8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) August 29, 2007 (August 23,
2007)

                            Anthracite Capital, Inc.
             (Exact name of registrant as specified in its charter)



           Maryland                      001-13937                     13-3978906
- -------------------------------   ------------------------   ----------------------------
(State or other jurisdiction of   (Commission File Number)   (IRS Employer Identification
        incorporation)                                                   No.)


40 East 52nd Street, New York, New York                 10022
- ----------------------------------------   -------------------------------------
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code (212) 810-3333

                                       N/A
          (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[_]  Written communications pursuant to Rule 425 under the Securities Act (17
     CFR 230.425)

[_]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

[_]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[_]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))




ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

11.75% Convertible Senior Notes due 2027

          On August 29, 2007, Anthracite Capital, Inc. (the "Company") issued
$60,000,000 aggregate principal amount of 11.75% Convertible Senior Notes due
2027 pursuant to a Purchase Agreement (the "Purchase Agreement"), dated August
23, 2007, among the Company, BlackRock Financial Management, Inc. (solely with
respect to Section 1(b) therein), and Banc of America Securities LLC and
Deutsche Bank Securities Inc., as the initial purchasers (the "Initial
Purchasers"). Under the Purchase Agreement, the Company also granted the Initial
Purchasers a 13-day option to purchase up to an additional $20,000,000 aggregate
principal amount of Notes. The aggregate discount to the Initial Purchasers was
$1,800,000. BlackRock Financial Management, Inc. is the manager of the Company.

          The Initial Purchasers and/or their affiliates have engaged in
transactions with and performed various investment and commercial banking and
other services for the Company and its subsidiaries in the past, for which they
have received compensation, are currently doing so and may do so from time to
time in the future. Affiliates of Banc of America Securities LLC and Deutsche
Bank Securities Inc. are parties to loan agreements with the Company and its
subsidiaries.

          The Notes and the shares of the Company's common stock, par value
$0.001 per share, issuable in certain circumstances upon conversion of the Notes
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Company offered and sold the Notes to the Initial
Purchasers in reliance on the exemption from registration provided by Section
4(2) of the Securities Act. The Initial Purchasers sold the Notes to qualified
institutional buyers pursuant to the exemption from registration provided by
Rule 144A under the Securities Act. The Company relied on these exemptions from
registration based in part on representations made by the Initial Purchasers in
the Purchase Agreement.

          The terms of the Notes are governed by an indenture, dated as of
August 29, 2007 (the "Indenture"), between the Company and Wells Fargo Bank,
N.A., as trustee. The Notes will bear interest at the rate of 11.75% per year.
The Company will pay interest on the Notes on September 1 and March 1 of each
year, beginning on March 1, 2008. The Notes will mature on September 1, 2027,
unless earlier converted, redeemed or repurchased by the Company.

          Holders may require the Company to repurchase some or all of such
Holders' Notes on September 1, 2012, September 1, 2017 and September 1, 2022,
and at any time following certain fundamental change transactions described in
the Indenture. The Company may redeem the Notes for cash in whole or in part at
any time on or after September 1, 2012, or earlier if necessary to preserve its
status as a REIT, at 100% of the principal amount of the Notes to be redeemed
plus accrued and unpaid interest (including additional amounts, if any).

          Holders may convert their Notes into cash and shares of the Company's
common stock, if any, at an initial conversion rate of 92.7085 shares per $1,000
principal amount of Notes (equal to an initial conversion price of approximately
$10.79 per share), subject to adjustment upon certain events, under the
following circumstances: (1) during specified periods, if the price of the
Company's common stock reaches specified thresholds described in the Indenture;
(2) if the trading price of the Notes is below a specified threshold; (3) at any
time on or after April 1, 2027; (4) upon the occurrence of certain corporate
transactions described in the Indenture; or




(5) in the case of Notes called for redemption, at any time prior to the close
of business on the business day prior to the redemption date.

          Upon conversion, the Company will deliver cash equal to the lesser of
the aggregate principal amount of Notes to be converted and its total conversion
obligation and shares of its common stock in respect of the remainder, if any,
of its conversion obligation (unless the Company has elected to deliver only
shares of its common stock). If certain fundamental change transactions occur
prior to September 1, 2012, the Company will increase the conversion rate for
any Notes converted in connection with those fundamental changes by a number of
additional shares of common stock specified in the Indenture.

          On August 29, 2007, in connection with the sale of the Notes, the
Company entered into a registration rights agreement with the Initial Purchasers
(the "Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Company agreed that it will use its commercially reasonable
efforts to:

o    file a shelf registration statement covering resales of the Notes and the
     Company's common stock issuable upon the conversion of the Notes pursuant
     to Rule 415 under the Securities Act within 120 days, and cause such
     registration statement to become effective under the Securities Act no
     later than 210 days after the original date of issuance of the Notes and to
     deliver registered shares of the Company's common stock upon conversion of
     the Notes, and

o    subject to the Company's right to suspend the effectiveness of the shelf
     registration statement or the use of the prospectus that is part of the
     shelf registration statement during specified periods under certain
     circumstances, keep the shelf registration statement effective until the
     earliest of certain dates specified in the Registration Rights Agreement.

          The Registration Rights Agreement also contains registration default
provisions.

          The above summaries are not complete and are qualified in their
entirety by reference to the complete text of the Purchase Agreement, the
Indenture and Registration Rights Agreement, copies of which are attached to
this Current Report on Form 8-K as Exhibit 1.1, Exhibit 4.1 and Exhibit 10.1,
respectively, and incorporated herein by reference.

Promissory Note

          On August 27, 2007, the Company borrowed $50,000,000 from KeyBank
National Association ("Lender") pursuant to a Promissory Note and an Ownership
Interests Pledge and Security Agreement, each by the Company in favor of Lender.

          The loan accrues interest that is payable monthly in arrears at the
rate of 1-month LIBOR + 1.5 percent. The loan matures on November 27, 2007,
unless the Company elects to extend the term until February 27, 2008. An
extension fee of 50 basis points is due at the time that the extension is
exercised. The loan is secured by a pledge of all of the Company's ownership
interests in shares of class C common stock of BlackRock Diamond Property Fund,
Inc.

          The above summary is not complete and is qualified in its entirety by
reference to the complete text of the Promissory Note and the Ownership
Interests Pledge and Security Agreement, copies of which are attached to this
Current Report on Form 8-K as Exhibit 10.2 and Exhibit 10.3, respectively, and
incorporated herein by reference.




ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
          OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

          The information required by Item 2.03 contained in Item 1.01 is
incorporated by reference into this Item 2.03.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

          The information required by Item 3.02 contained in Item 1.01 is
incorporated by reference into this Item 3.02.

ITEM 8.01 OTHER EVENTS.

          On August 23, 2007, the Company repurchased 1,307,189 shares of its
common stock on the open market at $9.18 per share, the closing sales price of
the Company's common stock on the New York Stock Exchange on August 23, 2007.
The repurchase is expected to settle on or around August 29, 2007.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

          (d) Exhibits.

1.1    Purchase Agreement, dated August 23, 2007, among Anthracite Capital,
       Inc., BlackRock Financial Management, Inc. (solely with respect to
       Section 1(b) therein), and Banc of America Securities LLC and Deutsche
       Bank Securities Inc., as the initial purchasers

4.1    Indenture, dated as of August 29, 2007, between Anthracite Capital, Inc.
       and Wells Fargo Bank, N.A., as trustee (including form of 11.75%
       Convertible Senior Notes due 2027)

10.1   Registration Rights Agreement, dated August 29, 2007, between the Company
       and Banc of America Securities LLC and Deutsche Bank Securities Inc., as
       the initial purchasers

10.2   Promissory Note of Anthracite Capital, Inc., as borrower, dated August
       27, 2007

10.3   Ownership Interests Pledge and Security Agreement, dated August 27, 2007,
       between Anthracite Capital, Inc., as pledgor, and KeyBank National
       Association, as lender




                                    SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    ANTHRACITE CAPITAL, INC.


                                    By: /s/ James J. Lillis
                                        ----------------------------------------
                                    Name: James J. Lillis
                                    Title: Chief Financial Officer and Treasurer

                                    Dated: August 29, 2007

EX-1.1

                     $60,000,000 AGGREGATE PRINCIPAL AMOUNT

                            ANTHRACITE CAPITAL, INC.

                         11.75% CONVERTIBLE SENIOR NOTES

                                    DUE 2027

                               PURCHASE AGREEMENT

                              DATED AUGUST 23, 2007



                               PURCHASE AGREEMENT

                                                                 August 23, 2007

BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
As Representatives of the several Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

     Anthracite Capital, Inc., a Maryland corporation (the "Company"), proposes
to issue and sell to the several purchasers named in Schedule A (the "Initial
Purchasers") $60,000,000 in aggregate principal amount of its 11.75% Convertible
Senior Notes due 2027 (the "Firm Notes"). In addition, the Company has granted
to the Initial Purchasers an option to purchase up to an additional $20,000,000
in aggregate principal amount of its 11.75% Convertible Senior Notes due 2027
(the "Optional Notes" and, together with the Firm Notes, the "Notes"). Banc of
America Securities LLC ("BAS") and Deutsche Bank Securities Inc. have agreed to
act as representatives of the several Initial Purchasers (in such capacity, the
"Representatives") in connection with the offering and sale of the Notes. To the
extent that there are no additional Initial Purchasers listed on Schedule A
other than you, the terms Representatives and Initial Purchasers as used herein
shall mean you, as Initial Purchasers. The terms Representatives and Initial
Purchasers shall mean either the singular or plural as the context requires.

     The Notes will be convertible on the terms, and subject to the conditions,
set forth in the indenture (the "Indenture") to be entered into between the
Company and Wells Fargo Bank, National Association, as trustee (the "Trustee"),
on the Closing Date (as defined herein). As used herein, "Conversion Shares"
means the shares of common stock, par value $0.001 per share, of the Company
(the "Common Stock") to be received by the holders of the Notes upon conversion
of the Notes pursuant to the terms of the Notes and the Indenture.

     The Notes will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder (the "Securities Act"), in reliance upon an exemption therefrom.

     Holders of the Notes (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Resale Registration
Rights Agreement, dated the Closing Date, between the Company and the Initial
Purchasers (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file or have on file with the Commission a shelf registration
statement pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Registration Statement") covering the resale of the Notes and the Conversion
Shares. This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are referred to herein collectively as the "Operative Documents."



     The Company understands that the Initial Purchasers propose to make an
offering of the Notes on the terms and in the manner set forth herein and in the
Disclosure Package (as defined below), including the Preliminary Offering
Memorandum (as defined below), and the Final Offering Memorandum (as defined
below) and agrees that the Initial Purchasers may resell, subject to the
conditions set forth herein, all or a portion of the Notes to purchasers (the
"Subsequent Purchasers") at any time after the date of this Agreement.

     The Company has prepared an offering memorandum, dated the date hereof,
setting forth information concerning the Company, the Notes, the Registration
Rights Agreement and the Common Stock, in form and substance reasonably
satisfactory to the Initial Purchasers. As used in this Agreement, "Offering
Memorandum" means, collectively, the Preliminary Offering Memorandum dated as of
August 23, 2007 (the "Preliminary Offering Memorandum") and the offering
memorandum dated the date hereof (the "Final Offering Memorandum"), each as then
amended or supplemented by the Company. As used herein, each of the terms
"Disclosure Package", "Offering Memorandum", "Preliminary Offering Memorandum"
and "Final Offering Memorandum" shall include in each case the documents
incorporated by reference therein.

     The Company and BlackRock Financial Management, Inc., a corporation
organized and existing under the laws of Delaware and the manager of the Company
(in such capacity, the "Manager"), each hereby confirms its agreements with the
Initial Purchasers as follows:

     SECTION 1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY AND THE
MANAGER.

     (a) The Company hereby represents, warrants and covenants to each Initial
Purchaser as follows:

          (i) No Registration. Assuming the accuracy of the representations and
     warranties of the Initial Purchasers contained in Section 6 and their
     compliance with the agreements set forth therein, it is not necessary, in
     connection with the issuance and sale of the Notes to the Initial
     Purchasers, the offer, resale and delivery of the Notes by the Initial
     Purchasers and the conversion of the Notes into Conversion Shares, in each
     case in the manner contemplated by this Agreement, the Indenture, the
     Disclosure Package and the Offering Memorandum, to register the Notes or
     the Conversion Shares under the Securities Act or to qualify the Indenture
     under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
     Act").

          (ii) No Integration. None of the Company or any of its subsidiaries
     has, directly or through any agent, sold, offered for sale, solicited
     offers to buy or otherwise negotiated in respect of, any "security" (as
     defined in the Securities Act) that is or will be integrated with the sale
     of the Notes or the Conversion Shares in a manner that would require
     registration under the Securities Act of the Notes or the Conversion
     Shares.

          (iii) Rule 144A. No securities of the same class (within the meaning
     of Rule 144A(d)(3) under the Securities Act of 1933, as amended) as the
     Notes are listed on any national securities exchange registered under
     Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), or quoted on an automated inter-dealer quotation system.

          (iv) Exclusive Agreement. The Company has not paid or agreed to pay to
     any person any compensation for soliciting another person to purchase any
     securities of the


                                        2



     Company in connection with the offer and sale of the Notes by the Initial
     Purchasers (except as contemplated in this Agreement).

          (v) Offering Memoranda. The Company hereby confirms that it has
     authorized the use of the Disclosure Package, including the Preliminary
     Offering Memorandum, and the Final Offering Memorandum in connection with
     the offer and sale of the Notes by the Initial Purchasers. Each document,
     if any, filed or to be filed pursuant to the Exchange Act and incorporated
     by reference in the Disclosure Package or the Final Offering Memorandum
     complied when it was filed, or will comply when it is filed, as the case
     may be, in all material respects with the Exchange Act and the rules and
     regulations of the Commission thereunder. The Preliminary Offering
     Memorandum, at the date thereof, did not contain any untrue statement of a
     material fact or omit to state a material fact necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading. At the date of this Agreement, the Closing Date
     and on any Subsequent Closing Date, the Final Offering Memorandum did not
     and will not (and any amendment or supplement thereto, at the date thereof,
     at the Closing Date and on any Subsequent Closing Date, will not) contain
     any untrue statement of a material fact or omit to state any material fact
     necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading; provided that the
     Company makes no representation or warranty as to information contained in
     or omitted from the Preliminary Offering Memorandum or the Final Offering
     Memorandum in reliance upon and in conformity with written information
     furnished to the Company by or on the behalf of the Initial Purchasers
     specifically for inclusion therein, it being understood and agreed that the
     only such information furnished by or on the behalf of the Initial
     Purchasers consists of the information described as such in Section 8
     hereof.

          (vi) Disclosure Package. The term "Disclosure Package" shall mean (i)
     the Preliminary Offering Memorandum, as amended or supplemented at the
     Applicable Time, (ii) the Final Term Sheet (as defined herein) and (iii)
     any other writings that the parties expressly agree in writing to treat as
     part of the Disclosure Package ("Issuer Written Information") as identified
     on Exhibit A hereto. The Disclosure Package as of 6:00 a.m. (Eastern time)
     on August 24, 2007 (the "Applicable Time") will not contain any untrue
     statement of a material fact or omit to state any material fact necessary
     in order to make the statements therein, in the light of the circumstances
     under which they were made, not misleading. The preceding sentence does not
     apply to statements in or omissions from the Disclosure Package in reliance
     upon and in conformity with written information furnished to the Company by
     any Initial Purchaser through the Representatives specifically for use
     therein, it being understood and agreed that the only such information
     furnished by or on behalf of any Initial Purchaser consists of the
     information described as such in Section 8 hereof.

          (vii) Statements in Offering Memorandum. The statements in the
     Disclosure Package and the Final Offering Memorandum under the headings
     "Description of Notes", "Description of Capital Stock" and "Federal Income
     Tax Considerations" insofar as such statements summarize legal matters,
     agreements, documents or proceedings discussed therein, are accurate and
     fair summaries of such legal matters, agreements, documents or proceedings
     in all material respects.

          (viii) Authorization of the Purchase Agreement. This Agreement has
     been duly authorized, executed and delivered by the Company.


                                        3



          (ix) Authorization of the Indenture. The Indenture has been duly
     authorized by the Company and, upon the effectiveness of the Registration
     Statement, will be qualified under the Trust Indenture Act; on the Closing
     Date, the Indenture will have been duly executed and delivered by the
     Company and, assuming due authorization, execution and delivery thereof by
     the Trustee, will constitute a legally valid and binding agreement of the
     Company enforceable against the Company in accordance with its terms,
     except as enforcement thereof may be limited by bankruptcy, insolvency,
     reorganization, moratorium or other similar laws relating to or affecting
     the rights and remedies of creditors or by general equitable principles;
     and the Indenture conforms in all material respects to the description
     thereof contained in the Disclosure Package and the Final Offering
     Memorandum.

          (x) Authorization of the Notes. The Notes have been duly authorized by
     the Company; when the Notes are executed, authenticated and issued in
     accordance with the terms of the Indenture and delivered to and paid for by
     the Initial Purchasers pursuant to this Agreement on the Closing Date or
     any Subsequent Closing Date, as the case may be (assuming due
     authentication of the Notes by the Trustee), such Notes will constitute
     legally valid and binding obligations of the Company, entitled to the
     benefits of the Indenture and enforceable against the Company in accordance
     with their terms, except as enforcement thereof may be limited by
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     relating to or affecting the rights and remedies of creditors or by general
     equitable principles; and the Notes will conform in all material respects
     to the description thereof contained in the Disclosure Package and the
     Final Offering Memorandum.

          (xi) Authorization of the Conversion Shares. The Conversion Shares
     have been duly authorized and reserved and, when issued upon conversion of
     the Notes in accordance with the terms of the Notes and the Indenture, will
     be validly issued, fully paid and non-assessable, and the issuance of such
     shares will not be subject to any preemptive or similar rights.

          (xii) Authorization of the Registration Rights Agreement. The
     Registration Rights Agreement has been duly authorized, executed and
     delivered by the Company.

          (xiii) No Material Adverse Change. Except as otherwise disclosed in
     the Disclosure Package and the Final Offering Memorandum (exclusive of any
     amendments or supplements thereto subsequent to the date of this
     Agreement), subsequent to the respective dates as of which information is
     given in the Disclosure Package: (i) there has been no material adverse
     change, or any development that could reasonably be expected to result in a
     material adverse change, in the condition (financial or otherwise), or in
     the results of operations, properties, business or prospects of the Company
     and its subsidiaries, considered as one entity (a "Material Adverse
     Change"); (ii) the Company and its subsidiaries, considered as one entity,
     have not incurred any material liability or obligation, indirect, direct or
     contingent, nor entered into any material transaction or agreement; and
     (iii) there has been no dividend or distribution of any kind declared, paid
     or made by the Company or, except for dividends paid to the Company or
     other subsidiaries, any of its subsidiaries on any class of capital stock
     or repurchase or redemption by the Company or any of its subsidiaries of
     any class of capital stock.

          (xiv) Independent Accountants. Deloitte & Touche LLP, which has
     expressed their opinion with respect to certain financial statements (which
     term as used in this


                                        4



     Agreement includes the related notes thereto) and any supporting schedules
     included or incorporated by reference in the Disclosure Package and the
     Final Offering Memorandum, is an independent registered public accounting
     firm with respect to the Company as required by the Securities Act and the
     Exchange Act and the applicable published rules and regulations thereunder.

          (xv) Preparation of the Financial Statements. The financial statements
     included or incorporated by reference in the Disclosure Package and the
     Final Offering Memorandum present fairly the consolidated financial
     position of the Company and its consolidated subsidiaries as of and at the
     dates indicated and the results of their operations and cash flows for the
     periods specified. Such financial statements comply as to form in all
     material respects with the applicable accounting requirements of Regulation
     S-X and have been prepared in conformity with generally accepted accounting
     principles as applied in the United States applied on a consistent basis
     throughout the periods involved, except as may be expressly stated in the
     related notes thereto. The financial data set forth in the Disclosure
     Package and the Final Offering Memorandum under the captions
     "Summary--Summary Financial Data" and "Capitalization" fairly present the
     information set forth therein on a basis consistent with that of the
     audited financial statements contained or incorporated by reference in the
     Disclosure Package and the Final Offering Memorandum. The Company's ratios
     of earnings to combined fixed charges and preferred stock dividends set
     forth in the Disclosure Package and the Final Offering Memorandum have been
     calculated in compliance with Item 503(d) of Regulation S-K.

          (xvi) Statistical and Market-Related Data. The statistical and
     market-related data included under the captions "Summary", "Management's
     Discussion and Analysis of Financial Condition and Results of Operations"
     and "Business" in the documents incorporated by reference in the Disclosure
     Package and the consolidated financial statements of the Company and its
     subsidiaries included or incorporated by reference in the Disclosure
     Package are based on or derived from sources that the Company believes to
     be both reliable and accurate in all material respects.

          (xvii) Incorporation and Good Standing of the Company and its
     Subsidiaries. Each of the Company and its subsidiaries has been duly
     organized, is validly existing and in good standing (to the extent the
     concept exists) as a corporation or other business entity under the laws of
     its jurisdiction of organization and is duly qualified to do business and
     in good standing as a foreign corporation or other business entity in each
     jurisdiction in which its ownership or lease of property or the conduct of
     its businesses requires such qualification, except where the failure to be
     so qualified or in good standing (or the failure of a subsidiary that is
     not a significant subsidiary (as defined below) to be duly organized) could
     not, individually or in the aggregate, reasonably be expected to have a
     material adverse effect on the condition (financial or otherwise), results
     of operations, properties, business or prospects of the Company and its
     subsidiaries taken as a whole (a "Material Adverse Effect"); each of the
     Company and its subsidiaries has all power and authority necessary to own
     or hold its properties and to conduct the businesses in which it is engaged
     and, in the case of the Company, to enter into and perform its obligations
     under this Agreement. Exhibit 21 to the Company's Annual Report on Form
     10-K for the most recent fiscal year lists all of the Company's
     subsidiaries as of such date. All of the issued and outstanding shares of
     capital stock of each subsidiary have been duly authorized and validly
     issued, are fully paid and non-assessable and are owned


                                        5



     by the Company, directly or through subsidiaries, free and clear of all
     liens, encumbrances, equities or claims, except for such liens,
     encumbrances, equities or claims ("Encumbrances") as could not, in the
     aggregate, reasonably be expected to have a Material Adverse Effect or such
     Encumbrances as described in the Disclosure Package and the Final Offering
     Memorandum.

          (xviii) Capitalization and Other Capital Stock Matters. The Company
     has an authorized capitalization as set forth in the Disclosure Package and
     the Final Offering Memorandum under the caption "Capitalization", and all
     of the issued shares of capital stock of the Company have been duly
     authorized and validly issued, are fully paid and non-assessable, conform
     to the description thereof contained in the Disclosure Package and the
     Final Offering Memorandum and were issued in compliance with federal and
     state securities laws and not in violation of any preemptive right, resale
     right, right of first refusal or similar right. All of the Company's
     options, warrants and other rights to purchase or exchange any securities
     for shares of the Company's capital stock have been duly authorized and
     validly issued, conform to the description thereof contained in the
     Disclosure Package and the Final Offering Memorandum and were issued in
     compliance with federal and state securities laws.

