Sabine Royalty Trust

The Manager (CIT Healthcare LLC) and its affiliates are expressly permitted to engage in other businesses, manage competing vehicles, and trade securities for their own accounts. The Company expressly acknowledges it is not entitled to preferential treatment compared with other clients of the Manager or its affiliates.

“nothing in this Agreement shall (i) prevent the 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 or entity, whether or not the investment objectives or policies of any such other Person or entity are similar to those of the Company or (ii) in any way bind or restrict the Manager or any of its Affiliates, officers, directors or employees 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, officers, directors or employees may be acting. ... the Company recognizes that it is not entitled to receive preferential treatment as compared with the treatment given by the Manager or any Affiliate of the Manager to others.”

Detailed conflicts of interest policy governs co-investment and deal allocation between the Company and the Manager. The Manager may hold competing debt tranches of different priority in the same underlying real estate asset as the Company, creating potential adverse incentives. The Company may not purchase from or co-invest with the Manager except under specific arm's-length conditions approved by Independent Directors.

“In the event that (i) the Company shall invest in a loan (or portion of a loan) that is secured (directly or indirectly) by the same underlying real estate asset that secures a loan (or tranche or other portion of a loan) of a different priority held by the Manager or (ii) the Manager or the Company holds a preferred equity interest in a real estate asset that (directly or indirectly) secures a loan in which the other party hereto has an interest (each such loan, loan tranche or other loan portion, or preferred equity interest being a 'Debt Tranche'), then, if each of the Manager and the Company holds a majority of its respective Debt Tranche, a majority of the Independent Directors may, upon the occurrence of (i) a material default in respect of the Debt Tranche in which the Company holds an interest ... retain a reputable independent third party special servicer or adviser”

If the Company non-renews the Management Agreement without cause, it owes a Termination Fee equal to 3x the average of the prior two years' annual Base Management Fee plus Incentive Fee. This creates a significant financial deterrent to replacing the external manager and entrenches CIT Healthcare LLC.

“If the Company issues the Termination Notice, the Company shall be obligated to pay the Manager the Termination Fee within ninety (90) days of the Effective Termination Date.”