that the Manager shall not consummate on behalf of the Company or any Subsidiary any transaction (other than a transaction that constitutes a co-investment, which is addressed in Section 3(c)(iii) above) that involves (i) the sale of any investment to, (ii) the acquisition of any investment from, (iii) investing in, (iv) merging with, (v) arranging financing from, or (vi) providing financing to, Constellation, any Other Constellation Fund or any of their Affiliates, unless such transaction (A) is on terms no more favorable to Constellation, any Other Constellation Fund or any of their Affiliates than would be obtained from a third party on an arm’s length basis and (B) has been approved 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, Constellation and the Other Constellation Funds (including as more fully described in Sections 3(c) and 3(d) above) and the Manager will seek to resolve any such conflicts of interest in a fair and equitable manner in accordance with the Investment Allocation Policy, to the extent applicable, and its prevailing policies and procedures with respect to conflicts resolution among Other Constellation Funds generally, there can be no assurance that any such conflicts will be resolved in favor of the Company and the Subsidiaries and only those transactions set forth above shall be required to be presented for approval by 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 and/or the Subsidiaries 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 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); provided further that if (x) the majority of the Independent Directors approve any matter or transaction presented for their approval despite a conflict of interest after the Manager has disclosed all material facts relating to such conflict of interest or (y) the Manager acts in a manner, or pursuant to standards or procedures, approved by a majority of the Independent Directors with respect to such conflicts of interest that arise or may arise from time to time, then the Manager shall not have any liability to the Company, the Subsidiaries or any of their respective equityholders by reason of such conflict of interest for actions in respect of such matter taken in good faith by any of them, including actions in the pursuit of their own interests. If a majority of 

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the Independent Directors determine in their periodic review of transactions that a particular transaction does not comply with the Investment Guidelines, then a majority of the Independent Directors will consider what corrective action, if any, can be taken. The Manager shall be permitted to rely upon the direction of the Secretary of the Company to evidence the approval of the Board of Directors or the Independent Directors with respect to a proposed investment. 
(d)    The Manager shall not consummate on behalf of the Company or any Subsidiary any offering or repurchase of the Company’s common or preferred equity securities or debt obligations unless such offering or repurchase has been authorized and/or approved by the Board of Directors or a duly constituted committee of the Board of Directors.
(e)    The Manager agrees to be bound by all policies and procedures, including the Company’s code of conduct and other compliance and governance policies and procedures, applicable to the Manager and its officers, directors, members, managers and employees that are adopted by the Board of Directors from time to time, including those required under the Exchange Act, the Securities Act, or by the applicable National Securities Exchange on which the Common Stock is listed, 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 Constellation) who are involved in the business and affairs of the Company, to be bound by such policies and procedures to the extent applicable to such Persons. 
(f)    The Manager shall at all times during the term of this Agreement 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, in an amount which is comparable to that customarily maintained by other managers or servicers of similar assets. 
Section 8.    Base Management Fee. 
(a)    During the Initial Term and any Renewal Term, Operating Company or its designee(s) shall pay the Manager the Base Management Fee quarterly in arrears, commencing with the quarter in which the Effective Date occurs (with such initial and final payments pro-rated based on the number of days during such initial and final quarter, respectively, that this Agreement was in effect). The Base Management Fee is payable independent of the performance of the Company, any of the Subsidiaries or the Investments. 

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(b)    The Manager shall compute each installment of the Base Management Fee within thirty (30) 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 of the Base Management Fee shall thereafter promptly be delivered to the Board of Directors and, upon such delivery, payment of such installment of the Base Management Fee shown therein shall, subject in any event to Section 14(a) of this Agreement, be due and payable in cash no later than the date that is five (5) Business Days after the date of delivery to the Board of Directors of such computations. 
(c)    The Base Management Fee is subject to adjustment pursuant to and in accordance with the provisions of Section 14(a) of this Agreement. 
Section 9.    Incentive Fee.
(a)    The Incentive Fee shall be payable in arrears in cash, in quarterly installments commencing with the quarter in which the Effective Date occurs. The Manager shall compute each quarterly installment of the Incentive Fee 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 of Directors and, upon such delivery, payment of such installment of the Incentive Fee 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 Directors of such computations.
Section 10.    Other Compensation Matters.  As a component of the Manager’s compensation, the Company or any Subsidiary may issue to the Manager or personnel of the Manager stock-based or other equity-based compensation under the Company’s or any such Subsidiary’s equity incentive plan.
Section 11.    Expenses of the Company. 
(a)    Operating Company or its designee(s) shall pay all of the expenses of the Company Parties and shall reimburse the Manager for documented expenses of the Manager incurred on behalf of the Company Parties (collectively, the “Expenses”) excepting only those expenses that are specifically the responsibility of the Manager pursuant to Section 2 of this Agreement.  Notwithstanding anything contained herein to the contrary, the Manager shall have the right to cause any services contemplated by this Agreement (including pursuant to Sections 2(d) and 2(f)) to be rendered by the Manager’s personnel or Affiliates (and Operating Company or its designee(s) shall pay or reimburse the Manager or its applicable Affiliate performing such services for the documented cost thereof); provided that such services may be provided by personnel or Affiliates of the Manager only to the extent that such costs and reimbursements are no greater than those that would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s length basis. Without limiting the generality of the foregoing, it is specifically agreed that the following costs and expenses of the Company Parties shall be paid by Operating Company or its designee(s) and shall not be paid by the Manager or Affiliates of the Manager: 

