Document:

NRZ-2014.6.30-Exhibit 10.3

EXECUTION VERSION

SECOND AMENDED AND RESTATED 
MANAGEMENT AND ADVISORY AGREEMENT 

dated as of August 5, 2014 

among 

NEW RESIDENTIAL INVESTMENT CORP.

and 

FIG LLC 

TABLE OF CONTENTS 
	
			
	 
	 
	Page

	SECTION 1.
	DEFINITIONS.
	1

	 
	 
	 

	SECTION 2.
	APPOINTMENT AND DUTIES OF THE MANAGER.
	3

	 
	 
	 

	SECTION 3.
	DEVOTION OF TIME; ADDITIONAL ACTIVITIES.
	7

	 
	 
	 

	SECTION 4.
	AGENCY.
	8

	 
	 
	 

	SECTION 5.
	BANK ACCOUNTS.
	8

	 
	 
	 

	SECTION 6.
	RECORDS; CONFIDENTIALITY.
	8

	 
	 
	 

	SECTION 7.
	OBLIGATIONS OF MANAGER; RESTRICTIONS.
	8

	 
	 
	 

	SECTION 8.
	COMPENSATION.
	9

	 
	 
	 

	SECTION 9.
	EXPENSES OF THE COMPANY.
	11

	 
	 
	 

	SECTION 10.
	CALCULATIONS OF EXPENSES.
	12

	 
	 
	 

	SECTION 11.
	LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION.
	12

	 
	 
	 

	SECTION 12.
	NO JOINT VENTURE.
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	SECTION 13.
	TERM; TERMINATION.
	13

	 
	 
	 

	SECTION 14.
	ASSIGNMENT.
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	SECTION 15.
	TERMINATION FOR CAUSE.
	15

	 
	 
	 

	SECTION 16.
	ACTION UPON TERMINATION.
	15

	 
	 
	 

	SECTION 17.
	RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST.
	16

	 
	 
	 

	SECTION 18.
	NOTICES.
	17

	 
	 
	 

	SECTION 19.
	BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS.
	17

	 
	 
	 

	SECTION 20.
	ENTIRE AGREEMENT.
	18

	 
	 
	 

	SECTION 21.
	CONTROLLING LAW.
	18

	 
	 
	 

	SECTION 22.
	INDULGENCES, NOT WAIVERS.
	18

	 
	 
	 

	SECTION 23.
	TITLES NOT TO AFFECT INTERPRETATION.
	18

	 
	 
	 

	SECTION 24.
	EXECUTION IN COUNTERPARTS.
	18

	 
	 
	 

	SECTION 25.
	PROVISIONS SEPARABLE.
	18

	 
	 
	 

	SECTION 26.
	GENDER.
	19

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SECOND AMENDED AND RESTATED MANAGEMENT AND ADVISORY AGREEMENT 
THIS SECOND AMENDED AND RESTATED MANAGEMENT AND ADVISORY AGREEMENT, is made as of August 5, 2014 (the “Agreement”) by and among NEW RESIDENTIAL INVESTMENT CORP., a Delaware corporation (the “Company”), and FIG LLC, a Delaware limited liability company (together with its permitted assignees, the “Manager”).
W I T N E S S E T H: 
WHEREAS, the Company and the Manager entered into a Management and Advisory Agreement dated as of May 15, 2013 (the “Original Management Agreement”); 
WHEREAS, the Company and the Manager amended and restated the Original Management Agreement in its entirety in the Amended and Restated Management and Advisory Agreement dated as of August 1, 2013 (the “Amended and Restated Management Agreement”); and 
WHEREAS, the Company and the Manager desire to amend and restate the Amended and Restated Management Agreement in its entirety on the terms and conditions hereinafter set forth.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN SET FORTH, THE PARTIES HERETO AGREE AS FOLLOWS: 

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I.    The Amended and Restated Management Agreement is hereby modified so that all of the terms and conditions of the aforesaid Amended and Restated Management Agreement shall be restated in their entirety as set forth herein.
II.    This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and assigns, and shall be deemed to be effective as of the date hereof.
III.    Any reference in any other document executed in connection with the Original Management Agreement, the Amended and Restated Management Agreement or this Agreement to the Original Management Agreement or the Amended and Restated Management Agreement shall be deemed to refer to this Agreement.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN SET FORTH, THE PARTIES HERETO FURTHER AGREE AS FOLLOWS: 
		
	SECTION 1.
	DEFINITIONS.

The following terms have the meanings assigned them: 
(a)    “Agreement” means this Management and Advisory Agreement, as amended from time to time.
(b)    “Board of Directors” means the Board of Directors of the Company.
(c)    “Code” means the Internal Revenue Code of 1986, as amended.
(d)    “Common Share” means a share of capital stock of the Company now or hereafter authorized as common voting stock of the Company.
(e)    “Distribution Date” means May 15, 2013.
(f)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(g)    “Excess MSRs” means excess mortgage servicing rights.
(h)    “Funds from Operations” is as defined by the National Association of Real Estate Investment Trusts and means net income (computed in accordance with GAAP) excluding gains (or losses) from debt restructuring and sales of property, plus depreciation and amortization on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.  Funds from Operations will be computed on an unconsolidated basis.  The computation of Funds from Operations may be adjusted at the direction of the Independent Directors based on changes in, or certain applications of, GAAP.

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(i)    “Governing Instruments” means, with regard to any entity, the articles of incorporation and bylaws in the case of a corporation, certificate of limited partnership (if applicable) and the partnership agreement in the case of a general or limited partnership or the articles of formation and the operating agreement in the case of a limited liability company.
(j)    “Independent Directors” means the members of the Board of Directors who are not officers or employees of the Manager.
(k)    “Investment Company Act” means the Investment Company Act of 1940, as amended.
(l)    “Investments” means the investments of the Company.
(m)    “Junior Share” means a share of capital stock of the Company now or hereafter authorized or reclassified that has dividend rights, or rights upon liquidation, winding up and dissolution, that are inferior or junior to the REIT Shares.
(n)    “Preferred Share” means a share of capital stock of the Company now or hereafter authorized or reclassified that has dividend rights, or rights upon liquidation, winding up and dissolution, that are superior or prior to the REIT Shares.
(o)    “REIT Share” means a share of the Company’s Common Shares, par value $0.01 per share.  Where relevant in this Agreement, “REIT Shares” includes shares of the Company’s Common Shares, par value $0.01 per share, issued upon conversion of Preferred Shares or Junior Shares.
(p)    “Subsidiary” means any subsidiary of the Company and any partnership, the general partner of which is the Company or any subsidiary of the Company and any limited liability company, the managing member of which is the Company or any subsidiary of the Company.
		
	SECTION 2.
	APPOINTMENT AND DUTIES OF THE MANAGER.

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

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(b)    The Manager, in its capacity as manager of the assets and the day-to-day operations of the Company, at all times will be subject to the supervision of the Company’s Board of Directors and will have only such functions and authority as the Company may delegate to it including, without limitation, the functions and authority identified herein and delegated to the Manager hereby.  The Manager will be responsible for the day-to-day operations of the Company and will perform (or cause to be performed) such services and activities relating to the assets and operations of the Company as may be appropriate, including, without limitation: 
(i)    serving as the Company’s consultant with respect to the periodic review of the investment criteria and parameters for Investments, borrowings and operations, any modifications to which shall be approved by a majority of the Independent Directors (such policy guidelines as are in effect on the date hereof, as the same may be modified with such approval, the “Guidelines”) and other policies for approval by the Board of Directors; 
(ii)    investigation, analysis, valuation and selection of investment opportunities; 
(iii)    with respect to prospective Investments by the Company and dispositions of Investments, conducting negotiations with real estate brokers, sellers and purchasers and their respective agents and representatives, investment bankers and owners of privately and publicly held real estate companies; 
(iv)    engaging and supervising, on behalf of the Company and at the Company’s expense, independent contractors which provide real estate brokerage, investment banking, leasing services, mortgage servicing, mortgage brokerage, securities brokerage and other financial services and such other services as may be required relating to the Investments; 
(v)    negotiating on behalf of the Company for the sale, exchange or other disposition of any Investments; 
(vi)    coordinating and managing operations of any joint venture or co-investment interests held by the Company and conducting all matters with the joint venture or co-investment partners; 
(vii)    coordinating and supervising, on behalf of the Company and at the Company’s expense, all property managers, leasing agents and developers for the administration, leasing, management and/or development of any of the Investments; 
(viii)    providing executive and administrative personnel, office space and office services required in rendering services to the Company; 

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(ix)    administering the day-to-day operations of the Company and performing and supervising the performance of such other administrative functions necessary in the management of the Company as may be agreed upon by the Manager and the Board of Directors, including, without limitation, the collection of revenues and the payment of the Company’s debts and obligations and maintenance of appropriate computer services to perform such administrative functions; 
(x)    communicating on behalf of the Company with the holders of any equity or debt securities of the Company as required to satisfy the reporting and other requirements of any governmental bodies or agencies or trading markets and to maintain effective relations with such holders; 
(xi)    counseling the Company in connection with policy decisions to be made by the Board of Directors; 
(xii)    evaluating and recommending to the Board of Directors modifications to the hedging strategies in effect on the date hereof and engaging in hedging activities on behalf of the Company, consistent with such strategies, as so modified from time to time, with the Company’s status as a real estate investment trust, and with the Guidelines; 
(xiii)    counseling the Company regarding the maintenance of its status as a real estate investment trust and monitoring compliance with the various real estate investment trust qualification tests and other rules set out in the Code and Treasury Regulations thereunder; 
(xiv)    counseling the Company regarding the maintenance of its exemption from the Investment Company Act and monitoring compliance with the requirements for maintaining an exemption from that Act; 
(xv)    assisting the Company in developing criteria that are specifically tailored to the Company’s investment objectives and making available to the Company its knowledge and experience with respect to its target assets; 
(xvi)    representing and making recommendations to the Company in connection with the purchase and finance, and commitment to purchase and finance, of its target assets, and in connection with the sale and commitment to sell such assets; 
(xvii)    monitoring the operating performance of the Investments and providing periodic reports with respect thereto to the Board of Directors, including comparative information with respect to such operating performance, valuation and budgeted or projected operating results; 

