EXHIBIT 10.1
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated March , 1998, between Anthracite Capital, Inc. (the
"Company"), a Maryland corporation, and BlackRock Financial Management, Inc.
(the "Manager"), a Delaware corporation.
WHEREAS, the Company intends to invest in a diversified portfolio of
multifamily, commercial and residential mortgage loans, mortgage backed
securities and other real estate related assets in U.S. and non-U.S. markets
("REIT Investments") and expects to qualify for the tax benefits 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 acquire, sell
and otherwise manage the investments of the Company and to perform certain
supervisory services for the Company in the manner and on the terms set forth
herein;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. DEFINITIONS Capitalized terms used but not defined herein shall
have the respective meanings assigned them in the Prospectus of the Company
dated March , 1998. In addition, the following terms have the meanings
assigned them.
(a)"Affiliate" means, when used with reference to a specified person,
(i) any person that directly or indirectly controls or is controlled by or is
under common control with the specified person, (ii) any person that is an
officer of, partner in or trustee of, or serves in a similar capacity with
respect to, the specified person or of which the specified person is an officer,
partner or trustee, or with respect to which the specified person serves in a
similar capacity, and (iii) any person that, directly or indirectly, is the
beneficial owner of 5% or more of any class of equity
securities of the specified person or of which the specified person is directly
or indirectly the owner of 5% or more of any class of equity securities;
provided, however, that neither the Company nor any of its [controlled
Affiliates] will be treated as an Affiliate of the Manager or any of its
Affiliates.
(b)"Agreement" means this Investment Advisory Agreement, as amended
from time to time.
(c)"Average Invested Assets" for any period means the average of the
aggregate book value of the assets of the Company, including the assets of all
of its direct and indirect subsidiaries, before reserves for depreciation or bad
debts or other similar noncash reserves, computed by taking the daily average of
such values during such period, and shall be determined as follows: (i) Average
Invested Assets with a rating of less than BB- or not rated means, for any
quarter, the Average Invested Assets in such quarter that have received a credit
rating of less than BB- from Standard & Poor's Corporation ("S&P") or less than
Ba3 from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") or have received an
equivalent rating from a nationally recognized securities rating organization
("NRSRO") or that have not been rated by either Xxxxx'x, S&P or an NRSRO and are
not guaranteed by the U.S. government or any agency or instrumentality thereof,
(ii) Average Invested Assets with a rating of BB- to BB+ shall mean the Average
Invested Assets that have received a credit rating of BB- to BB+ from S&P or Ba3
to Ba1 from Xxxxx'x or have received an equivalent rating from an NRSRO and that
are not covered by clause (i) above, and (iii) Average Invested Assets with a
credit rating above BB+ shall mean the Average Invested Assets that have
received a credit rating above BB+ from S&P or above Ba1 from Xxxxx'x or have
received an equivalent rating from an NRSRO and that are not covered by clause
(i) or (ii) above or that are not rated but are guaranteed by the U.S.
government or any agency or instrumentality thereof.
(d)"Board of Directors" means the Board of Directors of the Company.
(e)"Closing Date" means the date of closing of the Company's initial
public offering of Common Stock.
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(f)"Code" means the Internal Revenue Code of 1986, as amended.
(g)"Funds From Operations" means net income (computed in accordance
with GAAP) excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures.
(h)"Mortgage Backed Securities" means debt obligations (bonds) that
are secured by Mortgage Loans or mortgage certificates.
(i)"Mortgage Loans" means multifamily, residential and commercial term
loans secured by real property.
(j)"REIT Provisions of the Code" means Sections 856 through 860 of the
Code.
(k)"Ten-Year Treasury Rate" means the arithmetic average of the weekly
average yield to 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.
(l)"Unaffiliated Directors" shall mean those directors who (a) do not
own greater than a de minimis interest in the Manager or any of its Affiliates,
and (b) within the last two years, have not (i) directly or indirectly been
employed by the Manager or any of its Affiliates, (ii) been
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an officer or director of the Manager or any of its Affiliates, (iii) performed
services for the Manager or any of its Affiliates, or (iv) had any material
business or professional relationship with the Manager or any of its Affiliates.
