Exhibit 10.5
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AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
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AGREEMENT, dated as of March 11, 2004, between Anthracite
Capital, Inc. (the "Company"), a Maryland corporation, and BlackRock Financial
Management, Inc. (the "Manager"), a Delaware corporation.
WHEREAS, the Company is a real estate finance company that
generates income based on the spread between the interest income on its
mortgage loans and securities investments and the interest expense from
borrowings used to finance its investments. The Company seeks to earn high
returns on a risk-adjusted basis to support a consistent quarterly dividend.
The Company expects to qualify for the tax benefits accorded by Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the "Code");
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;
WHEREAS, the Company and the Manager entered into that
certain Amended and Restated Investment Advisory Agreement, dated as of March
27, 2003 (the "Prior Agreement");
WHEREAS, the Manager and the Company desire to amend and
restate the Prior Agreement in its entirety as set forth below; and
WHEREAS, this Agreement amends and restates the Prior
Agreement in all respects.
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. Certain Definitions
(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 Amended and Restated Investment
Advisory Agreement, as amended from time to time.
(c) "Board of Directors" means the Board of Directors of the
Company.
(d) "GAAP" means accounting principles generally accepted in
the United States of America.
(e) "Mortgage-Backed Securities" means debt obligations
(bonds) that are secured by Mortgage Loans or mortgage certificates.
(r) "Mortgage Loans" means multifamily, residential and
commercial term loans secured by real property.
(g) "Quarterly Average Total Stockholders' Equity" means the
average of (i) the Total Stockholders' Equity at the end of the quarter
preceding the applicable quarter and (ii) the Total Stockholders' Equity at
the end of the applicable quarter, as reported in the Company's publicly filed
financial statements.
(h) "REIT Provisions of the Code" means Sections 856 through
860 of the Code.
(i) "Ten-Year U.S. 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.
(j) "Unaffiliated Directors" shall mean those directors
serving on the Board of Directors who (a) do not own greater than a de minimis
interest in the Manager or any of its Affiliates or (b) within the last two
years, have not directly or indirectly (i) been an officer of or employed by
the Company or the Manager or any of their respective Affiliates, (ii) been a
director of the Manager or any of its Affiliates, (iii) performed more than a
de minimis amount of 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
Board of Directors. The Manager shall prepare regular reports for the 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 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 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, but
not limited to:
(i) providing a complete program of investing and
reinvesting the capital and assets of the Company in pursuit of the Company's
investment objectives and in accordance with the policies adopted by the 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
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 the
Company's 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
Board of Directors in accordance with hedging guidelines and policies adopted
by the Board of Directors, and engaging in hedging activities on behalf of the
Company, consistent with the Company's status as a REIT;
(vi) maintaining the Company's exemption from regulation as
an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(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 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 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
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 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 Exchange Act of
1934, as amended (the "Exchange Act");
(xvii) assisting 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 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 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; (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.
(c) The Manager will bear all costs and expenses of the
Manager's officers and employees and any overhead incurred in connection with
the Manager's duties hereunder, the cost of office space and equipment
required for performance of the Manager's duties and shall bear the costs of
any salaries or directors' fees of any officers or directors of the Company
who are Affiliates of the Manager, except that the Board of Directors 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 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 any 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
Mortgage-Backed Securities from pools of Mortgage Loans or otherwise, the
raising of capital, the 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 of the Manager 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 an appropriate books of
accounts and records relating to services performed under this Agreement, 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 under this
Agreement 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.
(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 the Manager's investment
advisory functions for the Company.
5. Compensation of the Manager
(a) 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 2% of the Quarterly
Average Total Stockholders' Equity for the applicable quarter and (ii)
incentive compensation in an amount equal to the product of 25% of the dollar
amount by which:
(1) net income of the Company (before incentive fee) determined in
accordance with GAAP, plus $534,623.47 (the "Fixed Amount") for each
fiscal quarter for which a calculation is made under this Section
(provided, that, if this Agreement is not renewed pursuant to Section
7 hereof or, in the event this Agreement is so renewed, if the terms
of this Section 5(a)(ii)(1) are amended to modify the Fixed Amount,
then the Fixed Amounts which would have been payable through and
including the quarter ended December 31, 2005 shall be included in
the final calculation made pursuant to this Section 5(a)(ii)(1) prior
to giving effect to any such non-renewal or modification; provided,
further, that the Fixed Amount for the quarter ended December 31,
2005 shall be deemed to be $446,141.80)
exceeds
(2) an amount equal to (A) the weighted average of the price per
share of the Common Stock in the initial public offering and the
prices per share of Common Stock in any secondary offerings of Common
Stock by the Company, including, without limitation, issuances of
Common Stock pursuant to the Company's Dividend Reinvestment and
Stock Purchase Plan, private placements, public offerings and
exercises of options granted under the Company's 1998 Stock Option
Plan, multiplied by (B) the greater of: (i) 8.5% or (ii) the Ten-Year
U.S. Treasury Rate plus 4.0% per annum (expressed as a quarterly
percentage) multiplied by (C) the weighted average number of shares
of Common Stock outstanding during such quarter.
Calculation of the incentive fee payable to the Manager
shall be calculated using a rolling four-quarter high watermark (the
"Watermark"). In determining the Watermark, the Manager shall calculate the
incentive fee based upon the current and prior three quarters' net income (the
"Yearly Incentive Fee"). The Company shall pay the Manager an incentive fee in
the current quarter if the Yearly Incentive Fee is greater than the amount the
Company paid to the Manager in the prior three quarters cumulatively.
Calculation of the incentive fee shall be based on GAAP and adjusted to
exclude special one-time events pursuant to changes in GAAP accounting
pronouncements, or other one-time events, after discussion between the Manager
and the Unaffiliated Directors.
For any period less than a fiscal 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.
(c) 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 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.
(d) 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 the 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 interests 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 stockholders 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 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 such 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 interests 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.
(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 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 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).
(d) 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 March 31, 2005. Thereafter, successive extensions,
each for a period not to exceed one year, 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 that 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 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. 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 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 shall the termination fee be 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) if the Manager commits a material breach of any provision of
this Agreement (including any material breach of the provisions contained in
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 appointment are commenced without such
authorization, consent or application against the Manager and continue
undismissed for 30 days; or (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 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 the
Manager's responsibilities and rights under this Agreement.
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 under this
Agreement, 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 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 prior
written 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
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.
16. Manager Brochure
The Company hereby acknowledges that it has received from
the Manager a copy of the Manager's Form ADV, Part II, at least forty-eight
hours prior to entering into this Agreement.
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.
By: /s/Chris A. Milner
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Name: Chris A. Milner
Title: President and Chief Executive
Officer
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/Laurence D. Fink
------------------------------------------
Name: Laurence D. Fink
Title: Chairman and Chief Executive
Officer