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(xviii)    investing and re-investing any moneys and securities of the Company (including investing in short-term Investments pending investment in Investments, payment of fees, costs and expenses, or payments of dividends or distributions to stockholders and partners of the Company) and advising the Company as to its capital structure and capital raising; 
(xix)    causing the Company to retain qualified accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to real estate investment trusts and to conduct quarterly compliance reviews with respect thereto; 
(xx)    causing the Company to qualify to do business in all applicable jurisdictions and to obtain and maintain all appropriate licenses; 
(xxi)    assisting the Company in complying with all regulatory requirements applicable to the Company in respect of its business activities, including preparing or causing to be prepared all financial statements required under applicable regulations and contractual undertakings and all reports and documents required under the Exchange Act; 
(xxii)    taking all necessary actions to enable the Company to make required tax filings and reports, including soliciting stockholders for required information to the extent provided by the provisions of the Code applicable to real estate investment trusts; 
(xxiii)    handling and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day operations, subject to such limitations or parameters as may be imposed from time to time by the Board of Directors; 
(xxiv)    using commercially reasonable efforts to cause expenses incurred by or on behalf of the Company to be reasonable or customary and within any budgeted parameters or expense guidelines set by the Board of Directors from time to time; 
(xxv)    performing such other services as may be required from time to time for management and other activities relating to the assets of the Company as the Board of Directors shall reasonably request or the Manager shall deem appropriate under the particular circumstances; and 
(xxvi)    using commercially reasonable efforts to cause the Company to comply with all applicable laws.

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Without limiting the foregoing, the Manager will perform portfolio management services (the “Portfolio Management Services”) on behalf of the Company with respect to the Investments.  Such services will include, but not be limited to, consulting with the Company on the purchase and sale of, and other investment opportunities in connection with, the Company’s portfolio of assets; the collection of information and the submission of reports pertaining to the Company’s assets, interest rates and general economic conditions; periodic review and evaluation of the performance of the Company’s portfolio of assets; acting as liaison between the Company and banking, mortgage banking, investment banking and other parties with respect to the purchase, financing and disposition of assets; and other customary functions related to portfolio management.  Additionally, the Manager will perform monitoring services (the “Monitoring Services”) on behalf of the Company with respect to any loan servicing activities provided by third parties.  Such Monitoring Services will include, but not be limited to, negotiating servicing agreements; acting as a liaison between the servicers of the assets and the Company; review of servicers’ delinquency, foreclosure and other reports on assets; supervising claims filed under any insurance policies; and enforcing the obligation of any servicer to repurchase assets.
(c)    The Manager may enter into agreements with other parties, including its affiliates, for the purpose of engaging one or more property and/or asset managers for and on behalf, and at the sole cost and expense, of the Company to provide property management, asset management, leasing, mortgage servicing, development and/or similar services to the Company (including, without limitation, Portfolio Management Services and Monitoring Services) with respect to the Investments, pursuant to property management agreement(s) and/or asset management agreement(s) with terms which are then customary for agreements regarding the management or servicing of assets similar in type, quality and value to the assets of the Company; provided, that (i) any such agreements entered into with affiliates of the Manager shall be (A) on terms no more favorable to such affiliate then would be obtained from a third party on an arms’-length basis and (B) to the extent the same do not fall within the provisions of the Guidelines, approved by a majority of the Independent Directors, (ii) with respect to Portfolio Management Services, (A) any such agreements shall be subject to the Company’s prior written approval and (B) the Manager shall remain liable for the performance of such Portfolio Management Services, and (iii) with respect to Monitoring Services, any such agreements shall be subject to the Company’s prior written approval.
(d)    The Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of accountants, legal counsel, appraisers, insurers, brokers, transfer agents, registrars, developers, investment banks, financial advisors, banks and other lenders and others as the Manager deems necessary or advisable in connection with the management and operations of the Company.  Notwithstanding anything contained herein to the contrary, the Manager shall have the right to cause any such services to be rendered by its employees or 

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affiliates.  The Company shall pay or reimburse the Manager or its affiliates performing such services for the cost thereof; provided, that such costs and reimbursements are no greater than those which would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s-length basis; and provided, further, that such costs shall not be reimbursed in excess of $500,000 per annum.
(e)    As frequently as the Manager may deem necessary or advisable, or at the direction of the Board of Directors, the Manager shall, at the sole cost and expense of the Company, prepare, or cause to be prepared, with respect to any Investment (i) an appraisal prepared by an independent real estate appraiser, (ii) reports and information on the Company’s operations and asset performance and (iii) other information reasonably requested by the Company.
(f)    The Manager shall prepare, or cause to be prepared, at the sole cost and expense of the Company, all reports, financial or otherwise, with respect to the Company reasonably required by the Board of Directors in order for the Company to comply with its Governing Instruments or any other materials required to be filed with any governmental body or agency, and shall prepare, or cause to be prepared, all materials and data necessary to complete such reports and other materials including, without limitation, an annual audit of the Company’s books of account by a nationally recognized independent accounting firm.
(g)    The Manager shall prepare regular reports for the Board of Directors to enable the Board of Directors to review the Company’s acquisitions, portfolio composition and characteristics, credit quality, performance and compliance with the Guidelines and policies approved by the Board of Directors.
(h)    Notwithstanding anything contained in this Agreement to the contrary, except to the extent that the payment of additional moneys is proven by the Company to have been required as a direct result of the Manager’s acts or omissions which result in the right of the Company to terminate this Agreement pursuant to Section 15 of this Agreement, the Manager shall not be required to expend money (“Excess Funds”) in excess of that contained in any applicable Company Account (as herein defined) or otherwise made available by the Company to be expended by the Manager hereunder.  Failure of the Manager to expend Excess Funds out-of-pocket shall not give rise or be a contributing factor to the right of the Company under Section 13(a) of this Agreement to terminate this Agreement due to the Manager’s unsatisfactory performance.
(i)    In performing its duties under this Section 2, the Manager shall be entitled to rely reasonably on qualified experts hired by the Manager.

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	SECTION 3.
	 DEVOTION OF TIME; ADDITIONAL ACTIVITIES.

(a)    The Manager will provide a management team, including a Chief Executive Officer, a Chief Financial Officer and a Chief Accounting Officer of the Company, to provide the management services to be provided by the Manager to the Company hereunder.  The members of such team shall devote such of their time to the management of the Company as the Board of Directors reasonably deems necessary and appropriate, commensurate with the level of activity of the Company from time to time.
(b)    Except to the extent set forth in clause (a) above, nothing herein shall prevent the Manager or any of its affiliates or any of the officers and employees of any of the foregoing from engaging in other businesses or from rendering services of any kind to any other person or entity, including investment in, or advisory service to others investing in, any type of real estate or real estate related investment, including investments which meet the principal investment objectives of the Company.
(c)    Managers, members, partners, officers, employees and agents of the Manager or affiliates of the Manager may serve as directors, officers, employees, agents, nominees or signatories for the Company or any Subsidiary, to the extent permitted by their Governing Instruments, as from time to time amended, or by any resolutions duly adopted by the Board of Directors pursuant to the Company’s Governing Instruments.  When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company.
		
	SECTION 4.
	AGENCY.

The Manager shall act as agent of the Company in making, acquiring, financing and disposing of Investments, disbursing and collecting the Company’s funds, paying the debts and fulfilling the obligations of the Company, supervising the performance of professionals engaged by or on behalf of the Company and handling, prosecuting and settling any claims of or against the Company, the Board of Directors, holders of the Company’s securities or the Company’s representatives or properties.
		
	SECTION 5.
	BANK ACCOUNTS.

At the direction of the Board of Directors, the Manager may establish and maintain one or more bank accounts in the name of the Company or any Subsidiary (any such account, a “Company Account”), and may collect and deposit funds into any such Company Account or Company Accounts, and disburse funds from any such Company Account or Company Accounts, 

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under such terms and conditions as the Board of Directors may approve; and the Manager shall from time to time render appropriate accountings of such collections and payments to the Board of Directors and, upon request, to the auditors of the Company or any Subsidiary.
		
	SECTION 6.
	RECORDS; CONFIDENTIALITY.

The Manager shall maintain appropriate books of accounts and records relating to services performed under this Agreement, and such books of account and records shall be accessible for inspection by representatives of the Company or any Subsidiary at any time during normal business hours upon one (1) business day’s advance written notice.  The Manager shall keep confidential any and all information obtained in connection with the services rendered under this Agreement and shall not disclose any such information to nonaffiliated third parties except with the prior written consent of the Board of Directors.
		
	SECTION 7.
	OBLIGATIONS OF MANAGER; RESTRICTIONS.

