Exhibit 10.8
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FUND I INVESTMENT MANAGEMENT AGREEMENT
Dated as of March 8, 2000
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914393.10
TABLE OF CONTENTS
Page
ARTICLE I
RETENTION; SERVICES AND POWERS
OF INVESTMENT MANAGER.....................................................1
1.1 Retention of Investment Manager.........................1
1.2 Services to be Performed by Investment Manager..........2
1.4 Miscellaneous. ........................................3
ARTICLE II
COMPENSATION OF THE INVESTMENT MANAGER; FEES AND EXPENSES
.........................................................................4
2.1 Investment Manager Compensation.........................4
2.2 Investment Manager Expenses. ..........................4
2.3 Fund Expenses. ........................................4
ARTICLE III
EXCULPATION AND INDEMNIFICATION...........................................5
3.1 Exculpation and Indemnification.........................5
ARTICLE IV
MISCELLANEOUS.............................................................7
4.1 Duration and Termination................................7
4.2 Status of Investment Manager as Independent Contractor..7
4.3 Notices.................................................7
4.4 Governing Law...........................................8
4.5 Severability............................................8
4.6 Entire Agreement........................................9
4.7 Binding on Successors...................................9
4.8 Headings................................................9
4.9 Waiver..................................................9
4.10 Amendment...............................................9
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FUND I INVESTMENT MANAGEMENT AGREEMENT
This FUND I INVESTMENT MANAGEMENT AGREEMENT (the "Agreement") is
entered into as of March 8, 2000, by and between CT Investment Management Co.,
LLC, a Delaware limited liability company in its capacity as the investment
manager of the Fund as provided in this Agreement (the "Investment Manager"),
and CT Mezzanine Partners I, LLC, a Delaware limited liability company (the
"Fund"). All definitions not expressly provided herein shall be those set forth
in the form of Limited Liability Company Agreement of the Fund between CT-F1,
LLC, a Delaware limited liability company ("CT-F1") and Travelers Limited Real
Estate Mezzanine Investments I, LLC, a Delaware limited liability company
("Limited REMI I") (the "Fund Operating Agreement") and as may be amended from
time to time and the Venture Agreement (as defined below).
PRELIMINARY STATEMENT
A. The Fund desires to retain the Investment Manager to
provide certain investment management services in connection with the day-to-day
management of the Fund.
B. Capital Trust, Inc., a Maryland corporation ("CT"),
XX-X0, XX-X0-XX, LLC, a Delaware limited liability company ("CT-F2-GP"),
CT-F2-LP, LLC, a Delaware limited liability company ("CT-F2-LP") and the
Investment Manager (collectively, the "CT Parties") and Limited REMI I,
Travelers General Real Estate Mezzanine Investments II, LLC, a Delaware limited
liability company ("General XXXX XX"), and Travelers Limited Real Estate
Mezzanine Investments II, LLC, a Delaware limited liability company ("Limited
XXXX XX") (collectively, the "CIG Parties") are parties to a Venture Agreement,
dated as of the date hereof (the "Venture Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Investment Manager and the Fund agree as
follows:
ARTICLE I
RETENTION; SERVICES AND POWERS
OF INVESTMENT MANAGER
1.1 Retention of Investment Manager. The Fund hereby appoints the
Investment Manager (subject to the following provisions of this Agreement)
exclusively to act as the investment manager of the Fund and to provide the
services to the Fund described in Section 1.2 of this Agreement.
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1.2 Services to be Performed by Investment Manager. Subject to the
provisions of the Fund Operating Agreement, the Investment Manager shall be
responsible for the day-to-day management of the Fund. Services to be rendered
by the Investment Manager to the Fund shall include the following:
(a) The Investment Manager shall identify, evaluate and
present Investment opportunities (including any financing plans associated with
such Investments) to the Members of Fund I. If the Members of Fund I determine
to make such Investments presented by the Investment Manager, the Investment
Manager shall have the authority to, (i) make such Investments on behalf of the
Fund, (ii) monitor Investments on a day-to-day basis, including arranging for
the accounting, budgeting, safekeeping and administration of Investments, (iii)
arrange debt financing for the Fund and Investments on the terms approved by the
Members of the Fund, (iv) advise the Fund with a view to optimizing the returns
from Investments; and (vi) execute all decisions of the Members of Fund I
regarding the disposition and refinancing of Investments.
