GUARANTY

     

    This
      GUARANTY
      is made
      and entered into by Anthracite
      Capital, Inc.,
      a
      Maryland corporation whose address is 40 East 52nd Street, New York, New York
      10022 (“Guarantor”),
      for
      the benefit of Deutsche
      Bank AG, Cayman Islands Branch,
      whose
      address is 60 Wall Street, New York, New York 10005 (“Buyer”).
      This
      Guaranty is made with reference to the following facts (with some capitalized
      terms being defined below):

     

    A. Buyer
      is
      considering entering into one or more repurchase agreement transactions (the
      “Repurchase
      Transactions”)
      in the
      aggregate amount of Two Hundred Million Dollars ($200,000,000.00) with
      Anthracite Funding, LLC, a Delaware limited liability company whose address
      is
      40 East 52nd
      Street,
      New York, New York 10154 (“Seller”).

     

    B. In
      connection with the Repurchase Transactions, Seller and Buyer are entering
      into
      the following documents (collectively, together with this Guaranty and any
      other
      documents evidencing, securing, or otherwise relating to the Repurchase
      Transactions or this Guaranty, the “Repurchase
      Documents,”
which
      term is more fully defined below):

     

    1. that
      certain Master Repurchase Agreement between Seller and Buyer dated December
      23,
      2004, together with all annexes thereto including but not limited to the English
      Loan Supplement between Seller and Buyer dated December 23, 2004 (as amended,
      modified and in effect from time to time, the “Repurchase
      Agreement”);
      and

     

    2. that
      certain Amended and Restated Custodial Agreement among Buyer, Seller and LaSalle
      Bank National Association dated as of December 23, 2004 together with the
      English Custodian Agreement between LaSalle Bank National Association and Buyer
      dated as of December 23, 2004 and any other amendments or
      supplements.

     

    C. Buyer
      has
      examined, among other things, both Seller’s and Guarantor’s creditworthiness and
      ability to pay and perform Seller’s obligations under the Repurchase
      Documents.

     

    D. Buyer
      has
      requested, as a condition of entering into the Repurchase Agreement, that the
      obligations of Seller be guarantied by Guarantor.

     

    E. Guarantor
      is the direct owner of 100% of the membership interests of Seller.

     

    F. Guarantor
      expects to benefit if Buyer enters into the Repurchase Agreement with Seller,
      and desires that Buyer enter into the Repurchase Agreement with
      Seller.

     

    G. Buyer
      would not enter into, and would not be obligated to enter into, the Repurchase
      Agreement with Seller unless Guarantor executed this Guaranty. This Guaranty
      is
      therefore delivered to Buyer to induce Buyer to enter into the Repurchase
      Agreement.

     

    NOW,
      THEREFORE,
      in
      exchange for good, adequate, and valuable consideration, the receipt of which
      Guarantor acknowledges, and to induce Buyer to enter into the Repurchase
      Agreement and accept the Repurchase Documents, Guarantor agrees as
      follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    1. Definitions.
      For
      purposes of this Guaranty, the following terms shall be defined as set forth
      below. In addition, any capitalized term defined in the Repurchase Agreement
      but
      not defined in this Guaranty shall have the same meaning in this Guaranty as
      in
      the Repurchase Agreement.

     

    (a) “Affiliate”
means,
      when used with respect to any specified Person, any other Person directly or
      indirectly controlling, controlled by, or under common control with, such
      Person. “Control” means the possession, direct or indirect, of the power to
      direct or cause the direction of the management and policies of a Person,
      whether through the ownership of voting securities, by contract or otherwise
      and
“controlling” and “controlled” shall have meanings correlative
      thereto.

     

    (b) “Business
      Day”
means
      a
      day other than (i) a Saturday or Sunday, or (ii) a day in which the New York
      Stock Exchange or banks in the State of New York or Illinois are authorized
      or
      obligated by law or executive order to be closed.

     

    (c) “Buyer
      Entity”
means,
      as designated by Buyer from time to time, Buyer or Buyer’s assignee, designee,
      nominee, servicer, or wholly owned Subsidiary, provided that Buyer’s assignee is
      a Person permitted under the Repurchase Agreement.

     

    (d) “Capital
      Lease”,
      as
      applied to any Person, means any lease of any property (whether real, personal
      or mixed) by that Person or entity as lessee that, in conformity with GAAP,
      is
      accounted for as a capital lease on the balance sheet of that Person or
      entity.

     

    (e) “Co-Guarantor”
means,
      as to each Guarantor, any person (other than Seller and such Guarantor) that
      guaranties or is otherwise liable for the Repurchase Transactions, or any
      portion of the Repurchase Transactions, whether by executing this Guaranty
      or by
      executing any other guaranty of the Repurchase Transactions, or by otherwise
      assuming personal liability for the Guarantied Obligations or any part thereof.
      If Guarantor is the only guarantor of the Repurchase Transactions, then all
      references to “Co-Guarantor(s)” shall be disregarded.

     

    (f) “Consolidated
      Net Income”
for
      any
      period means the amount of consolidated net income (or loss) of the Guarantor
      and its Subsidiaries for such period determined on a consolidated basis in
      accordance with GAAP.

     

    (g) “Debt
      Service Coverage”
means
      the ratio of Funds From Operations plus Interest Expense on recourse
      Indebtedness outstanding to Interest Expense on recourse Indebtedness
      outstanding.

     

    (h) “Funds
      From Operations”
for
      any
      period means the Consolidated Net Income of the Guarantor and its Subsidiaries
      for such period without giving effect to depreciation and amortization uniquely
      significant to real estate, gains or losses which are classified as
“extraordinary” in accordance with GAAP, capital gains or losses on sales of
      real estate, capital gains or losses with respect to the disposition of
      investments in marketable securities and any provision/benefit for income taxes
      for such period, plus the allocable portion, based on the Guarantor’s ownership
      interest, of funds from operations of unconsolidated joint ventures, all
      determined on a consistent basis.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    (i) “GAAP”
means
      with respect to the financial statements or other financial information of
      any
      Person, generally accepted accounting principles in the United States which
      are
      in effect from time to time.

