Document:

<PAGE>

                                  EXHIBIT 10.18

                          REGISTRATION RIGHTS AGREEMENT

          THIS REGISTRATION RIGHTS AGREEMENT, dated as of _______________, 2003
(this "Agreement"), is made by and between AMBIENT CORPORATION, a Delaware
corporation with headquarters located at 79 Chapel Street, Suite 300, Newton, MA
02458 (the "Company"), and each entity named on a signature page hereto (each,
an "Initial Investor") (each agreement with an Initial Investor being deemed a
separate and independent agreement between the Company and such Initial
Investor, except that each Initial Investor acknowledges and consents to the
rights granted to each other Initial Investor under such agreement).

                              W I T N E S S E T H:

          WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement-A, dated as of _____________, 2003, between the
Initial Investor and the Company (the "Securities Purchase Agreement";
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Securities Purchase Agreement), the Company has agreed to issue
and sell to the Initial Investors the Debentures and the Warrants; and

          WHEREAS, the Debentures are convertible into shares of Common Stock
(the "Conversion Shares"; which term, for purposes of this Agreement, shall
include shares of Common Stock of the Company issuable in lieu of accrued
interest through the Maturity Date of the Debentures, as that term is defined in
and as contemplated by the Debentures) upon the terms and subject to the
conditions contained in the Debentures; and

          WHEREAS, the Warrant Shares may be issued upon the exercise of the
Warrants; and

          WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities (as defined
below);

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:

          1.   DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:

          "Company Counsel" means Aboudi & Brounstein

          "Closing Date" shall mean the Initial Closing Date.

<PAGE>

          "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.

          "Held Shares Value" means, for shares of Common Stock acquired by the
Investor upon a conversion of a Debenture within the thirty (30) days preceding
the Restricted Sale Date, but not yet sold by the Investor, the principal amount
of the Debentures converted into such Conversion Shares; provided, however, that
if the Investor effected more than one such conversion during such thirty (30)
day period and sold less than all of such shares, the sold shares shall be
deemed to be derived first from the conversions in the sequence of such
conversions (that is, for example, until the number of shares from the first of
such conversions have been sold, all shares shall be deemed to be from the first
conversion; thereafter, from the second conversion until all such shares are
sold).

          "Investor" means the Initial Investor and any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Debentures or Registrable
Securities.

          "Payment Shares" means shares of Common Stock issued by the Company as
provided in Section 2(b) below.

          "Permitted Suspension Period" means one or more suspension periods
during any consecutive 12-month period which suspension periods, in the
aggregate, do not exceed fifty (50) days, provided, however, that no one such
suspension period shall either (i) be for more than twenty (20) days or (ii)
begin less than ten (10) business days after the last day of the preceding
suspension (whether or not such last day was during or after a Permitted
Suspension Period).

          "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the registration statement would be detrimental to the business and affairs of
the Company; or (ii) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a registration statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the registration statement would be
materially misleading absent the inclusion of such information.

          "Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.

                                        2
<PAGE>

          "Registrable Securities" means, collectively, the Conversion Shares,
the Warrant Shares, the Additional Shares and the Payment Shares.

          "Registration Statement" means a registration statement of the Company
under the Securities Act covering Registrable Securities on Form SB-2, if the
Company is then eligible to file using such form, and if not eligible, on Form
S-1 or other appropriate form.

          "Required Effective Date" means, initially, the Initial Required
Effective Date or Increased Required Effective Date (as defined below).

          "Required Filing Date" means October 31, 2003.

          "Restricted Sale Date" means the first date, other than a date during
a Permitted Suspension Period (as defined below), on which the Investor is
restricted from making sales of Registrable Securities covered by any previously
effective Registration Statement.

          2.   REGISTRATION.

          (A)  MANDATORY REGISTRATION.

          (i)  The Company shall prepare and file with the SEC, as soon as
practible after the Closing Date but no later than the Required Filing Date, a
Registration Statement registering for resale by the Investor a sufficient
number of shares of Common Stock for the Initial Investors to sell the
Registrable Securities, but in no event less than the number of shares equal to
one hundred fifty percent (150%) of the sum of (x) the number of shares into
which the Debentures and all interest thereon through their respective Maturity
Dates would be convertible at the time of filing of such Registration Statement
(assuming for such purposes that all Debentures, including the Additional
Debentures, had been issued, had been eligible to be converted, and had been
converted, into Conversion Shares in accordance with their terms, whether or not
such issuance, eligibility, accrual of interest or conversion had in fact
occurred as of such date) and (y) the number of Warrant Shares covered by the
Warrants (assuming for such purposes that all the Warrants, including the
Additional Warrants, had been issued, had been eligible to be exercised and had
been exercised for the issuance of Warrant Shares in accordance with their
terms, whether or not such issuance, eligibility or exercise had in fact
occurred as of such date). Unless otherwise specifically agreed to in writing in
advance by the Lender, the Registration Statement (W) shall include only (1) the
Registrable Securities, (2) the shares issuable on exercise of warrants issued
to the Finder in connection with the transactions contemplated by the
Transaction Agreements, (3) the shares issued or issuable in connection with the
transactions consummated on or about September 8, 2003 (including shares
issuable upon the exercise of warrants issued to the Finder in such
transaction), (4) shares issuable in connection with a Permitted New Transaction
(provided, however, that if not included in the initial filing of the
Registration Statement, such shares may be included in a pre-effective amendment
only if such inclusion will not substantially delay the effectiveness of the

                                        3
<PAGE>

Registration Statement), and (5) the shares issued or issuable by the Company
which are identified on SCHEDULE I attached hereto, and (X) shall also state
that, in accordance with Rule 416 and 457 under the Securities Act, it also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Debentures to prevent dilution resulting
from stock splits, or stock dividends.

          (ii)  The Company will use its reasonable best efforts to cause such
Registration Statement to be declared effective on a date (the "Initial Required
Effective Date") which is no later than the earlier of (Y) five (5) days after
oral or written notice by the SEC that it may be declared effective or (Z)
January 31, 2004.

          (B)   PAYMENTS BY THE COMPANY.

          (i)   If the Registration Statement covering the Registrable
Securities is not filed as contemplated by this Agreement with the SEC by the
Required Filing Date, the Company will make payment to the Initial Investor in
such amounts and at such times as shall be determined pursuant to this Section
2(b).

          (ii)  If the Registration Statement covering the Registrable
Securities is not effective by the relevant Required Effective Date or if there
is a Restricted Sale Date, then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).

          (iii) The amount (the "Periodic Amount") to be paid by the Company to
the Initial Investor shall be determined as of each Computation Date (as defined
below) and such amount shall be equal to the Periodic Amount Percentage (as
defined below) of the Purchase Price for all Debentures for the period from the
date following the relevant Required Filing Date or the Required Effective Date
or a Restricted Sale Date, as the case may be, to the first relevant Computation
Date, and thereafter to each subsequent Computation Date. The "Periodic Amount
Percentage" means (A) one percent (1%) of the Purchase Price of all Debentures
for such period to the first relevant Computation Date after the relevant
Required Filing Date, Required Effective Date or Restricted Sale Date, as the
case may be, (B) two percent (2%) of the Purchase Price of all Debentures to the
first next succeeding Computation Date, and (C) three percent (3%) of the
Purchase Price of all Debentures to each Computation Date thereafter; in each
case pro rated on a daily basis if the period is less than 30 days. Anything in
the preceding provisions of this paragraph (iii) to the contrary
notwithstanding, after the relevant Effective Date the Purchase Price shall be
deemed to refer to the sum of (X) the principal amount of all Debentures not yet
converted and (Y) the Held Shares Value. By way of illustration and not in
limitation of the foregoing, if the Registration Statement is filed on or before
the Required Filing Date, but is not declared effective until seventy-five (75)
days after the Initial Required Effective Date, the Periodic Amount will
aggregate four and one-half percent (4.5%) of the Purchase Price of the
Debentures theretofore issued (1% for days 1-30, plus 2% for days 31-60, plus
1.5% for days 61-75).

                                        4
<PAGE>

          (iv)   Each Periodic Amount, if any, will be payable by the Company,
except as provided in the other provisions of this subparagraph (iv), in cash or
other immediately available funds to the Investor (1) on the day after the
Required Filing Date, the Required Effective Date or a Restricted Sale Date, as
the case may be, and (2) on the earlier of (A) each thirtieth day thereafter,
(B) the third business day after the date the Registration Statement is filed or
is declared effective, or (C) the third business day after the Registration
Statement has its restrictions removed after the relevant Effective Date, in
each case without requiring demand therefor by the Investor.

          (v)    Notwithstanding the provisions of the immediately preceding
subparagraph (iv),

     (A) at the option of the Company, exercisable in its discretion on the date
     the Periodic Amount is due; provided, however, that the Company may
     exercise this discretion if, but only if the Effective Date is within one
     hundred fifty (150) days after the Closing Date and the Registration
     Statement covering the Payment Shares is then effective; or

     (B) at the option of the Investor, exercisable in its sole and absolute
     discretion by written notice to the Company at any time before the Periodic
     Amount is paid,

all or a portion of the Periodic Amount shall be paid by the issuance of
additional shares of Common Stock to the Investor ("Payment Shares") in an
amount equal to the Periodic Amount being paid thereby divided by the then
applicable Conversion Price; provided, further that the Delivery Date for the
Payment Shares shall be three (3) business days after the date the Periodic
Amount is due (if the election is made by the Company) or after the Investor
gives the notice contemplated by clause (ii) of this subparagraph.

          (vi)   The parties acknowledge that the damages which may be incurred
by the Investor if the Registration Statement is not filed by the Required
Filing Date or the Registration Statement has not been declared effective by a
Required Effective Date, including if the right to sell Registrable Securities
under a previously effective Registration Statement is suspended or the shares
of the Company's stock are not listed on the Principal Trading Market, may be
difficult to ascertain. The parties agree that the amounts payable pursuant to
the foregoing provisions of this Section 2(b) represent a reasonable estimate on
the part of the parties, as of the date of this Agreement, of the amount of such
damages.

          (vii)  Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent any delay
in the filing or effectiveness of the Registration Statement occurs because of
an act of, or a failure to act or to act timely by the Initial Investor or its
counsel.

          (viii) "Computation Date" means (A) the date which is the earlier of
(1) thirty (30) days after the Required Filing Date, the Required Effective Date
or a Restricted Sale Date,

                                        5
<PAGE>

as the case may be, or (2) the date after the Required Filing Date, the Required
Effective Date or Restricted Sale Date on which the Registration Statement is
filed (with respect to payments due as contemplated by Section 2(b)(i) hereof)
or is declared effective or has its restrictions removed or the shares of the
Company's stock are listed on the Principal Trading Market (with respect to
payments due as contemplated by Section 2(b)(ii) hereof), as the case may be,
and (B) each date which is the earlier of (1) thirty (30) days after the
previous Computation Date or (2) the date after the previous Computation Date on
which the Registration Statement is filed (with respect to payments due as
contemplated by Section 2(b)(i) hereof) or is declared effective or has its
restrictions removed or the shares of the Company's stock are listed on the
Principal Trading Market (with respect to payments due as contemplated by
Section 2(b)(ii) hereof), as the case may be.

