Document:

Unassociated Document

    SETTLEMENT
      AND RELEASE AGREEMENT

    

    This
      Settlement and Release (the “Settlement
      and Release”)
      is made
      this 30th day of March, 2008 (the “Effective
      Date”)
      by and
      between Soliton, LLC d/b/a BlueCar Partners also know as BlueCar Partners,
      LLC,
      a New York limited liability company (“Consultant”) and BioAuthorize Inc., a
      Colorado corporation (“BioAuthorize”). Consultant and BioAuthorize are sometimes
      referred to as the (“Parties”)
      and
      individually as a (“Party”).
      All
      terms used, but not otherwise defined herein, shall have the meanings ascribed
      to such terms in the BlueCar Partners, LLC Letter Agreement dated December
      7,
      2007 by and between Consultant and BioAuthorize, and later amended by the First
      Amendment to the Agreement dated January 18th,
      2008
      (collectively, the “Agreement”).

    

    Recitals

    

    WHEREAS,
      BioAuthorize has engaged Consultant, upon the terms and conditions set forth
      in
      the Agreement, to provide services including but not limited to a review of
      BioAuthorize’s entity structure, analyze IT plan and website review, business
      plan preparation, financial analysis, provide review of BioAuthorize’s advisors
      and recommendations regarding the same, acquisition or URL rights, software
      review, sales and marketing review and analysis, business development, merger
      and acquisition advisory, and investor relations services (the “Services”).

    

    WHEREAS,
      the Parties desire to terminate the Agreement and forever resolve all matters
      regarding the relationship between the Parties upon the terms and conditions
      set
      forth herein.

    

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

    

    Settlement
      and Release

     

    
      	 	
              1.

            	
              The
                Parties mutually agree that the Agreement is hereby terminated effective
                March 30, 2008 and except as provided for herein, the Parties shall
                have
                no continuing obligations to each other including performance of
                the
                Services by Consultant and the payment of any compensation by
                BioAuthorize.

            

    

     

    
      	 	
              2.

            	
              On
                or before Monday March 31, 2008, Consultant shall transfer and redeliver
                to Genesis Holdings, Inc. for cancellation, 1,275,000 shares of common
                stock of Genesis Holdings, Inc. (including the execution of stock
                powers
                required to make the transfer and redelivery) which were received
                by
                Consultant pursuant to provisions of the Share Exchange dated February
                18,
                2008 in exchange for shares of common stock of BioAuthorize that
                Consultant had earlier received from BioAuthorize pursuant to Section
                3 of
                the Agreement.

            

    

     

    
      	 	
              3.

            	
              Except
                for the express purpose of enforcing the provisions of this Settlement
                and
                Release or as otherwise provided herein, the Parties waive any and
                all
                claims, disputes, demands, causes of action, losses and damages of
                any
                nature which were made, could have been made or existed as of the
                date of
                this Settlement and Release which each Party may have against the
                other
                Party, its respective principals, agents, successors and assigns.
                

            

    

    

      
        	 	 
	
                Settlement
                  and Release Agreement

              	
                Page 
                  1

              

      

    

    
      
         

      

      
        
        

        
        

      

      
         

      

    

     

    
      	 	
              4.

            	
              Each
                Party (the “Indemnifying
                Party”)
                hereby agrees to indemnify, defend, protect and hold the other Party
                (the
                “Indemnified
                Party”),
                its officers, directors, agents, controlling persons (within the
                meaning
                of the Securities Act of 1933, as amended), employees, members and
                managers harmless for, from and against any and all claims, damages,
                liabilities, losses, attorney’s fees (including those incurred in any
                arbitration), dispute resolution expenses or other monetary loss
                of any
                kind whatsoever (including all actions or proceedings in respect
                thereof)
                (each, a “Claim”)
                brought by any person or entity relating to or arising from any
                breach, default or failure to perform any duty or obligation by the
                Indemnifying Party under the provisions of the Agreement or arising
                from
                any negligence, gross negligence or intentional or willful misconduct
                of
                the Indemnifying Party. The Indemnifying Party will reimburse the
                Indemnified Party, from time to time upon written request, for all
                reasonable legal and other expenses incurred in connection with
                investigating or defending any
                Claim.

            

    

     

    
      	 	
              5.

            	
              The
                Parties agree that nothing contained in this Agreement shall be deemed
                an
                admission that such Party failed to comply with the provisions of
                the
                Agreement. 

            

    

     

    
      	 	
              6.

            	
              The
                Parties hereto agree that the terms and conditions of this Settlement
                and
                Release or any part hereof may only be amended, modified, changed
                or
                superseded by a writing executed by all of the Parties.
                

            

    

     

    
      	 	
              7.

            	
              This
                Settlement and Release shall be binding upon the parties, their
                principals, their successors and assignees, and all others acting
                by,
                through, or under their direction or in privity with
                them.

            

    

     

    
      	 	
              8.

            	
              By
                execution hereof, each Party hereby represents that it has all requisite
                authority and power to enter into and deliver this Agreement and
                perform
                the obligations of such Party as set forth herein and that all necessary
                corporate and other action has been validly and lawfully granted
                or
                obtained.

            

    

     

    
      	 	
              9.

            	
              This
                Settlement and Release may be executed in one or more counterparts
                and by
                original or facsimile signature, each of which will constitute an
                original
                and all of which together will constitute one and the same
                instrument.