(a)    The Manager shall require each seller or transferor of investment assets to the Company to make such representations and warranties regarding such assets as may, in the judgment of the Manager, be necessary and appropriate.  In addition, the Manager shall take such other action as it deems necessary or appropriate with regard to the protection of the Investments.
(b)    The Manager shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Guidelines or (ii) would adversely affect the status of the Company as a real estate investment trust under the Code or that, in its sole judgment made in good faith, would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or any Subsidiary or that would otherwise not be permitted by such entity’s Governing Instruments.  If the Manager is ordered to take any such action by the Board of Directors, the Manager shall promptly notify the Board of Directors of the Manager’s judgment that such action would adversely affect such status or violate any such law, rule or regulation or the Governing Instruments.  Notwithstanding the foregoing, the Manager, its directors, officers, stockholders and employees shall not be liable to the Company or any Subsidiary, the Board of Directors, or the Company’s or any Subsidiary’s stockholders or partners for any act or omission by the Manager, its directors, officers, stockholders or employees except as provided in Section 11 of this Agreement.
(c)    The Manager shall not (i) consummate any transaction which would involve the acquisition by the Company of property in which the Manager or any affiliate thereof has an ownership interest or the sale by the Company of property to the Manager or any affiliate thereof, or (ii) under circumstances where the Manager is subject to an actual or potential 

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conflict of interest because it manages both the Company and another Person (not an Affiliate of the Company) with which the Company has a contractual relationship, take any action constituting the granting to such Person of a waiver, forebearance or other relief, or the enforcement against such Person of remedies, under or with respect to the applicable contract, unless such transaction or action, as the case may be and in each case, is approved by a majority of the Independent Directors.
(d)    The Board of Directors periodically reviews the Guidelines and the Company’s portfolio of Investments.  If a majority of the Independent Directors determine in their periodic review of transactions that a particular transaction does not comply with the Guidelines, then a majority of the Independent Directors will consider what corrective action, if any, can be taken.  If the transaction involved the acquisition of an asset from the Manager or an affiliate of the Manager that was not approved in advance by a majority of the Independent Directors, then the Manager may be required to repurchase the asset at the purchase price (plus closing costs) to the Company.
(e)    The Manager shall at all times during the term of this Agreement (including the Initial Term and any renewal term) maintain a tangible net worth equal to or greater than $1,000,000.  Additionally, during such period the Manager shall maintain “errors and omissions” insurance coverage and other insurance coverage which is customarily carried by property and asset and investment managers performing functions similar to those of the Manager under this Agreement with respect to assets similar to the assets of the Company, in an amount which is comparable to that customarily maintained by other managers or servicers of similar assets.
		
	SECTION 8.
	COMPENSATION.

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

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Company or any Subsidiary of the Company (exclusive, with respect to any Subsidiary, of capital of such Subsidiary consisting of a capital contribution or other form of capital investment made by the Company or another Subsidiary of the Company).
(b)    The Manager shall compute each installment of the Management Fee within 15 days after the end of the calendar month with respect to which such installment is payable.  A copy of the computations made by the Manager to calculate such installment shall thereafter, for informational purposes only and subject in any event to Section 13(a) of this Agreement, promptly be delivered to the Board of Directors and, upon such delivery, payment of such installment of the Management Fee shown therein shall be due and payable no later than the earlier to occur of (i) the date which is 20 days after the end of the calendar month with respect to which such installment is payable and (ii) the date which is two (2) business days after the date of delivery to the Board of Directors of such computations.
(c)    The Management Fee is subject to adjustment pursuant to and in accordance with the provisions of Section 13(a) of this Agreement.
(d)    The Board of Directors may, by written notice to the Manager delivered ten (10) days prior to the date on which any payment of the Incentive Compensation (as defined below) is payable, request that the Manager accept all or a portion of such payment in the form of issued Common Shares, which notice shall specify the amount of the payment of the Incentive Compensation, the amount thereof which the Company intends to pay in cash, if any, and the amount thereof which the Company intends to pay in the form of such Common Shares in the number of such shares as determined by the Board of Directors.  Within five (5) days following receipt of said notice, the Manager shall notify the Company in writing, such election to be made by the Manager in its sole discretion, whether it will accept such portion of such payment in the form of such shares and in such number of such shares.
(e)    In addition to the Management Fee otherwise payable hereunder, the Company shall pay the Manager annual incentive compensation (“Incentive Compensation”) on a cumulative, but not compounding, basis, in an amount equal to the product of (A) 25% of the dollar amount by which (1)(a) the Funds from Operations (before such payment) of the Company, excluding Funds from Operations from Investments in equity method investees that are invested in consumer loans as of the date hereof (the “Consumer Loan Companies”) and any unrealized gains or losses from mark-to-market valuation changes on investments and debt (and any deferred tax impact thereof), per REIT Share (based on the weighted average number of REIT Shares outstanding), plus (b) earnings (or losses) from the Consumer Loan Companies computed on a level-yield basis (such that the loans are treated as if they qualified as loans acquired with a discount for credit quality as set forth in ASC 310-30, as such codification was in effect on June 30, 2013) as if the Consumer Loan Companies had been acquired at their GAAP 

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basis on the Distribution Date, earnings (or losses) from equity method investees invested in Excess MSRs as if such equity method investees had not made a fair value election, and gains (or losses) from debt restructuring and gains (or losses) from sales of property, in each case per REIT Share (based on the weighted average number of REIT Shares outstanding), exceed (2) an amount equal to (a) the weighted average of the book value per REIT Share of the equity transferred by Newcastle Investment Corp. on the Distribution Date, and the prices per REIT Share at any subsequent offerings by the Company (adjusted for any prior capital dividends or capital distributions) multiplied by (b) a simple interest rate of ten percent (10%) per annum multiplied by (B) the weighted average number of REIT Shares outstanding during such period.  The obligation of the Company to pay the Incentive Compensation shall survive the expiration or earlier termination of this Agreement, subject to Section 16(b).
		
	SECTION 9.
	EXPENSES OF THE COMPANY.

The Company shall pay all of its expenses and shall reimburse the Manager for documented expenses of the Manager incurred on its behalf (collectively, the “Expenses”).  Expenses include all costs and expenses which are expressly designated elsewhere in this Agreement as the Company’s, together with the following: 
(a)    expenses in connection with the issuance and transaction costs incident to the acquisitions, disposition and financing of Investments; 
(b)    travel and other out-of-pocket expenses incurred by managers, officers, employees and agents of the Manager in connection with the purchase, financing, refinancing, sale or other disposition of an Investment; 
(c)    costs of legal, accounting, tax, auditing, administrative and other similar services rendered for the Company by providers retained by the Manager or, if provided by the Manager’s employees, in amounts which are no greater than those which would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s-length basis; 
(d)    the compensation and expenses of the Independent Directors and the cost of liability insurance to indemnify the Company’s directors and officers; 
(e)    compensation and expenses of the Company’s custodian and transfer agent, if any; 

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(f)    costs associated with the establishment and maintenance of any credit facilities and other indebtedness of the Company (including commitment fees, legal fees, closing and other costs) or any securities offerings of the Company; 
(g)    costs associated with any computer software or hardware that is used solely for the Company; 
(h)    costs and expenses incurred in contracting with third parties, including affiliates of the Manager, for the servicing and special servicing of assets of the Company; 
(i)    all other costs and expenses relating to the Company’s business and investment operations, including, without limitation, the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of Investments, including appraisal, reporting, audit and legal fees; 
(j)    all insurance costs incurred in connection with the operation of the Company’s business except for the costs attributable to the insurance that the Manager elects to carry for itself and its employees; 
(k)    expenses relating to any office or office facilities maintained for the Company or Investments separate from the office or offices of the Manager; 
(l)    expenses connected with the payments of interest, dividends or distributions in cash or any other form made or caused to be made by the Board of Directors to or on account of the holders of securities of the Company or its Subsidiaries, including, without limitation, in connection with any dividend reinvestment plan; 
(m)    expenses connected with communications to holders of securities of the Company or its Subsidiaries and other bookkeeping and clerical work necessary in maintaining relations with holders of such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies, including, without limitation, all costs of preparing and filing required reports with the Securities and Exchange Commission, the costs payable by the Company to any transfer agent and registrar in connection with the listing and/or trading of the Company’s stock on any exchange, the fees payable by the Company to any such exchange in connection with its listing, costs of preparing, printing and mailing the Company’s annual report to its shareholders and proxy materials with respect to any meeting of the shareholders of the Company; and 
(n)    all other expenses actually incurred by the Manager which are reasonably necessary for the performance by the Manager of its duties and functions under this Agreement.

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(o)    Without regard to the amount of compensation received under this Agreement by the Manager, the Manager shall bear the following expenses:  (i) wages and salaries of the Manager’s officers and employees; (ii) rent attributable to the space occupied by the Manager; and (iii) all other “overhead” expenses of the Manager.
		
	SECTION 10.
	CALCULATIONS OF EXPENSES.

The Manager shall prepare a statement documenting the Expenses of the Company and the Expenses incurred by the Manager on behalf of the Company during each calendar month, and shall deliver such statement to the Company within 20 days after the end of each calendar month.  Expenses incurred by the Manager on behalf of the Company shall be reimbursed monthly to the Manager on the first business day of the month immediately following the date of delivery of such statement.
		
	SECTION 11.
	LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION.

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

15

(including attorneys’ fees) in respect of or arising from the Manager’s bad faith, willful misconduct, gross negligence or reckless disregard of its duties under this Agreement.
		
	SECTION 12.
	NO JOINT VENTURE.

