Document:

exv10w4

Exhibit 10.4

FORM OF

MANAGEMENT AGREEMENT

     THIS MANAGEMENT AGREEMENT is made as of [•], 2009 by and among Foursquare Capital Corp., a
Maryland corporation (the “Company”), and Foursquare Capital Management, LLC, a Delaware
limited liability company (together with its permitted assignees, the “Manager”).

     WHEREAS, the Company is a newly organized corporation that intends to elect to be taxed as a
real estate investment trust for U.S. federal income tax purposes; and

     WHEREAS, the Company desires to retain the Manager to provide investment advisory services to
the Company and its Subsidiaries on the terms and conditions hereinafter set forth, and the Manager
wishes to be retained to provide such services.

     NOW THEREFORE, in consideration of the mutual covenants and agreements herein set forth, the
parties hereto agree as follows:

     Section 1. Definitions. For purposes of this Agreement, the following terms shall
have the indicated meanings:

     “Administrative Services Agreement” means the administrative services agreement
between the Manager and AllianceBernstein, as may be amended from time to time.

     “Advisor” means AllianceBernstein.

     “Advisor Indemnified Party” has the meaning set forth in Section 12(c) of this
Agreement.

     “Advisory Agreement” means the advisory agreement, dated as of the date hereof,
between the Manager and the Advisor, as may be amended from time to time.

     “Affiliate” means, with respect to any Person, (i) any other Person directly or
indirectly controlling, controlled by, or under common control with such Person, (ii) any executive
officer or general partner of such Person, (iii) any member of the board of directors or board of
managers (or body performing similar functions) of such Person, and (iv) any legal entity for which
such Person acts as an executive officer or general partner.

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

     “AllianceBernstein” means AllianceBernstein L.P., or an Affiliate thereof (excluding
the Manager).

     “Bankruptcy” means, with respect to any Person, (a) 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, (b) the making by such Person of any assignment for the benefit of its creditors, (c) the
expiration of 60 days after the filing of an involuntary petition relating to such Person under
Title 11 of the United 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 such Person or its debts
with respect to such Person under any other federal, state or foreign insolvency law, provided that
the same shall not have been vacated, set aside or stayed within such 60-day period, or (d) the
entry against such Person of a final and non-appealable order for relief with respect to such
Person as a debtor under any bankruptcy, insolvency or similar law now or hereinafter in effect.

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

     “Cause” has, with respect to the relevant Sub-Advisor or the Consultant, the meaning
set forth in the relevant Sub-Advisory Agreement or Consulting Agreement, as applicable.

     “Ceiling
Amount” has the meaning set forth in Section 8(f) of this Agreement.

     “Change of Control” has the meaning set forth in Section 16(a) of this
Agreement.

     “Co-Investing Party” has the meaning set forth in Section 8(g) of this
Agreement.

     “Co-Investment” means, with respect to any asset class, an investment in an asset of
such asset class by the Company together with the Advisor, any Sub-Advisor, the Consultant or any
combination thereof.

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

     “Clayton” means Clayton Holdings LLC, including its successors and permitted assigns.

     “Committee Chairman” has the meaning set forth in Section 8(a) of this
Agreement.

     “Company” has the meaning set forth in the preamble.

     “Company Account” has the meaning set forth in Section 5 of this Agreement;

     “Company Indemnified Party” has the meaning set forth in Section 12(f) of this
Agreement.

     “Company PPIF Interests” has the meaning set forth in Section 9(a) of this
Agreement.

     “Conduct Policies” has the meaning set forth in Section 2(l) of this
Agreement.

     “Consultant” means Flexpoint, or, subject to the terms of this Agreement, any
successor in interest thereto; provided that, no successor in interest to the Consultant shall be
the Consultant unless approved by the Advisor acting with the consent of the Manager (acting in
accordance with Section 3.3 of the Manager LLC Agreement). Consultant shall also include
any replacement that, at the election of the Advisor, acting with the consent of the Manager
(acting in accordance with Section 3.3 of the Manager LLC Agreement), becomes a Consultant
to the Advisor pursuant to a consulting agreement with the Advisor and the Manager in form and
substance substantially similar to the Consulting Agreement.

     “Consultant Indemnified Party” has the meaning set forth in Section 12(e) of
this Agreement.

     “Consulting Agreement” means the Consulting Agreement, dated as of the date hereof,
among Flexpoint, the Advisor and the Manager, as may be amended from time to time.

     “Core Earnings” is a non-GAAP measure and is defined as GAAP net income (loss)
excluding (i) non-cash equity compensation expense and (ii) any unrealized gains, losses or other
non-cash items

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recorded in the period, regardless of whether such items are included in other comprehensive
income or loss, or in net income, and (iii) one-time events pursuant to changes in GAAP and certain
other non-cash charges after discussions between the Manager and the Company’s Independent
Directors and after approval by a majority of the Company’s Independent Directors.

     “Core Earnings Offset” means any portion of a Core Loss from a period prior to the
Rolling Four Quarters Period that has not been taken into account in reducing the amount of Core
Earnings (but not below zero) from a period subsequent to the period in which such Core Loss
occurred in connection with the calculation of the Incentive Fee for any period.

     “Core Loss” means a loss with regard to any period as calculated in accordance with
the definition of Core Earnings.

     “Designating Party” has the meaning set forth in Section 8(b) of this
Agreement.

     “Disposal Amount” has the meaning set forth in Section 8(f) of this Agreement.

     “Effective Date” means the date hereof.

     “Effective Termination Date” has the meaning set forth in Section 14(a) of
this Agreement.

     “Eligible Professional” means, with respect to the Advisor or any Sub-Advisor, a
person that is a senior investment professional who is an officer or employee thereof.

     “Excess Funds” has the meaning set forth in Section 2(j) of this Agreement.

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

     “Expenses” has the meaning set forth in Section 10(a) of this Agreement.

     “Flexpoint” means Flexpoint Fund, L.P., including its successors.

     “GAAP” means generally accepted accounting principles, as applied in the United
States.

     “Governing Instruments” means, with regard to any entity, the articles of
incorporation and bylaws in the case of a corporation, certificate of limited partnership (if
applicable) and the partnership agreement in the case of a general or limited partnership, the
articles of formation and the 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 may be
amended from time to time.

     “Greenfield” means Greenfield Advisors, LLC, including its successors and its
permitted assigns.

     “Greenfield Sub-Advisory Agreement” means the sub-advisory agreement, dated as of the
date hereof, among the Manager, the Advisor and Greenfield, as may be amended from time to time.

     “Guidelines” has the meaning set forth in Section 2.1(b)(i) of this Agreement.

     “Incentive Fee” means the incentive management fee calculated and payable to the
Manager by the Company quarterly in arrears in an amount equal to 20% of the amount by which Core
Earnings, for the Rolling Four Quarters Period, plus the amount of the Incentive Fee, if any,
payable during any of the fiscal quarters in such Rolling Four Quarters Period and less the amount
of any Core Earnings Offset, exceeds the product of (i) the weighted average of the issue price per
share of all offerings of shares made

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by the Company multiplied by the weighted average number of common shares of the Company
outstanding in such quarter and (ii) 8%, commencing with the quarter in which this Agreement was
executed (with such initial payment pro-rated based on the number of days during such quarter that
this Agreement was in effect). For the initial four quarters following the consummation of the
Initial Public Offering, Core Earnings will be calculated from the date of the Initial Public
Offering on an annualized basis. If any incentive fee is payable by the Legacy Securities PPIF to
its designated investment manager, the Manager shall waive any incentive fees payable to the
Manager in respect of the Company PPIF Interests.

     “Indemnitee” has the meaning set forth in Section 12(f) of this Agreement.

     “Indemnitor” has the meaning set forth in Section 12(g) 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, if applicable, the rules of any national securities exchange on which the
Company’s common stock is listed.

     “Initial Public Offering” means the sale by the Company of the Company’s common stock
in the initial public offering of the Company registered with the Securities and Exchange
Commission.

     “Initial Term” has the meaning set forth in Section 14(a) of this Agreement.

     “Institutional Indemnitors” has the meaning set forth in Section 12(h) of this
Agreement.

     “Interests” has the meaning set forth in the Manager LLC Agreement.

     “Investment Committee” has the meaning set forth in Section 8(a) of this
Agreement.

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

     “Investment Parameters” has the meaning set forth in Section 8(f) of this
Agreement.

     “Investments” means the investments of the Company and the Subsidiaries.

     “IC
Report” means a report produced by the Investment Committee
containing: [•].

     “Last Appraiser” has the meaning set forth in Section 9(d) of this Agreement.

     “Legacy Securities PPIF” means AllianceBernstein Legacy Securities (Delaware), L.P., a
feeder fund of a public-private investment fund established under the PPIP’s Legacy Securities
Program.

     “Management Fee” has the meaning set forth in Section 9(a) of this Agreement.

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

     “Manager Indemnified Party” has the meaning set forth in Section 12(b) of this
Agreement.

     “Manager LLC Agreement” shall mean the Amended and Restated Limited Liability Company
Agreement of the Manager, as may be amended from time to time.

     “Manager Successorship Proposal” has the meaning set forth in Section 14(d) of this
Agreement.

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     “MBS” means mortgage backed securities.

     “Members” has the meaning set forth in
the Manager LLC Agreement.

     “Monitoring Services” has the meaning set forth in Section 2(b) of this
Agreement.

     “Non-Voting Member” has the meaning set forth in Section 8(d) of this Agreement.

     “Notice of Proposal to Negotiate” has the meaning set forth in Section 14(a)
of this Agreement.

     “NYSE” means the New York Stock Exchange Euronext.

     “Percentage Interests” has the meaning set forth in the Manager LLC Agreement.

     “Person” means any individual, corporation, partnership, association, 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.

     “Proposal Period” has the meaning set forth in Section 14(d) of this Agreement.

     “Portfolio Management Services” has the meaning set forth in Section 2(b) of
this Agreement.

     “PPIP” means the U.S. Government’s Public-Private Investment Program.

     “Purchase Notice” has the meaning set forth in Section 8(g) of this Agreement.

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

     “Renewal Term” has the meaning set forth in Section 14(a) of this Agreement.

     “Rialto” means Rialto Capital Partners, LLC, including its successors and its
permitted assigns.

     “Rialto Sub-Advisory Agreement” means the sub-advisory agreement, dated as of the date
hereof, among the Manager, the Advisor and Rialto, as may be amended from time to time.

     “Rolling Four Quarters Period” means the most recently completed fiscal quarterly
period and three fiscal quarters immediately preceding the most recently completed fiscal quarter.

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

     “Services Agreement” means the master services agreement, dated the date hereof,
between the Company and Clayton, as may be amended from time to time.

     “Stockholders’ Equity” means:

          (i) the sum of the net proceeds from all issuances of the Company’s equity securities
since its inception (allocated on a pro rata daily basis for such issuances during the
fiscal quarter of any such issuance), plus

          (ii) the Company’s retained earnings at the end of the most recently completed quarter
calculated in accordance with GAAP (without taking into account any non-cash equity
compensation expense incurred in current or prior periods), less

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          (iii) any amount that the Company pays to repurchase its common stock since inception.

Stockholders’ Equity shall also exclude (a) any unrealized gains, losses or other items that have
impacted stockholders’ equity as reported in the Company’s financial statements prepared in
accordance with GAAP and (b) one-time events pursuant to changes in GAAP and non-cash items the
exclusion of which in each case is recommended by the Manager and approved by a majority of the
Company’s Independent Directors.

     “Sub-Advisor Indemnified Party” has the meaning set forth in Section 12(d) of
this Agreement.

     “Sub-Advisors” means Greenfield and Rialto, and “Sub-Advisor” means any one of them
and any successor in interest to, or permitted assigns of, any of them; provided that, no successor
in interest to, or permitted assigns of, any Sub-Advisor (other than an Affiliate thereof to which
the relevant Sub-Advisory Agreement has been assigned pursuant to its terms) shall be a Sub-Advisor
unless approved by the Advisor acting (in each case) with the consent of the Manager (acting in
accordance with Section 3.3(A)(h) of the Manager LLC Agreement). Sub-Advisors shall also
include any replacement or additional entity that, at the election of the Advisor acting (in each
case) with the consent of the Manager (acting in accordance with Section 3.3(A)(h) of the
Manager LLC Agreement) becomes a Sub-Advisor to the Advisor pursuant to a sub-advisory agreement
with the Advisor in form and substance substantially similar to the other Sub-Advisory Agreements
and not materially more favorable to such Sub-Advisor than such other Sub-Advisory Agreement are to
the other Sub-Advisors.

     “Sub-Advisory Agreements” means the Greenfield Sub-Advisory Agreement, the Rialto
Sub-Advisory Agreement and any other sub-advisory agreement entered into by the Advisor with the
consent of the Manager provided in accordance with the Manager LLC Agreement, as each such
agreement may be amended from time to time.

     “Subsidiary” means any partnership, the general partner of which is the Company or any
Subsidiary of the Company; any limited liability company, the managing member of which is the
Company or any subsidiary of the Company; and any corporation or other entity of which a majority
(i) of the voting power of the voting equity securities or (ii) in value of the outstanding equity
interests, is owned, directly or indirectly, by the Company or any subsidiary of the Company.

     “Termination Fee” has the meaning set forth in Section 14(b) of this
Agreement.

     “Termination Notice” has the meaning set forth in Section 14(a) of this
Agreement.

     “Treasury Regulations” means the regulations promulgated under the Code, as in effect
from time to time.

     “Valuation Notice” has the meaning set forth in Section 9(d) of this Agreement.

     “Voting Member” has the meaning set forth in Section 8(a) of this Agreement.

     Section 2. Appointment and Duties of the Manager.

          (a) The Company hereby appoints the Manager to manage the assets and day-to-day operations of
the Company and the Subsidiaries, subject to the further terms and conditions set forth in this
Agreement and to the supervision of, and such further limitations or parameters as may be imposed
from time to time by the Board of Directors. The Manager hereby agrees to use its commercially

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reasonable efforts to perform each of the duties set forth herein. The Company’s 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, to waive such exclusivity, and except to the extent
that (i) the Manager elects, pursuant to the terms of this Agreement, to cause the duties of the
Manager hereunder to be provided by third parties, or (ii) the Manager elects to have any duties
performed by the Advisor (and to the extent that the Advisor further causes any of such duties to
be performed by the Sub-Advisors, the Consultant or any one of them).

