Document:

Exhibit 4.1

 

 

 

Link to searchable text of slide shown
above

 

 

 

 

               LNR -

Formed Under the Laws of the State of Maryland

 

[LOGO]

 

LNR CAPITAL
CORPORATION

 

SEE
REVERSE FOR IMPORTANT NOTICE ON TRANSFER RESTRICTIONS AND OTHER INFORMATION

 

THIS CERFTICATE IS
TRANSERABLE

IN THE CITY OF NEW YORK

 

THIS CERTIFIES THAT [___________], or its registered
assigns, is the owner of _______________ (_______________) FULLY PAID AND
NONASSESSABLE SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE, OF LNR Capital
Corporation (the “Corporation”) transferable on the books of the Corporation by
the holder hereof in person or by its duly authorized attorney, upon surrender
of this Certificate properly endorsed. This Certificate and the shares
represented hereby are issued and shall be held subject to the laws of the
State of Maryland and to all of the provisions of the charter of the
Corporation (the “Charter”) and the Bylaws of the Corporation and any
amendments thereto. This Certificate is not valid unless countersigned and
registered by the Transfer Agent and Registrar.

 

                IN
WITNESS WHEREOF, the Corporation has caused this Certificate to be executed on
its behalf by its duly authorized officers.

 

 

	
  DATED:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  
	
  Secretary

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Countersigned and Registered:

  	
   

  	
   

  	
   

  
	
  Transfer Agent and Registrar

  	
   

  	
  CUSIP NO:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  [SEAL]

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

 

 

© 1999 CORPEX BANKNOTE
CO., BAY SHORE N.Y.

 

 

                THE CORPORATION
WILL FURNISH TO ANY STOCKHOLDER, ON REQUEST AND WITHOUT CHARGE, A FULL
STATEMENT OF THE INFORMATION REQUIRED BY SECTION 2-211(B) OF THE CORPORATIONS
AND ASSOCIATIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND WITH RESPECT TO THE
DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS,
RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS,
QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH
CLASS WHICH THE CORPORATION HAS AUTHORITY TO ISSUE AND (I) THE DIFFERENCES IN
THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES TO THE
EXTENT SET, AND (II) THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS
AND PREFERENCES OF SUBSEQUENT SERIES. THE FOREGOING SUMMARY DOES NOT PURPORT TO
BE COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
CHARTER OF THE CORPORATION (THE “CHARTER”), AS MAY BE AMENDED FROM TIME TO
TIME, A COPY OF WHICH WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE CORPORATION AT ITS
PRINCIPAL OFFICE OR TO THE TRANSFER AGENT.

 

                THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND
CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION’S
MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST (“REIT”) UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUCH RESTRICTIONS ARE
SET FORTH IN THE CHARTER. INFORMATION REGARDING SUCH RESTRICTIONS AND A COPY OF
THE CHARTER, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE
FURNISHED TO EACH HOLDER OF CAPITAL STOCK OF THE CORPORATION ON REQUEST AND
WITHOUT CHARGE. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE CORPORATION
AT ITS PRINCIPAL OFFICE.

 

                KEEP THIS
CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED, THE
CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE.

Signature(s) Guaranteed:

 

 

__________________________________

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

 

 

 

Searchable text section of graphics
shown aboveExhibit 10.1

 

FORM OF MANAGEMENT
AGREEMENT

 

THIS MANAGEMENT AGREEMENT is
made and entered into as of                   ,  200[ ] by and among LNR Capital Corporation,
a Maryland corporation (the “Company”), for itself and on behalf of its
subsidiaries as the same may exist from time to time, and LNR Capital
Management LLC, a Delaware limited liability company (together with its
permitted assignees, the “Manager”).

 

WHEREAS, the Company is a
corporation organized on June 30, 2005 that will elect to be taxed as a
REIT (as defined below) for federal income tax purposes; and

 

WHEREAS, as of the date of
this Agreement, the Company is indirectly wholly-owned by LNR Property
Holdings, Ltd. (“LNR”), a Bermuda exempted company; and

 

WHEREAS, concurrently with
the completion of the initial public offering of the Company’s common stock,
subsidiaries of LNR will (i) sell to the Company, which will in turn
transfer to the Operating Partnership (as defined below) or one or more of the
Operating Partnership’s subsidiaries a portion of the Initial Portfolio (as
defined in the Registration Statement) and (ii) contribute to the
Operating Partnership the remainder of the Initial Portfolio; and

 

WHEREAS, the Company is the
general partner of the Operating Partnership; and

 

WHEREAS, the Company desires
to retain the Manager to provide services provided for in this Agreement to the
Company on the terms and conditions hereinafter set forth, and the Manager
wishes to be retained to provide such services on such terms and conditions.

 

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

 

SECTION 1.          DEFINITIONS.

 

The following terms have the
meanings assigned them:

 

(a)           “Affiliate”
means a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the person
specified.

 

(b)           “Agreement”
means this Management Agreement, as amended from time to time.

 

(c)           “Assets”
has the meaning set forth in Section 2(a) hereof.

 

(d)           “Base
Management Fee” means per month an amount equal to the sum of (i) 0.167%
of the sum up to $1,000,000,000 of the Equity and OP Minority Interest Value as
of the last day of such month and (ii) 0.146% of the sum in excess of
$1,000,000,000 of the Equity and OP Minority Interest Value as of the last day
of such month.

 

 

(e)           “B-Notes”
mean subordinated interests in mortgage loans (i) secured by first
mortgages on properties and (ii) subordinated to senior interests in the
mortgage loans (e.g., A-Notes) secured by the same first mortgages on the same
properties.

 

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

 

(g)           “Business
Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
close.

 

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

 

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

 

(j)            “Common Unit”
has the meaning as defined in the Operating Partnership Agreement.

 

(k)           “Companies”
has the meaning set forth in Section 2(a) hereof.

 

(l)            “Company
Account” has the meaning set forth in Section 5 hereof.

