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Exhibit 10.1
MANAGEMENT AGREEMENT
THIS AGREEMENT, dated as of May 6, 1998 by and among HEALTHCARE FINANCIAL
PARTNERS REIT, INC., a Maryland corporation (the "Company"), and HCFP REIT
MANAGEMENT, INC., a Maryland corporation (the "Manager");
WITNESSETH:
WHEREAS, the Company intends to invest in mortgage loans, real property
and non-real estate assets ("REIT Investments") and expects to qualify for the
tax benefits of a real estate investment trust (a "REIT") accorded by Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, the Company desires to retain the Manager to advise and counsel
the Company as to the acquisition and sale of, and to otherwise manage the
investments of, the Company and to perform administrative services for the
Company in the manner and on the terms set forth herein;
NOW THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined herein
shall have the respective meanings assigned them in the Offering Memorandum of
the Company dated April 29, 1998. In addition, the following terms shall have
the following:
(a) "Agreement" means this Management Agreement, as amended from time to
time.
(b) "Closing Date" means the date of closing of the Offering.
(c) "GMAC" means GMAC Commercial Mortgage Corporation, a California
corporation.
(d) "Governing Instruments" means the charter and bylaws in the case of a
corporation, or the partnership agreement in the case of a partnership.
(e) "HCFP" means HealthCare Financial Partners, Inc., a Delaware
corporation.
(f) "Loan Servicing Agreement" means the Loan Servicing Agreement between
GMAC and the Company dated May 6, 1998.
(g) The term "permanent mortgage loan" means a loan secured by real
property collateral which has an initial term of more than three years.
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(h) "Subsidiary" means any subsidiary of the Company and any partnership,
a general partner of which is the Company or any subsidiary of the Company.
SECTION 2. Duties of the Manager.
(a) The Manager at all times will be subject to the supervision of the
Board of Directors and will have only such functions and authority as the
Company delegates to it. The Manager will advise the Board of Directors as to
the activities and operations of the Company. The Manager may enter into
sub-contracts with other parties, including HCFP and its affiliates, to provide
certain services to the Company. The Manager will be responsible for the
day-to-day operations of the Company pursuant to the authority granted to it by
the Board of Directors under this Agreement, and the Manager will perform (or
cause to be performed) such services and activities relating to the assets and
operations of the Company as may be directed by the Board of Directors or as
the Manager otherwise considers appropriate, including:
(i) serving as the Company's consultant with respect to formulation of
investment criteria and preparation of policy Guidelines by the Board of
Directors;
(ii) advising and representing the Company in connection with the
acquisition and commitment to acquire assets, the sale and commitment to sell
assets, and the maintenance and administration of its portfolio of assets and
making available to the Company its knowledge and experience with respect to
the healthcare industry, mortgage loans, real estate and real estate related
assets;
(iii) advising and representing the Company in connection with defaults
by the Company's borrowers and lessees, including the exercise of remedies and
collection of amounts owed to the Company.