          (xix) Non-Contravention of Existing Instruments; No Further
     Authorizations or Approvals Required. (i) Neither the Company nor any of
     its "significant subsidiaries" (as defined by Rule 1-02 of Regulation S-X)
     is in violation of its charter or by-laws (or similar organizational
     documents). (ii) Neither the Company nor any of its subsidiaries (A) is in
     default, and no event has occurred that, with notice or lapse of time or
     both, would constitute such a default, in the due performance or observance
     of any term, covenant or condition contained in any indenture, mortgage,
     deed of trust, loan agreement, or other agreement or instrument to which it
     is a party or by which it is bound or to which any of its properties or
     assets is subject (each, an "Existing Instrument") or (B) is in violation
     of any statute or any order, rule or regulation of any court or
     governmental agency or body having jurisdiction over it or its property or
     assets, except in the case of clauses (ii)(A) and (B) above, to the extent
     any such conflict, breach, violation or default could not, in the
     aggregate, reasonably be expected to have a Material Adverse Effect.

          The execution and delivery of and performance of its obligations under
     the Operative Documents by the Company, the consummation of the
     transactions contemplated hereby and the application of the proceeds from
     the sale of the Notes as described under "Use of Proceeds" in the
     Disclosure Package and the Final Offering Memorandum (i) will not conflict
     with or result in a breach or violation of any of the terms or provisions
     of, impose any lien, charge or encumbrance upon any property or assets of
     the Company and its subsidiaries, or constitute a default under, any
     Existing Instrument; (ii) have been duly authorized by all necessary
     corporate action and will not result in any violation of the provisions of
     the charter or by-laws (or similar organizational documents) of (A) the
     Company or (B) any of its subsidiaries; or (iii) will not result in any
     violation of any statute or any order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Company or any of
     its subsidiaries or any of their properties or assets, except in the case
     of clauses (i) and (ii)(B) above as would not have a Material Adverse
     Effect or interfere with the transactions contemplated by this Agreement.
     For purposes of the Ownership Limit contained in the Company's charter,
     ownership of the Notes will not be treated as


                                        6



     ownership of the shares of Common Stock that are potentially issuable upon
     conversion of the Notes, but any shares of Common Stock that are received
     following a conversion will be subject to the Ownership Limit and the other
     provisions of the Company's charter, and such shares would be subject to
     the remedies for violation as contained in the Company's charter.

          No consent, approval, authorization or order of, or filing or
     registration with, any court or governmental agency or body having
     jurisdiction over the Company or any of its subsidiaries or any of their
     properties or assets is required for the execution and delivery of and
     performance its obligations under the Operative Documents by the Company,
     the consummation of the transactions contemplated hereby or the application
     of the proceeds from the sale of the Notes as described under "Use of
     Proceeds" in the Disclosure Package and the Final Offering Memorandum,
     except (i) with respect to the transactions contemplated by the
     Registration Rights Agreement, as may be required under the Securities Act,
     the Trust Indenture Act and the rules and regulations promulgated
     thereunder, and (ii) such as have been obtained or made by the Company and
     are in full force and effect under the Securities Act, applicable state
     securities or blue sky laws and from the National Association of Securities
     Dealers, Inc. (the "NASD").

          (xx) No Stamp or Transfer Taxes. To the Company's knowledge, there are
     no stamp or other issuance or transfer taxes or other similar fees or
     charges under federal law or the laws of any state, or any political
     subdivision thereof, required to be paid in connection with the execution
     and delivery of this Agreement or the issuance by the Company or sale by
     the Company of the Notes or upon the issuance of Common Stock upon the
     conversion thereof.

          (xxi) No Material Actions or Proceedings. Except as otherwise
     disclosed in the Disclosure Package and the Final Offering Memorandum,
     there are no legal or governmental proceedings pending to which the Company
     or any of its subsidiaries is a party or of which any property or assets of
     the Company or any of its subsidiaries is the subject that could, in the
     aggregate, reasonably be expected to have a Material Adverse Effect or
     could, in the aggregate, reasonably be expected to have a material adverse
     effect on the performance of this Agreement or the consummation of the
     transactions contemplated hereby; and to the Company's knowledge, no such
     proceedings are threatened or contemplated by governmental authorities or
     others.

          (xxii) Labor Matters. Neither the Company nor any of its subsidiaries
     has any employees.

          (xxiii) Intellectual Property Rights. The Company and each of its
     subsidiaries own or possess adequate license or other rights to use all
     patents, trademarks, service marks, trade names, copyrights, software and
     design licenses, trade secrets, and other intangible property rights
     (collectively, "Intangibles") necessary to entitle the Company and each of
     its subsidiaries to conduct their respective businesses as described in the
     Disclosure Package and the Final Offering Memorandum except where the
     failure to own or possess such licenses or rights would not in the
     aggregate have a Material Adverse Effect, and neither the Company nor any
     subsidiary has received written notice of any infringement of or conflict
     with (and the Company does not know of any such infringement of or conflict
     with) asserted rights of others with respect to any Intangibles that would
     have a Material Adverse Effect.


                                        7



          (xxiv) All Necessary Permits, etc. The Company and each of its
     subsidiaries have such permits, licenses, franchises, certificates and
     other approvals or authorizations of governmental or regulatory authorities
     ("Permits") as are necessary under applicable law to own their properties
     and conduct their businesses in the manner described in the Disclosure
     Package and the Final Offering Memorandum, except for any of the foregoing
     that could not, in the aggregate, reasonably be expected to have a Material
     Adverse Effect; each of the Company and its subsidiaries has fulfilled and
     performed all of its obligations with respect to the Permits, except where
     the failure to fulfill or perform would not have a Material Adverse Effect,
     and no event has occurred that allows, or after notice or lapse of time
     would allow, revocation or termination thereof or results in any other
     impairment of the rights of the holder or any such Permits, except for any
     of the foregoing that could not reasonably be expected to have a Material
     Adverse Effect.

          (xxv) Title to Properties. The Company and its subsidiaries have good
     and marketable title in fee simple to all real property and good and
     marketable title to all personal property owned by them, in each case free
     and clear of any and all Liens except such as are described in the
     Disclosure Package and the Final Offering Memorandum or such as would not
     have, individually or in the aggregate, a Material Adverse Effect; and any
     real property and buildings held under lease or sublease by the Company and
     its subsidiaries are held by them under valid, subsisting and enforceable
     leases with such exceptions as are not material to, and do not materially
     interfere with, the use made and proposed to be made of such property and
     buildings by the Company and its subsidiaries. Neither the Company nor any
     subsidiary has received any notice of any claim adverse to its ownership of
     any real or personal property or of any claim against the continued
     possession of any real property, whether owned or held under lease or
     sublease by the Company or any subsidiary.

          (xxvi) Tax Law Compliance. The Company and each subsidiary have
     accurately prepared in all material respects and timely filed all federal,
     state, foreign and other tax returns that are required to be filed by it
     and have paid or made provision for the payment of all taxes, assessments,
     governmental or other similar charges, including without limitation, all
     sales and use taxes and all taxes which the Company or any subsidiary is
     obligated to withhold from amounts owing to employees, creditors and third
     parties, with respect to the periods covered by such tax returns (whether
     or not such amounts are shown as due on any tax return), except, in all
     cases, for any such amounts that the Company is contesting in good faith
     and except in any case in which the failure to so prepare, file or pay
     would not in the aggregate have a Material Adverse Effect. No deficiency
     assessment with respect to a proposed adjustment of the Company's or any
     subsidiary's federal, state, local or foreign taxes is pending or, to the
     Company's knowledge, threatened, which could reasonably be expected in the
     aggregate to have a Material Adverse Effect. There is no tax lien, whether
     imposed by any federal, state, foreign or other taxing authority,
     outstanding against the assets, properties or business of the Company or
     any subsidiary, except for any such liens that would not, individually or
     in the aggregate, have a Material Adverse Effect.

          (xxvii) Company Not an "Investment Company". The Company is not, and
     after receipt of payment for the Notes and application of the proceeds
     therefrom as described under "Use of Proceeds" in the Disclosure Package
     and the Final Offering Memorandum will not be, an "investment company"
     within the meaning of the


                                        8



     Investment Company Act of 1940, as amended, and the rules and regulations
     of the Commission thereunder.

          (xxviii) Compliance with Reporting Requirements. The Company is
     subject to and in full compliance with the reporting requirements of
     Section 13 or Section 15(d) of the Exchange Act.

          (xxix) Insurance. Except as otherwise disclosed in the Disclosure
     Package and the Final Offering Memorandum, the Company and its significant
     subsidiaries are insured by recognized, financially sound and reputable
     institutions with policies in such amounts and with such deductibles and
     covering such risks as are generally deemed adequate and customary for
     their businesses including, but not limited to, policies covering real and
     personal property owned or leased by the Company and its significant
     subsidiaries against theft, damage, destruction, acts of terrorism or
     vandalism and earthquakes, it being understood that the only insurance held
     by the Company and its significant subsidiaries are directors and officers
     insurance policies. The Company and its subsidiaries are in compliance with
     the terms of such policies and instruments in all material respects. None
     of the Company nor any of its significant subsidiaries has reason to
     believe that it will not be able to renew its existing insurance coverage
     as and when such coverage expires or to obtain similar coverage from
     similar insurers as may be necessary to continue its business at a cost
     that would not have a Material Adverse Effect. Within the past twelve
     months, neither the Company nor any of it significant subsidiaries has been
     denied any insurance coverage that it has sought or for which it has
     applied.

          (xxx) No Restriction on Distributions. No significant subsidiary of
     the Company is currently prohibited, directly or indirectly, from paying
     any dividends to the Company, from making any other distribution on such
     subsidiary's capital stock, from repaying to the Company any loans or
     advances to such subsidiary from the Company or from transferring any of
     such subsidiary's property or assets to the Company or any other subsidiary
     of the Company, except as described in or contemplated by the Disclosure
     Package and the Final Offering Memorandum.

          (xxxi) No Price Stabilization or Manipulation. The Company has not
     taken and will not take, directly or indirectly, any action designed to or
     that has constituted or that could reasonably be expected to cause or
     result in the stabilization or manipulation of the price of any security of
     the Company to facilitate the sale or resale of the Notes. The Company
     acknowledges that the Initial Purchasers may engage in passive market
     making transactions in the Common Stock on the New York Stock Exchange in
     accordance with Regulation M under the Exchange Act.

          (xxxii) Related Party Transactions. No relationship, direct or
     indirect, exists between or among the Company, on the one hand, and the
     directors, officers, stockholders, customers or suppliers of the Company,
     on the other hand, that is required to be described by the Securities Act,
     Exchange Act or the rules and regulations thereunder in the Disclosure
     Package or the Final Offering Memorandum which is not so described.

          (xxxiii) No General Solicitation. Assuming the accuracy of
     representations and covenants of the Initial Purchasers herein, none of the
     Company or any of its affiliates (as defined in Rule 501(b) of Regulation D
     under the Securities Act of 1933, as amended ("Regulation D")), has,
     directly or through an agent, engaged in any form of general


                                        9



     solicitation or general advertising in connection with the offering of the
     Notes or the Conversion Shares (as those terms are used in Regulation D)
     under the Securities Act or in any manner involving a public offering
     within the meaning of Section 4(2) of the Securities Act; the Company has
     not entered into any contractual arrangement with respect to the
     distribution of the Notes or the Conversion Shares except for this
     Agreement, and the Company will not enter into any such arrangement except
     for the Registration Rights Agreement and as may be contemplated thereby.

          (xxxiv) No Unlawful Contributions or Other Payments. Neither the
     Company nor any of its subsidiaries, nor, to the knowledge of the Company,
     any director, officer, agent, employee or other person associated with or
     acting on behalf of the Company or any of its subsidiaries, has, while
     acting on behalf of the Company or any of its subsidiaries, (i) used any
     corporate funds for any unlawful contribution, gift, entertainment or other
     unlawful expense relating to political activity; (ii) made any direct or
     indirect unlawful payment to any foreign or domestic government official or
     employee from corporate funds; or (iii) violated or is in violation of any
     provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
     and the rules and regulations thereunder.

          (xxxv) No Conflict with Money Laundering Laws. (i) To the best of the
     Company's knowledge, the operations of the Company and its subsidiaries
     are, and have been conducted at all times, in compliance with applicable
     financial recordkeeping and reporting requirements of the Currency and
     Foreign Transactions Reporting Act of 1970, as amended, the money
     laundering statutes of all jurisdictions, the rules and regulations
     thereunder and any related or similar rules, regulations or guidelines,
     issued, administered or enforced by any governmental agency (collectively,
     the "Money Laundering Laws") and (ii) no action, suit or proceeding by or
     before any court or governmental agency, authority or body or any
     arbitrator involving the Company or any of its subsidiaries with respect to
     the Money Laundering Laws is pending or, to the knowledge of the Company,
     threatened.

          (xxxvi) No Conflict with OFAC Laws. Neither the Company nor any of its
     subsidiaries nor, to the knowledge of the Company, any director, officer,
     agent or affiliate of the Company or any of its subsidiaries is currently
     subject to any U.S. sanctions administered by the Office of Foreign Assets
     Control of the U.S. Treasury Department ("OFAC"); and the Company will not
     directly or indirectly use the proceeds of the offering, or lend,
     contribute or otherwise make available such proceeds to any subsidiary,
     joint venture partner or other person or entity, for the purpose of
     financing the activities of any person currently subject to any U.S.
     sanctions administered by OFAC.

          (xxxvii) Compliance with Environmental Laws. The Company and each of
     its subsidiaries are in compliance with any and all applicable foreign,
     federal, state and local laws and regulations relating to the protection of
     human health and safety, the environment or hazardous or toxic substances
     or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
     received all permits, licenses or other approvals required of them under
     applicable Environmental Laws to conduct their respective businesses and
     (iii) are in compliance with all terms and conditions of any such permit,
     license or approval, except where such noncompliance with Environmental
     Laws, failure to receive required permits, licenses or other approvals or
     failure to comply with the terms and conditions of such permits, licenses
     or approvals would not, singly or in the aggregate, have a Material Adverse
     Effect.


                                       10



          (xxxviii) Costs of Environmental Compliance. There are no costs or
     liabilities associated with Environmental Laws (including, without
     limitation, any capital or operating expenditures required for clean up,
     closure of properties or compliance with Environmental Laws or any permit,
     license or approval, any related constraints on operating activities and
     any potential liabilities to third parties) which would, singly or in the
     aggregate, have a Material Adverse Effect.

          (xxxix) No Outstanding Loans or Other Indebtedness. There are no
     outstanding loans, advances (except normal advances for business expenses
     in the ordinary course of business) or guarantees or indebtedness by the
     Company to or for the benefit of any of the officers or directors of the
     Company or any of the members of any of their families, except as disclosed
     in the Disclosure Package and the Final Offering Memorandum.

          (xl) Sarbanes-Oxley Compliance. There is and has been no failure on
     the part of the Company, and to the Company's knowledge, any of the
     Company's directors or officers, in their capacities as such, to comply
     with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and
     regulations promulgated in connection therewith.

          (xli) Internal Controls and Procedures. The Company maintains a system
     of internal control over financial reporting (as such term is defined in
     Rule 13a-15(f) under the Exchange Act) that complies with the requirements
     of the Exchange Act and has been designed by the Company's principal
     executive officer and principal financial officer, or under their
     supervision, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles. The Company's internal control over financial reporting is
     effective and the Company is not aware of any material weaknesses in its
     internal control over financial reporting. Since the date of the latest
     audited financial statements included or incorporated by reference in the
     Disclosure Package and the Final Offering Memorandum, there has been no
     change in the Company's internal control over financial reporting that has
     materially affected, or is reasonably likely to materially affect, the
     Company's internal control over financial reporting.

          (xlii) Disclosure Controls. The Company maintains disclosure controls
     and procedures (as such term is defined in Rule 13a-15(e) under the
     Exchange Act) that comply with the requirements of the Exchange Act; such
     disclosure controls and procedures have been designed to ensure that
     material information relating to the Company and its subsidiaries is made
     known to the Company's principal executive officer and principal financial
     officer by others within those entities; and such disclosure controls and
     procedures are effective to perform the functions for which they were
     established.

          (xliii) Stock Options. Except as described in each of the Disclosure
     Package and the Offering Memorandum, with respect to the stock options (the
     "Stock Options") granted pursuant to the stock-based compensation plans of
     the Company and its subsidiaries (the "Company Stock Plans"), (i) each
     Stock Option designated by the Company or the relevant subsidiary of the
     Company at the time of grant as an "incentive stock option" under Section
     422 of the Internal Revenue Code of 1986, as amended (the "Code"), so
     qualifies, (ii) each grant of a Stock Option was duly authorized no later
     than the date on which the grant of such Stock Option was by its terms to
     be effective (the "Grant Date") by all necessary corporate action,
     including, as applicable, approval by the


                                       11



     board of directors of the Company or the relevant subsidiary of the Company
     (or a duly constituted and authorized committee thereof) and any required
     stockholder approval by the necessary number of votes or written consents,
     and the award agreement governing such grant (if any) was duly executed and
     delivered by each party thereto, (iii) each such grant was made in
     accordance with the terms of the Company Stock Plans, the Exchange Act and
     all other applicable laws and regulatory rules or requirements, including
     the rules of the New York Stock Exchange and any other exchange on which
     the securities of the Company or the relevant subsidiary of the Company are
     traded, (iv) the per share exercise price of each Stock Option was equal to
     or greater than the fair market value of a share of Common Stock on the
     applicable Grant Date and (v) each such grant was properly accounted for in
     accordance with GAAP in the consolidated financial statements (including
     the related notes) of the Company and disclosed in the Company's filings
     with the Commission in accordance with the Exchange Act and all other
     applicable laws. Neither the Company nor any of its subsidiaries has
     knowingly granted, and there is no and has been no policy or practice of
     the Company or any of its subsidiaries of granting, Stock Options prior to,
     or otherwise coordinating the grant of Stock Options with, the release or
     other public announcement of material information regarding the Company or
     its subsidiaries or their results of operations or prospects.

          (xliv) Subsidiaries. The subsidiaries listed on Schedule E attached
     hereto are the only significant subsidiaries of the Company as defined by
     Rule 1-02 of Regulation S-X.

          (xlv) Lending Relationship. Except as disclosed in the Disclosure
     Package and the Final Offering Memorandum, the Company does not have any
     material lending or other relationship with any bank or lending affiliate
     of any Initial Purchaser.

          (xlvi) PORTAL. The Company has been advised by the NASD's PORTAL
     Market that the Notes have been designated PORTAL-eligible securities in
     accordance with the rules and regulations of the NASD.

          (xlvii) REIT Status. The Company has been, and upon the sale of the
     Notes pursuant to this Agreement will continue to be, organized and
     operated in conformity with the requirements for qualification and taxation
     as a "real estate investment trust" ("REIT") under Sections 856 through 860
     of the Internal Revenue Code of 1986, as amended (the "Code"), for all
     taxable years commencing with its taxable year ended December 31, 2004. The
     proposed method of operation of the Company as described in the Disclosure
     Package and the Final Offering Memorandum will enable the Company to
     continue to meet the requirements for qualification and taxation as a REIT
     under the Code. The Company currently intends to continue to operate in a
     manner which would permit it to qualify as a real estate investment trust
     under the Code.

     (b) The Manager represents, warrants and covenants to each Initial
Purchaser as follows:

          (i) The Manager has been duly organized and is validly existing as a
     corporation and is in good standing under the laws of Delaware. The Manager
     is duly qualified to do business and is in good standing in each
     jurisdiction in which the character or location of its properties (owned,
     leased or licensed) or the nature or conduct of its business makes such
     qualification necessary, except for those failures to be so qualified or in
     good standing which would not in the aggregate have a material adverse
     effect on the business, condition (financial or otherwise), results of
     operations, properties


                                       12



     or prospects of the Manager and its subsidiaries, taken as a whole (a
     "Manager Material Adverse Effect"). The Manager has all requisite power and
     authority, and all necessary governmental licenses, to own, lease and
     operate its properties and conduct its business as it is now being
     conducted, except where the failure to possess such governmental licenses
     will not in the aggregate have a Manager Material Adverse Effect.

          (ii) This Agreement and the Amended and Restated Investment Advisory
     Agreement dated as of March 15, 2007 between the Company and the Manager
     (the "Management Agreement") have been duly and validly authorized,
     executed and delivered by the Manager. The Management Agreement constitutes
     a valid and binding agreement of the Manager, enforceable in accordance
     with its terms, except to the extent that enforcement thereof may be
     limited by bankruptcy, insolvency, reorganization, moratorium, or other
     laws affecting enforcement of creditors' rights or by general equitable
     principles.

          (iii) Except as described in the Disclosure Package and the Final
     Offering Memorandum, there are no legal or governmental proceedings to
     which the Manager or any of its subsidiaries is a party, or of which any
     property of the Manager or any of its subsidiaries is the subject which,
     singularly or in the aggregate, if determined adversely to the Manager or
     any of its subsidiaries, are reasonably likely to have a Material Adverse
     Effect, and to the best of the Manager's knowledge, no such proceedings are
     overtly threatened or contemplated by governmental authorities or overtly
     threatened or contemplated by others.

          (iv) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency having jurisdiction over the Manager is necessary or
     required for the performance by the Manager of its obligations hereunder
     which has not been obtained or made or the failure of which to have been
     obtained or made in the aggregate would not have a Material Adverse Effect.

     Any certificate signed by an officer of the Company or the Manager and
delivered to the Representatives or to counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Company or the Manager to
each Initial Purchaser as to the matters set forth therein.

     SECTION 2. PURCHASE, SALE AND DELIVERY OF THE NOTES

     (a) The Firm Notes. The Company agrees to issue and sell to the several
Initial Purchasers the Firm Notes upon the terms herein set forth. On the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Initial Purchasers
agree, severally and not jointly, to purchase from the Company the respective
principal amount of Firm Notes set forth opposite their names on Schedule A at a
purchase price of 97% of the aggregate principal amount thereof.

     (b) The Closing Date. Delivery of the Firm Notes to be purchased by the
Initial Purchasers and payment therefor shall be made at the offices of Kirkland
& Ellis LLP, 153 East 53rd Street, New York, New York 10022 (or such other place
as may be agreed to by the Company and the Representatives) at 9:00 a.m. New
York City time, on August 29, 2007, or such other time and date not later than
September 12, 2007 as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the "Closing Date").


                                       13



     (c) The Optional Notes; Any Subsequent Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Initial Purchasers to purchase, severally
and not jointly, up to $20,000,000 aggregate principal amount of Optional Notes
from the Company at the same price as the purchase price to be paid by the
Initial Purchasers for the Firm Notes. The option granted hereunder may be
exercised at any time and from time to time upon notice by the Representatives
to the Company, which notice may be given at any time within 13 days from the
date of this Agreement. Such notice shall set forth (i) the amount (which shall
be an integral multiple of $1,000 in aggregate principal amount) of Optional
Notes as to which the Initial Purchasers are exercising the option, (ii) the
names and denominations in which the Optional Notes are to be registered and
(iii) the time, date and place at which such Notes will be delivered (which time
and date may be simultaneous with, but not earlier than, the Closing Date; and
in such case the term "Closing Date" shall refer to the time and date of
delivery of the Firm Notes and the Optional Notes). Such time and date of
delivery, if subsequent to the Closing Date, is called a "Subsequent Closing
Date" and shall be determined by the Representatives. Such date may be the same
as the Closing Date but not earlier than the Closing Date nor later than 10
business days after the date of such notice. If any Optional Notes are to be
purchased, each Initial Purchaser agrees, severally and not jointly, to purchase
the principal amount of Optional Notes (subject to such adjustments to eliminate
fractional amount as the Representatives may determine) that bears the same
proportion to the total principal amount of Optional Notes to be purchased as
the principal amount of Firm Notes set forth on Schedule A opposite the name of
such Initial Purchaser bears to the total principal amount of Firm Notes.