          (ix) Anything in the preceding provisions of this Section 2(b) to
the contrary notwithstanding, if, but only if, the Registration Statement is
declared effective within thirty (30) days following the Initial Required
Effective Date,

     (A)  the provisions of Section 2(b)(i) shall not apply; and

     (B)  the provisions of Section 2(b)(ii) shall not apply to the fact that
     the Registration Statement was initially declared effective after the
     Initial Required Effective Date;

and the Company will not have any obligation to pay any Periodic Amount to the
Investor with respect thereto; provided, however, that the provisions of Section
2(b)(ii) shall continue to apply to all other events described therein.

          3.   OBLIGATIONS OF THE COMPANY. In connection with the registration
of the Registrable Securities, the Company shall do each of the following:

          (a)  Prepare promptly, and file with the SEC by the Required Filing
Date a Registration Statement with respect to not less than the number of
Registrable Securities provided in Section 2(a) above, and thereafter use its
reasonable best efforts to cause such Registration Statement relating to
Registrable Securities to become effective by the Required Effective Date and
keep the Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earlier of (i) the date when the
Investors may sell all Registrable Securities under Rule 144 without volume or
other restrictions or limits or (ii) the date the Investors no longer own any of
the Registrable Securities, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;

          (b)  Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration

                                        6
<PAGE>

Statement effective at all times during the Registration Period, and, during the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;

          (c)  Permit a single firm of counsel designated by the Initial
Investors (which, until further notice, shall be deemed to be Krieger & Prager
LLP, Attn: Samuel Krieger, Esq., which firm has requested to receive such
notification; each, an "Investor's Counsel") to review the Registration
Statement and all amendments and supplements thereto a reasonable period of time
(but not less than three (3) business days) prior to their filing with the SEC,
and not file any document in a form to which such counsel reasonably objects;

          (d)  Notify each Investor and the Investor's Counsel and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than three
(3) business days prior to such filing) and (if requested by any such person)
confirm such notice in writing no later than one (1) business day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B) whenever
the SEC notifies the Company whether there will be a "review" of such
Registration Statement; (C) whenever the Company receives (or a representative
of the Company receives on its behalf) any oral or written comments from the SEC
in respect of a Registration Statement (copies or, in the case of oral comments,
summaries of such comments shall be promptly furnished by the Company to the
Investors); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any proceedings for that
purpose; (iv) if at any time any of the representations or warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall communicate with the
Investor's Counsel with regard to its proposed written responses to the comments
contemplated in clause (C) of this Section 3(d), so that, to the extent
practicable, the Investors shall have the opportunity to comment thereon;

                                        7
<PAGE>

          (e)  Furnish to each Investor and to Investor's Counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement, each
preliminary prospectus and prospectus, and each amendment or supplement thereto,
and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor;

          (f)  As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request;

          (g)  As promptly as practicable after becoming aware thereof, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the SEC
of a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;

          (h)  Comply with Regulation FD or any similar rule or regulation
regarding the dissemination of information regarding the Company, and in
furtherance of the foregoing, and not in limitation thereof, not disclose to the
Investor any non-public material information regarding the Company;

          (i)  Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing that the effectiveness of the Registration
Statement is suspended for any reason, whether due to a Potential Material Event
or otherwise, the Investors shall not offer or sell any Registrable Securities,
or engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of such notice until such Investor
receives written notice from the Company that such the effectiveness of the
Registration Statement has been restored, whether because the Potential Material
Event has been disclosed to the public or it no longer constitutes a Potential
Material Event or otherwise; PROVIDED, HOWEVER, that the Company may not so
suspend the right to such holders of Registrable Securities during the periods
the Registration Statement is required to be in effect other than during a
Permitted Suspension Period (and the applicable provisions of Section 2(b) shall
apply with respect to any such suspension other than during a Permitted
Suspension Period);

                                        8
<PAGE>

          (j)  Use its reasonable efforts to secure and maintain the designation
of all the Registrable Securities covered by the Registration Statement on the
Principal Trading Market within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on the Principal Trading Market;

          (k)  Provide a transfer agent ("Transfer Agent") and registrar, which
may be a single entity, for the Registrable Securities not later than the
initial Effective Date;

          (l)  Cooperate with the Investors who hold Registrable Securities
being offered to facilitate the timely preparation and delivery of certificates
for the Registrable Securities to be offered pursuant to the Registration
Statement and enable such certificates for the Registrable Securities to be in
such denominations or amounts as the case may be, as the Investors may
reasonably request, and, within five (5) business days after a Registration
Statement which includes Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected by the Company
to deliver, to the Transfer Agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and opinion of such counsel, which shall
include, without limitation, directions to the Transfer Agent to issue
certificates of Registrable Securities(including certificates for Registrable
Securities to be issued after the Effective Date and replacement certificates
for Registrable Securities previously issued) without legends or other
restrictions, subject to compliance with applicable law and other rules and
regulations, including, without limitation, prospectus delivery requirements;
and

          (m)  Take all other reasonable administrative steps and actions
(including the participation of Company counsel) necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement; provided, however, that the foregoing does not
require that the Company take any steps whatsoever regarding the identification
or selection of a broker to sell the Registrable Securities, the identification
of buyers of the Registrable Securities, or the negotiation of the sale terms of
the Registrable Securities.

          4.   OBLIGATIONS OF THE INVESTORS. In connection with the registration
of the Registrable Securities, the Investors shall have the following
obligations:

          (a)  Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and

          (b)  Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f), (g)
or (i) above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration

                                        9
<PAGE>

Statement covering such Registrable Securities until such Investor's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
3(f), (g) or (i), and, if so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

          5.   EXPENSES OF REGISTRATION. All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company. In addition, a fee for a single
counsel for the Investors (as a group and not individually) equal to $3,000 for
the review of each Registration Statement and $2,000 for the review of each
post-effective amendment to a Registration Statement shall be borne by the
Company.

          6.   INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:

          (a)  To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor, and
each Lender Control Person (each, an "Indemnified Party"), against any losses,
claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the final prospectus (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively
referred to as "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to any Claim
arising out of or based upon a Violation which occurs in reliance upon and

                                       10
<PAGE>

in conformity with information furnished in writing to the Company by or on
behalf of such Indemnified Party expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(b) hereof; (II) be available to the extent such Claim is
based on a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company or the amendment or supplement thereto
made available by the Company; (III) be available to the extent such Claim is
based on the delivery of a prospectus by the Investor after receiving notice
from the Company under Section 3(f), (g) or (i) hereof (other than a notice
regarding the effectiveness of the Registration Statement or any amendment or
supplement thereto), or (IV) apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. The Investor will
indemnify the Company and its officers, directors and agents (each, an
"Indemnified Party") against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company, by or on behalf of such Investor, expressly for use in
connection with the preparation of the Registration Statement or the amendment
or supplement thereto, subject to such limitations and conditions as are
applicable to the indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Party and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.

          (b)  Promptly after receipt by an Indemnified Party under this Section
6 of notice of the commencement of any action (including any governmental
action), such Indemnified Party shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
satisfactory to the indemnifying party (provided such counsel shall not have a
conflict of interest with the Indemnified Party and provided that all defenses
available to the Indemnified Party can be maintained without prejudicing the
rights of the indemnifying party). In case any such action is brought against
any Indemnified Party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, assume the defense thereof, subject to the provisions herein
stated and after notice from the indemnifying party to such Indemnified Party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such Indemnified Party under this Section 6 for any legal or other
reasonable out-of-pocket expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and reasonable out-of-pocket expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel as provided above. The failure to deliver
written notice to the indemnifying party within a reasonable time of the

                                       11
<PAGE>

commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Party under this Section 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.

          7.   CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; PROVIDED, HOWEVER, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) except where the seller has committed fraud (other
than a fraud by reason of the information included or omitted from the
Registration Statement as to which the Company has not given notice as
contemplated under Section 3 hereof) or intentional misconduct, contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.

          8.   REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With a view to
making available to Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:

          (a)  make and keep public information available, as those terms are
understood and defined in Rule 144;

          (b)  file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

          (c)  furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) if not available on the SEC's EDGAR system, a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant to
Rule 144 without Registration; and

          (d)  at the request of any Investor holding Registrable Securities (a
"Holder"), give its Transfer Agent instructions (supported by an opinion of
Company counsel, if required or requested by the Transfer Agent) to the effect
that, upon the Transfer Agent's receipt from such Holder of

                                       12
<PAGE>

     (i) a certificate (a "Rule 144 Certificate") certifying (A) that the
     Holder's holding period (as determined in accordance with the provisions of
     Rule 144) for the shares of Registrable Securities which the Holder
     proposes to sell (the "Securities Being Sold") is not less than (1) year
     and (B) as to such other matters as may be appropriate in accordance with
     Rule 144 under the Securities Act, and

     (ii) an opinion of counsel acceptable to the Company (for which purposes it
     is agreed that the initial Investor's Counsel shall be deemed acceptable if
     not given by Company Counsel) that, based on the Rule 144 Certificate,
     Securities Being Sold may be sold pursuant to the provisions of Rule 144,
     even in the absence of an effective Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the Holder,
as the seller or transferor thereof, or the status, including any relevant
legends or restrictions, of the shares of the Securities Being Sold while held
by the Holder). If the Transfer Agent reasonably requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.

          9.   ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investor to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debentures) only if the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, (b) the securities with respect to which such registration rights are
being transferred or assigned, and (c) written evidence of the transferee's
assumption of the Investor's obligations under this Agreement.

          10.  AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a eighty (80%) percent
interest of the Registrable Securities (as calculated by the stated value of the
then outstanding Debentures). Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company.

                                       13
<PAGE>

          11.  MISCELLANEOUS.

          (a)  A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

          (b)  Notices required or permitted to be given hereunder shall be
given in the manner contemplated by the Securities Purchase Agreement, (i) if to
the Company or to the Initial Investor, to their respective address contemplated
by the Securities Purchase Agreement, and (ii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 11(b).

          (c)  Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

          (d)  This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the City of Wilmington
or the state courts of the State of Delaware sitting in the City of Wilmington
in connection with any dispute arising under this Agreement and hereby waives,
to the maximum extent permitted by law, any objection, including any objection
based on FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions.

          (e)  The Company and the Investor hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection with
this Agreement or any of the other Transaction Agreements.

          (f)  If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

          (g)  Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

          (h)  All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

                                       14
<PAGE>

          (i)  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.

          (j)  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

          (k)  The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.