 

(m)          “Company
Indemnified Party” has the meaning set forth in Section 11(c) hereof.

 

(n)           “Effective
Termination Date” has the meaning set forth in Section 13(b) hereof.

 

(o)           “Equity”
means, for purposes of calculating the Base Management Fee, the sum of the net
proceeds from any issuance of the Company’s Equity Securities, after deducting
any underwriting discounts, placement fees and commissions and other expenses
and costs relating to the issuance, plus (or minus) the Company’s retained
earnings (or deficit) at the end of such month (without taking into account any
non-cash equity compensation expense incurred in current or prior periods),
which amount shall be reduced by any amount that the Company pays for
repurchases of Equity Securities.

 

(p)           “Equity
Securities” means the Common Shares, any preferred stock, any securities convertible
into Common Shares or any other securities issued by the Company from time to
time that are treated as equity on the books and records of the Company.

 

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

 

(r)            “Excess
Funds” has the meaning set forth in Section 2(h).

 

(s)           “Expenses”
has the meaning set forth in Section 9.

 

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

 

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articles of formation and
the operating agreement in the case of a limited liability company, the trust
instrument in the case of a trust, or similar governing documents, in each case
as amended from time to time.

 

(u)           “Guidelines”
shall have the meaning set forth in Section 3(b) hereof.

 

(v)           “Indemnified
Party” has the meaning set forth in Section 11(b) hereof.

 

(w)          “Independent
Directors” means the members of the Board of Directors who are not, and
have not been within the last two years, officers or employees of LNR or any
Person that is an Affiliate of the Manager or LNR and who are otherwise “independent”
in accordance with the Company’s Governing Instruments or any code or guideline
adopted by the Board of Directors, and if applicable, the rules of any
national securities exchange or other trading system on which the Common Shares
are listed.

 

(x)            “Initial
Term” has the meaning set forth in Section 13(a) hereof.

 

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

 

(z)            “Investments”
means the investments of the Partnership Companies.

 

(aa)         “LNR”
has the meaning set forth in the recitals to this Agreement.

 

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

 

(cc)         “Notice of
Proposal to Negotiate” has the meaning set forth in Section 13(b) hereto.

 

(dd)         “Operating
Partnership” means LNR Capital Limited Partnership, a Delaware limited
partnership.

 

(ee)         “Operating
Partnership Agreement” means the partnership agreement of the Operating
Partnership, dated as of the date hereof, as amended from time to time.

 

(ff)           “OP Minority
Interest Value” means the value of any minority interest as such value
appears on the balance sheet of the Company attributable to the Operating
Partnership.

 

(gg)         “Partnership
Companies” has the meaning set forth in Section 2(a) hereof.

 

(hh)         “Person”
means any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal,
state, county or municipal government or any bureau, department or agency
thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

 

(ii)           “Portfolio
Management Services” has the meaning set forth in Section 2(b) hereof.

 

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

 

(kk)         “Registration
Statement” means the Form S-11 filed by the Company (Registration
Number 333-126803) on July 22, 2005, as amended from time to time.

 

(ll)           “Renewal
Term” has the meaning as set forth in Section 13(a) hereto.

 

(mm)       “ROFO
Investment Opportunity” has the meaning set forth in Section 3(a) hereto.

 

(nn)         “ROFO
Investments” means any of the following assets:

 

(i)            unrated (by all rating
agencies) and non-investment grade rated (by all rating agencies) commercial
mortgage backed securities;

 

(ii)           preferred shares of, unrated
(by all rating agencies) and non-investment grade rated (by all rating
agencies) collateralized debt obligations and other resecuritizations of
commercial real estate assets;

 

(iii)          B-Notes;

 

(iv)          mezzanine loans that are
secured by equity interests in an entity that directly or indirectly owns real
property;

 

(v)           debt of other real estate
investment trusts and companies that invest in real estate assets; and

 

(vi)          synthetic investments
(including derivatives) that are related to the non-investment grade collateral
or on the non-synthetic assets otherwise included in this definition of ROFO
Investments. Synthetic investments are based upon financial instruments
(including, without limitation, credit derivative contracts or notes) that are
related to the non-investment grade collateral or the non-synthetic assets
otherwise included in this definition of ROFO Investments, that reference or transfer
the economic risk of an underlying financial instrument, without requiring
ownership of such underlying instrument.

 

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

 

(pp)         “Termination
Fee” has the meaning set forth in Section 13(c) hereof.

 

(qq)         “Termination
Notice” has the meaning set forth in Section 13(b) hereof.

 

(rr)           “Treasury
Regulations” means the regulations promulgated under the Code from time to
time, as amended.

 

(ss)         “200[ ]
Company’s Stock Incentive Plan” means the stock incentive
plan adopted by the Company on [         ],
200[ ].

 

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(tt)           “Underwriting
Agreement” means the underwriting agreement, dated as of [               ],
200[ ] among the Company, Deutsche Bank Securities Inc., Goldman, Sachs &
Co., Citigroup Global Markets Inc., and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as representatives of the several underwriters named
therein.

 

SECTION 2.          APPOINTMENT AND
DUTIES OF THE MANAGER.

 

(a)           Subject to the
further terms and conditions set forth in this Agreement, the Company hereby
appoints the Manager to manage the assets (whether or not included on a balance
sheet) (collectively, the “Assets”) and the day-to-day operations of the
Company, the Operating Partnership and any and all of its Subsidiaries (the
Operating Partnership and its Subsidiaries, collectively, the “Partnership
Companies”, and together with the Company, the “Companies”).  The Manager hereby agrees to use its
commercially reasonable efforts to perform each of the duties set forth herein
consistent with the Company’s status as a REIT and the Companies’ exclusion
from regulation under the Investment Company Act.  Subject to Section 2(c) below, the
Manager shall be the exclusive manager of the Assets, except to the extent that
the Manager otherwise agrees, in its sole and absolute discretion, and except
to the extent that the Manager elects, in accordance with the terms of this
Agreement, to delegate its duties hereunder to be provided by third parties.

