Exhibit 10.1

Anthracite Capital Inc.

DOCS® financing facility*

Shares of Common Stock,

$0.001 par value

SALES AGREEMENT

June 4, 2008

 

* DOCS® is a registered service mark of Brinson Patrick Securities Corporation.

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THIS SALES AGREEMENT (this “Agreement”) dated as of June 4, 2008 among Brinson
Patrick Securities Corporation, having its principal office at 330 Madison
Avenue, 9th Floor, New York, New York 10017 (the “Sales Manager”), Anthracite
Capital, Inc., a corporation organized and existing under the laws of the State
of Maryland (the “Company”), and BlackRock Financial Management, Inc. (the
“Manager”) as to Sections 1.2 and 4.1(g) only.

WHEREAS, the Company desires to issue and sell through the Sales Manager shares
of its common stock, par value $0.001 per share (such shares referred to herein
as the “Common Stock”), on the terms set forth in Article II hereof.

WHEREAS, the Company and the Sales Manager entered into a Sales Agency
Agreement, dated May 15, 2002, as amended by a First Amendment dated May 15,
2003 and a Second Amendment dated August 24, 2006 (as so amended, the “Previous
Agreement”), and the parties wish this Agreement to replace the Previous
Agreement.

IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Sales Manager agree as follows:

ARTICLE I

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY AND THE MANAGER

1.1 For purposes of this Agreement, unless the context requires to the contrary,
the term “Company” shall also include all significant subsidiaries (as defined
in Section 1-02 of Regulation S-X) of the Company. The Company represents and
warrants to, and agrees with, the Sales Manager that:

(a) The Company meets the requirements for use of Form S-3 under the Securities
Act of 1933, as amended (the “Act”), and the rules and regulations thereunder
(“Rules and Regulations”), and the Company is eligible to use Form S-3 for the
transactions contemplated by this Agreement. A registration statement on Form
S-3 (Registration No. 333-69848) with respect to, among other securities, the
Common Stock, including a form of prospectus, has been prepared by the Company
in conformity with the requirements of the Act and the Rules and Regulations,
has been filed with the Securities and Exchange Commission (the “Commission”)
and has been declared effective by the Commission. No stop order suspending the
effectiveness of such registration statement has been issued, and no proceeding
for that purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission. Additionally, the Company is eligible to file a
new registration statement on Form S-3 with respect to the Common Stock. Each
such registration statement, as it may have heretofore been or (only to the
extent (i) filed and declared effective by the Commission after the date hereof
and (ii) a prospectus supplement forming a part of such registration statement
and relating to the Common Stock to be offered and sold pursuant to this
Agreement having been filed pursuant to Rule 424 under the Act) may hereafter be
filed, as amended, is referred to herein as the “Registration Statement,” and
the final form of prospectus included in the Registration Statement, as amended
or supplemented from time to time relating to the Common Stock, is referred to
herein as the “Prospectus.” Any reference herein to the Registration Statement,
the

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Prospectus, or any amendment or supplement thereto shall be deemed to refer to
and include the documents incorporated (or deemed to be incorporated) by
reference therein, and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement or Prospectus shall be
deemed to refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference therein.

(b) Each part of the Registration Statement, when such part became or becomes
effective, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at each Settlement Date (as
hereinafter defined), conformed or will conform in all material respects with
the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Settlement Date, did not or will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Sales Manager, specifically for
use in the Registration Statement, the Prospectus or any amendment or supplement
thereto.

(c) The documents incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, when they became or become
effective under the Act or were or are filed with the Commission under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case
may be, conformed or will conform in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder.

(d) The financial statements of the Company, together with the related schedules
and notes thereto, set forth or included or incorporated by reference in the
Registration Statement and Prospectus, fairly present the financial condition of
the Company as of the dates indicated and the results of operations, changes in
financial position, stockholders’ equity, and cash flows for the periods therein
specified, in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise stated
therein). The summary and selected financial and statistical data included or
incorporated by reference in the Registration Statement and the Prospectus
fairly present the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis consistent
with the financial statements presented therein.

(e) Deloitte & Touche LLP, which has expressed their opinion with respect to
financial statements and the supporting schedules, if any, included or
incorporated by reference in the Registration Statement, is an independent
registered public accounting firm with respect to the Company within the meaning
of the Act and the applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United States).