            

    

    

      
        	 	 
	
                Settlement
                  and Release Agreement

              	
                Page
                  2

              

        
          
             

          

          
            
            

            
            

          

          
             

          

        

      

       

    

    IN
      WITNESS WHEREOF, this Settlement and Release has been executed by each of the
      Parties as of the Effective Date.

    

    

    

    
      	
              Consultant:

              Soliton,
                LLC DBA BlueCar Partners

            	
              BioAuthorize:

              BioAuthorize,
                Inc.

            
	
               

               

               

              By:
                /s/ Laura
                Whitelaw                                 
                

               

               

              Name:
                Laura Whitelaw

               

              Title:
                Vice-President

            	
               

               

               

              By:
                /s/ Yada
                Schneider                                       
                

               

               

              Name:
                Yada Schneider

               

              Title:
                President & CEO

            

    

    

      
        	 	 
	
                Settlement
                  and Release Agreement

              	
                Page
                  3Unassociated Document

    AMENDED
      AND RESTATED 

    INVESTMENT
      ADVISORY AGREEMENT 

     

    AGREEMENT,
      dated as of March 31, 2008, between Anthracite Capital, Inc. (the "Company"),
      a
      Maryland corporation, and BlackRock Financial Management, Inc. (the "Investment
      Manager"), a Delaware corporation. 

     

    WHEREAS,
      the Company is a real estate finance company that generates income based on
      the
      spread between the interest income on its mortgage loans and securities
      investments and the interest expense from borrowings used to finance its
      investments. The Company seeks to earn high returns on a risk-adjusted basis
      to
      support a consistent quarterly dividend. The Company expects to qualify for
      the
      tax benefits accorded by Sections 856 through 860 of the Internal Revenue Code
      of 1986, as amended (the "Code"); 

     

    WHEREAS,
      the Company desires to retain the Investment Manager to acquire, sell and
      otherwise manage the investments of the Company and to perform certain
      supervisory services for the Company in the manner and on the terms set forth
      herein; 

     

    WHEREAS,
      the Company and the Investment Manager entered into that certain Amended and
      Restated Investment Advisory Agreement, dated as of March 15, 2007 (the "Prior
      Agreement"); 

     

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

     

    NOW
      THEREFORE, in consideration of the mutual promises and agreements herein
      contained and other good and valuable consideration, the receipt of which is
      hereby acknowledged, it is agreed by and between the parties hereto as follows:
      

     

    
      	1.  	
              Certain
                Definitions 

            

    

     

    
      	(a)  	
              "Adjusted
                Operating Earnings" means Operating
                Earnings plus realized gains, net foreign currency gains and decreases
                in
                expense associated with reversals of credit impairments on commercial
                mortgage loans; less realized losses, net foreign currency losses
                and
                increases in expense associated with credit impairments on commercial
                mortgage loans.

            

    

     

    
      	(b)  	
              "Affiliate"
                means, when used with reference to a specified person,
                

            

    

     

    
      	(i)  	
              any
                person that directly or indirectly controls or is controlled by or
                is
                under common control with the specified
                person,

            

    

     

    
      	(ii)  	
              any
                person that is an officer of, partner in or trustee of, or serves
                in a
                similar capacity with respect to, the specified person or of which
                the
                specified person is an officer, partner or trustee, or with respect
                to
                which the specified person serves in a similar capacity and
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(iii)  	
              any
                person that, directly or indirectly, is the beneficial owner of 5%
                or more
                of any class of equity securities of the specified person or of which
                the
                specified person is directly or indirectly the owner of 5% or more
                of any
                class of equity securities; provided,
                however,
                that neither the Company nor any of its controlled Affiliates will
                be
                treated as an Affiliate of the Investment Manager or any of its
                Affiliates. 

            

    

     

    
      	(c)  	
              "Agreement"
                means this Amended and Restated Investment Advisory Agreement, as
                amended
                from time to time. 

            

    

     

    
      	(d)  	
              "Board
                of Directors" means the Board of Directors of the Company.
                

            

    

     

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

            

    

     

    
      	(f)  	
              "CDO"
                means collateralized debt
                obligations.

            

    

     

    
      	(g)  	
              "FAS
                159" means the Statement of Financial Accounting Standards No. 159,
                The
                Fair Value Option for Financial Assets and Financial Liabilities
                -
                Including an Amendment of FASB Statement No. 115, promulgated by
                the
                Financial Accounting Standards Board in February 2007.
                

            

    

     

    
      	(h)  	
              "GAAP"
                means accounting principles generally accepted in the United States
                of
                America.

            

    

     

    
      	(i)  	
              "Mortgage-Backed
                Securities" means debt obligations (bonds) that are secured by Mortgage
                Loans or mortgage certificates. 

            

    

     

    
      	(j)  	
              "Mortgage
                Loans" means multifamily, residential and commercial term loans secured
                by
                real property.

            

    

     

    
      	(k)  	
              "Operating
                Earnings" means net income after operating expenses and preferred
                dividends but before realized and unrealized gains (losses),
                incentive fees attributable to other income (loss), net foreign currency
                gain (loss), hedge ineffectiveness and income (loss) associated with
                credit impairments on commercial mortgage loans, with such other
                items as set forth in the Company's applicable Current Report on
                Form 8-K announcing quarterly results of
                operations.

            

    

     

    
      	(l)  	
              "Person"
                means and includes any natural person, corporation, partnership,
                association, trust, limited liability company or any other legal
                entity.

