EXHIBIT 10.16
ADMINISTRATIVE SERVICES
AGREEMENT
This ADMINISTRATIVE SERVICES
AGREEMENT (the “Agreement”) is made effective as of
July 25, 2008 (the “Effective Date”), by and
between Pacific Income Advisers, a Delaware corporation
(“PIA”), and Anworth Mortgage Asset Corporation, a
Maryland corporation (“Anworth”).
R E C I T A
L S :
A. Anworth is in the business of
investing primarily in United States agency mortgage-backed
securities that it acquires in the secondary market;
B. Anworth desires PIA to provide to
it certain services and equipment as it may require, and PIA
desires to provide such services and equipment to Anworth, in
accordance with the terms and conditions hereof.
A G R E E M
E N T :
NOW, THEREFORE, in consideration of
the foregoing recitals and the agreements contained herein, the
parties hereby agree as follows:
1. Services to be Performed by
PIA .
1.1 Services . PIA shall
furnish to Anworth and Anworth shall utilize the services described
in Schedule A-1 attached hereto (collectively, the
“Services”).
During the term of this Agreement,
PIA will use its best efforts to conduct its duties hereunder in
the best interests of Anworth and in a lawful manner in compliance
with applicable laws, statutes, rules and regulations. PIA shall
provide the Services with the same degree of care, skill and
prudence customarily exercised by it for its own operations. The
Services provided by PIA to Anworth shall be made available by PIA
at such level of utilization as Anworth may reasonably require
following the date hereof.
1.2 Inspection; Furnishing of
Information and Witnesses . PIA shall permit Anworth, and its
authorized representatives, to enter upon PIA’s premises
during normal business hours for the purpose of examining or
inspecting Anworth’s records or examining or making extracts
of Anworth’s books and records related to the Services;
provided, however, that the same shall be conducted without
unreasonable interference or disruption to the business and
operation of PIA.
PIA also agrees to use its best
efforts to make available to Anworth, upon Anworth’s request,
PIA’s officers, employees and agents as witnesses to the
extent that such persons may reasonably be required in connection
with any legal, administrative or other proceedings relating to the
Services in which Anworth may, from time to time, be involved.
Anworth agrees to reimburse PIA for its reasonable out-of-pocket
expenses incurred in making such officers, employees and agents
available as witnesses.
2. Term and Termination
.
The term of this Agreement shall be
from the Effective Date until the one year anniversary of the
Effective Date. Thereafter, this Agreement shall automatically
renew for successive one-year terms, unless written notice of
either parties’ intent not to renew is received by the other
party no less than thirty (30) days prior to the expiration of
the term or the applicable renewal period. Notwithstanding the
foregoing, Anworth shall have the sole and exclusive right to
terminate this Agreement without liability (other than for accrued
but unpaid liabilities provided hereunder) (i) for any reason
upon thirty (30) days prior written notice to PIA, and
(ii) immediately upon any material breach by PIA of its
obligations hereunder.
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3. Compensation .
As full payment for providing the
Services, Anworth shall pay PIA the amount set forth on
Schedule A-2 attached hereto, subject to adjustment as
described below (the “Service Charges”). If, for any
reason, Anworth’s requirements for the level, scope or type
of Services to be provided above significantly decreases or
completely terminates at any time during the term of this
Agreement, the Service Charges for such Service or Services shall
immediately be decreased or eliminated accordingly.
PIA shall bill Anworth on a monthly
basis within thirty (30) days of the end of each calendar
month, and Anworth shall pay the amount billed to it within thirty
(30) days of receipt of such bill.
If this Agreement is terminated
effective on some day other than the last day of a month, the
Service Charges shall be prorated based on the number of days the
Agreement was in effect during the month and the actual number of
days in such month.
4. Banking .
Any and all monies received by PIA
on behalf of Anworth in the business and performance of its duties
under this Agreement shall be received in trust and deposited in
special accounts bearing the name of Anworth at such banking
institutions and with such authorized signatories as Anworth
specifies. Such monies shall not be commingled with PIA’s
funds and may be withdrawn from the accounts only by
Anworth.
5. Litigation .
PIA shall, as soon as it becomes
aware of any threatened or potential legal, administrative or other
proceedings involving Anworth, promptly notify Anworth of such
threatened or potential proceeding in writing, and shall promptly
provide to Anworth the originals of any and all correspondence and
other documents related thereto that PIA receives.
6. Books and Records
.
6.1 Proprietary . All books
of account, accounting and personnel records, customers’ and
suppliers’ lists, documents, vouchers, letters and all other
papers and records (in whatever form stored or recorded) pertaining
to the Services and information provided to Anworth hereunder shall
be the property of Anworth.
6.2 Maintenance; Delivery .
PIA agrees to maintain books and records pertaining to the Services
and information provided hereunder in accordance with
Anworth’s internal control procedures and shall deliver all
such records to Anworth, at Anworth’s sole expense, promptly
upon the expiration of this Agreement.
7. Confidentiality
.
7.1 Duty of Confidentiality .
The parties agree: (i) to hold in trust and maintain
confidential; (ii) not to disclose to others without prior
written approval from the disclosing party; (iii) not to use
for any purpose, other than such purpose as may be authorized in
writing by the disclosing party or pursuant to this Agreement; and
(iv) to prevent duplication of and disclosure to any other
party, any Information received from the disclosing party or
developed, presently held or continued to be held, or otherwise
obtained, by the receiving party under this Agreement.
7.2 Information .
“Information” shall mean all information disclosed by
either party to the other orally, visually, in writing, or in any
other tangible form, and shall include, but is not limited to, all
technical information, financial plans, computer databases and
similar information disclosed in connection with this
Agreement.
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