     (d) Payment for the Notes. Payment for the Notes shall be made at the
Closing Date (and, if applicable, at any Subsequent Closing Date) by wire
transfer of immediately available funds to the order of the Company.

     It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Initial Purchasers, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Notes and any Optional Notes the Initial Purchasers have agreed to
purchase. BAS, individually and not as the Representative of the Initial
Purchasers, may (but shall not be obligated to) make payment for any Notes to be
purchased by any Initial Purchaser whose funds shall not have been received by
the Representatives by the Closing Date or any Subsequent Closing Date, as the
case may be, for the account of such Initial Purchaser, but any such payment
shall not relieve such Initial Purchaser from any of its obligations under this
Agreement.

     (e) Delivery of the Notes. The Company shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Initial
Purchasers the Firm Notes at the Closing Date, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Initial Purchasers, the Optional
Notes the Initial Purchasers have agreed to purchase at the Closing Date or any
Subsequent Closing Date, as the case may be, against the irrevocable release of
a wire transfer of immediately available funds for the amount of the purchase
price therefor. Delivery of the Notes shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Initial Purchasers.


                                       14



     SECTION 3. COVENANTS OF THE COMPANY

     The Company covenants and agrees with each Initial Purchaser as follows:

     (a) Representatives' Review of Proposed Amendments and Supplements. During
such period beginning on the date hereof and ending on the date of the
completion of the resale of the Notes by the Initial Purchasers (as notified by
the Initial Purchasers to the Company), prior to amending or supplementing the
Disclosure Package or the Final Offering Memorandum, the Company shall furnish
to the Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not print, use or distribute such proposed
amendment or supplement to which the Representatives reasonably object.

     (b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, at any time prior to the completion of the resale of
the Notes by the Initial Purchasers (as notified by the Initial Purchasers to
the Company), any event or development shall occur or condition exist as a
result of which it is necessary to amend or supplement the Disclosure Package or
the Final Offering Memorandum in order that the Disclosure Package or the Final
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made or then prevailing,
as the case may be, not misleading, or if in the opinion of the Representatives
it is otherwise necessary to amend or supplement the Disclosure Package or the
Final Offering Memorandum to comply with law, the Company shall promptly notify
the Initial Purchasers and prepare, subject to Section 3(a) hereof, such
amendment or supplement as may be necessary to correct such untrue statement or
omission.

     (c) Copies of Disclosure Package and the Offering Memorandum. The Company
agrees to furnish to the Representatives, without charge, until the earlier of
nine months after the date hereof or the completion of the resale of the Notes
by the Initial Purchasers (as notified by the Initial Purchasers to the Company)
as many copies of the materials contained in the Disclosure Package and the
Final Offering Memorandum and any amendments and supplements thereto as the
Representatives may request.

     (d) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Initial Purchasers, as the Initial
Purchasers may reasonably request from time to time, to qualify or register the
Notes for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial securities laws of those
jurisdictions designated by the Representatives, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Notes. The Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Representatives promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Notes for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of
the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.

     (e) Rule 144A Information. For so long as any of the Notes are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act of
1933, as amended, the Company shall provide to any holder of the Notes or to any
prospective purchaser of the Notes designated by any holder, upon request of
such holder or prospective purchaser, information required to be


                                       15



provided by Rule 144A(d)(4) of the Securities Act of 1933, as amended, if, at
the time of such request, the Company is not subject to the reporting
requirements under Section 13 or 15(d) of the Exchange Act.

     (f) Compliance with Securities Law. The Company will comply with all
applicable securities and other laws, rules and regulations, including, without
limitation, the Sarbanes-Oxley Act, and use its best efforts to cause the
Company's directors and officers, in their capacities as such, to comply with
such laws, rules and regulations, including, without limitation, the provisions
of the Sarbanes-Oxley Act.

     (g) Legends. Each of the Notes will bear, to the extent applicable, the
legend contained in "Notice to Investors; Transfer Restrictions" in the
Disclosure Package and the Final Offering Memorandum for the time period and
upon the other terms stated therein.

     (h) Written Information Concerning the Offering. Without the prior written
consent of the Representatives, the Company will not give to any prospective
purchaser of the Notes or any other person not in its employ any written
information concerning the offering of the Notes other than the Disclosure
Package, the Final Offering Memorandum or any other offering materials prepared
by or with the prior consent of the Representatives.

     (i) No General Solicitation. Except following the effectiveness of the
Registration Statement, the Company will not, and will cause its subsidiaries
not to, solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act of 1933, as amended) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.

     (j) No Integration. The Company will not, and will cause its subsidiaries
not to, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Securities Act) in a transaction
that could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.

     (k) Information to Publishers. Any information provided by the Company to
publishers of publicly available databases about the terms of the Notes and the
Indenture shall include a statement that the Notes have not been registered
under the Act and are subject to restrictions under Rule 144A of the Securities
Act of 1933, as amended.

     (l) DTC. The Company will cooperate with the Representatives and use its
best efforts to permit the Notes to be eligible for clearance and settlement
through The Depository Trust Company.

     (m) Rule 144 Tolling. During the period of two years after the last Closing
Date, the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Securities Act of 1933, as amended) to, resell any
of the Notes that constitute "restricted securities" under Rule 144 that have
been reacquired by any of them.

     (n) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Notes sold by it in the manner described under the caption "Use of
Proceeds" in the Disclosure Package and the Final Offering Memorandum.


                                       16



     (o) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.

     (p) Available Conversion Shares. The Company will keep available at all
times, free of pre-emptive rights, the full number of Conversion Shares.

     (q) Conversion Price. Between the date hereof and the Closing Date, the
Company will not do or authorize any act or thing that would result in an
adjustment of the conversion price.

     (r) Company to Provide Interim Financial Statements and Other Information.
Prior to the Closing Date, the Company will furnish the Initial Purchasers, as
soon as they have been prepared by or are available to the Company, a copy of
any unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements
appearing in the Disclosure Package and the Final Offering Memorandum.

     (s) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 60th day following the date of
the Final Offering Memorandum (the "Lock-Up Period"), the Company will not,
without the prior written consent of the Representatives (which consent may be
withheld at the sole discretion of the Representatives), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" or liquidate or decrease a "call equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer (or enter into any transaction that is designed
to, or might reasonably be expected to, result in the disposition of), or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or exercisable for
or convertible into shares of Common Stock (other than as contemplated by this
Agreement and the Registration Rights Agreement with respect to the Notes and
the Conversion Shares); provided, however, that the foregoing restrictions do
not apply to (i) shares of Common Stock issued upon the exercise of options
granted under stock option plans existing on the date hereof, (ii) grants of
Common Stock, restricted common stock or restricted stock units in accordance
with the terms of a plan in effect on the date hereof, (iii) shares of Common
Stock (or options, warrants or convertible securities relating to shares of
Common Stock) issued in connection with a bona fide merger or acquisition
transaction, (iv) the offer, issuance or sale of securities pursuant to the
Company's Dividend Reinvestment and Stock Purchase Plan existing on the date
hereof (the "DRIP") (provided that the Company agrees not to permit investments
greater than $20,000 by any single investor under the DRIP during the Lock-Up
Period) or (v) shares of Common Stock issued pursuant to the Management
Agreement.

     (t) Future Reports to Stockholders. The Company will make available to its
stockholders as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Final Offering Memorandum), to make
available to its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail.

     (u) Future Reports to the Representatives. Except as are available at
http://www.sec.gov, during the period of five years after the Closing Date the
Company will furnish to the Representatives at 9 West 57th Street, New York, New
York 10019 (i) as soon as


                                       17



practicable after the end of each fiscal year, copies of the annual report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.

     (v) Investment Limitation. The Company shall not invest or otherwise use
the proceeds received by the Company from its sale of the Notes in such a manner
as would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.

     (w) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any securities of
the Company to facilitate the sale or resale of the Notes.

     (x) New Lock-Up Agreements. The Company will enforce all agreements between
the Company and any of its security holders to be entered into pursuant to this
Agreement that prohibit the sale, transfer, assignment, pledge or hypothecation
of any of the Company's securities. In addition, the Company will direct the
transfer agent to place stop transfer restrictions upon any such securities of
the Company that are bound by such "lock-up" agreements for the duration of the
periods contemplated in such agreements.

     (y) Final Term Sheet. The Company will prepare or cause to be prepared a
final term sheet, containing solely a description of the Notes and the offering
thereof, in the form approved by you and attached as Schedule B hereto (the
"Final Term Sheet").

     SECTION 4. PAYMENT OF EXPENSES

     The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Notes (including all
printing and engraving costs), (ii) all fees and expenses of the Trustee under
the Indenture, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Notes to the Initial Purchasers,
(iv) all fees and expenses of the Company's counsel, independent public or
certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, shipping and distribution
of the materials contained in the Disclosure Package, including the Preliminary
Offering Memorandum, and the Final Offering Memorandum, all amendments and
supplements thereto and this Agreement, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Initial Purchasers in connection
with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Notes for offer and sale under the
state securities or blue sky laws, and, if requested by the Representatives,
preparing and printing a "Blue Sky Survey" or memorandum, and any supplements
thereto, advising the Initial Purchasers of such qualifications, registrations
and exemptions, (vii) the expenses of the Company and the Initial Purchasers in
connection with the marketing and offering of the Notes, including all
transportation and other expenses incurred in connection with presentations to
prospective purchasers of the Notes, (viii) the fees and expenses associated
with listing the Conversion Shares


                                       18



on the New York Stock Exchange and (ix) all expenses and fees in connection with
admitting the Notes for trading in the PORTAL Market. Except as provided in this
Section 4, Section 7, Section 10 and Section 11 hereof, the Initial Purchasers
shall pay their own expenses, including the fees and disbursements of their
counsel.

     SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS

     The obligations of the several Initial Purchasers to purchase and pay for
the Notes as provided herein on the Closing Date and, with respect to the
Optional Notes, any Subsequent Closing Date, shall be subject to the accuracy of
the representations, warranties and agreements on the part of the Company and
the Manager set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and, with respect to the Optional Notes, as of
the related Subsequent Closing Date as though then made, to the accuracy of the
statements of the Company and the Manager made in any certificates pursuant to
the provisions hereof, to the timely performance by the Company and the Manager
of its covenants and other obligations hereunder, and to each of the following
additional conditions:

     (a) Accountants' Comfort Letter. On the date hereof, the Representatives
shall have received from Deloitte & Touche LLP, independent public accountants
for the Company, a letter dated the date hereof addressed to the Initial
Purchasers, in form and substance satisfactory to the Representatives (i)
confirming that they are an independent registered public accounting firm within
the meaning of the Securities Act and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Disclosure
Package, as of a date not more than three days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
initial purchasers in connection with similar transactions.

     (b) No Material Adverse Change or Rating Agency Change. For the period from
and after the date of this Agreement and prior to the Closing Date and, with
respect to the Optional Notes, any Subsequent Closing Date:

          (i) in the judgment of the Representatives there shall not have
     occurred any Material Adverse Change;

          (ii) there shall not have been any change or decrease specified in the
     letter or letters referred to in paragraph (a) of this Section 5 which is,
     in the sole judgment of the Representatives, so material and adverse as to
     make it impractical or inadvisable to proceed with the offering or delivery
     of the Notes as contemplated by the Disclosure Package and the Final
     Offering Memorandum; and

          (iii) there shall not have occurred any downgrading, nor shall any
     notice have been given of any intended or potential downgrading or of any
     review for a possible change that does not indicate the direction of the
     possible change, in the rating accorded any securities of the Company or
     any of its subsidiaries by any "nationally recognized statistical rating
     organization" as such term is defined for purposes of Rule 436(g)(2) under
     the Securities Act of 1933, as amended.

     (c) Opinion of New York Counsel for the Company. On each of the Closing
Date and any Subsequent Closing Date, the Representatives shall have received
the favorable opinions and


                                       19



letter of Skadden, Arps, Slate, Meagher & Flom LLP, New York counsel for the
Company, dated as of such Closing Date, in form and substance reasonably
satisfactory to the Representatives.

     (d) Opinion of Maryland Counsel for the Company. On each of the Closing
Date and any Subsequent Closing Date, the Representatives shall have received
the favorable opinion of Miles & Stockbridge P.C., Maryland counsel for the
Company, dated as of such Closing Date, in form and substance reasonably
satisfactory to the Representatives.

     (e) Opinion of Counsel for the Initial Purchasers. On each of the Closing
Date and any Subsequent Closing Date, the Representatives shall have received
the favorable opinion of Kirkland & Ellis LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, in form and substance satisfactory
to, and addressed to, the Representatives, with respect to the issuance and sale
of the Notes, the Registration Statement, the Disclosure Package, the
Preliminary Offering Memorandum, the Final Offering Memorandum and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.

     (f) Officers' Certificate from the Company. On each of the Closing Date and
any Subsequent Closing Date, the Representatives shall have received a written
certificate executed by the Chief Executive Officer or President of the Company
and the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect that the signers of such
certificate have carefully examined the Disclosure Package, including the
Preliminary Offering Memorandum, and the Final Offering Memorandum, any
amendments or supplements thereto and this Agreement, to the effect set forth in
subsection (b)(iii) of this Section 5, and further to the effect that:

          (i) for the period from and after the date of this Agreement and prior
     to such Closing Date or such Subsequent Closing Date, as the case may be,
     there has not occurred any Material Adverse Change;

          (ii) the representations and warranties of the Company set forth in
     Section 1(a) of this Agreement are true and correct on and as of the
     Closing Date or the Subsequent Closing Date, as the case may be, with the
     same force and effect as though expressly made on and as of such Closing
     Date or such Subsequent Closing Date, as the case may be; and

          (iii) the Company has complied with all the agreements hereunder and
     satisfied all the conditions on its part to be performed or satisfied
     hereunder at or prior to such Closing Date or such Subsequent Closing Date,
     as the case may be.

     (g) Officers' Certificate from the Manager. On each of the Closing Date and
any Subsequent Closing Date, the Representatives shall have received a written
certificate executed by two Managing Directors of the Manager, dated as of such
Closing Date, to the effect that the signers of such certificate have carefully
examined the Disclosure Package, including the Preliminary Offering Memorandum,
and the Final Offering Memorandum, any amendments or supplements thereto and
this Agreement, to the effect that:

          (i) for the period from and after the date of this Agreement and prior
     to such Closing Date or such Subsequent Closing Date, as the case may be,
     there has not occurred any material adverse change in the condition
     (financial or otherwise), or in the results of operations, properties,
     business or prospects of the Manager and its subsidiaries


                                       20



     taken as a whole that could reasonably be expected in the aggregate to have
     a Manager Material Adverse Effect;

          (ii) the representations and warranties of the Manager set forth in
     Section 1(b) of this Agreement are true and correct on and as of the
     Closing Date or the Subsequent Closing Date, as the case may be, with the
     same force and effect as though expressly made on and as of such Closing
     Date or such Subsequent Closing Date, as the case may be; and

          (iii) the Manager has complied with all the agreements hereunder and
     satisfied all the conditions on its part to be performed or satisfied
     hereunder at or prior to such Closing Date or such Subsequent Closing Date,
     as the case may be.

     (h) Bring-down Comfort Letter. On each of the Closing Date and any
Subsequent Closing Date, the Representatives shall have received from Deloitte &
Touche LLP, independent public accountants for the Company, a letter dated such
date, in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant
to subsection (a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business
days prior to the Closing Date or Subsequent Closing Date, as the case may be.

     (i) Registration Rights Agreement. The Company and the Initial Purchasers
shall have executed and delivered the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchasers), and the Registration Rights
Agreement shall be in full force and effect.

     (j) Lock-Up Agreement from Certain Security Holders of the Company. On or
prior to the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit B hereto from the Manager
and the officers and directors of the Company as set forth on Schedule D hereto,
and such agreement shall be in full force and effect on each of the Closing Date
and any Subsequent Closing Date.

     (k) PORTAL Designation. The Notes shall have been designated
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.

     (l) The Company shall have caused the Conversion Shares to be approved for
listing, subject to issuance, on the New York Stock Exchange.

     (m) Additional Documents. On or before each of the Closing Date and any
Subsequent Closing Date, the Representatives and counsel for the Initial
Purchasers shall have received such information, documents and opinions as they
may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Notes as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.

     If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the Closing
Date and, with respect to the Optional Notes, at any time prior to the
applicable Subsequent Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 4, Section 7,
Section 8, Section 9 and Section 13 shall at all times be effective and shall
survive such termination.


                                       21



     SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INITIAL PURCHASERS

     Each of the Initial Purchasers represents and warrants that it is a
"qualified institutional buyer", as defined in Rule 144A of the Securities Act
of 1933, as amended. Each Initial Purchaser agrees with the Company that:

     (a) it has not offered or sold, and will not offer or sell, any Notes
within the United States or to, or for the account or benefit of, U.S. persons
(x) as part of their distribution at any time or (y) otherwise until one year
after the later of the commencement of the offering and the date of closing of
the offering except to those it reasonably believes to be "qualified
institutional buyers" (as defined in Rule 144A under the Act);

     (b) neither it nor any person acting on its behalf has made or will make
offers or sales of the Notes in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States;

     (c) in connection with each sale pursuant to Section 6(a), it has taken or
will take reasonable steps to ensure that the purchaser of such Notes is aware
that such sale is being made in reliance on Rule 144A;

     (d) any information provided by the Initial Purchasers to publishers of
publicly available databases about the terms of the Notes and the Indenture
shall include a statement that the Notes have not been registered under the Act
and are subject to restrictions under Rule 144A under the Act;

     (e) it acknowledges that additional restrictions on the offer and sale of
the Notes and the Common Stock issuable upon conversion thereof are described in
the Disclosure Package and the Final Offering Memorandum.

     SECTION 7. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES

     If this Agreement is terminated by the Representatives pursuant to Section
5, Section 10 or Section 11, or if the sale to the Initial Purchasers of the
Notes on the Closing Date is not consummated because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Initial Purchasers (or such Initial Purchasers as
have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Initial Purchasers in connection with the
proposed purchase and the offering and sale of the Notes, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.

     SECTION 8. INDEMNIFICATION

     (a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its directors, officers and
employees, agents, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Initial
Purchaser, director, officer, employee, agent or controlling person may become
subject, insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based upon any
untrue statement or alleged untrue


                                       22



statement of a material fact contained in the Preliminary Offering Memorandum,
the Final Offering Memorandum, the Final Term Sheet, any Issuer Written
Information or any other written information that constitutes an offer to sell
or a solicitation of an offer to buy the Notes used by the Company, if any, in
connection with the offer or sale of the Notes (or any amendment or supplement
to the foregoing), or the omission or alleged omission therefrom of a material
fact, in each case, necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and to
reimburse each Initial Purchaser, its officers, directors, employees, agents and
each such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by the Representatives) as such expenses are
reasonably incurred by such Initial Purchaser, its officers, directors,
employees, agents or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Representatives expressly for use in the Preliminary Offering
Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer
Written Information or any other written information that constitutes an offer
to sell or a solicitation of an offer to buy the Notes used by the Company in
connection with the offer or sale of the Notes (or any amendment or supplement
to the foregoing). The indemnity agreement set forth in this Section 8(a) shall
be in addition to any liabilities that the Company may otherwise have.

     (b) Indemnification of the Company, its Directors and Officers. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, or any such director, officer or controlling
person may become subject, insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum, the Final Offering Memorandum,
the Final Term Sheet, any Issuer Written Information or any other written
information that constitutes an offer to sell or a solicitation of an offer to
buy the Notes used by the Company in connection with the offer or sale of the
Notes (or any amendment or supplement to the foregoing), or arises out of or is
based upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, and only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Preliminary Offering
Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer
Written Information or any other written information that constitutes an offer
to sell or a solicitation of an offer to buy the Notes used by the Company in
connection with the offer or sale of the Notes (or any amendment or supplement
to the foregoing), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, officer or controlling person
for any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Company expressly
for use in the Preliminary Offering Memorandum, the Final Offering Memorandum,
the Final Term Sheet, any Issuer Written Information or any other


                                       23



written information that constitutes an offer to sell or a solicitation of an
offer to buy the Notes used by the Company in connection with the offer or sale
of the Notes (or any amendment or supplement to the foregoing) are the
statements set forth in Schedule C. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each Initial Purchaser
may otherwise have.

     (c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the failure
to so notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (other than local counsel),
reasonably approved by the indemnifying party (or by the Representatives in the
case of Section 8(b)), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

     (d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, which shall not be withheld unreasonably, but if settled with such
consent or if there is a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding


                                       24



effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (x) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding and (y) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

     SECTION 9. CONTRIBUTION

     If the indemnification provided for in Section 8 is for any reason
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Notes pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or alleged statements or alleged omissions that resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the offering of the Notes pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Notes pursuant to this Agreement (before deducting expenses)
received by the Company, and the total discount received by the Initial
Purchasers bear to the aggregate initial offering price of the Notes. The
relative fault of the Company, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

     The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.

     The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9.

     Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the purchase discount or
commission received by such Initial Purchaser in connection with the Notes
purchased by it hereunder. No person guilty of fraudulent


                                       25



misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each director, officer, employee and agent of an
Initial Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Initial Purchaser, and each director of the
Company, each officer of the Company, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Company.

     SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS

     If, on the Closing Date or any Subsequent Closing Date, as the case may be,
any one or more of the several Initial Purchasers shall fail or refuse to
purchase Notes that it or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Notes which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate principal amount of the Notes to be purchased on
such date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the principal amount of Firm Notes set forth opposite their
respective names on Schedule A bears to the aggregate principal amount of Firm
Notes set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Initial Purchasers, to
purchase the Notes which such defaulting Initial Purchaser or Initial Purchasers
agreed but failed or refused to purchase on such date. If, on the Closing Date
or any Subsequent Closing Date, as the case may be, any one or more of the
Initial Purchasers shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs exceeds 10%
of the aggregate principal amount of Notes to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Notes are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party (other than a
defaulting Initial Purchaser) to any other party except that the provisions of
Section 4, Section 7, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either the Representatives
or the Company shall have the right to postpone the Closing Date or any
Subsequent Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Final Offering
Memorandum or any other documents or arrangements may be effected.

     As used in this Agreement, the term "Initial Purchaser" shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

     SECTION 11. TERMINATION OF THIS AGREEMENT

     On or prior to the Closing Date this Agreement may be terminated by the
Representatives by notice given to the Company if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the New York Stock Exchange, or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established by
the Commission or the NASD or on either such stock exchange; (ii) a general
banking moratorium shall have been declared by any federal or New York authority
or a material


                                       26



disruption in commercial banking or securities settlement or clearance services
in the United States has occurred; or (iii) there shall have occurred any
outbreak or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Representatives is material and adverse
and makes it impracticable or inadvisable to market the Notes in the manner and
on the terms described in the Disclosure Package and the Final Offering
Memorandum or to enforce contracts for the sale of securities. Any termination
pursuant to this Section 11 shall be without liability on the part of (a) the
Company to any Initial Purchaser, except that the Company shall be obligated to
reimburse the expenses of the Representatives and the Initial Purchasers
pursuant to Sections 4 and 7 hereof or (b) any Initial Purchaser to the Company.