(iv) advising the Company regarding, and arranging for, borrowings and
the raising of equity capital, as appropriate;
(v) furnishing reports and statistical and economic research to the
Company regarding the Company's activities and the services performed for the
Company by the Manager and regarding market conditions in the area in which the
Company proposes to invest;
(vi) providing executive and administrative personnel, office space and
office services required in rendering services to the Company; administering
the day-to-day operations of the Company; establishing and maintaining records
of the Company's activities; and performing and supervising the performance of
such other administrative functions necessary in the management of the Company,
including the collection of revenues and the payment of the Company's debts and
obligations and the maintenance of appropriate data processing and computer
services to perform such administrative functions;
(vii) providing marketing services and assistance to the Company;
(viii) communicating on behalf of the Company with the holders of any
equity or debt securities of the Company as required to satisfy the reporting
and other requirements of any
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governmental bodies or agencies or trading markets and to maintain effective
relations with such holders;
(ix) to the extent not otherwise subject to an agreement executed by the
Company, designating a servicer for mortgage loans held by the Company and
arranging for the monitoring and administering of such servicer;
(x) counseling the Company in connection with policy decisions to be made
by the Board of Directors;
(xi) engaging in hedging activities on behalf of the Company which are
consistent with the Company's status as a REIT and with the Guidelines; and
upon request by the Board of Directors and in accordance with the Guidelines,
investing or reinvesting any money of the Company;
(xii) counseling the Company regarding (A) the maintenance of its
exemption from the Investment Company Act and monitoring compliance with the
requirements for maintaining exemption from that Act; (B) 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 the income tax
regulations promulgated thereunder (the "Treasury Regulations"); and (C)
compliance with all applicable laws, including those that would require the
Company to qualify to do business in particular jurisdictions;
(xiii) assisting the Company in complying with all regulatory
requirements applicable to the Company in respect of its business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act");
(xiv) taking all necessary actions to enable the Company to make required
tax filings and reports, including soliciting stockholders for required
information to the extent provided in the Code and the Treasury Regulations;
(xv) handling and resolving all claims, disputes or controversies
(including all litigation, arbitration, settlement or other proceedings or
negotiations) in which the Company may be involved or to which the Company may
be subject arising out of the Company's day-to-day operations, subject to such
limitations or parameters as may be imposed from time to time by the Board of
Directors;
(xvi) using commercially reasonable efforts to cause expenses incurred by
or on behalf of the Company to be reasonable or customary and within any
budgeted parameters or the Guidelines set by the Board of Directors from time
to time;
(xvii) performing such other services as may be required from time to
time for management and other activities relating to the assets of the Company
as the Board of Directors
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shall reasonably request or the Manager shall deem appropriate under the
particular circumstances; and
(xviii) using commercially reasonable efforts to cause the Company to
comply with all applicable laws.
(b) Portfolio Management. The Manager will perform portfolio management
services on behalf of the Company with respect to the Company's investments.
Such services will include, but not be limited to, consulting the Company on
purchase, sale and other opportunities, collection of information and
submission of reports pertaining to the Company's assets, interest rates, and
general economic conditions, periodic review and evaluation of the performance
of the Company's portfolio of assets, acting as liaison between the Company and
banking, mortgage banking, investment banking and other parties with respect to
the purchase, financing and disposition of assets, and other customary
functions related to portfolio management. The Manager may enter into
subcontracts with other parties, including HCFP and its affiliates, to provide
any such services to the Company.
(c) Primary Servicing. The Company has entered into the Loan Servicing
Agreement with GMAC for certain loan servicing activities with respect to the
Company's mortgage loans. The Manager will monitor and administer the loan
servicing activities provided by third-party servicers of the Company's
mortgage loans (including, without limitation, GMAC). Such monitoring and
administrative services will include, but not be limited to, the following
activities: serving as the Company's consultant with respect to the servicing
of loans; collection of information and submission of reports pertaining to the
mortgage loans and to moneys remitted to the Manager or the Company by
servicers; periodic review and evaluation of the performance of each servicer
to determine its compliance with the terms and conditions of the servicing
agreement and, if deemed appropriate, recommending to the Company the
termination of such servicing agreement; acting as a liaison between servicers
and the Company and working with servicers to the extent necessary to improve
their servicing performance. The Manager will provide all loan servicing
activities which are not provided by third-party servicers. Such services shall
include, but not be limited to, the following activities: review of and
recommendations as to fire losses, easement problems and condemnation,
delinquency and foreclosure procedures with regard to the mortgage loans;
preparation of delinquency, foreclosing and other reports on mortgage loans;
and advising as to and supervising claims filed under any insurance policies.
(d) Efforts. The Manager agrees to use commercially reasonable efforts at
all times in performing services for the Company hereunder.
SECTION 3. Additional Activities of Manager. Nothing herein shall limit
or restrict the right of the Manager or any of its officers, directors,
employees or Affiliates to engage in any business or to render services of any
kind to any other person including the purchase of, or rendering advice to
others purchasing, assets that meet the Company's policies and criteria, except
that so long as this Agreement is in effect, the Manager (i) may not manage or
advise another REIT or other entity that invests or intends to invest primarily
in permanent mortgage loans or purchase lease back transactions with respect to
healthcare facilities and (ii) may not
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directly or through an affiliate invest in real property or originate or
acquire permanent mortgage loans.