 

(b)           The Manager
will provide a management team, consisting of a Chairman, Chief Executive
Officer, President and Chief Operating Officer and Chief Financial Officer,
along with appropriate support personnel, to provide the management services to
be provided by the Manager to the Companies hereunder.

 

(c)           The Manager
will be subject to the supervision and direction of the Company’s Board of
Directors and will have such functions and authority as set forth herein and as
the Company may delegate to it.  The
Manager will perform (or cause to be performed) such services and activities
relating to the Assets and day-to-day operations of the Companies as may be
appropriate, on behalf of the Company, on its own behalf and in its capacity as
general partner of the Operating Partnership, and at the Companies’ expense, as
provided in Section 9 hereof, which services and activities
include, without limitation:

 

(i)            serving as the Company’s
consultant as to any review of the Guidelines (as defined in Section 3(a))
and other policies for approval by the Board of Directors;

 

(ii)           assisting the Company in
developing criteria for asset purchase commitments and investment opportunities
that are specifically tailored to the Companies’ investment objectives;

 

(iii)          coordinating and managing
the investigation, analysis and selection of asset purchase commitments and
investment opportunities, subject to Section 9 hereof;

 

(iv)          conducting negotiations on
behalf of the Companies with sellers and purchasers and their respective
agents, representatives and investment bankers with respect to any prospective
Investment by any of the Companies and any sale, exchange or other disposition
of any Investment by the Companies;

 

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(v)           engaging, on behalf of the
Companies and at the Companies’ expense, and supervising independent
contractors which provide investment banking, mortgage brokerage, securities
brokerage and other financial services and such other services as may be
required relating to the Investments;

 

(vi)          coordinating and managing (a) operations
of any joint venture or co-investment interests held by the Companies and (b) the
resolution of any matters or issues with the joint venture or co-investment
partners that may arise;

 

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

 

(viii)        administering the day-to-day
operations of the Companies and performing and supervising the performance of
such other administrative functions necessary to the management of the
Companies, including, without limitation, the collection of revenues and the
payment of the Companies’ debts and obligations and maintenance of appropriate
computer services to perform such administrative functions;

 

(ix)           using commercially
reasonable efforts to communicate on behalf of the Companies with the holders
of any equity or debt securities of the Companies as required to satisfy the
reporting and other requirements of any governmental bodies or agencies or
trading markets, contractual obligations and to maintain effective relations
with such holders;

 

(x)            counseling the Company with
respect to policy decisions to be made by the Board of Directors;

 

(xi)           evaluating and recommending
to the Board of Directors hedging strategies and engaging in hedging activities
on behalf of the Companies, consistent with such strategies, as so modified
from time to time, with the Company’s and any relevant Partnership Company’s
status as a REIT, and with the Guidelines;

 

(xii)          counseling the Company and
any relevant Partnership Company regarding the maintenance of its status as a
REIT and monitoring compliance with the various REIT qualification tests and
other rules set out in the Code and Treasury Regulations thereunder;

 

(xiii)         counseling the Company
regarding the maintenance by the Companies of their exclusion from regulation
under the Investment Company Act and monitoring compliance with the
requirements for maintaining such exception;

 

(xiv)        representing, making
recommendations to and otherwise advising the Companies in connection with (a) the
purchase and finance of, and commitment to purchase and finance, mortgage loans
(including on a portfolio basis), real estate, real estate securities, other
real estate-related assets and non-real estate related assets by the Companies,
(b) obtaining appropriate warehouse or other financings for the Companies’
assets and (c) structuring long-term financing vehicles for, the Companies’
portfolio of

 

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assets,
and arranging for the offering for sale and selling securities publicly or
privately in connection with any such structured financing;

 

(xv)         furnishing reports and
statistical and economic research to the Company regarding the Companies’
assets and investments and services performed for the Companies;

 

(xvi)        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 and budgeted or projected operating
results;

 

(xvii)       investing and reinvesting
any money or securities of the Companies (including investing in short-term
Investments pending investment in other Investments, payment of fees, costs and
expenses, or payments of dividends or distributions to stockholders, members
and partners of the Companies) and advising the Companies as to their capital
structure and capital raising;

 

(xviii)      causing the Companies to
retain 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 REITs and non-taxable or taxable REIT
subsidiaries and to conduct quarterly compliance reviews with respect thereto;

 

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

 

(xx)          using commercially
reasonable efforts to cause the Companies to comply with all regulatory
requirements in respect of its or their business activities, including
preparing or causing to be prepared all financial statements required under
applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act; provided, however, to the
extent that such compliance involves investigatory and other non-ordinary
course compliance, such compliance assistance will be at the expense of the
Companies in accordance with the terms of Section 9 hereof;

 

(xxi)         using commercially reasonable
efforts to cause the Companies to take all necessary actions to enable the
Companies to make required tax filings and reports, including soliciting
stockholders for required information to the extent provided by the provisions
of the Code and Treasury Regulations applicable to REITs;

 

(xxii)        handling, prosecuting and
settling all claims, disputes or controversies (including all litigation,
arbitration, settlement or other proceedings or negotiations) in which any of
the Companies, the Board of Directors, the holders of the Company’s securities
or the Company’s representatives may be involved or to which any of the
Companies may be subject arising out of any of the Companies’ day-to-day

 

7

 

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

 

(xxiii)       using commercially
reasonable efforts to cause expenses incurred by or on behalf of the Companies
to be commercially reasonable or commercially customary and within any budgeted
parameters as set forth in the annual budget of the Company as adopted by the
Board of Directors from time to time pursuant to the budget guidelines
(attached hereto as Exhibit B) or, in the absence of such budget,
within the expense guidelines set by the Board of Directors from time to time;

 

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

 

(xxv)        using commercially reasonable
efforts to cause the Companies to comply with all applicable laws.