          (l)  This Agreement (including to the extent relevant the provisions
of other Transaction Agreements) constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                            COMPANY:
                                            AMBIENT CORPORATION

                                            By: /s/ John J. Joyce
                                               ---------------------------------

                                            Name: John J. Joyce
                                                 -------------------------------

                                            Title: CEO
                                                  ------------------------------

                                            INITIAL INVESTOR:

                                            ------------------------------------
                                              [PRINT NAME OF INITIAL INVESTOR]

                                            By:
                                               ---------------------------------

                                            Name:
                                                 -------------------------------

                                            Title:
                                                  ------------------------------

                                       16Management Agreement

 Exhibit 10.1.1 
  
 MANAGEMENT AGREEMENT 
  
 THIS MANAGEMENT AGREEMENT (this “Agreement”) is made as of June 11, 2003 (the “Effective Date”), by and between (i)
Luminent Mortgage Capital, Inc., a Maryland corporation (the “Company”), and (ii) Seneca Capital Management, LLC, a California limited liability company (the “Manager”). 
  
 THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions: 
  
 A. The Company intends
to use the net proceeds of borrowings and security offerings and the net returns on its investments which are not otherwise distributed to stockholders in Mortgage Assets (defined herein) in a manner which allows the Company to qualify as a
“real estate investment trust” under the Internal Revenue Code of 1986, as amended (the “Code”) and to qualify for an exemption from being an “investment company” under the Investment Company Act of 1940, as amended
(the “Investment Company Act”). 
  
 B. The
Company desires that the Manager undertake, on the Company’s behalf, the duties and responsibilities set forth in this Agreement, subject to the direction and oversight of the Board of Directors of the Company (the “Board of
Directors”), on the terms and conditions set forth in this Agreement. 
  
 C. The Manager desires to undertake, on the Company’s behalf, the duties and responsibilities set forth in this Agreement, subject to the direction and oversight of the Board of Directors, on the terms and
conditions set forth in this Agreement. 
  
 NOW, THEREFORE,
in consideration of the premises and the mutual covenants of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  
 1. Definitions. Capitalized terms used in this Agreement shall have
the respective meanings assigned to them below: 
  
 1.1 “Affiliate” means, when used with reference to a specified person, any person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified
person. For purposes of this definition, the term “person” means and includes individuals, corporations, general and limited partnerships, stock companies, land trusts, business trusts and other entities and governments and agencies and
political subdivisions thereof. For purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any person, shall
mean the possession, directly, or indirectly through one or more intermediaries, of the power to direct or cause the direction of the management and policies of such person, whether by contract, through the ownership of voting securities,
partnership interests or other equity interests or otherwise. 
  
 1.2 “Annual Incentive Amount” shall have the meaning set forth in Section 6.2.1(2) of this Agreement. 
  

 1.3 “Agreement” means this Management Agreement dated as of the Effective Date,
by and between the Company and the Manager, as the same shall be amended from time to time in accordance with the terms of this Agreement. 
  
 1.4 “Average Net Invested Assets “ means for any period the arithmetic average of the aggregate of the net proceeds from
offerings of equity securities of the Company (after deducting underwriting discounts and commissions and other costs and expenses related thereto), computed by taking the average of such values at the end of each week during the applicable period.

  
 1.5 “Average Net Worth” means for
any period the average of the net worth of the Company at the end of each week during the period. For purposes of determining the Average Net Worth, the “net worth” means the difference between (i) the aggregate book value of the
consolidated assets of the Company and its subsidiaries, before reserves for depreciation, bad debts or other similar non-cash items, and (ii) the aggregate book value of debt of the Company and its subsidiaries. 
  
 1.6 “Base Management Compensation” shall have the
meaning set forth in Section 6.1 of this Agreement. 
  
 1.7 “Board of Directors” shall have the meaning set forth in Recital B of this Agreement. 
  
 1.8 “cause” means a reasonable good faith determination of the Board of Directors based on findings of fact which are disclosed
to the Manager that the Manager was grossly negligent, acted with reckless disregard or engaged in willful misconduct or active fraud while discharging its material duties under this Agreement. 
  
 1.9 “Change of Control” means in any transaction
or series of transactions (i) any sale, lease, assignment, transfer or other conveyance of all or substantially all of the Company’s assets, or (ii) any consolidation or merger involving the Company in which all of the stockholders of the
Company immediately prior to the consummation of such transaction, considered collectively, do not immediately following the transaction own shares of the surviving entity constituting at least a majority of the voting power of the surviving entity,
(iii) any reclassification or other exchange of capital stock, or any other recapitalization of the Company in which any person or group, as those terms are used in Rule 13d-1 promulgated under the Securities Exchange Act of 1934, as amended, that
owned thirty percent (30%) of the voting power of the Company immediately prior to the consummation of such transaction do not immediately following the transaction own at least thirty percent (30%) of the voting power of the Company or in which any
person or group that owned less than thirty percent (30%) of the voting power of the Company immediately prior to the consummation of the transaction do not immediately following the transaction own more than thirty percent (30%) of the voting power
of the Company, (iv) any liquidation, dissolution or winding up of the Company, or (v) any time fewer than two (2) members of the Board of Directors are individuals which were selected by the Manager. In instances where a natural person selected by
the Manager and immediately thereafter appointed to the Board of Directors either resigns or dies, then a Change of Control under clause (v) of the preceding sentence shall not be triggered if (i) the Board of Directors does 

  

 2 

 
not elect to terminate the Manager within thirty (30) days after the first director resigns or dies, or (ii) the qualified individual next selected by the
Manager is appointed as soon as possible after such selection and the Board of Directors does not take any action from the time the Manager selects the next individual until the time the next Manager-selected director is appointed. 
  
 1.10 “Code” shall have the meaning set forth in
Recital A of this Agreement. 
  
 1.11
“Company” shall have the meaning set forth in the Introductory Paragraph of this Agreement, and shall include any successor thereto. 
  
 1.12 “Deferred Payments” shall have the meaning set forth in Section 6.2.5 of this Agreement. 
  
 1.13 “Effective Date” shall have the meaning set
forth in the Introductory Paragraph of this Agreement. 
  
 1.14 “Federal Reserve Board” means the Board of Governors of the Federal Reserve System. 
  
 1.15 “GAAP” means generally accepted accounting principles, as applied in the United States. 
  
 1.16 “Governing Instruments” means the articles of
incorporation or charter, as the case may be, and the bylaws of the Company and its subsidiaries, as those documents may be amended from time to time. 
  
 1.17 “Incentive Management Compensation” shall have the meaning set forth in Section 6.2 of this Agreement. 
  
 1.18 “Investment Company Act” shall have the
meaning set forth in Recital A of this Agreement. 
  
 1.19 “Last Appraiser” shall have the meaning set forth in Section 6.2.7 of this Agreement. 
  
 1.20 “Last Auditor” shall have the meaning set forth in Section 6.3 of this Agreement. 
  
 1.21 “Manager” shall have the meaning set forth in
the Introductory Paragraph of this Agreement, and shall include any successor thereto. 
  
 1.22 “Manager Obligations” shall have the meaning set forth in Section 2.4.2 of this Agreement. 
  
 1.23 “Manager Refund” shall have the meaning set
forth in Section 6.2.1(2) of this Agreement. 
  

 3 

 1.24 “Mortgage Assets” means the following: 
  
 (i) mortgage securities (or interests therein), including
(a) pass-through certificates (including GNMA certificates, FNMA certificates and FHLMC certificates), (b) collateralized mortgage obligations, (c) securities representing interests in, or secured by, mortgages on real property other than
pass-through certificates and CMOs, (d) certificates and other securities collateralized by loans, mortgage derivative securities, subordinated interests and other mortgage-backed and mortgage-collateralized obligations, (e) mortgage derivative
securities and (f) subordinated interests; 
  
 (ii) mortgage loans, including (a) conforming mortgage loans (i.e., mortgage loans which comply with requirements for inclusion in credit support programs sponsored by FHLMC, FNMA or GNMA or are FHA or VA Loans, all of which are
secured by first mortgages or deeds of trust on single-family (one to four units) residences, multifamily residences or commercial properties) and (b) non-conforming mortgage loans; and 
  
 (iii) short-term investments, including short-term bank certificates of deposit, short-term U.S. Treasury
securities, short-term U.S. government agency securities, commercial paper, repurchase agreements, short-term CMOs, short-term asset-backed securities and other similar types of short-term investment instruments, all of which will have maturities or
average lives of less than one (1) year. 
  
 1.25
“Net Income” means for any period the taxable income of the Company and its subsidiaries (including net capital gains, if any, but excluding net capital losses, if any) before deducting (i) the Incentive Management Compensation, (ii) any
net operating loss deductions arising from losses in prior periods and (iii) any items which the Code permits to be deducted when calculating taxable income for a REIT. 
  
 1.26 “Quarterly Incentive Amount” shall have the meaning set forth in Section 6.2.1(1) of this
Agreement. 
  
 1.27 “Reconciliation
Notice” shall have the meaning set forth in Section 6.3 of this Agreement. 
  
 1.28 “Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the date hereof, by and
between the Company and Friedman, Billings, Ramsey & Co., Inc., as the same shall be amended from time to time. 
  
 1.29 “REIT” means a “real estate investment trust” as defined under the Code. 
  
 1.30 “REIT Provisions of the Code” means Sections
856 through 860 of the Code. 
  
 1.31
“Remaining Amount” shall have the meaning set forth in Section 6.2.1(2) of this Agreement. 
  
 1.32 “Restricted Stock Award Agreement” shall be the restricted stock award agreement substantially in the form attached hereto
as Exhibit A. 
  

 4 

 1.33 “Return on Equity” means for any period an amount calculated by dividing
the Net Income for such period by the Average Net Invested Assets for such period. 
  
 1.34 “Short-Term Investments” means short-term bank certificates of deposit, short-term U.S. Treasury securities, short-term
U.S. government agency securities, commercial paper, repurchase agreements, short-term CMOs, short-term asset-backed securities and other similar types of short-term investment instruments, all of which will have maturities or average lives of less
than one (1) year. 
  
 1.35
“Sub-manager” means any third party (other than Seneca) which has been selected by the Manager and approved by the Board of Directors to manage all or a portion of the day-to-day operations of the Company and perform the services and other
activities described in Section 2.1 of this Agreement. Any approval of a Sub-manager by the Board of Directors may be conditioned or limited in any manner determined by the Board of Directors, including, without limitation, the terms and conditions
of any such agreement with a Sub-manager. 
  
 1.36 “Ten-Year U.S. Treasury Rate” means for any period the average of the weekly average yields to maturity for actively traded current coupon U.S. Treasury fixed interest rate securities (adjusted to a constant maturity of ten
years) published by the Federal Reserve Board for each week during such period, or, if such rate is not published by the Federal Reserve Board, any Federal Reserve Bank or agency or department of the federal government selected by the Company. If
the Company determines in good faith that the Ten-Year U.S. Treasury Rate cannot be calculated as provided above, then the rate shall be the arithmetic average of the per annum average yields to maturities, based upon closing asked prices on each
business day during such period, for each actively traded marketable U.S. Treasury fixed interest rate security with a final maturity date not less than eight (8) nor more than twelve (12) years from the date of the closing asked prices as chosen
and quoted for each business day in each such period in New York City by at least three recognized dealers in U.S. government securities selected by the Company. 
  
