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                                                                    Exhibit 10.1

                              AMENDED AND RESTATED
                          INVESTMENT ADVISORY AGREEMENT

          AGREEMENT, dated as of March 15, 2007, between Anthracite Capital,
Inc. (the "Company"), a Maryland corporation, and BlackRock Financial
Management, Inc. (the "Investment 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 Investment 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 Investment Manager entered into that
certain Amended and Restated Investment Advisory Agreement, dated as of March
11, 2004 (the "Prior Agreement");

          WHEREAS, the Company and the Investment Manager entered into that
certain (x) Amendment and Extension, dated as of March 31, 2005, to the Prior
Agreement, (y) Second Amendment and Extension, dated as of March 31, 2006, to
the Prior Agreement, as amended, and (z) Third Amendment, dated as of September
8, 2006, to the Prior Agreement, as amended; and

          WHEREAS, the Investment Manager and the Company desire to amend and
restate the Prior Agreement, as amended, in its entirety as set forth below;

          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


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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 Investment 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


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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
Investment 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 Investment Manager or any of their respective Affiliates, (ii)
been a director of the Investment Manager or any of its Affiliates, (iii)
performed more than a de minimis amount of services for the Investment Manager
or any of its Affiliates or (iv) had any material business or professional
relationship with the Investment Manager or any of its Affiliates.

          (k) "Common Stock" means the common stock, par value $0.001 per share,
of the Company.

          2.   In General

          The Investment 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 Investment Manager shall manage the investment assets of the
Company in conformity with the policies that are approved and monitored by the
Board of Directors. The Investment 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 Investment
Manager shall allocate investment and disposition opportunities in accordance
with policies and procedures the Investment 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 Investment 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 Investment Manager
will be


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responsible for the day-to-day investment management of the Company and will
perform (or cause to be performed) such services and activities relating to the
investment of assets 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 investment 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 Investment Manager; and


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          (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.

          (b) In the performance of its duties under this Agreement, the
Investment 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, as such
objectives and policies may thereafter be amended from time to time; and (vi)
any policies and determinations of the Board of Directors.

          (c) The Investment Manager will bear all costs and expenses of the
Investment Manager's officers and employees and any overhead incurred in
connection with the Investment Manager's duties hereunder, the cost of office
space and equipment required for performance of the Investment 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 Investment Manager, except
that the Board of Directors may approve reimbursement to the Investment 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 Investment
Manager who devote substantial time to Company operations and administration or
the operations and administration of other companies advised by the Investment
Manager; provided that the Investment 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 Investment 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 Investment
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


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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 Investment 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 Investment Manager or
any partner, officer, employee or other Affiliate of the Investment 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 Investment 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 Investment Manager will not undertake activities
which, in its judgment, will substantially and adversely affect the performance
of its obligations under this Agreement.

          (f) The Investment Manager shall maintain 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 Investment 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 Investment 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 Investment Manager, be
necessary and appropriate. In addition, the Investment 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.


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          4.   Portfolio Transactions and Brokerage

          The Investment 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 Investment 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 and is authorized to direct the execution of such
transactions, in compliance with applicable law to dealers and brokers that are
affiliates of, or have a financial interest in, the Investment Manager or its
affiliates ("Affiliated Broker-Dealers"). The Investment Manager and any
Affiliated Broker-Dealers are also hereby authorized by the Company to execute
agency cross transactions on the Company's behalf. Agency cross transactions may
facilitate a purchase or sale of a block of securities at a predetermined price
and may avoid unfavorable price movements which might otherwise be suffered if
the purchase or sale order were exposed to the market. However, the Manager and
its Affiliated Broker-Dealers may receive commissions from, and therefore may
have a potentially conflicting division of loyalties and responsibilities
regarding, both parties to an agency cross transaction. The Company understands
that its authority to the Investment Manager to effect agency cross transactions
for the Company is terminable at will without penalty, effective upon receipt by
the Investment Manager of written notice from the Company. If the Company's
assets are subject to Section 11(a) of the Exchange Act and Rule 11a2-2(T)
thereunder, the Company authorizes the Investment Manager's Affiliated
Broker-Dealers that may be members of a U.S. securities exchange, or have the
right to trade on such an exchange, to execute transactions on such exchange for
the Company. Consistent with this policy, the Investment 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 Investment
Manager to be useful or valuable to the performance of the Investment Manager's
investment advisory functions for the Company.