 

Without limiting the
foregoing, the Manager will perform portfolio management services (the “Portfolio
Management Services”) on behalf of the Companies 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 Companies’ portfolio
of assets; the collection of information and the submission of reports
pertaining to the Companies’ assets, interest rates and general economic
conditions; periodic review and evaluation of the performance of the Companies’
portfolio of assets; acting as liaison between the Companies 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 provide monitoring services (the “Monitoring
Services”) in respect of the Assets and any loan servicing activities
provided by third parties.  The
Monitoring Services will include, to the extent applicable, acting as a liaison
between the servicers of the Assets and the Companies; 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
purchase assets.

 

(d)           The Manager may
enter into agreements with other parties, including its Affiliates, for the
purpose of engaging one or more parties for and on behalf and at the sole cost
and expense of, the Companies to provide other services to the Companies
(including, without limitation, Portfolio Management Services and Monitoring
Services) pursuant to agreement(s) with terms which are customary and
reasonable; provided that (x) prior to retaining any party to provide any
material Portfolio Management Services and Monitoring Services at the sole cost
and expense of the Manager, such party and the type of services to be performed
by such party shall be approved by a majority of the Independent Directors, and
(y) any such agreements entered into with Affiliates of the Manager for account
of the Company shall be approved by a majority of the Independent Directors.

 

(e)           The Manager may
retain, for and on behalf and at the sole cost and expense of, the Companies,
such services of accountants, legal counsel, appraisers, insurers,

 

8

 

brokers, transfer agents,
registrars, developers, investment banks, financial advisors, banks and other
lenders and others as the Manager deems reasonably necessary or advisable in
connection with the management and operations of the Companies.  Notwithstanding anything contained herein to
the contrary, the Manager shall have the right to arrange any such services to
be rendered by its employees or Affiliates, provided, however, that the Manager
must provide a quarterly summary to the Board of Directors of any such services
performed by Affiliates and the fees and expenses paid by the Company related
thereto and such summary must be approved by a majority of the Independent
Directors.  The Companies 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.

 

(f)            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 Companies,
prepare, or cause to be prepared, with respect to any Investment, reports and
other information with respect to such Investment as may be reasonably
requested by the Company.

 

(g)           The Manager
shall prepare, or cause to be prepared, at the sole cost and expense of the
Companies, all reports, financial or otherwise, with respect to the Companies
reasonably required by the Board of Directors in order for each of the
Companies 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 Companies’ books of account by a nationally recognized independent
accounting firm.

 

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

 

(i)            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
solely as a direct result of the Manager’s acts or omissions which result in
the Company’s exercise of its right to terminate this Agreement pursuant to Section 15
of this Agreement, the Manager shall not be required to expend money (“Excess
Funds”) to fund any expenses that are required to be paid for or reimbursed
by the Companies pursuant to Section 9 hereof in excess of that
contained in any applicable Company Account (as herein defined).  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 Sections 13(a) or 15 of this Agreement to
terminate this Agreement.

 

(j)            The Manager is
authorized, for and on behalf, and at the sole cost and expense of the
Companies, to employ such securities dealers for the purchase and sale of
investment assets of any of the Partnership Companies as may, in the good faith
judgment of the

 

9

 

Manager, be necessary to
obtain the best commercially available net results for the Companies taking
into account such factors as the policies of the Company, price, dealer spread,
the size, type and difficulty of the transaction involved, the firm’s general
execution and operational facilities and the firm’s risk in positioning the
securities involved. Consistent with this policy, the Manager is authorized to
direct the execution of the Partnership Companies’ portfolio transactions to
dealers and brokers furnishing statistical information or research deemed by
the Manager to be useful or valuable to the performance of its investment
advisory functions for the Company.

 

(k)           The Company
agrees to take all actions reasonably required to permit and enable the Manager
to carry out its duties and obligations under this Agreement, including,
without limitation, all steps reasonably necessary to allow the Manager to
deliver any financial statements or other reports with respect to the
Company.  If the Manager is not able to
provide a service, or in the reasonable judgment of the Manager it is not
prudent to provide a service, without the approval of the Board of Directors or
the Independent Directors, as applicable, then the Manager shall be excused
from providing such service (and shall not be in breach of this Agreement)
until the applicable approval has been obtained.

 

(l)            In performing
its duties under this Section 2, the Manager shall be entitled to
rely on qualified experts and professionals (including, without limitation,
accountants, legal counsel and other professional service providers) employed
by the Companies, the Manager or any Affiliate retained by the Manager at the
Companies’ sole cost and expense.

 

SECTION 3.          RESTRICTIONS
RELATING TO THE MANAGER AND AFFILIATES.

 

(a)           During the
Initial Term and any Renewal Term, the Manager shall cause LNR and its
Subsidiaries not to invest in any ROFO Investments unless LNR and its
Subsidiaries shall have first complied with this Section 3(a):

 

(i)            With respect to the ROFO
Investments in which LNR or any of its Subsidiaries desires to invest on its
behalf and not on behalf of any of the Partnership Companies (a “ROFO
Investment Opportunity”), the Manager shall notify the Independent
Directors of the existence of a ROFO Investment Opportunity which notification
shall (A) identify and describe the ROFO Investment Opportunity, (B) describe
the price and other terms upon which such ROFO Investment Opportunity are to be
purchased, (C) identify the persons or entities (if known) to which or
with which the ROFO Investment Opportunity is to be purchased from, (D) all
other significant terms and conditions of such investment opportunity and (E) the
reasons the Manager declined to pursue and/or consummate such offer on behalf
of the Partnership Companies; provided, however, that the Manager shall not be
obligated to make notification pursuant to this Section 3(a)(i) if
a ROFO Investment Opportunity does not fall within the provisions of the Guidelines
or the Manager reasonably believes that the Company does not possess the legal
or financial capacity to make investments in such ROFO Investments at such
time.

 

(ii)           With respect to any portion
of a ROFO Investment Opportunity in which the Independent Directors decline to
invest in or fail to give the Manager written

 

10

 

notice
of their determination to have any of the Partnership Companies invest within
five (5) Business Days of such notice, LNR and its Subsidiaries shall have
one (1) year to invest in such ROFO Investment Opportunity.