Nothing in this Agreement shall be construed to make the Company and the Manager partners or joint venturers or impose any liability as such on either of them.
		
	SECTION 13.
	TERM; TERMINATION.

(a)    Until this Agreement is terminated in accordance with its terms, this Agreement shall be in effect until the date that is one (1) year after May 15, 2013, and thereafter on each anniversary of such date be deemed renewed automatically each year for an additional one-year period unless (i) a majority consisting of at least two-thirds of the Independent Directors or a simple majority of the holders of outstanding Common Shares, agree that there has been unsatisfactory performance that is materially detrimental to the Company or (ii) a simple majority of the Independent Directors agree that the Management Fee payable to the Manager is unfair; provided, that the Company shall not have the right to terminate this Agreement under clause (ii) foregoing if the Manager agrees to continue to provide the services under this Agreement at a fee that the Independent Directors have determined to be fair.  If the Company elects not to renew this Agreement at the expiration of the original term or any such one-year extension term as set forth above, the Company shall deliver to the Manager prior written notice (the “Termination Notice”) of the Company’s intention not to renew this Agreement based upon the terms set forth in this Section 13(a) of this Agreement not less than 60 days prior to the expiration of the then existing term.  If the Company so elects not to renew this Agreement, the Company shall designate the date (the “Effective Termination Date”), not less than 60 days from the date of the notice, on which the Manager shall cease to provide services under this Agreement and this Agreement shall terminate on such date; provided, however, that in the event that such Termination Notice is given in connection with a determination that the compensation payable to the Manager is unfair, the Manager shall have the right to renegotiate the Management Fee by delivering to the Company, no fewer than forty-five (45) days prior to the prospective Effective Termination Date, written notice (any such notice, a “Notice of Proposal to Negotiate”) of its intention to renegotiate its compensation under this Agreement.  Thereupon, the Company and the Manager shall endeavor to negotiate in good faith the revised compensation payable to the Manager under this Agreement.  Provided that the Manager and the Company agree to a revised Management Fee (or other compensation structure) within 45 days following the receipt of the Notice of Proposal to Negotiate, the Termination Notice shall be deemed of no force and effect and this Agreement shall continue in full force and effect on the terms stated in this Agreement, except that the Management Fee shall be the revised 

16

Management Fee (or other compensation structure) then agreed upon by the parties to this Agreement.  The Company and the Manager agree to execute and deliver an amendment to this Agreement setting forth such revised Management Fee promptly upon reaching an agreement regarding same.  In the event that the Company and the Manager are unable to agree to a revised Management Fee during such 45 day period, this Agreement shall terminate, such termination to be effective on the date which is the later of (A) ten (10) days following the end of such 45 day period and (B) the Effective Termination Date originally set forth in the Termination Notice.
(b)    In the event that this Agreement is terminated in accordance with the provisions of Section 13(a) of this Agreement, the Company shall pay to the Manager, on the date on which such termination is effective, a termination fee (the “Termination Fee”) equal to the amount of the Management Fee earned by the Manager during the period consisting of the twelve (12) full, consecutive calendar months immediately preceding such termination.  The obligation of the Company to pay the Termination Fee shall survive the termination of this Agreement.
(c)    No later than sixty (60) days prior to the anniversary date of the Original Management Agreement (May 15) of any year during the Term, the Manager may deliver written notice to the Company informing it of the Manager’s intention not to renew the Term, whereupon the Term of this Agreement shall not be renewed and extended and this Agreement shall terminate effective on the anniversary date next following the delivery of such notice.
(d)    If this Agreement is terminated pursuant to this Section 13, such termination shall be without any further liability or obligation of either party to the other, except as provided in Section 13(b) and Section 16 of this Agreement.  In addition, Section 11 of this Agreement shall survive termination of this Agreement.
		
	SECTION 14.
	ASSIGNMENT.

(a)    Except as set forth in Section 14(b) of this Agreement, this Agreement shall terminate automatically in the event of its assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company with the consent of a majority of the Independent Directors; provided, however, that no such consent shall be required in the case of an assignment by the Manager to an entity whose day-to-day business and operations are managed and supervised by Messrs. Wesley R. Edens and Randal A. Nardone (collectively, the “Principals”), provided, further, that such transaction is determined at the time not to be an “assignment” for purposes of Section 205 of the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated under such act and the interpretations thereof issued by the Securities and Exchange Commission.  Any such permitted assignment shall bind the assignee under this Agreement in the same manner as the Manager is bound, and the Manager shall be liable to the Company for all errors or omissions of the assignee under any such 

17

assignment.  In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee as Manager.  This Agreement shall not be assigned by the Company without the prior written consent of the Manager, except in the case of assignment by the Company to another real estate investment trust or other organization which is a successor (by merger, consolidation or purchase of assets) to the Company, in which case such successor organization shall be bound under this Agreement and by the terms of such assignment in the same manner as the Company is bound under this Agreement.
(b)    Notwithstanding any provision of this Agreement, the Manager may subcontract and assign any or all of its responsibilities under Sections 2(b), 2(c) and 2(d) of this Agreement to any of its affiliates in accordance with the terms of this Agreement applicable to any such subcontract or assignment, and the Company hereby consents to any such assignment and subcontracting.  In addition, provided that the Manager provides prior written notice to the Company for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement.
		
	SECTION 15.
	TERMINATION FOR CAUSE.

(a)    The Company may terminate this Agreement effective upon sixty (60) days prior written notice of termination from the Company to the Manager, without payment of any Termination Fee, if any act of fraud, misappropriation of funds, or embezzlement against the Company or other willful violation of this Agreement by the Manager in its corporate capacity (as distinguished from the acts of any employees of the Manager which are taken without the complicity of any of the Principals) under this Agreement or in the event of any gross negligence on the part of the Manager in the performance of its duties under this Agreement.
(b)    The Manager may terminate this Agreement effective upon sixty (60) days prior written notice of termination to the Company in the event that the Company shall default in the performance or observance of any material term, condition or covenant contained in this Agreement and such default shall continue for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30 day period.
		
	SECTION 16.
	ACTION UPON TERMINATION.

(a)    From and after the effective date of termination of this Agreement, pursuant to Sections 13, 14, or 15 of this Agreement, the Manager shall not be entitled to compensation for further services under this Agreement, but shall be paid all compensation accruing to the date of 

18

termination and, if terminated pursuant to Section 13 or Section 15(b), the applicable Termination Fee.  Upon such termination, the Manager shall forthwith: 
(i)    after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled, pay over to the Company or a Subsidiary all money collected and held for the account of the Company or a Subsidiary pursuant to this Agreement; 
(ii)    deliver to the Board of Directors a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board of Directors with respect to the Company or a Subsidiary; and 
(iii)    deliver to the Board of Directors all property and documents of the Company or any Subsidiary then in the custody of the Manager.
(b)    In the event that this Agreement is terminated, the Company shall have the option, to be exercised by written notice to the Manager within ten (10) days following such termination, to purchase from the Manager the right of the Manager to receive the Incentive Compensation.  In exchange therefor the Company will be obligated to pay the Manager a cash purchase price (the “Cash Price”) equal to the amount of the Incentive Compensation that would be paid to the Manager if all of the Company’s assets were sold for cash at their then current fair market value (taking into account, among other things, expected future performance of the underlying investments, the “Fair Market Value”).  In the event that the Company does not elect to exercise such option to purchase the Incentive Compensation, the Manager shall have the right to require the Company to do so at the Cash Price by delivering to the Company written notice within twenty (20) days following such termination.  The Fair Market Value shall be determined by independent appraisal to be conducted by a nationally recognized appraisal firm mutually agreed upon by the Company and the Manager.  If the Company and the Manager are unable to agree upon an appraisal firm, then each of the Company and the Manager shall choose an independent appraisal firm to conduct an appraisal.  In such event, (i) if the appraisals prepared by the two appraisers so selected are the same or differ by an amount that does not exceed 20% of the higher of the two appraisals, the Fair Market Value will be deemed to be the average of such appraisals, and (ii) if the two appraisals differ by more than 20% of the higher of the two appraisals, the two appraisers together shall select a third nationally recognized appraisal firm to conduct an appraisal.  If the two appraisers are unable to agree as to the identity of such third appraiser, either of the Manager and the Company may request that the American Arbitration Association (“AAA”) select the third appraiser, which shall then be selected by the AAA.  The Fair Market Value will then be deemed to be the amount determined by such third appraiser, but in no event less than the lower or more than the higher of the first two appraisals made under this Section 16(b).

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

The Manager agrees that any money or other property of the Company or Subsidiary held by the Manager under this Agreement shall be held by the Manager as custodian for the Company or Subsidiary, and the Manager’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by the Company or such Subsidiary.  Upon the receipt by the Manager of a written request signed by a duly authorized officer of the Company requesting the Manager to release to the Company or any Subsidiary any money or other property then held by the Manager for the account of the Company or any Subsidiary under this Agreement, the Manager shall release such money or other property to the Company or any Subsidiary within a reasonable period of time, but in no event later than sixty (60) days following such request.  The Manager shall not be liable to the Company, any Subsidiary, the Independent Directors, or the Company’s or a Subsidiary’s stockholders or partners for any acts performed or omissions to act by the Company or any Subsidiary in connection with the money or other property released to the Company or any Subsidiary in accordance with the first sentence of this Section 17.  The Company and any Subsidiary shall indemnify the Manager and its members, managers, officers and employees against any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever, which arise in connection with the Manager’s release of such money or other property to the Company or any Subsidiary in accordance with the terms of this Section 17.  Indemnification pursuant to this provision shall be in addition to any right of the Manager to indemnification under Section 11 of this Agreement.
		