     

    (j) “Guarantied
      Obligations”
means
      Seller’s obligations: (a) to fully and promptly pay all sums owed under the
      Repurchase Documents at the times and according to the terms required by the
      Repurchase Documents, without regard to any modification, suspension, or
      limitation of such terms not agreed to by Buyer, such as a modification,
      suspension, or limitation arising in or pursuant to any Insolvency Proceeding
      affecting Seller (even if any such modification, suspension, or limitation
      causes Seller’s obligation to become discharged or unenforceable and even if
      such modification was made with Buyer’s consent or agreement); (b) to pay all
      other sums expended by Buyer or Buyer’s designee or nominee acting on Buyer’s
      behalf in exercising Buyer’s rights and remedies under the Repurchase Documents,
      including Buyer’s Legal Costs relating to the Repurchase Transactions and
      enforcement of remedies pursuant to the Repurchase Documents; and (c) to perform
      all other obligations contained in the Repurchase Documents, whether monetary
      or
      nonmonetary, when and as required by the Repurchase Documents, including all
      obligations of Seller relating to the Repurchase Transactions and the Security
      under the Repurchase Documents.

     

    (k) “Guarantor
      Litigation”
means
      any litigation, arbitration, investigation, or administrative proceeding of
      or
      before any court, arbitrator, or governmental authority, bureau or agency that
      relates to or affects this Guaranty or any asset(s) or property(ies) of
      Guarantor, including any litigation between or among Guarantor and any
      Co-Guarantor(s).

     

    (l) “Indebtedness”
means,
      for any Person: (a) obligations created, issued or incurred by such Person
      for
      borrowed money (whether by loan, the issuance and sale of debt securities or
      the
      sale of property to another Person subject to an understanding or agreement,
      contingent or otherwise, to repurchase such property from such Person); (b)
      obligations of such Person to pay the deferred purchase or acquisition price
      of
      property or services, other than trade accounts payable (other than for borrowed
      money) arising, and accrued expenses incurred, in the ordinary course of
      business so long as such trade accounts payable are payable within ninety (90)
      days of the date the respective goods are delivered or the respective services
      are rendered; (c) indebtedness of others secured by a Lien on the property
      of
      such Person, whether or not the respective indebtedness so secured has been
      assumed by such Person; (d) obligations of such Person in respect of letters
      of
      credit or similar instruments issued or accepted by banks and other financial
      institutions for account of such person; (e) Capital Leases of such Person;
      and
      (f) indebtedness of others guaranteed by such Person.

     

    (m) “Insolvency
      Proceeding”
means
      any case under Title 11 of the United States Code or any successor statute
      or
      any other insolvency, bankruptcy, reorganization, liquidation, or like
      proceeding, or other statute or body of law relating to creditors’ rights,
      whether brought under state, federal, or foreign law.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    (n) “Interest
      Expense”
means
      for any period, total interest expense, both expensed and capitalized, of
      Guarantor and its Subsidiaries for such period with respect to all outstanding
      Indebtedness of Guarantor and its Subsidiaries (including, without limitation,
      all commissions, discounts and other fees and charges owed with respect to
      letters of credit and bankers’ acceptance financing and net costs under interest
      rate protection agreements), determined on a consolidated basis in accordance
      with GAAP, net of interest income of Guarantor and its Subsidiaries for such
      period (determined on a consolidated basis in accordance with
      GAAP).

     

    (o) “Legal
      Costs”
means
      all reasonable costs and expenses actually incurred by Buyer in any Proceeding
      or in obtaining legal advice and assistance in connection with any Proceeding,
      any Guarantor Litigation, or any default by Seller under the Repurchase
      Documents or by Guarantor under this Guaranty (including any breach of a
      representation or warranty contained in this Guaranty), including reasonable
      attorneys’ fees, disbursements, and other charges actually incurred by Buyer’s
      attorneys, court costs and expenses, and charges for the services of paralegals,
      law clerks, and all other personnel whose services are charged to Buyer in
      connection with Buyer’s receipt of legal services.

     

    (p) “Lien”
means
      any mortgage, lien, encumbrance, charge or other security interest, whether
      arising under contract, by operation of law, judicial process or
      otherwise.

     

    (q) “Net
      Worth”
means
      the amount which would be included under stockholders’ equity on a consolidated
      balance sheet of Guarantor and its Subsidiaries determined on a consolidated
      basis in accordance with GAAP.

     

    (r) “Person”
means
      an individual, partnership, corporation, joint stock company, trust or
      unincorporated organization or a governmental agency or political subdivision
      thereof.

     

    (s) “Proceeding”
means
      any action, suit, arbitration, or other proceeding arising out of, or relating
      to the interpretation or enforcement of, this Guaranty or the Repurchase
      Documents, including (a) an Insolvency Proceeding; (b) any proceeding in which
      Buyer endeavors to realize upon any Security or to enforce any Repurchase
      Document(s) (including this Guaranty) against Seller or Guarantor; and (c)
      any
      proceeding commenced by Seller, Guarantor, or any Co-Guarantor against
      Buyer.