 

(iii)          Any investment in a ROFO
Investment Opportunity not consummated by LNR or its Subsidiaries during such
one-year period shall be reoffered by the Manager pursuant to the procedures
specified in this Section 3(a) prior to any investment therein
or partnerships or joint ventures related thereto by LNR or its Subsidiaries.

 

(b)           The Manager
agrees to comply with the investment guidelines (the “Guidelines”) of
the Company as adopted by and from time to time amended by the Board of
Directors (attached hereto as Exhibit A).

 

(c)           Nothing in this
Agreement shall restrict Cerberus Capital Management, L.P. (“Cerberus”)
or any of its Affiliates, other than LNR and persons controlled by LNR and its
Subsidiaries, or prevent Manager or any of its Affiliates, officers, directors
or employees, from engaging in other businesses or from rendering services of
any kind to any other Person, including, without limitation, investing in (except
for as set forth in Section 3(a) solely with respect to LNR
and its Subsidiaries), or rendering advisory services to others investing in,
any type of commercial mortgage-backed securities, collateralized debt
obligations, or other mortgage-backed securities, mortgages and other real estate debt, and commercial
real estate (including, without limitation, investments that
meet the principal investment objectives of the Company), whether or not the
investment objectives or policies of any such other Person or entity are
similar to those of the Company.

 

(d)           Except for
compliance with Section 3(a) solely with respect to LNR and its
Subsidiaries hereof, nothing in this Agreement shall in any way bind or
restrict the Manager or any of its Affiliates from buying, selling or trading
any securities or commodities for their own accounts or for the account of
others for whom the Manager or any of its Affiliates may be acting.  While information and recommendations
supplied to the Companies shall, in the Manager’s reasonable and good faith
judgment, be appropriate under the circumstances and in light of the investment
objectives and policies of the Company, the Company acknowledges that they may
be different from the information and recommendations supplied by the Manager
or any Affiliate of the Manager to other investment companies, funds and
advisory accounts.

 

(e)           The Companies
shall be entitled to equitable treatment under the circumstances in receiving
information, recommendations and any other services, but the Company recognizes
that the Companies are not entitled to receive preferential treatment as
compared with the treatment given by the Manager or any Affiliate of the
Manager to any Person.

 

(f)            The Company
hereby releases and disclaims any obligations to it by Cerberus and any of its
Affiliates other than LNR and its Subsidiaries to provide to the Companies any
Investments that they prepare to make on behalf of themselves or any related
funds or accounts.

 

11

 

(g)           Directors,
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 Companies, such Persons shall use their respective
titles therein.

 

SECTION 4.          AGENCY.

 

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

 

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 Companies (any such account, a “Company Account”),
and may collect and deposit funds into any such Company Account or Company
Accounts, and disburse funds from any such Company Account or Company Accounts,
under such terms and conditions as the Board of Directors may approve; and the
Manager shall from time to time render appropriate accountings of such
collections and payments to the Board of Directors and, upon request, to the
auditors of the Companies.

 

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 at any time during normal business
hours upon two (2) 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 (or use the same except
in furtherance of its duties under this Agreement) to nonaffiliated third
parties except (i) with the prior written consent of the majority of the
Board of Directors, (ii) to legal counsel, accountants and other
professional advisors; (iii) to appraisers, financing sources, rating agencies,
and others in the ordinary course of any of the Companies’ business; (iv) to
governmental officials having jurisdiction over any of the Companies; (v) in
connection with any governmental or regulatory filings of any of the Companies
or disclosure or presentations to any of the Companies’ investors; or (vi) as
required by law or legal process to which the Manager or any Person to whom
disclosure is permitted hereunder is a party. 
The foregoing shall not apply to information which has previously become
publicly available through the actions of a Person other than the Manager not
resulting from the Manager’s violation of this Section 6.  Notwithstanding anything herein to the
contrary, the Manager (and each employee, representative or other agent of the
Manager) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the Companies and any of their
transactions and all materials of any kind (including opinions or

 

12

 

other
tax analyses) that are provided to the Manager relating to such tax treatment
and tax structure.  The provisions of
this Section 6 shall survive the expiration or earlier termination
of this Agreement for a period of one year.

 

SECTION 7.          OBLIGATIONS OF
MANAGER; RESTRICTIONS.

 

(a)           The Manager
shall, as a precondition to any investment, require each seller or transferor
of investment assets to any of the Partnership Companies to make such
representations, warranties and covenants regarding such assets as may, in the
reasonable judgment of the Manager, be necessary and appropriate or as advised
by the Board of Directors and consistent with standard industry practice.  In addition, the Manager shall take such
other action as it deems reasonably necessary or appropriate or as reasonably
advised by the Board of Directors 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, (ii) would materially adversely
affect the status of the Company or any other relevant Partnership Company as a
REIT under the Code or any of the Companies’ status as an entity excluded from
the Investment Company Act or (iii) 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 any of
the Companies’ 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.

 

(c)           The Manager
shall not knowingly (i) consummate any transaction that would involve the
acquisition by any of the Companies of an asset in which the Manager or any
Affiliate thereof has a material ownership interest or the sale by any of the
Companies of an asset to the Manager or any Affiliate thereof, or (ii) under
circumstances where the Manager is subject to an actual or potential conflict
of interest, in the reasonable judgment of the Manager or the Board of
Directors, because the Manager 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, forbearance 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; provided, that this Section 7(c) shall
not apply to (A) any redemption of Common Units by the Company pursuant to
the Operating Partnership Agreement and (B) the transactions pursuant to
which the Companies acquire or acquired the Initial Portfolio (as such term is
defined in the Registration Statement).

 

(d)           The Board of
Directors shall have the right, but not the obligation, to review each proposed
investment.  If a majority of the
Independent Directors determine in their periodic review of transactions that a
particular transaction does not comply with the Guidelines (including as a result
of violation of the provisions of Section 7(c) above), then a
majority of the Independent Directors may determine what corrective action, if
any, can be taken.  The Manager shall be
permitted to rely upon the certificate or other writing from the Secretary of
the Company

 

13

 

to evidence the approval of
the Board of Directors or the Independent Directors with respect to a proposed
investment.