	SECTION 18.
	NOTICES.

Unless expressly provided otherwise in this Agreement, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by facsimile transmission or email against answerback, (iv) delivery by registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below: 
(a)    If to the Company:
New Residential Investment Corp. 
c/o FIG LLC  
1345 Avenue of the Americas 
46th Floor  
New York, New York 10105 
Attention:  Mr. Cameron D. MacDougall

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(b)    If to the Manager:
FIG LLC  
1345 Avenue of the Americas  
46th Floor  
New York, New York 10105  
Attention:  Mr. Randal A. Nardone 
Either party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section 18 for the giving of notice.
		
	SECTION 19.
	BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided in this Agreement.
		
	SECTION 20.
	ENTIRE AGREEMENT.

This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter of this Agreement.  The express terms of this Agreement control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms of this Agreement.  This Agreement may not be modified or amended other than by an agreement in writing.
		
	SECTION 21.
	CONTROLLING LAW.

This Agreement and all questions relating to its validity, interpretation, performance and enforcement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of New York, notwithstanding any New York or other conflict-of-law provisions to the contrary.
		
	SECTION 22.
	INDULGENCES, NOT WAIVERS.

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Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
		
	SECTION 23.
	TITLES NOT TO AFFECT INTERPRETATION.

The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation of this Agreement.
		
	SECTION 24.
	EXECUTION IN COUNTERPARTS.

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts of this Agreement, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
		
	SECTION 25.
	PROVISIONS SEPARABLE.

The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.
		
	SECTION 26.
	GENDER.

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

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
COMPANY:  
 
NEW RESIDENTIAL INVESTMENT CORP.,  
a Delaware corporation 
 
 
 
By:             
    Name:  Cameron D. MacDougall  
    Title:     Secretary
MANAGER:  
 
FIG LLC, 
a Delaware limited liability company  
 
 
 
By:             
    Name:  
    Title: 