            

    

     

    
      	(m)  	
              "Quarterly
                Average Total Stockholders' Equity" means the average of (i) the
                Total
                Stockholders' Equity at the end of the quarter preceding the applicable
                quarter and (ii) the Total Stockholders' Equity at the end of the
                applicable quarter, as reported in the Company's publicly filed financial
                statements.  It is understood that the Company adopted FAS 159
                as of January 1, 2008 and elected to apply the fair value option to
                the following financial assets and liabilities existing at the time
                of
                adoption: (1) all securities which were previously accounted for as
                available-for-sale; (2) all unsecured long-term liabilities,
                consisting of all senior unsecured notes, senior convertible notes,
                junior
                unsecured notes and junior subordinated notes; and (3) all CDO
                liabilities.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	(n)  	
              "REIT
                Provisions of the Code" means Sections 856 through 860 of the Code.
                

            

    

     

    
      	(o)  	
              "Ten-Year
                U.S. Treasury Rate" means the arithmetic average of the weekly average
                yield to maturity for actively traded current coupon U.S. Treasury
                fixed
                interest rate securities (adjusted to constant maturities of ten
                years)
                published by the Federal Reserve Board during a quarter, or if such
                rate
                is not published by the Federal Reserve Board, any Federal Reserve
                Bank or
                agency or department of the federal government selected by the Company.
                If
                the Company determines in good faith that the Ten-Year U.S. Treasury
                Rate
                cannot be calculated as provided above, then the rate shall be the
                arithmetic average of the per annum average yields to maturities,
                based
                upon closing asked prices on each business day during a quarter,
                for each
                actively traded marketable U.S. Treasury fixed interest rate security
                with
                a final maturity date not less than eight nor more than twelve years
                from
                the date of the closing asked prices as chosen and quoted for each
                business day in each such quarter in New York City by at least three
                recognized dealers in U.S. government securities selected by the
                Company.
                

            

    

     

    
      	(p)  	
              "Unaffiliated
                Directors" shall mean those directors serving on the Board of Directors
                who (a) do not own greater than a de minimis interest in the Investment
                Manager or any of its Affiliates, other than the Company and
                any Person controlled by the Company or (b) within the last two years,
                have not directly or indirectly (i) been an officer of or employed
                by the
                Company or the Investment Manager or any of their respective Affiliates,
                (ii) been a director of the Investment Manager or any of its
                Affiliates other
                than the Company and any Person controlled by the Company, (iii)
                performed
                more than a de minimis amount of services for the Investment Manager
                or
                any of its Affiliates or (iv) had any material business or professional
                relationship with the Investment Manager or any of its
                Affiliates other
                than as a director of the Company and any Person controlled by the
                Company. 

            

    

     

    
      	(q)  	
              "Window
                Period" shall mean the first 20 trading days of the Common Stock
                on the
                New York Stock Exchange commencing on the first full trading day
                after the
                release of the Operating Earnings, as that period may be shortened,
                prolonged or altered by the Company.

            

    

     

    
      	2.  	
              In
                General 

            

    

     

    The
      Investment Manager agrees, as more fully set forth herein, to act as investment
      adviser to the Company with respect to the investment of the Company's assets
      and to supervise and arrange the purchase of securities and loans for and the
      sale of securities and loans held in the investment portfolio of the Company.
      The Investment Manager shall manage the investment assets of the Company in
      conformity with the policies that are approved and monitored by the Board of
      Directors. The Investment Manager shall prepare regular reports for the Board
      of
      Directors that will review the Company's acquisitions of assets, portfolio
      composition and characteristics, credit quality, performance and compliance
      with
      the policies approved by the Board of Directors. The Investment Manager shall
      allocate investment and disposition opportunities in accordance with policies
      and procedures the Investment Manager considers fair and equitable, including,
      without limitation, such considerations as investment objectives, restrictions
      and time horizons, availability of cash and the amount of existing holdings.
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              Duties
                and Obligations of the Investment Manager with Respect to Investment
                of
                Assets of the Company 

            

    

     

    
      	(a)  	
              Subject
                to the succeeding provisions of this Section and subject to the direction
                and control of the Board of Directors, the Investment Manager will
                be
                responsible for the day-to-day investment management of the Company
                and
                will perform (or cause to be performed) such services and activities
                relating to the investment of assets of the Company as may be appropriate,
                including, but not limited to: 

            

    

     

    
      	(i)  	
              providing
                a complete program of investing and reinvesting the capital and assets
                of
                the Company in pursuit of the Company's investment objectives and
                in
                accordance with the policies adopted by the Board of Directors from
                time
                to time; 

            

    

     

    
      	(ii)  	
              serving
                as the Company's consultant with respect to formulation of investment
                criteria and preparation of policy guidelines by the Board of Directors;
                

            

    

     

    
      	(iii)  	
              assisting
                the Company in developing criteria for mortgage asset purchase commitments
                that are specifically tailored to the Company's investment objectives
                and
                making available to the Company the Investment
                Manager's knowledge and experience with respect to mortgage assets
                and
                other real estate related assets; 

            

    

     

    
      	(iv)  	
              counseling
                the Company in connection with investment policy decisions made by
                the
                Board of Directors; 

            

    

     

    
      	(v)  	
              evaluating
                and recommending hedging strategies to the Board of Directors in
                accordance with hedging guidelines and policies adopted by the Board
                of
                Directors, and engaging in hedging activities on behalf of the Company,
                consistent with the Company's status as a REIT;

            

    

     