 

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(f) The Company has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Maryland. Other than as
disclosed in the Registration Statement, the Company has no other subsidiaries
and does not control, directly or indirectly, any corporation, partnership,
limited liability company, joint venture, association or other business
organization. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its business
makes such qualification necessary (including every jurisdiction in which it
owns or leases property), except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect on the Company. For purposes of
this Agreement, “Material Adverse Effect” means any adverse effect on the
business, operations, properties or financial condition of the Company that is
(either alone or together with all other adverse effects) material to the
Company and its subsidiaries, taken as a whole, and any material adverse effect
on the issuance and sale of Common Stock by the Company contemplated under this
Agreement. Each of the Company’s significant subsidiaries (as defined in
Section 1-02 of Regulation S-X) is validly existing as a corporation, limited
liability company or partnership, as applicable, in its respective jurisdiction
of formation. Schedule 1.1(f) hereto identifies each of the Company’s
subsidiaries that is a significant subsidiary of the Company (determined at
December 31, 2007). All of the issued and outstanding capital stock, limited
liability company interests or partnership interests, as applicable, of each
significant subsidiary has been duly authorized and validly issued and, if
applicable, is fully paid and nonassessable and (except as otherwise disclosed
in the Registration Statement and the Prospectus or would not have a Material
Adverse Effect) is owned by the Company, directly or indirectly, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity
(except as otherwise disclosed in the Registration Statement and Prospectus,
including without limitation the credit facilities and repurchase agreements
filed as exhibits thereto or described therein, or as would not have a Material
Adverse Effect). The Company has all requisite corporate power and authority, as
applicable, and all necessary authorizations, approvals, consents, orders,
licenses, certificates and permits of and from all governmental orders or
regulatory bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being
conducted and as described in the Registration Statement and the Prospectus,
except for such authorizations, approvals, consents, orders, licenses,
certificates and permits the absence of which would not have a Material Adverse
Effect; and no such authorization, approval, consent, order, license,
certificate or permit contains a materially burdensome restriction other than as
disclosed or incorporated by reference in the Registration Statement and the
Prospectus.

(g) The Company has good title to each of the items of personal property which
are reflected in the financial statements referred to in Section 1.1(d) or are
referred to in the Registration Statement and the Prospectus as being owned by
the Company and valid and enforceable leasehold interests in each of the items
of real and personal property which are referred to in the Registration
Statement and the Prospectus as being leased by the Company, in each case free
and clear of all liens, encumbrances, claims, security interests and defects,
other than those described in the Registration Statement and the Prospectus and
those which would not have a Material Adverse Effect.

 

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(h) The Company has been subject to the requirements of Section 12 of the
Exchange Act during the period commencing 12 months preceding the filing of the
Registration Statement and ending on the date hereof (the “Reporting Period”)
and during such Reporting Period the Company has timely filed all material
required to be filed pursuant to Sections 13(a), 14 and/or 15(d) of the Exchange
Act. All such material conformed in form and substance in all material respects
to the requirements of the Exchange Act and the rules and regulations
thereunder. As of the date of the initial filing of the Registration Statement
on September 21, 2001, and as of the date hereof, the aggregate market value of
the voting and non-voting common equity held by non-affiliates of the Company
was and is at least $150 million.

(i) The debt financing employed by the Company to acquire its portfolio of
mortgage assets is not convertible into shares of common stock of the Company or
other equity interests in the Company except as disclosed in the Registration
Statement and the Prospectus.

(j) There is no litigation or governmental or other proceeding or investigation
before any court or before or by any public body or board pending or, to the
knowledge of the Company, threatened (and the Company does not know of any basis
therefor) against, or involving the assets, properties or businesses of the
Company that would have a Material Adverse Effect except as described or
incorporated by reference in the Registration Statement.

(k) The Company maintains insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed adequate for
its businesses and, to the knowledge of the Company, consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect, it being understood that the only insurance held by the Company and its
significant subsidiaries are directors and officers insurance policies.

(l) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as described therein,
(i) there has not been any material adverse change in the assets or properties,
business, results of operations or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business; (ii) the Company has not
sustained any material loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree;
(iii) since the date of the latest balance sheet included or incorporated by
reference in the Registration Statement and the Prospectus, except as reflected
therein, the Company has not undertaken any material liability or obligation,
direct or contingent, except such liabilities or obligations undertaken in the
ordinary course of business; and (iv) there has not been any transaction that is
material to the Company, except transactions in the ordinary course of business
or as otherwise disclosed in the Registration Statement and the Prospectus.

(m) There is no document or contract of a character required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described or filed as required. Each
document, instrument, contract and

 

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agreement of the Company described in the Registration Statement or the
Prospectus or listed as exhibits to the Registration Statement is in full force
and effect and is valid and enforceable by and against the Company in accordance
with their terms, assuming the due authorization, execution and delivery thereof
by each of the other parties thereto, except as otherwise disclosed in the
Registration Statement or Prospectus or except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles. The Company is not, nor to the knowledge of the Company is
any other party, in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, except for any default or event that would not have a Material Adverse
Effect. No default exists, and no event has occurred which with notice or lapse
of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company of any other
agreement or instrument to which the Company is a party or by which it or its
properties or business may be bound or affected, which default or event would
have a Material Adverse Effect.

(n) The Company is not in violation of any term or provision of its charter or
by-laws. The Company is not in violation of any franchise, license, permit,
judgment, decree, order, statute, rule or regulation of any court or
governmental body having jurisdiction over the Company, where the consequences
of such violation would have a Material Adverse Effect.