     

    (t) “Repurchase
      Documents”
means:
      (a) the Repurchase Documents, as defined in the recitals; (b) any other
      documents or instruments relating to any such documents executed by Seller,
      Guarantor, or any Co-Guarantor; and (c) any modifications, extensions, renewals,
      restatements, or replacements of any of the foregoing, whether or not consented
      to by Guarantor.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    (u) “Security”
means
      any security or collateral held by or for Buyer for the Repurchase Transactions
      or the Guarantied Obligations, whether real or personal property, including
      any
      mortgage, deed of trust, financing statement, security agreement, and other
      security document or instrument of any kind securing the Repurchase Transactions
      in whole or in part. “Security” shall include all assets and property of any
      kind whatsoever pledged or mortgaged to Buyer pursuant to the Security
      Documents.

     

    (v) “Seller”
means:
      (a) Seller as defined above, acting on its own behalf; (b) any estate created
      by
      the commencement of an Insolvency Proceeding affecting Seller; (c) any trustee,
      liquidator, sequestrator, or receiver of Seller or Seller’s property; and (d)
      any similar person duly appointed pursuant to any law governing any Insolvency
      Proceeding of Seller.

     

    (w) “State”
means
      the State of New York.

     

    (x) “Stock”
means
      all shares, options, warrants, general or limited partnership interests,
      membership interests or other ownership interests (regardless of how designated)
      of or in a corporation, partnership, limited liability company, trust or other
      entity, whether voting or nonvoting, including common stock, preferred stock,
      or
      any other “equity security” (as such term is defined in Rule 3a11-1 of the
      General Rules and Regulations promulgated by the Securities and Exchange
      Commission under the Securities Exchange Act of 1934, as amended).

     

    (y) “Subsidiary”
means
      as to any Person, a corporation, partnership, limited liability company or
      other
      entity of which shares of stock or other ownership interests having ordinary
      voting power (other than stock or such other ownership interests having such
      power only by reason of a contingency) to elect a majority of the board of
      directors or other managers of such corporation, partnership, limited liability
      company or other entity are at the time owned, or the management of which is
      otherwise controlled, directly or indirectly through one or more intermediaries,
      or both, by such Person.

     

    (z) “Tangible
      Net Worth”
means,
      as of a particular date,

     

    
      	 	
              (i)

            	
              all
                amounts that would be included under capital on a balance sheet of
                the
                Seller at such date, determined in accordance with GAAP,
                less

            


    

     

    
      	 	
              (ii)

            	
              the
                sum of (A) amounts owing to the Seller from Affiliates and (B) intangible
                assets.

            


    

     

    2. Absolute
      Guaranty of all Guarantied Obligations.
      Guarantor unconditionally and irrevocably guarantees Seller’s prompt and
      complete payment, observance, fulfillment, and performance of all Guarantied
      Obligations. Guarantor shall be personally liable for, and personally obligated
      to pay and perform, all Guarantied Obligations. All assets and property of
      Guarantor shall be subject to recourse if Guarantor fails to pay and perform
      any
      Guarantied Obligation(s) when and as required to be paid and performed pursuant
      to the Repurchase Documents.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    3. Nature
      and Scope of Liability.
      Guarantor’s liability under this Guaranty is primary and not secondary.
      Guarantor’s liability under this Guaranty shall be in the full amount of all
      Guarantied Obligations, including any interest, default interest, costs, and
      fees (including Legal Costs) payable by Seller under the Repurchase Documents,
      including any of the foregoing that would have accrued under the Repurchase
      Documents but for any Insolvency Proceeding.

     

    4. Changes
      in Repurchase Documents.
      Without
      notice to, or consent by, Guarantor, and in Buyer’s sole and absolute discretion
      and without prejudice to Buyer or in any way limiting or reducing Guarantor’s
      liability under this Guaranty, but subject to the terms of the Repurchase
      Agreement, Buyer may: (a) grant extensions of time, renewals or other
      indulgences or modifications to Seller, any Co-Guarantor or any other party
      under any of the Repurchase Document(s), (b) change, amend, or modify any
      Repurchase Document(s), (c) authorize the sale, exchange, release or
      subordination of any Security, (d) accept or reject additional Security in
      accordance with the terms of the Repurchase Agreement, (e) discharge or release
      any party or parties liable under the Repurchase Documents, (f) foreclose or
      otherwise realize on any Security, or attempt to foreclose or otherwise realize
      on any Security, whether such attempt is successful or unsuccessful, in
      accordance with the terms of the Repurchase Agreement, (g) accept or make
      compositions or other arrangements or file or refrain from filing a claim in
      any
      Insolvency Proceeding, (h) make loans to Seller in such amount(s) and at such
      time(s) as Buyer may determine, (i) credit payments in such manner and order
      of
      priority as Buyer may determine in its discretion provided such credits shall
      be
      consistent with the requirements of the Repurchase Agreement, and (j) otherwise
      deal with Seller and any Co-Guarantor and any other party related to the
      Repurchase Transactions or any Security as Buyer may determine in its sole
      and
      absolute discretion. Without limiting the generality of the foregoing,
      Guarantor’s liability under this Guaranty shall continue even if Buyer alters
      any obligations under the Repurchase Documents in any respect or Buyer’s or
      Guarantor’s remedies or rights against Seller are in any way impaired or
      suspended without Guarantor’s consent. If Buyer performs any of the actions
      described in this paragraph, then Guarantor’s liability shall continue in full
      force and effect even if Buyer’s actions impair, diminish or eliminate
      Guarantor’s subrogation, contribution, or reimbursement rights (if any) against
      Seller or any Co-Guarantor, or otherwise adversely affect Guarantor or expand
      Guarantor’s liability hereunder.