          (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
Company’s Board of Directors and will have only such functions and authority as the Board of
Directors may delegate to it, including, without limitation, the functions and authority identified
herein and delegated to the Manager hereby, in each case, to the extent agreed to by the Manager.
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, without
limitation:

          (i) serving as the Company’s and the Subsidiaries’ consultant with respect to periodic
reviews of the investment guidelines and other parameters for the Investments, financing
activities and operations of the Company and the Subsidiaries, any modifications to which
shall be approved by a majority of the Independent Directors (such guidelines as initially
so approved being attached hereto as Exhibit A, as the same may be modified with
such approval, the “Guidelines”);

          (ii) in conjunction with the Investment Committee and subject to any approval of the
Investment Committee required pursuant to this Agreement, investigating, analyzing and
selecting possible investment opportunities for the Company or the Subsidiaries and
acquiring, financing, retaining, selling, restructuring or disposing of Investments
consistent with the Guidelines;

          (iii) with respect to prospective purchases, sales or exchanges of Investments and
subject to the Guidelines and any Investment Committee approval required pursuant to this
Agreement, 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) advising the Company on, and negotiating and entering into on the Company’s
behalf, repurchase agreements, resecuritizations, securitizations, warehouse facilities,
seller-financing, bank credit facilities (including term loans and revolving facilities),
credit finance agreements, agreements relating to borrowings under programs established by
the U.S. Government, commercial paper, interest rate swap agreements and other hedging
instruments, and all 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
Company’s expense, independent contractors that provide investment banking, securities
brokerage, mortgage brokerage, other financial services (including those of FTI SMG, LLC, a
Maryland limited liability company, d/b/a The Schonbraun McCann Group), due diligence
services, underwriting review services, legal and accounting services (including those of
SS&C Technologies, Inc.), and all other services (including transfer agent and registrar

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services) as may be required relating to the Company’s and the Subsidiaries’
businesses, operations or Investments (or potential investments);

          (vi) together with the Advisor and the Sub-Advisors, as may be applicable, 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 thereof;

          (vii) coordinating and managing operations of any joint venture or co-investment
vehicle in which the Company or the Subsidiaries hold interests and conducting on behalf of
the Company all relationships with the joint venture or co-investment partners (including,
without limitation, the Advisor, the Sub-Advisors and the Consultant);

          (viii) obtaining at its own cost executive and administrative personnel, office space
and office services required to enable it to render the services to the Company and the
Subsidiaries required by this Agreement;

          (ix) administering the day-to-day operations and performing and supervising the
performance of such other administrative functions regarding the management of the Company
and the Subsidiaries as may be agreed upon by the Manager and the Company’s Board of
Directors, including, without limitation, services in respect of any equity incentive plan
created by the Company, the collection of revenues and the payment of the debts and
obligations of the Company and the Subsidiaries and the maintenance of appropriate computer
services to perform such administrative functions;

          (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 applicable agreements or any governmental bodies or agencies or trading
markets and to maintain effective relations with such holders;

          (xi) counseling the Company in connection with policy decisions to be made by the
Company’s 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, but always consistent with the Company’s
qualification as a REIT and with the 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 out
in the Code and Treasury Regulations thereunder and using commercially reasonable efforts to
cause the Company to qualify for taxation as a REIT;

          (xiv) 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 the Company and the
Subsidiaries to maintain their exemptions from such status;

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          (xv) furnishing reports and statistical and economic research to the Company and the
Subsidiaries regarding their activities and regarding the services performed for the Company
and the Subsidiaries by the Manager;

          (xvi) assisting the Company in developing criteria for asset purchase commitments that
are specifically tailored to the Company’s objectives and strategies and making available to
the Company its and its advisors’ knowledge and experience with respect to MBS, mortgage
loans, real estate, real estate related securities, other real estate related assets and non
real estate related assets;

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

          (xviii) investing and reinvesting any moneys 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 payments of dividends or distributions
to stockholders and partners of the Company and the Subsidiaries) and advising the Company
and the Subsidiaries as to their capital structure and capital raising;

          (xix) causing the Company and the Subsidiaries to retain qualified accountants 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, taxable REIT subsidiaries, and to conduct quarterly compliance
reviews with respect thereto;

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

          (xxi) assisting the Company and the Subsidiaries in complying with all regulatory
requirements applicable to them, 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 NYSE;

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

          (xxiii) placing, or facilitating the placement of, all orders pursuant to the Manager’s
investment determinations, subject to the approval of the Investment Committee, to the
extent required, for the Company and the Subsidiaries, either directly with the issuers or
through brokers or dealers (including affiliated brokers or dealers), to acquire and dispose
of Investments;

          (xxiv) handling and resolving 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, the Advisor, the Sub-Advisors
or any of their

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respective Affiliates), subject to such limitations or parameters as may be imposed
from time to time by the Board of Directors;

          (xxv) 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 Company’s
Board of Directors from time to time;

          (xxvi) representing and making recommendations to the Company and the Subsidiaries in
connection with the purchase and financing of, and commitments to purchase and finance, MBS,
mortgage loans (including on a portfolio basis), real estate, real estate related
securities, other real estate related assets and non real estate related assets, and the
sale and commitment to sell such assets;

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

          (xxviii) forming the Investment Committee;

          (xxix) serving as the Company’s and the Subsidiaries’ consultant with respect to
decisions regarding any of the Company’s and the Subsidiaries’ 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 is 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 Company’s and the Subsidiaries’ Investments;

          (xxx) providing the Company and the Subsidiaries with portfolio management services;

          (xxxi) 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;

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

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

     Without limiting the foregoing, the Manager will perform portfolio management services (the
“Portfolio Management Services”) on behalf of the Company 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, the Company’s portfolio of assets; the collection of information and the
submission of reports pertaining to the Company’s assets, interest rates and general economic
conditions; periodic review and evaluation of the performance of the Company’s portfolio of
Investments; acting as a liaison between the Company and the Subsidiaries and banking, mortgage
banking, investment banking and other parties with respect to the

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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 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
and each of the Subsidiaries hereby constitutes, appoints and authorizes the Manager (with full
power of delegation to other Persons) 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 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.

          (d) Subject to Section 2(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 Company,
propose to retain and enter into agreements with one or more additional entities for the provision
of advisory services to the Manager and the Company in order to enable the Manager to perform its
obligations to provide services to the Company and the Subsidiaries as specified by this Agreement;
provided that each such retention and agreement, other than the Advisory Agreement between the
Manager and the Advisor, and the Services Agreement between the Company and Clayton, in each case
entered into on the date hereof, shall be entered into only in a form that shall have been approved
by the Company.

          (e) The Manager may enter into agreements with other parties, including its Affiliates or any
of the Sub-Advisors or their respective Affiliates, for and on behalf, and, except as otherwise
agreed, at the sole cost and expense, of the Company, to provide credit analysis, risk management
services, asset management and/or other services to the Company and the Subsidiaries (including,
without limitation, Portfolio Management Services and Monitoring Services) pursuant to agreement(s)
with terms which are then customary for agreements regarding the provision of services of the
applicable type to companies that have assets similar in type, quality and value to the assets of
the Company and the Subsidiaries; provided that (i) any such agreement entered into with an
Affiliate of the Manager shall be (A) on terms no more favorable to such Affiliate than would be
obtained from a third party on an arm’s-length basis and (B) to the extent the same do not fall
within the parameters of this Agreement or within the provisions of the Guidelines, approved by a
majority of the Independent Directors, (ii) with respect to Portfolio Management Services, the
Manager shall remain liable for the performance of such Portfolio Management Services, and
(iii) with respect to Monitoring Services, any such agreements shall be subject to the prior
approval by the Independent Directors of the Company; provided, however, that the Advisory
Agreement and the Administrative Services Agreement, each dated the date hereof, between the
Manager and the Advisor, the Sub-Advisory Agreements, each dated the date hereof, among the
Advisor, the Manager and each of the Sub-Advisors, the Consulting Agreement dated the date hereof,
between the Advisor and the Consultant and the Services Agreement between the Company and Clayton,
dated the date hereof, are hereby acknowledged and approved by the Company and no further approval
of the Company or the Board shall be needed for the execution, delivery and performance of such
agreements by the Company, the Manager, the Advisor, the Consultant, Clayton and each Sub-Advisor.

11

 

          (f) The Manager may retain, for and on behalf, and at the sole cost and expense, of the
Company and the Subsidiaries, such services of accountants, legal counsel, appraisers, insurers,
brokers, transfer agents, developers, registrars, investment banks, financial advisors, due
diligence firms, banks and other lenders and others as the Manager deems necessary or advisable in
connection with the management and operations of the Company and the Subsidiaries. Notwithstanding
anything contained herein to the contrary, the Manager shall have the right to cause any such
services to be rendered by its employees or Affiliates or by the Advisor, the Sub-Advisors, the
Consultant or Clayton or by the employees of any of the foregoing or of the Affiliates of any of
the foregoing. The Company and the Subsidiaries shall pay or reimburse the Manager or its
Affiliates or such other Persons performing such services for the cost thereof; provided that such
costs and reimbursements are no greater than those which would be payable to outside professionals
or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s
length basis.

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

          (h) The Manager shall prepare, or cause to be prepared, at the sole cost and expense of the
Company and the Subsidiaries, 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, and shall prepare, or cause to be prepared, all materials and
data necessary to complete such reports and other materials including, without limitation, an
annual audit of the Company’s and the Subsidiaries’ books of account by a nationally recognized
registered independent public accounting firm.

          (i) The Manager shall prepare 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 Guidelines and policies
approved by the Board of Directors.

          (j) Notwithstanding anything contained in this Agreement to the contrary, except to the extent
that the payment of additional moneys is proven by the Company to have been required as a direct
result of the Manager’s acts or omissions which result in the right of the Company to terminate
this Agreement pursuant to Section 16 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 the Company and the Subsidiaries pursuant to Section 10 in excess
of that contained in any applicable Company Account or otherwise made available by the Company and
the Subsidiaries to be expended by the Manager hereunder. Failure of the Manager to expend Excess
Funds out-of-pocket shall not give rise or be a contributing factor to the right of the Company
under Section 14(a) of this Agreement to terminate this Agreement due to the Manager’s
unsatisfactory performance.

          (k) In performing its duties under this Section 2, the Manager shall be entitled to
rely reasonably on qualified experts and professionals (including, without limitation, accountants,
legal counsel and other service providers) hired by the Manager at the Company’s and the
Subsidiaries’ sole cost and expense.

          (l) The Manager acknowledges receipt of the Company’s Code of Business Conduct and Ethics and
Policy on Insider Trading and Communications Policy (collectively, the “Conduct 

12

 

Policies”) and the Manager agrees (i) to implement policies and procedures designed to
inform employees of the Manager and its Affiliates who provide services to the Company of the
Conduct Policies and to ensure that such employees are in substance held to at least the standards
of conduct set forth in the Conduct Policies and (ii) to comply with the Conduct Policies in its
performance of the services hereunder or such comparable policies as shall in substance hold it to
at least the standards of conduct set forth in the Conduct Policies.

     Section 3. Devotion of Time; Additional Activities.

          (a) The Manager and its Affiliates will provide the Company and the Subsidiaries with a
management team, including a Chief Financial Officer, Chief Investment Officer and Chief Accounting
Officer, 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
may be reasonably necessary and appropriate to enable the Company and the Subsidiaries to operate
their business from time to time. None of the officers or employees of the Manager will be
dedicated exclusively to the Company and the Subsidiaries.

          (b) Managers, partners, officers, employees, personnel and agents of the Manager or Affiliates
of the Manager, the Advisor, the Consultant or any Sub-Advisor may serve as directors, managers,
officers, employees, partners, shareholders, members, 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.

          (c) Subject to Section 2(d), the Manager is authorized, for and on behalf, and at the
sole cost and expense, of the Company and the Subsidiaries, to employ securities dealers for the
purchase and sale of Investments as the Manager deems necessary or appropriate, in its sole
discretion. All trades will be executed with established securities dealers which are approved by
the Manager selected in a manner consistent with best execution. No concessions on prices will be
made to any dealer by reason of services or goods provided or offered to be provided to the Manager
other than for the benefit of the Company. In addition to the gross dealing price, the Manager
will take into account the level of charges, mark up or mark down made by the counterparty and the
creditworthiness of the counterparty.

          (d) The Company (including the Board of Directors) 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, without limitation, all steps reasonably necessary to
allow the Manager to file any registration statement or other document or report on behalf of the
Company in a timely manner or to deliver any financial statements or other reports with respect to
the Company or any Subsidiary. If the Manager is not able to provide a service, or in the
reasonable judgment of the Manager it is not prudent to provide a service, without the approval of
the Board of Directors or the Independent Directors, as applicable, then the Manager shall use good
faith reasonable efforts to promptly obtain such approval and shall be excused from providing such
service (and shall not be in breach of this Agreement for not providing it) until the applicable
approval has been obtained.

     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

13

 

Subsidiaries, the Board of Directors, holders of the Company’s securities or representatives
or assets of the Company and the Subsidiaries. The Manager may appoint subagents to perform any of
these functions for the Manager.

     Section 5. Bank Accounts. At the direction of the Board of Directors, the Manager
will establish and maintain one or more bank accounts in the name of the Company or any Subsidiary
(any such account, a “Company Account”), and will collect and deposit funds into any such
Company Account or Company Accounts, and may disburse funds from any such Company Account, under
such terms and conditions as the Board of Directors may approve; and the Manager shall from time to
time render appropriate accountings of such collections and payments to the Board of Directors and,
upon request, to the auditors of the Company or any Subsidiary.

     Section 6. Records; Confidentiality. The Manager shall maintain appropriate books of
accounts and records relating to services performed under this Agreement, and such books of account
and records shall be accessible for inspection by representatives of the Company or any Subsidiary
at any time during normal business hours upon reasonable advance notice. The Company acknowledges
that all of its officers are also employees of the Manager or of its owners (including Affiliates
of the Advisor and the Sub-Advisors) and as such may receive information in connection with their
various positions. The Manager shall keep confidential any and all information (including any
confidential and non-public information about the Advisor, the Sub-Advisors, the Consultant or
their respective Affiliates) obtained in connection with the services rendered under this Agreement
and shall not disclose any such information or use the same, except in furtherance of the Manager’s
duties under this Agreement, to unaffiliated third parties except: (i) with the prior written
consent of the Board of Directors or with respect to confidential and non-public information
relating to the Advisor, a Sub-Advisor, the Consultant or their respective Affiliates, with the
prior written consent of such party as appropriate; (ii) to the Advisor, any Sub-Advisor, the
Consultant, legal counsel, accountants and other professional advisors retained in connection with
Company business; (iii) to appraisers, financing sources, partners, shareholders, employees,
officers, directors and members of the Manager, the Company and their Affiliates and others in the
ordinary course of the Company’s and the Subsidiaries’ business; (iv) to governmental agencies or
officials having jurisdiction over the Company or any Subsidiary; (v) in connection with any
governmental or regulatory filings of the Company or any Subsidiary, or disclosure or presentations
to Company investors; (vi) as required by law or legal process to which the Manager or any Person
to whom disclosure is permitted hereunder is a party; (vii) with the written consent of the
Company; or (viii) to the extent such information is otherwise publicly available through the
actions of a Person other than the Manager not resulting from the Manager’s violation of this
Section 6; provided, however that with respect to clauses (iv), (v) and (vi), it is agreed
that, so long as not legally prohibited, the Manager will provide the Company with prompt written
notice of such order, request or demand so that the Company may seek, at its sole expense, an
appropriate protective order and/or waive the Manager’s compliance with the provisions of this
Agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder, the
Manager is required to disclose such information, the Manager may disclose only that portion of
such information that is legally required without liability hereunder; provided, that the Manager
agrees to exercise its reasonable best efforts to obtain reliable assurance that confidential
treatment will be accorded such information. The provisions of this Section 6 shall
survive the expiration or earlier termination of this Agreement for a period of one year.

