EXHIBIT 10.3
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
Administration Agreement dated as of March 15, 2007 (this "Agreement")
by and between BlackRock Financial Management, Inc. ("BFM"), a Delaware
corporation, and Anthracite Capital, Inc. (the "Company"), a Maryland
corporation.
WHEREAS, the Company desires to retain BFM to furnish certain
administrative services to the Company, and BFM is willing to furnish such
services, on the terms and conditions hereinafter set forth. and
WHEREAS, the Company and BFM have previously entered into an
Administration Agreement dated as of January 1, 1999, which the parties wish to
amend and restate, in all respects.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF BLACKROCK FINANCIAL MANAGEMENT, INC.
The Company hereby appoints BFM to provide certain
administrative services with respect to the Company for the period and
on the terms set forth in this Agreement. BFM accepts such appointment
and agrees to render the services stated herein.
2. DELIVERY OF DOCUMENTS
The Company will promptly deliver to BFM upon request copies
of each of the following documents and all future amendments and
supplements, if any:
(a) The Company's Articles of Incorporation and by-laws;
(b) Certified copies of the resolutions of the Board of
Directors of the Company (the "Board") authorizing
(1) the company to enter into this Agreement and (2)
certain individuals on behalf of the Company to (a)
give instructions to BFM pursuant to this Agreement
and (b) sign checks and pay expenses; and
(c) Such other certificates, documents or opinions which
BFM may, in its reasonable discretion, deem necessary
or appropriate in the proper performance of its
duties.
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3. REPRESENTATIONS AND WARRANTIES OF BLACKROCK FINANCIAL
MANAGEMENT, INC.
BFM represents and warrants to the Company that:
(a) It is a Delaware corporation duly organized and
existing and in good standing under the laws of the
State of Delaware;
(b) It has the corporate power and authority under
applicable laws and by its charter and by-laws to
enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement;
(d) No legal or administrative proceedings have been
instituted or threatened which would impair BFM's
ability to perform its duties and obligations under
this Agreement; and
(e) Its entrance into this Agreement shall not cause a
material breach or be in material conflict with any
other agreement or obligation of BFM or any law or
regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to BFM that:
(a) It is a Maryland corporation duly organized and
existing and in good standing under the laws of the
State of Maryland;
(b) It has the corporate power and authority under
applicable laws and by its charter and by-laws to
enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement;
(d) No legal or administrative proceedings have been
instituted or threatened which would impair the
Company's ability to perform its duties and
obligations under this Agreement;
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(e) Its entrance into this Agreement shall not cause a
material breach or be in material conflict with any
other agreement or obligation of the Company or any
law or regulation applicable to it; and
(f) The Company is a publicly traded real estate
investment trust (a "REIT").
5. ADMINISTRATION SERVICES
BFM shall provide the following services, in each case,
subject to the control, supervision and direction of the Company and
the review and comment by the Company's auditors and legal counsel and
in accordance with procedures which may be established from time to
time between the Company and BFM:
(a) Financial Reporting. With the assistance of the
Company's outside legal and tax counsel and
independent accountants (it being understood that the
fees and expenses of such counsel and independent
accountants are to be borne by the Company), BFM
shall prepare the Company's quarterly filings on Form
10-Q and annual filings on Form 10-K, including
preparation of the following financial statements for
inclusion in such filings: Comparative Balance
Sheets, Comparative Statement of Operations,
Statement of Cash Flows, Statement of Stockholder's
Equity, and Notes to the Financial Statements;
(b) Audit Coordination.
(i) Act as a liaison between the Company's
independent accountants and State Street
Bank Fund Accounting or such other person or
persons as the Company may appoint as its
accounting agent (the "Accounting Agent") to
provide backup and answer questions with
respect to information presented on the
financial statements to the extent that the
financial statements reflect information
maintained by the Accounting Agent; and
(ii) Coordinate conference calls with the
Accounting Agent, BFM and the Company's
independent accountants to address issues
that arise during the audit process;
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(c) Accounting Oversight.
(i) Review monthly the trial balances and
supporting documentation supplied by the
Accounting Agent for reasonableness and
report any unusual items to the Company;
(ii) Review the accounting for trades with the
Company's independent accountants and the
Accounting Agent for determining the
appropriate accounting treatment including
valuation and income recognition policies;
and
(iii) Review monthly the pricing information and
net asset value determinations for
reasonableness;
(d) Expenses.