 

(e)           The Manager
shall at all times during the term of this Agreement maintain or cause to be
maintained “errors and omissions” insurance coverage and other insurance
coverage which is customarily carried by property, asset and investment
managers performing functions similar to those of the Manager under this Agreement
with respect to assets similar to the Assets, in an amount which is comparable
to that customarily maintained by other managers or servicers of similar
assets.

 

SECTION 8.          COMPENSATION.

 

(a)           During the
Initial Term of this Agreement, as the same may be extended from time to time,
the Company shall pay the Manager the Base Management Fee monthly in arrears
commencing with the month in which this Agreement was executed (with such
initial payment pro-rated based on the number of days during such month that
this Agreement was in effect).

 

(b)           The Manager
shall compute each installment of the Base Management Fee within fifteen (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  of this
Agreement, promptly be delivered to the Board of Directors and, upon such
delivery, payment of such installment of the Base Management Fee shown therein
shall be due and payable no later than the date which is five (5) Business
Days after the date of delivery to the Board of Directors of such computation.

 

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

 

(d)           In addition to
the Base Management Fee, the Manager shall be granted restricted stock, options
and other stock-based awards, in each case pursuant to the terms and conditions
set forth in the 200[ ] Company’s Stock Incentive Plan.  Such awards shall be subject to additional
grants on a pro rata basis if Deutsche Bank Securities Inc., Goldman, Sachs &
Co., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner &
Smith as representatives of the several underwriters named therein, elect to
exercise their over-allotment option pursuant to Section 2(c) of
the Underwriting Agreement.  Subject to
compliance with all applicable securities laws (including, without limitation,
prohibitions on insider trading), the Manager shall have the right to allocate
the awards granted to it pursuant to this Section 8(d) at its
sole and absolute discretion to its officers, employees and other individuals
who provide services to it at any time. 
To the extent that such awards (or the Common Shares relating thereto)
are not eligible to be registered for sale pursuant to a Registration Statement
on Form S-8 relating to the Stock Incentive Plan, at the request of the
Manager the Company agrees to file with the Securities and Exchange Commission
as soon as reasonably practicable a shelf registration statement providing for
the sale of such awards (or the Common Shares relating thereto) and to use its
commercially reasonably efforts to cause such registration statement to be
declared effective as promptly as practicable following such filing.

 

14

 

SECTION 9.          EXPENSES OF THE
COMPANY.

 

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

 

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

 

(b)           costs of legal,
tax, accounting, consulting, 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;

 

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

 

(d)           costs
associated with the establishment and maintenance of any credit facilities and
other indebtedness of the Company (including commitment fees, accounting fees,
legal fees, closing and other costs) or any securities offerings of any of the
Companies and any rating agency fees and related expenses;

 

(e)           expenses
connected with communications to holders of securities of any of the Companies
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 stockholders and proxy materials
with respect to any meeting of the stockholders of the Company;

 

(f)            costs
associated with any computer software or hardware, electronic equipment or
purchased information technology services from third party vendors that is used
for the Companies;

 

(g)           expenses
incurred by managers, officers, employees and agents of the Manager for travel
on any of the Companies’ behalf and other out-of-pocket expenses incurred by
managers, officers, employees and agents of the Manager in connection with the
purchase, monitoring, management, financing, refinancing, sale or other
disposition of an Investment or establishment and maintenance of any credit
facilities and other indebtedness or any securities offerings of any of the
Companies;

 

15

 

(h)           costs and
expenses incurred with respect to market information systems and publications,
research publications and materials, and settlement, clearing and custodial
fees and expenses;

 

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

 

(j)            the costs of
maintaining compliance with all federal, state and local rules and
regulations or any other regulatory agency;

 

(k)           all taxes and
license fees;

 

(l)            all insurance
costs incurred in connection with the operation of any of the Companies’
business except for the costs attributable to the insurance that the Manager
elects to carry for itself and its employees;

 

(m)          costs and
expenses incurred in contracting with third parties, including Affiliates of
the Manager, subject to compliance by the Manager with Section 2(e) hereof,
for the managing, operating and overseeing of the assets themselves and the
servicing and special servicing of Assets; provided, however, that costs and
expenses incurred that relate to Portfolio Management Services and Monitoring
Services shall not be included except to the extent that the services of third
parties are necessary in connection with required Portfolio Management Services
and Monitoring Services that are not in the ordinary course of the Companies’
businesses;

 

(n)           all other costs
and expenses relating to any of the Companies’ business and investment
operations, including, without limitation, the costs and expenses of acquiring,
owning, protecting, maintaining, managing, operating, developing and disposing
of Investments, including appraisal, reporting, audit, legal, brokerage and
contractor fees;

 

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

 

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

 

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

 

(r)            the Companies’
pro rata portion of rent, telephone, utilities, office furniture, equipment,
machinery and other office, internal and overhead expenses of the Manager and
its Affiliates required for any of the Companies’ operations; and

 

16

 

(s)           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.

 

Without regard to the amount
of compensation received under this Agreement by the Manager, the Manager shall
be responsible for the wages and salaries of the Manager’s officers and employees;
provided, however, that this sentence shall in no way be deemed to limit the
Manager’s right to be reimbursed for services provided by such officers and
employees, if such services are reimburseable expenses pursuant to this Section 9.

 

The provisions of this Section 9
shall survive the expiration or earlier termination of this Agreement to the
extent such expenses have previously been incurred or are incurred in
connection with such expiration or termination.

 

SECTION 10.        DOCUMENTATION
OF EXPENSES.