     SECTION 12. NO ADVISORY OR FIDUCIARY RESPONSIBILITY

     The Company acknowledges and agrees that: (i) the purchase and sale of the
Notes pursuant to this Agreement, including the determination of the offering
price of the Notes and any related discounts and commissions, is an arm's-length
commercial transaction between the Company, on the one hand, and the several
Initial Purchasers, on the other hand, and the Company is capable of evaluating
and understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction each
Initial Purchaser is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial
Purchaser has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such
Initial Purchaser has advised or is currently advising the Company on other
matters) and no Initial Purchaser has any obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement; (iv) the several Initial Purchasers and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company and that the several Initial
Purchasers have no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Initial Purchasers have
not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.

     This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company and the several Initial Purchasers, or any
of them, with respect to the subject matter hereof. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company may have against the several Initial Purchasers with respect to any
breach or alleged breach of agency or fiduciary duty.


                                       27



     SECTION 13. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY

     The respective indemnities, contribution, agreements, representations,
warranties and other statements of the Company, of the Manager, of their
respective officers and of the several Initial Purchasers set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation, or statement as to the result hereof, made
by or on behalf of any Initial Purchaser or the Company or any of its or their
partners, officers, directors, employees, agents or any controlling person, as
the case may be, (ii) acceptance of the Notes and payment for them hereunder or
(iii) any termination of this Agreement.

     SECTION 14. NOTICES

     All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:

     If to the Representatives:
          Banc of America Securities LLC
          9 West 57th Street
          New York, New York 10019
          Facsimile:  212-933-2217
          Attention:  Syndicate Department

     with a copy to:
          Banc of America Securities LLC
          9 West 57th Street
          New York, New York 10019
          Facsimile:  212-457-3745
          Attention:  ECM Legal

          Deutsche Bank Securities Inc.
          60 Wall Street
          New York, New York 10005
          Facsimile: 212-797-9344
          Attention: Equity Capital Markets Syndicate

     with a copy to:
          Deutsche Bank Securities Inc.
          60 Wall Street
          New York, New York 10005
          Facsimile: 212-797-4564
          Attention: General Counsel

     If to the Company:
          Anthracite Capital, Inc.
          40 East 52nd Street
          New York, New York 10022
          Facsimile:  212-810-8758
          Attention:  Richard Shea


                                       28



     If to the Manager:
          BlackRock Financial Management, Inc.
          40 East 52nd Street
          New York, New York 10022
          Facsimile:  212-810-5116
          Attention:  General Counsel

     with a copy to:
          Skadden, Arps, Slate, Meagher & Flom LLP
          4 Times Square
          New York, New York 10036
          Facsimile:  212-735-2000
          Attention:  Matthew Mallow, Esq.

     Any party hereto may change the address for receipt of communications by
giving written notice to the others.

     SECTION 15. SUCCESSORS

     This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Initial Purchasers pursuant to Section 10
hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and no other person will have any right or
obligation hereunder. The term "successors" shall not include any purchaser of
the Notes as such from any of the Initial Purchasers merely by reason of such
purchase.

     SECTION 16. PARTIAL UNENFORCEABILITY

     The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

     SECTION 17. GOVERNING LAW PROVISIONS

     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     SECTION 18. GENERAL PROVISIONS

     This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto. The Section headings
herein are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.


                                       29



     If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

                                        Very truly yours,

                                        ANTHRACITE CAPITAL, INC.


                                        By: /s/ Richard M. Shea
                                            -----------------------------------
                                            Name:  Richard M. Shea
                                            Title: President and Chief Operating
                                                   Officer


                                        BLACKROCK FINANCIAL MANAGEMENT, INC.,
                                        solely with respect to Section 1(b)


                                        By: /s/ Richard M. Shea
                                            ------------------------------------
                                            Name:  Richard M. Shea
                                            Title: Managing Director

     The foregoing Purchase Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.

BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
Acting as Representatives of the
several Initial Purchasers named in
the attached Schedule A.

BANC OF AMERICA SECURITIES LLC


By: /s/ Craig W. McCracken
    ------------------------------------
    Authorized Representative


DEUTSCHE BANK SECURITIES INC.


By: /s/ Simon Leopold
    ------------------------------------
    Authorized Representative


By: /s/ Chris Tognola
    ------------------------------------
    Authorized Representative



                                   SCHEDULE A

                                                             AGGREGATE PRINCIPAL
                                                            AMOUNT OF FIRM NOTES
INITIAL PURCHASERS                                             TO BE PURCHASED

Banc of America Securities LLC...........................        $30,000,000
Deutsche Bank Securities Inc.............................         30,000,000
                                                                 -----------
   Total.................................................        $60,000,000
                                                                 ===========


                                  Schedule A-1




                                   SCHEDULE B

                            ANTHRACITE CAPITAL, INC.
                                   $60,000,000
                            SENIOR CONVERTIBLE NOTES
                                    DUE 2027

PRICING SHEET



SECURITY INFORMATION
- -----------------------------------------------------------------------------------------------

Company name                                                           Anthracite Capital, Inc.
Common stock ticker                                                                 NYSE: "AHR"
Security                                                               Senior Convertible Notes
Registration format                                               144A with Registration Rights
CUSIP                                                                                 037023AG3
ISIN                                                                               US037023AG31
Ranking                                                                        Senior unsecured

INITIAL PURCHASERS                                                                    ECONOMICS
- -----------------------------------------------------------------------------------------------
Joint book-running managers          Banc of America Securities                          50.00%
                                       Deutsche Bank Securities                          50.00%

Gross spread                                                                              3.00%

ISSUANCE SIZE
- -----------------------------------------------------------------------------------------------
                                                          BONDS                        PROCEEDS
Base deal                                                60,000                     $60,000,000
Initial purchasers option (13-day)                       20,000                     $20,000,000
                                                         ------                     -----------
Total                                                    80,000                     $80,000,000

TERMS
- -----------------------------------------------------------------------------------------------
Par amount per bond                                                                      $1,000
Issue price                                                                              $1,000
Coupon                                                                                  11.750%
Conversion premium                                                                       17.50%
Last sale of common                                                                       $9.18
Conversion price (approximate)                                                           $10.79
Conversion rate                                                                         92.7085
Contingent conversion threshold                                                         130.00%
Contingent conversion price
(approximate)                                                                            $14.02

CALL SCHEDULE
- -----------------------------------------------------------------------------------------------
Call date                                                                              9/1/2012
Call price                                                                               $1,000

PUT SCHEDULE
- -----------------------------------------------------------------------------------------------
Put dates                                                          9/1/2012, 9/1/2017, 9/1/2022
Put price                                                                                $1,000



                                  Schedule B-1





DATES
- -----------------------------------------------------------------------------------------------

Trade date                                                                             08/24/07
Settlement date                                                                        08/29/07
Maturity                                                                               20 Years
Maturity date                                                                          9/1/2027
Coupon payment dates                                                                03/01, 9/01
First coupon date                                                                      3/1/2008

NET PROCEEDS
- -----------------------------------------------------------------------------------------------
Net Proceeds                                                                    $57.925 million
    (We estimate that the net proceeds from this offering will be approximately $77.325 million
         if the initial purchasers exercise in full their option to purchase additional notes).

Share repurchase (approximate)                                                      $12 million
Shares repurchased                                                             1.307189 million
- -----------------------------------------------------------------------------------------------


The notes and the common stock issuable upon conversion of the notes have not
been registered under the Securities Act of 1933, as amended, or any other state
securities laws. Unless they are registered, the notes and the common stock
issuable upon conversion of the notes may be offered only in transactions exempt
from or not subject to registration under the Securities Act of 1933, as
amended, or any other state securities laws. Accordingly, we are offering the
notes only to qualified institutional buyers under Rule 144A.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities nor shall there be any sale of these securities in
any state in which such solicitation or sale would be unlawful prior to
registration or qualification of these securities under the laws of any such
state.

A copy of the offering memorandum for the offering of the convertible notes may
be obtained by contacting Banc of America Securities LLC Capital Markets
(Prospectus Fulfillment) by email to
dg.prospectus_distribution@bofasecurities.com or prospectusrequest@list.db.com
or by mail to Banc of America Securities LLC, Capital Markets Operations, 100
West 33rd Street, 3rd Floor, New York, NY 10001 or from the offices of Deutsche
Bank Securities Inc. by writing to Deutsche Bank Securities Prospectus
Department, 100 Plaza One, Second Floor, Jersey City, NJ 07311 or by calling
800-503-4611.

MAKE-WHOLE TABLE

Additional shares delivered upon conversion upon certain Fundamental Changes

ASSUMPTIONS
- ------------------
Stock price              $9.18
Conversion premium       17.50%
Conversion price        $10.79
Face value           $1,000.00
Conversion rate        92.7085

 Make-whole premium upon a change of control (as adjustment to conversion rate)



EFFECTIVE DATE        $9.18     $10.00   $10.79   $12.00   $14.00   $16.00   $18.00   $20.00   $25.00   $30.00   $40.00
- --------------       -------   -------   ------   ------   ------   ------   ------   ------   ------   ------   ------

August 23, 2007      16.2239   12.2915   9.1451   5.8748   3.0558   1.7040   0.9971   0.6315   0.3715   0.3582   0.1140
September 1, 2008    16.2239   12.2415   9.0802   5.7998   2.9915   1.6228   0.9637   0.6165   0.3315   0.2582   0.0000
September 1, 2009    16.2239   12.0915   8.9134   5.5665   2.7129   1.5165   0.9304   0.4665   0.3235   0.1948   0.0000
September 1, 2010    16.2239   11.9815   8.4036   4.8665   2.0344   0.9978   0.5748   0.3815   0.1955   0.1048   0.0000
September 1, 2011    16.2239   10.2115   6.2072   2.5998   0.4772   0.0665   0.0000   0.0000   0.0000   0.0000   0.0000
September 1, 2012    16.2239    7.2915   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000


The maximum number of additional shares is 16.2239 per $1,000 principal amount
of notes, subject to adjustment in the same manner as in the conversion rate as
set forth under " __ Conversion Rate Adjustments" and in no event will the
number of additional shares of our common stock issuable upon conversion as a
result of a fundamental change exceed that amount.


                                  Schedule B-2



The exact stock prices and effective dates may not be set forth in the table
above, in which case:

If the stock price is between two stock prices in the table or the effective
date is between two effective dates in the table, the number of additional
shares will be determined by straight-line interpolation between the number of
additional shares set forth for the higher and lower stock prices and the two
effective dates, as applicable, based on a 365-day year;

If the stock price is in excess of $40.00 per share (subject to adjustment), no
additional shares will be added to the conversion rate.

If the stock price is less than $9.18 per share (subject to adjustment), no
additional shares will be added to the conversion rate.

ANY DISCLAIMER OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS
COMMUNICATION AND SHOULD BE DISREGARDED. SUCH

DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS
COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM


                                  Schedule B-3



                                   SCHEDULE C

Paragraphs 9 and 11 under the heading "Plan of Distribution" in the Preliminary
Offering Memorandum and the Final Offering Memorandum.


                                  Schedule C-1



                                   SCHEDULE D

                      PERSONS DELIVERING LOCK-UP AGREEMENTS

Officers

Chris A. Milner
Chief Executive Officer

Richard M. Shea
President and Chief Operating Officer

James J. Lillis
Chief Financial Officer and Treasurer

Daniel P. Sefcik
Chief Investment Officer and Vice President

Herman H. Howerton
Vice President and General Counsel

Francis P. Pomar
Vice President

Mark S. Warner
Vice President

Vincent B. Tritto
Secretary

Directors

Ralph L. Schlosstein
Chairman of the Board of Directors

Scott M. Amero

Hugh R. Frater

Carl F. Geuther

Jeffrey C. Keil

Deborah J. Lucas

John B. Levy

Entity

BlackRock Financial Management, Inc.


                                  Schedule D-1



                                   SCHEDULE E

Anthracite CDO I, Ltd., a Cayman company
Anthracite CDO II, Ltd., a Cayman company
Anthracite CDO III, Ltd., a Cayman company
Anthracite CRE CDO 2006-HY3 Ltd.
Anthracite Euro CRE CDO 2006-1 P.L.C.
LB-UBS Commercial Mortgage Trust 2004-2


                                  Schedule E-1



                                                                       EXHIBIT A

                           ISSUER WRITTEN INFORMATION

                                      None.


                                   Exhibit A-1



                                                                       EXHIBIT B

                   [DIRECTORS AND OFFICERS LOCK-UP AGREEMENT]

August ____, 2007

Banc of America Securities LLC
Deutsche Bank Securities Inc.
c/o Banc of America Securities LLC
9 West 57th Street
New York, NY  10019

Re: Anthracite Capital, Inc. (the "Company")

Ladies and Gentlemen:

     The Company proposes to carry out an offering of convertible senior notes
(the "Offering"), for which you will act as the initial purchasers. The notes
will be convertible into the Company's common stock, $0.001 par value (the
"Common Stock") under certain circumstances. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into purchase arrangements with the Company with
respect to the Offering.

     In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not (and will cause any spouse or immediate family member of
the spouse or the undersigned living in the undersigned's household not to),
without the prior written consent of Banc of America Securities LLC and Deutsche
Bank Securities Inc. (which consent may be withheld in their sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put equivalent position" or liquidate or decrease a "call equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended, or otherwise dispose of or transfer (or enter into any
transaction that is designed to, or might reasonably be expected to, result in
the disposition of) including the filing (or participation in the filing of) of
a registration statement with the Securities and Exchange Commission in respect
of, any shares of Common Stock, options or warrants to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into shares
of Common Stock currently or hereafter owned either of record or beneficially
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
by the undersigned (or such spouse or family member) (other than as contemplated
by the Registration Rights Agreement entered into by the Company and you in
connection with the Offering), or publicly announce an intention to do any of
the foregoing, for a period commencing on the date hereof and continuing through
the close of trading on the date 60 days after the date of the final offering
memorandum for the Offering. The undersigned also agrees and consents to the
entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.


                                   Exhibit B-1



     Notwithstanding the foregoing, the restrictions in the previous paragraph
will not prohibit (a) transfers of shares of Common Stock as a bona fide gift,
by will or by intestacy, and (b) dispositions to a trust, provided that the
shares of Common Stock so transferred are subject to restrictions described
above for the remainder of the 60-day restricted period

     This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned.

                                        Very truly yours,


                                        ----------------------------------------
                                        (Signature)


                                        ----------------------------------------
                                        (Printed Name)


                                        ----------------------------------------
                                        (Address)


                                   Exhibit B-2



                           [MANAGER LOCK-UP AGREEMENT]

August ____, 2007

Banc of America Securities LLC
Deutsche Bank Securities Inc.
c/o Banc of America Securities LLC
9 West 57th Street
New York, NY  10019

Re: Anthracite Capital, Inc. (the "Company")

Ladies and Gentlemen:

     The Company proposes to carry out an offering of convertible senior notes
(the "Offering"), for which you will act as the initial purchasers. The notes
will be convertible into the Company's common stock, $0.001 par value (the
"Common Stock"), under certain circumstances. The undersigned recognizes that
the Offering will be of benefit to the undersigned and will benefit the Company.
The undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into purchase arrangements with the Company with
respect to the Offering.

     In consideration of the foregoing, during the period commencing on the date
hereof and ending on the 60th day following the date of the final offering
memorandum for the Offering, the undersigned hereby agrees that the undersigned
will not, without the prior written consent of Banc of America Securities LLC
and Deutsche Bank Securities Inc. (which consent may be withheld in their sole
discretion), directly or indirectly, sell, offer, contract or grant any option
to sell, pledge, transfer or establish an open "put equivalent position" or
liquidate or decrease a "call equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of or transfer (or enter into any transaction that is designed to, or
might reasonably be expected to, result in the disposition of), or announce the
offering of, or file any registration statement under the Securities Act of
1933, as amended, in respect of, any shares of Common Stock, options or warrants
to acquire shares of Common Stock or securities exchangeable or exercisable for
or convertible into shares of Common Stock currently or hereafter owned either
of record or beneficially (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by the undersigned.

     Notwithstanding the foregoing, the restrictions in the previous paragraph
do not apply to (a) the filing of registration statements pursuant to the
Registration Rights Agreement entered into in connection with the Offering, (b)
transfers of shares of Common Stock by the undersigned to an affiliate of the
undersigned, provided that in the case of any such transfer pursuant to this
clause, any such transferee shall sign and deliver a lock-up letter
substantially in the form of this letter, and (c) transfers of shares, or
interests in shares, of Common Stock to employees of the undersigned or
affiliates of the undersigned, provided that in the case of any such transfer
pursuant to this clause, any such employee will not transfer any such shares or
interests during the 60-day lock-up period described above.


                                   Exhibit B-3



     This agreement is irrevocable and will be binding on the undersigned and
the respective successors and assigns of the undersigned.

                                        Very truly yours,


                                        ----------------------------------------
                                        (Signature)


                                        ----------------------------------------
                                        (Printed Name)


                                        ----------------------------------------
                                        (Address)


                                   Exhibit B-4

EX-4.1

                            ANTHRACITE CAPITAL, INC.

                    11.75% CONVERTIBLE SENIOR NOTES DUE 2027

                                   ----------

                                    INDENTURE

                           DATED AS OF AUGUST 29, 2007

                                   ----------

                             WELLS FARGO BANK, N.A.

                                     TRUSTEE



                            TIA CROSS-REFERENCE TABLE

    TIA                     INDENTURE
  SECTIONS                   SECTIONS
- -----------                -----------
Section 310    (a)          7.10
               (b)          7.10
Section 311    (a)          7.11
               (b)          7.11
Section 312    (b)         12.03
               (c)         12.03
Section 313    (a)          7.06
               (b)          7.06
               (c)          7.06
               (d)          7.06
Section 314    (a)          4.02; 4.03
Section 315    (a)          7.01(b)
               (b)          7.05
               (c)          7.01(a)
               (d)          7.01(c)
               (e)          6.11
Section 316    (a)(1)(A)    6.05
               (a)(1)(B)    6.04
               (b)          6.07
               (c)          9.04
Section 317    (a)(1)       6.08
               (a)(2)       6.09
               (b)          2.04

Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of the Indenture.


                                        i



                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.....................      1
   Section 1.01    Definitions...........................................      1
   Section 1.02    Other Definitions.....................................      5
   Section 1.03    Incorporation by Reference of Trust Indenture Act.....      6
   Section 1.04    Rules of Construction.................................      6
   Section 1.05    Acts of Holders.......................................      7

ARTICLE 2 THE SECURITIES.................................................      8
   Section 2.01    Form and Dating.......................................      8
   Section 2.02    Execution and Authentication..........................      9
   Section 2.03    Registrar, Paying Agent and Conversion Agent..........     10
   Section 2.04    Paying Agent to Hold Money and Securities in Trust....     10
   Section 2.05    Holder Lists..........................................     11
   Section 2.06    Transfer and Exchange.................................     11
   Section 2.07    Replacement Securities................................     12
   Section 2.08    Outstanding Securities................................     13
   Section 2.09    Temporary Securities..................................     14
   Section 2.10    Cancellation..........................................     14
   Section 2.11    Persons Deemed Owners.................................     14
   Section 2.12    Global Securities.....................................     14
   Section 2.13    CUSIP and ISIN Numbers................................     19
   Section 2.14    Liquidated Damages Under Registration Rights
                   Agreement.............................................     19
   Section 2.15    Ranking...............................................     19
   Section 2.16    Company Determination Final...........................     19

ARTICLE 3 REDEMPTION AND REPURCHASES.....................................     19
   Section 3.01    Company's Right to Redeem; Notices to Trustee.........     19
   Section 3.02    Selection of Securities To Be Redeemed................     20
   Section 3.03    Notice of Redemption..................................     20
   Section 3.04    Effect of Notice of Redemption........................     21
   Section 3.05    Deposit of Redemption Price...........................     21
   Section 3.06    Securities Redeemed in Part...........................     21
   Section 3.07    Repurchase of Securities by the Company at Option of
                   the Holder............................................     22
   Section 3.08    Repurchase of Securities at Option of the Holder Upon
                   a Fundamental Change..................................     24
   Section 3.09    Effect of Repurchase Notice or Fundamental Change
                   Repurchase Notice.....................................     28
   Section 3.10    Deposit of Repurchase Price or Fundamental Change
                   Repurchase Price......................................     29
   Section 3.11    Securities Repurchased in Part........................     29


                                       ii



   Section 3.12    Covenant to Comply with Securities Laws Upon
                   Repurchase of Securities..............................     29
   Section 3.13    Repayment to the Company..............................     30

ARTICLE 4 COVENANTS......................................................     30
   Section 4.01    Payments..............................................     30
   Section 4.02    SEC and Other Reports.................................     30
   Section 4.03    Compliance Certificate................................     31
   Section 4.04    Further Instruments and Acts..........................     31
   Section 4.05    Maintenance of Office or Agency.......................     31
   Section 4.06    Delivery of Certain Information.......................     31

ARTICLE 5 SUCCESSOR CORPORATION..........................................     32
   Section 5.01    When Company May Merge or Transfer Assets.............     32

ARTICLE 6 DEFAULTS AND REMEDIES..........................................     33
   Section 6.01    Events of Default.....................................     33
   Section 6.02    Acceleration..........................................     34
   Section 6.03    Other Remedies........................................     35
   Section 6.04    Waiver of Past Defaults...............................     35
   Section 6.05    Control by Majority...................................     35
   Section 6.06    Limitation on Suits...................................     35
   Section 6.07    Rights of Holders to Receive Payment..................     36
   Section 6.08    Collection Suit by Trustee............................     36
   Section 6.09    Trustee May File Proofs of Claim......................     36
   Section 6.10    Priorities............................................     37
   Section 6.11    Undertaking for Costs.................................     37
   Section 6.12    Waiver of Stay or Extension Laws......................     37

ARTICLE 7 TRUSTEE........................................................     37
   Section 7.01    Duties of Trustee.....................................     37
   Section 7.02    Rights of Trustee.....................................     38
   Section 7.03    Individual Rights of Trustee..........................     40
   Section 7.04    Trustee's Disclaimer..................................     40
   Section 7.05    Notice of Defaults....................................     40
   Section 7.06    Reports by Trustee to Holders.........................     40
   Section 7.07    Compensation and Indemnity............................     40
   Section 7.08    Replacement of Trustee................................     41
   Section 7.09    Successor Trustee by Merger...........................     42
   Section 7.10    Eligibility; Disqualification.........................     42
   Section 7.11    Preferential Collection of Claims Against Company.....     42
   Section 7.12    Trustee's Application for Instructions from the
                   Company...............................................     43

ARTICLE 8 DISCHARGE OF INDENTURE.........................................     43
   Section 8.01    Discharge of Liability on Securities..................     43
   Section 8.02    Repayment to the Company..............................     43


                                       iii



ARTICLE 9 AMENDMENTS.....................................................     43
   Section 9.01    Without Consent of Holders............................     43
   Section 9.02    With Consent of Holders...............................     44
   Section 9.03    Compliance with Trust Indenture Act...................     45
   Section 9.04    Revocation and Effect of Consents, Waivers and
                   Actions...............................................     46
   Section 9.05    Notation on or Exchange of Securities.................     46
   Section 9.06    Trustee to Sign Supplemental Indentures...............     46
   Section 9.07    Effect of Supplemental Indentures.....................     46

ARTICLE 10 CONVERSIONS...................................................     46
   Section 10.01   Conversion Rights.....................................     46
   Section 10.02   Conversion Consideration..............................     49
   Section 10.03   Conversion Procedures.................................     51
   Section 10.04   Taxes on Conversions..................................     52
   Section 10.05   Company to Provide Stock..............................     52
   Section 10.06   Adjustment for Change in Capital Stock................     52
   Section 10.07   Adjustment for Rights Issue...........................     53
   Section 10.08   Adjustment for Other Distributions....................     54
   Section 10.09   Adjustment for Cash Dividends.........................     55
   Section 10.10   Adjustment for Company Tender Offer...................     56
   Section 10.11   Additional Adjustments................................     57
   Section 10.12   When No Adjustment Required...........................     58
   Section 10.13   De minimis Impact on Conversion Rate..................     59
   Section 10.14   Notice of Adjustment..................................     59
   Section 10.15   Company Determination Final...........................     59
   Section 10.16   Trustee's Adjustment Disclaimer.......................     59
   Section 10.17   Simultaneous Adjustments..............................     59
   Section 10.18   Successive Adjustments................................     59
   Section 10.19   Limitation on Adjustments.............................     60
   Section 10.20   Adjustment to Conversion Rate Upon Certain Fundamental
                   Change Transactions...................................     60

ARTICLE 11 PAYMENT OF INTEREST...........................................     61
   Section 11.01   Payment of Interest...................................     61
   Section 11.02   Additional Amounts....................................     62
   Section 11.03   Defaulted Interest....................................     63
   Section 11.04   Interest Rights Preserved.............................     63

ARTICLE 12 MISCELLANEOUS.................................................     64
   Section 12.01   Trust Indenture Act Controls..........................     64
   Section 12.02   Notices...............................................     64
   Section 12.03   Communication by Holders with Other Holders...........     64
   Section 12.04   Certificate and Opinion as to Conditions Precedent....     65
   Section 12.05   Statements Required in Certificate or Opinion.........     65
   Section 12.06   Separability Clause...................................     65
   Section 12.07   Rules by Trustee, Paying Agent, Conversion Agent, and
                   Registrar.............................................     65


                                       iv



   Section 12.08   Legal Holidays........................................     65
   Section 12.09   Governing Law.........................................     66
   Section 12.10   No Recourse Against Others............................     66
   Section 12.11   Successors............................................     66
   Section 12.12   Multiple Originals....................................     66
   Section 12.13   Table of Contents; Headings...........................     66

EXHIBIT A................................................................    A-1


                                        v



     INDENTURE dated as of August 29, 2007 between ANTHRACITE CAPITAL, INC., a
MARYLAND corporation (the "COMPANY"), and WELLS FARGO BANK, N.A., a national
banking association (the "TRUSTEE").

     Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 11.75% Convertible
Senior Notes due 2027:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.01 Definitions.

     "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

     "BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of such board.

     "BUSINESS DAY" means any day, other than a Saturday or Sunday, that is not
a day on which commercial banks are authorized or required by law, regulation or
executive order to close in New York City.

     "CAPITAL STOCK" for any entity means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that entity.

     "CERTIFICATED SECURITIES" means securities that are in registered
definitive form.

     "CLOSING SALE PRICE" of the Common Stock on any date means the closing sale
price per share (or, if no closing sale price is reported, the average of the
bid and asked prices or, if more than one in either case, the average of the
average bid and the average asked prices) on such date as reported by The New
York Stock Exchange or, if the shares of Common Stock are not reported by The
New York Stock Exchange, in composite transactions for the principal U.S.
national or regional securities exchange on which the Common Stock is traded. If
the Common Stock is not listed for trading on a U.S. national or regional
securities exchange on the relevant date, the Closing Sale Price will be the
last quoted bid price for the Common Stock in the over-the-counter market on the
relevant date as reported by the National Quotation Bureau Incorporated or
similar organization. If the Common Stock is not so quoted, the Closing Sale
Price will be the average of the mid-point of the last bid and asked prices for
the Common Stock on the relevant date from each of at least three independent
nationally recognized investment banking firms selected by the Company for this
purpose.



     "COMMON STOCK" shall mean the shares of common stock, no par value, of the
Company.

     "COMPANY" means the party named as such in this Indenture until a successor
replaces it pursuant to the applicable provisions hereof and, thereafter, means
the successor.

     "COMPANY ORDER" means a written request or order signed in the name of the
Company by any two Officers.

     "CONTINUING DIRECTOR" means a director who either was a member of the
Company's Board of Directors on the date hereof or who becomes a member of the
Company's Board of Directors subsequent to that date and whose appointment,
election or nomination for election by the Company's shareholders is duly
approved by a majority of the Continuing Directors on the Company's Board of
Directors at the time of such approval, either by specific vote or by approval
of the proxy statement issued by the Company on behalf of the Board of Directors
in which such individual is named as nominee for director.

     "CORPORATE TRUST OFFICE" means the corporate trust office of the Trustee at
which at any time the trust created by this Indenture shall be administered,
which office at the date hereof is located at Wells Fargo Bank, N.A., 213 Court
Street, Suite 703, Middletown, Connecticut 06457, Attention: Corporate Trust
Services, or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the corporate trust office of any
successor Trustee at which such trust shall be administered (or such other
address as a successor Trustee may designate from time to time by notice to the
Holders and the Company).

     "DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "EX-DIVIDEND DATE" means the first date upon which a sale of the Common
Stock does not automatically transfer the right to receive a distribution that
is payable by the Company to holders of Common Stock from the seller of the
Common Stock to its buyer.

     "GAAP" means generally accepted accounting principles in the United States
of America as in effect and, to the extent optional, adopted by the Company, on
the date of this Indenture, consistently applied.

     "GLOBAL SECURITY" means a permanent Global Security that is in the form of
the Security attached hereto as Exhibit A, and that is deposited with the
Depositary or its custodian and registered in the name of the Depositary.

     "HOLDER" or "HOLDERS" means a Person or Persons in whose name a Security is
registered on the Registrar's books.

     "INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.


                                       2



     "ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.

     "LIQUIDATED DAMAGES" means "Liquidated Damages" as specified in the
Registration Rights Agreement.

     "MARKET DISRUPTION EVENT" means the occurrence or existence for more than
one half-hour period in the aggregate on any scheduled Trading Day for shares of
Common Stock of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by The New York Stock Exchange or
otherwise) in shares of Common Stock or in any options, contracts or future
contracts relating to shares of Common Stock, and such suspension or limitation
occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

     "OFFICER" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, the Chief Financial Officer, any Executive
Vice President, any Senior Vice President, any Vice President, the Treasurer or
the Secretary or any Assistant Treasurer or Assistant Secretary of the Company.

     "OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by a financial or
accounting Officer of the Company but need not contain the information specified
in Sections 12.04 and 12.05.

     "OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 12.04 and 12.05 from legal counsel. The counsel may be an
employee of, or counsel to, the Company.

     "PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.

     "REDEMPTION DATE" means the date specified in a notice of redemption on
which the Securities may be redeemed in accordance with the terms of the
Securities and this Indenture.

     "REFERENCE DIVIDEND" means aggregated quarterly cash dividends on the
Common Stock in the amount of $0.30 per share of Common Stock in respect of any
fiscal quarter (without regard to the actual quarterly period in which paid),
subject to adjustment in accordance with Section 10.09.

     "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of August 29, 2007, among the Company and Banc of America Securities
LLC and Deutsche Bank Securities Inc.

     "RESTRICTED SECURITY" means a Security required to bear the Restrictive
Legend set forth in the Form of Security attached hereto as Exhibit A.


                                       3



     "RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES" means any of the Company's 11.75% Convertible Senior Notes due
2027, as amended or supplemented from time to time, issued under this Indenture.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" of the Company within the meaning of Rule 1-02 of Regulation S-X
promulgated by the SEC.

     "STATED MATURITY," when used with respect to any Security, means September
1, 2027.

     "SUBSIDIARY" means a Person more than 50% of the outstanding Voting Stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company, or by the Company and one or more other
Subsidiaries of the Company.

     "TERMINATION OF TRADING" means the Common Stock (or other common stock into
which the Securities are then convertible) is not listed for trading on a U.S.
national or regional securities exchange.

     "TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.

     "TRADING DAY" means any day on which (i) there is no Market Disruption
Event and (ii) The New York Stock Exchange, or if the Common Stock is not listed
on The New York Stock Exchange, the principal U.S. national securities exchange
on which the Common Stock is listed, admitted for trading or quoted, is open for
trading or, if the Common Stock is not so listed, admitted for trading or
quoted, any Business Day; provided, however, that a "Trading Day" only includes
those days that have a scheduled closing time of 4:00 p.m. (New York City Time)
or the then-standard closing time for regular trading on the relevant exchange
or trading system.

     "TRADING PRICE" of the Securities on any date of determination means the
average of the secondary market bid quotations per Security obtained by the
Trustee for $5,000,000 aggregate principal amount of the Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company, provided that if (i) three such bids cannot reasonably be obtained by
the Trustee, but two such bids are obtained, then the average of the two bids
shall be used, and (ii) if only one such bid can reasonably be obtained by the
Trustee, such bid shall be used; provided further that if no bids are received,
then for purposes of determining whether the condition set forth in Section
10.01(a)(ii) is satisfied, the Trading Price per $1,000 principal amount of
Securities will be deemed to be less than 98% of the product of the Closing Sale
Price of the Common Stock and the Conversion Rate of the Securities on such
date.


                                       4



     "TRUSTEE" means the party named as the "TRUSTEE" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.

     "TRUST OFFICER" means any officer within the Corporate Trust department of
the Trustee (or any successor group of the Trustee) with direct responsibility
for the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

     "UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as in
effect from time to time.

     "VOTING STOCK" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

     "WHOLLY OWNED SUBSIDIARY" means, at any time, a Subsidiary all the Voting
Stock of which (except directors' qualifying shares and investments by foreign
nationals mandated by applicable law) is at such time owned, directly or
indirectly, by the Company and its other Wholly Owned Subsidiaries.

     Section 1.02 Other Definitions.

TERM SECTION                             DEFINED IN:
- --------------------------------------   -----------
"Act"                                    1.05
"Additional Notes"                       2.02
"Additional Shares"                      10.20
"Agent Members"                          2.12(f)
"Bankruptcy Law"                         6.01
"beneficial owner"                       3.08(a)
"cash"                                   3.07(a)
"Cash Settlement Averaging Period"       10.02
"Company Notice"                         3.07(b)
"Company Notice Date"                    3.07(b)
"Conversion Agent"                       2.03
"Conversion Date"                        10.03
"Conversion Price"                       10.02(a)
"Conversion Rate"                        10.02(a)
"Custodian"                              6.01
"Daily Conversion Value"                 10.02
"Daily Measurement Value"                10.02
"Daily Settlement Amount"                10.02
"Daily VWAP"                             10.02


                                       5



TERM SECTION                             DEFINED IN:
- --------------------------------------   -----------
"Defaulted Interest"                     11.03
"Depositary"                             2.01(a)
"DTC"                                    2.01(a)
"Event of Default"                       6.01
"Fundamental Change"                     3.08
"Fundamental Change Effective Date"      10.20
"Fundamental Change Notice"              3.08(b)
"Fundamental Change Notice Date"         3.08(b)
"Fundamental Change Repurchase Date"     3.08(a)
"Fundamental Change Repurchase Notice"   3.08(c)
"Fundamental Change Repurchase Price"    3.08(a)
"Initial Notes"                          2.02
"Interest Payment Date"                  11.01(a)
"Legal Holiday"                          12.08
"Listed Common Equity"                   10.20
"Ownership Limit"                        10.01(j)
"Paying Agent"                           2.03
"Physical Settlement Election"           10.02(d)
"QIB"                                    2.01(a)
"Record Date"                            11.01(a)
"Redemption Price"                       3.01
"Registrar"                              2.03
"Repurchase Date"                        3.07(a)
"Repurchase Notice"                      3.07(a)(i)
"Repurchase Price"                       3.07(a)
"Restrictive Legend"                     2.06(f)
"Rule 144A Information"                  4.06
"Settlement Amount"                      10.02(b)
"Share Price"                            10.20
"Spin-Off"                               10.08

     Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. All TIA terms used in this
Indenture that are defined by the TIA, defined by TIA reference to another
statute or defined by SEC rule have the meanings assigned to them by such
definitions.

     Section 1.04 Rules of Construction.

          (1) a term has the meaning assigned to it;

          (2) an accounting term not otherwise defined has the meaning assigned
     to it and shall be construed in accordance with GAAP;

          (3) "OR" is not exclusive;


                                       6



          (4) "INCLUDING" means including, without limitation;

          (5) words in the singular include the plural, and words in the plural
     include the singular;

          (6) all references to $, dollars, cash payments or money refer to
     United States currency; and

          (7) all references to payments of interest on the Securities shall
     include Additional Amounts, if any, and Liquidated Damages, if any, payable
     in accordance with the terms of the Registration Rights Agreement.

     Section 1.05 Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in Person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "ACT" of Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.

          (a) The fact and date of the execution by any Person of any such
     instrument or writing may be proved by the affidavit of a witness of such
     execution or by a certificate of a notary public or other officer
     authorized by law to take acknowledgments of deeds, certifying that the
     individual signing such instrument or writing acknowledged to such officer
     the execution thereof. Where such execution is by a signer acting in a
     capacity other than such signer's individual capacity, such certificate or
     affidavit shall also constitute sufficient proof of such signer's
     authority. The fact and date of the execution of any such instrument or
     writing, or the authority of the Person executing the same, may also be
     proved in any other manner which the Trustee deems sufficient.

          (b) The ownership of Securities shall be proved by the register for
     the Securities.

          (c) Any request, demand, authorization, direction, notice, consent,
     waiver or other Act of the Holder of any Security shall bind every future
     Holder of the same Security and the Holder of every Security issued upon
     the registration of transfer thereof or in exchange therefor or in lieu
     thereof in respect of anything done, omitted or suffered to be done by the
     Trustee, the Company or the Conversion Agent in reliance thereon, whether
     or not notation of such action is made upon such Security.

          (d) If the Company shall solicit from the Holders any request, demand,
     authorization, direction, notice, consent, waiver or other Act, the Company
     may, at its option, by or pursuant to a board resolution, fix in advance a
     record date for the determination of Holders entitled to give such request,
     demand, authorization, direction,


                                       7



     notice, consent, waiver or other Act, but the Company shall have no
     obligation to do so. If such a record date is fixed, such request, demand,
     authorization, direction, notice, consent, waiver or other Act may be given
     before or after such record date, but only the Holders of record at the
     close of business on such record date shall be deemed to be Holders for the
     purposes of determining whether Holders of the requisite proportion of
     outstanding Securities have authorized or agreed or consented to such
     request, demand, authorization, direction, notice, consent, waiver or other
     Act, and for that purpose the outstanding Securities shall be computed as
     of such record date; provided that no such authorization, agreement or
     consent by the Holders on such record date shall be deemed effective unless
     it shall become effective pursuant to the provisions of this Indenture not
     later than six months after the record date.

                                   ARTICLE 2

                                 THE SECURITIES

     Section 2.01 Form and Dating. The Securities and the Trustee's certificate
of authentication shall be substantially in the form set forth in the Form of
Security attached hereto as Exhibit A, which is a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage (provided that any such notation, legend or endorsement
required by usage is in a form acceptable to the Company). The Company shall
provide any such notations, legends or endorsements to the Trustee in writing.
Each Security shall be dated the date of its authentication. Except as otherwise
expressly permitted in this Indenture, all Securities shall be identical in all
respects. Notwithstanding any differences among them, all Securities issued
under this Indenture shall vote and consent together on all matters as one
class.

          (a) Global Securities. Securities offered and sold to qualified
     institutional buyers as defined in Rule 144A ("QIBS") in reliance on Rule
     144A shall be issued initially in the form of one or more permanent Global
     Securities, which shall be deposited with or on behalf of The Depository
     Trust Company ("DTC") and registered in the name of Cede & Co., as nominee
     of DTC (Cede & Co., DTC, or any successors thereto being hereinafter
     referred to as the "DEPOSITARY"), duly executed by the Company and
     authenticated by the Trustee as hereinafter provided. The aggregate
     principal amount of the Global Securities may from time to time be
     increased or decreased by adjustments made on the records of the Trustee
     and the Depositary as hereinafter provided.

          (b) Global Securities in General. Each Global Security shall represent
     such of the outstanding Securities as shall be specified therein and each
     shall provide that it shall represent the aggregate principal amount of
     outstanding Securities from time to time endorsed thereon and that the
     aggregate principal amount of outstanding Securities represented thereby
     may from time to time be reduced or increased, as appropriate, to reflect
     exchanges, redemptions, repurchases and conversions.

     Any adjustment of the aggregate principal amount of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as


                                       8



required by Section 2.12 hereof and shall be made on the records of the Trustee
and the Depositary.

          (c) Book-Entry Provisions. This Section 2.01(c) shall apply only to
     Global Securities deposited with or on behalf of the Depositary.

     The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear a legend substantially to the effect of the
global note legend set forth in the Form of Security attached hereto as Exhibit
A.

     Section 2.02 Execution and Authentication. The Securities shall be
executed on behalf of the Company by any Officer. The signature of an Officer on
the Securities may be manual or by facsimile.

     If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.

     At any time after the execution and delivery of this Indenture, the Company
may deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities.

     A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been duly authenticated under
this Indenture.

     The Securities shall originally be issued only in fully registered form
without interest coupons and only in denominations of $1,000 of principal amount
and any integral multiple thereof.

     The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited. The Company may, without the
consent of the holders of Notes, issue additional Notes (the "ADDITIONAL NOTES")
from time to time in the future with the same terms and the same CUSIP number as
the Notes originally issued under this Indenture (the "INITIAL NOTES") in an
unlimited principal amount, provided that such Additional Notes must be part of
the same issue as the Initial Notes for United States federal income tax
purposes. The Initial Notes and any such Additional Notes will constitute a
single series of debt securities, and in circumstances in which this Indenture
provides for the holders of Notes to vote or take any action, the holders of
Initial Notes and the holders of any such Additional Notes will vote or take
that action as a single class.

     The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.


                                       9



An authenticating agent shall have the same rights as the Registrar, Paying
Agent or Conversion Agent to deal with the Company or an Affiliate of the
Company.

     Section 2.03 Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for repurchase, redemption or payment ("PAYING
AGENT"), an office or agency where Securities may be presented for conversion
("CONVERSION AGENT") and an office or agency where notices to or upon the
Company in respect of the Securities and this Indenture may be served. The
Registrar shall keep a register of the Securities and of their transfer,
exchange, repurchase, redemption and conversion. The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent, including any named pursuant to Section 4.05. The term Conversion
Agent includes any additional conversion agent, including any named pursuant to
Section 4.05.

     The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of any such agent. If
the Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Registrar, Paying Agent,
Conversion Agent or co-registrar.

     The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities, custodian for the Depositary
with respect to the Global Securities, and each office or agency of the Trustee
to be such office or agency of the Company for the aforesaid purposes.

     Section 2.04 Paying Agent to Hold Money and Securities in Trust.
Except as otherwise provided herein, on or prior to each due date of payment in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or Common
Stock or, as permitted by this Indenture, a combination thereof, sufficient to
make such payments when so becoming due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent shall
hold in trust for the benefit of Holders or the Trustee all money and Common
Stock held by the Paying Agent for the making of payments in respect of the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. At any time during the continuance of any such default, the
Paying Agent shall, upon the written request of the Trustee, forthwith pay to
the Trustee all money and Common Stock so held in trust. If the Company or a
Wholly Owned Subsidiary acts as Paying Agent, it shall segregate the money and
Common Stock held by it as Paying Agent and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money and Common
Stock held by it to the Trustee and to account for any funds and Common Stock
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.


                                       10



     Section 2.05 Holder Lists. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee, in writing at least five Business Days before each
Interest Payment Date, and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.

     Section 2.06 Transfer and Exchange. (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Security, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing, at the office
or agency of the Company designated as Registrar or co-registrar pursuant to
Section 2.03, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denomination or denominations, of a like
aggregate principal amount.

     At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Holder or such Holder's attorney-in-fact duly authorized in
writing, at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

     The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the Holder
requesting such transfer or exchange.

     The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Repurchase Notice or
Fundamental Change Repurchase Notice has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the
case of Securities to be repurchased in part, the portion thereof not to be
repurchased).

          (b) Notwithstanding any provision to the contrary herein, so long as a
     Global Security remains outstanding and is held by or on behalf of the
     Depositary, transfers of a Global Security, in whole or in part, shall be
     made only in accordance with Section 2.12 and this Section 2.06(b).
     Transfers of a Global Security shall be limited to transfers of such Global
     Security to the Depositary, to nominees of the Depositary or to a successor
     of the Depositary or such successor's nominee.

          (c) Successive registrations and registrations of transfers and
     exchanges as aforesaid may be made from time to time as desired, and each
     such registration shall be noted on the register for the Securities.


                                       11



          (d) Any Registrar appointed pursuant to Section 2.03 hereof shall
     provide to the Trustee such information as the Trustee may reasonably
     require in connection with the delivery by such Registrar of Securities
     upon transfer or exchange of Securities.

          (e) No Registrar shall be required to make registrations of transfer
     or exchange of Securities during any periods designated in the text of the
     Securities or in this Indenture as periods during which such registration
     of transfers and exchanges need not be made.

          (f) Except as set forth in the following sentence, Securities that are
     issued upon the transfer, exchange or replacement of Restricted Securities
     shall bear the restrictive legend set forth in the Form of Security
     attached hereto as Exhibit A (the "RESTRICTIVE LEGEND") and be subject to
     the restrictions on transfer set forth therein. If any Restricted
     Securities are tendered for transfer, exchange or replacement or a request
     is made to remove the Restrictive Legend on a Security, the Securities
     issued upon such transfer, exchange or replacement shall bear the
     Restrictive Legend, or the Restrictive Legend shall not be removed, as the
     case may be, unless (i) there is delivered to the Company and the Registrar
     such satisfactory evidence, which may include an Opinion of Counsel, as may
     be reasonably required by the Company and the Registrar, that neither the
     Restrictive Legend nor the restrictions on transfer set forth therein are
     required to ensure that transfers thereof comply with the provisions of
     Rule 144A or Rule 144 under the Securities Act or that such Securities are
     not "restricted securities" within the meaning of Rule 144 under the
     Securities Act or (ii) the Company notifies the Trustee and Registrar of
     the sale of such Security pursuant to a registration statement that is
     effective at the time of such sale. Upon (i) provision of such satisfactory
     evidence, or (ii) notification by the Company to the Trustee and Registrar
     of such sale pursuant to an effective registration statement, the Trustee,
     upon receipt of a Company Order, shall authenticate and deliver a Security
     that does not bear the Restrictive Legend. If the Restrictive Legend is
     removed from the face of a Security and the Security is subsequently held
     by the Company or an Affiliate of the Company, the Restrictive Legend shall
     be reinstated.