23Exhibit102

PROPERTY MANAGEMENT AGREEMENT
This Property Management Agreement (the “Agreement”) is made and entered into as of May 10, 2014 (the “Effective Date”) by and between Silver Bay Operating Partnership L.P., a Delaware limited partnership (“Operating Partnership”), and Silver Bay Property Corp. (“Property Manager”) (each sometimes referred to as a “Party” and, collectively, the “Parties”) with reference to the following:  
RECITALS
A.Property Manager is in the business of managing single-family and other residences.  
B.Upon the terms and conditions set forth below, Operating Partnership desires to retain Property Manager to operate, maintain, repair, manage and lease the Property (defined below) on behalf of Operating Partnership and one or more potential owners (hereafter, “Owner”).
C.Owner is party to certain Loan Documents (defined below) dated on or about May 10, 2013 with the Bank of America, National Association, as agent for the lenders (the “Agent”) and the lenders party thereto from time to time (collectively, the “Lender”), pursuant to which the Agent has been granted a security interest in Owner and Owner’s personal property.
D.Certain capitalized terms shall have the meanings set forth herein and on Exhibit A.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Operating Partnership and Property Manager agree as follows:
1.APPOINTMENT; PROFESSIONAL MANAGEMENT STANDARDS.  
1.1    Engagement.  Operating Partnership, as master property manager for the Owner, engages Property Manager to be the manager of the properties identified on Exhibit B attached hereto (collectively, as may be updated from time to time, the “Property”), and Property Manager accepts the engagement, on the terms and conditions set forth herein.
1.1.1    Acquisitions.  From time to time hereafter, Operating Partnership shall have the right, at its sole option, to cause additional single family and other residential properties that are acquired by Owner to become part of the “Property” (an “Acquisition”) by providing written notice to Property Manager (an “Acquisition Notice”).  Upon Property Manager’s receipt of an Acquisition Notice and Operating Partnership’s approval of an Approved Budget relating to the property identified in such Acquisition Notice in accordance with Section 4.13 hereof, such property shall be deemed part of the “Property”, and Exhibit B shall be updated accordingly. 
1.1.2    Dispositions.  From time to time hereafter, Operating Partnership shall have the right, at its sole option, to cause any Property that is sold or transferred to be removed as part of the “Property” (a “Disposition”) by providing written notice to Property Manager (a “Disposition Notice”).  Upon Property Manager’s receipt of a Disposition Notice, such Property shall no longer be deemed part of the “Property”, and Exhibit B shall be updated accordingly.
1.1.3    Financings.  From time to time hereafter, Operating Partnership shall have the right, at its sole option in accordance with the terms of the Loan Documents, to cause any Property that ceases to directly or indirectly be security for the Agent under the Loan Documents to be removed as part of the “Property” and transferred to that certain Amended and Restated Property Management Agreement dated May 10, 2014 between Operating Partnership and Property Manager by providing written notice to Property Manager (a “Release Notice”), with a copy to the Agent.  Upon Property Manager’s receipt of a Release Notice, if the Agent does not object to such Release Notice within ten (10) days, such Property shall no longer be deemed part of the “Property”, and Exhibit B shall be updated accordingly.      
1.2    Property Manager Status.  Property Manager is not a joint venturer, partner or employee of Operating Partnership.  In the performance of its duties hereunder, Property Manager shall act solely as property manager for the account of Operating Partnership but only to the extent expressly set forth herein.      
1.3    Standards.  Property Manager will perform the services required of it under this Agreement (the “Services”) in conformance with the following standards (the “Standards”): (a) those management, rental, sales and collection practices of prudent companies that manage single family and 2-4 family residential homes for rent and sale of a type similar to the Properties in the jurisdiction where the related Property is located, (b) in accordance with commercially reasonable professional standards, (c) in compliance with all Legal Requirements; (d) using good faith and commercially reasonable efforts; and (e) in accordance with instructions that Operating Partnership issues from time to time. 
2.    TERM.  
2.1    Initial Term.  The initial term of this Agreement commences on the Effective Date and ends on the (1) year anniversary thereof (the “Term”).  
2.2    Termination.  Following the initial Term, this Agreement shall continue on a monthly basis.  Article 8 hereof contains provisions regarding termination of this Agreement.  
3.    COMPENSATION
  Property Manager will be compensated for its services under this Agreement as outlined on Exhibit C attached hereto.  Such compensation is referred to herein as the “Management Fee”.
4.    PROPERTY MANAGER’S RESPONSIBILITIES.  
4.1    Property Management Report.  Property Manager shall populate App Folio, or another accounting system selected by Operating Partnership, with the data contemplated by such program, in a timely fashion (and no later than five (5) calendar days after the data is available).    
4.2    Initial Renovation of Properties.  Property Manager shall negotiate agreements with contractors for renovation work to Properties consistent with a standardized scope of work as approved by Operating Partnership.   All renovation agreements must be approved in advance by Operating Partnership.  Property Manager will oversee completion of the approved renovation work.
4.3    Management and Maintenance.  Property Manager shall maintain and manage the Property in conformance with the Standards.  Property Manager shall comply with the provisions of Property Management Plan attached hereto as Exhibit D.  
4.4    Leasing.  Property Manager shall provide Operating Partnership with an estimated projected rent for each Property.  Property Manager shall lease in conformance with the Leasing Plan attached hereto as Exhibit E, as the same may be modified by Operating Partnership.  Property Manager must obtain Operating Partnership’s approval prior to any Lease that would be 95% or less of the projected rent set forth in the Approved Budget.   
4.4.1    Lease Form.  Property Manager shall use the lease form (the “Lease Form”) attached hereto as Exhibit F.  
4.4.2    Lease Parameters.  Property Manager shall negotiate leases in compliance with the lease parameters attached as Exhibit G which Operating Partnership may revise from time to time in Operating Partnership’s sole and absolute discretion (the “Lease Parameters”).  Property Manager shall not discriminate in the leasing of the Property in violation of any applicable law.
4.4.3    Authority.  Subject to the terms of this Agreement, Property Manager is authorized to enter into Leases with Tenants.   
4.5    Marketing.  Property Manager shall use commercially reasonable efforts and advertising to attract, procure and retain Tenants at each Property.
4.6    Legal Proceedings and Legal Counsel.  The selection of attorneys and professionals for legal matters that relate to any Property and Lease shall be subject to Operating Partnership’s prior approval.  All legal action with respect to any Property or Tenants must be approved by Operating Partnership; with such approval, Property Manager may file unlawful detainer actions and actions to recover rent and other amounts payable by Tenants.  Any legal fees incurred by Property Manager under $1,500 shall be considered “Operating Expenses” hereunder, and Property Manager shall incur no other legal fees.  Property Manager shall promptly notify Operating Partnership of any claims related to any Property or any Lease.  
4.7    Government Approvals/Rental Taxes.  Property Manager shall timely secure tax or business licenses in the name of Owner or Operating Partnership as may be required for the rental of the Property and shall register the Property if required by Legal Requirements.    
4.8    Cooperation With Financing and Sales Efforts.  Property Manager shall cooperate with any financing, sale, or other transfer or disposition relating to any Property or to Operating Partnership, Silver Bay Property Corp. (“OP Manager”) or any of their affiliates.    
4.9    Accounts.   
4.9.1    Trust Deposit Account.  All funds received by Property Manager as a refundable security deposit (the “Security Deposits”) in connection with the Lease shall be placed in trust for Operating Partnership’s benefit into an account at a financial institution approved in advance by Operating Partnership whose deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”) and in a manner to indicate the custodial nature of such account (the “Trust Deposit Account”).  Property Manager shall establish a separate Trust Deposit Account for each Owner that is not an affiliate of any other Owner; provided, however, that Property Manager shall not be required to establish separate Trust Deposit Accounts for affiliated Owners. 
4.9.2    Master Collection Account.  Except for Security Deposits as provided above in Section 4.9.1, all Gross Collections shall be directed to the Master Collection Account. Property Manager shall direct all Tenants to send checks directly to the Lockbox or, if any such Tenant pays by electronic means, including direct debit, credit card or ACH, such Tenants shall be directed to make such payments directly to the Master Collection Account. If Property Manager receives any payment directly from a Tenant, Property Manager shall immediately deposit such payment into the Master Collection Account or direct such payment to the Lockbox.
4.9.3    Trust Operating Account.  Except for Security Deposits as provided above in Section 4.9.1, and Gross Collections as provided above in Section 4.9.2, all funds held by Property Manager shall be placed in trust for Owner’s benefit into an account at a financial institution approved in advance by Operating Partnership whose deposits are insured by the FDIC and in a manner to indicate the custodial nature of such account (the “Trust Operating Account”).  Property Manager shall establish a separate Trust Operating Account for each Owner that is not an affiliate of any other Owner; provided, however, that Property Manager shall not be required to establish separate Trust Operating Accounts for affiliated Owners.
4.9.4    No Commingling.  In no event shall any Security Deposits, any Gross Collections or any other funds from the Property be commingled with any other funds, and in no event shall any funds attributable to the Property of one Owner be used for the benefit of the Property of another Owner.
4.9.5    Access to Accounts.  Operating Partnership shall be given read-only access, the account number and password to all Property accounts.
4.9.6    Security Interest.  Property Manager hereby grants to Operating Partnership a security interest in the Trust Deposit Account and Trust Operating Account to secure performance of Property Manager’s obligations under this Agreement.  The parties intend for this Agreement to create a security interest in and to such accounts, and Operating Partnership shall have all the rights of a secured party, as provided in the Uniform Commercial Code, as in effect from time to time.  Property Manager agrees to execute any financing statements required to perfect Operating Partnership’s interest in such accounts.  Property Manager acknowledges that the security interest described in this Section 4.9.6 will be assigned to the Agent.  
4.10    Disbursements.  
4.10.1    Requests for Funds.  Property Manager may provide a written request to Operating Partnership with respect to funding the Trust Operating Accounts for the ensuing month to the extent reasonably required.  Property Manager’s request shall describe and document any request for funds in excess of those anticipated in the Approved Budget.  
4.10.2    Operating Expenses.  Property Manager shall pay all Operating Expenses on a timely basis from the funds in the applicable Trust Operating Account; provided, however, that except as otherwise provided in the Approved Budget, any maintenance or repair outlay estimated to cost more than $500.00 shall require the prior written approval of Operating Partnership.  
4.10.3    Payment of Management Fee.  Owner shall pay Property Manager the Management Fee on the eighth (8th) calendar day of each month, or if such day is not a banking day, the following calendar day, calculated on all rent collected since the last payment date.
4.10.4    Property Manager Not Entitled to Rents and Other Charges and Collections.  Property Manager acknowledges and agrees that it is collecting and processing rents and other charges and collections solely as the property manager for Owners and Operating Partnership (as master property manager for Owners).  Property Manager has no right to, or title in, the rents and other charges and collections collected or processed with respect to the Property.  In any bankruptcy, insolvency or similar proceeding the Property Manager, or any trustee acting on behalf of the Property Manager, waives any claim to such rents and other charges and collections other than as such may be used to pay the fees and compensation of the Property Manager pursuant to the terms and conditions of this Agreement.  
4.11    Reports.  Property Manager shall cause the following statements, reports and documentation (collectively, the “Reports”) to be delivered to Operating Partnership at the time and in the form and manner referenced below:
4.11.1    Periodic Inspections.  Promptly after each inspection, which shall be at least annually, an update of any material changes, damage, problems or issues. 
4.11.2    Claim Reports.  A report of any claims that may be made by a Tenant or any other Person arising out of the Property relating to any injury, damage, loss, liability, cost, expense or other similar issues, whether or not covered by insurance (the “Claims Report”), a copy of which will be transmitted to Operating Partnership and its insurance agent within 48 hours of receipt by Property Manager.
4.11.3    Account Reconciliations.  A monthly reconciliation of the Trust Deposit Accounts and Trust Operating Accounts and all deposits, disbursements, fees and charges, fund balances and all related information (the “Account Reconciliations”), not later than five (5) calendar days following the end of each month.
4.11.4    Monthly Reports.  On or before the fifth (5th) calendar day of each month:
a.    a monthly income and expense statement (on a form furnished or approved by Operating Partnership and certified by Property Manager) that shows detail of all Gross Collection and Operating Expenses;
b.    an up-to-date rent roll, including a Tenant delinquency report and a vacancy report, in excel format; 
c.    security deposit funds detail;
d.    a balance sheet;
e.    accounts receivable
f.    accounts payable aging;
g.    expense distribution in excel format;
h.    income register in excel format;
i.    Management Fee support;
j.    the monthly close and reporting checklist attached as Exhibit H hereto; and