(i) Determine with the Company the budget on an
annual basis;
(ii) After the annual budget is approved,
determine the daily accruals for fixed
expenses;
(iii) Review the budget every 4-6 weeks and
recommend changes as necessary;
(iv) Review Administrative services fees for
conformance to this Agreement;
(v) Due to the calculation methodology of the
quarterly incentive fee and management fee,
BFM will work with the Company for the
annual budgeted amount and accrual of these
expenses; and
(vi) Ensure that all expense invoices are
submitted for "proper approval" before
processing them for payment.
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(e) Officers. At the request and subject to the
supervision of the Board, permit and cause employees
of BFM to serve as officers of the Company and to
fulfill all of the responsibilities of such officers.
(f) Other Administrative Services.
(i) Contract, as necessary, with third parties
for master servicing and special servicing
of assets acquired by the Company;
(ii) Communicate 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;
(iii) Cause the Company to qualify to do business
in all applicable jurisdictions;
(iv) Cause 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;
(v) Assist 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 Exchange Act of 1934, as amended;
(vi) Assist the Company in making all required
tax filings and reports and maintaining its
status as a REIT, including soliciting
stockholders for required information to the
extent provided in the Sections 856 through
860 of the Internal Revenue Code of 1986, as
amended;
(vii) Use all reasonable efforts to cause the
Company to comply with all applicable laws;
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(viii) Perform such other services as may be
required from time to time for investment
and other activities relating to the assets
of the Company as the Board shall reasonably
request or BFM shall deem appropriate under
the particular circumstances; and
(ix) Provide such administrative services to the
Company as may be agreed upon by BFM and the
Board.
BFM shall provide the office facilities and the personnel
required by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
BFM shall receive from the Company such compensation for BFM's
services provided pursuant to this Agreement as may be agreed to from
time to time in a written fee schedule approved by the parties and
initially set forth in Schedule A to this Agreement. BFM's fees will be
paid within ten business days after presentation of the bill. Upon the
termination of this Agreement before the end of any month, the fee for
the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly
period and shall be payable upon the date of termination of this
Agreement. In addition, the Company shall reimburse BFM for its
out-of-pocket costs incurred in connection with this Agreement.
The Company agrees promptly to reimburse BFM for any equipment
and supplies specially ordered by or for the Company through BFM and
for any other expenses not contemplated by this Agreement that BFM may
incur on the Company's behalf at the Company's request or with the
Company's consent.
The Company will bear all expenses that are incurred in its
operation and not specifically assumed by BFM. Expenses to be borne by
the Company include, but are not limited to: organizational expenses;
cost of services of independent accountants and outside legal and tax
counsel (including such counsel's review of the Company's registration
statement, proxy materials, federal and state tax qualification as a
real estate investment trust and other reports and materials prepared
by BFM under this Agreement); cost of any services contracted for by
the Company directly from parties other than BFM; cost of trading
operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for the Company;
investment advisory fees; taxes, insurance premiums and other fees and
expenses applicable to its operation; costs incidental to any meetings
of shareholders including, but not limited to, legal and accounting
fees, proxy filing fees and the costs of preparation, printing and
mailing of any proxy materials; costs incidental to Board meetings,
including fees and expenses of Board members; the salary and expenses
of any officer, director/trustee or employee of the Company; costs
incidental to the preparation, printing and distribution of the
Company's
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registration statements and any amendments thereto and shareholder
reports; cost of typesetting and printing of prospectuses; cost of
preparation and filing of the Company's tax returns, and all notices,
registrations and amendments associated with applicable federal and
state tax and securities laws; all applicable registration fees and
filing fees required under federal and state securities laws; fidelity
bond and directors' and officers' liability insurance; and cost of
independent pricing services used in computing the Company's net asset
value.
BFM is authorized to and may employ or associate with such
person or persons as BFM may deem desirable to assist it in performing
its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by BFM and that
BFM shall be as fully responsible for the acts or omissions of any such
person or persons as it is for its own acts and omissions.
7. INSTRUCTIONS AND ADVICE
At any time, BFM may apply to any officer of the Company for
instructions and may consult with its own legal counsel or outside
counsel for the Company or the independent accountants for the Company
at the expense of the Company, with respect to any matter arising in
connection with the services to be performed by BFM under this
Agreement. BFM shall not be liable, and shall be indemnified by the
Company, for any action taken or omitted by it in good faith in
reliance upon any such instructions or advice or upon any paper or
document believed by it to be genuine and to have been signed by the
proper person or persons. BFM shall not be held to have notice of any
change of authority of any person until receipt of written notice
thereof from the Company. Nothing in this paragraph shall be construed
as imposing upon BFM any obligation to seek such instructions or
advice, or to act in accordance with such advice when received.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
BFM shall be responsible for the performance of only such
duties as are set forth in this Agreement and, except as otherwise
provided under Section 6, shall have no responsibility for the actions
or activities of any other party, including other service providers.