2. IN GENERAL
The Manager agrees, as more fully set forth herein, to act as
investment adviser to the Company with respect to the investment of the
Company's assets and to supervise and arrange the purchase of securities and
loans for and the sale of securities and loans held in the investment portfolio
of the Company. The Manager shall manage the business affairs of the Company in
conformity with the policies that are approved and monitored by the Company's
Board of Directors. The Manager shall prepare regular reports for the Company's
Board of Directors that will review the Company's acquisitions of assets,
portfolio composition and characteristics, credit quality, performance and
compliance with the policies approved by the Company's Board of Directors. The
Manager shall allocate investment and disposition opportunities in accordance
with policies and procedures the Manager considers fair and equitable,
including, without limitation, such considerations as investment objectives,
restrictions and time horizons, availability of cash and the amount of existing
holdings.
3. DUTIES AND OBLIGATIONS OF THE MANAGER WITH RESPECT TO INVESTMENT
OF ASSETS OF THE COMPANY
(a) Subject to the succeeding provisions of this section and subject
to the direction and control of the Company's Board of Directors, the Manager
will be responsible for the day-to-day operations of the Company and will
perform (or cause to be performed) such services and activities relating to the
assets and operations of the Company as may be appropriate, including:
(i) providing a complete program of investing and reinvesting the
capital and assets of the Company in pursuit of its investment objectives and in
accordance with policies
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adopted by the Company's Board of Directors from time to time;
(ii) serving as the Company's consultant with respect to formulation
of investment criteria and preparation of policy guidelines by the Company's
Board of Directors;
(iii) assisting the Company in developing criteria for mortgage asset
purchase commitments that are specifically tailored to the Company's investment
objectives and making available to the Company its knowledge and experience with
respect to mortgage assets and other real estate related assets;
(iv) counseling the Company in connection with policy decisions made
by the Board of Directors;
(v) evaluating and recommending hedging strategies to the Company's
Board of Directors in accordance with hedging guidelines and policies adopted by
the Board of Directors, engaging in hedging activities on behalf of the Company,
consistent with the Company's status as a REIT;
(vi) maintenance of the Company's exemption from regulation as an
investment company;
(vii) representing the Company in connection with the purchase and
commitment to purchase or sell mortgage assets, including the accumulation of
Mortgage Loans for securitization and the incurrence of debt;
(viii) arranging for the issuance of Mortgage Backed Securities from
pools of Mortgage Loans or other mortgage backed securities owned by the
Company;
(ix) 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;
(x) monitoring and providing to the Company's Board of Directors on an
ongoing basis price information and other data, obtained from certain nationally
recognized dealers that maintain markets in mortgage assets identified by the
Board of Directors from time to time, and providing data and
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advice to the Board of Directors in connection with the identification of such
dealers;
(xi) administering the day-to-day operations of the Company and
performing and supervising the performance of such other administrative
functions necessary in the management of the Company as may be agreed upon by
the Manager and the Company's Board of Directors;
(xii) contracting, as necessary, with third parties for master
servicing and special servicing of assets acquired by the Company;
(xiii) communicating on behalf of the Company with the holders of the
equity and debt securities of the Company as required to satisfy the reporting
and other requirements of any governmental bodies or agencies and to maintain
effective relations with such holders;
(xiv) causing the Company to qualify to do business in all applicable
jurisdictions;
(xv) causing the Company to retain qualified accountants and legal
counsel to assist in developing appropriate accounting procedures, compliance
procedures and testing systems and to conduct quarterly compliance reviews;
(xvi) 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");
(xvii) assisting the Company in making required tax filings and
reports and maintaining its status as a REIT, including soliciting stockholders
for required information to the extent provided in the REIT Provisions of the
Code;
(xviii) 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
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Directors shall reasonably request or the Manager shall deem appropriate under
the particular circumstances; and
(xix) using all reasonable efforts to cause the Company to comply with
all applicable laws.
(b) In the performance of its duties under this Agreement, the
Manager shall at all times use all reasonable efforts to conform to and act in
accordance with any requirements imposed by (i) the status of the Company as a
REIT as defined in the REIT Provisions of the Code; (ii) the Company's status as
an entity exempt from regulation under the Investment Company Act of 1940; (iii)
any other applicable provision of law; (iv) the provisions of the Articles of
Incorporation and By-Laws of the Company, as such documents are amended from
time to time; (v) the investment objectives and policies of the Company as set
forth in its Registration Statement on Form S-11; and (vi) any policies and
determinations of the Board of Directors of the Company.