 1.37 “Threshold Return” shall have the meaning set forth in Section 6.2.3 of this Agreement.

  
 1.38 “Tiered Percentage” shall have
the meaning set forth in Section 6.2.2 of this Agreement. 
  
 1.39 “Trigger Events” shall have the meaning set forth in Section 15.3.2 of this Agreement. 
  
 1.40 “Unaffiliated Director” means a natural person serving as a director of the Company who is not affiliated, directly or
indirectly, with the Manager or any of its Affiliates in any material respect, whether by ownership of, ownership interest in, employment by, any material business or professional relationship with, or serving as an officer or director of the
Manager or any of its Affiliates. 
  
 1.41
“Valuation Notice” shall have the meaning set forth in Section 6.2.7 of this Agreement. 
  

 5 

 2. General Duties of the Manager. 
  
 2.1 Services. Subject at all times to the direction and oversight of the Board of Directors, the
Manager shall (i) generally manage the day-to-day operations of the Company and perform the services and other activities described below, and (ii) to the extent directed by the Board of Directors, perform similar management and services for any
subsidiary of the Company. The Manager, in its sole discretion, may elect to cause the duties of the Manager under this Agreement to be provided by a Sub-manager. The Manager shall perform the following services from time to time as may be required
for the management of the Company and its assets: 
  
 2.1.1 serving as the Company’s consultant with respect to the formulation of investment criteria and the preparation of policy guidelines by the Board of Directors; 
  
 2.1.2 assisting the Company in developing criteria for Mortgage Asset purchase commitments that are
consistent with the Company’s long-term investment objectives and making available to the Company its knowledge and experience with respect to Mortgage Assets; 
  
 2.1.3 representing the Company in connection with the purchase, sale and commitment to purchase or sell
Mortgage Assets that meet in all material respects the Company’s investment criteria; 
  
 2.1.4 managing the Company’s portfolio of Mortgage Assets; 
  
 2.1.5 advising the Company and negotiating the Company’s agreements with third-party lenders for
borrowings by the Company; 
  
 2.1.6 making
available to the Company statistical and economic research and analysis regarding the Company’s activities and the services performed for the Company by the Manager; 
  
 2.1.7 monitoring and providing to the Board of Directors from time to time 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; 
  
 2.1.8 investing or reinvesting
any money of the Company in accordance with the Company’s policies and procedures; 
  
 2.1.9 providing the executive and administrative personnel, office space and services required in rendering services to the Company, in
accordance with and subject to the terms of this Agreement; 
  
 2.1.10 administering the day-to-day operations of the Company and performing and supervising the performance of such other administrative functions necessary to the management of the Company as may be agreed upon by
the Manager and the Board of Directors, including the collection of revenues and the payment of the Company’s debts and obligations from the Company’s accounts, and the maintenance of appropriate computer systems to perform such
administrative functions; 

  

 6 

 2.1.11 advising the Board of Directors in connection with policy decisions; 

 
 2.1.12 evaluating and recommending hedging strategies to
the Board of Directors and, upon approval by the Board of Directors, engaging in hedging activities on behalf of the Company consistent with the Company’s status as a REIT; 
  
 2.1.13 supervising compliance by the Company with the REIT Provisions of the Code and maintenance of its
status as a REIT; 
  
 2.1.14 qualifying and
causing the Company to qualify to do business in all applicable jurisdictions and obtaining and maintaining all appropriate licenses; 
  
 2.1.15 assisting the Company in an executive search for a chief financial officer; 
  
 2.1.16 assisting the Company to retain qualified accountants
and tax experts to assist in developing and monitoring appropriate accounting procedures and testing systems and to conduct quarterly compliance reviews as the Board of Directors may deem necessary or advisable; 
  
 2.1.17 assisting the Company in its compliance with all
federal (including the Sarbanes-Oxley Act of 2002), state and local regulatory requirements applicable to the Company in respect of its business activities, including preparing or causing to be prepared all financial statements required under
applicable regulations and contractual undertakings and all reports, documents and filings, if any, required under the Securities Exchange Act of 1934, as amended, or other federal or state laws; 
  
 2.1.18 assisting the Company in its compliance with federal,
state and local tax filings and reports and generally enable the Company to maintain its status as a REIT, including soliciting stockholders, as defined below, for required information to the extent provided in the REIT Provisions of the Code;

  
 2.1.19 assisting the Company in its
maintenance of an exemption from the Investment Company Act and monitoring compliance with the requirements for maintaining an exemption from the Investment Company Act; 
  
 2.1.20 coordinating and managing the operations of any joint venture or co-investment interests held by the
Company and conducting all matters with the joint venture or co-investment collaborators; 
  
 2.1.21 advising the Company as to its capital structure and capital raising activities; 
  

 7 

 2.1.22 handling and resolving all claims, disputes or controversies (including all
litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day operations, subject to the approval of the Board of
Directors; 
  
 2.1.23 engaging and supervising,
on behalf of the Company and at the Company’s expense, the following, without limitation: independent contractors to provide investment banking services, leasing services, mortgage brokerage services, securities brokerage services, other
financial services and such other services as may be deemed by the Manager and the Board of Directors to be necessary or advisable from time to time; and 
  
 2.1.24 so long as Seneca does not incur additional costs or expenses, performing such other services as may be required from time to time
for management and other activities relating to the assets of the Company as the Board of Directors shall reasonably request or the Manager shall deem appropriate under the particular circumstances. 
  
 2.2 Obligations of the Manager. 
  
 2.2.1 Verify Conformity with Acquisition Criteria.
Subject to the direction of the Board of Directors, the Manager shall use commercially reasonable efforts to provide that each Mortgage Asset acquired by the Company conforms in all material respects to the acquisition criteria of the Company and
shall seek to cause each seller or transferor of Mortgage Assets to the Company to make such representations and warranties regarding such Mortgage Assets as may, in the reasonable judgment of the Manager, be necessary and appropriate, subject to
market custom. In addition, the Manager shall take such other action as it deems reasonably necessary or appropriate in seeking to protect the Company’s investments to the extent consistent with its duties under this Agreement. 
  
 2.2.2 Conduct Activities in Conformity with REIT Status
and All Applicable Restrictions. Subject to the direction of the Board of Directors, the Manager shall refrain from any action which, in its sole judgment made in good faith, would adversely affect the status of the Company or, if applicable,
any subsidiary of the Company as a REIT or (i) which, in its sole judgment made in good faith, would violate any material law, rule or regulation of any governmental body or agency having jurisdiction over the Company or any such subsidiary or (ii)
which would otherwise not be permitted by the Company’s or such subsidiary’s Governing Instruments, any material operating policies adopted by the Company, or any agreements actually known by the Manager, except in each of clauses (i) and
(ii) as could not reasonably be expected to have a material adverse effect on the Company. If the Manager is directed to take any such action by the Board of Directors, the Manager shall promptly notify the Board of Directors of the Manager’s
judgment that such action would adversely affect such status or cause such violation or not be permitted as aforesaid. 
  
 2.2.3 Reports. Upon the request of the Board of Directors and at the sole cost and expense of the Company, the Manager shall cause
an annual compliance report of the Company to be prepared by a firm independent of the Manager and its Affiliates and having the proper expertise to determine compliance with the REIT Provisions of the Code and related matters. In addition, the
Manager shall prepare regular reports for the Board of Directors that 

  

 8 

 
will review the Company’s acquisitions of Mortgage Assets, portfolio composition and characteristics, credit quality (if applicable), performance and
compliance with the Company’s investment policies and policies that enable the Company to maintain its qualification as a REIT and to maintain its exemption from being deemed an “investment company” under the Investment Company Act.

  
 2.2.4 Portfolio Transactions. In
placing portfolio transactions and selecting brokers or dealers, the Manager shall seek to obtain on behalf of the Company commercially reasonable terms. In assessing commercially reasonable terms for any transaction, the Manager shall consider all
factors it deems relevant, including the breadth of the market for the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. 
  
 2.3 Cooperation of the Company. The Company (including the Board of Directors) agrees to take all actions reasonably required to permit and enable the Manager to carry out its duties and obligations under this Agreement, including,
without limitation, all steps reasonably necessary to allow the Manager to file any registration statement on behalf of the Company in a timely manner. The Company further agrees to use commercially reasonable efforts to make available to the
Manager all resources, information and materials reasonably requested by the Manager to enable the Manager to satisfy its obligations hereunder, including its obligations to deliver financial statements and any other information or reports with
respect to the Company. If the Manager is not able to provide a service, or in the reasonable judgment of the Manager it is not prudent to provide a service, without the approval of the Board of Directors or the Unaffiliated Directors, as
applicable, then the Manager shall be excused from providing such service (and shall not be in breach of this Agreement) until the applicable approval has been obtained. 
  
 2.4 Engagement of Third Parties. 
  
 2.4.1 Securities Dealers. The Manager is authorized, for and on behalf, and at the sole cost and
expense of the Company, to employ such securities dealers (including Affiliates of the Manager) for the purchase and sale of Mortgage Assets as may, in the judgment of the Manager, be necessary to obtain the best commercially available net results
taking into account such factors as the policies of the Company, price, dealer spread, the size, type and difficulty of the transaction involved, the firm’s general execution and operational facilities and the firm’s risk in positioning
the securities involved. Consistent with this policy, the Manager is authorized to direct the execution of the Company’s portfolio transactions to dealers and brokers furnishing statistical information or research deemed by the Manager to be
useful or valuable to the performance of its investment advisory functions for the Company. 
  
 2.4.2 Other Third Parties. The Manager is authorized to retain, for and on behalf of the Company, the services of third parties
(including Affiliates of the Manager), including, without limitation, accountants, legal counsel, appraisers, insurers, brokers, dealers, transfer agents, registrars, developers, investment banks, financial advisors, banks and other lenders and
others as the Manager deems reasonably necessary or advisable in connection with the management and operations of the Company. The costs and expenses related to the retention 

  

 9 

 
of third parties shall be the sole cost and expense of the Company except to the extent the third party is retained to make decisions to invest in and
dispose of Mortgage Assets, provide administrative, data processing or clerical services, prepare the financial records of the Company or prepare a report summarizing the Company’s acquisitions of Mortgage Assets, portfolio compensation and
characteristics, credit quality (if applicable) or performance of the portfolio, in which case it shall be at the sole cost and expense of the Manager unless otherwise approved by the Board of Directors (collectively, “Manager
Obligations”). 
  
 2.4.3 Affiliates.
Notwithstanding anything contained in this Agreement to the contrary, the Manager shall have the right to cause any services under this Agreement to be rendered by the Manager’s employees or Affiliates of the Manager. The Company shall pay or
reimburse the Manager or its Affiliates for the cost and expense of performing services by the Affiliate if (i) the costs and expenses of such Affiliate would have been reimbursable under this Agreement if such Affiliate were an unaffiliated third
party. and (ii) the costs and expenses of such Affiliate have been approved by a majority of the Unaffiliated Directors or incurred in accordance with a policy adopted by a majority of the Unaffiliated Directors. 
  