BFM shall have no liability for any error of judgment or mistake of law
or for any loss or damage resulting from the performance or
nonperformance of its duties hereunder unless solely caused by or
resulting from the gross negligence or willful misconduct of BFM, its
officers or employees. BFM shall not be liable for any special,
indirect, incidental, or consequential damages of any kind whatsoever
(including, without limitation, attorneys' fees) under any provision of
this Agreement or for any such damages arising out of any act or
failure to act hereunder. In any event BFM's liability under this
Agreement shall be limited to its administration fees paid hereunder
during the preceding twelve months for any liability or loss suffered
by the Company including, but not limited to, any liability relating to
the Company's compliance with any federal or state tax or securities
statue, regulation or ruling.
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BFM shall not be responsible or liable for any failure or
delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitation, work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental
action or communication disruption, nor shall any such failure or delay
give the Company the right to terminate this Agreement.
The Company shall indemnify and hold BFM, its officers,
directors and employees harmless from all loss, cost, damage and
expense, including reasonable fees and expenses for counsel, incurred
by BFM resulting from any claim, demand, action or suit in connection
with BFM's acceptance of this Agreement, any action or omission by it
in the performance of its duties hereunder, or as a result of acting
upon any instructions reasonably believed by it to have been duly
authorized by the Company, provided that this indemnification shall not
apply to actions or omissions of BFM, its officers, directors or
employees in cases of its or their own gross negligence or willful
misconduct.
The Company will be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any liability subject to the indemnification
provided above. In the event the Company elects to assume the defense
of any such suit and retain counsel, BFM or any of its affiliated
persons, named as defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically authorized the retaining
of such counsel or (ii) BFM shall have determined in good faith that
the retention of such counsel is required as a result of a conflict of
interest.
The indemnification contained herein shall survive the
termination of this Agreement.
9. CONFIDENTIALITY
BFM agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other
regulatory authority, it will keep confidential all records and
information in its possession relating to the Company or its
shareholders or shareholder accounts and will not disclose the same to
any person except at the request or with the written consent of the
Company.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Company assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations
applicable to it.
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11. SERVICES NOT EXCLUSIVE
The services of BFM to the Company are not to be deemed
exclusive, and BFM shall be free to render similar services to others.
BFM shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Company from
time to time, have no authority to act or represent the Company in any
way or otherwise be deemed an agent of the Company.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on March 15, 2007 and
continue in effect thereafter with respect to the Company unless
terminated in writing by either party with sixty (60) days' prior
written notice given by either party to the other party. Upon
termination of this Agreement, the Company shall pay to BFM such
compensation and any reimbursable expenses as may be due under the
terms hereof as of the date of such termination, including reasonable
out-of-pocket expenses associated with such termination. This Agreement
may be modified, or amended from time to time by mutual written
agreement of the parties hereto.
13. NOTICES
Any notice or other communication authorized or required by
this Agreement to be given to either party shall be in writing and
deemed to have been given when delivered in person or by confirmed
facsimile, or posted by certified mail, return receipt requested, to
the following address (or such other address as a party may specify by
written notice to the other): if to the Company; Anthracite Capital,
Inc., 40 East 52nd Street New York, NY 10022, Attn: Richard M. Shea,
fax: (212) 810-8784; if to BFM: BlackRock Financial Management, Inc.,
40 East 52nd Street, New York, N.Y. 10022, Attn: Robert P. Connolly,
fax: (212) 810-3744.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto
without the prior consent of the other party, except that BFM may
assign this Agreement to a successor of all or a substantial portion of
its business, or to a party controlling, controlled by or under common
control with BFM.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the
benefit of the Company and BFM and their respective successors and
permitted assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and supersedes
all previous representations,
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warranties or commitments regarding the services to be performed
hereunder whether oral or in writing.
17. WAIVER
The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
nor shall it deprive such party of the right thereafter to insist upon
strict adherence to that term or any term of this Agreement. Any waiver
must be in writing signed by the waiving party.
18. SEVERABILITY
If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and
if any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
19. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of the
date first written above.
ANTHRACITE CAPITAL, INC.
By: /s/ Chris A. Milner
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Name: Chris A. Milner
Title: Chief Executive Officer
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/ Ralph D. Schlosstein
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Name: Ralph D. Schlosstein
Title: President
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SCHEDULE A
[BLACK ROCK FINANCIAL MANAGEMENT, INC.
ADMINISTRATION FEE SCHEDULE
FOR
ANTHRACITE CAPITAL, INC.]
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