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 of its Subsidiaries, 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 or
any of its Subsidiaries' Governing Instruments. When executing documents or
otherwise acting in such capacities for the Company, such persons shall use
their respective titles in the Company.
SECTION 4. Commitments. In order to meet the investment requirements of
the Company, as determined by the Board of Directors from time to time, the
Manager agrees at the direction of the Board of Directors to issue on behalf of
the Company commitments on such terms as are established by the Board of
Directors, for the acquisition by the Company of assets.
SECTION 5. Bank Accounts. At the direction of the Board of Directors, the
Manager may establish and maintain one or more bank accounts in the name of the
Company or any of its Subsidiaries, and may collect and deposit funds into any
such account or accounts, and disburse funds from any such account or 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 Company or any of its Subsidiaries.
SECTION 6. Records; Confidentiality. The Manager shall maintain
appropriate books of accounts and records relating to services performed
hereunder, and such books of account and records shall be accessible for
inspection by representatives of the Company or any of its Subsidiaries at any
time during normal business hours. The Manager shall keep confidential any and
all information obtained in connection with the services rendered hereunder and
shall not disclose any such information to nonaffiliated third parties except
with the prior written consent of the Board of Directors or as may be required
by law or order of a court or other tribunal having requisite jurisdiction.
SECTION 7. Obligations of Manager.
(a) The Manager shall require each borrower or lessee of the Company to
make such representations and warranties regarding the applicable facilities
financed by the Company as may be directed by the Board of Directors, or, if no
such directions are given, as may, in the judgment of the Manager, be necessary
and appropriate. In addition, the Manager shall take such other action as may
be directed by the Board of Directors, or, if no such directions are given, as
it deems necessary or appropriate with regard to the protection of the
Company's assets.
(b) The Manager shall refrain from any action that, in its sole judgment
made in good faith, would adversely affect the status of the Company as a REIT,
or as exempt from regulation under the Investment Company Act or that, in its
sole judgment made in good faith, would violate any law, rule or regulation of
any governmental body or agency having jurisdiction over
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the Company or any of its Subsidiaries or that would otherwise not be permitted
by their respective Governing Instruments. If the Manager is ordered to take
any such action by the Board of Directors, the Manager shall promptly notify
the Board of Directors of the Manager's judgment that such action would
adversely affect such status or violate any such law, rule or regulation or the
Governing Instruments. Notwithstanding the foregoing, the Manager, its
directors, officers, stockholders and employees shall not be liable to the
Company or any of its Subsidiaries, the Independent Directors, or the Company's
or any of its Subsidiaries' stockholders or partners for any act or omission by
the Manager, its directors, officers, stockholders or employees except as
provided in Section 11 of this Agreement.
SECTION 8. Compensation.
(a) Commencing with the first fiscal quarter after the Closing Date, the
Company shall pay to the Manager, for services rendered under this Agreement, a
base management fee (the "Base Management Fee") payable and calculated
quarterly (prorated based on the number of days elapsed during any partial
fiscal quarter) in an amount equal to a percentage (the "Percentage Amount") of
the Average Invested Assets for such quarter. The term "Average Invested
Assets" for any quarter means the average of the aggregate book value of the
consolidated assets of the Company, before reserves for depreciation or bad
debts or other non-cash reserves, computed by dividing the sum of such values
for each of the three months during such quarter (based on the book value of
such assets on the last day of such month) by three. The "Percentage Amount"
shall be 1.50% for Average Invested Assets up to and including $300 million;
1.25% for Average Invested Assets in excess of $300 million up to and including
$600 million; 1.00% for Average Invested Assets in excess of $600 million up to
and including $900 million; 0.75% for Average Invested Assets in excess of $900
million up to and including $1.2 billion; and 0.50% for Average Invested Assets
in excess of $1.2 billion.