 3. Additional Activities of the Manager and its Affiliates.

  
 3.1 Other Activities of the Manager.
Except as provided in the last sentence of this Section 3.1, nothing in this Agreement shall (i) prevent the Manager, any Sub-manager or any of their respective Affiliates, officers, directors or employees, from engaging in other businesses or from
rendering services of any kind to any other person or entity, including, without limitation, investing in, or rendering advisory service to others investing in, any type of Mortgage Assets or other real estate investments ( including, without
limitation, investments that meet the principal investment objectives of the Company), whether or not the investment objectives or policies of any such other person or entity are similar to those of the Company, or (ii) in any way bind or restrict
the Manager, any Sub-manager or any of their respective Affiliates, officers, directors or employees from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom the Manager, the
Sub-manager or any of their respective Affiliates, officers, directors or employees may be acting. The Company acknowledges that the Manager will base allocation decisions on the procedures the Manager reasonably and in good faith considers fair and
equitable, including, without limitation, such considerations as investment objectives, restrictions and time horizon, availability of cash and the amount of existing holdings. While information and recommendations supplied to the Company shall, in
the Manager’s reasonable and good faith judgment, be appropriate under the circumstances and in light of the investment objectives and policies of the Company, they may be different from the information and recommendations supplied by the
Manager, any Sub-manager, any Affiliate of the Manager or any Sub-manager to other investment companies, funds and advisory accounts. The Company shall be entitled to equitable treatment under the circumstances in receiving information,
recommendations and any other services, but the Company recognizes that it is not entitled to receive preferential treatment as compared with the treatment given by the Manager, any Sub-manager, any Affiliate of the Manager or any Sub-manager to any
investment company, fund or advisory account other than any fund or advisory account which contains only funds invested by Seneca (and not of any of its clients or customers) or its officers and directors. Notwithstanding
anything to the contrary in this Section 3.1, for so long as the Manager is the exclusive manager of the Company (unless the 

  

 10 

 
Manager is not the exclusive manager of the Company because the Company has engaged a Sub-manager) pursuant to this Agreement, the Manager shall not sponsor
any other residential mortgage REIT that invests primarily in high-quality, residential mortgage-backed securities, unless otherwise approved by a majority of the Unaffiliated Directors. 
  
 3.2 Service to the Company; Execution of Documents. Directors, officers, employees and agents of the
Manager and its Affiliates may serve as trustees, directors, officers, employees, agents, nominees or signatories for the Company or any subsidiary of the Company, to the extent permitted by the Governing Instruments, as from time to time amended,
or by any resolutions duly adopted by the Board of Directors pursuant to the Governing Instruments. When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company.

  
 4. Bank Accounts. At the direction of the Board of
Directors, the Manager may establish and maintain one or more bank accounts in the name of the Company or any subsidiary of the Company, and may collect and deposit into any such account or accounts, and disburse funds from any such account or
accounts in a manner consistent with this Agreement, including, without limitation, the following: (a) the payment of the Base Management Compensation and the Incentive Management Compensation, (b) the payment (or advance) of reimbursable costs and
expenses, and (c) such other amounts authorized by the Board of Directors. The Manager shall from time to time render appropriate accountings of such collections and payments to the Board of Directors and, upon request, to the auditors of the
Company or any subsidiary of the Company. 
  
 5. Records;
Confidentiality. The Manager shall maintain appropriate and accurate books of account and records relating to services performed under this Agreement, and such books of account and records shall be accessible for inspection by representatives
(including the auditors) of the Company or any subsidiary of the Company at any time during normal business hours. Except in the ordinary course of business of the Company, the Manager shall, and shall use commercially reasonable efforts to cause
each of its Affiliates to, keep confidential any and all information they (or such Affiliates) may obtain from time to time in connection with the services they (or such Affiliates) render under this Agreement. 
  
 6. Compensation of the Manager. 
  
 6.1 Base Management Compensation. For services
rendered under this Agreement, the Company shall pay to the Manager quarterly in arrears commencing on the Effective Date annual base management compensation equal to one percent (1%) of the first Three Hundred Million Dollars ($300,000,000) of
Average Net Worth during each fiscal year, plus eight tenths of one percent (0.8%) of the Average Net Worth during such year in excess of Three Hundred Million Dollars ($300,000,000) (the “Base Management Compensation”). The portion
of the Base Management Compensation payable each fiscal quarter shall be calculated by the Manager within fifteen (15) days after the end of such quarter, and a written statement documenting such calculation in reasonable detail shall be promptly
delivered to the Company thereafter. The Company shall pay any amount payable pursuant to this Section 6.1 for such quarter within fifteen (15) days after the receipt of the written statement setting forth the computation of the Base Management
Compensation, or, at the Manager’s election, the Manager may deduct such amount from the Company’s account or accounts, in any case without demand, deduction, offset or delay (other than any deduction or offset for the liquidated sum of
any Manager Refund). 
  

 11 

 6.2 Calculation of Incentive Management Compensation. In addition to the Base
Management Compensation, the Manager shall receive incentive management compensation for each fiscal quarter (the “Incentive Management Compensation”). 
  
 6.2.1 The Incentive Management Compensation shall be calculated by the Manager and paid or refunded (as
applicable) as follows: 
  
 (1) At the end of
each of the first three fiscal quarters during each fiscal year, the Manager shall calculate the Tiered Percentage of the difference of (i) the Net Income for such quarter (or lesser portion thereof), minus (ii) the Threshold Return for such quarter
(or lesser portion thereof) (the “Quarterly Incentive Amount”). If the Quarterly Incentive Amount is a positive number, then at the end of each such quarter the Company shall pay the Manager the Quarterly Incentive Amount. 
  
 (2) At the end of each fiscal year and upon any termination
of this Agreement, the Manager shall calculate the Tiered Percentage of the difference of (i) the Net Income for such year (or lesser portion thereof), minus (ii) the Threshold Return for such year (or lesser portion thereof) (the “Annual
Incentive Amount”). If the aggregate of the Quarterly Incentive Amounts received by the Manager for such year (but not taking into account any prior years) is less than the Annual Incentive Amount, then the Company shall pay the Manager such
shortfall (the “Remaining Amount”). On the other hand, if the aggregate of the Quarterly Incentive Amounts received by the Manager during such year (but not taking into account any prior years) exceeds the Annual Incentive Amount, then the
Manager shall pay the Company such excess (the “Manager Refund”). The Manager Refund for any particular year shall not exceed the aggregate of the Quarterly Incentive Amounts received by the Manager during such year. 
  
 6.2.2 The “Tiered Percentage” shall mean for any
period the weighted average of the following percentage rates (weighting to be based on Average Net Invested Assets attributable to each percentage rate): (i) twenty percent (20%) for the first Four Hundred Million Dollars ($400,000,000) of Average
Net Invested Assets; and (ii) ten percent (10%) for the Average Net Invested Assets in excess of Four Hundred Million Dollars ($400,000,000). 
  
 6.2.3 The “Threshold Return” shall mean for any period the amount of Net Income for such period that would produce an annualized
Return on Equity equal to the sum of (i) the Ten-Year U.S. Treasury Rate for such period plus (ii) two percent (2.0%). 
  
 6.2.4 Payment. The Manager shall calculate the Incentive Management Compensation, the Quarterly Incentive Amount, any Remaining
Amount and any Manager Refund and deliver to the Company a written statement setting forth such computation in reasonable detail within fifteen (15) days after the end of each fiscal quarter, fiscal year and after 

  

 12 

 
the date of any termination of this Agreement, as applicable. The Company shall pay to the Manager all Quarterly Incentive Amounts and all Remaining Amounts
(or, at the Manager’s election, the Manager may deduct such amount from the Company’s account or accounts) with respect to each fiscal quarter or year (or lesser portion thereof) within fifteen (15) days following the delivery to the
Company of the written statement setting forth the computation of the Incentive Management Compensation for such quarter or year (or lesser portion thereof), as applicable, without demand, deduction, offset or delay (other than any deduction or
offset for the liquidated sum of any Manager Refund). The Manager shall pay the Manager Refund, if any, with respect to a particular fiscal year within fifteen (15) days following the delivery to the Company of the written statement setting forth
the computation of the Incentive Management Compensation for such year (or lesser portion thereof), without demand or delay. In connection with the Company’s annual audit (or any audit upon termination of this Agreement), the Manager shall
determine any year-end adjustments to the Incentive Management Compensation and Manager Refund payable under this Section 6.2 and deliver to the Company a written statement setting forth such computation within forty-five (45) days after the end of
each fiscal year. Any required adjustments to the Incentive Management Compensation or the Manager Refund shall be paid by the Company to the Manager or by the Manager to the Company, respectively, within fifteen (15) days after delivery of such
computation to the Company by the Manager, without demand, deduction, offset or delay (other than any deduction or offset for the liquidated sum of any Manager Refund). 
  
 6.2.5 Composition. All Incentive Management Compensation shall be paid by the Company fifty percent
(50%) in cash and fifty percent (50%) in common stock of the Company. All common stock of the Company paid to the Manager as Incentive Management Compensation shall be subject to the terms and conditions of the Restricted Stock Award Agreement which
shall include the following vesting schedule: (i) one-third of the common stock shall vest on the first anniversary of the date of issuance, (ii) one-third of the common stock shall vest on the second anniversary of the date of issuance, and (iii)
one-third of the common stock shall vest on the third anniversary of the date of issuance (collectively, the “Deferred Payments”). The vesting of the Deferred Payments shall accelerate in accordance with the terms of the Restricted Stock
Award Agreement or this Agreement (including a termination without cause, a termination in connection with a Change of Control, etc.). Any Manager Refund shall also be paid fifty percent (50%) in cash and fifty percent (50%) in common stock of the
Company (excluding any dividends paid while the Manager held the common stock), with the common stock received as part of the most recent Quarterly Incentive Amount to be returned first and then the common stock received as part of the next most
recent Quarterly Incentive Amount to be returned next. 
  
 6.2.6 Registration Rights. The Company has agreed to register the issuance and resale of the stock portion of the Incentive Management Compensation. The Manager shall have the unlimited right to piggyback on to any registration
statement of the Company, subject to the following cutbacks only in underwritten offerings: (i) in the event of an underwritten initial public offering, the managing underwriters may exclude entirely the shares of the Manager, if the managing
underwriters determine in good faith that marketing factors require a limitation on the number of shares to be included in such offering, and (ii) in the event of any other underwritten offering, the managing underwriters may exclude the shares of
the Manager to the same extent and in the same proportion that shares of holders (other than the 

  

 13 

 
Company) are excluded, if the managing underwriters determine in good faith that marketing factors require a limitation on the number of shares to be
included in such offering. As soon as the Company is eligible to use Form S-2, Form S-3 or any successor or replacement forms, the Manager shall also have the right to require the Company to prepare, file and maintain at all times a registration
statement exclusively for the issuance and resale of the stock portion of the Incentive Management Compensation. The Company shall take all actions reasonably necessary, suitable or convenient as the Manager may request from time to time in order to
allow the Manager to accomplish the foregoing. All costs and expenses (other than the discounts and commissions of any underwriter) shall be paid by the Company. 
  