     Section 7. Obligations of Manager; Restrictions.

          (a) The Manager shall require each seller or transferor of investment assets 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 or appropriate. In addition, the Manager shall take such
other action as it deems necessary or appropriate with regard to the protection of the Investments.

14

 

          (b) The Manager shall refrain from any action that, in its sole judgment made in good faith,
(i) is not in compliance with the Guidelines, (ii) would adversely and materially affect the status
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 investment company
status 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. If the Manager is ordered to
take any such action by the Board of Directors, the Manager shall promptly notify the Board of
Directors of the Manager’s judgment that such action would adversely and materially affect such
status or violate any such law, rule or regulation or the Governing Instruments. Notwithstanding
the foregoing, the Manager, its directors, members, officers, stockholders, managers, personnel,
employees and any Person controlling or controlled by the Manager and any Person providing
advisory, sub-advisory or consulting services to the Manager shall not be liable to the Company or
any Subsidiary, the Board of Directors, or the Company’s or any Subsidiary’s stockholders, partners
or members for any act or omission by the Manager, its directors, officers, stockholders or
employees except as provided in Section 12 of this Agreement.

          (c) The Board of Directors shall periodically review the Guidelines and the Company’s
portfolio of Investments but will not review each proposed investment, except as otherwise provided
herein. If a majority of the Independent Directors determine in their periodic review of
transactions that a particular transaction does not comply with the Guidelines, then the
Independent Directors will consider what corrective action, if any, can be taken. The Manager
shall be permitted to rely upon a statement by the Secretary or any other officer of the Company to
evidence the approval of the Board of Directors or the Independent Directors with respect to a
proposed acquisition.

          (d) The Manager shall at all times during the term of this Agreement maintain, at the
Company’s expense, “errors and omissions” insurance coverage including insurance coverage of the
Investment Committee and Voting Members and other insurance coverage which 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. Investment Committee.

          (a) The Manager shall cause to be established and maintained from and after the Effective Date
an investment committee (the “Investment Committee”) that shall, at all times include
(i) the Chief Investment Officer of the Company, (ii) the Company’s Chief Executive Officer, (iii)
during the term of each Sub-Advisory Agreement entered into on the date of this Agreement, an
Eligible Professional of and designated by each Sub-Advisor, and, (iv) if the Chief Investment
Officer of the Company is not an Eligible Professional of the Advisor, a Person that is an Eligible
Professional of and designated by the Advisor (each, a “Voting Member”). The Chief
Investment Officer of the Company shall be the chairman of the Investment Committee (the
“Committee Chairman”). No Designating Party may transfer or assign its right to designate
a Voting Member.

          (b) The Manager shall ensure that on the Effective Date each of the Advisor (if the Chief
Investment Officer of the Company is not an Eligible Professional of the Advisor) and each
Sub-Advisor (each, a “Designating Party”) designates one Eligible Professional of itself to
be a Voting Member. The names of the Voting Members on the Effective Date are as set forth in
Exhibit B hereto. Any Designating Party may, at any time, subject to the terms of the Advisory
Agreement or the relevant Sub-Advisory Agreement, as the case may be, after providing written
notice to the Investment Committee and the Manager, replace its designated Voting Member with
another Eligible Professional of such

15

 

Designating Party, and such replacement shall be effective upon the receipt of such notice by
each other Voting Member.

          (c) A Voting Member shall be removed from the Investment Committee if (i) such Voting Member
was designated by a Designating Party that is the Advisor (other than the Chief Investment Officer
so long as he or she remains in that position) or a Sub-Advisor, the Advisory Agreement or a
Sub-Advisory Agreement, as the case may be, of which has been terminated (whether for Cause or for
any other reason) or (ii) the Designating Party that designated such Voting Member transfers all of
its equity interest in the Manager other than to an Affiliate of such Voting Member.

          (d) The Investment Committee may, at any time, by a unanimous vote of the Voting Members, add
non-voting members (each, a “Non-Voting Member”) to the Investment Committee, and each
Non-Voting Member shall have no voting rights with respect to the Investment Committee. A
Non-Voting Member may be removed at any time by a unanimous vote of the Voting Members of the
Investment Committee.

          (e) The Investment Committee shall conduct meetings as often as shall be necessary or
appropriate to fulfill its functions under this Agreement, and in any event not less than once each
month. Any meeting may be conducted in person or by means of a telephone or video conference. In
addition, the Investment Committee shall, not later than the last day of each fiscal quarter,
provide the IC Report to the Board of Directors.

          (f) The Investment Committee shall establish, by a unanimous consent or approval of the Voting
Members, parameters for acquiring and disposing of assets within the Guidelines (the
“Investment Parameters”), which shall be updated by the Investment Committee by unanimous
consent or approval from time to time. Any Voting Member may, with the consent of the Committee
Chairman but without consulting the Investment Committee, recommend to the Advisor the purchase or
the disposal of any asset or the purchase or the disposal of a Co-Investment in any asset that
meets all of the applicable Investment Parameters, including, by way of example, that the purchase
price of such type of asset does not exceed a certain amount (such amount, with respect to such
type of asset, the “Ceiling Amount”), or the disposal price of such type of asset is equal
to or greater than a certain amount with respect to the relevant asset (such amount, with respect
to such type of asset, the “Disposal Amount”); provided, that the Consultant may, with the
consent of the Committee Chairman but without consulting the Investment Committee, recommend to the
Advisor the purchase of an asset or a Co-Investment in any asset that meets all of the applicable
Investment Parameters, and the Advisor may then purchase or dispose of such asset or Co-Investment
in such asset (but will not be required to do so) on behalf of the Company or its Subsidiaries,
provided that the Advisor provides each Sub-Advisor and, if the Consultant recommended such asset,
the Consultant, with at least 3 business days prior written notice of each such proposed purchase
or disposal before becoming bound to purchase or dispose of such asset or Co-Investment. If the
Advisor wishes to purchase or dispose of an asset on behalf of the Company or any Voting Member
wishes to recommend to the Advisor an asset or Co-Investment for purchase or disposal that fails to
meet all of the applicable Investment Parameters or the purchase price of which exceeds the Ceiling
Amount or the disposal price of which is less than the Disposal Amount of such asset, or the
Consultant wishes to recommend to the Advisor an asset or Co-Investment for purchase that fails to
meet all of the applicable Investment Parameters or the purchase price of which exceeds the Ceiling
Amount, the Advisor shall only purchase or dispose of such asset or enter into or dispose of such
Co-Investment on behalf of the Company if the Voting Members of the Investment Committee approve
such recommendation unanimously (including any recommendation by the Advisor). The Advisor shall
also consult the Investment Committee regarding any exercise by the Company of any right on the
part of the Company or its Subsidiaries to give or withhold consent or approval with respect to any
security or loan asset held by the Company or its Subsidiaries where the matter upon which such
consent or approval is requested

16

 

would alter or amend the security or loan in such a manner as would cause it not to be in
compliance with the Guidelines.

          (g) Prior to the Advisor purchasing an asset on behalf of the Company, the Advisor shall
deliver a notice of its intent to purchase such asset (a “Purchase Notice”) to the Manager,
the Advisor, each Sub-Advisor and, if the Consultant recommended such asset, to the Consultant for
purposes of making the Co-Investment offer described in this Section 8(g) available to
them. Each Purchase Notice shall include sufficient information for the recipient to make the
investment decision described in this paragraph. Any Co-Investment shall be subject to
satisfactory due diligence and co-investment documentation. If within five business days of
delivery of the Purchase Notice relating to an asset or Co-Investment, one or both of the Sub-Advisors notifies the Advisor that it wishes to participate in the
purchase of such asset, either on its own behalf or on the behalf of any fund or investment vehicle
managed by it or its Affiliates, and/or the Advisor (together with the Sub-Advisors, the
“Co-Investing Parties” and each, a “Co-Investing Party”) wishes to participate in
the purchase of a Co-Investment, either on its own behalf or on the behalf of any fund or
investment vehicle managed by it or its Affiliates, the Advisor shall effect the Company’s purchase
of such asset as a Co-Investment and consent to a contemporaneous purchase of the remainder of such
asset by the Co-Investing Parties that wish to participate on the basis as mutually agreed among
them on a case by case basis; provided that at the time of any such purchases, the Advisor on
behalf of the Company or its Subsidiaries and each Co-Investing Party shall execute and deliver any
necessary intercreditor agreement or other customary agreements.

          (h) Subject to the last sentence of this subsection (h), if within five business days of
delivery of the Purchase Notice relating to an asset or Co-Investment recommended by the
Consultant, any of the other Co-Investing Parties (which for the purposes of this Section shall
include the Consultant) notifies the Advisor that it wishes to participate in the purchase of such
asset, either on its own behalf or on the behalf of any fund or investment vehicle managed by it or
its Affiliates, and/or the Advisor wishes to participate in the purchase of a Co-Investment, either
on its own behalf or on the behalf of any fund or investment vehicle managed by it or its
Affiliates, the Advisor shall effect the Company’s purchase of such asset as a Co-Investment and
consent to a contemporaneous purchase of the remainder of such asset by the Co-Investing Parties
that wish to participate on the basis as mutually agreed among them on a case by case basis;
provided that at the time of any such purchases, the Advisor on behalf of the Company or its
Subsidiaries and each Co-Investing Party shall execute and deliver any necessary intercreditor
agreement or other customary agreements. Notwithstanding the provisions of Section 8(g) or this
Section 8(h), the Advisor shall not be required to deliver any Purchase Notice to the Advisor, any
Sub-Advisor and, if the Consultant recommended such asset, the Consultant, and the Advisor, the
Sub-Advisors and the Consultant, if applicable, shall not have any Co-Investment rights with
respect to an asset if the Advisor determines in its sole discretion that there is not a sufficient
amount of such asset available to allow for Co-Investment or that it would not be practicable to
offer any Co-Investment rights to the Advisor, the Sub-Advisors and, if applicable, the Consultant.

          (i) The Investment Committee shall define the servicing criteria to be utilized by servicing
providers with respect to foreclosures on collateral underlying the Company’s assets (to the extent
the Company has the right to impose servicing criteria pursuant to the terms governing such
collateral).

          (j) The Investment Committee shall establish as soon as practical after the date hereof (but
in any event before any asset is acquired by the Advisor on behalf of the Company or any of its
Subsidiaries) the Investment Parameters (which may include, among other parameters, purchase and
disposal prices for assets depending on the type thereof, financing terms related thereto and the
types and amounts of assets to be acquired) and shall continuously monitor, review and supervise
the Company’s

17

 

investment program, portfolio of assets and compliance with the Guidelines and the Investment
Parameters. If the Investment Committee determines at any time that any adjustment to the
Guidelines, Investment Parameters, investment procedures or any of the Manager’s other functions is
necessary, the Manager shall implement such adjustment to the extent permissible under this
Agreement and any other related agreement. Any change to the Guidelines is subject to approval by
a majority of the Independent Directors as required by Section 2(b)(i) of this Agreement.

     Section 9. Compensation.

          (a) During the Initial Term and any Renewal Term, the Company shall pay the Manager a
management fee equal to 1.50% of the Stockholders’ Equity per annum (the “Management Fee”),
calculated and payable in cash quarterly in arrears commencing with the quarter in which this
Agreement was executed (with such initial payment pro-rated based on the number of days during such
quarter that this Agreement was in effect). The Management Fee is payable independent of, and
irrespective of, the performance of the Company’s Investments. The Management Fee payable in
respect of the Stockholders’ Equity that is allocable to the Company’s (or the Subsidiaries’)
interests in the Legacy Securities PPIF (the “Company PPIF Interests”) will be reduced (but
not below zero) so that the sum of such Management Fee plus the allocable share of any management
fee payable by the Legacy Securities PPIF to its designated investment manager that is allocable to
the Company PPIF Interests will not exceed 1.50% per annum of the Company’s Stockholders’ Equity
that is allocable to the Company PPIF Interests.

          (b) During the Initial Term and any Renewal Term, the Company shall pay the Manager quarterly
in arrears the Incentive Fee, commencing with the quarter in which this Agreement is executed.
Each installment of the Incentive Fee shall be payable as follows:

          (i) fifty
percent (50%) of the Incentive Fee will be payable in shares of the Company’s
common stock; provided, however, the percentage of the Incentive Fee payable in shares of
the Company’s common stock is subject to the following: (1) the ownership of such shares by
the Manager does not violate the limit on ownership of the Company’s common stock set forth
in the Company’s Governing Instruments, after giving effect to any waiver from such limit
that the Board of Directors may grant to the Manager in the future, (2) the Company’s
issuance of such shares to the Manager complies with all applicable restrictions under U.S.
federal securities laws and the rules of the NYSE, and (3) such shares shall be subject to a
separate agreement between the Company and the Manager as shall be mutually agreed
by the Company and the Manager (acting with the approval of the Members), which shall set forth
the contractual rights and obligations with respect to registration of such shares by the Company pursuant
to the Securities Act at any time and/or from time to time including demand and piggyback registration rights as specified therein; and

          (ii) the remainder will be payable in cash.

          (c) The number of shares of the Company’s common stock payable as the Incentive Fee to be
issued to the Manager will be equal to the dollar amount of the portion of the quarterly
installment of the Incentive Fee payable in shares of the Company’s common stock divided by a value
determined as follows:

          (i) if the Company’s common stock is traded on a securities exchange, the value shall
be deemed to be the average of the closing prices of such common stock on such exchange on
the five business days prior to the date on which the quarterly installment of the Incentive
Fee is paid;

          (ii) if the Company’s common stock is not traded on a securities exchange but is
actively traded over-the-counter, the value shall be deemed to be the average of the closing
bids or sales prices, as applicable, on the five business days prior to the date on which
the quarterly installment of the Incentive Fee is paid; and

18

 

          (iii) if the Company’s common stock is neither traded on a securities exchange nor
actively traded over-the-counter, the value shall be the fair market value thereof, as
reasonably determined in good faith by the Board of Directors (including a majority of the
Independent Directors) of the Company.