    
      	(vi)  	
              maintaining
                the Company's exemption from regulation as an investment company
                under the
                Investment Company Act of 1940, as amended (the "Investment Company
                Act");
                

            

    

     

    
      	(vii)  	
              representing
                the Company in connection with the purchase and commitment to purchase
                or
                sell mortgage assets, including the accumulation of Mortgage Loans
                for
                securitization and the incurrence of debt;

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	(viii)  	
              arranging
                for the issuance of Mortgage-Backed Securities from pools of Mortgage
                Loans owned by the Company; 

            

    

     

    
      	(ix)  	
              acquiring
                and managing Mortgage-Backed
                Securities;

            

    

     

    
      	(x)  	
              furnishing
                reports and statistical and economic research to the Company regarding
                the
                Company's activities and the services performed for the Company by
                the
                Investment Manager; and 

            

    

     

    
      	(xi)  	
              monitoring
                and providing to the Board of Directors on an ongoing basis price
                information and other data, obtained from certain nationally recognized
                dealers that maintain markets in mortgage assets identified by the
                Board
                of Directors from time to time, and providing data and advice to
                the Board
                of Directors in connection with the identification of such dealers.
                

            

    

     

    
      	(b)  	
              In
                the performance of its duties under this Agreement, the Investment
                Manager
                shall at all times use all reasonable efforts to conform to and act
                in
                accordance with any requirements imposed by (i) the status of the
                Company
                as a REIT as defined in the REIT Provisions of the Code; (ii) the
                Company's status as an entity exempt from regulation under the Investment
                Company Act; (iii) any other applicable provision of law; (iv) the
                provisions of the Articles of Incorporation and By-Laws of the Company,
                as
                such documents are amended from time to time; (v) the investment
                objectives and policies of the Company as set forth in its Registration
                Statement on Form S-11, as such objectives and policies may thereafter
                be
                amended from time to time; and (vi) any policies and determinations
                of the
                Board of Directors. 

            

    

     

    
      	(c)  	
              The
                Investment Manager will bear all costs and expenses of the Investment
                Manager's officers and employees and any overhead incurred in connection
                with the Investment Manager's duties hereunder, the cost of office
                space
                and equipment required for performance of the Investment Manager's
                duties
                and shall bear the costs of any salaries or directors' fees of any
                officers or directors of the Company who are Affiliates of the Investment
                Manager, except that the Board of Directors may approve reimbursement
                to
                the Investment Manager of the Company's pro rata portion of the salaries,
                bonuses, health insurance, retirement benefits and all similar employment
                costs for the time spent on Company operations and administration
                (other
                than the provision of services covered by Section 3(a) above) of
                all
                personnel employed by the Investment Manager who devote substantial
                time
                to Company operations and administration or the operations and
                administration of other companies advised by the Investment Manager;
                provided
                that the Investment Manager shall not be expected to bear the following
                expenses: issuance and transaction costs incident to the acquisition,
                disposition and financing of investments, legal, accounting and auditing
                fees and expenses, the compensation and expenses of the Company's
                Unaffiliated Directors, the costs of printing and mailing proxies
                and
                reports to stockholders, costs incurred by employees of the Investment
                Manager for travel on behalf of the Company, costs associated with
                any
                computer software or hardware that is used solely for the Company,
                costs
                to obtain liability insurance to indemnify the Company's directors
                and
                officers, the Investment Manager and its employees and directors
                and any
                underwriters, and the compensation and expenses of the Company's
                custodian
                and transfer agent, if any. The Company will also be required to
                pay all
                expenses incurred in connection with due diligence, the accumulation
                of
                Mortgage Loans, the master and special servicing of Mortgage Loans,
                the
                issuance and administration of Mortgage-Backed Securities from pools
                of
                Mortgage Loans or otherwise, the raising of capital, the incurrence
                of
                debt, the acquisition of assets, interest expenses, taxes and license
                fees, non-cash costs, litigation, the base and incentive management
                fee
                and extraordinary or non-recurring expenses.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              The
                Investment Manager shall give the Company the benefit of its best
                judgment
                and effort in rendering services hereunder.

            

    

     

    
      	(e)  	
              Nothing
                in this Agreement shall prevent the Investment Manager or any partner,
                officer, employee or other Affiliate of the Investment Manager from
                acting
                as investment adviser for any other person, firm or corporation,
                or from
                engaging in any other lawful activity, and shall not in any way limit
                or
                restrict the Investment Manager or any of its shareholders, officers,
                employees or agents from buying, selling or trading any securities
                for its
                or their own accounts or for the accounts of others for whom it or
                they
                may be acting; provided,
                however,
                that the Investment Manager will not undertake activities which,
                in its
                judgment, will substantially and adversely affect the performance
                of its
                obligations under this Agreement. 

            

    

     

    
      	(f)  	
              The
                Investment Manager shall maintain appropriate books of accounts and
                records relating to services performed under this Agreement, and
                such
                books of accounts and records shall be accessible for inspection
                by
                representatives of the Company or any of its subsidiaries at any
                time
                during normal business hours. The Investment Manager shall keep
                confidential any and all information obtained in connection with
                the
                services rendered under this Agreement and shall not disclose any
                such
                information to nonaffiliated third parties except with the prior
                written
                consent of the Board of Directors or as may be required by law or
                order of
                a court or other tribunal having requisite jurisdiction.
                