(b) The Company shall pay to the Manager incentive compensation (the
"Incentive Compensation") for each fiscal quarter in an amount equal the product
of (A) 25% of the dollar amount by which (1)(a) Funds From Operations of the
Company (before the Incentive Compensation) per share of Common Stock (based on
the weighted average number of shares outstanding) for such quarter plus (b)
gains (or minus losses) from debt restructuring and sales of property per share
of Common Stock (based on the weighted average number of shares outstanding),
exceeds (2) an amount equal to (a) the weighted average of the prices per share
of Common Stock issued by the Company (including shares of Common Stock issued
upon the exercise of Options or warrant and assuming a price of $20 per share
for shares sold in the Offering) multiplied by (b) the Ten Year U.S. Treasury
Rate for such quarter plus 3.50% multiplied by (B) the weighted average number
of shares of Common Stock outstanding during such quarter. "Funds From
Operations" as defined by NAREIT means net income (computed in accordance with
generally accepted accounting principles) ("GAAP") excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization on real estate assets, and after adjustments for unconsolidated
partnerships and joint ventures. Funds From Operations does not represent cash
generated from operating activities in accordance with GAAP and should not be
considered as an alternative to net income as an indication of the Company's
performance or to cash flows as a measure of liquidity or ability to make
distributions. As used in calculating the Manager's compensation, the term "Ten
Year U.S. Treasury Rate" means the arithmetic average of the weekly average
yield to
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maturity for actively traded current coupon U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years) published by the
Federal Reserve Board during a quarter, or, if such rate is not published by
the Federal Reserve Board, any Federal Reserve Bank or agency or department of
the federal government selected by the Company. If the Company determines in
good faith that the Ten Year U.S. Treasury Rate cannot be calculated as
provided above, then the rate shall be the arithmetic average of the per annum
average yields to maturities, based upon closing asked prices on each business
day during a quarter, for each actively traded marketable U.S. Treasury fixed
interest rate security with a final maturity date not less than eight nor more
than twelve years from the date of the closing asked prices as chosen and
quoted for each business day in each such quarter in New York City by at least
three recognized dealers in U.S. government securities selected by the Company.
(c) The Manager is expected to use the proceeds from its Base Management
Fee and Incentive Compensation in part to pay compensation to its officers and
employees who, notwithstanding that certain of them are officers of the
Company, will initially receive no cash compensation directly from the Company.
The Base Management Fee and Incentive Compensation are payable in arrears. The
Manager shall compute the compensation payable under Sections 8(a) and 8(b) of
this Agreement within 45 days after the end of each fiscal quarter. A copy of
the computations made by the Manager to calculate its compensation shall
thereafter promptly be delivered to the Board of Directors and, upon such
delivery, payment of the compensation earned under Sections 8(a) and 8(b) of
this Agreement shown therein shall be due and payable within 60 days after the
end of such fiscal quarter.
(d) The Manager may charge the Company for any out of pocket expenses that
the Manager incurs in connection with employing unaffiliated third parties to
conduct due diligence on assets considered for purchase by the Company.
SECTION 9. Expenses of the Company. The Company or any Subsidiary shall
pay all of its expenses and shall reimburse the Manager for documented expenses
of the Manager incurred on its behalf.
SECTION 10. Calculations of Expenses. Expenses incurred by the Manager on
behalf of the Company shall be reimbursed quarterly to the Manager within 60
days after the end of each quarter. The Manager shall prepare a statement
documenting the expenses of the Company and those incurred by the Manager on
behalf of the Company during each quarter, and shall deliver such statement to
the Company within 45 days after the end of each quarter.