(c) The Manager will bear all costs and expenses of its officers and
employees and any overhead incurred in connection with its duties hereunder, the
cost of office space and equipment required for performance of its duties and
shall bear the costs of any salaries or directors fees of any officers or
directors of the Company who are Affiliated persons of the Manager except that
the Board of Directors of the Company may approve reimbursement to the Manager
of the Company's pro rata portion of the salaries, bonuses, health insurance,
retirement benefits and all similar employment costs for the time spent on
Company operations and administration (other than the provision of services
covered by Section 3(a) above) of all personnel employed by the Manager who
devote substantial time to Company operations and administration or the
operations and administration of other companies advised by the Manager;
provided that the Manager shall not be expected to bear the following expenses:
issuance and transaction costs incident to the acquisition, disposition and
financing of investments, legal, accounting and auditing fees and expenses, the
compensation and expenses of the Company's Unaffiliated Directors, the costs of
printing and mailing proxies and reports to stockholders, costs incurred by
employees of the Manager for travel on behalf of the Company, costs associated
with any computer software or
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hardware that is used solely for the Company, costs to obtain liability
insurance to indemnify the Company's directors and officers, the Manager and its
employees and directors and the Underwriters, and the compensation and expenses
of the Company's custodian and transfer agent, if any. The Company will also be
required to pay all expenses incurred in connection with due diligence, the
accumulation of Mortgage Loans, the master and special servicing of Mortgage
Loans, the issuance and administration of MBS from pools of Mortgage Loans or
otherwise, the raising of capital, incurrence of debt, the acquisition of
assets, interest expenses, taxes and license fees, non-cash costs, litigation,
the base and incentive management fee and extraordinary or non-recurring
expenses.
(d) The Manager shall give the Company the benefit of its best
judgment and effort in rendering services hereunder.
(e) Nothing in this Agreement shall prevent the Manager or any
partner, officer, employee or other Affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Manager or any
of its shareholders, officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however that the Manager
will not undertake activities which, in its judgment, will substantially and
adversely affect the performance of its obligations under this Agreement.
(f) The Manager shall maintain appropriate books of accounts and
records relating to services performed hereunder, and such books of accounts 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.
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(g) The Manager shall require each seller or transferor of assets to
be acquired by the Company to make such representations and warranties regarding
such assets 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.
4. PORTFOLIO TRANSACTIONS AND BROKERAGE
The Manager is authorized, for the purchase and sale of the Company's
assets, to employ such securities dealers as may, in the judgment of the
Manager, implement the policy of the Company to obtain the best net results
taking into account such factors as price, including 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 Company's 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.
5. COMPENSATION OF THE MANAGER
(a) Commencing with the first fiscal quarter after the Closing Date,
the Company agrees to pay to the Manager and the Manager agrees to accept as
full compensation for all services rendered by the Manager as such, (i) a
quarterly base management fee calculated as a percentage of the Average Invested
Assets of the Company on the last business day for which market quotations are
available of each calendar quarter and equal to 1% per annum of such Average
Invested Assets rated lower than BB- or not rated, 0.75% of such Average
Invested Assets rated BB- through BB+, and 0.35% of such Average Invested Assets
that are rated above BB+ and (ii) incentive compensation for each fiscal quarter
in an amount equal to the product of (A) 25% of the dollar amount by which
(1)(a) Funds From Operations of the Company (before incentive
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fee) per share of Common Stock (based on the weighted average number of shares
outstanding) 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), exceed (2) an amount equal to (a) the weighted average of
the price per share of the initial offering and the prices per share of any
secondary offerings of Common Stock by the Company multiplied by (b) the Ten-
Year U.S. Treasury Rate plus 3.5% per annum (expressed as a quarterly
percentage) multiplied by (B) the weighted average number of shares of Common
Stock outstanding during such quarter. Notwithstanding the foregoing, no
payment of any portion of the incentive compensation provided for in clause (ii)
above that is attributable to net capital gains of the Company prior to the end
of the first full fiscal quarter of the Company's operations following any
minimum calculation period longer than a quarter or other time period required
by Rule 205-3 of the Investment Advisers Act of 1940 at the time of such
calculation, shall accrue or be payable until completion of such fiscal quarter,
at which time the cumulative net capital gains of the Company through the end of
such quarter shall be computed and incentive compensation shall be paid on such
net gains at the rate provided in clause (ii) above and after which time the net
capital gains includible in clause (ii) above for each quarter shall be the
excess of such net capital gains for such minimum calculation period through the
end of such quarter (the "Total Period") over the net capital gains (if any) for
the portion of the Total Period other than such quarter. For any period less
than a quarter during which this Agreement is in effect, the fee shall be
prorated according to the proportion which such period bears to a full quarter
of 90, 91 or 92 days, as the case may be.