          (d) If at any time the Manager shall, in connection with a determination of the value of the
Company’s common stock made by the Board of Directors pursuant to Section 9(c)(iii) hereof, (i)
dispute such determination in good faith by more than five percent (5%), and (ii) such dispute
cannot be resolved between the Independent Directors and the Manager within ten (10) business days
after the Manager provides written notice to the Company of such dispute (the “Valuation
Notice”), then the matter shall be resolved by an independent appraiser of recognized standing
selected jointly by the Independent Directors and the Manager within not more than twenty (20) days
after the Valuation Notice. In the event the Independent Directors and the Manager cannot agree
with respect to such selection within the aforesaid twenty (20) day time-frame, the Independent
Directors shall select one such independent appraiser and the Manager shall select one independent
appraiser within five (5) business days after the expiration of the twenty (20) day period, with
one additional such appraiser (the “Last Appraiser”) to be selected by the appraisers so
designated within five (5) business days after their selection. Any valuation decision made by the
Last Appraiser shall be deemed final and binding upon the Board of Directors and the Manager and
shall be delivered to the Manager and the Board of Directors within not more than fifteen (15) days
after the selection of the Last Appraiser. The expenses of the appraisal shall be paid by the party
with the estimate which deviated the furthest from the final valuation decision made by the
independent appraisers.

          (e) The Manager shall compute each installment of the Management Fee and the Incentive Fee
within 30 days after the end of the fiscal quarter with respect to which such installment is
payable. A copy of the computations made by the Manager to calculate each such installment shall
promptly be delivered to the Advisor, each Sub-Advisor and the Consultant. A copy of the
computations made by the Manager to calculate each such installment shall thereafter, for
informational purposes only and subject in any event to Section 14 of this Agreement,
promptly be delivered to the Board of Directors and, upon such delivery, payment of such
installment of the Management Fee and the Incentive Fee (if any) shown therein shall be due and
payable in the manner described in Section 14(d) no later than the date which is five business days
after the date of delivery to the Board of Directors of such computations.

          (f) As an additional component of the Manager’s compensation, the Company may in the future
issue stock-based compensation under the Company’s equity incentive plan to the Manager (for
allocation to its Members pro rata in accordance with their respective Percentage Interests).

          (g) The Management Fee is subject to adjustment pursuant to and in accordance with the
provisions of Section 14 of this Agreement.

          (h) The Company shall not be responsible for the payment of any Management Fees charged by the
Advisor, the Consultant or any Sub-Advisor and such fees shall instead be paid by the Manager or
the Advisor, as applicable.

     Section 10. Expenses of the Company.

          (a) The Company shall pay all of its own expenses and the Company shall reimburse the Manager
for documented expenses of the Manager (including equivalent expenses of the Advisor, and the
Sub-Advisors and the Consultant) incurred on the Company’s behalf (including reimbursable amounts
described in Section 5.4 of the Manager LLC Agreement) (collectively, the “Expenses”)
excepting only those expenses that are specifically the responsibility of the Manager pursuant to,
and as specifically set

19

 

forth in, Section 2 of this Agreement and any Management Fees or Incentive Fees to be
paid by the Manager to or with respect to the Advisor, the Consultant or the Sub-Advisors. Without
limiting the generality of the foregoing, it is specifically agreed that the following costs and
expenses of the Company or any Subsidiary shall be borne by the Company and shall not be borne by
the Manager, the Advisor, any Sub-Advisor, the Consultant or their respective Affiliates:

          (i) costs and expenses associated with the issuance, and transaction costs incident to
the acquisition, disposition and financing of, Investments;

          (ii) costs of legal, tax, accounting, third party administrators for the establishment
and maintenance of the books and records, consulting, auditing, administrative and other
similar services rendered for the Company and the Subsidiaries by providers retained by the
Manager, the Advisor, the Sub-Advisors or the Consultant or, if provided by the Manager’s,
the Advisor’s, the Sub-Advisors’ or the Consultant’s personnel, in amounts which are no
greater than those which would be payable to outside professionals or consultants engaged to
perform such services pursuant to agreements negotiated on an arm’s-length basis;

          (iii) the compensation and expenses of the Company’s directors and the cost of
liability insurance to indemnify the Company’s directors and officers and the members of the
Investment Committee;

          (iv) costs associated with (1) the establishment and maintenance of any of the
Company’s or any Subsidiary’s repurchase agreements, resecuritizations, securitizations,
warehouse facilities, seller financing, bank credit facilities (including term loans and
revolving facilities) or other indebtedness of the Company or any Subsidiary (including
commitment fees, investment banking or brokerage fees, accounting fees, legal fees, closing
and other similar costs) or (2) any of the Company’s or any Subsidiary’s securities
offerings;

          (v) 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, without limitation, all
costs of preparing and filing required reports with the Securities and Exchange Commission
and/or any exchange, 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 exchange, the fees
payable by the Company to any such exchange in connection with its listing, and costs of
preparing, printing and mailing and/or transmitting the Company’s annual report to its
stockholders and proxy materials with respect to any meeting of the Company’s stockholders;

          (vi) costs associated with any computer software or hardware, electronic equipment or
purchased information technology services from third party vendors that is used by the
Company and/or the Subsidiaries;

          (vii) expenses incurred by managers, officers, personnel and agents of the Manager, the
Advisor, the Sub-Advisors or the Consultant for travel on the Company’s behalf and other
out-of-pocket expenses incurred by them in connection with the purchase, financing,
refinancing, sale or other disposition of an Investment or establishment and maintenance of
any of the Company’s or any Subsidiary’s repurchase agreements, resecuritizations,
securitizations, warehouse facilities, seller financing, bank credit facilities (including
term loans and revolving facilities) and borrowings under programs established by the U.S.
Government or any of their securities offerings;

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          (viii) costs and expenses incurred by the Manager, the Advisor, the Sub-Advisors or the
Consultant, with respect to market information systems and publications, research
publications and similar materials used exclusively or primarily on behalf of the Company,
and settlement, clearing and custodial fees and expenses;

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

          (x) the costs of maintaining compliance with all U.S. federal, state and local rules
and regulations or those of any other regulatory agency;

          (xi) all taxes and license and other regulatory fees and charges;

          (xii) all insurance costs incurred in connection with the operation of the Company’s
and the Subsidiaries’ business (including with respect to the Investment Committee and the
Voting Members), except for the costs attributable to the insurance that the Manager elects
to carry for itself and its personnel;

          (xiii) costs and expenses incurred in contracting with third parties, including
Affiliates of the Manager, the Advisor, the Sub-Advisors and the Consultant, for the due
diligence, pricing, servicing, surveillance and special servicing of the assets of the
Company and the Subsidiaries;

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

          (xv) expenses in connection with the application for, and participation in, programs
established by the U.S. Government;

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

          (xvii) 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, without
limitation, in connection with any dividend reinvestment plan;

          (xviii) any judgment or settlement of pending or threatened proceedings (whether civil,
criminal or otherwise) against the Company or any Subsidiary, or against any trustee,
director, partner, member or officer of the Company or of any Subsidiary, the Manager, the
Advisor, the Sub-Advisor, the Consultant and/or their respective Affiliates 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 or otherwise;

          (xix) expenses relating to fees incurred pursuant to the Administrative Services
Agreement;

          (xx) expenses associated with securities offerings by the Company; and

21

 

          (xxi) all other expenses actually incurred by the Manager, the Advisor, the
Sub-Advisors and the Consultant (except as described below) which are reasonably necessary
for the performance by the Manager (directly or through the Advisor, the Sub-Advisors, the
Consultant or any of their respective Affiliates pursuant to the Advisory Agreements, the
Sub-Advisory Agreements and the Consulting Agreement, respectively) of its duties and
functions under this Agreement.

          (b) To the extent specified in Section 2(f) of this Agreement and subject to the
following sentence, the Company shall pay or reimburse the Manager, the Advisor, the Sub-Advisors,
the Consultant and/or their Affiliates for costs of the personnel of the Manager, the Advisor, the
Sub-Advisors, the Consultant and their respective Affiliates who, directly or indirectly, provide
services to the Company under this Agreement, the Advisory Agreement, the Sub-Advisory Agreements
and the Consulting Agreement. The Company shall not otherwise be responsible for the compensation
paid by the Manager or its Affiliates to their personnel, except for (i) the allocable share of the
compensation of consultants retained by AllianceBernstein or its Affiliates to provide in-house
legal and accounting resources to the Company, based upon the time they spend on the Company’s
affairs and (ii) with respect to the Chief Financial Officer retained by the Manager that is
dedicated exclusively to the Company.

          (c) The Company will be required to pay all of the rent, telephone, utilities, office
furniture, equipment, machinery and other office, internal and overhead expenses of the Manager and
its Affiliates (including the Advisor) required for the operations of the Company and the
Subsidiaries.

          (d) The Manager may, at its option, elect not to seek reimbursement for certain expenses
(which shall not include expenses that are reimbursable, directly or indirectly, to the Advisor,
the Sub-Advisors or the Consultant) during a given quarterly period, which determination shall not
be deemed to constitute a waiver of reimbursement for similar expenses in future periods. In the
event that the Initial Public Offering is consummated, promptly after the Company receives the
proceeds of that offering, the Company will reimburse the Manager, the Manager’s Affiliates
(including the Advisor), the Sub-Advisors and the Consultant for all organizational, formation and
offering costs they and their respective Affiliates have incurred on behalf of the Company.

          (e) The provisions of this Section 10 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 11. Calculations of Expenses. The Manager shall prepare a statement
documenting the Expenses during each fiscal quarter and shall deliver such statement to the Company
within 30 days after the end of each fiscal quarter. A copy of such statements shall be
concurrently delivered to the Sub-Advisors and the Consultant. Expenses shall be reimbursed by the
Company to the Manager, the Advisor, each Sub-Advisor and the Consultant not later than the fifth
business day immediately following the date of delivery of such statement; provided, however, that
such reimbursements (excluding amounts relating to reimbursement of the Sub-Advisors or the
Consultant) may be offset by the Manager against amounts due to the Company and the Subsidiaries.
The provisions of this Section 11 shall survive the expiration or earlier termination of
this Agreement. Upon receipt by the Company of instructions by the Manager (which may consist of
standing instructions until revoked) to make payment of Expenses directly to any Sub-Advisor or the
Consultant, the Company shall effect payment of such expenses directly.

     Section 12. 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. The Manager, the
Advisor, the Consultant, the Sub-Advisors and their respective officers, stockholders, members,
managers, partners, personnel, directors, any Person controlling or controlled by or under common
control with the Manager or any Person providing advisory, sub-advisory or consulting services to
the Manager and any Affiliates of any of the foregoing and their respective officers, stockholders,
members, managers, partners, personnel, directors, and agents (including the Voting Members) and
any Person who was any of the foregoing at any time during the term of this Agreement will not be
liable to the Company or any Subsidiary or to any of their members, stockholders or partners or the
Company’s Board of Directors for any acts or omissions by any such Person (including, without
limitation, trade errors that may result from ordinary negligence, such as errors in the investment
decision making process or in the trade process), performed pursuant to or in accordance with this
Agreement, the Advisory Agreement, any Sub-Advisory Agreement or the Consulting Agreement, except
by reason of acts constituting bad faith, willful misconduct, gross negligence or reckless
disregard of the duties of the Manager, the Advisor, the Consultant and the Sub-Advisors under this
Agreement, the Advisory Agreement, any Sub-Advisory Agreement or the Consulting Agreement (as the
case may be), as determined by a final non-appealable order of a court of competent jurisdiction.

          (b) The Company shall, to the fullest extent lawful, reimburse, indemnify and hold harmless
the Manager and its Affiliates, and their respective officers, stockholders, members, managers,
directors, personnel and any Person controlling or controlled by or under common control with the
Manager and any Person who was any of the foregoing at any time during the term of this Agreement
(each, a “Manager Indemnified Party”), for and in respect of any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever (including attorneys’
fees) in respect of or arising from any acts or omissions of such Manager Indemnified Party made in
good faith in the performance of the Manager’s duties under this Agreement and not constituting the
Manager Indemnified Party’s bad faith, gross negligence, willful misconduct or reckless disregard
of the Manager’s duties under this Agreement.

          (c) The Company shall, to the fullest extent lawful, reimburse, indemnify and hold harmless
the Advisor and its Affiliates, and their respective officers, stockholders, members, managers,
directors, personnel and any Person controlling or controlled by or under common control with the
Advisor (including its Voting Member) and any Person who was any of the foregoing at any time
during the term of this Agreement (each, an “Advisor Indemnified Party”), for and in
respect of any and all expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever (including attorneys’ fees) in respect of or arising from any acts or omissions
of such Advisor Indemnified Party made in good faith in the performance of the Advisor’s duties
under the Advisory Agreement and not constituting the Advisor Indemnified Party’s bad faith, gross
negligence, willful misconduct or reckless disregard of the Advisor’s duties under the Advisory
Agreement.

          (d) The Company shall, to the fullest extent lawful, reimburse, indemnify and hold harmless
each Sub-Advisor and its respective Affiliates, and their respective officers, stockholders,
members, managers, directors, personnel and any Person controlling or controlled by or under common
control with each Sub-Advisor and any Affiliate of any of the foregoing (including their respective
Voting Members) and any Person who was any of the foregoing at any time during the term of this
Agreement (each, a “Sub-Advisor Indemnified Party”), for and in respect of any and all
expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever
(including attorneys’ fees) in respect of or arising from any acts or omissions of any Sub-Advisor
Indemnified Party made in good faith in the performance of such Sub-Advisor’s duties under the
relevant Sub-Advisory Agreement and not

23

 

constituting the Sub-Advisor Indemnified Party’s bad faith, gross negligence, willful
misconduct or reckless disregard of the Sub-Advisor’s duties under the relevant Sub-Advisory
Agreement.

          (e) The Company shall, to the fullest extent lawful, reimburse, indemnify and hold harmless
the Consultant and its Affiliates, and their respective officers, stockholders, members, managers,
directors, personnel and any Person controlling or controlled by or under common control with the
Consultant and any Person who was any of the foregoing at any time during the term of this
Agreement (each, a “Consultant Indemnified Party”), for and in respect of any and all
expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever
(including attorneys’ fees) in respect of or arising from any acts or omissions of such Consultant
Indemnified Party made in good faith in the performance of the Consultant’s duties under the
Consulting Agreement and not constituting the Consultant Indemnified Party’s bad faith, gross
negligence, willful misconduct or reckless disregard of the Consultant’s duties under the
Consulting Agreement.