            

    

     

    
      	(g)  	
              The
                Investment Manager shall require each seller or transferor of assets
                to be
                acquired by the Company to make such representations and warranties
                regarding such assets as may be directed by the Board of Directors,
                or, if
                no such directions are given, as may, in the judgment of the Investment
                Manager, be necessary and appropriate. In addition, the Investment
                Manager
                shall take such other action as may be directed by the Board of Directors,
                or, if no such directions are given, as it deems necessary or appropriate
                with regard to the protection of the Company's assets.
                

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	4.  	
              Portfolio
                Transactions and Brokerage 

            

    

     

    The
      Investment Manager is authorized, for the purchase and sale of the Company's
      assets, to employ such securities dealers as may, in the judgment of the
      Investment Manager, implement the policy of the Company to obtain the best
      net
      results taking into account such factors as price, including dealer spread,
      the
      size, type and difficulty of the transaction involved, the firm's general
      execution and operational facilities and the firm's risk in positioning the
      securities involved and is authorized to direct the execution of such
      transactions, in compliance with applicable law to dealers and brokers that
      are
      affiliates of, or have a financial interest in, the Investment Manager or its
      affiliates ("Affiliated Broker-Dealers"). The Investment Manager and any
      Affiliated Broker-Dealers are also hereby authorized by the Company to execute
      agency cross transactions on the Company's behalf. Agency cross transactions
      may
      facilitate a purchase or sale of a block of securities at a predetermined price
      and may avoid unfavorable price movements which might otherwise be suffered
      if
      the purchase or sale order were exposed to the market. However, the Manager
      and
      its Affiliated Broker-Dealers may receive commissions from, and therefore may
      have a potentially conflicting division of loyalties and responsibilities
      regarding, both parties to an agency cross transaction. The Company understands
      that its authority to the Investment Manager to effect agency cross transactions
      for the Company is terminable at will without penalty, effective upon receipt
      by
      the Investment Manager of written notice from the Company. If the Company's
      assets are subject to Section 11(a) of the Securities Exchange Act of 1934,
      as
      amended (the "Exchange Act"), and Rule 11a2-2(T) thereunder, the Company
      authorizes the Investment Manager's Affiliated Broker-Dealers that may be
      members of a U.S. securities exchange, or have the right to trade on such an
      exchange, to execute transactions on such exchange for the Company. Consistent
      with this policy, the Investment Manager is authorized to direct the execution
      of the Company's portfolio transactions to dealers and brokers furnishing
      statistical information or research deemed by the Investment Manager to be
      useful or valuable to the performance of the Investment Manager's investment
      advisory functions for the Company. 

     

    
      	5.  	
              Compensation
                of the Investment Manager 

            

    

     

    
      	(a)  	
              The
                Company agrees to pay to the Investment Manager and the Investment
                Manager
                agrees to accept,
                the fees specified in this Section 5(a) and Section 5(f) below, as
                full
                compensation for all services rendered by the Investment Manager
                as such:
                

            

    

     

    
      	 	
              (i)

            	
              a
                quarterly base management fee based on Quarterly Average Total
                Stockholders' Equity, calculated as follows:

            

    

     

    
      
        	
                Quarterly
                  Average Total

              	 	
                Base

              	 
	
                Stockholders'
                  Equity

              	 	
                Management
                  Fee

              	 
	
                Less
                  than or equal to $400 million

              	 	 	
                0.3750

              	
                %

              
	
                Greater
                  than $400 million, but less than or equal to $800 million

              	 	 	
                0.3125

              	
                %

              
	
                Greater
                  than $800 million

              	 	 	
                0.2500

              	
                %

              
	 	 	 	 	 
	
                and
                  

              	 	 	 	 

      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              an
                incentive fee in an amount equal to the product of 25% of the dollar
                amount by which: 

            

    

     

    
      	(1)  	
              Adjusted
                Operating Earnings
                of
                the Company (before incentive fee) for the applicable quarterly period
                exceeds

            

    

     

    
      	(2)  	
              an
                amount equal to (A) the weighted average of the price per share of
                the
                Common Stock in the initial public offering and the prices per share
                of
                Common Stock in any secondary offerings of Common Stock by the Company,
                including, without limitation, issuances of Common Stock pursuant
                to the
                Company's Dividend Reinvestment and Stock Purchase Plan, private
                placements, public offerings and exercises of options granted under
                the
                Company's 1998 Stock Option Plan, multiplied by (B) the Ten-Year
                U.S.
                Treasury Rate plus 4.0% per annum (expressed as a quarterly percentage)
                multiplied by (C) the weighted average number of shares of Common
                Stock
                outstanding during such quarter.

            

    

     