 6.2.7 Valuation. The common stock of the Company shall be valued as follows: 
  
 (1) With respect to common stock of the Company not subject
to a vesting schedule or transfer restrictions or other similar restrictions on free marketability (other than any transfer restrictions imposed by Rule 144(e) under the Securities Act upon “affiliates” (as defined under Rule 144 under the
Securities Act)): 
  
 (a) if such securities are
traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty (30) day period ending three (3) days prior to the issuance of such securities; 
  
 (b) if such securities are actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid or sales price as applicable over the thirty (30) day period ending three (3) days prior to the issuance of such securities; and 
  
 (c) if there is no active public market for such
securities, the value shall be the fair market value thereof, as reasonably determined in good faith by the Board of Directors of the Company. 
  
 (2) The method of valuation of securities subject to a vesting schedule or transfer restrictions or other restrictions on free
marketability (other than any transfer restrictions imposed by Rule 144(e) under the Securities Act upon “affiliates” (as defined under Rule 144 under the Securities Act)) shall be to make an appropriate discount from the market value
determined as above in clauses (1)(a), (b) or (c) to reflect the approximate fair market value thereof, as determined in good faith by the Board of Directors of the Company. 
  
 (3) With respect to any common stock of the Company that the Manager is required to return as part of the
Manager Refund, the value shall be deemed to be the value used when issuing the common stock to the Manager. 
  
 6.2.8 Valuation Disputes. If at any time the Manager shall, in connection with a determination of fair market value made by the
Board of Directors, believe in good faith that (a) such determination differs by more than five percent (5%) from the fair 

  

 14 

 
market value that would result if computed pursuant to clauses (1) or (2) of Section 6.2.6 above, and (b) the dispute cannot be resolved between the
Unaffiliated Directors and the Manager within ten (10) business days after the Manager’s receipt of such written determination and provides written notice to the Company of that belief (the “Valuation Notice”), then the matter shall
be resolved by an independent appraiser of recognized standing selected jointly by the Unaffiliated Directors and the Manager within not more than twenty (20) days after the Valuation Notice. In the event the Unaffiliated Directors and the Manager
cannot agree with respect to such selection within the aforesaid twenty (20) day time-frame, the Unaffiliated Directors shall select one such independent appraiser and the Manager shall each select one independent appraiser within five (5) business
days after the expiration of the twenty (20) day period, with one additional such appraiser (the “Last Appraiser”) to be selected by the appraisers so designated within five (5) business days after their selection. Any valuation decision
made by the appraisers shall be deemed final and binding upon the Board of Directors and the Manager and shall be delivered to the Manager and the Company within not more than fifteen (15) days after the selection of the Last Appraiser. The expenses
of the appraisal shall be paid by the party with the estimate which deviated the furthest from the final valuation decision made by the appraisers. 
  
 6.3 Annual Reconciliation. The calculation of the Base Management Compensation and the Incentive Management Compensation shall be
subject to audit and reconciliation at the end of each fiscal year and upon any termination of this Agreement. If at any time the Manager shall disagree with such audit and reconciliation and the dispute cannot be resolved between the Unaffiliated
Directors and the Manager within ten (10) business days after the Manager’s receipt of such audit and reconciliation and provides written notice to the Company of that belief (the “Reconciliation Notice”), then the matter shall be
resolved by an independent auditor of recognized standing selected jointly by the Unaffiliated Directors and the Manager within not more than twenty (20) days after the Reconciliation Notice. In the event the Unaffiliated Directors and the Manager
cannot agree with respect to such selection within the aforesaid twenty (20) day time-frame, the Unaffiliated Directors shall select one such independent auditor and the Manager shall each select one independent auditor within five (5) business days
after the expiration of the twenty (20) day period, with one additional such auditor (the “Last Auditor”) to be selected by the auditors so designated within five (5) business days after their selection. Any decision made by the auditors
shall be deemed final and binding upon the Board of Directors and the Manager and shall be delivered to the Manager and the Company within not more than fifteen (15) days after the selection of the Last Auditor. The expenses of the auditors shall be
paid by the party with the estimate which deviated the furthest from the final valuation decision made by the auditors. 
  
 7. Expenses of the Manager and the Company. 
  
 7.1 Expenses of the Manager. The Manager shall be responsible for the following expenses: 
  
 7.1.1 employment expenses of the personnel employed by the
Manager (including the officers of the Company which are also employed by the Manager), including, without limitation, salaries, wages, payroll taxes and the cost of employee benefit plans of such personnel; 
  

 15 

 7.1.2 rent, telephone, utilities, office furniture, equipment, machinery and other
office, internal and overhead expenses of the Manager required for the Company’s day-to-day operations, including bookkeeping, clerical and back-office services provided by the Manager, provided, however, that the Company shall
reimburse the Manager for the Company’s pro rata portion of such rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses to the extent that the Company’s employees, officers,
representatives and/or agents (who are not also employed by the Manager) use such facilities or incur such expenses; and 
  
 7.1.3 unless otherwise approved by the Board of Directors, the cost and expense of the Sub-manager, if any. 
  
 7.2 Expenses of the Company. The Company shall pay
all of the costs and expenses of the Company and the Manager incurred on behalf of the Company or any subsidiary or in connection with this Agreement, excepting only those expenses that are specifically the responsibility of the Manager pursuant to
Section 7.1 of this Agreement. Without limiting the generality of the foregoing, it is specifically agreed that the following costs and expenses of the Company or any subsidiary of the Company shall be paid by the Company and shall not be paid by
the Manager and/or the Affiliates of the Manager: 
  
 7.2.1 all costs and expenses associated with the formation and capital raising activities of the Company and its subsidiaries, including, without limitation, the costs and expenses of the Company’s 144A transaction, the preparation of
the Company’s registration statements, and any and all costs and expenses of an initial public offering of the Company, any subsequent offerings and any filing fees and costs of being a public company, including, without limitation, filings
with the Securities and Exchange Commission, the National Association of Securities Dealers, the New York Stock Exchange (and any other exchange or over-the-counter market), among other such entities; 
  
 7.2.2 all costs and expenses in connection with the
acquisition, disposition, financing, hedging, administration and ownership of the Company’s or any subsidiary’s investment assets (including, without limitation, the Mortgage Assets) and, including, without limitation, costs and expenses
incurred in contracting with third parties, including Affiliates of the Manager, to provide such services, such as legal fees, accounting fees, consulting fees, trustee fees, appraisal fees, insurance premiums, commitment fees, brokerage fees,
guaranty fees, ad valorem taxes, costs of foreclosure, maintenance, repair and improvement of property and premiums for insurance on property owned by the Company or any subsidiary of the Company; 
  
 7.2.3 all costs and expenses relating to the acquisition of,
and maintenance and upgrades to, the Company’s portfolio accounting systems; 
  
 7.2.4 all costs and expenses of money borrowed by the Company or its subsidiaries, including, without limitation, principal, interest and
the costs associated with the establishment and maintenance of any credit facilities, warehouse loans and other indebtedness of the Company and its subsidiaries (including commitment fees, legal fees, closing and other costs); 
  

 16 

 7.2.5 all taxes and license fees applicable to the Company or any subsidiary of the
Company, including interest and penalties thereon; 
  
 7.2.6 all legal, audit, accounting, underwriting, brokerage, listing, filing, rating agency, registration and other fees, printing, engraving, clerical, personnel and other expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and stock exchange listing of the Company’s or any subsidiary’s equity securities or debt securities; 
  
 7.2.7 other than for the Manager Obligations, all fees paid to and expenses of third-party advisors and independent contractors,
consultants, managers and other agents (other than the Manager or any Sub-manager) engaged by the Company or any subsidiary of the Company or by the Manager for the account of the Company or any subsidiary of the Company (other than the Manager or
Sub-manager) and all employment expenses of the personnel employed by the Company or any subsidiary of the Company (including, without limitation, a chief financial officer of the Company, but excluding any personnel which are also employed by the
Manager or Sub-manager), including, without limitation, the salaries, wages, equity based compensation of such personnel, payroll taxes and the incremental cost for administering employee benefit plans of the Manager which are used by such
personnel; 
  
 7.2.8 all insurance costs incurred
by the Company or any subsidiary of the Company, including, without limitation, any costs to obtain liability or other insurance to indemnify the Manager and underwriters of any securities of the Company; 
  
 7.2.9 all custodian, transfer agent and registrar fees and
charges; 
  
 7.2.10 all compensation and fees
paid to directors of the Company or any subsidiary of the Company (excluding those directors who are also employees of the Manager), all expenses of directors of the Company or any subsidiary of the Company (including those directors who are also
employees of the Manager), the cost of directors and officers liability insurance and premiums for errors and omissions insurance, and any other insurance deemed necessary or advisable by the Board of Directors for the benefit of the Company and its
directors and officers (including those directors who are also employees of the Manager); 
  
 7.2.11 all third-party legal, accounting and auditing fees and expenses and other similar services relating to the Company’s or any
subsidiary’s operations (including, without limitation, all quarterly and annual audit or tax fees and expenses); 
  
 7.2.12 all legal, expert and other fees and expenses relating to any actions, proceedings, lawsuits, demands, causes of action and claims,
whether actual or threatened, made by or against the Company, or which the Company is authorized or obligated to pay under applicable law or its Governing Instruments or by the Board of Directors; 
  
 7.2.13 any judgment or settlement of pending or threatened
proceedings (whether civil, criminal or otherwise) against the Company or any subsidiary of the Company, or against any trustee, director or officer of the Company or any subsidiary of the Company in his capacity as such for which the Company or any
subsidiary of the Company is required to indemnify such trustee, director or officer by any court or governmental agency, or settlement of pending or threatened proceedings; 

  

 17 

 7.2.14 all travel and related expenses of directors, officers and employees of the
Company and the Manager, incurred in connection with attending meetings of the Board of Directors or holders of securities of the Company or any subsidiary of the Company or performing other business activities that relate to the Company or any
subsidiary of the Company, including, without limitations, travel and expenses incurred in connection with the purchase, financing, refinancing, sale or other disposition of Mortgage Assets or other investments of the Company; provided, however,
that the Company shall only be responsible for a proportionate share of such expenses, as determined by the Manager in good faith, where such expenses were not incurred solely for the benefit of the Company; 
  
 7.2.15 all expenses of organizing, modifying or dissolving
the Company or any subsidiary of the Company and costs preparatory to entering into a business or activity, costs of winding up or disposing of a business of activity of the Company or its subsidiaries; 
  
 7.2.16 all expenses relating to payments of dividends or
interest or distributions in cash or any other form made or caused to be made by the Board of Directors to or on account of holders of the securities of the Company or any subsidiary of the Company, including, without limitation, in connection with
and dividend reinvestment plan; 
  
