Amended and Restated Advisory Agreement ---- between ---- NB Capital Corporation --- and --- National Bank of Canada
Amended
and Restated
----
between ----
NB
Capital Corporation
---
and ---
National
Bank of Canada
March
21, 2006
TABLE
OF CONTENTS
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Page
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1.
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DEFINITIONS
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1
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2.
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DUTIES
OF THE ADVISOR
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2
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3.
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COMPENSATION
OF THE ADVISOR
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4
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4.
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EXPENSES
OF THE ADVISOR
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4
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5.
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RECORDS
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4
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6.
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REIT
QUALIFICATION AND COMPLIANCE
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4
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7.
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TERM:
TERMINATION
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5
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8.
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OTHER
ACTIVITIES OF THE ADVISOR
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5
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9.
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CONFIDENTIALITY
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5
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10.
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BINDING
EFFECT: ASSIGNMENT
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5
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11.
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SUBCONTRACTING
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6
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12.
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LIABILITY
AND INDEMNITY OF THE ADVISOR
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6
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13.
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ACTION
UPON NOTICE OF NON-RENEWAL OR TERMINATION
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6
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14.
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NO
JOINT VENTURE OF PARTNERSHIP
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7
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15.
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NOTICES
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7
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16.
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SEVERABILITY
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7
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17.
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GOVERNING
LAW
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8
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18.
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AMENDMENTS
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8
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19.
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HEADINGS
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9
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AMENDED
AND RESTATED ADVISORY AGREEMENT
Amended
and Restated Advisory Agreement entered into as of March 21, 2006.
BETWEEN: NB
CAPITAL CORPORATION,
a
Maryland
corporation;
(the
“Company”)
AND: NATIONAL
BANK OF CANADA,
a
Canadian
chartered bank;
(the
“Advisor”)
WHEREAS
the Company qualifies as a “real estate investment trust” (“REIT”)
under
the Internal
Revenue Code of 1986,
as
amended (the “Code”);
WHEREAS
the Company desires to avail itself of the experience and assistance of the
Advisor and to have the Advisor undertake, on the Company’s behalf, the duties
and responsibilities hereinafter set forth, subject to the control and
supervision of the Board of Directors of the Company (the “Board
of Directors”)
as
provided for herein;
WHEREAS
the parties signed an advisory agreement dated September 3, 1997, that was
subsequently amended on October 31, 2001, October 31, 2003 and November 3,
2004,
by a first supplemental advisory agreement, a second supplemental advisory
agreement and an amended and restated advisory agreement,
respectively;
WHEREAS
the parties wish to amend said amended and restated advisory agreement,
hereinafter referred to as the “Agreement”, as defined below;
| 1. |
| 1.1 |
Definitions
As
used herein, the following terms shall have the respective meanings
set
forth below:
|
| 1.1.1 |
“Advisor”
has the meaning set forth in the forepart of this
Agreement.
|
| 1.1.2 |
“Advisor
Termination Date”
means the date on which this Agreement
terminates.
|
1
| 1.1.3 |
“Agreement”
means this Amended and Restated Advisory Agreement, as amended,
modified
and supplemented from time to
time.
|
| 1.1.4 |
“Board
of Directors”
has the meaning set forth in the forepart of this
Agreement.
|
| 1.1.5 |
“Company”
has the meaning set forth in the forepart of this
Agreement.
|
| 1.1.6 |
“Independent
Directors”
means the members of the Board of Directors who are not current
officers
or employees of the Company or current directors, employees or
officers of
the Advisor or any affiliate of the
Advisor.
|
| 1.1.7 |
“Operating
Expenses”
for any period means any operating expenses of the Company (with
the
exception of those expenses to be borne by the Advisor in accordance
with
Section 4 hereof).
|
| 1.1.8 |
“Person”
means and includes individuals, corporations, limited partnerships,
general partnerships, joint stock companies or associations, limited
liability companies, joint ventures, associations, consortia, companies,
trusts, banks, trust companies, land trusts, common laws trusts,
business
trusts or other entities, governments and agencies and political
subdivisions thereof.
|
| 1.1.9 |
“REIT”
has the meaning set forth in the forepart of this
Agreement.