     

    5. Certain
      Financial Covenants.
      Guarantor shall not permit with respect to itself any of the following to be
      breached, as determined quarterly on a consolidated basis in conformity with
      GAAP as set forth in the financial statements of the Guarantor delivered
      pursuant to Section 15 hereof:

     

    (a) Minimum
      Tangible Net Worth.
      Tangible Net Worth to be less than $250 million;

     

    (b) Minimum
      Debt Service Coverage.
      Debt
      Service Coverage to be less than 1.75 to 1 in the aggregate;

     

    (c) Debt
      to Book Equity.
      Recourse Indebtedness to Net Worth to exceed 3.0 to 1; and

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    (d) Minimum
      Cash or Marketable Securities.
      Cash or
      marketable securities, approved by Buyer, based on Guarantor’s ratio of recourse
      Indebtedness to Net Worth, to be less than the following:

     

    
      	
              Debt
                to Book Equity Ratio

            	 	
              Minimum
                Cash or Marketable Securities

            
	 	 	 
	
              Above
                2:1

            	 	
              $10
                million

            
	 	 	 
	
              Between
                1:1 and 2:1

            	 	
              $5
                million

            
	 	 	 
	
              Below
                1:1

            	 	
              $3
                million

            


    

     

    6. Nature
      of Guaranty.
      Guarantor’s liability under this Guaranty is a guaranty of payment and
      performance of the Guarantied Obligations, and is not a guaranty of collection
      or collectibility. Guarantor’s liability under this Guaranty is not conditioned
      or contingent upon the genuineness, validity, regularity or enforceability
      of
      any of the Repurchase Documents. Guarantor’s liability under this Guaranty is a
      continuing, absolute, and unconditional obligation under any and all
      circumstances whatsoever (except as expressly stated, if at all, in this
      Guaranty), without regard to the validity, regularity or enforceability of
      any
      of the Guarantied Obligations. Guarantor acknowledges that Guarantor is fully
      obligated under this Guaranty even if Seller had no liability at the time of
      execution of the Repurchase Documents or later ceases to be liable under any
      Repurchase Document, whether pursuant to Insolvency Proceedings or otherwise.
      Guarantor shall not be entitled to claim, and irrevocably covenants not to
      raise
      or assert, any defenses against the Guarantied Obligations that would or might
      be available to Seller, other than actual payment and performance of all
      Guarantied Obligations in full in accordance with their terms. Guarantor waives
      any right to compel Buyer to proceed first against Seller, any Co-Guarantor(s)
      or any Security before proceeding against Guarantor. Guarantor agrees that
      if
      any of the Guarantied Obligations are or become void or unenforceable (because
      of inadequate consideration, lack of capacity, Insolvency Proceedings, or for
      any other reason), then Guarantor’s liability under this Guaranty shall continue
      in full force with respect to all Guarantied Obligations as if they were and
      continued to be legally enforceable, all in accordance with their terms before
      giving effect to the Insolvency Proceedings. Guarantor also recognizes and
      acknowledges that its liability under this Guaranty may be more extensive in
      amount and more burdensome than that of Seller. Guarantor waives any defense
      that might otherwise be available to Guarantor based on the proposition that
      a
      guarantor’s liability cannot exceed the liability of the principal. Guarantor
      intends to be fully liable under the Guarantied Obligations regardless of the
      scope of Seller’s liability thereunder. Without limiting the generality of the
      foregoing, if the Guarantied Obligations are “nonrecourse” as to Seller or
      Seller’s liability for the Guarantied Obligations is otherwise limited in some
      way, Guarantor nevertheless intends to be fully liable, to the full extent
      of
      all of Guarantor’s assets, with respect to all the Guarantied Obligations, even
      though Seller’s liability for the Guarantied Obligations may be more limited in
      scope or less burdensome. Guarantor waives any defenses to this Guaranty arising
      or purportedly arising from the manner in which Buyer disburses the Repurchase
      Transactions to Seller or otherwise, or any waiver of the terms of any
      Repurchase Document by Buyer or other failure of Buyer to require full
      compliance with the Repurchase Documents. Guarantor’s liability under this
      Guaranty shall continue until all sums due under the Repurchase Documents have
      been paid in full and all other performance required under the Repurchase
      Documents has been rendered in full, except as expressly provided otherwise
      (if
      at all) in this Guaranty. Guarantor’s liability under this Guaranty shall not be
      limited or affected in any way by any impairment or any diminution or loss
      of
      value of any Security whether caused by (a) hazardous substances, (b) Buyer’s
      failure to perfect a security interest in any Security, (c) any disability
      or
      other defense(s) of Seller or any Co-Guarantor(s), (d) any acts or omissions
      of
      Buyer; or (e) any breach by Seller of any representation or warranty contained
      in any Repurchase Document.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    7. Waivers
      of Rights and Defenses.
      Guarantor waives any right to require Buyer to (a) proceed against Seller or
      any
      Co-Guarantor(s), (b) proceed against or exhaust any Security, or (c) pursue
      any
      other right or remedy for Guarantor’s benefit. Guarantor agrees that Buyer may
      proceed against Guarantor with respect to the Guarantied Obligations without
      taking any actions against Seller or any Co-Guarantor(s) and without proceeding
      against or exhausting any Security. Guarantor agrees that Buyer may
      unqualifiedly exercise in its sole discretion (or may waive or release,
      intentionally or unintentionally) any or all rights and remedies available
      to it
      against Seller or any Co-Guarantor(s) without impairing Buyer’s rights and
      remedies in enforcing this Guaranty, under which Guarantor’s liabilities shall
      remain independent and unconditional. Guarantor agrees and acknowledges that
      Buyer’s exercise (or waiver or release) of certain of such rights or remedies
      may affect or eliminate Guarantor’s right of subrogation or recovery against
      Seller (if any) and that Guarantor may incur a partially or totally
      nonreimbursible liability in performing under this Guaranty. Guarantor has
      assumed the risk of any such loss of subrogation rights, even if caused by
      Buyer’s acts or omissions. If Buyer’s enforcement of rights and remedies, or the
      manner thereof, limits or precludes Guarantor from exercising any right of
      subrogation that might otherwise exist, then the foregoing shall not in any
      way
      limit Buyer’s rights to enforce this Guaranty. Without limiting the generality
      of any other waivers in this Guaranty, Guarantor expressly waives any statutory
      or other right that Guarantor might otherwise have to: (i) limit Guarantor’s
      liability after a nonjudicial foreclosure sale to the difference between the
      Guarantied Obligations and the fair market value of the property or interests
      sold at such nonjudicial foreclosure sale or to any other extent, (ii) otherwise
      limit Buyer’s right to recover a deficiency judgment after any foreclosure sale,
      or (iii) require Buyer to exhaust its Security before Buyer may obtain a
      personal judgment for any deficiency. Notwithstanding anything in the Repurchase
      Agreement to the contrary, any proceeds of a foreclosure or similar sale shall
      be applied first to any obligations of Seller that also constitute Guarantied
      Obligations within the meaning of this Guaranty. Guarantor acknowledges and
      agrees that any nonrecourse or exculpation provided for in any Repurchase
      Document, or any other provision of a Repurchase Document limiting Buyer’s
      recourse to specific Security or limiting Buyer’s right to enforce a deficiency
      judgment against Seller or any other person, shall have absolutely no
      application to Guarantor’s liability under this Guaranty. To the extent that
      Buyer collects or receives any sums or payments from Seller or any Co-Guarantor,
      Buyer shall apply such amounts first to that portion of Seller’s obligations to
      Buyer (if any) that is covered by this Guaranty.