 7.2.17 all
expenses of third parties relating to communications to holders of equity securities or debt securities issued by the Company or any subsidiary of the Company and the other bookkeeping and clerical work necessary in maintaining relations with
holders of such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies, including any costs of computer services in connection with this function, the cost of printing and mailing
certificates for such securities and proxy solicitation materials and reports to holders of the Company’s or any subsidiary’s securities and reports to third parties required under any indenture to which the Company or any subsidiary of
the Company is a party; 
  
 7.2.18 subject to
Section 7.1, all expenses relating to any office or office facilities maintained by the Company or any subsidiary of the Company exclusive of the office of the Manager and/or Affiliates of the Manager, including, without limitation, rent, telephone,
utilities, office furniture, equipment, machinery and other office expenses for the Company’s chief financial officer and any other persons the Board of Directors authorizes the Company to hire; 
  
 7.2.19 all costs and expenses related to the design and
maintenance of the Company’s web site or sites and associated with any computer software or hardware that is used solely for the Company; 
  
 7.2.20 other than for the Manager Obligations, all other costs and expenses relating to the Company’s business and investment
operations, including, without limitation, the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of Mortgage Assets, including, without limitation, appraisal, reporting, audit and legal fees; 

  

 18 

 7.2.21 other than for the Manager Obligations, all other expenses actually incurred by
the Manager, its Affiliates or any Sub-manager or their respective officers, employees, representatives or agents, or any Affiliates thereof, which are reasonably necessary for the performance by the Manager of its duties and functions under this
Agreement (including, without limitation, any fees or expenses relating to the Company’s compliance with all governmental and regulatory matters); and 
  
 7.2.22 all other expenses of the Company or any subsidiary of the Company that are not the responsibility of the Manager under Section 7.1
of this Agreement. 
  
 7.3 Expense
Reimbursement to the Manager. Any individual cost or expense exceeding One Hundred Thousand ($100,000) (or such other limit as may be approved by the Board of Directors from time to time) shall be approved by the Board of Directors, unless such
item was previously reflected in the Company’s budget approved by the Board of Directors. Costs and expenses incurred by the Manager on behalf of the Company shall be reimbursed monthly to the Manager or, at the Manager’s election, offset
against any funds of the Company in the Company’s account or accounts held by the Manager or otherwise. The Manager shall prepare a written statement in reasonable detail documenting the costs and expenses of the Company and those incurred by
the Manager on behalf of the Company during each month, and shall deliver such written statement to the Company within fifteen (15) days after the end of each month. Unless deducted directly by the Manager as aforesaid, the Company shall pay all
amounts payable to the Manager pursuant to this Section 7.3 within three (3) days after the receipt of the written statement without demand, deduction, offset or delay. Cost and expense reimbursement to the Manager shall be subject to adjustment at
the end of each calendar year in connection with the annual audit of the Company. 
  
 8. Limits of Manager Responsibility; Indemnity. 
  
 8.1 Limits of Manager Responsibility. The Manager shall have no responsibility under this Agreement other than to render the
services specifically called for under this Agreement and shall not be responsible for any action of the Board of Directors in following or declining to follow any advice or recommendations of the Manager, including, without limitation, as set forth
in Section 2.2.2 of this Agreement. The Manager, any Sub-manager and their respective Affiliates, directors, officers, stockholders, equity holders, employees, representatives and agents, and any Affiliates thereof, shall not be liable to the
Company (including, without limitation, any stockholder thereof), any issuer of mortgage securities, any subsidiary of the Company, its subsidiary’s stockholders, the Unaffiliated Directors, any credit-party, any counter-party under any
agreement or any other person whatsoever for any acts or omissions, errors of judgment or mistakes of law by the Manager, any Sub-manager, or their respective Affiliates, directors, officers, employees, representatives or agents, or any Affiliates
thereof, under or in connection with this Agreement, except to the extent that the Unaffiliated Directors shall have made a reasonable good faith determination based upon findings of fact which are disclosed to the Manager that the Manager was
grossly negligent, acted with reckless disregard or engaged in willful misconduct or active fraud while discharging its material duties under this Agreement. 

  

 19 

 8.2 Indemnification. The Company and its subsidiaries shall reimburse, indemnify
and hold harmless the Manager, any Sub-manager, and their respective Affiliates, directors, officers, stockholders, equity holders, employees, representatives and agents, and any Affiliates thereof (each, an “indemnitee”) from and against
any and all expenses, losses, costs, damages, liabilities, demands, charges and claims of any nature whatsoever, actual or threatened (including, without limitation, reasonable attorneys’ fees), arising from or in respect of any acts or
omissions, errors of judgment or mistakes of law (or any alleged acts or omissions, errors of judgment or mistakes of law) performed or made while acting in any capacity contemplated under this Agreement or pursuant to any underwriting agreement or
similar agreement to which Manager is a party that is related to the Company’s activities. Notwithstanding the foregoing, the Company shall have no indemnification obligation under this Section 8.2 to the extent that the Unaffiliated Directors
shall have made a reasonable good faith determination based upon findings of fact which are disclosed to the Manager that the Manager was grossly negligent, acted with reckless disregard or engaged in willful misconduct or active fraud while
discharging its material duties under this Agreement. 
  
 9. No
Joint Venture. The Company and the Manager are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as such on any of them. The
Manager is an independent contractor and, except as expressly provided or authorized in this Agreement, shall have no authority to act for or represent the Company. 
  
 10. Term; Termination; Termination Fee. 
  
 10.1 Term. This Agreement shall commence on the Effective Date and shall have an initial term of one
year. Thereafter, this Agreement shall automatically renew for an additional year, unless terminated in accordance with the terms and conditions of this Agreement. For the avoidance of doubt, this Agreement cannot expire, it can only be
terminated. 
  
 10.2 Termination
Without Cause; Termination Fee. Notwithstanding any other provision of this Agreement to the contrary, after the first anniversary of the Effective Date, (i) the Company shall have the right to terminate this Agreement without cause at any time
after 60-days prior written notice to the Manager and the affirmative vote of two-thirds of the Unaffiliated Directors to do so and (ii) the Manager shall have the right to terminate this Agreement without cause at any time after 60-days prior
written notice to the Board of Directors. If the Company terminates this Agreement without cause, the Company shall make the following payments to the Manager within fifteen (15) days after the effective date of termination without demand,
deduction, offset or delay or, at the Manager’s election, the Manager may deduct such payments from any account or accounts of the Company: 
  
 10.2.1 all unpaid reimbursable costs and expenses permitted under the Agreement and all earned and unpaid Base Management Compensation and
Incentive Management Compensation payments; 
  

 20 

 10.2.2 two (2) years of the Base Management Compensation calculated on the highest annual
Base Management Compensation amount earned by the Manager in any of the three (3) years (or on an annualized basis if a lesser period) preceding the termination; 
  
 10.2.3 two (2) years of the Incentive Management Compensation calculated on the highest annual Incentive
Management Compensation earned by the Manager in any of the three (3) years (or on an annualized basis if a lesser period) preceding the termination; and 
  
 10.2.4 all Deferred Payments, including all vested and unvested amounts on a fully-accelerated basis. 
  
 Notwithstanding the foregoing, if the Company elects to terminate this
Agreement without cause in connection with an irrevocable decision by the Board of Directors to internalize the management of the Company’s business operations within ninety (90) days after the irrevocable decision to do so and not enter into a
contract with any other persons or entities to perform services comparable to the services contemplated under this Agreement, the payments to the Manager shall be as described above except that the payments under Sections 10.2.2. and 10.2.3 above
shall be equal to one (1) year of the Base Management Compensation and one (1) year of the Incentive Management Calculation, respectively, each calculated on the highest amount earned by the Manager in any of the three (3) years (or on an annualized
basis if a lesser period) preceding the termination. Nothing herein shall imply (i) a present or other intention by the Board of Directors to internalize the management of the Company’s business operations or (ii) the Manager’s
recommendation that the Board of Directors do so. 
  
 10.3 Termination by Company for Cause. In the event that the Unaffiliated Directors shall have made a reasonable good faith determination based on findings of fact which are disclosed to the Manager that cause exists, then two-thirds
of the Unaffiliated Directors shall have the right to terminate this Agreement for cause at the following time: (i) immediately, if the Unaffiliated Directors determined in good faith that its claims are based primarily on criminal activity or
active fraud) or (ii) after not less than sixty (60) days after written notice to the Manager, if the Unaffiliated Directors determined in good faith that its claims are based other than as described in clause (i) above and the Unaffiliated
Directors shall have determined that cause still exists after written notice to the Manager disclosing the findings of the Unaffiliated Directors and a reasonable opportunity to cure. In the event that the Agreement is terminated for
“cause” in accordance with the provisions of this Section 10.3, the Company shall pay the Manager as follows: 
  
 10.3.1 all unpaid reimbursable costs and expenses and all earned and unpaid Base Management Compensation and Incentive Management
Compensation payments. 
  

 21 

 10.4 Payment to the Manager in the Event of a Change of Control. In the
event of a Change of Control of the Company, the Manager shall have the right to terminate this Agreement upon sixty (60) days prior written notice, provided that the Manager delivers such notice within ninety (90) days after such Change of Control
shall have occurred. In the event of a termination of this Agreement in connection with a Change in Control, the Company shall pay the Manager: 
  
 10.4.1 all unpaid reimbursable costs and expenses permitted under the Agreement and all earned and unpaid Base Management Compensation and
Incentive Management Compensation payments; 
  
 10.4.2 two (2) years of the Base Management Compensation calculated on the highest annual Base Management Compensation amount earned by the Manager in any of the three (3) years (or on an annualized basis if a lesser period) preceding the
termination; 
  
 10.4.3 two (2) years of the
Incentive Management Compensation calculated on the highest annual Incentive Management Compensation earned by the Manager in any of the three (3) years (or on an annualized basis if a lesser period) preceding the termination; and 

  
 10.4.4 all Deferred Payments, including all
vested and unvested amounts on a fully-accelerated basis. 
  
 11.
Action Upon Termination. From and after the effective date of termination of this Agreement, except as specified in Section 10.2, 10.3 or 10.4 of this Agreement, the Manager shall not be entitled to any payment or compensation and any
unvested Deferred Payments as of the date of termination shall terminate and be cancelled without consideration. Upon such termination, the Manager shall promptly: 
  
 11.1.1 pay over to the Company or any subsidiary of the Company all money collected and held for the account
of the Company or any subsidiary of the Company pursuant to this Agreement; 
  
 11.1.2 pay over to the Company any unpaid Manager Refund; 
  
 11.1.3 deliver to the Board of Directors an accounting, including a statement showing all payments collected by it and a statement of all
money held by it, covering the period following the date of the last accounting furnished to the Board of Directors with respect to the Company or any subsidiary of the Company; and 
  
 11.1.4 deliver to the Board of Directors all property and documents of the Company or any subsidiary of the
Company then in the custody of the Manager. 
  