|
The
Advisor shall regulary consult with the Board of Directors and the officers
of
the Company and shall, at their request, furnish advice and recommendations
with
respect to all aspects of the business and affairs of the Company. Furthermore,
subject to the control and discretion of and to instructions to the contrary
from the Board of Directors, the Advisor shall perform the following services,
without any specific request from the Board of Directors:
| (a) |
administer
the day-to-day operations and affairs of the Company, including,
without
limitation, the performance or supervision of the functions described
in
this Section 2;
|
| (b) |
monitor
the credit quality of the real estate mortgage assets held by the
Company;
|
| (c) |
advise
the Company with respect to the acquisition, management, financing
and
disposition of the Company’s real estate mortgage
assets;
|
| (d) |
represent
the Company in its day-to-day dealings with Persons with whom the
Company
interacts, including, without limitation, stockholders of the Company,
the
transfer agent of the Company, consultants, accountants, attorneys,
servicers of the Company’s mortgage loans, custodians, insurers, banks,
governments, government agencies and regulatory
bodies;
|
| (e) |
establish
and provide all the necessary services for the Company, including,
without
limitation, executive, administrative, accounting, stockholder relations,
secretarial, recordkeeping, copying, telephone, mailing and distribution
facilities;
|
2
| (f) |
maintain
communications and relations with the stockholders of the Company,
including, but not limited to, responding to inquiries, proxy
solicitations, providing reports to stockholders and arranging and
coordination of all meetings of
stockholders;
|
| (g) |
monitor
and supervise the performance of all parties who have contracts to
perform
services for the Company, provided that the Advisor shall have no
duty to
assume the obligations or guarantee the performance of such parties
under
such contract;
|
| (h) |
arrange
for the execution and delivery of such documents and instruments
by the
officers of the Company as may be required in order to perform the
functions herein described and to take other required action contemplated
by the terms of this Agreement;
|
| (i) |
maintain
proper books and records of the Company’s affairs and furnish or cause to
be furnished to the Board of Directors such periodic reports and
accounting information as may be required from time to time by the
Board
of Directors, including, but not limited to, quarterly reports of
all
income, expenses and distributions of the Company;
|
| (j) |
consult
and work with legal counsel for the Company in implementing Company
decisions and undertaking measures consistent with all pertinent
federal,
provincial, state and local laws and rules or regulations of governmental
or quasi-governmental agencies, including, but not limited to, federal,
provincial and state securities laws and tax laws, as it relates
to the
Company’s qualification as a REIT, and the regulations promulgated under
each of the foregoing;
|
| (k) |
consult
and work with accountants for the Company in connection with the
preparation of financial statements, annual reports and tax
returns;
|
| (l) |
prepare
and distribute, in consultation with the accountants for the Company,
annual reports to stockholders which will contain audited financial
statements;
|
| (m) |
furnish
reports to the Board of Directors and provide research, economical
and
statistical data in connection with the Company’s investments;
and
|
| (n) |
as
reasonably requested by the Company, make reports to the Company
of its
performance of the foregoing services and furnish advice and
recommendations with respect to other aspects of the business of
the
Company.
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For
greater certainty, this Agreement does not provide the Advisor with the
authority to modify or conclude contracts in the name of the
Company.
3
The
Company shall pay to the Advisor, for services rendered by the Advisor
hereunder, an advisory fee equal to ONE HUNDRED THOUSAND Dollars ($100,000)
per
year, payable in equal quarterly instalments.
| (a) |
Without
regard to the compensation received pursuant to Section 3 hereof,
the
Advisor shall bear the following
expenses:
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| (i) |
employment
expenses of the personnel employed by the Advisor, including, without
limitation, salaries, wages, payroll taxes and the cost of employee
benefit plans; and
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| (ii) |
rent,
telephone equipment, utilities, office furniture and equipment and
machinery and other office expenses of the Advisor incurred in connection
with the maintenance of any office facility of the
Advisor.
|
| (b) |
Subject
to paragraph 4(a) above, the Company shall reimburse the Advisor
within 30
days of a written request by the Advisor for any Operating Expenses
paid
or incurred by the Advisor on behalf of the
Company.