SECTION 11. Limits of Manager Responsibility. The Manager assumes no
responsibility under this Agreement other than to render the services called
for hereunder in good faith and shall not be responsible for any action of the
Board of Directors in following or declining to follow any advice or
recommendations of the Manager, including as set forth in Section 7(b) of this
Agreement. The Manager, its directors, officers, stockholders and employees
under or in connection with this Agreement, except by reason of acts
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of their duties. The Manager and its directors and officers will not
be liable to the Company, any subsidiary of the Company, the Independent
Directors, the Company's stockholders or any subsidiary's stockholders for acts
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performed in accordance with and pursuant to this Agreement, except by reason
of acts constituting bad faith, willful misconduct, gross negligence or
reckless disregard of their duties under this Agreement. The Company and its
Subsidiaries shall reimburse, indemnify, defend and hold harmless the Manager,
its stockholders, directors, officers and employees of and from any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, (including attorneys' fees) in respect of or arising from
any acts or omissions of the Manager, its stockholders, directors, officers and
employees made in good faith in the performance of the Manager's duties under
this Agreement and not constituting bad faith, willful misconduct, gross
negligence or reckless disregard of its duties.
SECTION 12. No Joint Venture. The Company and the Manager are not partners
or joint venturers with each other and nothing herein shall be construed to
make them such partners or joint venturers or impose any liability as such on
either of them.
SECTION 13. Term.
(a) This Agreement shall continue in force and effect for an initial term
(the "Initial Term") expiring on the third anniversary of the Closing Date,
subject to being terminated for cause as provided in Section 14 herein.
Thereafter, the term of this Agreement may be extended by agreement between the
Company and the Manager, subject to the affirmative vote of a majority of the
Independent Directors. Each extension shall be executed in writing by all
parties hereto before the expiration of this Agreement or, if applicable, the
most recent extension thereof. Each such extension shall be effective for a
period of one year. At any time after the Initial Term, the Company may
terminate, or decline to renew the term of, this Agreement without cause upon
90 day(s) written notice by a majority vote of the Independent Directors;
provided that the Company will be required upon such termination or nonrenewal,
at the option of the Company, either (i) to acquire the Manager from HCFP for a
purchase price equal to the Acquisition Price, as hereinafter defined, or (ii)
to pay the Manager a termination or nonrenewal fee ("Termination Fee") equal to
80% of the Acquisition Price. The Acquisition Price is an amount equal to 10
times the Manager's earnings before taxes for the latest twelve calendar months
immediately preceding the date of termination or nonrenewal. Such termination
or nonrenewal shall first become effective as of the 90th day after the receipt
by the Manager of such written notice of such termination or nonrenewal from
the Company. A failure to extend the term of this Agreement at the expiration
of its term (or, if the term of this Agreement shall have been extended
pursuant to this Section 13, at the expiration of the most recent extension)
shall be deemed for all purposes of this Agreement to be a termination of this
Agreement pursuant to this Section 13. The Company shall pay the Acquisition
Price or Termination Fee, as applicable, to HCFP on or before the effective
termination date. In the event the Company elects to acquire the Manager in
connection with such termination, HCFP will, upon receipt of the Acquisition
Price, deliver stock certificates representing all of such capital stock
endorsed to the order of the Company.
(b) In addition, the Company has the right at any time during the term of
this Agreement to terminate this Agreement without the payment of any
termination or nonrenewal fee and without acquiring the Manager upon, among
other things, a material breach by the
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Manager of any provision contained in the Management Agreement (including the
failure of the Manager to use reasonable efforts to comply with the
Guidelines).
SECTION 14. Termination for Cause. This Agreement, or any extension
hereof, may be terminated by either party for cause immediately upon written
notice, (i) by a majority vote of the Independent Directors in the case of
termination by the Company, or (ii) by a majority vote of the directors of the
Manager, in the case of termination by the Manager. Grounds for termination for
cause will occur with respect to a party if:
(i) Such party shall have violated any provision of this Agreement
and, after notice of such violation, shall not have cured such default
within 30 days; or
(ii) There is entered an order for relief or similar decree or
order with respect to the other party by a court having 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 other party (A) 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 any
composition or arrangement with, creditors; (B) applies for, or consents
(by admission of material allegations of a petition or otherwise) to the
appointment of a receiver, trustee, assignee, custodian, liquidator or
sequestrator (or other similar official) of the other party 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
other party and continue undismissed for 30 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 authorizes such application or consent, or proceedings
to such end are instituted against the other party without such
authorization, application or consent and are approved as properly
instituted and remain undismissed for 30 days or results 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 30 days.