     

    8. Additional
      Waivers.
      Guarantor waives diligence and all demands, protests, presentments and notices
      of every kind or nature, including notices of protest, dishonor, nonpayment,
      acceptance of this Guaranty and the creation, renewal, extension, modification
      or accrual of any of the Guarantied Obligations. Guarantor further waives the
      right to plead any and all statutes of limitations as a defense to Guarantor’s
      liability under this Guaranty or the enforcement of this Guaranty. No failure
      or
      delay on Buyer’s part in exercising any power, right or privilege under this
      Guaranty shall impair or waive any such power, right or privilege.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    9. No
      Duty to Prove Loss.
      To the
      extent that Guarantor at any time incurs any liability under this Guaranty,
      Guarantor shall immediately pay Buyer (to be applied on account of the
      Guarantied Obligations) the amount provided for in this Guaranty, without any
      requirement that Buyer demonstrate that Buyer has currently suffered any loss
      or
      that Buyer has otherwise exercised (to any degree) or exhausted any of Buyer’s
      rights or remedies with respect to Seller or any Security.

     

    10. Full
      Knowledge.
      Guarantor acknowledges, represents, and warrants that Guarantor has had a full
      and adequate opportunity to review the Repurchase Documents, the transaction
      contemplated by the Repurchase Documents, and all underlying facts relating
      to
      such transaction. Guarantor represents and warrants that Guarantor fully
      understands: (a) the remedies Buyer may pursue against Seller and/or Guarantor
      in the event of a default under the Repurchase Documents, (b) the value (if
      any)
      and character of any Security, and (c) Seller’s financial condition and ability
      to perform under the Repurchase Documents. Guarantor agrees to keep itself
      fully
      informed regarding all aspects of the foregoing and the performance of Seller’s
      obligations to Buyer. Buyer has no duty, whether now or in the future, to
      disclose to Guarantor any information pertaining to Seller, the Repurchase
      Transactions or any Security. If at any time provided for in the Repurchase
      Documents, Guarantor agrees and acknowledges that an Insolvency Proceeding
      affecting Guarantor, or other actions or events relating to Guarantor (including
      Guarantor’s change in financial position), as set forth in the Repurchase
      Documents, may be event(s) of default under the Repurchase
      Documents.

     

    11. Representations
      and Warranties.
      Guarantor acknowledges, represents, and warrants as follows, and acknowledges
      that Buyer is relying upon the following acknowledgments, representations,
      and
      warranties by Guarantor in making the Repurchase Transactions:

     

    (a) Repurchase
      Documents.
      All
      Repurchase Documents to which Guarantor is a party have been duly authorized,
      executed, and delivered by Guarantor, and are fully valid, binding, and
      enforceable against Guarantor, in accordance with their terms, subject to
      bankruptcy, insolvency, and other limitations on creditors’ rights generally and
      to equitable principles. Seller is validly formed, in good standing, and
      obligated under the Repurchase Documents in accordance with their
      terms.

     

    (b) No
      Conflict.
      The
      execution, delivery, and performance of this Guaranty will not violate any
      provision of any law, regulation, judgment, order, decree, determination, or
      award of any court, arbitrator or governmental authority, or of any mortgage,
      indenture, loan, or security agreement, lease, contract or other agreement,
      instrument or undertaking to which Guarantor is a party or that purports to
      bind
      Guarantor or any of Guarantor’s property or assets.

     

    (c) No
      Third Party Consent Required.
      No
      consent of any person (including creditors or partners, members, stockholders,
      or other owners of Guarantor) is required in connection with Guarantor’s
      execution of this Guaranty or performance of Guarantor’s obligations under this
      Guaranty (other than consents that have been obtained). Guarantor’s execution
      of, and obligations under, this Guaranty are not contingent upon any consent,
      license, permit, approval, or authorization of, exemption by, notice or report
      to, or registration, filing, or declaration with, any governmental authority,
      bureau, or agency, whether local, state, federal, or foreign.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    (d) Authority
      and Execution.
      Guarantor has full power, authority, and legal right to execute, deliver and
      perform its obligations under this Guaranty. Guarantor has taken all necessary
      corporate and legal action to authorize this Guaranty, which has been duly
      executed and delivered and is a legal, valid, and binding obligation of
      Guarantor, enforceable in accordance with its terms, subject to bankruptcy,
      insolvency and other limitations on creditors’ rights generally and to equitable
      principles.