     Section 2.07 Replacement Securities. If a mutilated Security is surrendered
to the Registrar or if the Holder of a Security claims that such Security has
been lost, destroyed or stolen, the Company shall issue and the Trustee shall
authenticate a replacement Security if the requirements of Section 8-405 of the
Uniform Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Company
and the Trustee to protect the Company, the Trustee, the Paying Agent, the
Registrar and any co-registrar from any loss which any of them may suffer if a
Security is replaced. The Company and the Trustee may charge the Holder for
their expenses in replacing a Security.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be repurchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or repurchase such Security in cash in an amount
equal to its principal amount plus any accrued and unpaid interest thereon.


                                       12



     Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

     Every new Security issued pursuant to this Section 2.07 in exchange for any
mutilated Security, or in lieu of any destroyed, lost or stolen Security, shall
constitute an original additional contractual obligation of the Company and any
other obligor upon the Securities, whether or not the mutilated, destroyed, lost
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

     Section 2.08 Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those cancelled
by it, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security; provided,
however, that in determining whether the Holders of the requisite principal
amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent, waiver or other action hereunder,
Securities owned by the Company or any obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Trust Officer
of the Trustee actually knows to be so owned shall be so disregarded. Subject to
the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

     If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

     If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, on the Business Day following a Repurchase Date or a
Fundamental Change Repurchase Date, or on Stated Maturity, money sufficient to
pay Securities payable on that date, then on and after such Redemption Date or
Stated Maturity, or on and after the Business Day following the Repurchase Date
or Fundamental Change Repurchase Date, as the case may be, such Securities shall
cease to be outstanding and interest, if any (including Liquidated Damages and
Additional Amounts, if any), on such Securities shall cease to accrue and such
Securities shall cease to be convertible; provided, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.

     If a Security is converted in accordance with Article 10, then on and after
the Conversion Date, such Security shall cease to be outstanding and interest,
if any (including Liquidated Damages and Additional Amounts, if any), shall
cease to accrue on such Security.


                                       13



     Section 2.09 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.

     Section 2.10 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment,
conversion or cancellation and shall dispose of such cancelled Securities in its
customary manner. The Company may not issue new Securities to replace Securities
it has redeemed, repurchased, paid or delivered to the Trustee for cancellation
or that any Holder has converted pursuant to Article 10.

     Section 2.11 Persons Deemed Owners. Prior to due presentment of an
outstanding Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of such Security or the payment of any Redemption
Price, Repurchase Price or Fundamental Change Repurchase Price in respect
thereof, and interest thereon (including Liquidated Damages and Additional
Amounts, if any), for the purpose of conversion thereof and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

     Section 2.12 Global Securities. (a) Notwithstanding any other provisions of
this Indenture or the Securities, (A) transfers of a Global Security, in whole
or in part, shall be made only in accordance with Section 2.06 and Section
2.12(a)(i), (B) transfers of a beneficial interest in a Global Security for a
Certificated Security shall comply with Section 2.06 and Section 2.12(a)(iii)
below, and (C) transfers of a Certificated Security shall comply with Section
2.06 and Section 2.12(a)(iv) and (v) below.

          (i) Transfer of Global Security. A Global Security may not be
     transferred, in whole or in part, to any Person other than the Depositary
     or a nominee or any successor thereof; provided that this clause (i) shall
     not prohibit any issuance of a Certificated Security in exchange for a
     Global Security pursuant to clause (iii) below. No transfer of a Security
     to any Person shall be effective under this Indenture or the Securities
     unless and until such Security has been registered in the name of such
     Person. Nothing in this Section 2.12(a)(i) shall prohibit or render
     ineffective any transfer of a beneficial interest in a Global Security
     effected in accordance with the other provisions of this Section 2.12(a).

          (ii) Restrictions on Transfer of a Beneficial Interest in a Global
     Security for a Certificated Security. Owners of beneficial interests in a
     Global Security will not be entitled to have Securities represented by that
     Global Security registered in their names, will not receive or be entitled
     to receive physical delivery of Certificated Securities,


                                       14



     except as provided below, and will not be considered the owners or
     holders thereof under this Indenture or under the Securities for any
     purpose, including with respect to the giving of any direction, instruction
     or approval to the Trustee.

          (iii) A beneficial interest in a Global Security may not be exchanged
     for a Certificated Security except:

          (A) Certificated Securities shall be issued to all owners of
     beneficial interests in a Global Security in exchange for such interests
     if:

          1) DTC notifies the Company that it is unwilling or unable to continue
     as Depositary for such Global Security or DTC ceases to be a clearing
     agency registered under the Exchange Act, at a time when DTC is required to
     be so registered in order to act as Depositary, and in each case a
     successor Depositary is not appointed by the Company within 90 days of such
     notice;

          2) the Company executes and delivers to the Trustee and Registrar an
     Officers' Certificate stating that the book-entry system through DTC shall
     be discontinued; or

          3) an Event of Default has occurred and is continuing with respect to
     the Securities.

          In connection with the exchange of one or more entire Global
     Securities for Certificated Securities pursuant to this subsection (ii),
     such Global Securities shall be deemed to be surrendered to the Trustee for
     cancellation, and the Company shall execute, and upon Company Order the
     Trustee shall authenticate and deliver, to each beneficial owner identified
     by DTC in exchange for its beneficial interest in such Global Security, an
     equal aggregate principal amount of Certificated Securities of authorized
     denominations.

          (B) The owner of a beneficial interest in a Global Security will be
     entitled to receive a Certificated Security in exchange for such interest
     if an Event of Default has occurred and is continuing.

          Upon receipt by the Registrar of instructions from the Holder of a
     Global Security directing the Registrar to (x) issue one or more
     Certificated Securities in authorized denominations and the amounts
     specified to the owner of a beneficial interest in such Global Security and
     (y) debit or cause to be debited an equivalent amount of beneficial
     interest in such Global Security, subject to the rules and procedures of
     DTC:

          1) the Registrar shall notify the Company and the Trustee of such
     instructions, identifying the owner and amount of such beneficial interest
     in such Global Security;

          2) the Company shall promptly execute and, upon Company Order, the
     Trustee shall authenticate and deliver to such beneficial owner
     Certificated Security(ies)


                                       15



     in authorized denominations and an equivalent amount to such beneficial
     interest in such Global Security; and

          3) the Registrar shall decrease such Global Security by such amount in
     accordance with the foregoing.

          (iv) Transfer and Exchange of Certificated Securities. When
     Certificated Securities are presented to the Registrar with a request:

               (x) to register the transfer of such Certificated Securities; or

               (y) to exchange such Certificated Securities for an equal
          principal amount of Certificated Securities of other authorized
          denominations,

          the Registrar shall register the transfer or make the exchange as
          requested if its reasonable requirements for such transaction are met;
          provided, however, that the Certificated Securities surrendered for
          transfer or exchange:

     (1)  shall be duly endorsed or accompanied by a written instrument of
          transfer in form reasonably satisfactory to the Company and the
          Registrar, duly executed by the Holder thereof or his attorney duly
          authorized in writing; and

     (2)  so long as such Securities are Restricted Securities, such Securities
          are being transferred or exchanged pursuant to an effective
          registration statement under the Securities Act or pursuant to clause
          (a), (b) or (c) below, and are accompanied by the following additional
          information and documents, as applicable:

          (a) if such Certificated Securities are being delivered to the
     Registrar by a Holder for registration in the name of such Holder, without
     transfer, a certification from such Holder to that effect; or

          (b) if such Certificated Securities are being transferred to the
     Company or its Subsidiary, a certification to that effect; or

          (c) if such Certificated Securities are being transferred pursuant to
     an exemption from registration, (i) a certification to that effect (in the
     form set forth in the Form of Security attached hereto as Exhibit A, if
     applicable) and (ii) if the Company so requests, an Opinion of Counsel in
     form and substance reasonably satisfactory to it or other evidence in form
     and substance reasonably satisfactory to it as to the compliance with the
     restrictions set forth in the Restrictive Legend.

          (v) Restrictions on Transfer of a Certificated Security for a
     Beneficial Interest in a Global Security. A Certificated Security may not
     be exchanged for a beneficial interest in a Global Security except upon
     satisfaction of the requirements set forth below.


                                       16



     Subject to the occurrence of the circumstances specified in Section
2.12(a)(iii) above, upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

     (I) so long as the Securities are Restricted Securities, certification, in
     the form set forth in the Form of Security attached hereto as Exhibit A,
     that such Certificated Security is being transferred to a QIB in accordance
     with Rule 144A; and

     (II) written instructions directing the Trustee to make, or to direct the
     Registrar to make, an adjustment on its books and records with respect to
     such Global Security to reflect an increase in the aggregate principal
     amount of the Securities represented by the Global Security, such
     instructions to contain information regarding the Depositary account to be
     credited with such increase,

     the Trustee shall cancel such Certificated Security and cause, or direct
     the Registrar to cause, in accordance with the standing instructions and
     procedures existing between the Depositary and the Registrar, the aggregate
     principal amount of Securities represented by the Global Security to be
     increased by the aggregate principal amount of the Certificated Security to
     be exchanged, and shall credit or cause to be credited to the account of
     the Person specified in such instructions a beneficial interest in the
     Global Security in authorized denominations and equal to the principal
     amount of the Certificated Security so cancelled.

          (b) Subject to Section 2.06(f), every Restricted Security, including
     beneficial interests in a Global Security, shall be subject to the
     restrictions on transfer provided in the Restrictive Legend, including the
     delivery of an Opinion of Counsel, if so required. Whenever any
     Certificated Security that is a Restricted Security is presented or
     surrendered for registration of transfer or for exchange for a Security
     registered in a name other than that of the Holder, such Restricted
     Security must be accompanied by a certificate in substantially the form set
     forth in the Form of Security attached hereto as Exhibit A, dated the date
     of such surrender and signed by the Holder of such Security, as to
     compliance with such restrictions on transfer. The Registrar shall not
     accept for such registration of transfer or exchange any Security not so
     accompanied by a properly completed certificate.

          (c) The restrictions imposed by the Restrictive Legend upon the
     transferability of any Security shall cease and terminate when such
     Security has been sold pursuant to an effective registration statement
     under the Securities Act or transferred in compliance with Rule 144 under
     the Securities Act (or any successor provision thereto) or, if earlier,
     upon the expiration of the holding period applicable to sales thereof under
     Rule 144(k) under the Securities Act (or any successor provision). The
     Holder of any Security as to which such restrictions on transfer shall have
     expired in accordance with their terms or shall have terminated may
     request, upon a surrender of such Security for exchange to the Registrar in
     accordance with the provisions of this Indenture, the removal of such
     Restrictive Legend in accordance with the provisions of Section 2.06(f).
     The Company shall inform the Trustee of the effective date of any
     registration statement registering the Securities under the Securities Act.
     The Trustee shall not be liable for any


                                       17



     action taken or omitted to be taken by it in good faith in accordance with
     the aforementioned opinion of counsel or registration statement.

          (d) As used in Sections 2.12(b) and (c), the term "transfer"
     encompasses any sale, pledge, transfer, loan, hypothecation, or other
     disposition of any Security.

          (e) The provisions of clauses (i), (ii) and (iii) below shall apply
     only to Global Securities:

          (i) Securities issued in exchange for a Global Security or any portion
     thereof shall be issued in definitive, fully registered form, without
     interest coupons, shall have an aggregate principal amount equal to that of
     such Global Security or portion thereof to be so exchanged, shall be
     registered in such names and be in such authorized denominations as the
     Depositary shall designate and shall bear the applicable legends provided
     for herein. Any Global Security to be exchanged in whole shall be
     surrendered by the Depositary to the Trustee, as Registrar. With regard to
     any Global Security to be exchanged in part, either such Global Security
     shall be so surrendered for exchange or, if the Trustee is acting as
     custodian for the Depositary with respect to such Global Security, the
     principal amount thereof shall be reduced, by an amount equal to the
     portion thereof to be so exchanged, by means of an appropriate adjustment
     made on the records of the Trustee. Upon any such surrender or adjustment,
     the Trustee shall authenticate and deliver the Security issuable on such
     exchange to or upon the order of the Depositary or an authorized
     representative thereof.

          (ii) Subject to the provisions of Section 2.12(f) below, the
     registered Holder may grant proxies and otherwise authorize any Person,
     including Agent Members and Persons that may hold interests through Agent
     Members, to take any action which a Holder is entitled to take under this
     Indenture or the Securities.

          (iii) In the event of the occurrence of any of the events specified in
     Section 2.12(a)(iii) above, the Company will promptly make available to the
     Trustee a reasonable supply of Certificated Securities in definitive, fully
     registered form, without interest coupons.

          (f) Neither any members of, or participants in, the Depositary
     (collectively, the "AGENT MEMBERS") nor any other Persons on whose behalf
     Agent Members may act shall have any rights under this Indenture with
     respect to any Global Security registered in the name of the Depositary or
     any nominee thereof, or under any such Global Security, and the Depositary
     or such nominee, as the case may be, may be treated by the Company, the
     Trustee and any agent of the Company or the Trustee as the absolute owner
     and Holder of such Global Security for all purposes under this Indenture
     and under the Securities. Notwithstanding the foregoing, nothing herein
     shall prevent the Company, the Trustee or any agent of the Company or the
     Trustee from giving effect to any written certification, proxy or other
     authorization furnished by the Depositary or such nominee, as the case may
     be, or impair, as between the Depositary, its Agent Members and any other
     Person on whose behalf an Agent Member may act, the operation of customary
     practices of such Persons governing the exercise of the rights of a Holder
     of any Security.


                                       18



     The Holder of a Global Security may grant proxies and otherwise authorize
     any Person, including Agent Members and Persons that may hold interests
     through Agent Members, to take any action that a Holder is entitled to take
     under this Indenture or the Securities.

     Section 2.13 CUSIP and ISIN Numbers. The Company in issuing the Securities
may use "CUSIP" and "ISIN" numbers (if then generally in use) and, if so, the
Trustee shall use CUSIP and ISIN numbers in notices of redemption as a
convenience to Holders; provided, however, that neither the Company nor the
Trustee shall have any responsibility for any defect in the CUSIP or ISIN number
that appears on any Security, check, advice of payment or redemption notice, and
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee in the event of any change in the CUSIP or ISIN
numbers.

     Section 2.14 Liquidated Damages Under Registration Rights
Agreement. The terms of the Registration Rights Agreement are hereby
incorporated herein by reference and any Liquidated Damages payable pursuant to
the terms of the Registration Rights Agreement are deemed to be interest for
purposes of this Indenture.

     Section 2.15 Ranking. The Securities will be senior, unsecured
obligations of the Company and will rank equal in right of payment to all of the
Company's existing and future unsecured and unsubordinated indebtedness.

     Section 2.16 Company Determination Final. The Company will be
responsible for making all calculations required under the Securities, unless
otherwise set forth in this Indenture. Such calculations include, but are not
limited to, determinations of the Closing Sale Price of the Common Stock, the
Trading Price of the Securities, the amount of accrued interest (including
Liquidated Damages and Additional Amounts, if any) payable on the Securities and
the Conversion Price of the Securities. The Company shall make all such
calculations in good faith, and, absent manifest error, such calculations will
be final and binding on Holders of Securities. The Company shall provide a
schedule of its calculations to the Trustee, and the Trustee is entitled to rely
upon the accuracy of such calculations without independent verification. The
Trustee will forward such calculations to any Holder upon the request of such
Holder.

                                   ARTICLE 3

                           REDEMPTION AND REPURCHASES

     Section 3.01 Company's Right to Redeem; Notices to Trustee. (a) The
Securities will not be subject to redemption prior to September 1, 2012, except
as otherwise set forth in this Section 3.01. On or after September 1, 2012, the
Company shall have the right to redeem the Securities in whole or in part, at
any time or from time to time, for a cash Redemption Price equal to 100% of the
principal amount of the Securities to be redeemed, plus any accrued and unpaid
interest (including Liquidated Damages and Additional Amounts, if any) thereon
up to, but not including, the Redemption Date (the "REDEMPTION PRICE"). If the
Redemption Date is


                                       19



on a date that is after a Record Date and on or prior to the corresponding
Interest Payment Date, the Company shall pay the related interest (including
Liquidated Damages and Additional Amounts, if any) to the person to whom
principal is payable.

     (b) If, at any time, the Company determines it is necessary to redeem
the Securities in order to preserve the Company's qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended ("REIT"),
the Company, upon not less than 30 nor more than 60 days' prior written notice
delivered to the Holders, may redeem all of the Securities then outstanding at
100% principal amount of the Securities, plus accrued and unpaid interest
(including Liquidated Damages and Additional Amounts, if any), to the Redemption
Date. In such case, the Company shall provide the Trustee with an Officer's
Certificate evidencing that the Board of Directors has, in good faith, made the
determination that it is necessary to redeem the Securities in order to preserve
the Company's qualification as a REIT for U.S. federal income tax purposes.

     The Company shall give each notice to the Trustee provided for in this
Section 3.01 at least 60 days before the Redemption Date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.

     Section 3.02 Selection of Securities To Be Redeemed. If fewer than
all outstanding Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed by lot, on a pro rata basis or by another method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers appropriate. The Trustee shall make the selection
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal amount of Securities that
have denominations larger than $1,000. Securities and portions of Securities the
Trustee selects shall be in principal amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.

     If the Trustee selects a portion of a Holder's Securities for partial
redemption and such Holder converts a portion of the same Securities, the
converted portion will be deemed first to be from the portion selected for
redemption.

     Section 3.03 Notice of Redemption. At least 30 days but not more
than 60 days before a Redemption Date, the Company or the Trustee shall mail a
notice of redemption by first-class mail, postage prepaid, to each Holder of
Securities to be redeemed.

     The notice shall identify the Securities to be redeemed and shall state:

          (a) the Redemption Date;

          (b) the Redemption Price;

          (c) the Conversion Rate;


                                       20



          (d) the name and address of the Paying Agent and the Conversion Agent;

          (e) that Securities called for redemption may be converted at any time
     before the close of business on the Business Day immediately preceding the
     Redemption Date;

          (f) that Holders who want to convert their Securities must satisfy all
     the requirements set forth herein and in the Securities;

          (g) that Securities called for redemption must be surrendered to the
     Paying Agent to collect the Redemption Price;

          (h) if fewer than all of the outstanding Securities are to be
     redeemed, the certificate numbers, if any, and principal amounts of the
     particular Securities to be redeemed;

          (i) that, unless the Company defaults in making payment of such
     Redemption Price, interest, if any (including Liquidated Damages and
     Additional Amounts, if any), on Securities called for redemption will cease
     to accrue on and after the Redemption Date; and

          (j) the CUSIP and ISIN number(s) of the Securities.

     At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense, provided that the Company
makes such request at least three Business Days prior to the date by which such
notice of redemption must be given to Holders in accordance with this Section
3.03, provided further that, in all cases, the text of such notice of redemption
shall be prepared by the Company.

     Section 3.04 Effect of Notice of Redemption. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice of redemption except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice of redemption.

     Section 3.05 Deposit of Redemption Price. Prior to 10:00 a.m. (New York
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation or have been converted. The Paying Agent shall as
promptly as practicable return to the Company any money not required for that
purpose because of conversion of Securities pursuant to Article 10. If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.

     Section 3.06 Securities Redeemed in Part.

          (a) In the event of any redemption in part, the Company will not be
     required to issue, register the transfer of or exchange any Security during
     a period beginning at the


                                       21



     opening of business 15 days before any selection of Securities for
     redemption and ending at the close of business on the earliest date on
     which the relevant notice of redemption is deemed to have been given to all
     Holders of Securities to be so redeemed or, register the transfer of or
     exchange any Security, so selected for redemption, in whole or in part,
     except the unredeemed portion of any Security being redeemed in part.

          (b) Upon surrender of a Security that is redeemed in part, the Company
     shall execute and the Trustee shall authenticate and deliver to the Holder
     a new Security in an authorized denomination equal in principal amount to
     the unredeemed portion of the Security surrendered, or in the case of a
     Global Security, the Company shall instruct the Registrar to decrease such
     Global Security by the principal amount of the redeemed portion of the
     Security surrendered.

     Section 3.07 Repurchase of Securities by the Company at Option of
the Holder. (a) General. Securities, in whole or in part (equal to $1,000 or a
integral multiple thereof), shall be repurchased by the Company at the option of
the Holder on September 1, 2012, September 1, 2017 and September 1, 2022 or the
next Business Day following such date to the extent any such date is not a
Business Day (each, a "REPURCHASE DATE"), in U.S. legal tender ("CASH") at 100%
of the principal amount to be repurchased plus any accrued and unpaid interest,
(including Liquidated Damages and Additional Amounts, if any), thereon up to,
but not including, such Repurchase Date (the "REPURCHASE PRICE"). If a
Repurchase Date is on a date that is after the Record Date and on or prior to
the corresponding Interest Payment Date, the Company shall pay the related
interest (including Liquidated Damages and Additional Amounts, if any) to the
person to whom the principal is payable.

     No Securities may be repurchased by the Company at the option of Holders if
there has occurred and is continuing an Event of Default with respect to the
Securities, other than a default in the payment of the Repurchase Price with
respect to the Securities. Repurchases of Securities hereunder shall be made, at
the option of the Holder thereof, upon:

          (i) delivery to the Paying Agent and the Company by the Holder of a
     written notice (or in the case of Global Securities, a notice delivered
     electronically or by other means in accordance with the Depositary's
     customary procedures) of repurchase (a "REPURCHASE NOTICE") during the
     period beginning at any time from the opening of business on the date that
     is 20 Business Days prior to the relevant Repurchase Date until the close
     of business on the second Business Day prior to such Repurchase Date
     stating:

          (A) if the Securities are Certificated Securities the certificate
     number of the Security which the Holder will deliver to be repurchased, if
     any; if the Securities are not Certificated Securities, all information
     required to comply with all DTC procedures,

          (B) the principal amount of the Security, or portion thereof, which
     the Holder will deliver to be repurchased, which portion must be in
     principal amounts of $1,000 or an integral multiple thereof, and


                                       22



          (C) that such Security or portion thereof shall be repurchased by the
     Company as of the Repurchase Date pursuant to the terms and conditions
     specified in the applicable provisions of such Security and this Indenture,
     and

          (ii) delivery of such Security to the Paying Agent at any time after
     delivery of the Repurchase Notice (together with all necessary endorsements
     and compliance by the Holder with all DTC procedures) at the offices of the
     Paying Agent, such delivery being a condition to receipt by the Holder of
     the Repurchase Price therefor; provided, however, that such Repurchase
     Price shall be so paid pursuant to this Section 3.07 only if the Security
     so delivered to the Paying Agent shall conform in all respects to the
     description thereof in the related Repurchase Notice, as determined by the
     Company.