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(i)    fees, costs and expenses in connection with the Initial Public Offering, if any;
(ii)    fees, costs and expenses in connection with the issuance and transaction costs incident to the Company’s and the Subsidiaries’ unconsummated investments and the acquisition, negotiation, structuring, trading, settling disposition and financing of the Company’s and the Subsidiaries’ consummated Investments, 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;
(iii)    the cost of legal, tax, accounting, consulting, auditing, finance, administrative, investment banking, capital markets and other similar services rendered for the Company and the Subsidiaries by providers retained by the Manager, which may include personnel or Affiliates of the Manager; 
(iv)    the compensation and expenses of the Company’s directors (excluding those directors who are officers of the Manager) and the cost of “errors and omissions” liability insurance to indemnify the Company’s directors and officers; 
(v)    interest, fees and expenses arising out of borrowings made by the Company or any Subsidiary, including costs associated with the establishment and maintenance of any of the Company’s or any Subsidiary’s credit facilities, other financing arrangements, or other indebtedness of the Company or any Subsidiary (including commitment fees, accounting fees, legal fees, closing and other similar costs) or any of the Company’s or any Subsidiary’s securities offerings; 
(vi)    expenses connected with communications to holders of the Company’s or any Subsidiary’s securities 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 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 stock on any National Securities Exchange, the fees payable by the Company to any such National Securities Exchange in connection with its listing, costs of preparing, printing and mailing the Company’s annual report to its stockholders and proxy materials with respect to any meeting of the Company’s stockholders; 

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(vii)    technology-related expenses, including costs associated with any computer software or hardware, electronic equipment or purchased information technology services from third party vendors, in each case that is used by the Company and/or the Subsidiaries; 
(viii)    expenses incurred by managers, officers, personnel and agents of the Manager for travel solely on the Company’s behalf and other out-of-pocket expenses incurred by managers, officers, personnel and agents of the Manager 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 or any Subsidiary’s securitizations or any of their securities offerings; 
(ix)    costs and expenses incurred with respect to market information systems and publications, research publications and materials, and settlement, clearing and custodial fees and expenses applicable solely to the Company or any Subsidiary; 
(x)    the Company’s and the Subsidiaries’ allocable share of the compensation, including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (1) the Manager’s personnel serving as the Company’s chief financial officer, based on the percentage of his or her time spent managing the Company’s and the Subsidiaries’ affairs, and (2) other corporate finance, tax, accounting, internal audit, legal risk management, operations, compliance and other non-investment personnel of the Manager or its Affiliates who spend all or a portion of their time managing the Company’s and the Subsidiaries’ affairs (and the Company’s and the Subsidiaries’ share of such costs shall be based upon the percentage of time devoted by such personnel of the Manager or its Affiliates to the Company’s and the Subsidiaries’ affairs);
(xi)    compensation and expenses of the Company’s custodian, transfer agent and trustee, if any; 
(xii)    the cost of maintaining compliance with all U.S. federal, state and local rules and regulations or with any other regulatory agency; 