 

The Manager shall prepare a
statement documenting the Expenses of the Companies and the Expenses incurred
by the Manager or its Affiliates on behalf of the Companies 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 or its Affiliates on behalf of the Companies shall be
reimbursed by the Company to the Manager on the first Business Day of the month
immediately following the date of delivery of such statement; provided,
however, that such reimbursements may be offset by the Manager or its
Affiliates against amounts due to the Companies.  The Independent Directors shall review all
payments of Expenses to the Manager hereunder on a quarterly basis.  The provisions of this Section 10
shall survive the expiration or earlier termination of this Agreement.

 

SECTION 11.        EXCULPATION;
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, notwithstanding any
other provision of this Agreement, 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.  Notwithstanding any
other provision of this Agreement, the Manager, its members, managers, officers
and employees will not be liable to any of the Companies, to the Board of
Directors, or any of the Companies’ stockholders, members or partners for any
acts or omissions by the Manager, its members, directors, 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.

 

(b)           The Company
shall, to the full extent lawful, reimburse, indemnify and hold the Manager,
its members, directors, 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 reasonable attorneys’
fees and expenses) 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,

 

17

 

willful misconduct, gross
negligence or reckless disregard of the Manager’s duties under this Agreement.

 

(c)           The Manager
shall, to the full extent lawful, reimburse, indemnify and hold the Companies,
their respective stockholders, directors, members, partners, officers and
employees and each other Person, if any, controlling the Company (each, a “Company
Indemnified Party”), harmless of and from any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever
(including reasonable attorneys’ fees and expenses) in respect of or arising
from the Manager’s bad faith, willful misconduct or gross negligence or any
claims by Manager’s employees relating to the terms and conditions of their
employment by Manager.

 

(d)           The Manager
shall not be liable to the Companies, the Independent Directors, or any of the
Companies’ stockholders, members, or partners for any acts performed or
omissions to act by any of the Companies in connection with the money or other
property released to any of the Companies in accordance with the provisions of Section 17
of this Agreement.  The Companies 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 any of the Companies in accordance with the
terms of Section 17 of this Agreement.

 

(e)           The provisions
of this Section11 shall survive the expiration or earlier termination of
this Agreement.

 

SECTION 12.        NO JOINT
VENTURE.

 

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

 

SECTION 13.        TERM.

 

(a)           Unless this
Agreement is terminated in accordance with its terms, this Agreement shall be
in effect until December 31, 2008 (the “Initial Term”) and shall be
automatically renewed for a one-year term each anniversary date thereafter (a “Renewal
Term”) unless at least two-thirds of the Independent Directors or the
holders of at least a majority of the outstanding Common Shares vote against
such automatic renewal on the basis of a reasonable determination that (i) there
has been unsatisfactory performance by the Manager that is materially
detrimental to the Company or (ii) the compensation payable to the Manager
hereunder is unfair to the Company; provided, that the Company shall not have
the right to terminate this Agreement under clause (ii) above if the
Manager agrees to continue to provide the services under this Agreement at a
fee that at least two-thirds of the Independent Directors determines to be fair
pursuant to the procedure set forth below.

 

(b)           If the Company
elects not to renew this Agreement at the expiration of the Initial 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 not less than 180 days prior

 

18

 

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 180 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 such compensation by delivering to the Company, no fewer than
thirty (30) days prior to the prospective Effective Termination Date, written
notice (any such notice, a “Notice of Proposal to Negotiate”) of its
intention to renegotiate its compensation under this Agreement.  Thereupon, the Company (represented by the
Independent Directors) and the Manager shall endeavor to negotiate in good
faith the revised compensation payable to the Manager under this Agreement.
Provided that the Manager and at least two-thirds of the Independent Directors
agree to the terms of the revised compensation to be payable to the Manager
within thirty (30) days following the receipt of the Notice of Proposal to
Negotiate, the Termination Notice shall be deemed of no force and effect and
this Agreement shall continue in full force and effect on the terms stated in
this Agreement, except that the compensation payable to the Manager hereunder
shall be the revised compensation 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 compensation promptly upon reaching an agreement regarding same. In the
event that the Company and the Manager are unable to agree to the terms of the
revised compensation to be payable to the Manager during such thirty (30) 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 thirty (30) day period and (B) the Effective Termination Date
originally set forth in the Termination Notice.

 

(c)           In the event
that this Agreement is terminated in accordance with the provisions of Section 13(b)
or Section 15(c), 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 four times the average annual Base Management
Fee during the 12-month period immediately preceding the date of such
termination, calculated as of the end of the most recently completed fiscal
quarter prior to the date of termination. 
The obligation of the Company to pay the Termination Fee shall survive
the termination of this Agreement.

 

(d)           No later than
60 days prior to the expiration of the Initial Term or any Renewal Term, the
Manager may deliver written notice to the Company informing it of the Manager’s
intention to decline to renew this Agreement, whereupon this Agreement shall
not be renewed and extended and this Agreement shall terminate effective upon
expiration of the then current term.

 

(e)           If this
Agreement is terminated pursuant to this Section 13 or Section 15,
such termination shall be without any further liability or obligation of either
party to the other, except as provided in Sections 6, 9, 11,
10, 13(c) and 16 of this Agreement.

 

SECTION 14.        ASSIGNMENT.

 

(a)           Except as set
forth in Section 14(b) of this Agreement, this Agreement is
not assignable, in whole or in part, by the Manager, unless such assignment is
consented

 

19

 

to in writing by the Company
with the consent of a majority of the Independent Directors.  Any such permitted assignment shall bind the
assignee under this Agreement in the same manner as the Manager is bound, and
the Manager shall be liable to the Company for all errors or omissions of the assignee
under any such assignment. In addition, the assignee shall execute and deliver
to the Company a counterpart of this Agreement naming such assignee as
Manager.  This Agreement shall not be
assigned by the Company without the prior written consent of the Manager,
except in the case of assignment by the Company to another REIT 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 but
not any monies of the Company being held by the Manager as custodian for the
Company.

 

SECTION 15.        TERMINATION FOR
CAUSE.