(o) Neither the execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Common Stock) will (i) conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or result in the execution or
imposition of any lien, charge, encumbrance, claim, security interest,
restriction or defect upon any properties or assets of the Company pursuant to
the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or its properties or businesses are
bound, or (ii) will violate any franchise, license, permit, judgment, decree,
order, statute, rule or regulation of any court or governmental body having
jurisdiction over the Company that is applicable to the Company or (iii) will
violate any provision of the charter or by-laws of the Company except, in the
case of (i) and (ii), as would not have a Material Adverse Effect or for which
consents or waivers have already been obtained and are in full force and effect.

(p) All of the outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and none of
the shares were issued in violation of any preemptive or other similar right.
The Common Stock, when issued and sold pursuant to this Agreement, will be duly
authorized and validly issued, fully paid and nonassessable and will not be
issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any capital stock of the
Company or any security convertible into or exercisable or exchangeable for such
capital stock, except for standard dividend reinvestment

 

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plans. The Common Stock conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus. Any stock
options issued by the Company have been issued in compliance with applicable
law, and the terms and provisions of such stock options were established in
compliance with applicable law except as would not have a Material Adverse
Effect.

(q) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as (x) described or referred
to therein, or (y) are not material (as to clauses (i) and (ii) only), are
consistent with past practice (as to clauses (i) and (ii) only), or are publicly
disclosed, the Company has not (i) issued any securities or incurred any
liability or obligation, direct or contingent, except such liabilities or
obligations incurred in the ordinary course of business, (ii) entered into any
transaction not in the ordinary course of business or (iii) declared or paid any
dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital stock except for the dividends
declared or paid on the Company’s 9.375% Series C Cumulative Redeemable
Preferred Stock, 8.25% Series D Cumulative Redeemable Preferred Stock, 12%
Series E-1 Cumulative Convertible Redeemable Preferred Stock, 12% Series E-2
Cumulative Convertible Redeemable Preferred Stock and 12% Series E-3 Cumulative
Convertible Redeemable Preferred Stock, as applicable.

(r) Except as disclosed in the Registration Statement and Prospectus, no holder
of any security of the Company has the right, which has not been waived or
fulfilled, to have any security owned by such holder included in the
Registration Statement or any right to demand registration of any security owned
by such holder.

(s) All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement
and the issuance and sale of the Common Stock by the Company. This Agreement has
been duly and validly authorized, executed and delivered by the Company and
constitutes and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. Except for any “blue
sky” filings or Trading Market (as defined below) listing applications to be
filed pursuant hereto or any filings required by the Financial Industry
Regulatory Authority, each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary for the execution and delivery by the Company of
this Agreement and the consummation of the transactions contemplated hereby and
the issuance and sale of the Common Stock by the Company has been obtained or
made and is in full force and effect. and no such approval, consent, order,
authorization, designation, declaration or filing is required in connection with
the execution, delivery and performance by the Company of: (i) the Amended and
Restated Investment Advisory Agreement, dated as of March 31, 2008, by and
between the Manager and the Company; (ii) the Amended and Restated Accounting
Services Agreement, dated as of March 15, 2007, by and between the Manager and
the Company; or (iii) the Amended and Restated Administration Agreement, dated
as of March 15, 2007 by and between the Company and the Manager (collectively,
the “Management Agreements”). The Company

 

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will use its best reasonable efforts to cause the Common Stock to be listed for
trading on the Trading Market. For purposes of this Agreement, the “Trading
Market” is (i) the New York Stock Exchange, Inc., and (ii) each other securities
exchange on which the common stock of the Company is listed for trading.

(t) The Company has not incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in connection
with the transactions contemplated by this Agreement other than as contemplated
hereby or as described in the Registration Statement.

(u) The Company is conducting its business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where the failure to be so in compliance would not have a
Material Adverse Effect.

(v) No transaction has occurred between or among the Company and any of its
officers or directors or any affiliate or affiliates of any such officer or
director that is required to be described in and is not described in the
Registration Statement and the Prospectus.

(w) The Company has not taken, nor will it take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in,
or which has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of any of the Common Stock.

(x) The Company has filed all federal, state, local and foreign tax returns
which are required to be filed through the date hereof (and will file all such
tax returns when and as required to be filed after the date hereof), or has
received extensions thereof, and has paid all taxes shown on such returns to be
due on or prior to the date hereof (and will pay all taxes shown on such returns
to be due after the date hereof) and all assessments received by it to the
extent that the same are material and have become due, except where the failure
to file such a return or pay such amount would not have a Material Adverse
Effect.

(y) The Company has met the qualification requirements for a “real estate
investment trust” during its taxable years ending on December 31, 1999 to
December 31, 2007 and its proposed method of operations will enable it to
continue to meet the requirements for qualification and taxation as a “real
estate investment trust” under the Internal Revenue Code of 1986, as amended
(the “Code”), assuming no change in the applicable underlying law. The Company
does not know of any current event that would cause or is likely to cause the
Company to fail to qualify as a “real estate investment trust” at any time.