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(xiii)    the costs and expenses relating to ongoing regulatory compliance matters and regulatory reporting obligations relating to the Company’s and the Subsidiaries’ activities;
(xiv)    all taxes and license fees; 
(xv)    all insurance costs incurred in connection with the operation of the Company’s and the Subsidiaries’ business, except for the costs attributable to the insurance that the Manager elects to carry for itself and its personnel; 
(xvi)    costs and expenses incurred in contracting with third parties for the servicing of the assets of the Company and the Subsidiaries; 
(xvii)    all other costs and expenses relating to the Company’s and the Subsidiaries’ business and investment operations, including the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of Investments, including appraisal, reporting, audit and legal fees; 
(xviii)    expenses relating to any office(s) or office facilities, including disaster backup recovery sites and facilities, maintained for the Company and the Subsidiaries or Investments separate from the office or offices of the Manager; 
(xix)    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 of Directors to or on account of holders of the Company’s or any Subsidiary’s securities, including in connection with any dividend reinvestment plan; 
(xx)    the costs of any litigation or other pending or threatened proceedings (whether civil, criminal or otherwise) involving the Company or any Subsidiary or their respective assets and the amount of any judgment or settlement against the Company or any Subsidiary, or against any trustee, director, partner, member or officer of the Company or of any Subsidiary in his, her or its capacity as such for which the Company or any Subsidiary is required to indemnify such Person by any court or governmental agency; and
(xxi)    all other expenses actually incurred by the Manager (except as described below) that are reasonably necessary for the performance by the Manager of its duties and functions under this Agreement; 
provided, however, that with respect to expenses incurred by the Manager in connection with assets acquired by or services rendered to the Company together with any Other Constellation Funds, Operating Company or its designee(s) shall only be responsible for the Company Parties’ pro rata share of such expenses, based on the ratio of the amount of capital contributed by the Company Parties for any investment in such assets compared to the total capital invested in such assets. 

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(b)    Operating Company or its designee(s) will be required to pay the Company’s and the Subsidiaries’ pro rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Manager and its Affiliates required for the operations of the Company and the Subsidiaries. These expenses will be allocated between the Manager, on the one hand, and the Company and the Subsidiaries, on the other hand, based on the ratio of the Company’s and the Subsidiaries’ proportion of gross assets compared to all remaining gross assets managed or held by Constellation and its Affiliates, including the Manager, as calculated at each quarter end. The Manager and the Company will modify this allocation methodology, subject to the Independent Directors’ approval, if the allocation becomes inequitable (i.e., if the Company and the Subsidiaries become highly leveraged compared to Constellation or the Other Constellation Funds). Operating Company or its designee(s) will also be required to pay the rent for office space and other office, internal and overhead expenses incurred by persons who are employed directly by the Company or the Subsidiaries and who are not simultaneously employed by the Manager or any of its Affiliates.  
(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 constitute a waiver of reimbursement for similar expenses in future periods. 
(d)    The provisions of this Section 11 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 12.    Calculations of Expenses. The Manager shall prepare a written statement documenting in reasonable detail the Expenses during each calendar quarter, and shall use commercially reasonable efforts to deliver such statement to the Company within thirty (30) days after the end of each calendar quarter (subject to reasonable delays resulting from delays in the receipt of information). Expenses shall be reimbursed by Operating Company or its designee(s) to the Manager no later than the fifteenth (15th) Business Day immediately following the date of delivery of such statement; provided, however, that such reimbursements may be offset by the Manager against amounts due to the Company and the Subsidiaries from the Manager. The provisions of this Section 12 shall survive the expiration or earlier termination of this Agreement. 
Section 13.    Limits of the Manager’s Responsibility; Indemnification. 