Each party agrees that if any of the events specified in this Section 14
shall occur, it will give prompt written notice thereof to the other party's
Board of Directors after the happening of such event.
If this Agreement is terminated pursuant to this Section 14, such
termination shall be without any further liability or obligation of either
party to the other, except as provided in Section 16 of this Agreement.
SECTION 15. Assignment; Subcontract.
(a) This Agreement shall terminate automatically in the event of its
assignment, in whole or in part, by the Manager, unless such assignment is to a
corporation, association, trust or
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other organization which shall acquire the property and carry on the business
of the Manager, if at the time of such assignment a majority of the voting
stock of such assignee organization shall be owned, directly or indirectly, by
HCFP or unless such assignment is consented to in writing by the Company with
the consent of a majority of the Independent Directors. Such an assignment
shall bind the assignee hereunder in the same manner as the Manager is bound
hereunder and, to further evidence its obligations hereunder the assignee shall
execute and deliver to the Company a counterpart of this Agreement. This
Agreement shall not be assignable by the Company without the consent of the
Manager, except in the case of assignment by the Company to a 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 hereunder and by the terms of said assignment in the same manner as the
Company is bound hereunder.
(b) Notwithstanding the foregoing, the Company and the Manager agree that
the Manager may enter into a subcontract with any third party, which third
party shall be approved by the Company's Board of Directors, pursuant to which
such third party will provide such of the management services required
hereunder as the Manager deems necessary, and the Company hereby consents to
the entering into and performance of such subcontract; provided, however, that
no such arrangement between the Manager and any third party shall relieve the
Manager of any of its duties or obligations hereunder.
SECTION 16. Action Upon Termination. From and after the effective date of
termination of this Agreement pursuant to Sections 13 or 14 hereof, the Manager
shall not be entitled to compensation for further services hereunder, but shall
be paid all compensation accruing to the date of termination and, if such
termination is not pursuant to Section 14, the termination fee determined
pursuant to Section 13. The Manager shall forthwith upon such termination
deliver to the Board of Directors all funds and property, documents, corporate
records, reports and software of the Company or any Subsidiary of the Company
then in the custody of Manager.
SECTION 17. Release of Money or Other Property Upon Written Request. The
Manager agrees that any money or other property of the Company and its
Subsidiaries held by the Manager under this Agreement shall be held by the
Manager as custodian for the Company and its Subsidiaries, and the Manager's
records shall be appropriately marked clearly to reflect the ownership of such
money or other property by the Company and its Subsidiaries. Upon the receipt
by the Manager of a written request signed by a duly authorized officer of the
Company requesting the Manager to release to the Company or any such
Subsidiary, respectively, any money or other property then held by the Manager
for the account of the Company or any such Subsidiary under this Agreement, the
Manager shall release such money or other property to the Company or any of its
Subsidiaries within a reasonable period of time, but in no event later than 60
days following such request. The Manager shall not be liable to the Company,
the Independent Directors, or the Company's or any of its Subsidiaries'
stockholders or partners for any acts performed or omissions to act by the
Company or any of its Subsidiaries in connection with the money or other
property released to the Company or any of its Subsidiaries in accordance with
this Section. The Company and its Subsidiaries jointly and severally shall
indemnify, defend and hold harmless the Manager, its directors, officers,
stockholders and
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employees against any and all expenses, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever, which arise in connection with the
Manager's release of such money or other property to the Company or any of its
Subsidiaries in accordance with the terms of this Section 17 of this Agreement.
Indemnification pursuant to this provision shall be in addition to any right of
the Manager to indemnification under Section 11 of this Agreement.
SECTION 18. 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 jurisdiction of its incorporation, 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
and its Subsidiaries, taken as a whole. The Company does not do business
under any fictitious business name.
(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
and creditors of the Company, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required by the
Company in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and 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 each of the Company, and this Agreement
constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the legally valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms.