(z) The Company is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(aa) The Company’s systems of internal accounting controls taken as a whole are
sufficient to meet the broad objectives of internal accounting control insofar
as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company’s
financial statements; and, to the best of the Company’s knowledge, neither the
Company nor any employee or agent thereof has made any payment of funds of the
Company or received or retained any funds, and no funds of the Company have been
set aside to be used for any payment, in each case in violation of any law, rule
or regulation.

 

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(bb) The Company is not involved in any labor dispute and, to the knowledge of
the Company, no such dispute has been threatened, except for such disputes as
would not have a Material Adverse Effect on the Company, or subject the Company
or its shareholders to any material liability or disability.

(cc) Except as disclosed in the Registration Statement or the Prospectus,
(i) there has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or to the
knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or that would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have a
Material Adverse Effect; (ii) there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release that would not have a Material
Adverse Effect; and (iii) the terms “hazardous wastes,” “toxic wastes” and
“hazardous substances” shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.

(dd) There is and has been no failure on the part of the Company or, to the
knowledge of the Company, any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including without limitation Section 402 related to loans
and Sections 302 and 906 related to certificates.

1.2 The Manager hereby represents, warrants and agrees with the Sales Manager
that:

(a) The Manager has been duly organized and is validly existing as a corporation
and is in good standing under the laws of Delaware. The Manager is duly
qualified to do business and is in good standing in each jurisdiction in which
the character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which would not in the
aggregate have a material adverse effect on the business, operations, properties
or financial condition of the Manager and its subsidiaries, taken as a whole (a
“Manager Material Adverse Effect”). The Manager has all requisite power and
authority, and all necessary governmental licenses, to own, lease and operate
its properties and conduct its business as it is now being conducted, except
where the failure to possess such governmental licenses will not in the
aggregate have a Manager Material Adverse Effect.

(b) The Manager has full legal right, power and authority to perform the
Management Agreements and to consummate the transactions contemplated therein;
the Management Agreements have been duly authorized, executed and delivered by
the Manager

 

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and constitute valid and binding agreements of the Manager, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally, and by general principles of equity.

(c) The execution, delivery and performance of this Agreement by the Manager
will not (i) conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time or both
would constitute a default) under or result in the execution or imposition of
any lien, charge, encumbrance, claim, security interest, restriction or defect
upon any properties or assets of the Manager pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Manager is a party, or any of its properties or businesses are bound, (ii) will
violate any franchise, license, permit, judgment, decree, order, statute, rule
or regulation of any court or governmental body having jurisdiction over the
Manager that is applicable to the Manager or (iii) will violate any provision of
the charter or by-laws of the Manager except, for, in the case of (i) and (ii),
as would not have a Material Adverse Effect or for which consents or waivers
have already been obtained and are in full force and effect.

(d) No approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other government body is
required in connection with execution, delivery and performance by the Manager
of the Management Agreements.

ARTICLE II

SALE AND DELIVERY OF SECURITIES

2.1(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell through the Sales Manager, as agent, and the Sales
Manager agrees to sell, as agent for the Company, on a best efforts basis,
shares of the Common Stock during the term of this Agreement on the terms set
forth herein. The Common Stock will be sold from time to time as described in
the Registration Statement and Prospectus, in amounts and, subject to price
limitations, at prices as directed by the Company and as agreed to by the Sales
Manager.

(b) The Company or the Sales Manager may, upon notice to the other party hereto
by telephone (confirmed promptly by telecopy or e-mail), at any time and from
time to time suspend the offering of Common Stock; provided, however, that such
suspension shall not affect or impair the parties’ respective obligations with
respect to the Common Stock sold hereunder prior to the giving of such notice.

(c) The compensation to the Sales Manager for sales of Common Stock sold under
this Agreement shall be at a fixed commission rate of 2.0% of the gross sales
price per share of any Common Stock sold under this Agreement. The remaining
proceeds, after further deduction for any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sale shall
constitute the net proceeds to the Company for such Common Stock (the “Net
Proceeds”).

 

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(d) The Company shall open and/or maintain a trading account (the “Trading
Account”) at a clearing agent designated by the Sales Manager to facilitate the
transactions contemplated by this Agreement. The Net Proceeds from the sale of
the Common Stock shall be available in the Trading Account on the third business
day (or such other day as is industry practice for regular-way trading)
following each sale of the Common Stock (each, a “Settlement Date”). The Company
shall effect the delivery of the applicable number of shares of Common Stock to
an account designated by the Sales Manager at The Depository Trust Company on or
before the Settlement Date of each sale hereunder. The Sales Manager’s
compensation shall be withheld from the sales proceeds on each Settlement Date
and shall be paid to the Sales Manager.

(e) At each Settlement Date, the Company and the Manager shall be deemed to have
affirmed each representation, warranty, covenant and other agreement contained
in this Agreement. Any obligation of the Sales Manager under this Agreement
shall be subject to the continuing accuracy of the representations and
warranties of the Company and Manager herein, to the performance by the Company
and Manager of their obligations hereunder and to the continuing satisfaction of
the additional conditions specified in Article IV of this Agreement.