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(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.  To the fullest extent permitted by law, the Manager and its Affiliates, including their respective directors, members, officers, managers, employees, trustees, control persons, partners, stockholders and equityholders, will not be liable to the Company, any Subsidiary, the Board of Directors, the Company’s stockholders or any Subsidiary’s stockholders, members or partners for any acts or omissions by any such Person (including trade errors that may result from ordinary negligence, including errors in the investment decision making process or in the trade process), performed in accordance with and pursuant to this Agreement, whether by or through attempted piercing of the corporate veil, principles of fiduciary duty and agency, by or through a claim, by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, or otherwise, except by reason of acts or omission constituting gross negligence, fraud, willful misconduct, bad faith or reckless disregard of the Manager’s duties under this Agreement.  
(b)    The Company, to the fullest extent permitted by law, shall indemnify and hold harmless the Manager, its Affiliates and the Manager’s and its Affiliates’ respective officers, directors, members, managers, employees, stockholders, partners, trustees, control persons and equityholders (each a “Manager Covered Person”) from and against any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever, including reasonable legal fees and other expenses reasonably incurred (collectively, “Losses”), in respect of, arising out of or in connection with the business and operations of the Company or any Subsidiary or any action taken or omitted by any such Manager Covered Person in good faith by or on behalf of the Company or any Subsidiary pursuant to authority granted by this Agreement, except where found by a court of competent jurisdiction to be attributable to the gross negligence, fraud, willful misconduct or bad faith of any such Manager Covered Person or the reckless disregard by such Manager Covered Person of their duties under this Agreement. In the event that any Manager Covered Person becomes involved in any capacity in any suit, action, proceeding or investigation in connection with any matter arising out of or in connection with the Manager’s duties hereunder, the Company will periodically reimburse such Manager Covered Person for its reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith; provided, however, that prior to any such advancement of expenses (i) such Manager Covered Person shall provide the Company with an undertaking to promptly repay to the Company the amount of any such expenses paid to it if it shall ultimately be determined that such Manager Covered Person is not entitled to be indemnified by the Company as herein provided in connection with such suit, action, proceeding or investigation, and (ii) such Manager Covered Person shall provide the Company with a written affirmation that such Manager Covered Person in good faith believes that it has met the standard of conduct necessary for indemnification hereunder; provided, further, however, that the failure for any reason of the Company to advance funds to any Manager Covered Person shall in no way affect such Manager Covered Person’s right to reimbursement of such costs 

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if it is ultimately determined that such Manager Covered Person was entitled to indemnification pursuant to the terms hereof.
(c)    The Manager, to the fullest extent permitted by law, shall indemnify and hold harmless the Company, Operating Company and any other Subsidiary, including their respective officers, directors, members, managers, employees, stockholders, partners, trustees, control persons and equityholders (each, a “Company Covered Person”; a Manager Covered Person and a Company Covered Person are each sometimes hereinafter referred to as an “Indemnified Party”) of and from any and all Losses in respect of, arising out of or in connection with (i) any action taken or omitted by the Manager that is found by a court of competent jurisdiction to constitute gross negligence, fraud, willful misconduct, bad faith or reckless disregard of the Manager’s duties under this Agreement or (ii) any claims by the Manager’s employees relating to the terms and conditions of their employment by the Manager.  
(d)    An Indemnified Party will promptly notify the party from whom indemnification is sought pursuant to Section 13(b) or 13(c), as applicable (the “Indemnifying Party”), of the occurrence of any action, claim, suit, proceeding or investigation (a “Claim”) likely to result in an indemnification request pursuant hereto and shall describe the nature of the Claim; provided, however, that any failure by such Indemnified Party to notify the Indemnifying Party will not relieve the Indemnifying Party from its obligations hereunder, except to the extent that such failure shall have actually prejudiced the Indemnifying Party’s ability to eliminate or reduce any liability or the defense of such action.  Each Indemnified Party hereby undertakes, and the Indemnifying Party hereby accepts each Indemnified Party’s undertaking, to repay any and all such amounts so advanced if it shall ultimately be determined that such Indemnified Party is not entitled to be indemnified therefor.  The Indemnifying Party will be entitled to take control, at its own cost, in the defense of said Claim, including the selection of counsel, in the Indemnifying Party’s sole discretion.  In such a case, the Indemnified Party shall provide the Indemnifying Party with all necessary information and shall consult with the Indemnified Party on the conduct of its defense. Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such third-party claim, and the use of reasonable efforts to make employees available to provide additional information and explanation of any material provided hereunder.  Should the Indemnifying Party so elect to assume the defense of a third-party claim, the Indemnifying Party will not be liable to any Indemnified Party for legal expenses subsequently incurred by such Indemnified Party in connection with the defense thereof, unless the third-party claim involves potential conflicts of interest between the Indemnified Party and the Indemnifying Party.  If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense (except as provided in the immediately preceding sentence), separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense.  No Indemnified Party shall settle, compromise or consent to the entry of a judgment with respect to any pending or threatened Claim in respect of which indemnification can be sought under this Agreement without the Indemnifying Party’s prior written consent, in its sole discretion.  The Indemnifying Party shall accept no liability or settlement 