     The Company shall repurchase from the Holder thereof, pursuant to this
Section 3.07, a portion of a Security, if the principal amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

     Any repurchase by the Company contemplated pursuant to the provisions of
this Section 3.07 shall be consummated by the delivery to the Paying Agent of
the consideration to be received by the Holder on the Business Day following the
later of the Repurchase Date or the satisfaction of the foregoing conditions to
such repurchase to be fulfilled by the Holder hereunder. If the Paying Agent
holds money sufficient to pay the Repurchase Price of the Security on such
Business Day in accordance with the terms of this Indenture, then, from and
including the Repurchase Date, interest (including Liquidated Damages and
Additional Amounts, if any) on such Security will cease to accrue and all other
rights of the Holder shall terminate, other than the right to receive the
Repurchase Price upon satisfaction of the foregoing conditions.

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Repurchase Notice contemplated by this Section 3.07(a)
shall have the right to withdraw such Repurchase Notice at any time prior to the
close of business on the second Business Day prior to the Repurchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.09. If the Repurchase Notice is withdrawn during such period, the
Company will not be obligated to purchase the related Securities. The Paying
Agent shall promptly notify the Company of the receipt by it of any written
notice of withdrawal of a Repurchase Notice.

          (b) Company Notice. At least 30 days but not more than 60 days before
     a Repurchase Date (the "COMPANY NOTICE DATE"), the Company or the Trustee
     shall mail a notice to Holders setting forth information specified in this
     Section 3.07(b) (the "COMPANY NOTICE").

     Each Company Notice shall include a form of Repurchase Notice to be
completed by a Holder and shall state:

          (i) the Repurchase Price and the Conversion Rate;

          (ii) the name and address of the Paying Agent and the Conversion
     Agent;


                                       23



          (iii) that Securities as to which a Repurchase Notice has been given
     may be converted if they are otherwise convertible only in accordance with
     Article 10 hereof and the applicable provisions of the Securities if the
     applicable Repurchase Notice has been withdrawn in accordance with the
     terms of this Indenture;

          (iv) that Securities must be surrendered to the Paying Agent to
     collect payment;

          (v) that the Repurchase Price for any Security as to which a
     Repurchase Notice has been given and not withdrawn will be paid on the
     Business Day following the later of the Repurchase Date and the Holder's
     satisfaction of all applicable conditions;

          (vi) the procedures the Holder must follow to exercise its repurchase
     rights under this Section 3.07 and a brief description of such rights;

          (vii) briefly, the conversion rights, if any, of the Securities;

          (viii) the procedures for withdrawing a Repurchase Notice;

          (ix) that, unless the Company defaults in making payment on Securities
     for which a Repurchase Notice has been submitted, interest, if any
     (including Liquidated Damages and Additional Amounts, if any), on such
     Securities will cease to accrue on and after the Repurchase Date; and

          (x) the CUSIP and ISIN number(s) of the Securities.

     At the Company's request, the Trustee shall give such Company Notice in the
Company's name and at the Company's expense, provided that the Company makes
such request at least three Business Days prior to the date by which such
Company Notice must be given to Holders in accordance with this Section 3.07;
provided further that, in all cases, the text of such Company Notice shall be
prepared by the Company.

          (c) Procedure upon Repurchase. The Company shall deposit cash in
     respect of cash repurchases under this Section 3.07 at the time and in the
     manner as provided in Section 3.10, sufficient to pay the aggregate
     Repurchase Price of all Securities to be repurchased pursuant to this
     Section 3.07.

     Section 3.08 Repurchase of Securities at Option of the Holder Upon
a Fundamental Change.

          (a) If a Fundamental Change occurs prior to September 1, 2012,
     outstanding Securities shall be repurchased by the Company in whole or in
     part (equal to $1,000 or an integral multiple thereof), at the option of
     the Holder thereof, in cash, at the Repurchase Price on the Fundamental
     Change Repurchase Date (the "FUNDAMENTAL CHANGE REPURCHASE PRICE"), as of
     the date that is no earlier than 20 Business Days and no later than 30
     Business Days after the date of the Fundamental Change Notice delivered by
     the Company (the "FUNDAMENTAL CHANGE REPURCHASE DATE"), subject to
     satisfaction by or on behalf of the Holder of the requirements set forth in
     Section 3.08(c). If the


                                       24



     Fundamental Change Repurchase Date is on a date that is after a Record Date
     and on or prior to the corresponding Interest Payment Date, the Company
     will pay the related interest (including Liquidated Damages and Additional
     Amounts, if any) to the person to whom principal is payable. No Securities
     may be repurchased by the Company at the option of Holders upon a
     Fundamental Change if there has occurred and is continuing an Event of
     Default with respect to the Securities, other than a default in payment of
     the Fundamental Change Repurchase Price with respect to the Securities.

     A "FUNDAMENTAL CHANGE" shall be deemed to have occurred at such time after
the Securities are originally issued that any of the following events shall
occur:

          (i) a "person" or "group" (each within the meaning of Section 13(d)(3)
     of the Exchange Act) becomes the direct or indirect "beneficial owner," as
     defined in Rule 13d-3 under the Exchange Act, of shares of Common Stock
     representing more than 50% of the total voting power in the aggregate of
     classes of the Company's Capital Stock entitled to vote generally in the
     election of directors; or

          (ii) the first day on which a majority of the members of the Board of
     Directors does not consist of Continuing Directors; or

          (iii) a consolidation, merger or binding share exchange, or any
     conveyance, transfer, sale, lease or other disposition of all or
     substantially all of the Company's assets to another Person, other than:

          (A) any transaction

               (y) that does not result in any reclassification, conversion,
          exchange or cancellation of outstanding shares of the Company's
          Capital Stock; and

               (z) pursuant to which holders of the Company's Capital Stock
          immediately prior to the transaction have the entitlement to exercise,
          directly or indirectly, 50% or more of the total voting power of all
          shares of Capital Stock entitled to vote generally in election of
          directors of the continuing or surviving or successor Person
          immediately after giving effect to such issuance; or

          (B) any consolidation, merger, share exchange, conveyance, transfer,
     sale, lease or other disposition of assets or similar transaction solely
     for the purpose of changing the Company's jurisdiction of incorporation and
     resulting in a reclassification, conversion or exchange of outstanding
     Common Stock, if at all, solely into common stock, ordinary shares,
     American Depositary Shares or depositary receipts or other certificates
     representing common equity interests of the surviving entity or a direct or
     indirect parent of the surviving corporation; or

          (C) any consolidation or merger with or into any of the Company's
     Subsidiaries, so long as such merger or consolidation is not part of a plan
     or a series of transactions designed to or having the effect of merging or
     consolidating with any other Person;


                                       25



          (iv) a Termination of Trading; or

          (v) the holders of the Company's Capital Stock approve any plan or
     proposal for the liquidation or dissolution of the Company, whether or not
     in compliance with the terms hereof.

     Notwithstanding the foregoing provisions of this Section 3.08, a Holder
will not have the right to require the Company to repurchase its Securities upon
a Fundamental Change described in clause (iii) of the definition of such term if
more than 90% of the consideration in the transaction or transactions consists
of Listed Common Equity immediately following the relevant transaction or
transactions, and, as a result of the transaction or transactions, the
Securities become convertible into that Listed Common Equity (including any
rights attached thereto).

     If the Company desires the Trustee to give the Fundamental Change Notice
required by Section 3.08(b), at least three Business Days before the Fundamental
Change Notice Date, the Company shall deliver an Officers' Certificate to the
Trustee specifying the information required by Section 3.08(b).

          (b) Within 15 days after the occurrence of a Fundamental Change, the
     Company (or the Trustee, as applicable) shall mail a written notice of the
     Fundamental Change (the "FUNDAMENTAL CHANGE NOTICE," the date of such
     mailing, the "FUNDAMENTAL CHANGE NOTICE DATE") by first-class mail to the
     Trustee and to each Holder. Simultaneously with providing such notice, the
     Company will issue a press release and publish the information on its
     website. The Fundamental Change Notice shall include a form of Fundamental
     Change Repurchase Notice to be completed by the Holder and shall state:

          (i) briefly, the nature of the Fundamental Change and the date of such
     Fundamental Change;

          (ii) the date by which the Fundamental Change Repurchase Notice
     pursuant to Section 3.08(c) must be given;

          (iii) the Fundamental Change Repurchase Date;

          (iv) the Fundamental Change Repurchase Price;

          (v) the name and address of the Paying Agent and the Conversion Agent;

          (vi) the Conversion Rate and any adjustments thereto;

          (vii) that the Securities as to which a Fundamental Change Repurchase
     Notice has been given may be converted if they are otherwise convertible
     pursuant to Article 10 hereof only if the Fundamental Change Repurchase
     Notice has been withdrawn in accordance with the terms of this Indenture;

          (viii) that the Securities must be surrendered to the Paying Agent to
     collect payment;


                                       26



          (ix) that the Fundamental Change Repurchase Price for any Security as
     to which a Fundamental Change Repurchase Notice has been duly given and not
     withdrawn will be paid on the Business Day following the later of the
     Fundamental Change Repurchase Date and the Holder's satisfaction of all
     applicable conditions;

          (x) briefly, the procedures the Holder must follow to exercise rights
     under this Section 3.08;

          (xi) briefly, the conversion rights, if any, of the Securities;

          (xii) the procedures for withdrawing a Fundamental Change Repurchase
     Notice;

          (xiii) that, unless the Company defaults in making payment of such
     Fundamental Change Repurchase Price, interest, if any, on Securities
     surrendered for repurchase by the Company will cease to accrue on and after
     the Fundamental Change Repurchase Date; and

          (xiv) the CUSIP and ISIN number(s) of the Securities.

     At the Company's request, the Trustee shall give such Fundamental Change
Notice in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to the date by
which such Fundamental Change Notice must be given to Holders in accordance with
this Section 3.08; provided further that, in all cases, the text of such
Fundamental Change Notice shall be prepared by the Company.

          (c) A Holder may exercise its rights specified in Section 3.08(a) upon
     delivery of a written notice of repurchase (a "FUNDAMENTAL CHANGE
     REPURCHASE NOTICE") to the Paying Agent at any time on or prior to the
     close of business on the second Business Day prior to Fundamental Change
     Repurchase Date, stating:

          (i) If the Securities are Certificated Securities, the certificate
     number of the Security which the Holder will deliver to be repurchased; if
     the Securities are not Certificated Securities, all information required to
     comply with all DTC procedures;

          (ii) the principal amount of the Security, or portion thereof, which
     the Holder will deliver to be repurchased, which portion must be $1,000 or
     an integral multiple thereof; and

          (iii) that such Security shall be repurchased pursuant to the terms
     and conditions specified in the applicable provisions of such Security and
     this Indenture.

The delivery of such Security to the Paying Agent with the Fundamental Change
Repurchase Notice (together with all necessary endorsements and compliance by
the Holder with all DTC procedures) at the offices of the Paying Agent shall be
a condition to the receipt by the Holder of the Fundamental Change Repurchase
Price therefor; provided, however, that such Fundamental Change Repurchase Price
shall be so paid pursuant to this Section 3.08 only if the Security so


                                       27



delivered to the Paying Agent shall conform in all material respects to the
description thereof set forth in the related Fundamental Change Repurchase
Notice.

     The Company shall repurchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

     Any repurchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder on the Business Day following the later of the
Fundamental Change Repurchase Date or the satisfaction of the foregoing
conditions to such repurchase to be fulfilled by the Holder hereunder. If the
Paying Agent holds money sufficient to pay the Fundamental Change Repurchase
Price of the Securities which Holders have elected to require the Company to
repurchase on such Business Day in accordance with the terms of this Indenture,
then, from and including the Fundamental Change Repurchase Date, those
Securities will cease to be outstanding and interest (including Liquidated
Damages and Additional Amounts, if any) on the Securities will cease to accrue
and all other rights of the Holders shall terminate, other than the right to
receive the Fundamental Change Repurchase Price upon satisfaction of the
foregoing conditions.

          (d) Procedure upon Repurchase. The Company shall deposit cash, at the
     time and in the manner as provided in Section 3.10, sufficient to pay the
     aggregate Fundamental Change Repurchase Price of all Securities to be
     repurchased pursuant to this Section 3.08.

     Section 3.09 Effect of Repurchase Notice or Fundamental Change Repurchase
Notice. Upon receipt by the Paying Agent of the Repurchase Notice or Fundamental
Change Repurchase Notice specified in Section 3.07(a) or Section 3.08(c), as
applicable, the Holder of the Security in respect of which such Repurchase
Notice or Fundamental Change Repurchase Notice, as the case may be, was given
shall (unless such Repurchase Notice or Fundamental Change Repurchase Notice, as
the case may be, is withdrawn as specified in the following paragraph)
thereafter be entitled to receive solely the Repurchase Price or Fundamental
Change Repurchase Price, as the case may be, with respect to such Security. Such
Repurchase Price or Fundamental Change Repurchase Price shall be paid to such
Holder, subject to receipt of funds by the Paying Agent, promptly following the
later of (i) the Business Day following the Repurchase Date or the Fundamental
Change Repurchase Date, as the case may be, with respect to such Security
(provided the conditions in Section 3.07(a) or Section 3.08(c), as applicable,
have been satisfied) and (ii) the time of delivery of such Security to the
Paying Agent by the Holder thereof in the manner required by Section 3.07(a) or
Section 3.08(c), as applicable. Securities in respect of which a Repurchase
Notice or Fundamental Change Repurchase Notice has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Repurchase Notice or Fundamental Change Repurchase
Notice unless such Repurchase Notice or Fundamental Change Repurchase Notice has
first been validly withdrawn as specified in the following paragraph.


                                       28



     A Repurchase Notice or Fundamental Change Repurchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent in accordance with the Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be, at any time prior to the close of
business on the second Business Day prior to the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, specifying:

          (a) If the Securities are Certificated Securities, the certificate
     number of the Security in respect of which such notice of withdrawal is
     being submitted; if the Securities are not Certificated Securities, all
     information required to comply with all DTC procedures;

          (b) the principal amount of the Security, or portion thereof, with
     respect to which such notice of withdrawal is being submitted; and

          (c) the principal amount, if any, of such Security which remains
     subject to the original Repurchase Notice or Fundamental Change Repurchase
     Notice, as the case may be, and which has been or will be delivered for
     repurchase by the Company.

     Section 3.10 Deposit of Repurchase Price or Fundamental Change
Repurchase Price. Prior to 10:00 a.m. New York City time on the Business Day
following the later of the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, and the Holder's satisfaction of all applicable
conditions specified in Section 3.07 or 3.08, as applicable, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.04) an amount of cash
(in immediately available funds if deposited on such Business Day), sufficient
to pay the aggregate Repurchase Price or Fundamental Change Repurchase Price, as
the case may be, of all the Securities or portions thereof which are to be
repurchased in respect of such Repurchase Date or Fundamental Change Repurchase
Date, as the case may be.

     Section 3.11 Securities Repurchased in Part. Any Certificated
Security which is to be repurchased only in part shall be surrendered at the
office of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the portion of the principal amount of the Security so surrendered which is
not repurchased, or in the case of a Global Security, the Company shall instruct
the Registrar to decrease such Global Security by the principal amount of the
repurchased portion of the Security surrendered.

     Section 3.12 Covenant to Comply with Securities Laws Upon
Repurchase of Securities. When complying with the provisions of Section 3.07 or
3.08 hereof (provided that such offer or repurchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or repurchase), the Company shall, to the extent applicable, (a) comply
with Rule 13e-4 and


                                       29



Rule 14e-1 (or any successor provision) under the Exchange Act and comply with
any other tender offer rules under the Exchange Act that may then be applicable,
(b) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (c) otherwise comply with any applicable Federal and
state securities laws so as to permit the rights and obligations under Sections
3.07 and 3.08 to be exercised in the time and in the manner specified in
Sections 3.07 and 3.08.

     Section 3.13 Repayment to the Company. Subject to any applicable
abandoned property law, the Trustee and the Paying Agent shall return to the
Company any cash held by the Trustee or the Paying Agent, as applicable, for the
payment of the Repurchase Price or Fundamental Change Repurchase Price, as the
case may be, that remains unclaimed by the Holders for a period of two years;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.10 exceeds the aggregate
Repurchase Price or Fundamental Change Repurchase Price, as the case may be, of
the Securities or portions thereof which the Company is obligated to repurchase
as of the Business Day following the Repurchase Date or Fundamental Change
Repurchase Date, as the case may be, then, unless otherwise agreed in writing
with the Company, promptly after the Business Day following the Repurchase Date
or Fundamental Change Repurchase Date, as the case may be, the Trustee shall
return any such excess to the Company.

                                   ARTICLE 4

                                   COVENANTS

     Section 4.01 Payments. The Company shall promptly make all payments
in respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. Any amounts of cash or shares of
Common Stock to be given to the Trustee or Paying Agent shall be deposited with
the Trustee or Paying Agent by 10:00 a.m. New York City time by the Company on
the required date. The Company shall make payments in respect of Certificated
Securities by check mailed to a Holder's registered address (unless otherwise
agreed with the Holder thereof) and shall make payments in respect of Global
Securities by wire transfer. Subject to the applicable provisions of Sections
3.01, 3.07 and 3.08, the Company shall make any required interest payments
(including payments of Liquidated Damages and Additional Amounts, if any) to the
Person in whose name each Security is registered at the close of business on the
Record Date for such interest payment (including payments of Liquidated Damages
and Additional Amounts, if any). Principal amount, accrued interest, if any
(including Liquidated Damages and Additional Amounts, if any), Redemption Price,
Repurchase Price and Fundamental Change Repurchase Price, shall be considered
paid on the applicable date due if on such date (in the case of a Repurchase
Price or Fundamental Change Repurchase Price, on the Business Day following the
later of the applicable Repurchase Date or Fundamental Change Repurchase Date,
as the case may be, and the Holders' satisfaction of all applicable conditions
under Section 3.07 or 3.08, as applicable) the Trustee or the Paying Agent
holds, in accordance with this Indenture, cash sufficient to pay all such
amounts then due.

     Section 4.02 SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual and
quarterly reports and of the information, documents and other


                                       30



reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall
comply with the other provisions of TIA Section 314(a). Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officers'
Certificates).

     Section 4.03 Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof, the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder). If the Company
shall be in default, the Company shall specify all such defaults and the nature
and status thereof of which such signers may have knowledge.

     Section 4.04 Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

     Section 4.05 Maintenance of Office or Agency. The Company will
maintain in the United States of America, an office or agency of the Trustee,
Registrar, Paying Agent and Conversion Agent where Securities may be presented
or surrendered for payment, where Securities may be surrendered for registration
of transfer, exchange, repurchase, redemption or conversion and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office of Wells Fargo Bank, N.A., Wells Fargo Bank,
National Association, 213 Court Street, Suite 703, Middletown, Connecticut 06457
Attention: Corporate Trust Services, Telecopier No.: 860-704-6219, shall
initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the Corporate Trust Office of the Trustee). If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with any such address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the United States
of America, for such purposes.

     Section 4.06 Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of shares of Common Stock issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information to
such Holder or any beneficial owner of Securities or holder or beneficial owner
of


                                       31



shares of Common Stock, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such Security, until such
time as the same are no longer "restricted securities" within the meaning of
Rule 144 under the Securities Act. "RULE 144A INFORMATION" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act. Whether a Person is a beneficial owner shall be determined by the Company
to the Company's reasonable satisfaction.

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

     Section 5.01 When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into any other Person, convey, transfer,
sell or lease all or substantially all of its assets to any Person, or permit
any Person to consolidate with or merge into the Company, unless:

          (a) either the Company is the continuing corporation or the resulting,
     surviving or transferee Person will be a corporation organized and existing
     under the laws of the United States of America, any State thereof or the
     District of Columbia (unless such corporation has expressly assumed, by a
     supplemental indenture, executed and delivered to the Trustee, in form
     reasonably satisfactory to the Trustee, all of the Company's obligations
     under the Securities and this Indenture);

          (b) if as a result of such transaction the Securities become
     exchangeable into common stock or other equity securities issued by a third
     party, such third party assumes or fully and unconditionally guarantees all
     obligations under the Securities and this Indenture;

          (c) immediately after giving effect to such transaction (and treating
     any indebtedness which becomes an obligation of the successor Person, if
     other than the Company, as a result of such transaction as having been
     incurred by the successor Person at the time of such transaction), no Event
     of Default, and no Default shall have occurred and be continuing; and

          (d) the Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, merger, conveyance, transfer, sale or lease and, if a
     supplemental indenture is required in connection with such transaction,
     such supplemental indenture, comply with this Article 5 and that all
     conditions precedent herein provided for relating to such transaction have
     been satisfied.

     The successor Person formed by such consolidation or into which the Company
is merged or the successor Person to which such conveyance, transfer, sale or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; and thereafter,
except in the case of a lease of all or substantially all of the


                                       32



Company's assets, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities. Subject to Section 9.06, the
Company, the Trustee and the successor Person shall enter into a supplemental
indenture to evidence the succession and substitution of such successor Person
and such discharge and release of the Company.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

     Section 6.01 Events of Default. Each of the following events shall be an
"EVENT OF DEFAULT":

          (i) the Company defaults in any payment of interest due and payable on
     the Securities (including Liquidated Damages and Additional Amounts, if
     any), and such Default continues for a period of 30 days past the
     applicable due date;

          (ii) the Company defaults in the payment of all or any part of the
     principal amount, Redemption Price, Repurchase Price or Fundamental Change
     Repurchase Price when the same becomes due and payable at its Stated
     Maturity, upon redemption, upon repurchase at the option of a Holder, upon
     a Fundamental Change or any other Repurchase Date, or otherwise;

          (iii) the Company fails to provide a Fundamental Change Notice as
     required in Section 3.08(b);

          (iv) the Company defaults in its obligation to deliver when due the
     Settlement Amount upon conversion of the Securities, together with cash in
     lieu thereof in respect of any fractional shares, required to be delivered
     upon conversion of the Securities;

          (v) the Company fails to perform or observe any covenant in the
     Securities or in this Indenture (other than a failure that is the subject
     of the foregoing clauses (i) or (ii)) for 60 days after receipt by the
     Company of a notice of default from the Trustee or after receipt by the
     Company and the Trustee of a notice of default from the Holders of at least
     25% in principal amount of the outstanding Securities;

          (vi) a failure to pay when due at maturity or a Default that results
     in the acceleration of any indebtedness for borrowed money of the Company
     or its Subsidiaries in an aggregate amount of $15,000,000 or more;

          (vii) the failure by the Company or any of its Subsidiaries to pay
     final judgments aggregating in excess of $15,000,000, which judgments are
     not paid, discharged or stayed for a period of 60 days from the dates such
     judgments are entered; and

          (viii) the Company or any of its Significant Subsidiaries pursuant to
     or within the meaning of any Bankruptcy Law:

          (A) commences a voluntary case;


                                       33



          (B) consents to the entry of an order for relief against it in an
     involuntary case;

          (C) consents to the appointment of a Custodian of it or for any
     substantial part of its property; or

          (D) makes a general assignment for the benefit of its creditors or
     takes any comparable action under any foreign laws relating to insolvency;
     or

          (ix) a court of competent jurisdiction enters an order or decree under
     any Bankruptcy Law that:

          (A) is for relief against the Company or any of its Significant
     Subsidiaries in an involuntary case;

          (B) appoints a Custodian of the Company or any of its Subsidiaries or
     for any substantial part of its property;

          (C) orders the winding up or liquidation of the Company or any of its
     Significant Subsidiaries; or

          (D) grants any similar relief under any foreign laws and in each such
     case the order or decree remains unstayed and in effect for 60 days.