(f) If the Company shall default on its obligation to deliver Common Stock on
any Settlement Date, the Company shall (i) hold the Sales Manager harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay the Sales Manager any commission to which it would
otherwise be entitled absent such default.

ARTICLE III

COVENANTS OF THE COMPANY

3.1 The Company covenants and agrees with the Sales Manager that:

(a) As promptly as practicable after the date of this Agreement, the Company
will (if not previously filed) file the Registration Statement to permit sales
of the Common Stock under the Act. The Company will use its best reasonable
efforts to cause the Registration Statement (if not already declared effective)
to become effective as promptly as possible thereafter.

(b) During the period in which the Sales Agent has been requested to offer and
sell Common Stock, the Company will notify the Sales Manager promptly of the
time when any subsequent amendment to the Registration Statement has become
effective or any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for additional information. The
Company will prepare and file with the Commission, promptly upon the Sales
Manager’s reasonable request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Sales Manager’s reasonable opinion, may be
necessary or advisable in connection with the sale of the Common Stock pursuant
to this Agreement. The Company will not file any amendment or supplement to the
Registration Statement or Prospectus (other than a supplement or an amendment to
the Prospectus that (i) does not materially change the information about the
Company or its business, operations, properties or financial condition

 

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previously disclosed in the Registration Statement or Prospectus or (ii) relates
to an offering of securities other than the Common Stock (each, an “Excluded
Supplement”)) unless a copy thereof has been submitted to the Sales Manager a
reasonable period of time before the filing and the Sales Manager has not
reasonably objected thereto; and it will notify the Sales Manager at the time of
filing thereof of any document that upon filing is deemed to be incorporated by
reference in the Registration Statement or Prospectus, which will then be
available on EDGAR and/or the Company’s website at
http://www.anthracitecapital.com (and will furnish to the Sales Manager any such
document that is not available on the EDGAR or Company’s website). The Company
will cause each amendment to the Registration Statement or supplement to the
Prospectus and each filing or report incorporated therein, to be prepared in
form and substance in all material respects as required by the Act, the Rules
and Regulations, the Exchange Act and the rules and regulations thereunder, and
to be timely filed with the Commission as required.

(c) The Company will advise the Sales Manager, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Common Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.

(d) Within the time during which a prospectus relating to the Common Stock is
required to be delivered under the Act, the Company will use its reasonable best
efforts to comply with all requirements imposed upon it by the Act and by the
Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Common Stock as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus, as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Act, the Company will promptly notify the Sales Manager to
suspend the offering of Common Stock during such period and the Company will
amend or supplement the Registration Statement or Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance and will use its reasonable best efforts to have any amendment or
supplement to the Registration Statement or Prospectus declared effective as
soon as possible, unless the Company has reasonable business reasons to defer
public disclosure of the relevant information.

(e) The Company will use its reasonable best efforts to qualify the Common Stock
for sale under the securities laws of such jurisdictions as the Sales Manager
designates and to continue such qualifications in effect so long as required for
the sale of the Common Stock, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.

(f) The Company will furnish to the Sales Manager and its legal counsel (at the
expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements to the

 

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Registration Statement or Prospectus that are filed with the Commission during
the period in which a prospectus relating to the Common Stock is required to be
delivered under the Act (including all documents filed with the Commission
during such period that are deemed to be incorporated by reference therein), in
each case as soon as available and in such quantities as the Sales Manager may
from time to time reasonably request. The Company will take such action as to
enable the conditions set forth in Rule 153(b) of the Rules and Regulations to
be satisfied at all times that the Sales Agent is selling Common Stock.

(g) The Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that satisfies the provisions of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations.

(h) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Company will reimburse the Sales Manager for its reasonable
out-of-pocket costs and expenses incurred in connection with entering into this
Agreement, including, without limitation, reasonable travel, reproduction,
printing and similar expenses, initial and ongoing due diligence. In addition to
any fees that may be payable to the Sales Manager under this Agreement, the
Company will promptly, upon request of the Sales Manager, reimburse the Sales
Manager for the reasonable fees and disbursements of the Sales Manager’s legal
counsel in an amount up to fifty thousand dollars ($50,000) (x) incurred in
connection with the establishment of the DOCS® financing facility established by
this Agreement and (y) incurred in connection with any amendments to the DOCS®
financing facility established by this Agreement, including, without limitation,
in connection with any amendments to this Agreement and/or the drafting or
revising of any Prospectus Supplement.

(i) The Company shall use its reasonable best efforts to list, subject to notice
of issuance, the Common Stock on the applicable Trading Market.

(j) The Company will apply the Net Proceeds from the sale of the Stock as set
forth in the Prospectus.