    
      	(b)  	
              Calculation
                of the incentive fee payable to the Investment Manager shall be calculated
                using a rolling four-quarter high watermark (the "Watermark"). In
                determining the Watermark, the Investment Manager shall calculate
                the
                incentive fee based upon the current and prior three quarters' Adjusted
                Operating Earnings and/or net income (the "Yearly Incentive Fee"),
                as the
                case may be, as follows: (i)
                for the 1st quarter of fiscal 2008 and all prior quarters, net income,
                and
                (ii) for the 2nd quarter of fiscal 2008 and all subsequent quarters,
                Adjusted Operating Earnings. For clarification purposes only, in
                calculating the incentive fee at: (i) June 30, 2008, the Investment
                Manager shall calculate the Watermark based upon: 2nd quarter of
                fiscal
                2008 Adjusted Operating Earnings, and 1st quarter of fiscal 2008
                and 3rd
                and 4th quarters of fiscal 2007 net income; and (ii) at September
                30,
                2008, the Investment Manager shall calculate the Watermark based
                upon: 2nd
                and 3rd quarters of fiscal 2008 Adjusted Operating Earnings and 1st
                quarter of fiscal 2008 and 4th quarter of fiscal 2007 net income.
                The
                Company shall pay the Investment Manager an incentive fee in the
                current
                quarter if the Yearly Incentive Fee is greater than the amount the
                Company
                paid to the Investment Manager in the prior three quarters cumulatively.
                In calculating the incentive fee, Adjusted Operating Earnings may
                exclude
                special one-time events pursuant to changes in GAAP accounting
                pronouncements, or other one-time events, after discussion between
                the
                Investment Manager and the Unaffiliated Directors. In calculating
                the
                incentive fee, net income shall be based on GAAP and adjusted to
                exclude
                special one-time events pursuant to changes in GAAP accounting
                pronouncements, or other one-time events, after discussion between
                the
                Investment Manager and the Unaffiliated Directors. For any period
                less
                than a fiscal quarter during which this Agreement is in effect, the
                fee
                shall be prorated according to the proportion which such period bears
                to a
                full quarter of 90, 91 or 92 days, as the case may
                be.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	(c)  	
              One
                hundred percent (100%) of the base management fee and the incentive
                fee
                shall (subject to the other provisions of this Section 5) be payable
                to
                the Investment Manager in Common Stock. Any shares issued pursuant
                to this
                provision shall be issued pursuant to any applicable stock plan approved
                by the Company's stockholders. 

            

    

     

    
      	(d)  	
              The
                management fees earned under Section 5(a) will be payable in arrears.
                The
                amount of Common Stock payable for the base management fee and the
                incentive fee for a quarter shall be calculated by dividing the applicable
                fee by the average of the opening and closing prices of the Common
                Stock
                on the New York Stock Exchange during the first 10 days of the Window
                Period in the subsequent quarter. Payment of such fees shall be made
                as
                soon as practicable following such calculation.

            

    

     

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

            

    

     

    
      	(f)  	
              The
                Company shall pay to the Investment Manager, which payment shall
                be part
                of the base management fee, a number of shares of Common Stock equal
                to
                one half of one percent (0.5%) of the total number of shares of Common
                Stock outstanding as of the tenth trading day of the Window Period
                that
                commences in the fourth quarter of each year or, if there is no such
                Window Period, as of December 31 of each year. The Company shall
                pay such
                shares as soon as practicable after calculation of the shares payable.
                Any
                shares of Common Stock issued pursuant to this provision shall be
                issued
                pursuant to any applicable stock plan approved by the Company's
                stockholders.

            

    

     

    
      	(g)  	
              The
                Investment Manager's receipt of Common Stock in accordance herewith
                shall
                be subject to all applicable securities laws (including, without
                limitation, prohibitions on insider trading), and all further restrictions
                as shall be deemed necessary or advisable by the Board of Directors.
                To
                the extent that the Investment Manager may be deemed a director of
                the
                Company, all acquisitions of Company equity securities, including
                Common
                Stock, made by the Investment Manager pursuant to and in accordance
                with
                the terms and conditions of this Agreement shall constitute exempt
                acquisitions by the Investment Manager pursuant to Rule 16b-3 under
                the
                Exchange Act. The Investment Manager shall have the right to allocate
                such
                shares in its sole and absolute discretion to its officers, employees
                and
                other individuals who provide services to the Investment Manager,
                subject
                to the same restrictions as above. 

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	6.  	
              Indemnity
                

            

    

     

    
      	(a)  	
              The
                Company hereby agrees to indemnify the Investment Manager and each
                of the
                Investment Manager's shareholders, officers, employees, agents, associates
                and controlling persons and the shareholders, officers, employees
                and
                agents thereof (including any individual who serves at the Investment
                Manager's request as director, officer, partner, trustee or the like
                of
                another corporation) (each such person being an "indemnitee") against
                any
                liabilities and expenses, including amounts paid in satisfaction
                of
                judgments, in compromise or as fines and penalties, and counsel fees
                (all
                as provided in accordance with applicable corporate law) reasonably
                incurred by such indemnitee in connection with the defense or disposition
                of any action, suit or other proceeding, whether civil or criminal,
                before
                any court or administrative or investigative body in which he may
                be or
                may have been involved as a party or otherwise or with which he may
                be or
                may have been threatened, while acting in any capacity set forth
                above in
                this Section 6 or thereafter by reason of his having acted in any
                such
                capacity, except with respect to any matter as to which he shall
                have been
                adjudicated not to have acted in good faith in the reasonable belief
                that
                his action was in the best interests of the Company and furthermore,
                in
                the case of any criminal proceeding, so long as he had no reasonable
                cause
                to believe that the conduct was unlawful; provided,
                however,
                that (1) no indemnitee shall be indemnified hereunder against any
                liability to the Company or its stockholders or any expense of such
                indemnitee arising by reason of (i) willful misfeasance, (ii) bad
                faith,
                (iii) gross negligence or (iv) reckless disregard of the duties involved
                in the conduct of his position (the conduct referred to in such clauses
                (i) through (iv) being sometimes referred to herein as "disabling
                conduct"), (2) as to any matter disposed of by settlement or a compromise
                payment by such indemnitee, pursuant to a consent decree or otherwise,
                no
                indemnification either for such payment or for any other expenses
                shall be
                provided unless there has been a determination that such settlement
                or
                compromise is in the best interests of the Company and that such
                indemnitee appears to have acted in good faith in the reasonable
                belief
                that his action was in the best interests of the Company and did
                not
                involve disabling conduct by such indemnitee and (3) with respect
                to any
                action, suit or other proceeding voluntarily prosecuted by any indemnitee
                as plaintiff, indemnification shall be mandatory only if the prosecution
                of such action, suit or other proceeding by such indemnitee was authorized
                by a majority of the Board of Directors. Notwithstanding the foregoing,
                nothing contained in this paragraph or elsewhere in this Agreement
                shall
                constitute a waiver by the Company of any of its legal rights to
                the
                extent they may not be waived.