(b) The Management Fees earned under Section 5(a)(i) will be payable
in arrears. The Manager shall compute the compensation payable under Section
5(a) of this Agreement within 45 days after the end of each calendar 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 Section 5(a) of this
Agreement shown therein shall be due and payable within 60 days after the end of
such fiscal quarter. If requested by
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the Manager, the Company will make advance payments of the base management fee
in Section 5(a)(i) above as often as semi-monthly at the rate of 75% of such fee
estimated by the Manager.
(c) The base management fee is intended to compensate the Manager for
its costs in providing management services to the Company. The Board of
Directors may adjust the base management fee with consent of the Manager in the
future if necessary to align the fee more closely with the costs of such
services.
6. INDEMNITY
(a) The Company hereby agrees to indemnify the Manager and each of
the Manager's shareholders, officers, employees, agents, associates and
controlling persons and the shareholders, officers, employees and agents thereof
(including any individual who serves at the Manager's request as director,
officer, partner, trustee or the like of another corporation)(each such person
being an "indemnitee") against any liabilities and expenses, including amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
counsel fees (all as provided in accordance with applicable corporate law)
reasonably incurred by such indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which he may be or
may have been involved as a party or otherwise or with which he may be or may
have been threatened, while acting in any capacity set forth above in this
Section 6 or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Company and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the conduct
was unlawful; provided, however, that (1) no indemnitee shall be indemnified
hereunder against any liability to the Company or its shareholders or any
expense of such indemnitee arising by reason of (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence or (iv) reckless disregard of the duties
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involved in the conduct of his position (the conduct referred to in such clauses
(i) through (iv) being sometimes referred to herein as "disabling conduct", (2)
as to any matter disposed of by settlement or a compromise payment by such
indemnitee, pursuant to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided unless there has
been a determination that such settlement or compromise is in the best interests
of the Company and that such indemnitee appears to have acted in good faith in
the reasonable belief that his action was in the best interest of the Company
and did not involve disabling conduct by such indemnitee and (3) with respect to
any action, suit or other proceeding voluntarily prosecuted by any indemnitee as
plaintiff, indemnification shall be mandatory only if the prosecution of such
action, suit or other proceeding by such indemnitee was authorized by a majority
of the Board of Directors of the Company.
(b) The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if a majority of the Board of Directors of the Company determine that the
facts then known to them would not preclude indemnification. In addition, at
least one of the following conditions must be met: (A) the indemnitee shall
provide a security for his undertaking, (B) the Company shall be insured against
losses arising by reason of any lawful advances, or (C) a majority of a quorum
consisting of directors of the Company who are neither affiliated persons of the
Company nor parties to the proceeding ("Disinterested Non-Party Directors") or
an independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
(c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the
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merits by a court or other body before whom the proceeding was brought that such
indemnitee is not liable by reason of disabling conduct or, (2) in the absence
of such a decision, by (i) a majority vote of a quorum of the Disinterested
Non-Party Directors of the Company, or (ii) if a majority vote of such quorum so
directs, independent legal counsel in a written opinion. All determinations
that advance payments in connection with the expense of defending any proceeding
shall be authorized shall be made in accordance with the immediately preceding
clause (2) above.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
7. DURATION AND TERMINATION
This Agreement shall commence on the date hereof for an initial term
expiring on the second anniversary of the Closing Date. Thereafter, successive
extensions, each for a period not to exceed two years, may be made by agreement
between the Company and the Manager, with the approval of a majority of the
Unaffiliated Directors until terminated or assigned under the provisions of this
Section 7 or Section 9, as the case may be, of this Agreement.