 12. Limited
Right to Offset; Survival of Payments. Notwithstanding anything to the contrary, the Company shall not have any right to offset any amount whatsoever from any payments in Sections 6, 7, 10, 11 or otherwise and the Company’s obligation to
make such payments shall survive the termination of this Agreement, except that the Company shall have the right to offset against the liquidated sum of any Manager Refund. 
  
 13. Assignments. 
  
 13.1 Assignment by the Manager. Other than transfers and assignments by operation of law (including transfers in connection with a
change of control of the Manager), this Agreement shall terminate automatically in the event that the Manager assigns this Agreement, unless such assignment is consented to in advance in writing by the Company with the consent of 

  

 22 

 
a majority of the Unaffiliated Directors. In the event an assignment by the Manager is consented to by the Company in accordance with this Section 12.1, such
assignment shall bind the assignee under this Agreement in the same manner as the Manager is bound, and the Manager shall be released from all of its obligations, duties and responsibilities under this Agreement and all liability therefore and in
respect hereof. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee as Manager. 
  
 13.2 Assignment by the Company. This Agreement shall not be assigned by the Company without the prior written consent of the
Manager. 
  
 14. Release of Money or Other Property Upon
Written Request. The Manager agrees that any money or other property of the Company or any subsidiary of the Company held by the Manager under this Agreement shall be held by the Manager as custodian for the Company or such subsidiary, and the
Manager’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by the Company or such subsidiary. 
  
 14.1 Procedures. Upon the receipt by the Manager of a written request signed by a duly authorized officer of the Company or an
authorized member of the Board of Directors requesting the Manager to release to the Company or any subsidiary of the Company any money or other property then held by the Manager for the account of the Company or any subsidiary of the Company under
this Agreement, the Manager shall release such money or other property to the Company or such subsidiary of the Company within a reasonable period of time, but in no event later than ninety (90) days following such request; provided, however, that
the Manager shall have the right to offset any Base Management Compensation, Incentive Management Compensation reimbursable costs or any other sums due and owning to the Manager under this Agreement against payment of any money or property held by
the Manager for the account of the Company or any subsidiary of the Company under this Agreement. 
  
 14.2 Limitations. The Manager, any Sub-manager and their respective Affiliates, directors, officers, stockholders, equity holders,
employees, representatives and agents, and any Affiliates thereof, shall not be liable to the Company, any subsidiaries of the Company, the Unaffiliated Directors or the Company’s or its subsidiaries’ stockholders for any acts performed or
omissions to act by the Company or any subsidiary of the Company in connection with the money or other property released to the Company or any subsidiary of the Company in accordance with this Section 14, except to the extent that the Board of
Directors shall have made a reasonable good faith determination based upon findings of fact which are disclosed to the Manager that the Manager was grossly negligent, acted with reckless disregard or engaged in willful misconduct or active fraud
while discharging its material duties under this Agreement 
  
 14.3 Indemnification. The Company and any subsidiary of the Company shall indemnify the Manager, any Sub-manager and their respective Affiliates, directors, officers, stockholders, equity holders, employees,
representatives and agents, and any Affiliates thereof, against any and all expenses, costs, losses, damages, liabilities, demands, charges and claims of any nature whatsoever, which arise in connection with the Manager’s (or a
Sub-manager’s) release of such money or other property to the Company or any subsidiary of the Company in accordance with the terms of this Section 14, except to the extent that the Board of Directors 

  

 23 

 
shall have made a reasonable good faith determination based upon findings of fact which are disclosed to the Manager that the Manager was grossly negligent,
acted with reckless disregard or engaged in willful misconduct or active fraud while discharging its material duties under this Agreement. Indemnification pursuant to this provision shall be in addition to any right of the Manager, any Sub-manager
and their respective Affiliates, directors, officers, stockholders, equity holders, employees, representatives and agents, and any Affiliates thereof, to indemnification under Section 8 of this Agreement. 
  
 15. Representations, Warranties and Covenants. 
  
 15.1 Company in Favor of the Manager. The Company
hereby represents and warrants to the Manager as follows: 
  
 15.1.1 Due Formation. The Company is duly organized, validly existing and in good standing under the laws of Maryland, has the power to own its assets and to transact the business in which it is now engaged and
is duly qualified to do business and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or
licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Company and its subsidiaries, taken as a whole. The Company does not do business under any fictitious business
name. 
  
 15.1.2 Power and Authority. The
Company has the power and authority to execute, deliver and perform this Agreement and all obligations required under this Agreement and has taken all necessary action to authorize this Agreement on the terms and conditions hereof and the execution,
delivery and performance of this Agreement and all obligations required under this Agreement. Except as shall have been obtained, no consent of any other person, including, without limitation, stockholders and creditors of the Company, and no
license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Company in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and all obligations required under this Agreement. This Agreement has been, and each instrument or document required under this Agreement will be, executed and delivered by a duly authorized
officer of the Company, and this Agreement constitutes, and each instrument or document required under this Agreement when executed and delivered under this Agreement will constitute, the legally valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. 
  
 15.1.3 Execution, Delivery and Performance. The execution, delivery and performance of this Agreement and the documents or instruments required under this Agreement will not violate any provision of any
existing law or regulation binding on the Company, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Company, or the Governing Instruments of, or any securities issued by, the Company or of any
mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Company is a party or by which the Company or any of its assets may be bound, the violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Company and its subsidiaries, taken as a whole, and will not 

  

 24 

 
result in, or require, the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or undertaking (other than the pledge of amounts payable to the Manager under this Agreement to secure the Manager’s obligations to its lenders). 
  
 15.2 Manager in Favor of the Company. The Manager
hereby represents and warrants to the Company as follows: 
  
 15.2.1 Due Formation. The Manager is duly organized, validly existing and in good standing under the laws of California, has the power to own its assets and to transact the business in which it is now engaged
and is duly qualified to do business and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized
or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Manager and its subsidiaries, taken as a whole. The Manager does not do business under any fictitious
business name. 
  
 15.2.2 Power and
Authority. The Manager has the power and authority to execute, deliver and perform this Agreement and all obligations required under this Agreement and has taken all necessary corporate action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this Agreement and all obligations required under this Agreement. Except as shall have been obtained, no consent of any other person including, without limitation, stockholders and
creditors of the Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Manager in connection with this Agreement
or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations required under this Agreement. This Agreement has been and each instrument or document required under this Agreement will be executed and
delivered by a duly authorized officer of the Manager, and this Agreement constitutes, and each instrument or document required under this Agreement when executed and delivered under this Agreement will constitute, the legally valid and binding
obligation of the Manager enforceable against the Manager in accordance with its terms. 
  
 15.2.3 Execution, Delivery and Performance. The execution, delivery and performance of this Agreement and the documents or
instruments required under this Agreement will not violate any provision of any existing law or regulation binding on the Manager, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Manager, or
the governing instruments of, or any securities issued by, the Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Manager is a party or by which the Manager or any of its assets may be
bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Manager and its subsidiaries, taken as a whole, and will not result in, or require, the creation or imposition of any
lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage indenture, lease, contract or other agreement, instrument or undertaking. 
  

 25 

 15.3 Covenants. 
  
 15.3.1 Chief Financial Officer. Within a reasonable period of time after the Effective Date, the
Company shall hire, or cause the Manager to hire on the Company’s behalf and at the Company’s expense, a chief financial officer, which shall be an employee of the Company and not the Manager. 
  
 15.3.2 Registration Rights Agreement. On the
Effective Date, the Company and FBR entered into the Registration Rights Agreement. If certain events occur (the “Trigger Events”), then the Manager suffers certain adverse consequences. The Company (including, without limitation, the
Board of Directors) will take all steps reasonably necessary to assist the Manager in avoiding any Trigger Events from occurring and will provide the Manager with the information and resources necessary in order to allow the Manager to seek to avoid
the occurrence of any Trigger Events. The Company (and the Board of Directors) shall take all steps reasonably necessary to assist the Manager in the meeting all of the obligations under the Registration Rights Agreement, including, without
limitation, all steps reasonably necessary to allow the Manager to file the Shelf Registration Statement (as defined in the Registration Rights Agreement) in a timely manner and to seek to avoid any suspension of the payment to the Manager of the
Incentive Management Compensation. 
  
 16. Notices. Unless
expressly provided otherwise in this Agreement, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when (1) delivered
by hand, (2) otherwise delivered against receipt therefor, or (3) upon actual receipt of registered or certified mail, postage prepaid, return receipt requested. The parties may deliver to each other notice by electronically transmitted facsimile
copies, provided that such facsimile notice is followed within 24 hours by any type of notice otherwise provided for in this Section 16. Any notice shall be duly addressed to the parties as follows: 
  

	 	16.1	if to the Company: 

  
 909 Montgomery Street 
 Suite 500 
 San Francisco, California 94133 
 Attn: Albert J. Gutierrez, CFA 
           President 
 Telecopy: (415)
391-0642 
  
 with a copy given in the manner
prescribed above, to: 
  

	 	16.2	if to the Manager: 

  
 909 Montgomery Street 
 Suite 500 
 San Francisco, California 94133 
 Attn: Sandy Monticelli, CPA 
 Telecopy: (415) 391-0642 
  

 26 

 Any party may alter the address to which communications or copies are to be sent by giving notice of such
change of address in conformity with the provisions of this Section 16 for the giving of notice. 
  
 17. Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns as provided in this Agreement. 
  
 18. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 
  
 19. Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of California, notwithstanding any California or other conflict of law provisions to the
contrary. 
  
 20. No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any
other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 
  
 21. Titles Not to Affect Interpretation. The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 
  
 22. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories. 
  
 23. Provisions Severable. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other
or others of them may be invalid or unenforceable in whole or in part. 
  
 24. Gender. Words used herein regardless of the number and gender specifically used shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context
requires. 
  

 27 

 25. Attorneys’ Fees. Should any action or other proceeding be necessary to enforce any of the
provisions of this Agreement or the various transactions contemplated hereby, the prevailing party will be entitled to recover its actual reasonable attorneys’ fees and expenses from the non-prevailing party. 
  
 26. Amendments. This Agreement may not be amended, modified or changed
(in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by all of the parties and, in the case of the Company, approved by a majority of the Unaffiliated Directors.
The parties hereto expressly acknowledge that no consent or approval of the Company’s stockholders is required in connection with any amendment, modification or change to this Agreement. 
  
 27. Authority. Each signatory to this Agreement warrants and
represents that he is authorized to sign on behalf of and to bind the party on whose behalf he, she or it is signing. 
  
 [Signature pages attached] 
  
  

 28 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

  

	 “COMPANY”

	
	 LUMINENT MORTGAGE CAPITAL,
 INC., a Maryland corporation

		
	By:	 	 /s/ Albert J. Gutierrez

	 	

	 Its:
	 	 President

  

	
	“MANAGER”
	
	 SENECA CAPITAL MANAGEMENT,
 LLC, a California limited liability company

		
	By:	 	 /s/ Sandra J. Monticelli

	 	

	 Its:
	 	 Chief Operating Officer

  
  
  

 S-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]