(b) The Investment Manager shall develop and administer the
Fund's financial and accounting reporting functions, treasury and cash or
management functions and internal control and audit functions.
(c) The Investment Manager shall identify, recommend and
oversee necessary third-party independent contractors and, upon the consent of
Limited REMI I, select or discharge the Fund's accountants and legal counsel.
(d) The Investment Manager shall submit to each Member the
following reports:
(i) An unaudited monthly activity report on the
Fund's operations which shall include an
income statement, a balance sheet, a
commentary report on both a monthly basis
and a year-to-date basis and a list of all
Fund assets and the status thereof. Such
report shall be delivered to the Members
within 10 business days after the last day
of each month.
(ii) An unaudited quarterly report of the Fund's
operations which will include an income
statement, a balance sheet, a statement of
cash flows, and statement of the Fund's
equity. The report will present the income
statement and statement of cash flows on
both a quarterly basis and a year-to-date
basis. The report also will compare actual
operations to those projected in the Fund's
Annual Operating Budget, to the extent
adopted by the Members of the Fund. The
report will be delivered to the Members
within 30 business days after the last day
of each quarter.
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(iii) An annual audited financial statement certified
to be in accordance with GAAP within 60 days of the
fiscal year end.
(e) The Investment Manager shall obtain, at the expense of the
Fund, director and officer/manager liability insurance, and other customary
liability insurance and liability insurance customary for businesses like that
of the Fund. The liability insurance coverages set forth above shall provide for
full tail coverage (on an occurrence basis during the term of the Fund) for a
minimum of three years following the date of the dissolution of the Fund.
1.3 Key Personnel. The Investment Manager shall cause each of Xxxx X.
Xxxxx and Xxxxx X. Xxxxxxx (the "Key Individuals") to commit to devote a
substantial portion of their professional time and energy to the performance of
the Investment Manager's duties under this Agreement; it being understood and
agreed that so long as Xx. Xxxxx is an employee of CT and continues to provide
services to the Investment Manager in accordance with this Section 1.3, Xx.
Xxxxxxx may devote up to 50% of his professional time to activities not related
to the Fund. The Investment Manager shall cause at least one additional Senior
Manager of the Investment Manager to devote a substantial portion of his or her
professional time and energy to the performance of the Investment Manager's
duties under this Agreement; provided, however, that the identity of such Senior
Manager is reasonably acceptable to the Fund. The Fund and Limited REMI I agree
that either of Xxxxxx Xxxxxx or Xxxxxx Xxxxxxx would be acceptable as the Senior
Manager. In the event of (i) Xx. Xxxxx'x death or Disability (but not
termination of his employment for any other reason) during the term of this
Agreement, and (ii) Xx. Xxxxxxx and Xx. Xxxxxx each devote a substantial portion
of his professional time and energy to the performance of the Investment
Manager's duties under this Agreement, then the death or Disability of Xx. Xxxxx
shall not be deemed a breach by the Investment Manager of this Section 1.3. If
Xx. Xxxxxxx either dies, becomes Disabled or his employment with the Investment
Manager is terminated during the term of this Agreement and Xx. Xxxxx and either
Xx. Xxxxxx, Xx. Xxxxxxx or another Senior Manager (which is reasonably
acceptable to Limited REMI I) each devote a substantial portion of his
professional time and energy to the performance of the Investment Manager's
duties under this Agreement, then the death or disability of Xx. Xxxxxxx or the
termination of Xx. Xxxxxxx'x employment shall not be deemed a breach of this
Section 1.3.
1.4 Miscellaneous. To the extent that the performance of the duties set
forth in this Agreement places any affirmative regulatory obligations upon the
Investment Manager, the Investment Manager shall not be deemed to have accepted
such duties unless and until it complies with any and all applicable laws and
regulations. The Investment Manager, in its performance of its duties hereunder,
shall act in conformity with the instructions and directions of the General
Partner and/or the Fund shall comply with and conform to the requirements of all
applicable federal and state laws, regulations and rulings.