     

    (e) No
      Representations by Buyer.
      Guarantor delivers this Guaranty based solely upon Guarantor’s own independent
      investigation and based in no part upon any representation, statement, or
      assurance by Buyer.

     

    (f) No
      Misstatements.
      No
      information, exhibit, report or certificate furnished by Seller or Guarantor
      to
      Buyer in connection with the Repurchase Transactions or any Repurchase Document
      contains any material misstatement of fact or has omitted to state a material
      fact or any fact necessary to make the statements contained therein not
      materially misleading.

     

    12. Reimbursement
      and Subrogation Rights.
      Except
      to the extent that Buyer notifies Guarantor to the contrary in writing from
      time
      to time:

     

    (a) General
      Deferral of Reimbursement.
      Guarantor waives any right to be reimbursed by Seller for any payment(s) made
      by
      Guarantor on account of the Guarantied Obligations, unless and until all
      Guarantied Obligations have been paid in full and all periods within which
      such
      payments may be set aside or invalidated have expired. Guarantor acknowledges
      that Guarantor has received adequate consideration for execution of this
      Guaranty by virtue of Buyer’s entering into the Repurchase Transactions (which
      benefits Guarantor, as an owner or principal of Seller) and Guarantor does
      not
      require or expect, and is not entitled to, any other right of reimbursement
      against Seller as consideration for this Guaranty.

     

    (b) Deferral
      of Subrogation and Contribution.
      Guarantor agrees it shall have no right of subrogation against Seller or Buyer,
      no right of subrogation against any Security, and no right of contribution
      against any Co-Guarantor unless and until in Buyer’s reasonable determination:
      (a) such right of subrogation does not violate (or otherwise produce any result
      adverse to Buyer under) any applicable law, including any bankruptcy or
      insolvency law; (b) all amounts due under the Repurchase Documents have been
      paid in full and all other performance required under the Repurchase Documents
      has been rendered in full to Buyer; (c) all periods within which such payment
      and performance may be set aside or invalidated have expired; and (d) Buyer
      has
      released, transferred or disposed of all of its right, title and interest in
      all
      Security (such deferral of Guarantor’s subrogation and contribution rights, the
“Subrogation Deferral”).

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    (c) Effect
      of Invalidation.
      To the
      extent that a court of competent jurisdiction determines that Guarantor’s
      Subrogation Deferral is void or voidable for any reason, Guarantor agrees,
      notwithstanding any acts or omissions by Buyer, that: (a) Guarantor’s rights of
      subrogation against Seller or Buyer and Guarantor’s right of subrogation against
      any Security shall at all times be junior and subordinate to Buyer’s rights
      against Seller and to Buyer’s right, title, and interest in such Security; and
      (b) Guarantor’s right of contribution against any Co-Guarantor shall be junior
      and subordinate to Buyer’s rights against such Co-Guarantor.

     

    13. Claims
      in Insolvency Proceeding.
      Guarantor shall not file any claim in any Insolvency Proceeding affecting Seller
      unless Guarantor simultaneously assigns and transfers such claim to Buyer,
      without consideration, pursuant to documentation fully satisfactory to Buyer.
      Guarantor shall automatically be deemed to have assigned and transferred such
      claim to Buyer whether or not Guarantor executes documentation to such effect.
      By executing this Guaranty, Guarantor hereby authorizes Buyer (and grants Buyer
      a power of attorney coupled with an interest, and hence irrevocable) to execute
      and file such assignment and transfer documentation on Guarantor’s behalf. Buyer
      shall have the sole right to vote, receive distributions, and exercise all
      other
      rights with respect to any such claim; provided, however, that if and when
      the
      Guarantied Obligations have been paid in full Buyer shall release to Guarantor
      any further payments received on account of any such claim.

     

    14. Buyer’s
      Disgorgement of Payments.
      Upon
      payment of all or any portion of the Guarantied Obligations, Guarantor’s
      obligations under this Guaranty shall continue and remain in full force and
      effect if all or any part of such payment is, pursuant to any Insolvency
      Proceeding or otherwise, avoided or recovered directly or indirectly from Buyer
      as a preference, fraudulent transfer, or otherwise irrespective of (a) any
      notice of revocation given by Guarantor prior to such avoidance or recovery,
      or
      (b) payment in full of the Repurchase Transactions. Guarantor’s liability under
      this Guaranty shall continue until all periods have expired within which Buyer
      could (on account of Insolvency Proceedings, whether or not then pending,
      affecting Seller, any Co-Guarantor, or any other person) be required to return,
      repay, or disgorge any amount paid at any time on account of the Guarantied
      Obligations.

     

    15. Financial
      Information.
      Within
      ninety days after the end of each calendar year or other fiscal year of
      Guarantor (or within five business days after filing, in the case of tax
      returns) and within forty-five days after the end of each of the first three
      calendar quarters, and within fifteen business days after Buyer’s request made
      at any time or from time to time, Guarantor shall deliver to Buyer: (a) complete
      and current financial statements of Guarantor (audited for the annual financial
      statements and unaudited for the financial statements of the first three
      calendar quarters), in form and scope reasonably satisfactory to Buyer; (b)
      copies of Guarantor’s tax returns; and (c) such other financial information
      relating to Guarantor as Buyer may reasonably request.