k.    and such other reports and supporting data as reasonably requested by Operating Partnership.
4.11.5    Database Updates.  At least weekly, Property Manager shall update Operating Partnership’s proprietary database with such information as Operating Partnership may reasonably request.
4.12    Records.  Property Manager shall organize and maintain accurate records of all of the information and data prepared by or utilized by Property Manager in the performance of its duties, including the following (collectively, the “Records”):
4.12.1    All Security Deposits, Gross Collections, Operating Expenses and Management Fees; 
4.12.2    The original of each Lease and Tenant application;
4.12.3    Each Approved Budget;
4.12.4    The banking statements, Account Reconciliations and all back-up information (including proposals, invoices, receipts, etc.) for both the Trust Deposit Accounts and Trust Operating Accounts; and
4.12.5    Insurance policies, all reports required hereunder and all correspondence and activities with respect thereto.
4.12.6    The Records shall be open for inspection by Operating Partnership at all reasonable times and shall be sufficiently detailed to allow Operating Partnership to trace payments and withdrawals to each individual Property.  Property Manager shall provide reasonable assistance in the conduct of any audit of the financial statements of Operating Partnership or any of its clients or affiliates. Manager shall keep safe and intact all such Records for a period of three (3) years after the year to which the records pertain.    
4.13    Budgets.  
4.13.1    Initial Budget.  Property Manager shall promptly and diligently prepare an initial budget for the operation, maintenance, repair and leasing of each Property and shall submit it to Operating Partnership for Operating Partnership’s approval.  
4.13.2    Updated Budgets.  As reasonably necessary in accordance with the Standards, and when otherwise requested by Operating Partnership, Property Manager shall prepare and submit to Operating Partnership for Operating Partnership’s approval a proposed updated budget for the Property (broken out for each Property).   The applicable (initial or updated) budget is the “Approved Budget”.  
4.14    Compliance With Laws and Requirements.  Property Manager shall comply with all Legal Requirements applicable to the performance of the Services and with all insurance policies, surety bonds, agreements and contracts delivered to Property Manager by Operating Partnership, including all documents and instruments entered into respecting loans for Owner, Operating Partnership, OP Manager or any of their affiliates (the “Loan Documents”).  Notwithstanding the foregoing, Property Manager shall not take any action required by Legal Requirements if Operating Partnership has notified Property Manager that Operating Partnership is contesting or has affirmed its intention to contest and promptly institute proceedings contesting such Legal Requirements, unless failure to comply promptly with any such Legal Requirements would expose Property Manager to civil and/or criminal liability.    
4.15    Other Forms of Compensation Prohibited.  Property Manager agrees that its compensation as described in Article 3 hereof is the consideration for all services of Property Manager under this Agreement.  Expenses related to Property Manager’s Employees or to Property Manager’s office overhead (including marketing expenses), whether or not allocable to services rendered in the management of Property, are not to be an Operating Expense of the Properties.  All rebates, discounts or commissions collected by Property Manager, or credited to Property Manager’s use, that relate to the purchasing of supplies or to the rendering of services for the Property, shall be for the benefit of Owner, other than de minimis discounts for bulk purchases or handling charges.  Property Manager shall not collect or charge any undisclosed fee, rebate or discount in connection with the management or leasing of the Property.
4.16    Inspections of Properties.  Property Manager shall cooperate with Operating Partnership and Operating Partnership’s representatives in order to allow them to inspect the Property.
4.17    Internal Controls. Property Manager will establish internal controls to the extent necessary to permit Operating Partnership and its clients and affiliates to fully comply with the requirements of the Exchange Act of 1934, as amended (the “Exchange Act”), which includes establishing and maintaining disclosure controls and procedures under the Exchange Act (rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting under the Exchange Act (rules 13a-15(f) and 15d-15(f)).  Property Manager and Operating Partnership will consult on the proposed internal controls (along related policies and procedures) prior to adoption of any such controls.
5.    INSURANCE; DAMAGE.
5.1    Insurance.  Property Manager shall at all times obtain and keep in force, at no expense to Operating Partnership or Owner, the following policies of insurance:
5.1.1    a commercial general liability policy of insurance protecting Property Manager, Operating Partnership, OP Manager and Owner against claims and damages, including punitive damages, for bodily injury, property damage and personal injury, based upon or arising out of the ownership, use, occupancy or maintenance of the Property and all areas appurtenant thereto, to the extent arising out of an act or omission of Property Manager.  Such insurance shall be on an occurrence basis providing single limit coverage in an amount at limits of not less than $l,000,000 per occurrence, with a $2,000,000 aggregate limit.
5.1.2    statutory workers’ compensation and employers’ liability insurance with minimum limits of $100,000 per accident, $100,000 per disease for each of employee of Property Manager, and $100,000 per policy limit, covering all of Property Manager’s employees;
5.1.3    professional liability or errors and omissions insurance with minimum limits of at least $1,000,000.00 per occurrence, with a $1,000,000.00 aggregate limit, and with a minimum five (5) year extended reporting period.
Deductibles shall be subject to Operating Partnership’s approval, in its sole and absolute discretion.  The limits of the foregoing insurance shall not limit the liability of Property Manager nor relieve Property Manager of any obligation hereunder.  All insurance carried by Property Manager shall be primary to and not contributory with any similar insurance carried by Operating Partnership, OP Manager or Owner, whose insurance shall be considered excess insurance only.  Property Manager shall name Operating Partnership, OP Manager and Owner and their respective directors, officers, members, managers, employees, and agents as named or additional insureds on the commercial general liability policy and the professional liability policy.  Property Manager shall not do or permit to be done anything that invalidates the required insurance policies.  Property Manager shall deliver to Operating Partnership certified copies of all policies of insurance or certificates evidencing the existence and amounts of the required insurance within ten (10) days following the execution of this Agreement.  No such policy shall be cancelable or subject to modification except after thirty (30) days prior to written notice to Operating Partnership.  Property Manager shall, at least thirty (30) days prior to the expiration of such policies, furnish Operating Partnership with evidence of renewals or “insurance binders” evidencing renewal thereof.  The cost of Property Manager’s insurance hereunder shall not be included in Operating Expenses.  Operating Partnership may at its option obtain any insurance required by this Section 5.1 and deduct the cost thereof from Property Manager’s fees hereunder, and may terminate this Agreement upon notice to Property Manager in the event that Property Manager does not timely provide to Operating Partnership the evidence of insurance required hereunder.
5.2    Insurance Policies.  The insurance policies required under this Agreement shall contain the “Amendment of the Pollution Exclusion Endorsement” for damage caused by heat, smoke or fumes from a fire.  The policies shall not contain any intra-insured exclusions as between insured persons or organizations.  The policies required herein shall be issued by companies duly licensed or admitted to transact business in the state where the Property is located, and maintaining during the policy term a “General Policyholders Rating”, as set forth in the most current issue of AM Best’s Insurance Guide, of A/VII or higher.  In the event of a rating downgrade below the required minimum level, Property Manager shall use good faith and commercially diligent efforts to replace the policy with a carrier that has the agreed-upon minimum rating.  
5.3    Contractors.  Other than “handyman” services costing less than $1,000, Property Manager shall require all contractors providing services to the Property to carry insurance in accordance with the Standards.  Property Manager shall deliver to Operating Partnership evidence that such insurance policies are valid and in effect prior to a contractor beginning work on any of the Properties.
5.4    Waiver of Subrogation.  Property Manager shall have its respective insurance carriers waive any right to subrogation that such companies may have against Owner, Operating Partnership, OP Manager or Property Manager, as the case may be, so long as the insurance is not invalidated thereby.  
5.5    Damage.  Property Manager shall promptly investigate and make a full timely written report to Operating Partnership of all damage or destruction to any Property and all accidents or claims for damages relating to the ownership, operation or maintenance of each Property (each report, a “Damage Report”).  
6.    REPRESENTATIONS AND WARRANTIES.  
6.1    Representations, Warranties and Covenants of Property Manager.  Property Manager covenants, represents and warrants to:
6.1.1    Due Organization and Authorization.  Property Manager is validly existing and in good standing and has full power and authority to enter into this Agreement.  
6.1.2    Licenses.  Property Manager and its employees possess all licenses and permits under the laws of the state in which the Property is located as are necessary for them to perform their duties set forth in this Agreement, and all such licenses and permits are in good standing.  
6.1.3    Financial Success.  Property Manager has not relied on any historical financial statement of the Property, or any projection of earnings or any statements as to the possibility of future success or other similar matter that may have been delivered or made available to Property Manager, and Property Manager understands that Operating Partnership does not make nor has made any guarantee as to the future financial success of the Property.
6.2    No Operating Partnership Warranties or Representations as to the Property.  Property Manager acknowledges and agrees that Operating Partnership has not made, nor shall Operating Partnership be deemed to have made, any warranty or representation, express or implied, with respect to the Property.  
6.3    Representations and Warranties of Operating Partnership.  Operating Partnership represents and warrants to Property Manager that Operating Partnership is validly existing and in good standing, and has full power and authority to enter into this Agreement.
7.    CONFIDENTIALITY.  
Property Manager will keep confidential all information regarding Operating Partnership and any related parties.  The provisions of this Article 7 shall survive any termination of this Agreement.
8.    TERMINATION.  
8.1    Voluntary Termination.  Either party may terminate this Agreement after the initial Term upon thirty (30) days written notice to the other party.  Operating Partnership may terminate this Agreement during the initial Term upon thirty (30) days written notice to Property Manager for a fee of $150 for each Property.  
8.2    Effect of Dispositions.  This Agreement shall automatically and immediately terminate with respect to any Property upon the sale or other disposition of such Property.  
8.3    Termination for Cause Without Prior Notice.  At any time Operating Partnership may terminate this Agreement for cause (“Cause”), which includes any of the following:  (a) dissolution or termination of Property Manager; (b)  termination or suspension of any of Property Manager licenses required to perform the Services; (c)  Property Manager ceases to do business; (d) bankruptcy, insolvency, or assignment for the benefit of creditors of Property Manager; (e) appointment of a receiver, liquidator or trustee of Property Manager; (f) gross negligence, intentional misconduct or fraud in the performance of Property Manager’s duties and obligations; (g) breach of any material representation, warranty or covenant of Property Manager hereunder; (h) conviction of any senior executive of Property Manager on any criminal charge related to fraud or misappropriation; or (i) a final non-appealable determination against or implicating Property Manager by any licensing board or other governmental or quasi-governmental entity.    
8.4    Effect of Termination.  On termination or expiration of this Agreement:
8.4.1    Property Manager shall deliver to Operating Partnership as quickly as practical, but in any event within ten (10) days following the termination date, all original Records, and all electronic records, and to provide each original record in hard copy format as Operating Partnership may request at Operating Partnership’s expense.  
8.4.2    Property Manager shall deliver to Operating Partnership as quickly as practical, (and within five (5) days following the termination), all keys to the Property.  
8.4.3    Property Manager shall cooperate in transferring the Trust Deposit Accounts and Trust Operating Accounts, as directed by Operating Partnership.
8.4.4    Any payments received by Property Manager related to each Property following expiration of this Agreement shall be promptly forwarded to Operating Partnership.
8.4.5    Property Manager shall immediately transfer control of any pending litigation against Tenants or former Tenants to Operating Partnership or its designee. 
8.4.6    Property Manager shall, within thirty (30) days of such termination (or sooner if required by an applicable sale contract), deliver a final accounting reflecting the balance of income and expenses for each Property as of the date of termination.  
8.4.7    Property Manager’s right to compensation shall immediately cease upon the effective date of the termination and shall be prorated through that date.  
8.4.8    Property Manager shall assign and does hereby assign any leases or agreements entered into by Property Manager with respect to the Properties as requested by Operating Partnership.
9.    NOTICES.  
All notices, waivers, demands, requests or other communications required or permitted by this Agreement (sometimes collectively referred to herein as “Notices”), to be effective, shall be in writing, properly addressed to the address specified below, and shall be given:  (a) by personal delivery; (b) by established overnight commercial courier with delivery charges prepaid or duly charged; (c) by registered or certified mail, return receipt requested, first class postage prepaid; or (d) by facsimile transmission, to the address specified below.  
		