(k) The Company will not, directly or indirectly, offer or sell any shares of
common stock (other than the Common Stock) or securities convertible into or
exchangeable for, or any rights to purchase or acquire, common stock during the
period from the date of this Agreement through the final Settlement Date for the
sale of Common Stock hereunder without (i) giving the Sales Manager at least one
business day prior notice (written, including, without limitation, email, or
oral) specifying the nature of the proposed sale and the date of such proposed
sale and (ii) suspending activity under this program for such period of time as
may reasonably be determined by agreement of the Company and the Sales Manager;
provided, however, that no such notice and suspension shall be required in
connection with the Company’s issuance or sale of (i) shares of common stock or
securities pursuant to any stock option, equity or benefits plan (including
without limitation the Anthracite Capital, Inc. 2008 Manager Equity

 

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Plan), stock ownership plan, dividend reinvestment plan (including without
limitation Anthracite Capital, Inc.’s Dividend Reinvestment and Stock Purchase
Plan) and Management Agreements, as such plans may be amended, replaced or
supplemented from time to time, and (ii) common stock issuable upon conversion
of securities or the exercise of warrants, options or other rights in effect or
outstanding on the date hereof. Notwithstanding the foregoing, this paragraph
(k) shall not apply during periods that the Company is neither selling Common
Stock through the Sales Manager nor has requested the Sales Manager to sell
Common Stock.

(l) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Sales Manager immediately after it
shall have received notice or obtain knowledge thereof, of any information or
fact that would alter or affect any opinion, certificate, letter and other
document provided to the Sales Manager pursuant to Article IV of this Agreement.

(m) Each time that the Registration Statement or the Prospectus shall be amended
or supplemented (other than an Excluded Supplement or by a document incorporated
by reference) and on the dates specified in Section 4.1(f) below, the Company
shall (unless the Company is not then selling Common Stock through the Sales
Manager and has not requested the Sales Manager to sell Common Stock) furnish or
cause to be furnished to the Sales Manager forthwith a certificate, in form and
substance reasonably satisfactory to the Sales Manager to the effect that the
statements contained in the certificates referred to in Section 4.1(f) below
that were last furnished to the Sales Manager are true and correct at the time
of such amendment or supplement, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificates, certificates of the same tenor as the
certificates referred to in said Section 4.1(f) below, modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.

(n) Each time that a post-effective amendment to the Registration Statement
(other than an Excluded Supplement) is declared effective by the Commission, and
at such other times as may be reasonably requested by the Sales Manager
(including within a reasonable amount of time after the Company files its Annual
Report or Form 10-K), the Company shall (unless the Company is not then selling
Common Stock through the Sales Manager and has not requested the Sales Manager
to sell Common Stock) furnish or cause to be furnished forthwith to the Sales
Manager (with a copy to its legal counsel), a written opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, counsel to the Company (“Company Counsel”), or other
counsel reasonably satisfactory to the Sales Manager, dated the date of
effectiveness of such amendment or other such date, as the case may be, in form
and substance reasonably satisfactory to the Sales Manager, of the same tenor as
the opinion referred to in Section 4.1(d) below, but modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion.

(o) Each time that a post-effective amendment to the Registration Statement
(other than an Excluded Supplement) is declared effective by the Commission, and
at such other times as may be reasonably requested by the Sales Manager
(including within a reasonable amount of time after the Company files its Annual
Report on Form 10-K), the Company shall

 

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(unless the Company is not then selling Common Stock through the Sales Manager
and has not requested the Sales Manager to sell Common Stock) cause Deloitte &
Touche, LLP, or other independent accountants then retained by the Company,
forthwith to furnish to the Sales Manager a letter, dated the date of
effectiveness of such amendment, or other such date, as the case may be, in form
and substance reasonably satisfactory to the Sales Manager, of the same tenor as
the letter referred to in Section 4.1(e) below but modified to relate to the
Registration Statement and the Prospectus, as amended and supplemented to the
date of such letter.

(p) The Company represents and agrees that, unless it obtains the prior consent
of the Sales Manager, and the Sales Manager represents and agrees that, unless
it obtains the prior consent of the Company, it has not made and will not make
any offer relating to the Common Stock that would constitute an Issuer Free
Writing Prospectus, or that would otherwise constitute a “free writing
prospectus” as defined in Rule 405, required to be filed with the Commission.
Any such free writing prospectus consented to by the Company and the Sales
Manager is hereinafter referred to as a “Permitted Free Writing Prospectus.” The
Company represents that it has treated and agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433 of the Act, and has complied and will comply with the
requirements of Rules 164 and 433 of the Act, as applicable to any Permitted
Free Writing Prospectus, including timely Commission filings where required,
legending and record keeping.

For the purposes of this Section, “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433 of the Act, relating to
the Common Stock in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) of the Act.

ARTICLE IV

CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS

4.1 The obligations of the Sales Manager to sell the Common Stock as provided
herein shall be subject to the accuracy, as of the date hereof, and as of each
Settlement Date contemplated under this Agreement, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:

(a) The Registration Statement has been declared effective. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Company or the Sales Manager, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the Sales Manager’s reasonable satisfaction. The Common Stock shall have
been listed for trading on the Trading Market.