     

    16. Consent
      to Jurisdiction.
      Guarantor agrees that any Proceeding to enforce this Guaranty may be brought
      in
      any state or federal court located in the State, as Buyer may select from time
      to time. By executing this Guaranty, Guarantor irrevocably accepts and submits
      to the nonexclusive personal jurisdiction of each of the aforesaid courts,
      generally and unconditionally with respect to any such Proceeding. Guarantor
      agrees not to assert any basis for transferring jurisdiction of any such
      proceeding to another court. Guarantor further agrees that a final judgment
      against Guarantor in any Proceeding shall be conclusive evidence of Guarantor’s
      liability for the full amount of such judgment.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    17. Merger;
      No Conditions; Amendments.
      This
      Guaranty and documents referred to herein contain the entire agreement among
      the
      parties with respect to the matters set forth in this Guaranty. This Guaranty
      supersedes all prior agreements among the parties with respect to the matters
      set forth in this Guaranty. No course of prior dealings among the parties,
      no
      usage of trade, and no parol or extrinsic evidence of any nature shall be used
      to supplement, modify, or vary any terms of this Guaranty. This Guaranty is
      unconditional. There are no unsatisfied conditions to the full effectiveness
      of
      this Guaranty. No terms or provisions of this Guaranty may be changed, waived,
      revoked, or amended without Buyer’s written agreement. If any provision of this
      Guaranty is determined to be unenforceable, then all other provisions of this
      Guaranty shall remain fully effective.

     

    18. Governing
      Law; Enforcement.
      This
      Guaranty shall be governed solely by New York internal law (disregarding such
      state’s law on conflict of laws) notwithstanding the location of any Security.
      Guarantor acknowledges that any restrictions, limitations, and prohibitions
      set
      forth in New York Real Property Actions and Proceedings Law Sections 1301 and
      1371 that would or might otherwise limit or establish conditions to Buyer’s
      recovery of a judgment against Guarantor if the Security were located in New
      York State shall have absolutely no application to Buyer’s enforcement of this
      Guaranty as against Guarantor, except to the extent that real property Security
      is located within the State of New York. Guarantor acknowledges that this
      Guaranty is an “instrument for the payment of money only,” within the meaning of
      New York Civil Practice Law and Rules Section 3213. In the event of any
      Proceeding between Seller or Guarantor and Buyer, including any Proceeding
      in
      which Buyer enforces or attempts to enforce this Guaranty or the Repurchase
      Transactions against Seller or Guarantor, or in the event of any Guarantor
      Litigation, Guarantor shall reimburse Buyer for all Legal Costs of such
      Proceeding.

     

    19. Fundamental
      Changes.
      Guarantor shall not wind up, liquidate, or dissolve its affairs or enter into
      any transaction of merger or consolidation (except a transaction of merger
      or
      consolidation in accordance with the Repurchase Agreement), or sell, lease,
      or
      otherwise dispose of (or agree to do any of the foregoing) all or substantially
      all of its property or assets, or change its state of formation or entity
      status, without Buyer’s prior written consent.

     

    20. Further
      Assurances.
      Guarantor shall execute and deliver such further documents, and perform such
      further acts, as Buyer may request to achieve the intent of the parties as
      expressed in this Guaranty, provided in each case that any such documentation
      is
      consistent with this Guaranty and with the Repurchase Documents.

     

    21. Supplemental
      Provisions.

     

    (a) Other
      Guaranties.
      This
      Guaranty is in addition to and independent of any guaranty(ies) executed by
      any
      Co-Guarantors and any other guaranties of Seller’s obligations executed by
      Guarantor in favor of Buyer. This Guaranty shall in no way limit or lessen
      any
      other liability, arising in any way, that Guarantor may have for the payment
      of
      any indebtedness of Seller to Buyer.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

       

    

    (b) Multiple
      Guarantors.
      If more
      than one person or entity has executed this Guaranty (or any other guaranty
      of
      the Repurchase Transactions), then all such persons and entities shall be
      jointly and severally liable under this Guaranty. Guarantor shall hold harmless,
      defend, protect, and indemnify Buyer from any Legal Costs and all other claims
      of every nature that may arise as a result of any dispute between or among
      any
      or all of Guarantor, Seller, any Co-Guarantors, and any other persons or
      entities.

     

    (c) Certain
      Entities.
      If
      Seller or Guarantor is a partnership, limited liability company, or other
      unincorporated association, then: (a) Guarantor’s liability shall not be
      impaired by changes in the name or composition of Seller or Guarantor; and
      (b)
      the withdrawal or removal of any partner(s) or member(s) of Seller or Guarantor
      shall not diminish Guarantor’s liability or (if Guarantor is a partnership) the
      liability of any withdrawing general partner of Guarantor.

     

    (d) Status
      of Seller.
      If this
      Guaranty defines more than one person as Seller, then any reference to Seller
      means any one or all of them, whether their liability is joint or
      several.

     

    (e) Counterparts.
      This
      Guaranty may be executed in counterparts. The effectiveness of this Guaranty
      against each Guarantor executing this Guaranty is not conditioned upon execution
      and/or delivery of this Guaranty by any Co-Guarantor.

     

    22. WAIVER
      OF TRIAL BY JURY. GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
      ARISING FROM OR RELATING TO THIS GUARANTY OR THE REPURCHASE DOCUMENTS OR ANY
      OBLIGATION(S) OF GUARANTOR HEREUNDER OR UNDER THE REPURCHASE
      DOCUMENTS.

     

    23. Miscellaneous.

     

    (a) Assignability.
      Buyer
      may assign this Guaranty (in whole or in part) together with any one or more
      of
      the Repurchase Documents to any Person permitted under the Repurchase Agreement,
      without in any way affecting Guarantor’s or Seller’s liability. Upon request in
      connection with any such assignment Guarantor shall deliver such documentation
      as Buyer shall reasonably request. Buyer may from time to time designate any
      Buyer Entity to hold and exercise any or all of Buyer’s rights and remedies
      under this Guaranty. This Guaranty shall benefit Buyer and its successors and
      assigns (including any Buyer Entity) and shall bind Guarantor and its heirs,
      executors, administrators and successors. Guarantor may not assign this
      Guaranty, in whole or in part.