          (f) The Manager shall, to the fullest extent lawful, reimburse, indemnify and hold the Company
(or any Subsidiary), its and their directors and officers, personnel, agents and each other Person,
if any, controlling or controlled by or under common control with the Company and any Person who
was any of the foregoing at any time during the term of this Agreement (each, a “Company
Indemnified Party” and, together with each Manager Indemnified Party, each Advisor Indemnified
Party, each Sub-Advisor Indemnified Party and each Consultant Indemnified Party, each, an
“Indemnitee”), harmless of and from any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever (including attorneys’ fees) in respect of or
arising from acts of the Manager constituting bad faith, gross negligence, willful misconduct or
reckless disregard of its duties under this Agreement or any claims by the Manager’s personnel
relating to the terms and conditions of their employment by the Manager.

          (g) Each Indemnitee will promptly notify the party against whom indemnity is claimed (the
“Indemnitor”) of any claim for which it seeks indemnification; provided, however, that the
failure to so notify the Indemnitor will not relieve the Indemnitor from any liability which it may
have hereunder. The Indemnitor shall have the right to assume the defense and settlement of such
claim; provided, that the Indemnitor acknowledges its obligation to indemnify the Indemnitee and
notifies the Indemnitee of its election to assume such defense and settlement within 30 days after
the Indemnitee gives the Indemnitor notice of the claim. In such case, the Indemnitee will not
settle or compromise such claim, and the Indemnitor will not be liable for any such settlement
made, without the Indemnitor’s prior written consent. If the Indemnitor is entitled to, and does,
assume such defense by delivering the aforementioned notice to the Indemnitee, the Indemnitee will
(i) have the right to approve the Indemnitor’s counsel (which approval will not be unreasonably
withheld, delayed or conditioned), (ii) be obligated to cooperate in furnishing evidence and
testimony and in any other manner in which the Indemnitor may reasonably request and (iii) be
entitled to participate in (but not control) the defense of any such action with its own counsel
and at its own expense. The Indemnitor shall not, without the prior written consent of an
Indemnitee, consent to entry of judgment or effect any settlement of any claim pending or
threatened proceeding in respect of which such Indemnitee is or could have been a party and
indemnity could have been sought hereunder by such Indemnitee, unless such judgment or settlement
includes an unconditional release of such Indemnitee from all liability arising out of such claim
or proceeding and does not include any statement of admission of fault, culpability or failure to
act by or on behalf of such Indemnitee.

          (h) The Company hereby acknowledges that certain Indemnitees affiliated with the Advisor, the
Sub-Advisors and/or the Consultant may have certain rights to indemnification, advancement of
expenses and/or insurance provided by the Advisor, the Sub-Advisors or the Consultant, as
applicable, or certain of their respective Affiliates (collectively, the “Institutional
Indemnitors”). The

24

 

Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to
an Indemnitee are primary and any obligation of the Institutional Indemnitors or other Person to
advance expenses or to provide indemnification for the same expenses or liabilities incurred by an
Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses
incurred by an Indemnitee in accordance with this Section 12 without regard to any rights such
Indemnitee may have against the Institutional Indemnitors or otherwise and (iii) that it
irrevocably waives, relinquishes and releases the Institutional Indemnitors from any and all claims
or rights against the Institutional Indemnitors for contribution, subrogation or any other recovery
or payment of any kind in respect thereof. The Company further agrees that no advancement or
payment by the Institutional Indemnitors on behalf of an Indemnitee with respect to any claim for
which such Indemnitee has sought indemnification from the Company shall affect the foregoing, and
the Institutional Indemnitors shall have a right of contribution and/or be subrogated to the extent
of such advancement or payment to all of the rights of recovery of an Indemnitee against the
Company.

          (i) The provisions of this Section 12 shall survive the expiration or earlier
termination of this Agreement.

     Section 13. No Joint Venture. Nothing in this Agreement shall be construed to make
the Manager or any Subsidiary, on the one hand, and the Manager, the Advisor, the Consultant, any
Sub-Advisor or any Affiliate of the any of them, on the other hand, partners or joint venturers or
impose any liability as such on either of them.

     Section 14. Term; Termination.

          (a) This Agreement shall be in effect until the third anniversary of the date hereof (the
“Initial Term”) and shall be automatically renewed for a one-year term each anniversary
date thereafter (a “Renewal Term”) unless at least two-thirds of the Independent Directors
agree that (i) there has been unsatisfactory performance by the Manager that is materially
detrimental to the Company and the Subsidiaries (which has remained uncured for 60 days after
written notice by the Independent Directors thereof) or (ii) the compensation payable to the
Manager hereunder is unfair; provided that the Company shall not have the right to terminate this
Agreement under clause (ii) above if the Manager agrees to continue to provide the services under
this Agreement at a reduced fee that at least two-thirds of the Independent Directors determine to
be fair pursuant to the procedure set forth below. The Company may exercise the foregoing option
to elect not to renew this agreement upon the expiration of the Initial Term or any Renewal Term if
it, or the Independent Directors, give 180 days’ prior written notice of the non-renewal to the
Manager (the “Termination Notice”) only for the reasons described in clauses (i) and (ii)
above, and if the Company so elects to issue the Termination Notice, the Company shall be obligated
to (i) specify the reason for non-renewal in the Termination Notice and (ii) pay the Manager the
Termination Fee before or on the last day of the last term of this Agreement (whether that is the
Initial Term or a Renewal Term) (the “Effective Termination Date”); provided, however,
that, in the event that such Termination Notice is given in connection with a determination that
the compensation payable to the Manager is unfair, the Manager shall have the right to renegotiate
such compensation by delivering to the Company, no fewer than 60 days prior to the prospective
Effective Termination Date, written notice (any such notice, a “Notice of Proposal to
Negotiate”) of its intention to renegotiate its compensation under this Agreement. Thereupon,
the Company (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
(acting in accordance with the Manager LLC Agreement) and more than two-thirds of the Independent
Directors agree to the terms of the revised compensation to be payable to the Manager within 60
days following the receipt of the Notice of Proposal to Negotiate, the Termination Notice shall be
deemed of no force and effect and this Agreement shall continue in full force and effect on the
terms stated in this Agreement, except that the compensation payable to the Manager hereunder

25

 

shall be revised in accordance with the agreement of the parties to this Agreement. The
Company and the Manager (acting in accordance with the Manager LLC Agreement) 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 during the 60 day period to the terms of the revised compensation to be payable to the
Manager, this Agreement shall terminate on the Effective Termination Date originally set forth in
the Termination Notice.

          (b) In recognition of the level of the upfront effort required by the Manager to structure and
acquire assets for 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) of this Agreement, unless terminated pursuant to Section 15(a) or for
cause pursuant to Section 16(a), 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
times the sum of (i) the average annual Management Fee plus (ii) the average annual Incentive Fee,
earned by the Manager during the 24-month period immediately preceding the date of such
termination, calculated as of the end of the most recently completed fiscal 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 180 days prior to the expiration of the Initial Term or any Renewal Term,
the Manager (acting in accordance with Section 3.3 of the Manager LLC Agreement) may
deliver written notice to the Company informing it of the Manager’s intention to decline to renew
this Agreement, whereupon this Agreement shall not be renewed and extended and this Agreement shall
terminate effective on the anniversary date of this Agreement next following the delivery of such
notice. The Company is not required to pay to the Manager the Termination Fee if the Manager
terminates this Agreement pursuant to this Section 14(c).

          (d) Upon the receipt of any written notice from AllianceBernstein (or an Affiliate thereof
that is then the Advisor) to the Manager of the Advisor’s intention to terminate the Advisory
Agreement, the Company agrees with the Manager that the Manager will have the right, prior to the
effective date of AllianceBernstein or its Affiliates ceasing to be the Advisor under the Advisory
Agreement but within 90 days of the receipt of such notice terminating the Advisory Agreement (the
“Proposal Period”), to submit to the Company a written proposal for a continuation as the
Manager by the existing Manager (after giving effect to the termination of such Advisor) or by a
replacement Manager established by all of the existing Manager’s Members (other than any Member
that is AllianceBernstein or an Affiliate thereof) or any such lesser number of Members thereof
that desire to support such proposal (each such proposal, a “Manager Successorship
Proposal”) (or (in each case) any Affiliates thereof). The Company agrees that any Manager
Successorship Proposal received by it within the Proposal Period will be referred (on an exclusive
basis and prior to the Company or its representatives soliciting or negotiating with any third
party replacement Manager) to the Company’s Independent Directors for a determination of approval
or non-approval and that if a Manager Successorship Proposal is approved by the Independent
Directors, then the Company shall implement such Manager Successorship Proposal and shall not send
the written termination notice to the Manager pursuant to Section 16(a)(viii) if such
approved Manager Successorship Proposal was based on a continuation of the existing Manager (after
giving effect to the termination of the Advisor). The parties hereto acknowledge that no provision
hereof shall obligate the Company to approve or implement any particular Manager Successorship
Proposal and that any determination by the Independent Directors shall be within their sole control
and not the control by either party hereto.

          (e) If this Agreement is terminated pursuant to Section 14, such termination shall be
without any further liability or obligation of either party to the other, except as provided in
Sections 6, 9,

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10, 12, 14(b), 16(b), and 17 of this Agreement. In
addition, Sections 12 and 24 of this Agreement shall survive termination of this
Agreement.

     Section 15. Assignment.

          (a) Except as set forth in Section 15(b) of this Agreement, this Agreement shall
terminate automatically in the event of its assignment, in whole or in part, by the Manager, unless
such assignment is consented to in writing by the Company with the consent of a majority of the
Independent Directors; provided, however, that no such consent shall be required in the case of an
assignment by the Manager to an Affiliate (as defined in clause (i) of the definition of
“Affiliate”) of AllianceBernstein or to a successor by merger, consolidation, purchase of assets or
other similar business combination, provided further, however, that any such assignment shall be
subject to any prior approvals required under Section 3.3 of the Manager LLC Agreement.
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 the Manager. This Agreement shall
not be assigned by the Company without the prior written consent of the Manager (acting in
accordance with Section 3.3 of the Manager LLC Agreement), except in the case of assignment
by the Company to another REIT or other organization which is a successor (by merger,
consolidation, purchase of assets, or similar transaction) to the Company, in which case such
successor organization shall assume and be bound under this Agreement and by the terms of such
assignment in the same manner as the Company is bound under this Agreement.

          (b) Notwithstanding any provision of this Agreement, the Manager may subcontract and assign
any or all of its responsibilities under Sections 2(b) through 2(i) or any other
provision of this Agreement to any of its Affiliates or to the Advisor or its Affiliates or any
Sub-Advisor or its Affiliates (which in turn, may subcontract or assign particular aspects of its
responsibilities to any of the Sub-Advisors or their Affiliates), and the Company hereby consents
to any such assignment and subcontracting, provided, however, that the Manager provides prior
written notice to the Company for informational purposes only. In addition, the Manager may assign
this Agreement, in whole or in part, to any of its Affiliates (as defined in clause (i) of the
definition of “Affiliate”) or to the Advisor without the approval of the Company’s Independent
Directors if such assignment does not require the Company’s approval under the Investment Advisers
Act of 1940, as amended subject to the limitations provided in the Manager LLC Agreement.

     Section 16. Termination for Cause.

          (a) The Company may terminate this Agreement effective upon 30 days’ prior written notice of
termination from the Company to the Manager, without payment by the Company of any Termination Fee,
if (i) the Manager, its agents or its assignees materially breaches any provision of this Agreement
and such breach shall continue for a period of 30 days after written notice thereof specifying such
breach and requesting that the same be remedied in such 30-day period (or 45 days after written
notice of such breach if the Manager takes material steps to cure such breach within 30 days of the
written notice), (ii) the Manager knowingly engages in any act of fraud, misappropriation of funds,
or embezzlement against the Company or any Subsidiary, (iii) a Bankruptcy of the Manager occurs,
(iv) there is a dissolution of the Manager, (v) the Manager or any of its officers or directors
commits a material violation of any securities laws or regulations promulgated thereunder, or any
other regulations applicable to the Manager’s business, and such violation or the consequences of
such violation has or will have a material adverse effect on the Manager’s ability to perform its
obligations hereunder, (vi) the Manager acts, or fails to act, in a manner constituting gross
negligence in the performance of its duties under this Agreement, (vii) the Manager or any of its
officers or directors is convicted of a felony

27

 

(including a plea of nolo contendere), or (viii) a majority of the Interests (or any other
voting interests of the Manager) of the Manager ceases to be owned by AllianceBernstein or any of
its Affiliates (a “Change of Control”) and at least a majority of the Company’s Independent
Directors determine that such Change of Control of the Manager would materially adversely affect
the Company’s business; provided a Change of Control shall not be considered to have occurred as a
result of any restructuring, merger or acquisition with respect to AllianceBernstein or its
Affiliates (other than the Manager) other than a restructuring, merger or acquisition effectuated
to achieve a Change of Control of the Manager.

          (b) The Manager (acting in accordance with Section 3.3 of the Manager LLC Agreement)
may terminate this Agreement effective upon 60 days’ prior written notice of termination to the
Company in the event that the Company shall default in the performance or observance of any
material term, condition or covenant contained in this Agreement and such default shall continue
for a period of 30 days after written notice thereof specifying such default and requesting that
the same be remedied in such 30-day period. The Company is required to pay to the Manager the
Termination Fee if the termination of this Agreement is made pursuant to this Section
16(b).

          (c) The Manager (acting in accordance with Section 3.3 of the Manager LLC Agreement)
may terminate this Agreement, without payment of any Termination Fee, in the event the Company
becomes regulated as an “investment company” under the Investment Company Act, with such
termination deemed to have occurred immediately prior to such event.

     Section 17. Action Upon Termination. From and after the effective date of termination
of this Agreement pursuant to Sections 14 or 16 of this Agreement, the Manager
shall not be entitled to compensation for further services under this Agreement, but shall be paid
all compensation accruing to the date of termination and, if terminated pursuant to
Section 14(a) or 16(b), the applicable Termination Fee. Upon such termination, the
Manager shall forthwith:

          (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; and

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

     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 30 days following such request. The Manager shall not be liable to the Company, any
Subsidiary, the Independent Directors or the Company’s or a Subsidiary’s stockholders or partners
for any acts performed or omissions to act by the Company or any Subsidiary in connection with the
money or other property

28

 

released to the Company or any Subsidiary in accordance with the second sentence of this
Section 18 other than if it acts in a way that constitutes bad faith, willful misconduct,
gross negligence or reckless disregard of its duties hereunder. The Company and each Subsidiary
shall indemnify the Manager and its officers, directors, personnel, managers, agents and officers
against any and all expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, which arise as a result of the Manager’s release of such money or other property
to the Company or such Subsidiary in accordance with the terms of this Section 18 other
than if it acts in a way that constitutes bad faith, willful misconduct, gross negligence or
reckless disregard of its duties hereunder. Indemnification pursuant to this provision shall be in
addition to any right of the Manager to indemnification under Section 12 of this Agreement.