(b) The Sales Manager shall not have advised the Company that the disclosures in
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, are not reasonably acceptable to the Sales Manager.

 

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(c) Except as contemplated in the Prospectus, subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any material adverse change in the capital
stock of the Company, or any material adverse change, or any development that
may reasonably be expected to cause a material adverse change, in the condition
(financial or other), business or results of operations of the Company, or any
adverse change in the rating assigned to any securities of the Company.

(d) (i) The Sales Manager shall have received at the date of the first sale of
Common Stock hereunder (the “Commencement Date”) and at every other date
specified in Section 3.1(n) hereof, opinions of Company Counsel, dated as of the
Commencement Date and dated as of such other date, in a form reasonably
acceptable to the Sales Manager.

(ii) The Sales Manager shall have received a letter from Company Counsel
authorizing the Sales Manager to rely on the opinion on tax matters delivered by
Company Counsel as Exhibit 8.1 to the Registration Statement.

(e) At the Commencement Date and at such other dates specified in Section 3.1(o)
hereof, the Sales Manager shall have received a “comfort letter” from Deloitte &
Touche, LLP, independent public accountants for the Company, or other
independent accountants then retained by the Company, dated the date of delivery
thereof, in form and substance satisfactory to the Sales Manager.

(f) The Sales Manager shall have received from the Company a certificate, or
certificates, signed by the Chief Financial Officer and Chief Operating Officer
(or other officer acceptable to the Sales Manager) of the Company, dated as of
the Commencement Date (if different from the date of the Agreement) and (unless
the Company is not then selling Common Stock through the Sales Manager and has
not requested the Sales Manager to sell Common Stock) dated as of the first
business day of each calendar quarter thereafter and such other times as the
Sales Manager shall request (each, a “Certificate Date”), to the effect that:

(i) The representations and warranties of the Company in this Agreement are true
and correct, as if made at and as of the Commencement Date or the Certificate
Date (as the case may be), and the Company has performed all the agreements and
satisfied all the conditions on its part to be performed or satisfied pursuant
to this Agreement at or prior to the Commencement Date and each such Certificate
Date (as the case may be);

(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been instituted or, to
the knowledge of such officer after due inquiry, is threatened, by the
Commission;

(iii) Since the date of this Agreement there has occurred no event required to
be set forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth and there has been no document
required to be filed under the Exchange Act and the rules and regulations of the
Commission thereunder that upon such filing would be deemed to be incorporated
by reference in the Prospectus that has not been so filed; and

 

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(iv) Since the date of this Agreement, there has not been any material adverse
change in the assets or properties, business, results of operations or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole,
which has not been described in the Registration Statement or Prospectus
(directly or by incorporation by reference).

(g) The Sales Manager shall have received from the Manager a letter signed by an
officer of the Manager dated as of the Commencement Date and (unless the Company
is not then selling Common Stock through the Sales Manager and has not requested
the Sales Manager to sell Common Stock) dated as of the first business day of
each calendar quarter thereafter and each Certificate Date, to the effect that
the representations and warranties made on behalf of the Manager in this
Agreement are true and correct as of the date of the Commencement Date or the
Certificate Date (as the case may be) as though made at such date.

(h) At the Commencement Date and on each Settlement Date, the Company shall have
furnished to the Sales Manager such appropriate further certificates and
documents as the Sales Manager may reasonably request.

(i) At the Commencement Date and on each Settlement Date, the Company shall have
listed the Common Stock on the Trading Market.

All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Sales Manager. The Company will furnish the Sales
Manager with such conformed copies of such opinions, certificates, letters and
other documents as the Sales Manager shall reasonably request.

ARTICLE V

INDEMNIFICATION AND CONTRIBUTION

5.1 (a) The Company agrees to indemnify and hold harmless the Sales Manager and
each person, if any, who controls the Sales Manager within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue statement of
a material fact contained in the representations in this Agreement or contained
in the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any

 

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litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including, subject to
Section 5(c) of this Agreement, the reasonable fees and disbursements of legal
counsel chosen by the Sales Manager), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense is not
paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Sales Manager expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).

(b) The Sales Manager agrees to indemnify and hold harmless the Company and its
directors and each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in Section 5.1(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendments thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the Sales
Manager expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).

(c) Any indemnified party that proposes to assert the right to be indemnified
under this Article V will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Article V, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from any liability that it might have to any
indemnified party to the extent it is not materially prejudiced as a result
thereof. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
legal counsel reasonably satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of

 

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investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own legal
counsel in any such action, but the fees, expenses and other charges of such
legal counsel will be at the expense of such indemnified party unless (1) the
employment of legal counsel by the indemnified party has been authorized in
writing by the indemnifying party and the indemnifying party expressly agrees in
writing to pay such fees, expenses and charges, (2) the indemnified party has
reasonably concluded (based on written advice of legal counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on written advice of legal
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or
(4) the indemnifying party has not in fact employed legal counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of legal counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld).