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ARTICLE II
COMPENSATION OF THE INVESTMENT MANAGER; FEES AND EXPENSES
2.1 Investment Manager Compensation. As compensation for its services
in acting as Investment Manager of the Fund, the Fund shall pay to the
Investment Manager a investment management fee (the "Investment Management Fee")
equal to 0.75% per annum of the Fund's aggregate Invested Capital (as defined in
the Venture Agreement). The Investment Management Fee shall accrue and be
payable monthly in arrears. Within 90 days of the end of each calendar year, the
Members of the Fund and the Investment Manager shall jointly calculate and
determine the aggregate Investment Management Fee that accrued to the Investment
Manager for such year based on the formula provided above. As provided in the
Venture Agreement, to the extent the amount of Investment Management Fee
payments actually received by the Investment Manager during such year exceeded
the calculated amount, such excess shall be applied to the Investment Management
Fee payments to be made to the Investment Manager in the next quarter(s) until
recouped; provided, however, that if upon termination of this Agreement any
portion of such excess amount remains unpaid, the Investment Manager shall pay
the Fund such remaining excess amount in full as promptly as practicable after
such termination. As provided in the Venture Agreement, to the extent the
calculated amount exceeds the amount of Investment Management Fee payments
actually received by the Investment Manager, the Fund shall pay the Investment
Manager the difference between such amounts as promptly as practicable after the
calculation of such excess amount.
2.2 Investment Manager Expenses. The Investment Manager shall bear the
following ordinary day-to-day expenses incidental to the administration of the
Fund (i) all costs and expenses of providing to the Fund and the Investment
Manager the office space, facilities, utility service, supplies and necessary
administrative and clerical functions connected with the Fund's, and the
Investment Manager's, operations; and (ii) compensation of all employees who are
engaged in the operation or management of the Fund's or the Investment Manager's
business (collectively, "Administrative Expenses").
2.3 Fund Expenses. Except as provided in Section 2.2 above, the Fund
shall bear and be charged with all other costs and expenses of the Fund's
activities and operations, including all activities and operations prior to the
date of this Agreement as set forth on Schedule 2.3 hereto, and including,
without limitation, to the extent directly related to the Fund and its
Investments: (i) all costs and expenses incurred in developing, negotiating,
structuring, acquiring or financing any proposed Investment, whether or not the
Fund actually invests therein including, without limitation, any travel, legal
and accounting expenses and other fees and out-of-pocket costs related thereto,
and the costs of rendering financial assistance to or arranging for financing
for any assets or businesses constituting any such proposed Investment
(provided, however, that either such proposed Investment is specifically
approved by Limited REMI I or the expenses incurred in connection with such
proposed Investment are approved by Limited REMI I); (ii) all costs and
expenses, if any, incurred in monitoring Investments, including without
limitation any travel, legal
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and accounting expenses and other fees and out-of-pocket costs related thereto;
(iii) all costs and expenses, if any, incurred in disposing of or otherwise
dealing with Investments, including, without limitation, any travel, legal and
accounting expenses and other fees and out-of-pocket costs related thereto, and
the costs of rendering financial assistance to or arranging for financing for
any assets or businesses constituting Investments; (iv) taxes of the Fund, fees
of auditors, counsel and other advisors of the Fund, insurance costs of the Fund
and costs related to litigation and threatened litigation involving the Fund;
(v) expenses associated with third party accountants, attorneys and tax advisors
with respect to the Fund and its activities, including assisting the Investment
Manager in the preparation and auditing of financial reports and statements and
other similar matters, and costs associated with the distribution of financial
and other reports and capital call notices to the Members, and costs associated
with Fund meetings (it being understood that this clause (v) does not permit the
Investment Manager to outsource its accounting department); (vi) brokerage
commissions and other investment costs incurred by or on behalf of the Fund and
paid to third parties unaffiliated with the Investment Manager, and to the
extent approved by Limited REMI I, brokerage commissions and other investment
costs incurred by and on behalf of the Fund and paid to affiliates of the
Investment Manager, (vii) all costs and expenses associated with obtaining and
maintaining insurance as provided in Section 1.2(e), including, without
limitation, customary liability insurance to insure the Investment Manager and
other parties whom the Fund has agreed to indemnify against liability under the
Fund Operating Agreement; (viii) fees incurred in connection with the
maintenance of bank and custodian accounts; (ix) all expenses incurred in
connection with the registration of the Fund's securities under applicable
securities laws or regulations; and (x) all expenses of the Fund that are not
recurring normal operating expenses (all such expenses, collectively, the
"Operating Expenses"). To the extent any Operating Expenses are paid by the
Investment Manager, such Operating Expenses shall be reimbursed by the Fund.