     Section 19. Representations and Warranties.

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

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

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

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

29

 

          (iv) The Company has, and will, maintain or cause to be maintained, custody of its
assets in compliance with applicable law.

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

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

          (ii) The Manager has the limited liability company power and authority and the legal
right to make, deliver and perform this Agreement and all obligations required hereunder and
has taken all necessary limited liability company action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance by the Manager of
this Agreement and all its obligations hereunder. No consent of any other Person, including
members and creditors of the Manager, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with, any
governmental authority is required by the Manager in connection with this Agreement or the
execution, delivery, performance, validity or enforceability of this Agreement and the
performance by the Manager of all its obligations hereunder. This Agreement has been, and
each instrument or document required hereunder will be, executed and delivered by a duly
authorized officer of the Manager, and this Agreement constitutes, and each instrument or
document required hereunder when executed and delivered hereunder will constitute, the
legally valid and binding obligation of the Manager enforceable against the Manager in
accordance with its terms.

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

     Section 20. Notices. Unless expressly provided otherwise in this Agreement, all
notices, requests, demands and other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given, made and received when delivered
against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable
overnight courier, (iii) delivery by facsimile transmission with telephonic confirmation or
(iv) delivery by registered or certified mail, postage prepaid, return receipt requested, addressed
as set forth below:

          (a) If to the Company:

30

 

Foursquare Capital Corp.

1345 Avenue of the Americas

New York, New York 10105

Attention: Chief Executive Officer

Facsimile No. (212) 969-1334

          (b) If to the Manager:

Foursquare Capital Management, LLC

1345 Avenue of the Americas

New York, New York 10105

Attention: Chief Executive Officer

Facsimile No. (212) 969-1334

          with (in each case) a copy to:

Clifford Chance US LLP

31 W 52nd Street

New York, NY 10019

Attention: Steven T. Kolyer, Esq.

Facsimile No. (212) 878-8376

     Either party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this Section 20 for
the giving of notice.

     Section 21. Binding Nature of Agreement; Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns as provided in this Agreement.

     Section 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. Neither this Agreement, nor the terms hereof, may be
modified, amended or supplemented other than by an agreement in writing signed by each of the
Company and the Manager (acting in accordance with the Manager LLC Agreement).

     Section 24. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
APPLY THE LAW OF ANY OTHER JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION, PROCEEDING OR JUDGMENT
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO
THE LAYING OF VENUE IN SUCH COURT.

31

 

     Section 25. WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 26. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any party hereto, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. No
waiver of any provision hereunder shall be effective unless it is in writing and is signed by the
party asserted to have granted such waiver.

     Section 27. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed part of this Agreement.

     Section 28. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts of this Agreement, individually or
taken together, shall bear the signatures of all of the parties reflected hereon as the
signatories.

     Section 29. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     Section 30. Gender. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number, singular or plural,
and any other gender, masculine, feminine or neuter, as the context requires.

     Section 31. Survival of Representations and Warranties. All representations and
warranties made hereunder, and in any document, certificate or statement delivered pursuant hereto
or in connection herewith, shall survive the execution and delivery of this Agreement.

     Section 32. No Third Party Rights. This Agreement is intended solely for the benefit
of the parties hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any Person other than the parties hereto; provided that (i) each of the Advisor, each
Sub-Advisor and the Consultant shall be a third party beneficiary with respect to all provisions of
this Agreement relating to such third party beneficiary or for such third party beneficiary’s
benefit, including, without limitation, Sections 6, 7(d), 8, 9(c), 9(d), 10, 11, 12, 14 and
15 of this Agreement, and shall have all the benefits and rights conferred to it thereunder and
such provisions are for the benefit of, and may be asserted and enforced by, each such third party
beneficiary and (ii) each Indemnitee (other than the Company and the Manager) shall be a third
party beneficiary with respect to Section 12 of this Agreement and shall have all the
benefits and rights conferred to it thereunder.

32

 

     Section 33. Approvals and Consents Under Manager LLC Agreement. Notwithstanding the
failure to appropriately so note in any provision or section of this Agreement, any acts, actions,
decisions, expenses, consents and/or approvals to be made, incurred, or taken by the Manager
pursuant to this Agreement are subject to the limitations and the first obtaining of any applicable
consents and/or approvals set forth in Section 3.3 of the Manager LLC Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

33

 

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

	 	 	 	 	 
	 	FOURSQUARE CAPITAL CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	FOURSQUARE CAPITAL MANAGEMENT, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

- 34 -

 

EXHIBIT A

INVESTMENT GUIDELINES

	•	 	No investment or other transaction shall be made that would cause the Company to fail to
qualify as a REIT for U.S. federal income tax purposes;

	•	 	No investment or other transaction shall be made that would cause the Company to be
regulated as an investment company under the Investment Company Act;

	•	 	The Company’s investments will be in its target assets classes which are commercial
mortgage-backed securities, residential mortgage-backed securities (“RMBS”), commercial and
residential mortgage loans, other classes of asset-backed securities (which are debt and
equity tranches of securitizations backed by small-balance commercial mortgages, aircraft,
automobiles, credit cards, equipment, manufactured housing, franchises, recreational vehicles
or student loans) and securities (common stock, preferred stock and debt) of other real estate
related entities and non-real estate related asset-backed securities and secured and unsecured
corporate debt (RMBS will include both securities that are not issued or guaranteed by a U.S.
government agency or federally chartered corporation and securities that are so issued or
guaranteed (“Agency RMBS”)); and

	•	 	Until appropriate investments can be identified or until the Company receives capital calls
from the Legacy Securities PPIF, the Manager may invest the Company’s assets in
interest-bearing short-term investments, including money market accounts and/or funds, and
liquid Agency RMBS, in each case that are consistent with the Company’s intention to qualify
as a REIT.

 

 

EXHIBIT B

INITIAL MEMBERS OF THE INVESTMENT COMMITTEE

	 	 	 
	Designating Party	 	Voting Member
	AllianceBernstein
	 	CIO of Company1
	 
	Greenfield
	 	Eugene A. Gorab
	 
	Rialto
	 	Jeff Krasnoff
	 
	N/A
	 	Chief Executive Officer

 

			
	1	 	Provided that if, at any time, the CIO of the Company
is not an Eligible Professional of AllianceBernstein, Alliance Bernstein, in
its capacity as Advisor, shall appoint an Eligible Professional of
AllianceBernstein to be a Voting Member of the Investment Committee.exv10w5

Exhibit 10.5

FORM OF

ADVISORY AGREEMENT

     This ADVISORY AGREEMENT (as may be amended from time to time, this “Agreement”) is
entered into as of [ ], 2009 by and among Foursquare Capital Management LLC (the
“Manager”) and AllianceBernstein L.P. (the “Advisor”).

     WHEREAS, Foursquare Capital Corp., a Maryland real estate investment trust (together with all
of its subsidiaries, the “Company”) has been established to invest in a portfolio of real
estate related assets, including certain types of mortgage-backed securities; and

     WHEREAS, the Manager has agreed to provide management services to the Company pursuant to a
management agreement, dated as of [ ], 2009 (as may be amended from time to time, the
“Management Agreement”), between the Company and the Manager; and

     WHEREAS, the Manager now wishes to retain the Advisor, an investment advisor registered under
the Investment Advisers Act of 1940, as amended (the “Advisers Act”), to provide investment
advisory and certain other portfolio services to the Manager, in connection with the Manager’s
management services to the Company, and the Advisor is willing to provide such services to the
Manager as set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto
as herein set forth, the parties covenant and agree as follows:

     1. Definitions. For purposes of this Agreement, terms used and not defined herein has
the meanings specified in the Management Agreement. The following terms shall have the indicated
meanings:

          “Administrative Services Agreement” means the administrative services agreement, dated
as of the date hereof, between the Advisor and the Manager, as may be amended from time to time.

          “Advisers Act” has the meaning set forth in the preamble.

          “Advisor” has the meaning set forth in the preamble.

          “Advisor Fee” has the meaning set forth in Section 5(a) of this Agreement.

          “Advisor Indemnified Party” has the meaning set forth in Section 8(b) of this
Agreement.

          “Advisor Termination Fee” has the meaning set forth in Section 5(a) of this Agreement.

          “Affiliate” means with respect to any Person (i) any other Person directly or
indirectly controlling, controlled by, or under common control with such Person, (ii) any executive
officer or general partner of such Person, (iii) any member of the board of directors or board of
managers (or bodies performing similar functions) of such Person, and (iv) any legal entity for
which such Person acts as an executive officer or general partner.

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

 

 

          “Bankruptcy” means, with respect to the Advisor, (a) the filing by the Advisor 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 the Advisor filing an answer consenting to or acquiescing in any such petition,
(b) the making by the Advisor of any assignment for the benefit of its creditors, (c) the
expiration of 60 days after the filing of an involuntary petition relating to the Advisor under
Title 11 of the United States Code, an application for the appointment of a receiver for a material
portion of the assets of the Advisor, or an involuntary petition seeking liquidation,
reorganization, arrangement or readjustment of the Advisor or its debts with respect to the Advisor
under any other federal, state or foreign insolvency law, provided that the same shall not have
been vacated, set aside or stayed within 60 days after it is filed, or (d) the entry against the
Advisor of a final and non-appealable order for relief of it as a debtor under any bankruptcy,
insolvency or similar law now or hereinafter in effect.

          “Board of Directors” has the meaning set forth in the Manager LLC Agreement.

          “Cause” has the meaning set forth in Section 9(d) of this Agreement.

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

          “Company” has the meaning set forth in the recitals.

          “Conduct Policies” has the meaning set forth in Section 7(c) of this Agreement.

          “Confidential Information” has the meaning set forth in Section 11 of this Agreement.

          “Consultant” means Flexpoint or, subject to the terms of the Consulting Agreement and
the Management Agreement, any successor thereto.

          “Consultant Fee” has the meaning set forth in the Consulting Agreement.

          “Consultant Termination Fee” has the meaning set forth in the Consulting Agreement.

          “Consulting Agreement” means the Consulting Agreement, dated as of the date hereof,
between Flexpoint, the Manager and the Advisor, as may be amended from time to time.

          “Eligible Professional” means, with respect to the Advisor or any Sub-Advisor, a
person that is a senior investment professional who is an officer or employee thereof.

          “Flexpoint” means Flexpoint Fund, L.P., including its successors.

          “Greenfield” means Greenfield Advisors, LLC, including its successors and its
permitted assigns.

          “Greenfield Sub-Advisory Agreement” means the sub-advisory agreement among the
Manager, the Advisor and Greenfield dated as of the date hereof, as may be amended from time to
time.

          “Governing Instruments” has the meaning set forth in the Manager LLC Agreement.

          “Indemnitee” has the meaning set forth in Section 8(c) of this Agreement.

          “Indemnitor” has the meaning set forth in Section 8(d) of this Agreement.

2

 

          “Investment Committee” has the meaning specified in the Management Agreement.

          “Management Agreement” has the meaning set forth in the recitals.

          “Manager Indemnified Party” has the meaning set forth in Section 8(c) of this
Agreement.

          “Manager LLC Agreement” means the Amended and Restated Limited Liability Company
Agreement of the Manager dated as of [ ], 2009, as may be further amended from time to time.

          “NYSE” has the meaning set forth in the Manager LLC Agreement.

          “Person” means any individual, corporation, partnership, association, 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.

          “Rialto” means Rialto Capital Partners, LLC, including its successors and its
permitted assigns.

          “Rialto Sub-Advisory Agreement” means the sub-advisory agreement among the Manager,
the Advisor and Rialto dated as of the date hereof, as may be amended from time to time.

          “Special Situations Group” means the special situations group of the Advisor.

          “Sub-Advisors” means Greenfield and Rialto, and “Sub-Advisor” means any one of them
and any successor in interest to, or permitted assigns of, any of them; provided, however, that no
successor in interest to, or permitted assigns of, any Sub-Advisor (other than an Affiliate thereof
to which the relevant Sub-Advisory Agreement has been assigned pursuant to its terms) shall be a
Sub-Advisor unless approved by the Advisor acting (in each case) with the consent of the Manager
(acting in accordance with Section 3.3(A)(h) of the Manager LLC Agreement). Sub-Advisors
shall also include any replacement or additional entity that, at the election of the Advisor acting
(in each case) with the consent of the Manager (acting in accordance with Section 3.3(A)(h)
of the Manager LLC Agreement), becomes a Sub-Advisor to the Advisor pursuant to a sub-advisory
agreement with the Advisor in form and substance substantially similar to the other Sub-Advisory
Agreements and not materially more favorable to such Sub-Advisor than such other Sub-Advisory
Agreements are to the other Sub-Advisors.

          “Sub-Advisory Agreements” means the Greenfield Sub-Advisory Agreement, the Rialto
Sub-Advisory Agreement and any other sub-advisory agreement entered into by the Advisor with the
consent of the Manager provided in accordance with the Manager LLC Agreement, as each such
agreement may be amended from time to time.

          “Sub-Advisory Fee” has the meaning set forth in the applicable Sub-Advisory Agreement
for each Sub-Advisor.

          “Sub-Advisor Termination Fee” has the meaning set forth in the applicable Sub-Advisory
Agreement for each Sub-Advisor.

          “Termination Fee” has the meaning set forth in the Management Agreement.

3

 

          “Treasury” means the United States Department of the Treasury.

     2. Appointment of the Advisor. The Manager hereby appoints the Advisor to perform the
investment advisory and portfolio management services for the sourcing, investment and reinvestment
of the Company’s assets and related portfolio support functions as determined from time to time by
the Manager. The Advisor shall provide the Manager with such investment advice, supervision and
other services, as set out in Section 4 below, as the Manager may from time to time consider
necessary for the proper supervision and management of the Company’s assets.

     3. Investment Committee

          (a) The Advisor agrees that, if the Chief Investment Officer of the Company is not an Eligible
Professional of the Advisor on the date hereof, in connection with the establishment on such date
by the Manager of the Investment Committee, the Advisor shall designate an Eligible Professional of
the Advisor to serve as a Voting Member (as such term is defined in the Management Agreement) on
the Investment Committee and to perform all duties thereof as set forth in the Management
Agreement.

          (b) Subject to the Chief Investment Officer of the Company not being an Eligible Professional
of the Advisor, the Advisor may, at any time, by notice in writing to the Manager, designate a
different Eligible Professional of the Advisor to serve as its Voting Member on the Investment
Committee in accordance with the provisions of the Management Agreement. If the Advisor designates
a different Eligible Professional of the Advisor to serve as its Voting Member, the person
previously designated as a Voting Member shall thereupon cease be a Voting Member.