          5.   Compensation of the Investment Manager

          (a) The Company agrees to pay to the Investment Manager and the
Investment Manager agrees to accept as full compensation for all services
rendered by the Investment 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:


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     (1) net income of the Company (before incentive fee) determined in
     accordance with GAAP

     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 Investment Manager
shall be calculated using a rolling four-quarter high watermark (the
"Watermark"). In determining the Watermark, the Investment 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 Investment
Manager an incentive fee in the current quarter if the Yearly Incentive Fee is
greater than the amount the Company paid to the Investment 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 Investment 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 Investment 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 Investment 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 Investment
Manager, the Company will make advance payments of the base


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management fee in Section 5(a)(i) above as often as semi-monthly at the rate of
75% of such fee estimated by the Investment Manager.

          (d) The base management fee is intended to compensate the Investment
Manager for its costs in providing investment management services to the
Company. The Board of Directors may adjust the base management fee with the
consent of the Investment Manager in the future if necessary to align the fee
more closely with the costs of such services.

          (e) Thirty percent (30%) of the incentive fee shall (subject to the
other provisions of this Section 5) be payable to the Investment Manager in
Common Stock, and the remainder thereof shall be paid in cash; provided,
however, that payment of the incentive fee shall be paid in Common Stock as
aforesaid only when the issue price (as determined pursuant to paragraph (f)
below) on the relevant quarter end date exceeds the published GAAP book value
per share of Common Stock on the same quarter end date. Any shares issued
pursuant to this provision shall be issued pursuant to the Anthracite 2006 Stock
Award and Incentive Plan approved by the Company's stockholders at the Company's
2006 Annual Meeting or applicable subsequent comparable or substitute plan.

          (f) Common Stock payable as a portion of the incentive fee shall be
payable in accordance with the same schedule established by the Company in
connection with its Dividend Reinvestment and Stock Purchase Plan for the first
month following the applicable quarter end.

          (g) The Company shall pay to the Investment Manager a number of shares
of Common Stock equal to one half of one percent (.05%) of the total number of
shares of Common Stock outstanding as of December 31 each year in which this
Agreement is in effect. Any shares of Common Stock issued pursuant to this
provision shall be issued pursuant to the Anthracite 2006 Stock Award and
Incentive Plan approved by the Company's stockholders at the Company's 2006
Annual Meeting or applicable subsequent comparable or substitute plan.

          (h) The Investment Manager's receipt of Common Stock in accordance
herewith shall be subject to all applicable securities laws (including, without
limitation, prohibitions on insider trading), and all further restrictions as
shall be deemed necessary or advisable by the Board of Directors. The Investment
Manager shall have the right to allocate such shares in its sole and absolute
discretion to its officers, employees and other individuals who provide services
to the Investment Manager, subject to the same restrictions as above.


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          6.   Indemnity

          (a) The Company hereby agrees to indemnify the Investment Manager and
each of the Investment 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 Investment 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


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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, 2008. Thereafter, successive extensions, each for a period
not to exceed one year, may be made by agreement between the Company and the
Investment 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 Investment 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 Investment Manager a


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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 Investment Manager.
If the Company and the Investment 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 Investment
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 Investment Manager, without
payment of any termination fee, if any of the following events occur: (i) if the
Investment 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 Investment 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 Investment 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 Investment 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 Investment 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


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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
Investment 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 Investment 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 Investment 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
Investment Manager's sole expense; provided, however, that the Investment
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 Investment
Manager agrees to cooperate with Company and such successor manager in effecting
the termination of the Investment 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 Investment 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 Investment
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 Investment
Manager; provided, however, that the Investment Manager shall be entitled to
retain copies of all such documents and other instruments as it may be required
by federal or state law.


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          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.


                                      -14-

<PAGE>

          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
Investment Manager a copy of the Investment Manager's Form ADV, Part II, at
least forty-eight hours prior to entering into this Agreement.


                                      -15-

<PAGE>

          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
                                            ------------------------------------
                                        Name: Chris A. Milner
                                        Title: Chief Executive Officer


                                        BLACKROCK FINANCIAL MANAGEMENT, INC.


                                        By: /s/ Ralph L. Schlosstein
                                            ------------------------------------
                                        Name: Ralph L. Schlosstein
                                        Title: President


                                      -16-