(d) In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in the foregoing paragraphs of this
Article V is applicable in accordance with its terms but for any reason is held
to be unavailable from the Company or the Sales Manager, the Company and the
Sales Manager will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but with respect to the Company after
deducting any contribution received by the Company from persons other than the
Sales Manager, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and the Sales Manager may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and the
Sales Manager on the other. The relative benefits received by the Company on the
one hand and the Sales Manager on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total compensation (before
deducting expenses) received by the Sales Manager from the sale of Common Stock
on behalf of the Company. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Sales Manager, on the
other, with respect to the statements or omission which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by

 

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reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Sales Manager, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Sales Manager agree that
it would not be just and equitable if contributions pursuant to this
Section 5.1(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 5.1(d) shall be deemed to
include, for the purpose of this Section 5.1(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the foregoing provisions
of this Section 5.1(d), the Sales Manager shall not be required to contribute
any amount in excess of the amount by which the total actual sales price at
which Common Stock sold by the Sales Manager exceeds the amount of any damages
that the Sales Manager has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission and no person
found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 5.1(d), any person who controls a party to this Agreement within the
meaning of the Act will have the same rights to contribution as that party, and
each officer and director of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 5.1(d), will
notify any such party or parties from whom contribution may be sought, but the
omission so to notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 5.1(d). No party will be liable for contribution with respect to
any action or claim settled without its written consent (which consent will not
be unreasonably withheld).

(e) The indemnity and contribution provided by this Article V shall not relieve
the Company and the Sales Manager from any liability the Company and the Sales
Manager may otherwise have (including, without limitation, any liability the
Sales Manager may have for a breach of its obligations under Article II of this
Agreement).

ARTICLE VI

REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY

6.1 All representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Sales Manager
contained in Article V hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Sales Manager
or any controlling persons, or the Company (or any of their officers, directors
or controlling persons), and shall survive delivery of and payment for the
Common Stock, it being understood and agreed by the parties that,
notwithstanding the foregoing, such representations, warranties and agreements
are made or deemed to have been made as of the date hereof only, on each date
set forth in Section 2.1(e), or the date of the certificate only, as applicable,
and not as of any other date.

 

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ARTICLE VII

TERMINATION

7.1 The Company shall have the right, by giving notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 3.1(h), Article V and Article VI of this
Agreement shall remain in full force and effect notwithstanding such
termination.

7.2 The Sales Manager shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Article 3.1(h), Article V and Article VI of this
Agreement shall remain in full force and effect notwithstanding such
termination.

7.3 This Agreement shall remain in full force and effect unless terminated
pursuant to Section 7.1 or 7.2 of this Agreement or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 3.1(h), Article V and
Article VI shall remain in full force and effect.

7.4 Any termination of this Agreement shall be effective on the date specified
in such notice of termination; provided that such termination shall not be
effective until the close of business on the date of receipt of such notice by
the Sales Manager or the Company, as the case may be. If such termination shall
occur during a period when sales of Common Stock are being made pursuant to this
Agreement, any sales of Common Stock made prior to the termination of this
Agreement shall settle in accordance with the provisions of this Agreement.

ARTICLE VIII

NOTICES

8.1 All notices or communications hereunder shall be in writing and if sent to
the Sales Manager shall be mailed, delivered or telecopied and confirmed to the
Sales Manager at Brinson Patrick Securities Corporation, 330 Madison Avenue, 9th
Floor, New York, New York 10017, facsimile number (212) 453-5555, Attention:
Corporate Finance, or if sent to the Company or the Manager, shall be mailed,
delivered or telecopied and confirmed to the Company at Anthracite Capital,
Inc., 40 East 52nd Street, New York, NY 10022, facsimile number (212) 810-8758,
Attention: Richard Shea. Each party to this Agreement may change such address
for notices by sending to the parties to this Agreement written notice of a new
address for such purpose.

 

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ARTICLE IX

MISCELLANEOUS

9.1 This Agreement shall inure to the benefit of and be binding upon the Company
and the Sales Manager and their respective successors and the controlling
persons, officers and directors referred to in Article V hereof, and no other
person will have any right or obligation hereunder.

9.2 This Agreement constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written and oral,
between the parties hereto with regard to the subject matter hereof.

9.3 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.

9.4 This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The parties agree that this Agreement will be considered signed when
the signature of a party is delivered to the other party. Any facsimile
transmission shall be treated in all respects as having the same effect as an
original signature.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date hereof.

 

ANTHRACITE CAPITAL, INC. By:  

/s/ James J. Lillis

Name:   James J. Lillis Title:   Chief Financial Officer and Treasurer
BRINSON PATRICK SECURITIES CORPORATION By:  

/s/ Todd Wyche

Name:   Todd Wyche Title:   Managing Director

BLACKROCK FINANCIAL MANAGEMENT, INC.

(solely with respect to Sections 1.2 and 4.1(g) herein)

By:  

/s/ Richard M. Shea

Name:   Richard M. Shea Title:   Managing Director

 

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SCHEDULE 1.1(f)

[List of Significant Subsidiaries]