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| 5. |
The
Advisor shall maintain appropriate books of account and records relating to
services performed hereunder, and such books of account and records shall be
accessible for inspection by the Board of Directors and representatives of
the
Company at all times.
The
Advisor shall consult and work with the Company’s legal counsel in maintaining
the Company’s qualification as a REIT. Notwithstanding any other provisions of
this Agreement to the contrary, the Advisor shall refrain from any action which,
in its reasonable judgment or in the judgment of the Board of Directors (of
which the Advisor has received written notice), may adversely affect the
qualification of the Company as a REIT or which would violate any laws, rule
or
regulation of any governmental body or agency having jurisdiction over the
Company or its securities, or which would otherwise not be permitted by the
articles of incorporation or by-laws of the Company. Furthermore, the Advisor
shall take any action which, in its judgment or the judgment of the Board of
Directors (of which the Advisor has received written notice), may be necessary
to maintain the qualification of the Company as a REIT or prevent the violation
of any law or regulation of any governmental body or agency having jurisdiction
over the Company or its securities.
4
This
Agreement shall be in full force and effect for a term beginning on the date
hereof with an initial term of one year, and may be renewed for additional
one-year periods at the election of the Company. Notwithstanding the foregoing,
at any time after the initial term, the Company may terminate this Agreement
at
any time upon 60 days’ prior written notice; provided, however, that as long as
any shares of the Company’s 8.35% Non Cumulative Exchangeable Preferred Stock,
Series A, par value US$.01 per share, remain outstanding, any decision by the
Company to renew, terminate or modify this Agreement must be approved by a
majority of the Board of Directors, as well as by a majority of the Independent
Directors.
| (a) |
Nothing
herein contained shall prevent the Advisor, an affiliate of the Advisor
or
an officer, director, employee or stockholder of the Advisor from
engaging
in any activity, including, without limitation, originating, purchasing
and managing real estate mortgage assets, rendering of services and
investment advice with respect to real estate investment opportunities
to
any other Person (including other REITs) and managing other investments
(including the investments of the Advisor and its
affiliates).
|
| (b) |
Officers,
directors, employees, stockholders and agents of the Advisor or of
any
affiliate of the Advisor may serve as officers, directors, employee
or
agents of the Company, but shall receive no compensation (other than
reimbursement for expenses) from the Company for such
service.
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The
Advisor acknowledges that all information provided in this Agreement is
confidential, non-public and/or proprietary in nature. The Advisor agrees that
it will, at all times, treat such information as confidential and that it will
not circulate, communicate or otherwise disclose any information in the
Agreement, directly or indirectly, to anyone other than the original recipient.
The Advisor agrees that all information provided shall be used solely for the
purposes described in the Agreement and that it shall have no rights of
ownership in any such information provided.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns. Neither party may assign
this Agreement or any of its respective rights hereunder (other than an
assignment to a successor organization which acquires substantially all of
the
property of such party or, in the case of the Advisor, to an affiliate of the
Advisor) without the prior written consent of the other party to this
Agreement.
5
| 11. |
The
Advisor may at any time subcontract all or a portion of its obligations under
this Agreement to one or more affiliates of the Advisor that are involved in
the
Business of managing real estate mortgage assets without the consent of the
Company. If no affiliate of the Advisor is engaged in the business of managing
real estate mortgage assets, the Advisor may, with the approval of a majority
of
the Board of Directors, as well as a majority of the Independent Directors,
subcontract all or a portion of its obligations under this Agreement to
unrelated third parties. Notwithstanding the foregoing, the Advisor will not,
in
connection with subcontracting any of its obligations under this Agreement,
be
discharged or relieved in any respect from its obligations under this
Agreement.
The
Advisor assumes no responsibilities under this Agreement other than to perform
the services called for hereunder in good faith. Neither the Advisor nor any
of
its affiliates, stockholders, directors, officers or employees will have any
liability to the Company, stockholders of the Company or others except by reason
of acts or omissions constituting gross negligence or willful breach of any
of
the Advisor’s material obligations under this Agreement. The Company shall
indemnify and reimburse (if necessary) the Advisor, its stockholders, directors,
officers, employees and agents for any and all expenses (including, without
limitation, attorney’s fees and expenses), losses, damages, liabilities, demands
and charges of any nature whatsoever in respect of or arising from any acts
or
omissions by the Advisor, or any of its affiliates, stockholders, directors,
officers or employees pursuant to this Agreement, provided that the conduct
against which the claim is made was determined by such Person, in good faith,
to
be in the best interests of the Company and was not the result of gross
negligence by such Person or willful breach of any of such Person’s material
obligations by such Person. The Advisor agrees that any such indemnification
is
recoverable only from the assets of the Company and not from the
stockholders.