 

(a)           The Company may
terminate this Agreement effective upon sixty (60) days’ prior written notice
of termination from the Board of Directors to the Manager, without payment of
any Termination Fee, if (i) the Manager materially breaches any provision
of this Agreement and such breach shall continue for a period of thirty (30)
days after the Manager’s receipt of written notice thereof specifying such
breach and requesting that the same be remedied in such 30 day period, (ii) the
Manager engages in any act of fraud, misappropriation of funds, or embezzlement
against the Company, (iii) there is an event of any gross negligence on
the part of the Manager in the performance of its duties under this Agreement
that causes material damage or diminution in value of the Assets or the Company,
or (iv) there is entered an order for relief or similar decree or order
with respect to the Manager by a court having competent jurisdiction in an
involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or the Manager (A) ceases, or admits in writing its inability
to pay its debts as they become due and payable, or makes a general assignment
for the benefit of, or enters into a composition or arrangement with,
creditors; (B) applies for, or consents (by admission of material
allegations of a petition or otherwise) 
to sequestrator (or other similar official) of the Manager or of any
substantial part of its properties or assets, or authorizes such an application
or consent, or proceedings seeking such appointment are commenced without such
authorization, consent or application against the Manager and continue
undismissed for 60 days; (C) authorizes or files a voluntary petition in
bankruptcy, or applies for or consents (by admission of material allegations of
a petition or otherwise) to the application of any bankruptcy, reorganization,
arrangement, readjustment of debt, insolvency, dissolution, liquidation or
other similar law of any jurisdiction, or authorized such application or
consent, of proceedings to such end are instituted against application or

 

20

 

consent, or proceedings to
such end are instituted against the Manager without such authorization,
application or consent and are approved as properly instituted and remain
undismissed for 60 days or result in adjudication of bankruptcy or insolvency;
or (D) permits or suffers all or any substantial part of its properties or
assets to be sequestered or attached by court order and the order remains
undismissed for 60 days.

 

(b)           The Manager
agrees that if any of the events specified above occur, it will give prompt
written notice thereof to the Company’s Board of Directors after the Manager
becomes aware of the occurrence of such event.

 

(c)           The Manager may
terminate this Agreement effective upon thirty (30) 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.

 

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

 

SECTION 16.        ACTION UPON
TERMINATION.

 

(a)           From and after
the effective date of termination of this Agreement, pursuant to Section 13,
14, or 15 of this Agreement, the Manager shall not be entitled to
compensation for further services under this Agreement, but shall be paid all
compensation accruing to the date of termination and, if terminated pursuant to
Section 13 or Section 15(c), 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)           The provisions
of this Section 16 shall survive the expiration or earlier
termination of this Agreement.

 

21

 

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

 

The Manager agrees that any
money or other property of the Companies held by the Manager under this
Agreement shall be held by the Manager as custodian for the Companies, and the
Manager’s records shall be appropriately marked clearly to reflect the ownership
of such money or other property by the Companies.  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 Companies any money or other property then held by
the Manager for the account of the Companies under this Agreement, the Manager
shall release such money or other property to the Companies within a reasonable
period of time, but in no event later than forty-five (45) days following such
request.

 

SECTION 18.        REPRESENTATIONS
AND WARRANTIES.

 

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

 

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

 

(ii)           The Company has the
corporate power and authority to execute, deliver and perform this Agreement
and all obligations required hereunder and has taken all necessary corporate
action to authorize this Agreement on the terms and conditions hereof and the
execution, delivery and performance of this Agreement and all obligations
required hereunder.  No consent of any
other person including, without limitation, stockholders or creditors of the
Company, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by the Company in connection with this
Agreement or the execution, delivery or performance of this Agreement and all
obligations required hereunder.  This
Agreement has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized officer of the Company, and this
Agreement constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.

 

(iii)          The execution, delivery and
performance of this Agreement and the documents or instruments required
hereunder will not violate any provision of any existing law or regulation
binding on the Company, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Company, or the charter or
bylaws of, or any securities issued by, the Company or of any mortgage,

 

22

 

indenture,
lease, contract or other agreement, instrument or undertaking to which the
Company is a party or by which the Company or any of its assets may be bound,
the violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Company, and will not result
in, or require, the creation or imposition of any lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.

 

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

 

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

 

(ii)           The Manager has the limited
liability company power and authority to execute, deliver and perform this
Agreement and all obligations required hereunder and has taken all necessary
limited liability company action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this Agreement
and all obligations required hereunder. 
No consent of any other person including, without limitation, members or
creditors of the Manager, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required by the Manager in connection with this
Agreement or the execution, delivery or performance of this Agreement and all
obligations required hereunder.  This
Agreement has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized agent of the Manager, and this
Agreement constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the valid and binding
obligation of the Manager enforceable against the Manager in accordance with
its terms.

 

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

 

23

 

SECTION 19.        NOTICES.

 

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

 

(a)           If to the
Company:

LNR Capital Corporation

1601 Washington Avenue, Suite 800

Miami Beach, Florida 33139

Attention:  Chief Financial
Officer

 

(b)           If to the
Manager:

LNR Capital Management LLC

1601 Washington Avenue, Suite 800

Miami Beach, Florida 33139

Attention:  General Counsel

 

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

 

SECTION 20.        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.  Each of the Company
and the Manager agrees that the representations, warrantees, covenants and
agreements of the Company contained herein are made on behalf of the Company
and its wholly-owned Subsidiaries, and the representations, warranties,
covenants and agreements of the Manager are for the benefit of the Company and
its wholly-owned Subsidiaries.

 

SECTION 21.        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 signed by
the parties hereto.

 

24

 

SECTION 22.        GOVERNING LAW.

 

THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTS OF LAW
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTIONS)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN
THE STATE OF NEW YORK.

 

SECTION 23.        NO WAIVER;
CUMULATIVE REMEDIES.

 

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

 

SECTION 24.        HEADINGS.

 

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

 

SECTION 25.        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 26.        SEVERABILITY.

 

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

 

SECTION 27.        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.

 

25

 

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

 

	
   

  	
  LNR CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  LNR CAPITAL MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

26

 

Exhibit A

 

Guidelines

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}]]