          (c) The Advisor shall, pursuant to each applicable Sub-Advisory Agreement, require each
Sub-Advisor to designate an Eligible Professional of such Sub-Advisor to serve from the date hereof
as a Voting Member, and the Advisor shall ensure that any additional Sub-Advisor is required
pursuant to its Sub-Advisory Agreement to designate an Eligible Professional to serve as a Voting
Member on the date such additional Sub-Advisor executes the applicable Sub-Advisory Agreement.

          (d) The Advisor acknowledges that, upon the termination of this Agreement, the Eligible
Professional that the Advisor had designated as a Voting Member of the Investment Committee shall
no longer be a Voting Member.

     4. Services Provided by the Advisor

          (a) The Advisor agrees to provide the services to be performed by the Manager set forth in
Sections 2(b) to 2(i) of the Management Agreement and such other services under the Management
Agreement as may be requested by the Manager from time to time, except those services which are
expressly specified to be performed or provided by the Advisor to the Manager pursuant to the terms
of the Administrative Services Agreement.

          (b) Both parties hereto acknowledge that the Special Situations Group will allocate any
investment or co-investment opportunities it considers appropriate among the clients of the Special
Situations Group (including the Manager on behalf of the Company) in a manner that the Special
Situations Group deems fair and equitable, and it may do so by recommending investment
opportunities or co-investment opportunities to the Investment Committee. In addition, both
parties acknowledge that no other internal group, division or Affiliate of the Advisor other than
the Special Situations Group shall be required to source assets for investment by the Company or to
make investment or co-investment recommendations to the Investment Committee, although such
internal group, division or Affiliate may choose to do so in its sole and absolute discretion.

4

 

          (c) Both parties hereto acknowledge that none of the officers or employees of the Advisor will
be dedicated exclusively to the performance of the Advisor’s duties under this Agreement and that
such officers and employees of the Advisor shall devote such time to the performance of its duties
hereunder as is reasonably necessary.

          (d) Both parties hereto acknowledge that the Advisor may use third parties to assist the
Advisor in its performance of its duties under this Agreement, including the Sub-Advisors and the
Consultant. Both parties hereto further acknowledge that any compensation to be paid to such third
parties rendering that assistance to the Advisor shall be paid by the Advisor and such amounts
shall not be reimbursed to the Advisor by the Manager or the Company. The Company may also obtain
services relating to diligence with regard to potential investments, which may be rendered by a
Sub-Advisor or its Affiliates and the costs of which will be paid or reimbursed by the Company.

          (e) The Advisor agrees that it shall not terminate any Sub-Advisory Agreement or Consulting
Agreement for Cause or otherwise or consent to any assignment of such agreements or appoint any
additional or replacement Sub-Advisor or additional or replacement Consultant without the prior
written consent of the Manager (acting in accordance with Section 3.3 of the Manager LLC
Agreement).

          (f) In addition, the Advisor agrees to offer the Company the right for the Company, directly
or through its Subsidiaries, to participate in investment and financing opportunities that the
Advisor determines are appropriate for the Company in view of its investment objectives, policies
and strategies, and other relevant factors, subject to the condition that the Company (and its
Subsidiaries) might not participate in each such opportunity but will on an overall basis equitably
participate with the Advisor’s other clients in relevant investment opportunities in accordance
with the Advisor’s then prevailing allocation policy. Nothing in this Agreement shall (i) prevent
the Manager, the Advisor, the Consultant, any Sub-Advisor or any of their respective Affiliates,
owners, officers, directors, employees or personnel, from engaging in other businesses or from
rendering services of any kind to any other Person, including, without limitation, investing in, or
rendering advisory services to others investing in, any type of investment assets (including,
without limitation, investments that meet the principal investment objectives of the Company),
whether or not the investment objectives or policies of any such other Person or entity are similar
to those of the Company or (ii) in any way restrict the Manager, the Advisor, the Consultant, any
Sub-Advisor or any of their respective Affiliates, owners, officers, directors, employees or
personnel from buying, selling or trading any securities or investments for their own accounts or
for the accounts of others for whom the Manager, the Advisor, the Consultant, any Sub-Advisor or
any of its Affiliates, owners, officers, directors, employees or personnel may be acting. When
making decisions where a conflict of interest may arise, the Advisor will endeavor to allocate
investment and financing opportunities in a fair and equitable manner over time as between the
Company and the Advisor’s other clients, in each case in accordance with the Advisor’s then
prevailing allocation policy. While recommendations made to the Company shall, in the Advisor’s
reasonable and good faith judgment, be appropriate under the circumstances and in light of the
investment objectives, policies and strategies of the Company, they may be different from the
recommendations made by the Advisor or any Affiliate of the Advisor to other clients of the Advisor
or its Affiliates.

     5. Compensation of the Advisor.

          (a) For the services to be rendered, the Manager shall pay to the Advisor each quarter an
investment advisory fee (the “Advisor Fee”) (which may include the common stock of the
Company and the cash/stock ratio of which shall be the same for the Advisor Fee, the Sub-Advisory
Fee and the Consultant Fee paid respectively to the Advisor, the Sub-Advisors and the Consultant)
computed as set forth in Schedule A attached hereto. The transfer by the Manager to the
Advisor of any of the

5

 

Company’s common stock as part of the Advisor Fee shall be on the same basis as described with
respect to the Incentive Fee to be paid to the Manager pursuant to Section 9(b) of the Management
Agreement and shall, at all times, be subject to the following: (1) the ownership of such shares by
the Advisor does not violate the limit on ownership of the Company’s common stock set forth in the
Company’s Governing Instruments, after giving effect to any waiver from such limit that the Board
of Directors may grant to the Advisor in the future, (2) the transfer of such shares by the
Manager to the Advisor complies with all applicable restrictions under U.S. federal securities laws
and the rules of the NYSE, and (3) the Advisor shall have substantially the same registration rights and obligations with
respect to such shares as shall be provided to the Manager pursuant to the agreement referred to in
Section 9(b)(i)(3) of the Management Agreement. If the Advisor serves for less than the whole of any period specified,
its compensation shall be prorated accordingly based upon the number of days in the period that the
Advisor actually serves. In the event that the Management Agreement is terminated and the Company
is required to pay a Termination Fee pursuant to Section 14(b) or 16(b) of the Management
Agreement, the Manager shall pay to the Advisor the termination fee (the “Advisor Termination
Fee”) as set forth in Schedule A attached hereto.

          (b) Pursuant to the Sub-Advisory Agreements, the Manager has agreed, on behalf of the Advisor,
to pay the Sub-Advisors directly, all amounts payable to the Sub-Advisors by the Advisor pursuant
to the Sub-Advisory Agreements, including, without limitation, the Sub-Advisory Fee (which may
include the common stock of the Company and the cash/stock ratio of which shall be the same for the
Advisor Fee, the Sub-Advisory Fee and the Consultant Fee paid respectively to the Advisor, the
Sub-Advisors and the Consultant), any Sub-Advisor Termination Fee or any reimbursement of eligible
expenses to the Sub-Advisors thereunder, until prior written notice is provided to the contrary by
the applicable Sub-Advisor. In addition, in the event that a Bankruptcy of the Advisor occurs, to
the extent that any compensation or amounts relating to reimbursements of eligible expenses to a
Sub-Advisor that would have been payable by the Advisor to such Sub-Advisor remains unpaid, or the
Advisor cannot pay such amounts to such Sub-Advisor as a result of such Bankruptcy, the Manager
rather than the Advisor shall, to the extent permitted by applicable law, be obligated to make such
payments to such Sub-Advisor and such outstanding amounts owing to such Sub-Advisor by the Manager
or the Advisor pursuant to the applicable Sub-Advisory Agreement shall be deemed to be satisfied
upon such payment by the Manager to such Sub-Advisor. The Advisor agrees to and acknowledges the
foregoing and hereby authorizes the Manager to apply and remit the appropriate portion of (i) the
Advisor Fee payable to the Advisor and allocable to the Sub-Advisors as the Sub-Advisory Fee to
each Sub-Advisor, and (ii) the Advisor Termination Fee payable to the Advisor and allocable to the
Sub-Advisors as the Sub-Advisor Termination Fee, if any, to each Sub-Advisor.

          (c) Pursuant to the Consulting Agreement, the Manager has agreed on behalf of the Advisor to
pay the Consultant directly, all amounts payable to the Consultant by the Advisor pursuant to the
Consulting Agreement, including, without limitation, the Consultant Fee (which may include the
common stock of the Company and the cash/stock ratio of which shall be the same for the Advisor
Fee, the Sub-Advisory Fee and the Consultant Fee paid respectively to the Advisor, the Sub-Advisors
and the Consultant), any Consultant Termination Fee or any reimbursement of eligible expenses to
the Consultant thereunder, until prior written notice is provided to the contrary by the
Consultant. In addition, in the event that a Bankruptcy of the Advisor occurs, to the extent that
any compensation or amounts relating to reimbursements of eligible expenses to the Consultant that
would have been payable by the Advisor to the Consultant remains unpaid, or the Advisor cannot pay
such amounts to the Consultant as a result of such Bankruptcy, the Manager rather than the Advisor
shall, to the extent permitted by applicable law, be obligated to make such payments to the
Consultant and such outstanding amounts owing to the Consultant by the Manager or the Advisor
pursuant to the Consulting Agreement shall be deemed to be satisfied upon such payment by the
Manager to the Consultant. The Advisor agrees to and acknowledges the foregoing and hereby
authorizes the Manager to apply and remit the appropriate portion of (i) the Advisor Fee payable to
the Advisor and allocable to the Consultant as the Consultant Fee to the Consultant, and (ii) the
Advisor Termination Fee payable to the Advisor and allocable to the Consultant as the Consultant
Termination Fee, if any, to the Consultant.

6

 

          (d) Each party hereto agrees and acknowledges that any of the foregoing amounts or payments
made or to be made by the Manager on behalf of the Advisor described in Sections 5(b) and 5(c)
shall reduce and be a credit against any corresponding fees or expenses (as the case may be)
payable to the Advisor by the Manager hereunder as set forth in Schedule A or otherwise
herein.

     6. Representations and Warranties of the Parties. Each party to this Agreement
covenants, represents and warrants to the other parties as of the date hereof and as of each day
during the term of this Agreement that:

          (a) it is a limited partnership or limited liability company, as the case may be, duly
organized and validly existing under the laws of the state of its formation and has full capacity
and authority to enter into this Agreement and to perform its obligations and duties and to provide
the services required of it under this Agreement;

          (b) this Agreement has been duly and validly authorized, executed and delivered on behalf of
such party and is a valid and binding agreement of such party enforceable in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting rights of creditors, and the party will deliver to any other party hereto such
evidence of such authority as such other party may reasonably require, whether by way of a
certified resolution or otherwise;

          (c) the terms of this Agreement do not violate any obligation by which such party is bound,
whether arising by contract, operation of law or otherwise;

          (d) it has obtained or made all material governmental approvals or registrations or licenses
required under applicable law to authorize the performance of its obligations under this Agreement,
except for failures to be so approved, registered or licensed that do not, individually or in the
aggregate, have a material adverse effect on the Company or the Manager or on the ability of such
party to perform its obligations and duties and to provide the services required of it under this
Agreement, and it is not aware of any material legal or financial impediments to performing its
obligations under this Agreement that it has not disclosed in writing to the other party;

          (e) it has or shall promptly obtain all required trained personnel that it reasonably
determines to be necessary or appropriate to perform its obligations under this Agreement;

          (f) it owns or is licensed or sublicensed or has a right to use software programs and data
processing hardware that are necessary for it to perform its obligations under this Agreement, and
to the best of its knowledge such software programs and data processing hardware do not infringe
upon or constitute an infringement on or misappropriation of any valid United States patent,
copyright, trademark, trade secret or other proprietary rights of any third party. During the term
of this Agreement, to the extent that it does not own, license, sublicense or have a contractual
right to such software necessary to perform its obligations under this Agreement, it will purchase,
license, sublicense or obtain right to use such software at its own expense;

          (g) to its knowledge, it is not on any Federal excluded parties, debarment or suspension
lists;

          (h) it is not subject to any pending or current or, to its knowledge, contemplated enforcement
actions that are likely to impair its ability to provide any services under this Agreement, or that
are likely to pose a material reputational risk to the Company or the other party in performing its
obligations under this Agreement; and

7

 

          (i) if doing business with the Treasury or another Federal agency, it is not, and will not
during the term of this Agreement be, in any kind of probationary status and is, and will during
the term of this Agreement be, addressing and resolving any identified deficiencies in performance.

     7. Additional Representations and Warranties of the Advisor.

          (a) The Advisor represents and warrants to the Manager as of the date hereof and as of each
day during the term of this Agreement that it is a duly registered investment advisor with the
Securities and Exchange Commission pursuant to the Advisers Act.

          (b) The Advisor represents and warrants to the Manager as of the date hereof and as of each
day during the term of this Agreement that it has the necessary operational resources and capacity
to perform the services set forth in Section 4(a).

          (c) The Advisor acknowledges receipt of the Company’s Code of Business Conduct and Ethics and
Policy on Insider Trading and Communications Policy (collectively, the “Conduct Policies”),
and the Advisor agrees to ensure that employees of the Advisor and its Affiliates who provide
services to the Company are in substance held to comparable policies and to at least the standards
of conduct set forth in the Conduct Policies.

     8. Limits of Responsibility; Indemnification.

          (a) The Advisor 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 Manager or the Company in following or declining to follow any advice or recommendations of
the Advisor. The Advisor and its officers, stockholders, members, managers, partners, personnel,
directors and any Person controlling or controlled by the Advisor will not be liable to the Manager
or the Company for any acts or omissions by any such Person (including, without limitation, trade
errors that may result from ordinary negligence, such as errors in the investment decision making
process or in the trade process) performed pursuant to or in accordance with this Agreement, except
by reason of acts or omissions constituting bad faith, willful misconduct, gross negligence or
reckless disregard of the Advisor’s duties under this Agreement.

          (b) The Manager shall, to the fullest extent lawful, reimburse, indemnify and hold the
Advisor, its officers, stockholders, members, managers, directors, personnel and any Person
controlling or controlled by or under common control with the Advisor, together with the managers,
officers, directors and personnel thereof (each, an “Advisor Indemnified Party”), harmless
of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever (including attorneys’ fees) in respect of or arising from any acts or omissions
of the Manager constituting the Manager’s bad faith, willful misconduct, gross negligence or
reckless disregard of the Manager’s duties under this Agreement, provided,
however, that, if the Company is providing an indemnity to any Advisor Indemnified Party
with respect to the same claim as any Advisor Indemnified Party may claim indemnification for under
this Section 8(b), the indemnity provided by the Company shall take precedence, and the Manager
shall not be required to indemnify such Advisor Indemnified Party.