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in the context of Claims the consequences of which would be likely to give rise to indemnification pursuant hereto, without the prior written consent of the applicable Indemnified Party, unless such settlement agreement includes a full and unreserved clause of exclusion of liability of any Indemnified Party in the context of such dispute.
(e)    Notwithstanding any provision of this Section 13 to the contrary, to the fullest extent permitted by law, (i) each Indemnified Party must use commercially reasonable efforts to pursue all other sources of indemnification, advancement, insurance and contribution it has against third parties, including portfolio companies (or any legal entity in which the Indemnifying Party holds an investment), with respect to the amounts to which it is entitled under this Section 13, (ii) any such third party, including any portfolio company (or any other legal entity in which the Indemnifying Party holds an investment), shall be the indemnitor of first resort and any obligation of the Indemnifying Party to provide payments under this Section 13 for amounts to which an Indemnified Party is entitled are secondary, (iii) if the Indemnifying Party pays or causes to be paid any amounts under this Section 13 that should have been paid by a third party, including any portfolio company (or any legal entity in which the Indemnifying Party holds an investment), then (A) the Indemnifying Party shall be fully subrogated to the rights of such Indemnified Party with respect to such payment, (B) such Indemnified Party shall assign to the Indemnifying Party all of such Indemnified Party’s rights to advancement, indemnification and contribution from or with respect to such third party, including any portfolio company (or any legal entity in which the Indemnifying Party holds an investment), and (C) such Indemnified Party shall cooperate with the Indemnifying Party (at the expense of the Indemnifying Party) in its efforts to recover such payments through indemnification or otherwise, including filing a claim against such third party in the name of the Indemnified Party, (iv) the Indemnified Party will not agree to subordinate or otherwise compromise or release indemnity from a third party, including any portfolio company (or any legal entity in which the Indemnifying Party holds an investment) and (v) in the event the Indemnifying Party has previously provided separate indemnification or advancement in connection therewith, the Indemnified Party shall reimburse the Indemnifying Party with any subsequent proceeds it receives from such third parties, including portfolio companies (or other legal entities in which the Indemnifying Party holds an investment).  The intent of this Section 13(e) is to set forth the relative responsibilities of the Indemnifying Party and other third parties, including portfolio companies (or other legal entities in which the Indemnifying Party holds an investment), who have overlapping indemnity, advancement or contribution obligations to an Indemnified Party.  Nothing in this Section 13(e) is intended to diminish the indemnification and advancement rights given by the Indemnifying Party to an Indemnified Party, including the right to receive prompt payment of valid indemnification and advancement claims if any third party is unwilling or unable to do so promptly. 

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(f)    The provisions of this Section 13 shall survive the expiration or earlier termination of this Agreement. 
Section 14.    Term; Termination. 
(a)    Until this Agreement is terminated in accordance with its terms, this Agreement shall continue in operation until the third (3rd) anniversary of the Effective Date (the “Initial Term”) and shall be automatically renewed for a one (1)-year term on each anniversary date thereafter (a “Renewal Term”) unless the Company or the Manager elects not to renew this Agreement in accordance with this Section 14(a) or Section 14(c), respectively.  The Company may elect not to renew this Agreement upon the expiration of the Initial Term or any Renewal Term by providing at least one hundred eighty (180) days’ prior written notice to the Manager (the “Termination Notice”) only if there has been an affirmative vote of at least two-thirds of the Independent Directors that (i) there has been unsatisfactory performance by the Manager that is materially detrimental to the Company and the Subsidiaries or (ii) the compensation payable to the Manager, in the form of Base Management Fees and Incentive Fees, or the amount thereof, is unfair to any of the Company Parties. If the Company issues the Termination Notice, the Company shall be obligated to (x) specify the reason for nonrenewal in the Termination Notice (pursuant to either clause (i) or (ii) of the immediately preceding sentence of this paragraph) and (y) pay the Manager the Termination Fee on or before the last day of the Initial Term or Renewal Term (the “Effective Termination Date”).  Notwithstanding the foregoing provisions of this Section 14(a), 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 such compensation by delivering to the Company, no fewer than one hundred and twenty (120) 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. Upon receipt by the Company of a Notice of Proposal to Negotiate, the Company (represented by the Independent Directors) and the Manager shall endeavor to negotiate in good faith the revised compensation payable to the Manager under this Agreement. If the Manager and at least two-thirds of the Independent Directors agree to the terms of the revised compensation to be payable to the Manager within one hundred and twenty (120) 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 in this Agreement, except that the compensation payable to the Manager shall be the revised compensation then agreed upon by the Company and the Manager. The Company, Operating Company and the Manager agree to execute and deliver an amendment to this Agreement setting forth such revised compensation promptly upon reaching an agreement regarding the same. In the event that the Company and the Manager are unable to agree to the terms of the revised compensation to be payable to the Manager during such one hundred and twenty (120)-day period, this Agreement shall terminate, such termination to be effective on the date that is the later of (A) ten (10) days following the end of such one hundred and twenty (120)-day period and (B) the Effective Termination Date originally set forth in the Termination Notice, and Operating Company shall be 