            

    

     

    
      	(b)  	
              The
                Company shall make advance payments in connection with the expenses
                of
                defending any action with respect to which indemnification might
                be sought
                hereunder if the Company receives a written affirmation of the
                indemnitee's good faith belief that the standard of conduct necessary
                for
                indemnification has been met and a written undertaking to reimburse
                the
                Company unless it is subsequently determined that he is entitled
                to such
                indemnification and if a majority of the Board of Directors determine
                that
                the facts then known to them would not preclude indemnification.
                In
                addition, at least one of the following conditions must be met: (A)
                the
                indemnitee shall provide a security for his undertaking, (B) the
                Company
                shall be insured against losses arising by reason of any lawful advances
                or (C) a majority of a quorum consisting of directors of the Company
                who
                are neither affiliated persons of the Company nor parties to the
                proceeding ("Disinterested Non-Party Directors") or an independent
                legal
                counsel in a written opinion, shall determine, based on a review
                of
                readily available facts (as opposed to a full trial-type inquiry),
                that
                there is reason to believe that the indemnitee ultimately will be
                found
                entitled to indemnification. 

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	(c)  	
              All
                determinations with respect to indemnification hereunder shall be
                made (1)
                by a final decision on the merits by a court or other body before
                whom the
                proceeding was brought that such indemnitee is not liable by reason
                of
                disabling conduct or (2) in the absence of such a decision, by (i)
                a
                majority vote of a quorum of the Disinterested Non-Party Directors
                of the
                Company or (ii) if a majority vote of such quorum so directs, independent
                legal counsel in a written opinion. All determinations that advance
                payments in connection with the expense of defending any proceeding
                shall
                be authorized shall be made in accordance with the immediately preceding
                clause (b). 

            

    

     

    
      	(d)  	
              The
                rights accruing to any indemnitee under these provisions shall not
                exclude
                any other right to which he may be lawfully entitled.
                

            

    

     

    
      	7.  	
              Duration
                and Termination 

            

    

     

    This
      Agreement shall commence on the date hereof for an initial term expiring on
      March 31, 2009. Thereafter, successive extensions, each for a period not to
      exceed one year, may be made by agreement between the Company and the Investment
      Manager, with the approval of a majority of the Unaffiliated Directors until
      terminated or assigned under the provisions of this Section 7 or Section 9,
      as
      the case may be, of this Agreement. 

     

    Upon
      termination of this Agreement by the Company, the Company is obligated to pay
      the Investment Manager a termination fee that will be determined by independent
      appraisal other than in the case of termination by the Company for cause (as
      described below). The
      Company may terminate, or decline to renew the term of, this Agreement without
      cause at any time upon 60 days' written notice by a majority vote of the
      Unaffiliated Directors; provided
      that the
      Company shall pay the Investment Manager a termination fee determined by
      independent appraisal of the value of this Agreement. Such appraisal is to
      be
      conducted by a nationally recognized appraisal firm mutually agreed upon by
      the
      Company and the Investment Manager. If the Company and the Investment Manager
      are unable to agree upon an appraisal firm, then each of the Company and the
      Manager is to choose an independent appraisal firm to conduct an appraisal.
      In
      such event, (i) if the appraisals prepared by the two appraisers so selected
      are
      the same or differ by an amount that does not exceed 20% of the higher of the
      two appraisals, the termination fee is to be deemed to be the average of the
      appraisals as prepared by each party's chosen appraiser and (ii) if these two
      appraisals differ by more than 20% of such higher amount, the two appraisers
      together are to select a third appraisal firm to conduct an appraisal. If the
      two appraisers are unable to agree as to the identity of such third appraiser,
      either of the Investment Manager and the Company may request that the American
      Arbitration Association ("AAA") select the third appraiser. The termination
      fee
      then is to be the amount determined by such third appraiser, but in no event
      shall the termination fee be less than the lower of the two initial appraisals
      or more than the higher of such two initial appraisals. Each party shall pay
      the
      costs of the appraisers chosen by it, and each party shall pay one half of
      the
      costs of the third appraiser. Any appraisal hereunder shall be performed no
      later than 45 days following selection of the appraiser or appraisers.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    At
      the
      option of the Company, this Agreement, or any extension hereof, shall be and
      become terminated with cause upon 60 days' prior written notice of termination
      from the Board of Directors to the Investment Manager, without payment of any
      termination fee, if any of the following events occur: (i) if the Investment
      Manager commits a material breach of any provision of this Agreement (including
      any material breach of the provisions contained in Section 3(a) and (b) herein)
      and, after notice of such violation, shall not cure such violation within 30
      days; or (ii) there is entered an order for relief or similar decree or order
      with respect to the Investment Manager by a court having competent jurisdiction
      in an involuntary case under the federal bankruptcy laws as now or hereafter
      constituted or under any applicable federal or state bankruptcy, insolvency
      or
      other similar laws; or the Investment Manager (A) ceases, or admits in writing
      its inability, to pay its debts as they become due and payable, or makes a
      general assignment for the benefit of, or enters into any composition or
      arrangement with, creditors; (B) applies for, or consents (by admission of
      material allegations of a petition or otherwise) to the appointment of a
      receiver, trustee, assignee, custodian, liquidator or sequestrator (or other
      similar official) of the Investment Manager or of any substantial part of its
      properties or assets, or authorizes such an application or consent, or
      proceedings seeking such appointment are commenced without such authorization,
      consent or application against the Investment Manager and continue undismissed
      for 30 days; or (C) authorizes or files a voluntary petition in bankruptcy,
      or
      applies for or consents (by admission of material allegations of a petition
      or
      otherwise) to the application of any bankruptcy, reorganization, arrangement,
      readjustment of debt, insolvency, dissolution, liquidation or other similar
      law
      of any jurisdiction, or authorizes such application or consent, of proceedings
      to such end are instituted against application or consent, or proceedings to
      such end are instituted against the Investment Manager without such
      authorization, application or consent and are approved as properly instituted
      and remain undismissed for 30 days or result in adjudication of bankruptcy
      or
      insolvency; or (D) permits or suffers all or any substantial part of its
      properties or assets to be sequestered or attached by court order and the order
      remains undismissed for 30 days. 