Forthwith
upon giving of notice of non-renewal of this Agreement by the Company or of
termination of this Agreement by the Company, the Advisor shall not be entitled
to compensation after the Advisor Termination Date for further services under
this Agreement, but shall be paid all compensation accruing to the Advisor
Termination Date and shall be reimbursed for all expenses of the Company paid
or
incurred by the Advisor as of the Advisor Termination Date which are
reimbursable by the Company under this Agreement. The Advisor shall promptly
after the Advisor Termination Date:
| (a) |
deliver
to the Company all assets and documents of the Company then in the
custody
of the Advisor; and
|
| (b) |
cooperate
with the Company and take all reasonable steps requested to assist
the
Board of Directors in making an orderly transfer of the administrative
functions of the Company.
|
6
Nothing
in this Agreement shall be deemed to create a joint venture or partnership
between the parties, whether for purposes of taxation or otherwise. Furthermore,
nothing in the Agreement conveys to, or otherwise grants, the Advisor the
authority to conclude contracts in the name of the Company.
| 15. |
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 made by hand delivery, certified mail, overnight courier service,
telex or telecopier. Any notice shall be duly addressed to the parties as
follows:
| (a) |
If
to the Company:
|
NB
CAPITAL CORPORATION
▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Chairman of the Board and President
| (b) |
If
to the Advisor:
|
NATIONAL
BANK OF CANADA
▇▇▇
▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
(▇▇▇▇▇▇)
▇▇▇
▇▇▇
Attention:
Vice-President & Chief Accountant
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 15 for the giving of notice.
| 16. |
If
any
term of provision of this Agreement or the application thereof with respect
to
any Person or circumstance shall, to any extent, be invalid or unenforceable
(other than Section 14), the remainder of this Agreement, or the application
of
that term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
7
Each
of
the parties hereto irrevocably and unconditionally submits, for itself and
its
property, to the non-exclusive jurisdiction of the Québec courts, and any
appellate court thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement in the courts
of any jurisdiction. Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection they may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to his Agreement in the courts
of the Province of Québec. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defence of an inconvenient forum
to
the maintenance of such action or proceeding in any such court. The Company
hereby irrevocably appoints the Bank of Nova Scotia Trust Company of New York,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. (“Company’s
Process Agent”),
as
its agent to receive, on behalf of the Company, service of copies of the summons
and complaint and in any other process that may be served in any such action
or
proceeding. Any such service may be made by mailing or delivering a copy of
such
process, in care of the Company’s Process Agent at the Company’s Process Agent’s
above address. The Company hereby irrevocably authorizes and directs its agent
to accept such service on its behalf. The parties hereto hereby agree that
the
final judgment in any such action or proceeding shall be conclusive and may
be
in force in any other jurisdiction by suit on the judgment or any other manner
provided by law.
| 18. |
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Québec and the obligations, rights and remedies hereunder shall be
determined in accordance with the substantive laws of the Province of
Québec.
| 19. |
This
Agreement shall not be amended, changed, modified or terminated in whole or
in
part except by an instrument in writing signed by both parties hereto or their
respective successors or assigns, or otherwise as provided herein.
The
provisions of this Agreement replace any and all previous advisory agreements
between the parties, namely, the advisory agreement dated September 3, 1997,
the
first supplemental advisory agreement dated October 31, 2001, the second
supplemental advisory agreement dated October 31, 2003 and the amended and
restarted advisory agreement dated November 3, 2004.
8
| 20. |
The
section headings herein have been inserted for convenience of reference only
and
shall not be construed to affect the meaning, construction or effect of this
Agreement.
NB
CAPITAL CORPORATION
| By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ | |||
|
|
NATIONAL
BANK OF CANADA
| By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
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9