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obligated to pay the Manager the Termination Fee upon the effective date of termination as provided in Section 14(b) below. Nothing in this Section 14(a) shall prohibit the Company from discussing or negotiating with any Person the terms of a replacement manager and management agreement during such one hundred and twenty (120)-day period.
(b)    In recognition of the upfront effort required by the Manager to structure and acquire the assets of the Company and the Subsidiaries and the commitment of resources by the Manager, in the event that this Agreement is terminated in accordance with the provisions of Section 14(a) or Section 15(b) 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 three (3) times the sum of (i) the average annual Base Management Fee and (ii) the average annual Incentive Fee, in each case earned by the Manager during the twenty-four (24)-month period immediately preceding the most recently completed calendar quarter prior to the date of termination. The obligation of the Company to pay the Termination Fee shall survive the termination of this Agreement. 
(c)    No later than one hundred eighty (180) days prior to the expiration of the Initial Term or 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 upon the expiration of the Initial Term or the applicable Renewal Term following the delivery of such notice. The Company shall not be required to pay the Termination Fee to the Manager if the Manager terminates this Agreement pursuant to this Section 14(c). 
(d)    In the event of a termination or non-renewal of this Agreement, the Manager shall reasonably 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 15.    Termination for Cause. 
(a)    The Company may terminate this Agreement at any time, including during the Initial Term, upon at least thirty (30) days’ prior written notice of termination from the Board of Directors to the Manager, without payment of any Termination Fee, if: 
(i)    the Manager engages in any act or omission that constitutes gross negligence, bad faith, fraud or willful misconduct; provided, however, that if any of the actions or omissions described in this Section 15(a)(i) 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 after the Manager’s receipt of written notice thereof from the Company, then the Company may not terminate this Agreement pursuant to this Section 15(a)(i);

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(ii)    the Manager, its agents or its assignees breaches any material provision of this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof specifying such breach and requesting that the same be remedied in such thirty (30) day period (or forty-five (45) days after written notice of such breach if the Manager takes steps to cure such breach within thirty (30) days of the written notice); 
(iii)    there is a commencement of any proceeding relating to the Bankruptcy or insolvency of the Manager or Constellation, including an order for relief in an involuntary Bankruptcy case or the authorization or filing by the Manager or Constellation of a voluntary Bankruptcy petition; 
(iv)    the Manager is convicted (including a plea of nolo contendere) of a felony 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; or 
(v)    there is a dissolution of the Manager. 
(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 breach this Agreement in any material respect or otherwise be unable to perform its obligations hereunder and such breach shall continue for a period of thirty (30) days after written notice thereof from the Manager to the Company specifying such breach and requesting that the same be remedied in such thirty (30)-day period. The Company shall be required to pay the Termination Fee to the Manager if this Agreement is terminated pursuant to this Section 15(b). 
(c)    The Manager may terminate this Agreement in the event the Company becomes regulated or required to register as an “investment company” under the Investment Company Act, with such termination deemed to have occurred immediately prior to such event. If the Manager terminates this Agreement pursuant to this Section 15(c), the Company shall not be required to pay the Termination Fee. 
Section 16.    Survival; Action Upon Termination. From and after the effective date of termination or non-renewal of this Agreement, pursuant to Sections 14, 15 or 17 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 or not renewed pursuant to Section 14(a) or 15(b), the applicable Termination Fee. Upon such termination, the Manager shall forthwith: 

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(i)    after deducting any accrued compensation and reimbursement for 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; 
(iii)    deliver to the Board of Directors all property and documents of the Company or any Subsidiary 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 6 of this Agreement with respect to the retained documents; and 
(iv)    Sections 3(i), 6, 11, 12, 13, 14, 15, 16 and 25 shall survive the termination or non-renewal of this Agreement. 
Section 17.    Assignment. 
(a)    This Agreement shall terminate automatically, without payment of the Termination Fee, in the event of its assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company after the approval of a majority of the Independent Directors; provided, however, that the Manager may, at any time, (i) assign this Agreement without the consent of the Company or the approval of the Independent Directors to any Majority-Owned Affiliate of Constellation and/or (ii) delegate to one or more if its Affiliates, including sub-advisors where applicable, the performance of any of its responsibilities hereunder without the consent of the Company or the approval of the Independent Directors, so long as the Manager remains liable for any such Affiliate’s performance, in each case so long as such assignment or delegation does not require the Company’s consent under the Investment Advisers Act of 1940, as amended (but if any such consent is required, the Company shall not unreasonably withhold, condition or delay its consent). 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. 