Upon termination of this Agreement by the Company, the Company is
obligated to pay the Manager a termination fee which will be determined by
independent appraisal other than in the case of termination by the Company for
cause (as described below). The Company may terminate, or decline to renew the
term of, this Agreement without cause at any time after the first two years upon
60 days written notice by a majority vote of the Unaffiliated Directors;
provided that the Company shall pay the Manager a termination fee determined by
independent appraisal of the value of this Agreement for a period of four years
following the date of termination. Such appraisal is to be conducted by a
nationally recognized appraisal firm mutually agreed upon by the Company and the
Manager. If the Company and the Manager are unable to agree upon an appraisal
firm, then each of the Company and the Manager is to choose an independent
appraisal firm to conduct an appraisal. In such event, (i) if the appraisals
prepared by the two appraisers so selected are the
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same or differ by an amount that does not exceed 20% of the higher of the two
appraisals, the termination fee is to be deemed to be the average of the
appraisals as prepared by each party's chosen appraiser, and (ii) if these two
appraisals differ by more than 20% of such higher amount, the two appraisers
together are to select a third appraisal firm to conduct an appraisal. If the
two appraisers are unable to agree as to the identity of such third appraiser,
either of the Manager and the Company may request that the American Arbitration
Association ("AAA") select the third appraiser. The termination fee then is to
be the amount determined by such third appraiser, but in no event less than the
lower of the two initial appraisals or more than the higher of such two initial
appraisals. Each party shall pay the costs of the appraisers chosen by it, and
each party shall pay one half of the costs of the third appraiser. Any
appraisal hereunder shall be performed no later than 45 days following selection
of the appraiser or appraisers.
At the option of the Company, this Agreement, or any extension hereof,
shall be and become terminated with cause upon 60 days' prior written notice of
termination from the Board of Directors to the Manager, without payment of any
termination fee, if any of the following events occur: (i) the Manager
commits a material breach of any provision of this Agreement (including any
material breach of the provisions of Section 3(a) and (b) herein) and, after
notice of such violation, shall not cure such violation within 30 days; or (ii)
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 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 Manager or of any substantial
part of its properties or assets, or authorizes such an application or consent,
or proceedings seeking such
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appointment are commenced without such authorization, consent or application
against the Manager 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, of proceedings to such end are
instituted against application or 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 30
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 30
days.
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 occurrence of such event.
Upon written request from the Company, the Manager shall prepare,
execute and deliver to a successor manager any and all documents and other
instruments, place in such successor manager's possession all files and do or
cause to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, to the successor manager at the
Manager's sole expense; provided, however, that the Manager shall be entitled to
retain copies of all such documents and other instruments as it may be required
by federal or state law. The Manager agrees to cooperate with Company and such
successor manager in effecting the termination of Manager's responsibilities and
rights hereunder.
8. ACTION UPON TERMINATION. From and after the effective date of
termination of this Agreement pursuant to Section 7 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 for cause, the termination fee determined pursuant to Section
7. The Manager shall
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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; provided, however,
that the Manager shall be entitled to retain copies of all such documents and
other instruments as it may be required by federal or state law.
9. ASSIGNMENT
This Agreement may not be assigned without the consent of all the
parties to this Agreement. For the foregoing purposes, "assigned" shall have
the meaning ascribed to it under the Investment Advisers Act of 1940, as amended
and the rules promulgated thereunder.
10. NOTICES
Any notice under this Agreement shall be in writing to the other
party at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein without
reference to choice of law principles thereof.
12. AMENDMENTS
This Agreement shall not be amended, changed, modified, terminated or
discharged in whole or in part except by an instrument in writing signed by all
parties hereto, or their respective successors or assigns, or otherwise as
provided herein.
13. SEVERABILITY
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The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity of any other provision, and all other provisions
shall remain in full force and effect.
14. ENTIRE AGREEMENT
This instrument contains the entire agreement between the parties as
to the rights granted and the obligations assumed in this instrument.
15. COUNTERPARTS
This Agreement may be signed by the parties in counterparts which
together shall constitute one and the same agreement among the parties.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the date
and the year first above written.
ANTHRACITE CAPITAL, INC.
[SEAL] By
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Name
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Title
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BLACKROCK FINANCIAL MANAGEMENT, INC.
By
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Name
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Title
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