	If to Operating Partnership:
	Silver Bay Operating Partnership L.P. 
Attention:  CFO 
601 Carlson Parkway, Suite 250 
Minnetonka, MN 55305 

		
	With a copy to:
	Pine River Capital Management L.P.

601 Carlson Parkway, Suite 330
Minnetonka, MN 55305
Attn: General Counsel
    
		
	If to Property Manager:
	Silver Bay Property Corporation

4449 Easton Way, Suite 2089
Columbus, OH 43219

		
	With a copy to:
	Pine River Capital Management L.P.

601 Carlson Parkway, Suite 330
Minnetonka, MN 55305
Attn: General Counsel

Notices delivered by personal delivery shall be deemed to have been given upon tender to a natural person at the address shown.  Notices delivered by overnight courier shall be deemed to have been given the next business day after delivery to such overnight commercial courier.  Notices delivered by mail shall be deemed to have been given on the third day after deposit into the United States Postal System.  Notices delivered by facsimile transmission shall be deemed to have been given upon confirmation of transmission to the correct telecopy phone number of the intended recipient.  Either Party may change its address for notices by giving notice to the other Party as provided herein.  
10.    POWER OF ATTORNEY.
Operating Partnership grants a Special Power of Attorney to Property Manager with limited powers, and authorizes Property Manager to act as Operating Partnership’s Attorney in Fact in relation to each Property, for the following limited purposes: (a) to make contracts for any and all utilities including electricity, gas, water, waste management, etc.; (b) to put these services in place (until a Tenant takes occupancy of the pertinent Property) with billing delivered to Property Manager; (c) to obtain utility account information for each Property; (d) to communicate and act on Operating Partnership’s behalf with respect to all home owners association matters; (e) to obtain any and all required sales tax licenses relative to the rents to be collected from each Property; (f) to engage and terminate tenancies using the approved form of lease; (g) to deliver to Tenants all notices required by all applicable landlord/tenant laws; and (h) to prosecute, release, settle and otherwise pursue all legal actions permitted by but in strict accordance with this Agreement.
11.    MEDIATION; ARBITRATION.
If any dispute between the Parties related to this Agreement is not resolved by negotiation, then the dispute shall be mediated.  Unless the Parties agree otherwise, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Association.  If the mediation is unsuccessful, then the dispute shall be arbitrated under the rules of the American Arbitration Association.  
12.    MISCELLANEOUS.  
12.1    Operating Partnership’s Consent.  Except as otherwise expressly provided, Operating Partnership’s consent to matters may be granted or withheld in Operating Partnership’s sole and absolute discretion.
12.2    Backup Property Manager.  Upon receipt by the Property Manager of a notice from the Agent that a “Backup Property Manager Reporting Event” has occurred under the Loan Documents, the Property Manager shall provide to any backup servicer or backup property manager (the “Backup Servicer”) appointed by the Agent with respect to the Properties all reports and other information delivered to the Operating Partnership hereunder without seeking further instruction from the Owner or the Operating Partnership, and, by its execution hereof, the Property Manager agrees to do so. The Property Manager may rely upon the contents of any notice or instructions from the Agent or the Backup Servicer without any independent investigation and shall have no liability to the Owner or the Operating Partnership for acting in accordance with such notice. 
12.3    Acknowledgment Agreement. Each of the Operating Partnership and Property Manager hereby agree that certain property management acknowledgment, dated as of May 10, 2013 among the Operating Partnership, the Property Manager, the Owner and the Agent (the “Acknowledgment Agreement”) entered into in connection with the Loan Documents shall be incorporated herein by reference herein. 
12.4    Relationship.  The relationship of Property Manager to Operating Partnership is that of an agent with limited authority as described herein and otherwise, as an independent contractor, and it is not that of an employee, partner or joint venturer.  
12.5    Ambiguities.  The doctrine that any ambiguity in this Agreement is construed against the Party whose counsel has drafted it is expressly waived by each of the Parties.  
12.6    Time of Essence.  Time is of the essence in this Agreement.
12.7    No Assignment; Successors.  This Agreement shall be for the benefit of and binding upon the permitted successors and assigns of the Parties.  Property Manager may not assign its rights or obligations hereunder, by operation of law or otherwise, without Operating Partnership’s prior written consent.    
12.8    Waiver of Trial by Jury.  EACH OF THE PARTIES, WITH ADVICE OF LEGAL COUNSEL OF THEIR CHOICE, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CAUSE OF ACTION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE PROPERTIES OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACCOUNTS OF ANY PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY ENTERING INTO THIS AGREEMENT.  
12.9    Counterparts; Electronic Signatures.  This Agreement may be executed by original, facsimile or electronic image signature in any number of counterparts, and such counterparts together shall constitute one and the same instrument.  
12.10    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the choice of laws and conflicts of law rules and principles of such state.
12.11    Recitals.  The Recitals of this Agreement are incorporated herein as part of this Agreement.
12.12    Modification.  This Agreement may be modified or amended by a written agreement executed by both Parties.  
12.13    Severability.  If any Article, Section, paragraph, sentence, clause or phrase contained in this Agreement becomes or is held by any court of competent jurisdiction to be illegal, null or void or against public policy, the remaining Articles, Sections, paragraphs, sentences, clauses or phrases contained in this Agreement shall not thereby be construed to also be illegal, null and void or against public policy. 
12.14    Third Party Beneficiaries.  Property Manager and Operating Partnership expressly agree that the Agent, OP Manager, Owner and their affiliates shall each be a beneficiary of all rights and benefits of Operating Partnership hereunder, and no other Person shall have any right or cause of action hereunder.  
12.15    Subordination and Attornment.  
12.15.1    Subordination.  This Agreement, including Management Fees and any and all liens, rights and interests (whether choate or inchoate and including, without limitation, all mechanic’s and materialmen’s liens under applicable law) owed, claimed or held, by Property Manager in and to the Properties, are and shall be in all respects subordinate and inferior to the liens and security interests created or to be created for the benefit of the Agent under the Loan Documents and any other agreement executed in connection therewith, and all renewals, extensions, increases supplements, amendments, modifications or replacements thereof.  In confirmation of such subordination, each Party agrees that it shall execute and deliver to a Agent such documents or subordination instruments as Agent may reasonably request.  The Property Manager hereby agrees not to contest or impede the exercise by Agent of any right it has under or in connection with this Agreement.
12.15.2    Termination.  At such time as the debt under the Loan Documents is paid in full and the Agent’s security interest under the Loan Documents is released by the Agent, all of the Agent’s right, title and interest hereunder shall terminate.
12.15.3    Representations.  Property Manager represents and warrants that (a) neither Property Manager nor, to Property Manager’s knowledge, Operating Partnership is in default under any of the terms, covenants or provisions of this Agreement or any other or prior agreement related to the Property, and Property Manager knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under this Agreement; (b) neither Property Manager nor, to Property Manager’s knowledge, Operating Partnership has commenced any action or given or received any notice for the purpose of terminating this Agreement or any other or prior agreement related to the Property; and (c) the Management Fees and all other sums due and payable to Property Manager under this Agreement, and any other or prior agreement related to the Property, as of the date hereof have been paid in full.
12.16    Further Assurances.  Each Party shall take all such actions, and execute all such documents, as the other Party shall reasonably request to give effect to this Agreement.  
12.17    Entire Agreement.  This Agreement supersedes and cancels any and all prior discussions, negotiations and writings between the Parties which may have occurred with respect to the subject matter of this Agreement (other than the Acknowledgment Agreement).
 [Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Property Management Agreement as of the Effective Date.
	
		
	OPERATING PARTNERSHIP:

SILVER BAY OPERATING PARTNERSHIP, L.P.,  
a Delaware limited partnership

By   Silver Bay Management LLC,  
a Delaware limited liability company,  
its general partner

By:   Silver Bay Realty Trust Corp.,  
a Maryland corporation,  
its sole member

By:   /s/Christine Battist
Christine Battist 
Chief Financial Officer

	PROPERTY MANAGER:

SILVER BAY PROPERTY CORP.

By:   /s/Christine Battist     
Christine Battist 
Chief Financial Officer

	 
	 

EXHIBIT A
DEFINITIONS

“Building Systems” means the electrical, mechanical, plumbing, heating, ventilating, and air conditioning, hot water, landscape irrigation, swimming pool, spa fountain or other circulation or filtration systems at a Property.
“CCRs” means, collectively, the declarations of covenants, conditions, easements and restrictions of any HOA plus the applicable bylaws of the HOA and its rules and regulations.
“Gross Collections” means all amounts actually collected in respect of the Property, including, rents, utility payments and deposit forfeitures, interest earned on the Trust Operating Accounts, interest earned on the Trust Deposit Accounts in excess of related banking charges, and other collected revenues.  Notwithstanding the foregoing, it is expressly agreed that Gross Collections shall exclude: (a) one half of late charges and insufficient fund charges collected by Property Manager from Tenants; (b) Security Deposits and other refundable deposits received from Tenants that have not been forfeited; (c) any and all proceeds from property insurance policies; (d) the proceeds of any taking by condemnation or eminent domain; and (e) any awards from suits not related to the collection of rent and related charges.
“HOA” means any homeowners or condominium association that includes a Property.  
“Lease” means a lease agreement for a Property in accordance with this Agreement.
“Legal Requirements” means governmental statutes, laws, constitutions, codes, ordinances, regulations or rules of governmental entities having jurisdiction over the Property Manager or the Property, orders of any insurance company, and the CCRs, rules and regulations and bylaws of any HOA.
“Lockbox” means that certain post office box established by the Operating Partnership and identified as the “Lockbox” to Property Manager. As of the date hereof, the Lockbox is P.O. Box 957438, St. Louis, MO 63195-7438.  
“Master Collection Account” means that certain collection account established by the Operating Partnership and identified as the “Master Collection Account” to Property Manager. As of the date hereof, the Master Collection Account is account number 153795158085 established and maintained by U.S. Bank National Association.  
“Net Operating Income” means Gross Collections minus Operating Expenses.
“Operating Expenses” means: (a) the Management Fee calculated in accordance with the terms of this Agreement and (b) all expenses reasonably and necessarily incurred in connection with the business, operation and maintenance of the Properties during the Term as provided in the Approved Budget, including rental taxes, utilities, casualty and liability insurance premiums, real and personal property taxes, costs and expenses of Operating Supplies, but excluding leasing incentives.
“Operating Supplies” means consumables used by Property Manager or its Employees in the operation of the Properties, including light bulbs, cleaning supplies, batteries, furnace filters, pool chemicals, and other items of a similar nature.
“Person” means any natural person, or any partnership, joint venture, limited liability company, limited partnership, corporation, association, trust or trustee, or any other legal entity.  
“Property” refers to the Property collectively; “each,” “any,” or “a” Property, or phrases of similar import, refers to each residence unit comprising a portion of the Property.  
“Tenant” means, collectively, any person leasing or otherwise entitled to occupy any Property pursuant to a Lease.

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