ARTICLE III
EXCULPATION AND INDEMNIFICATION
3.1 Exculpation and Indemnification. (a) Neither the Investment Manager
nor any of its partners, affiliates, directors, officers, employees,
shareholders, members and other agents (each, an "Indemnified Party"), shall be
liable to the Fund or to the Members for monetary damages for any losses,
claims, damages or liabilities ("Damages") arising from any act performed or
omitted by such parties arising out of or in connection with the performance by
Investment Manager of its services under this Agreement or the Fund's business
or affairs, except to the extent that any such Damages are primarily
attributable to the gross negligence or willful misconduct of such Indemnified
Party.
(b) (1) The Fund shall, to the fullest extent permitted by applicable
law, indemnify, defend and hold harmless the Indemnified Parties
against any Damages to which the Indemnified Party may become subject
in connection with any matter arising out of or in connection with the
performance by Investment Manager of its services under this
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Agreement or the Fund's business or affairs, except, with respect to
any Indemnified Party to the extent that any such Damages are primarily
attributable to the gross negligence or willful misconduct of such
Indemnified Party. If the Indemnified Party becomes involved in any
capacity in any action, proceeding or investigation in connection with
any matter arising out of or in connection with the performance by
Investment Manager of its services under this Agreement or the Fund's
business or affairs, the Fund shall reimburse the Indemnified Party for
its reasonable legal and other expenses (including the cost of any
investigation and preparation) as they are incurred in connection
therewith, provided, however, that the Indemnified Party shall promptly
repay to the Fund the amount of any such reimbursed expenses paid to it
if it shall ultimately be finally determined that the Indemnified Party
was not entitled to be indemnified by the Fund in connection with such
action, proceeding or investigation. If for any reason (other than by
reason of the exclusions from indemnification hereinabove set forth)
the foregoing indemnification is unavailable to the Indemnified Party,
or insufficient to hold it harmless, then the Fund shall contribute to
the amount paid or payable by the Indemnified Party as a result of such
loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative benefits received by the Fund on
the one hand and the Indemnified Party on the other hand or, if such
allocation is not permitted by applicable law, to reflect not only the
relative benefits referred to above but also any other relevant
equitable considerations.
(2) The provisions of this Section 3.1(b) shall survive for a
period of three years from the date of dissolution of the Fund;
provided however, that if at the end of such period there are any
actions, proceedings or investigations then pending, the Indemnified
Party shall notify the Members (which notice shall include a brief
description of each such action, proceeding or investigation and the
liabilities asserted therein) and the provisions of this Section 3.1(b)
shall survive with respect to each such action, proceeding or
investigation set forth in such notice (or any related action,
proceeding or investigation based upon the same or similar claim) until
the date that such action, proceeding or investigation is finally
resolved; and provided, further, that the obligations of the Fund under
this Section 3.1(b) shall be satisfied solely out of Fund assets,
subject to the right of the liquidator of the Fund to establish
reserves, pursuant to the Fund Operating Agreement for contingent
obligations under this Section 3.1(b).
(c) No Member of the Fund shall have any obligation to the
Fund or any other Member of the Fund to bring or join in any action in defense
of an Indemnified Party pursuant to Section 3.1 (a) or (b). Nothing contained in
this Section 3.1 shall be construed as any waiver of insurance claims or
recoveries by the Fund or an Indemnified Party.
(d) The remedies of an Indemnified Party under this Article
III shall be non- exclusive and, without duplication, each such Indemnified
Party may pursue any other remedy provided in law or equity.
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(e) The provisions of this Article III shall inure to the
benefit of the Indemnified Parties, and any successors, assigns, heirs and
personal representatives of such Indemnified Parties.