          (c) The Advisor shall, to the fullest extent lawful, reimburse, indemnify and hold the
Manager, its directors and officers, stockholders, members, managers, personnel, agents and each
other Person, if any, controlling or controlled by or under common control with the Manager (each,
a “Manager Indemnified Party” and together with an Advisor Indemnified Party, an
“Indemnitee”), harmless of and from any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever (including attorneys’ fees) in respect of or
arising from acts or omissions of the Advisor

8

 

constituting bad faith, willful misconduct, gross negligence or reckless disregard of
the Advisor’s duties under this Agreement.

          (d) Each Indemnitee will promptly notify the party against whom indemnity is claimed (the
“Indemnitor”) of any claim for which it seeks indemnification; provided,
however, that the failure to so notify the Indemnitor will not relieve the Indemnitor from
any liability which it may have hereunder except to the extent such failure actually prejudices the
Indemnitor. The Indemnitor shall have the right to assume the defense and settlement of such
claim; provided, that the Indemnitor notifies the Indemnitee of its election to assume such
defense and settlement within 30 days after the Indemnitee gives the Indemnitor notice of the
claim. In such case, the Indemnitee will not settle or compromise such claim, and the Indemnitor
will not be liable for any such settlement made, without the Indemnitor’s prior written consent.
If the Indemnitor is entitled to, and does, assume such defense by delivering the aforementioned
notice to the Indemnitee, the Indemnitee will (i) have the right to approve the Indemnitor’s
counsel (which approval will not be unreasonably withheld, delayed or conditioned), (ii) be
obligated to cooperate in furnishing evidence and testimony and in any other manner in which the
Indemnitor may reasonably request and (iii) be entitled to participate in (but not control) the
defense of any such action with its own counsel and at its own expense. The Indemnitor shall not,
without the prior written consent of an Indemnitee, consent to entry of judgment or effect any
settlement of any claim pending or threatened proceeding in respect of which such Indemnitee is or
could have been a party and indemnity could have been sought hereunder by such Indemnitee, unless
such judgment or settlement includes an unconditional release of such Indemnitee from all liability
arising out of such claim or proceeding and does not include any statement of admission of fault,
culpability or failure to act by or on behalf of such Indemnitee.

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

     9. Duration and Termination

          (a) Unless this Agreement is earlier terminated in accordance with its terms, this Agreement
shall remain in effect until the date that is the third anniversary of the date hereof and shall be
automatically renewed for a one-year term on such third anniversary date and on each one-year
anniversary date thereafter if the Management Agreement is renewed on such date.

          (b) This Agreement shall terminate (i) on any date on which the Manager is no longer acting in
such capacity with respect to the Company, (ii) on any date on which the Management Agreement is
terminated or (iii) on any date that is mutually agreed by the Advisor and the Manager (acting in
accordance with the Manager LLC Agreement).

          (c) The Advisor may terminate this Agreement effective as of any date on or following the
third anniversary of the date hereof by delivering 180 days’ prior written notice to the Manager.

          (d) If any one or more of the following events or circumstances (each, a “Cause”)
shall occur,

     (i) the Advisor sells or otherwise disposes of all of its equity interest in the
Manager, unless such sale or other disposition is to an Affiliate of the Advisor and is made
in accordance with the Manager LLC Agreement;

9

 

     (ii) the Advisor breaches any provision of this Agreement or otherwise defaults in the
performance of its obligations hereunder and such breach has a material adverse effect on
the Manager or the Company or on their respective businesses, assets or operations and such
breach shall continue for a period of 30 days after written notice thereof specifying such
breach and requesting that the same be remedied in such 30-day period (or 45 days after
written notice of such breach if the Advisor takes material steps to cure such breach within
30 days of the written notice);

     (iii) a material representation or warranty made by the Advisor herein proves to have
been not true and correct when made or deemed made hereunder and such representation or
warranty will have a material adverse effect on the Manager or the Company or their
respective businesses, assets or operations;

     (iv) a Bankruptcy of the Advisor occurs;

     (v) the Advisor knowingly engages in any act of fraud, misappropriation of funds, or
embezzlement against the Manager or the Company;

     (vi) the Advisor acts, or fails to act, in a manner constituting gross negligence in
the performance of its duties under this Agreement;

     (vii) a final, non-appealable judgment is entered giving effect to a conviction of the
Advisor or any of its officers or directors of a felony (including a plea of nolo
contendere) under the laws of the United States or a state thereof or the laws of any other
jurisdiction in which it conducts business and such conviction have a material adverse
effect on the Advisor’s ability to perform its duties and obligations hereunder; or

     (viii) a final, non-appealable judgment is entered giving effect to a conviction of the
Advisor or any of its officers or directors of a material violation of any securities laws
or regulations promulgated thereunder, or any regulations applicable to the Advisor’s
business, and the consequences of such violation and conviction has or will have a material
adverse effect on the Advisor’s ability to perform its duties and obligations hereunder;

then the Manager (acting in accordance with Section 3.3 and Article 9 of the Manager LLC Agreement)
shall have the right, by 30 business days’ notice to the Advisor, to terminate this Agreement (and
the Advisor’s role as such), whereupon this Agreement shall terminate.

          (e) If the Advisor (or an Affiliate thereof), in its capacity as a Managing Member under the
Manager LLC Agreement, withdraws thereunder, then the Manager may terminate this Agreement by
notice to the Advisor.

          (f) From and after the effective date of termination of this Agreement, the Advisor shall not
be entitled to compensation for further services under this Agreement, but shall be paid all
compensation accruing to the date of termination, including any Advisor Termination Fee.

     10. Custody. The Advisor shall not be responsible for any custodial arrangements
involving any assets of the Company or for the payment of any custodial charges and fees, nor shall
the Advisor have possession or custody of any such assets.

     11. Confidential Information. Each party hereby covenants with and undertakes to the
other party that, save as may be required by law or by any regulatory authority or agency or as may
otherwise

10

 

be contemplated by this Agreement, it shall keep secret and confidential and shall not
disclose to any person any Confidential Information (as defined below), provided,
however, that it shall not be required to keep secret and confidential any Confidential
Information which has properly entered the public domain otherwise than through the default of such
party. “Confidential Information” shall mean any models, strategies or information
relating to the organization, finances, business, transactions or affairs of the Company, the
Manager, the Advisor and the Sub-Advisors and any of their respective Affiliates. Notwithstanding
the foregoing, any party hereto may disclose Confidential Information: (i) to any advisors, legal
counsel, accountants and other professional advisors retained in connection with such party’s
business; (ii) to appraisers, financing sources, partners, shareholders, employees, officers,
directors and members of the Advisor, the Manager and their Affiliates and other real estate
related service providers in the ordinary course of such party’s business; (iii) to governmental
officials having jurisdiction over the relevant party; (iv) in connection with any governmental or
regulatory or exchange filings of the relevant party or any Affiliate, or in connection with
disclosure or presentations to Company investors; (v) as required by law or legal process to which
the Company, the Manager, the Advisor or any party to whom disclosure is permitted hereunder is a
party; (vi) with the written consent of each party hereto; or (vii) to the extent such information
is otherwise publicly available through the actions of a Person other than any party to this
Agreement. In addition, any proprietary information developed by the Manager or the Advisor in
connection with this Agreement may be used by such party in its ordinary course of business.

     12. Notices. Unless otherwise specified herein, all notices delivered pursuant to
this Agreement shall be deemed duly given when received by a party at its address as set forth
below. The Manager may rely upon any notice (written or oral) from any Person which the Manager
reasonably believes to be an authorized representative of the Advisor.

	 	(a)	 	If to the Manager:
	 
	 	 	 	Foursquare Capital Management LLC

1345 Avenue of the Americas

New York, New York 10105

Attention: Chief Executive Officer

with a copy to:

	 
	 	 	 	Clifford Chance US LLP

31 W 52nd Street

New York, NY 10019

Attention: Steven T. Kolyer, Esq.

	 
	 	(b)	 	If to the Advisor:

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

Attention: Jeffrey Phlegar

	 
	 	 	 	with a copy to:

	 
	 	 	 	Clifford Chance US LLP

31 W 52nd Street

	 	 	 	New York, NY 10019

Attention: Steven T. Kolyer, Esq.

11

 

     13. No Partnership. Nothing in this Agreement shall be construed to make the Manager,
on the one hand, and the Advisor, on the other hand, partners or joint venturers or impose any
liability as such on either of them, and nothing in this Agreement shall be construed to make the
Advisor an employee or an agent of the Manager.

     14. Assignment. No assignment, as that term is defined in the Advisers Act, of this
Agreement shall be made by the Advisor without the written consent of the Manager (acting in
accordance with the Manager LLC Agreement).

     15. Allocation of Charges and Expenses. The Advisor shall furnish at its own expense
all necessary services, facilities and personnel in connection with its responsibilities hereunder,
including all legal fees and disbursements; provided, however, that the Advisor
shall be reimbursed by the Company for any out of pocket expenses in connection with the
performance of its duties hereunder which are reasonably necessary expenses of the Advisor in
connection with the performance of its duties hereunder, in each case to the extent (and only to
the extent) that such type of expense (i) is or would have been reimbursable to the Manager or the
Advisor by the Company if the Manager had been performing the relevant services under the
Management Agreement, but instead the Advisor is performing such services hereunder, (ii) is
included in a budget of the Manager or the Company that has been approved by the Manager, in
accordance with Section 3.3 of the Manager LLC Agreement, or (iii) is otherwise approved pursuant
to the Manager LLC Agreement (including Section 5.4 thereof).

     16. Invalid Provisions. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future law, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid
or unenforceable provision or its severance from this Agreement.

     17. Counterparts. This Agreement may be executed in two or more counterparts, each
one of which shall be deemed to be an original.

     18. GOVERNING LAW. TO THE EXTENT FEDERAL LAW DOES NOT APPLY, THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION.

     19. Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the Advisor’s provision of advisory services to the Manager with respect to the
Company.

     20. Other Advisors. The Advisor shall have the right to engage any legal, tax,
financial or other advisors in connection with its duties under this Agreement at its own expense,
including any affiliates, so long as such engagement is on an arm’s length basis.

     21. Amendments. This Agreement, and the terms hereof, may not be modified, amended or
supplemented other than by an agreement in writing signed by the Advisor and the Manager (acting in
accordance with the Manager LLC Agreement).

12

 

     22. Survival. All representations and warranties made hereunder, and in any document,
certificate or statement delivered pursuant hereto or in connection herewith, as well as the
provisions of Section 8 shall survive the execution and delivery of this Agreement.

     23. Trial by Jury. The Manager and Advisor each hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or any transaction hereunder.

     24. Approvals and Consents Under Manager LLC Agreement. Notwithstanding the failure
to appropriately so note in any provision or section of this Agreement, any acts, actions,
decisions, expenses, consents and/or approvals to be made, incurred, or taken by the Advisor
pursuant to this Agreement are subject to the limitations and the first obtaining of any applicable
consents and/or approvals set forth in Section 3.3 of the Manager LLC Agreement.

[Signature page follows.]

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective representatives as of the date first above written.

	 	 	 	 	 
	 	

FOURSQUARE CAPITAL MANAGEMENT LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ALLIANCEBERNSTEIN L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

13

 

	 	 	 	 	 

SCHEDULE A

1. Advisor Fee

With respect to each quarter, the amount of the Advisor Fee to be paid to the Advisor by the
Manager on the Fee Payment Date for such quarter shall equal (A+B-C), where

“A” is equal to the amount of Management Fee (as defined in the Management
Agreement) received by the Manager on such Fee Payment Date,

“B” is equal to the amount of Incentive Fee (as defined in the Management Agreement)
(if any) received by the Manager on such Fee Payment Date, and

“C” is equal to the sum of (i) any expenses of and with respect to the Manager
itself (and not the Advisor or any of their respective Affiliates), incurred by the Manager
for the quarter immediately preceding such Fee Payment Date not reimbursed (or to be
reimbursed) by the Company under the Management Agreement, which expenses for avoidance of
doubt are and will only be organizational, accounting, legal and other corporate governance
expenses authorized to be incurred by and with respect to the Manager itself in accordance
with the Manager LLC Agreement or specifically approved in a budget of the Manager in
accordance with Section 3.3 of the Manager LLC Agreement, (ii) any Purchase Payments (as
defined in the Manager LLC Agreement) to be made pursuant to the Manager LLC Agreement out
of the Management Fees and the Incentive Fees, if any, (as defined in the Manager LLC
Agreement) on such Fee Payment Date and (iii) all Sub-Advisor/Consultant Amounts paid
directly by the Manager to the Sub-Advisors or the Consultant on behalf of the Advisor, for
the quarter immediately preceding such Fee Payment Date, pursuant to the Sub-Advisory
Agreements or the Consulting Agreement, as the case may be.

“Fee Payment Date” for any quarter, shall mean the fifth business day after the date of
delivery to the Board of Directors of the Company of the computations made by the Manager to
calculate the Management Fee and the Incentive Fee (if any) that are paid by the Company to the
Manager after the end of such fiscal quarter (or such earlier date on which the Management Fee
and the Incentive Fee with respect to such quarter were actually paid in accordance with Section
9(e) of the Management Agreement).

“Sub-Advisor/Consultant Amounts” means, for any period, (i) with respect to each
Sub-Advisor, the Sub-Advisory Fee (as defined in the Sub-Advisory Agreement with such
Sub-Advisor), payable to such Sub-Advisor by the Advisor pursuant to the applicable Sub-Advisory
Agreement, plus (ii) the Consultant Fee (as defined in the Consulting Agreement) payable to the
Consultant by the Advisor pursuant to the Consulting Agreement.

2. Advisor Termination Fee

The Advisor Termination Fee shall be equal to (i) the Termination Fee received by the Manager
under the Management Agreement, less (ii) (A) any unreimbursed expenses of and with
respect to the Manager itself (and not the Advisor nor any of their respective Affiliates)
required to be paid by the Manager in connection with the termination of the Management Agreement
and approved in a budget of the Manager in accordance with Section 3.3 of the Manager LLC
Agreement and/or otherwise approved thereunder and any Purchase Payments to be made pursuant to
the Manager LLC Agreement out of the Termination Fee (as defined in the Manager LLC Agreement),
and (B) any Sub-Advisor

Sch. A-1

 

Termination Fee (as defined in the applicable Sub-Advisory Agreement) and any Consultant
Termination Fee (as defined in the Consulting Agreement) payable by the Manager directly to a
Sub-Advisor or the Consultant, respectively, on behalf of the Advisor pursuant to the applicable
Sub-Advisory Agreements or the Consulting Agreement, as the case may be.

The Advisor Termination Fee shall be paid to the Advisor by the Manager no later than the
business day following the day on which the Manager received the Termination Fee.

2

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