     

    (b) Notices.
      All
      notices, consents, approvals and requests required or permitted hereunder shall
      be given in writing and shall be effective for all purposes if hand delivered
      or
      sent by (a) hand delivery, with proof of attempted delivery, (b) certified
      or
      registered United States mail, postage prepaid, (c) expedited prepaid delivery
      service, either commercial or United States Postal Service, with proof of
      attempted delivery, or (d) by telecopier (with answerback acknowledged) provided
      that such telecopied notice must also be delivered by one of the means set
      forth
      in (a), (b) or (c) above, addressed if to Buyer at 60 Wall Street, New York,
      New
      York 10005, Attention: Stephen Choe, Telecopier Number (212)
      250-6911,
      and if
      to Guarantor at 40 East 52nd
      Street,
      New York, New York 10022, Attention: Richard Shea, Telecopier Number (212)
      754-5579, or at such other address and person as shall be designated from time
      to time by any party hereto, as the case may be, in a written notice to the
      other parties hereto in the manner provided for in this Section. A copy of
      all
      notices shall be delivered concurrently to the following: Dechert LLP, 4000
      Bell
      Atlantic Tower, 1717 Arch Street, Philadelphia, PA 19103, Attention: Richard
      Jones, Esquire, Telefax Number: 215.994.2222. A notice shall be deemed to have
      been given: (a) in the case of hand delivery, at the time of delivery, (b)
      in
      the case of a registered or certified mail, when delivery or the first attempted
      delivery on a Business Day, (c) in the case of expedited prepaid delivery upon
      the first attempted delivery on a Business Day, or (d) in the case of
      telecopier, upon receipt of answerback confirmation, provided that such
      telecopied notice was also delivered as required in this Section. A party
      receiving a notice which does not comply with the technical requirements for
      notice under this Section may elect to waive any deficiencies and treat the
      notice as properly given.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    (c) Interpretation.
      The word
“include” and its variants shall be interpreted in each case as if followed by
      the words “without limitation.”

     

    24. Business
      Purposes.
      Guarantor acknowledges that this Guaranty, although executed in Guarantor’s
      individual capacity, is executed and delivered for business and commercial
      purposes, and not for personal, family, household, consumer, or agricultural
      purposes. Guarantor acknowledges that Guarantor is not entitled to, and does
      not
      require the benefits of, any rights, protections, or disclosures that would
      or
      may be required if this Guaranty were given for personal, family, household,
      consumer, or agricultural purposes. Guarantor acknowledges that none of
      Guarantor’s obligation(s) under this Guaranty constitute(s) a “debt” within the
      meaning of the United States Fair Debt Collection Practices Act, 15 U.S.C.
§
1692a(5), and accordingly compliance with the requirements of such Act is not
      required if Buyer (directly or acting through its counsel) makes any demand
      or
      commences any action to enforce this Guaranty.

     

    25. No
      Third-Party Beneficiaries.
      This
      Guaranty is executed and delivered for the benefit of Buyer and its heirs,
      successors, and permitted assigns, and is not intended to benefit any third
      party.

     

    26. CERTAIN
      ACKNOWLEDGMENTS BY GUARANTOR.
      GUARANTOR ACKNOWLEDGES THAT BEFORE EXECUTING THIS GUARANTY: (A) GUARANTOR HAS
      HAD THE OPPORTUNITY TO REVIEW IT WITH AN ATTORNEY OF GUARANTOR’S CHOICE; (B)
      BUYER HAS RECOMMENDED TO GUARANTOR THAT GUARANTOR OBTAIN SEPARATE COUNSEL,
      INDEPENDENT OF SELLER’S COUNSEL, REGARDING THIS GUARANTY; AND (C) GUARANTOR HAS
      CAREFULLY READ THIS GUARANTY AND UNDERSTOOD THE MEANING AND EFFECT OF ITS TERMS,
      INCLUDING ALL WAIVERS AND ACKNOWLEDGMENTS CONTAINED IN THIS GUARANTY AND THE
      FULL EFFECT OF SUCH WAIVERS AND THE SCOPE OF GUARANTOR’S OBLIGATIONS UNDER THIS
      GUARANTY.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    


    IN
      WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date
      indicated below.

     

    
      	Date: December 23, 2004	 	 
	 	 	 
	 	GUARANTOR
	 	 
	 	Anthracite Capital, Inc.
	 
 	 
 	 
 
	 	By:  	/s/
              Robert Friedberg
	 	
              
Name:
              Robert Friedberg
	 	Title: Vice
              President


    

     

    
      	Acknowledgment(s)	 	 	 
	 	 	 	 	 
	Deutsche Bank AG, Cayman
              Islands
              Branch	 	 	 
	 	 	 	 	 
	By:	/s/
              Christopher
              Tognola	 	 	 
	 	
              
                

              

              Name: Christopher
                Tognola

              Title: Vice
                President

            	 	 	
            


    

     

    
      	By:	/s/
              Christine
              Belbusti	 	 	 
	 	
              
                

              

              Name: Christine
                Belbusti

              Title: Vice
                President

            	 	 	
            


    

     

    
      	Anthracite Funding, LLC	 	 	 
	 	 	 	 	 
	Deutsche Bank AG, Cayman
              Islands
              Branch	 	 	 
	 	 	 	 	 
	By:	Anthracite Capital, Inc., its sole
              member	 	 	 
	 	 	 	 	 
	By:	/s/
              Robert
              Friedberg	 	 	 
	 	
              
                

              

              Name: Robert
                Friedberg

              Title: Vice
                President

            	 	 	
            


    

     

    
      
         

      

      
        15