ARTICLE IV
MISCELLANEOUS
4.1 Duration and Termination. If Limited REMI I has the right and
elects to purchase CT-F1's membership interest in the Fund pursuant to Section
9.3 of the Fund Operating Agreement, then this Agreement shall terminate
immediately upon the completion of such purchase. If either Member has the right
and elects to Unwind the Fund pursuant to Section 10.2(c) of the Fund Operating
Agreement and Section 2.12 of the Venture Agreement, then this Agreement shall
terminate upon the completion of the Unwind as provided in Section 11.2(a)(ii)
of the Fund Operating Agreement and Section 2.12 of the Venture Agreement. If
the Investment Manager commits an act of fraud involving the Fund (which results
in material damages to the Fund) or intentionally misappropriates significant
funds of the Fund, which results in an Event of Default under the Fund Operating
Agreement, then this Agreement may be terminated by the Fund by delivery of
written notice of termination from Limited REMI I to the Investment Manager. If
pursuant to the Limited Liability Company Agreement of CT XX XX LLC, General
XXXX XX has caused CT XX XX LLC to terminate the Fund II Investment Management
Agreement between CT XX XX LLC and the Investment Manager, then Limited REMI I
shall have the right to elect to Unwind the Fund and this Agreement shall
terminate upon the completion of such Unwind.
The obligation of the Fund to pay all accrued and unpaid Management
Fees to the Investment Manager shall survive any termination of this Agreement.
Articles III and IV shall also survive any termination of this Agreement.
Any dispute which arises under this Agreement shall be resolved
pursuant to Section 4.2 of the Venture Agreement.
4.2 Status of Investment Manager as Independent Contractor. The
Investment Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Fund from time to time, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
4.3 Notices. Any notices required hereunder shall be in writing and
shall be deemed given when delivered in person or by courier or when sent by
first-class registered or certified mail or by national prepaid overnight
delivery service to the parties at such addresses as either party may from time
to time specify by notice.
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If to the Fund at:
Travelers Limited Real Estate
Mezzanine Investments I, LLC
000 Xxxxxxxx Xxxxxxxxx, 0XX
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx, Esq.
Real Estate Investment Number: 12832
with a copy to:
Loeb & Loeb LLP
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
If to the Investment Manager at:
CT Investment Management, LLC
c/o Capital Trust, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
4.4 Governing Law. This Agreement shall be governed, construed,
administered and regulated in all respects under the laws of the State of New
York to the extent such laws are not preempted or superseded by the laws of the
United States.
4.5 Severability. If any one or more of the covenants, agreements,
provisions or terms of this Agreement shall be held to be contrary to any
express provision of law or contrary to policy of express law, though not
expressly prohibited, or to be against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this
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Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
4.6 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and
supersedes any prior agreement or understanding among the parties hereto with
respect to the subject matter hereof.
4.7 Binding on Successors. This Agreement shall be binding upon the
Fund, the General Partner, the Investment Manager and their respective
successors and assigns. However, no assignment of this Agreement shall be made
without the prior written consent of the Fund.
4.8 Headings. The headings used in this Agreement are inserted for
reference purposes only and shall not be deemed to limit or affect in any way
the meaning or interpretation of any of the terms or provisions herein.
4.9 Waiver. Any failure of any party to comply with any obligation or
agreement herein may be waived in writing by the other party but such waiver or
failure to insist upon strict compliance with such obligation or agreement shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
4.10 Amendment. This Agreement may be amended, modified, or
supplemented only by written agreement of the parties hereto.
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IN WITNESS WHEREOF, this Agreement is hereby executed as of the date
first hereinabove written.
CT INVESTMENT MANAGEMENT CO., CT MEZZANINE PARTNERS I, LLC
LLC
By: Capital Trust, Inc., its sole member By: Travelers Limited Real Estate
Mezzanine Investments, LLC,
By: /s/ Xxxx X. Xxxxx a Member
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Xxxx X. Xxxxx
Chief Executive Officer By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Vice President
By: CT-F1, LLC, a Member
By: Capital Trust, Inc., its
sole member
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Chief Executive Officer
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