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(b)    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 that 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 18.    Release of Money or Other Property Upon Written Request. The Manager agrees that any money or other property of the Company or any 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 thirty (30) days following such request. The Manager shall not be liable to the Company, any Subsidiary, the Board of Directors, or the Company’s or a Subsidiary’s stockholders, members 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 second sentence of this Section 18. The Company shall indemnify the Manager and its officers, directors, personnel, managers, employees, stockholders, partners and agents from and against any and all Losses that arise out of or 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 18. Indemnification pursuant to this provision shall be in addition to any right of the Manager to indemnification under Section 13 of this Agreement. 
Section 19.    Representations and Warranties. 
(a)    The Company and Operating Company hereby make the following representations and warranties to the Manager, all of which shall survive the execution and delivery of this Agreement: 
(i)    Each of the Company and Operating Company is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the State of Maryland or the State of Delaware, as applicable, and each is, or shall be prior to the commencement of services hereunder, qualified to do business and in good standing in Maryland or Delaware, as applicable.  Each of the Company and Operating Company has all power and authority required to execute and deliver this Agreement and to perform all its duties and obligations hereunder.  

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(ii)    The execution, delivery and performance of this Agreement by each of the Company and Operating Company has been duly authorized by all necessary action on the part of the Company and Operating Company, respectively.   
(iii)    This Agreement constitutes a legal, valid, and binding agreement of each of the Company and Operating Company, enforceable against each of the Company and Operating Company in accordance with its terms, except as limited by Bankruptcy, insolvency, receivership and similar laws from time to time in effect and general principles of equity, including those relating to the availability of specific performance. 
(b)    The Manager hereby makes the following representations and warranties to the Company, all of which shall survive the execution and delivery of this Agreement: 
(i)    The Manager is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware and is, or shall be prior to the commencement of services hereunder, qualified to do business and in good standing in Delaware. The Manager has all power and authority required to execute and deliver this Agreement and to perform all its duties and obligations hereunder, subject only to its qualifying to do business and obtaining all requisite permits and licenses required as a result of or relating to the nature or location of any of the assets or properties of the Company and the Subsidiaries (which it shall do promptly after being required to do so). 
(ii)    The execution, delivery and performance of this Agreement by the Manager has been duly authorized by all necessary action on the part of the Manager.
(iii)    This Agreement constitutes a legal, valid, and binding agreement of the Manager, enforceable against the Manager in accordance with its terms, except as limited by Bankruptcy, insolvency, receivership and similar laws from time to time in effect and general principles of equity, including those relating to the availability of specific performance.  
Section 20.    Notice.  All notices, requests and other communications given or made under this Agreement must be in writing and will be deemed given if personally delivered, electronic transmission or mailed by registered or certified mail (return receipt requested) to the persons and addresses set forth below or such other place as such party may specify by like notice (provided that notices of a change of address will be effective only upon receipt thereof).

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	The Company or Operating Company:
	Colony Credit Real Estate, Inc.

	 
	515 South Flower Street

	 
	44th Floor

	 
	Los Angeles, CA 90071

	 
	Attention: Director, Legal Department

	 
	 

	 
	Email: clny-legal@clny.com

	 
	 

	 
	 

	The Manager:
	CLNC Manager, LLC

	 
	515 South Flower Street

	 
	44th Floor

	 
	Los Angeles, CA 90071

	 
	Attention: Director, Legal Department

	 
	 

	 
	Email: clny-legal@clny.com

	 
	 

Notices will be deemed to have been received (a) on the date of receipt if (i) personally delivered or (ii) upon receipt of an appropriate electronic answerback or confirmation when so delivered by electronic submission (to such email address specified above or another email address as such person may subsequently designate by notice given hereunder) only if followed by overnight or hand delivery or (b) on the date that is five (5) business days after dispatch by registered or certified mail.
Section 21.    Binding Nature of Agreement; Successors and Assigns; No Third Party Beneficiaries. 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. Except for Section 3 and Section 13, none of the provisions of this Agreement are intended to be, nor shall they be construed to be, for the benefit of any third party.
Section 22.    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. 
Section 23.    Amendments. This Agreement may be amended or modified only by an agreement in writing signed by all parties hereto. 