(iii) The execution, delivery and performance 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
of its subsidiaries, or any order, judgment, award or decree of any
court, arbitrator or governmental authority binding on the Company or any
of its Subsidiaries, or the Governing Instruments of, or any securities
issued by the Company or any of its Subsidiaries, or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking
to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries, or any of their respective
assets, may be bound, the violation of which would have a material
adverse effect on the business operations, assets or financial
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condition of the Company 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.
(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 jurisdiction of its incorporation, has the
corporate 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 qualifications,
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. The Manager does not do business under
any fictitious name.
(ii) The Manager 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, execute and
deliver this Agreement and perform all obligations required hereunder. No
consent of any other person including, without limitation, stockholders
and creditors of the Manager, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required by the
Manager in connection with this Agreement or the execution and delivery
of this Agreement and the performance 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 legally 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 Governing
Instruments of, or any securities issued by, the Manager or of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which the Manager is a party or by which the Manager or
any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Manager and 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.
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SECTION 19. Notices. Unless expressly provided otherwise herein, 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
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:
(a) If to the Company:
HealthCare Financial Partners REIT, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Manager:
HCFP REIT Management, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy given in the manner prescribed above to:
G. Xxxxxxx Xxxxx, Esq.
Powell, Goldstein, Xxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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 19 for the giving of notice.
SECTION 20. Entire Agreement. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, 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 hereof.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing.
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SECTION 21. Binding Nature of Agreement; Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns as
provided herein.
SECTION 22. Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other rights or
remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 23. Schedules and Exhibits. All Schedules and Exhibits referred to
herein or attached hereto are hereby incorporated by reference into, and made a
part of, this Agreement.
SECTION 24. Indulgences, Not Waivers. Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted
such waiver.
SECTION 25. Costs and Expenses. Each party hereto shall bear its own costs
and expenses (including the fees and disbursements of counsel and accountants)
incurred in connection with the negotiations and preparation of and the closing
under this Agreement, and all matters incidental thereto.
SECTION 26. Titles Not to Affect Interpretation. The titles of paragraphs
and subparagraphs contained in this Agreement are for convenience only, and
they neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.
SECTION 27. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
SECTION 28. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.
SECTION 29. Gender. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.
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SECTION 30. Computation of Interest. Interest will be computed on the
basis of a 360-day year consisting of twelve months of thirty days each.
SECTION 31. Professional Fees. If any party becomes involved in litigation
(including bankruptcy proceedings) or arbitration against any other party
arising out of or relating to this Agreement, the court in the litigation
(including bankruptcy proceedings) or arbitrator in the arbitration shall award
legal expenses (including, but not limited to attorneys' fees, court costs and
other legal expenses) to the prevailing party. The award for legal expenses
shall not be computed in accordance with any court schedule, but shall be as
necessary to fully reimburse all attorneys' fees and other legal expenses
actually incurred in good faith, regardless of the size of the judgment, it
being the intention of the parties to fully compensate for all the attorneys'
fees and other legal expenses paid in good faith. For the purpose of this
Agreement, the terms "attorneys' fees" or "attorneys' fees and costs" shall
mean the reasonable fees and expenses of counsel to the parties hereto
(including, without limitation, the cost of in-house counsel employed by such
party, such cost to be determined by imputing a cost for those services
commensurate with such counsel's skills and experience), which may include
printing, duplicating and other expenses, air freight charges, and fees billed
for law clerks, paralegals, librarians and others not admitted to the bar but
performing services under the supervision of an attorney. The terms "attorneys'
fees" or "attorneys' fees and costs" shall also include, without limitation,
all reasonable fees and expenses incurred with respect to appeals, arbitrations
and bankruptcy proceedings, and whether or not any action or proceeding is
brought with respect to the matter for which said fees and expenses were
incurred.
SECTION 32. Controlling Law. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the
State of Maryland, notwithstanding any Maryland or other conflict-of-law
provisions to the contrary.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
HEALTHCARE FINANCIAL
PARTNERS REIT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Executive Vice President and Chief
Financial Officer
HCFP REIT MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Executive Vice President and Chief
Financial Officer
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