     

    The
      Investment Manager agrees that if any of the events specified above occur,
      it
      will give prompt written notice thereof to the Board of Directors after the
      occurrence of such event. 

     

    Upon
      written request from the Company, the Investment Manager shall prepare, execute
      and deliver to a successor manager any and all documents and other instruments,
      place in such successor manager's possession all files and do or cause to be
      done all other acts or things necessary or appropriate to effect the purposes
      of
      such notice of termination, to the successor manager at the Investment Manager's
      sole expense; provided,
      however,
      that the
      Investment Manager shall be entitled to retain copies of all such documents
      and
      other instruments as it may be required by federal or state law. The Investment
      Manager agrees to cooperate with Company and such successor manager in effecting
      the termination of the Investment Manager's responsibilities and rights under
      this Agreement. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	8.  	
              Action
                Upon Termination

            

    

     

    From
      and
      after the effective date of termination of this Agreement pursuant to Section
      7
      hereof, the Investment Manager shall not be entitled to compensation for further
      services under this Agreement, but shall be paid all compensation accruing
      to
      the date of termination and, if such termination is not for cause, the
      termination fee determined pursuant to Section 7. The Investment Manager shall
      forthwith upon such termination deliver to the Board of Directors all funds
      and
      property, documents, corporate records, reports and software of the Company
      or
      any subsidiary of the Company then in the custody of Investment Manager;
provided,
      however,
      that the
      Investment Manager shall be entitled to retain copies of all such documents
      and
      other instruments as it may be required by federal or state law.

     

    
      	9.  	
              Assignment

            

    

     

    This
      Agreement may not be assigned without the prior written consent of all the
      parties to this Agreement. For the foregoing purposes, "assigned" shall have
      the
      meaning ascribed to it under the Investment Advisers Act of 1940, as amended,
      and the rules promulgated thereunder. 

     

    
      	10.  	
              Notices

            

    

     

    Any
      notice under this Agreement shall be in writing to the other party at such
      address as the other party may designate from time to time for the receipt
      of
      such notice and shall be deemed to be received on the earlier of the date
      actually received or on the fourth day after the postmark if such notice is
      mailed first class postage prepaid. 

     

    
      	11.  	
              Governing
                Law 

            

    

     

    This
      Agreement shall be construed in accordance with the laws of the State of New
      York for contracts to be performed entirely therein without reference to choice
      of law principles thereof.

     

    
      	12.  	
              Amendments
                

            

    

     

    This
      Agreement shall not be amended, changed, modified, terminated or discharged
      in
      whole or in part except by an instrument in writing signed by all parties
      hereto, or their respective successors or assigns, or otherwise as provided
      herein. 

     

    
      	13.  	
              Severability
                

            

    

     

    The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity of any other provision, and all other provisions shall
      remain in full force and effect. 

     

    
      	14.  	
              Entire
                Agreement 

            

    

     

    This
      instrument contains the entire agreement between the parties as to the rights
      granted and the obligations assumed in this instrument. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	15.  	
              Counterparts
                

            

    

     

    This
      Agreement may be signed by the parties in counterparts which together shall
      constitute one and the same agreement among the parties. 

     

    
      	16.  	
              Manager
                Brochure 

            

    

     

    The
      Company hereby acknowledges that it has received from the Investment Manager
      a
      copy of the Investment Manager's Form ADV, Part II, at least forty-eight hours
      prior to entering into this Agreement. 

     

    IN
      WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
      be
      executed by their duly authorized officers, all as of the date and the year
      first above written. 

     

    
      
        	
                ANTHRACITE
                  CAPITAL, INC. 

              
	 
	
                /s/
                  Chris A. Milner

              
	
                Name:
                  Chris A. Milner 

              
	
                Title:
                  Chief Executive Officer 

              
	 
	 
	
                BLACKROCK
                  FINANCIAL MANAGEMENT, INC. 

              
	 
	
                
                  /s/
                    Robert S. Kapito

                

              
	
                Name:
                  Robert S. Kapito

              
	
                Title:
                  President

              

      

    

     

    
      
        
        

      

      
        14

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