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Section 24.    No Implied Waivers; Remedies. No failure or delay on the part of any party in exercising any right, privilege, power or remedy under this Agreement, and no course of dealing, shall operate as a waiver of any such right, privilege, power or remedy; nor shall any single or partial exercise of any right, privilege, power or remedy under this Agreement preclude any other or further exercise of any such right, privilege, power or remedy or the exercise of any other right, privilege, power or remedy. No waiver shall be asserted against any party unless signed in writing by such party. The rights, privileges, powers and remedies available to the parties are cumulative and not exclusive of any other rights, privileges, powers or remedies provided by statute, at law, in equity or otherwise. Except as provided in this Agreement, no notice to or demand on any party in any case shall entitle such party to any other or further notice or demand in any similar or other circumstances or constitute a waiver of the right of the party giving such notice or making such demand to take any other or further action in any circumstances without notice or demand. 
Section 25.    Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE. EACH OF THE PARTIES HEREBY IRREVOCABLY AGREES THAT THE COURTS OF THE STATE OF DELAWARE SHALL HAVE EXCLUSIVE JURISDICTION IN CONNECTION WITH ANY ACTIONS OR PROCEEDINGS ARISING BETWEEN THE PARTIES UNDER THIS AGREEMENT. EACH OF THE PARTIES HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF SAID COURTS FOR ANY SUCH ACTION OR PROCEEDING. EACH OF THE PARTIES HEREBY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING IN SAID COURTS. 
Section 26.    Waiver of Jury Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT 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.
Section 27.    Headings. The headings contained in this Agreement are for convenience only and shall not affect the construction or interpretation of any provisions of this Agreement. 
Section 28.    Severability. If any provision of the Agreement shall be held to be invalid, the remainder of the Agreement shall not be affected thereby. 

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Section 29.    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. 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their representatives on the date first written above.    
 
	
				
	 
	Colony Credit Real Estate, Inc.

	 
	 

	 
	By: /s/  David A. Palamé        

	 
	      Name: David A. Palamé

	 
	      Title:   General Counsel

	

	 

	 
	Credit RE Operating Company, LLC

	 
	 

	 
	 

	 
	By:  /s/  David A. Palamé      

	 
	      Name: David A. Palamé

	 
	      Title:    Vice President

	 
	 

	 
	CLNC Manager, LLC

	 
	 

	 
	By:  /s/  Mark M. Hedstrom   

	 
	      Name: Mark M. Hedstrom

	 
	      Title:    Vice President

[Signature Page to Amended and Restated Management Agreement]
             
     
         
   
   
     

Exhibit A
The Board of Directors has adopted the following investment guidelines: 
		
	a.
	No investment shall be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes; 

		
	b.
	No investment shall be made that would cause the Company or any Subsidiary to be required to be registered as an investment company under the Investment Company Act; 

		
	c.
	Until appropriate investments can be identified, the Manager may invest the proceeds of the Company’s Initial Public Offering, if any, and any future offerings in interest-bearing, short-term investments, including money market accounts and/or U.S. treasury securities, that are consistent with the Company’s intention to qualify as a REIT and maintain its exemption from registration under the Investment Company Act;

		
	d.
	No investment shall require prior approval of the Board of Directors or a majority of the Independent Directors solely because such investment constitutes (1) a co-investment made by and between the Company or any Subsidiary, on the one hand, and one or more investment vehicles formed, sponsored and managed by Constellation or any of its subsidiaries, on the other hand, regardless of when such co-investment is made, or (2) a transaction related to any such co-investment; 

		
	e.
	Any investment with a total net commitment by Operating Company of greater than 5% of Operating Company’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by Operating Company being the aggregate amount of funds directly or indirectly committed by Operating Company to such investment net of any upfront fees received by the Company or any Subsidiary in connection with such investment); and

		
	f.
	Any investment with a total net commitment by Operating Company of between 3% and 5% of Operating Company’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by Operating Company being the aggregate amount of funds directly or indirectly committed by Operating Company to such investment net of any upfront fees received by the Company or any Subsidiary in connection with such investment), unless the investment falls within specific parameters approved by the Board of Directors and in effect at the time such commitment is made.

A-1
     
        
     
         
   
   
     
 

These Investment Guidelines may be amended, restated, modified, supplemented or waived pursuant to the approval of the Board (which must include a majority of the Independent Directors) and the Manager from time to time, but without the approval of the Company’s stockholders.

A-2

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