     The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

     The term "BANKRUPTCY LAW" means Title 11, United States Code, or any
similar Federal, state or non-U.S. law for the relief of debtors. The term
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.

     The Company shall deliver to the Trustee, as promptly as reasonably
practicable and in any event within 30 days after the occurrence thereof,
written notice in the form of an Officers' Certificate of any Event of Default
and any Default, its status and what action the Company is taking or proposes to
take with respect thereto.

     Section 6.02 Acceleration. Except as provided in Section 11.02, if
an Event of Default (other than an Event of Default specified in Sections
6.01(viii) or 6.01(ix)with respect to the Company) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding by notice to the Company and
the Trustee, may declare the principal amount of Securities outstanding plus
accrued and unpaid interest, if any (including Liquidated Damages and Additional
Amounts, if any), on all the outstanding Securities to be immediately due and
payable. Upon such a declaration, such accelerated amount shall be due and
payable immediately. If an Event of Default specified in Sections 6.01(viii) or
6.01(ix) with respect to the Company occurs and is continuing, the principal
amount of Securities outstanding plus accrued and unpaid interest, if any
(including Liquidated Damages and Additional Amounts, if any), on all the
Securities shall,


                                       34



automatically and without any action by the Trustee or any Holder, become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Holders of a majority in aggregate principal
amount of the Securities at the time outstanding by notice to the Trustee and
the Company and without notice to any other Holder may rescind any declaration
of acceleration if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of the principal amount plus accrued and unpaid interest, if any
(including Liquidated Damages and Additional Amounts, if any), that have become
due solely as a result of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

     Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount plus accrued and unpaid interest, if any (including
Liquidated Damages and Additional Amounts, if any), on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of the Securities in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

     Section 6.04 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding by notice
to the Trustee and without notice to any other Holder may waive any past Default
and its consequences except (a) an Event of Default described in Sections
6.01(i) and 6.01(ii), (b) a Default in respect of a covenant that under Section
9.02 cannot be amended without the consent of each Holder, (c) a Default which
constitutes a failure to convert any Security in accordance with the terms of
Article 10 or (d) a Default arising from the Company's failure to repurchase any
Securities when required in accordance with Sections 3.07 and 3.08. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

     Section 6.05 Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Holders or would potentially involve the
Trustee in personal liability. Prior to taking any action hereunder, the Trustee
shall be entitled to indemnification satisfactory to the Trustee in its sole
discretion against all losses and expenses caused by taking or not taking such
action.

     Section 6.06 Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Securities, except in the case of a Default due
to the non-payment of principal or interest (including Liquidated Damages and
Additional Amounts, if any), a failure to deliver the Settlement Amount upon
conversion of the Securities, a Default arising from the Company's failure to
repurchase any Securities when required pursuant to the terms of this


                                       35



Indenture or a Default in respect of any covenant that cannot be amended without
the consent of each Holder affected unless:

          (a) such Holder shall have previously given to the Trustee written
     notice of a continuing Event of Default;

          (b) the Holders of at least 25% in aggregate principal amount of the
     Securities at the time outstanding make a written request, and such Holder
     or Holders shall have offered indemnity satisfactory to the Trustee to
     pursue such remedy;

          (c) the Trustee has not received from the Holders of a majority in
     aggregate principal amount of the Securities at the time outstanding a
     direction inconsistent with such request; and

          (d) the Trustee fails to comply with the request within 60 days after
     receipt of the request and offer of indemnity.

     A Holder may not use this Indenture to prejudice the rights of any other
Holder or to obtain a preference or priority over any other Holder.

     Section 6.07 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount, Redemption Price, Repurchase Price, Fundamental Change
Repurchase Price or interest, if any (including Liquidated Damages and
Additional Amounts, if any), in respect of the Securities held by such Holder,
on or after the respective due dates expressed in such Holder's Securities or
any Redemption Date, Repurchase Date or Fundamental Change Repurchase Date, and
to convert the Securities in accordance with Article 10, or to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to convert, shall not be impaired or affected without the consent of such
Holder.

     Section 6.08 Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(i) or 6.01(ii) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any unpaid
interest, including Liquidated Damages and Additional Amounts, to the extent
lawful) and the amounts provided for in Section 7.07.

     Section 6.09 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company, its creditors or its property and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.


                                       36



     Section 6.10 Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:

     FIRST: to the Trustee for amounts due under Section 7.07;

     SECOND: to Holders for amounts due and unpaid on the Securities for the
principal amount, Redemption Price, Repurchase Price, Fundamental Change
Repurchase Price or interest, if any (including Liquidated Damages and
Additional Amounts, if any), as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Securities; and

     THIRD: the balance, if any, to the Company.

     The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and the amount to be paid.

     Section 6.11 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders
of more than 10% in aggregate principal amount of the Securities at the time
outstanding.

     Section 6.12 Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.

                                    ARTICLE 7

                                     TRUSTEE

     Section 7.01 Duties of Trustee. (a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.

          (b) Except during the continuance of an Event of Default:


                                       37



          (i) the Trustee undertakes to perform such duties and only such duties
     as are specifically set forth in this Indenture and no implied covenants or
     obligations shall be read into this Indenture against the Trustee; and

          (ii) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture.

          (c) The Trustee may not be relieved from liability for its own
     negligent action, its own negligent failure to act or its own bad faith or
     willful misconduct, except that:

          (i) this paragraph does not limit the effect of Section 7.01(b);

          (ii) the Trustee shall not be liable for any error of judgment made in
     good faith by a Trust Officer unless it is proved that the Trustee was
     negligent in ascertaining the pertinent facts; and

          (iii) the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05.

          (d) Every provision of this Indenture that in any way relates to the
     Trustee is subject to Sections Section 7.01(a), (b) and (c).

          (e) The Trustee shall not be liable for interest on any money received
     by it.

          (f) Cash or Common Stock held in trust by the Trustee need not be
     segregated from other funds except to the extent required by law.

          (g) No provision of this Indenture shall require the Trustee to expend
     or risk its own funds or otherwise incur financial liability in the
     performance of any of its duties hereunder or in the exercise of any of its
     rights or powers.

          (h) Every provision of this Indenture relating to the conduct or
     affecting the liability of or affording protection to the Trustee shall be
     subject to the provisions of this Section and to the provisions of the TIA
     and the provisions of this Article 7 shall apply to the Trustee in its role
     as Registrar and Paying Agent.

          (i) The Trustee shall not be deemed to have notice of a Default or an
     Event of Default unless (i) a Trust Officer of the Trustee has received
     written notice thereof from the Company or any Holder referencing the
     Indenture and the Securities and stating that such notice is a notice of
     default or (ii) a Trust Officer shall have actual knowledge thereof.

     Section 7.02 Rights of Trustee. (a) The Trustee may conclusively rely on
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The


                                       38



Trustee need not investigate any fact or matter stated in the document. The
Trustee may, however, in its discretion make such further inquiry or
investigation into such facts or matters as it may see fit and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the expense of the Company and shall incur no
liability of any kind by reason of such inquiry or investigation.

          (b) Before the Trustee acts or refrains from acting, it may require an
     Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
     not be liable for any action it takes or omits to take in good faith in
     reliance on the Officers' Certificate or Opinion of Counsel.

          (c) The Trustee may act through agents, attorneys or custodians and
     shall not be responsible for the misconduct or negligence of any agent,
     attorney or custodian appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits
     to take in good faith that it believes to be authorized or within its
     rights or powers unless the Trustee's conduct constitutes bad faith,
     willful misconduct or negligence.

          (e) The Trustee may consult with counsel of its own selection, and the
     advice or Opinion of Counsel with respect to legal matters relating to this
     Indenture and the Securities shall be full and complete authorization and
     protection from liability in respect to any action taken, omitted or
     suffered by it hereunder in good faith and in accordance with the advice or
     opinion of such counsel.

          (f) The permissive rights of the Trustee to do things enumerated in
     this Indenture shall not be construed as a duty unless so specified herein.

          (g) The Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Indenture at the request or direction
     of any of the Holders pursuant to this Indenture, unless such Holders shall
     have offered to the Trustee security or indemnity satisfactory to the
     Trustee against the costs, expenses and liabilities which might be incurred
     by it in compliance with such request or direction.

          (h) The rights, privileges, protections, immunities and benefits given
     to the Trustee, including, without limitation, its right to be indemnified,
     are extended to, and shall be enforceable by, the Trustee in each of its
     capacities hereunder.

          (i) The Trustee may request that the Company deliver an Officers'
     Certificate setting forth the names of individuals and/or titles of
     officers authorized at such time to take specified actions pursuant to this
     Indenture, which Officers' Certificate may be signed by any Person
     authorized to sign an Officers' Certificate, including any Person specified
     as so authorized in any such certificate previously delivered and not
     superseded.

          (j) In no event shall the Trustee be responsible or liable for
     special, indirect, or consequential loss or damage of any kind whatsoever
     (including, but not limited to,


                                       39



     loss of profit) irrespective of whether the Trustee has been advised of the
     likelihood of such loss or damage and regardless of the form of action.

     Section 7.03 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.

     Section 7.04 Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity, priority or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.

     Section 7.05 Notice of Defaults. If a Default or Event of Default occurs
and is continuing and if it is known to a Trust Officer of the Trustee, the
Trustee shall mail to each Holder notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default described in
Section 6.01(i) or 6.01(ii), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the interests of Holders. The second sentence of this Section
7.05 shall be in lieu of the proviso to Section 315(b) of the TIA and such
proviso is hereby expressly excluded from this Indenture, as permitted by the
TIA. The Trustee shall not be deemed to have knowledge of a Default unless a
Trust Officer of the Trustee has received written notice of such Default.

     Section 7.06 Reports by Trustee to Holders. As promptly as practicable
after each December 31 beginning with December 31, 2007, and in any event prior
to March 31 in each year thereafter, the Trustee shall mail to each Holder a
brief report dated as of December 31 each year that complies with TIA Section
313(a), if and to the extent required by such subsection. The Trustee shall also
comply with TIA Section 313(b).

     The Company agrees to notify promptly the Trustee if and when the
Securities become listed on any stock exchange and of any delisting thereof.

     Section 7.07 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as shall be agreed upon from time to
time in writing for its services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall fully indemnify the Trustee
against any and all loss, liability, claim, damage or expense (including
reasonable attorneys' fees and expenses) incurred by it in connection with the
acceptance and administration of this trust and the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim (whether asserted by the Company, any Holder or any other Person). The
Trustee


                                       40



shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company of any claim for which it may
seek indemnity of which a Trust Officer has actually received written notice
shall not relieve the Company of its obligations hereunder except to the extent
such failure shall have materially prejudiced the Company. The Company shall
defend the claim and the Trustee shall cooperate in the defense. If the Trustee
is advised by counsel in writing that it may have available to it defenses which
are in conflict with the defenses available to the Company, then the Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not reimburse any expense or indemnify against
any loss, liability, claim, damage or expense incurred by the Trustee through
the Trustee's own bad faith, willful misconduct or negligence. The Company need
not pay for any settlement made by the Trustee without the Company's consent.
All indemnifications and releases from liability granted hereunder to the
Trustee shall extend to its officers, directors, employees, agents, attorneys,
custodians, successors and assigns.

     To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest (including Liquidated Damages and Additional Amounts,
if any) on particular Securities.

     The Company's obligations pursuant to this Section shall survive the
resignation or removal of the Trustee and the discharge of this Indenture. When
the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(viii) or 6.01(ix) with respect to the Company, the expenses are
intended to constitute expenses of administration under the Bankruptcy Law.

     Section 7.08 Replacement of Trustee. The Trustee may resign at any time by
so notifying the Company at least 30 days prior to the proposed resignation. The
Holders of a majority in aggregate principal amount of the Securities then
outstanding may remove the Trustee by so notifying the Trustee. The Company
shall remove the Trustee if:

          (a) the Trustee fails to comply with Section 7.10;

          (b) the Trustee is adjudged bankrupt or insolvent;

          (c) a receiver or other public officer takes charge of the Trustee or
     its property; or

          (d) the Trustee otherwise becomes incapable of acting.

     If the Trustee resigns, is removed by the Company or by the Holders of a
majority in aggregate principal amount of the Securities then outstanding, or if
a vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to


                                       41



Holders. The retiring Trustee shall upon payment of all of its costs and the
costs of its agents and counsel promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.

     If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% or more in aggregate principal amount of the Securities then outstanding may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee.

     If the Trustee fails to comply with Section 7.10, any Holder who has been a
bona fide Holder of a Security for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

     Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.

     Section 7.09 Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Trustee.

     In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trust created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
such successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.

     Section 7.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Trustee shall have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall have) a combined capital and surplus of at least
$50,000,000 as set forth in its (or its related bank holding company's) most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b), subject to the penultimate paragraph thereof; provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

     Section 7.11 Preferential Collection of Claims Against Company. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.


                                       42



     Section 7.12 Trustee's Application for Instructions from the Company. Any
application by the Trustee for written instructions from the Company may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective. The Trustee
shall not be liable to the Company for any action taken by, or omission of, the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any Officer of the Company actually receives such
application, unless any such Officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of any omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

                                    ARTICLE 8

                             DISCHARGE OF INDENTURE

     Section 8.01 Discharge of Liability on Securities. When (a) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (b) all outstanding
Securities have become due and payable or have been converted, and the Company
irrevocably deposits with the Trustee cash sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.07) or delivers all amounts owing on conversion, as the case may be,
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 2.07, cease to be of
further effect; provided, however, that the foregoing shall not discharge the
Company's obligation to effect conversion, registration of transfer or exchange
of Securities in accordance with the terms of this Indenture. The Trustee shall
acknowledge satisfaction and discharge of this Indenture with respect to the
Securities on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.

     Section 8.02 Repayment to the Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

     Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.

                                    ARTICLE 9

                                   AMENDMENTS

     Section 9.01 Without Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities without the consent of any
Holder to:


                                       43



          (a) to add guarantees with respect to the Securities or secure the
     Securities or remove any such guarantees;

          (b) to evidence the assumption of the Company's obligations by a
     successor Person under Article 5;

          (c) to surrender any of the Company's rights or powers under this
     Indenture;

          (d) to add covenants or Events of Default for the benefit of the
     Holders of Securities;

          (e) eliminate the right to elect to satisfy the Company's conversion
     obligation entirely in shares of Common Stock;

          (f) cure any omission or correct any inconsistency in this Indenture,
     so long as such action will not materially adversely affect the interests
     of Holders;

          (g) to cure any ambiguity, manifest error or defect;

          (h) to modify or amend this Indenture to permit the qualification of
     this Indenture or any supplemental indenture under the Trust Indenture Act
     of 1939 as then in effect;

          (i) to establish the forms or terms of the Securities;

          (j) to evidence the acceptance of appointment by a successor Trustee;

          (k) to provide for uncertificated Securities in addition to or in
     place of Certificated Securities; provided, however, that the
     uncertificated Securities are issued in registered form for purposes of
     Section 163(f) of the Code or in a manner such that the uncertificated
     Securities are described in Section 163(f)(2)(B) of the Code;

          (l) to conform, as necessary, this Indenture and the form or terms of
     the Securities to the "Description of Notes" as set forth in the offering
     memorandum dated August 24, 2007 relating to the initial placement of the
     Securities; or

          (m) to make any other change to this Indenture or forms or terms of
     the Securities so long as such change will not adversely affect the
     interests of the Holders of the Securities.

     After an amendment under this Section 9.01 becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure to
give such notice to all such Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.

     Section 9.02 With Consent of Holders. With the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time outstanding
(voting as a single class), the Company and the Trustee may amend or modify this
Indenture or the Securities. However,


                                       44



without the consent of each Holder affected, an amendment to, or modification
of, this Indenture or the Securities may not:

          (a) reduce the principal amount of or change the Stated Maturity of
     any Security;

          (b) reduce the rate or extend the time for payment of interest
     (including Liquidated Damages and Additional Amounts, if any) on any
     Security;

          (c) make any change that adversely affects the right to require the
     Company to repurchase a Security, reduce any amount payable upon repurchase
     of any Security (including upon the occurrence of a Fundamental Change) or
     change the time at which or circumstances under which the Securities may or
     shall be repurchased;

          (d) adversely change the terms upon which the Securities may be
     redeemed;

          (e) impair the right to receive payment with respect to the Securities
     or the right to institute suit for the enforcement of any payment with
     respect to, or conversion of, any Security;

          (f) change the currency in which any Security is payable;

          (g) impair the right of a Holder to convert any Security in accordance
     with its terms or reduce the number of shares of Common Stock or amount of
     any other property receivable upon conversion;

          (h) reduce the quorum or voting requirements under this Indenture;

          (i) change the Company's obligation to maintain an office or agency in
     the places and for the purposes specified in this Indenture;

          (j) amend or modify any provision of this Indenture relating to
     amendment or modification or waiver of provisions of this Indenture that
     themselves may not be amended without the consent of each Holder affected;
     or

          (k) reduce the percentage of Securities required for consent to any
     amendment or modification of this Indenture.

     It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.

     After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.

     Section 9.03 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.


                                       45



     Section 9.04 Revocation and Effect of Consents, Waivers and Actions. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Holder. An amendment
or waiver becomes effective upon the execution of such amendment or waiver by
the Trustee.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.

     Section 9.05 Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

     Section 9.06 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such supplemental indenture the Trustee shall
be provided with, and (subject to the provisions of Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.

     Section 9.07 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

                                   ARTICLE 10

                                   CONVERSIONS

     Section 10.01 Conversion Rights. (a) A Holder of Securities may convert
such Securities, in whole or in part, prior to the close of business on the
Business Day immediately


                                       46



preceding the Stated Maturity; provided, however, that Holders may convert their
Securities only in the circumstances and to the extent specified in clauses (i)
through (vi) below:

          (i) during any fiscal quarter after the fiscal quarter ending
     September 30, 2007, if the Closing Sale Price per share of the Common Stock
     for at least 20 Trading Days during the 30-consecutive-Trading Day-period
     ending on the last Trading Day of the preceding fiscal quarter exceeds 130%
     of the Conversion Price per share of Common Stock on such last Trading Day;

          (ii) during the 5 Business Days immediately following any
     five-consecutive- Trading-Day period in which the Trading Price per $1,000
     principal amount of the Securities (as determined following a request by a
     Holder of the Securities in accordance with the procedures described in
     Section 10.01(c)) for each day of such period was less than 98% of the
     product of (x) the Closing Sale Price and (y) the Conversion Rate of the
     Securities on each such Trading Day;

          (iii) after the Company or the Trustee has issued a notice of
     redemption of the Securities pursuant to Section 3.01 hereof, at any time
     prior to the close of business one Business Day prior to the Redemption
     Date for such Securities, even if such Securities are not otherwise
     convertible at such time;

          (iv) at any time after the Company gives notice to Holders of
     Securities of any election by it to distribute to all, or substantially
     all, Holders of Common Stock:

          (A) rights or warrants entitling such Holders of the Common Stock to
     purchase, for a period expiring within 60 days after the date for such
     distribution, shares of Common Stock at less than the Closing Sale Price of
     the Common Stock on the Trading Day immediately preceding the announcement
     date of the distribution, or

          (B) assets (including cash), debt securities (or other evidences of
     indebtedness) or rights or warrants to purchase the Company's securities,
     which distribution has a value per share of Common Stock as determined by
     the Board of Directors exceeding 10% of the Closing Sale Price of the
     Common Stock on the Trading Day immediately preceding the announcement date
     of the distribution,

in each case, until the earlier of the close of business on the Business Day
immediately prior to the Ex-Dividend Date or the Company's announcement that
such distribution will not take place, provided that no Holder may exercise this
right to convert if such Holder may participate in the distribution without
conversion;

          (v) if a Fundamental Change occurs, regardless of whether a Holder has
     the right to require the Company to repurchase the Securities as described
     in Section 3.08, at any time from or including the effective date of the
     transaction until and including the 30th Business Day following such
     effective date; and

          (vi) at any time on or after April 1, 2027 until the close of business
     on the Business Day immediately preceding the Stated Maturity.


                                       47



          (b) The Company will determine on a daily basis whether the Securities
     are convertible as a result of the Closing Sale Price of the Common Stock
     pursuant to Section 10.01(a)(i) and will notify the Trustee if the
     Securities are so convertible.

          (c) The Trustee shall have no obligation to determine the Trading
     Price of the Securities as described in Section 10.01(a)(ii) unless the
     Company has requested such determination; and the Company shall have no
     obligation to make such request unless a Holder provides the Company with
     reasonable evidence that the Trading Price per $1,000 principal amount of
     Securities would be less than 98% of the product of (x) the Closing Sale
     Price of the Common Stock and (y) the Conversion Rate of the Securities on
     such day. At such time, the Company will instruct the Trustee to determine
     the Trading Price of the Securities beginning on the next Trading Day and
     on each successive Trading Day until the Trading Price per $1,000 principal
     amount of Securities is greater than or equal to 98% of the product of the
     Closing Sale Price of the Common Stock and the Conversion Rate of the
     Securities. The Trustee's sole duty in respect of such determination shall
     consist of requesting and receiving, and, if applicable, averaging the
     quotations provided by the independent nationally recognized securities
     dealers referred to in the definition of "Trading Price." The Trustee shall
     be entitled at its sole discretion to consult with the Company and to
     request the assistance of the Company in connection with the Trustee's
     duties and obligations pursuant to this Section 10.01(c) and the Company
     agrees, if requested by the Trustee, to cooperate with, and provide
     assistance to, the Trustee in carrying out its duties under this Section
     10.01(c).

          (d) If the Company makes a distribution described in Section
     10.01(a)(iv), the Company shall notify Holders at least 20 Business Days
     prior to the Ex-Dividend Date for such distribution.

          (e) The Company will notify Holders of the Securities and the Trustee
     on the same date on which the Company publicly announces any Fundamental
     Change, but in no event less than 5 Business Days prior to the anticipated
     effective date of such Fundamental Change.

          (f) The Company appoints the Trustee as the initial Conversion Agent.
     The Trustee may resign from its appointment as Conversion Agent at any time
     and the Company shall then appoint a new Conversion Agent.

          (g) Securities with respect to which a Repurchase Notice or a
     Fundamental Change Repurchase Notice has been given by the Holder may be
     converted pursuant to this Section 10.01 only if the Repurchase Notice or
     Fundamental Change Repurchase Notice has been withdrawn in accordance with
     the provisions of Section 3.09.

          (h) Whenever any event described in clauses (i) through (vi) of
     Section 10.01(a) shall occur such that the Securities become convertible as
     provided in this Section 10.01, the Company shall promptly inform the
     Trustee, issue a press release and use its reasonable efforts to post such
     information on its website or otherwise publicly disclose the information,
     or provide notice to the Holders of the Securities in a manner contemplated
     by this Indenture, including through the facilities of DTC, which press


                                       48



     release, website posting, notice or other public disclosure, as the case
     may be, shall include:

               (i) a description of such event;

               (ii) a description of the periods during which the Securities
          shall be convertible as provided in clauses (i) through (vi) of
          Section 10.01(a);

               (iii) a statement of whether an adjustment to the Conversion Rate
          shall take effect in respect of such event pursuant to Section 10.06
          through 10.11 below; and

               (iv) the procedures Holders of the Securities must follow to
          convert their Securities in accordance with Section 10.03 below,
          including the name and address of the Conversion Agent.

          (i) Notwithstanding any other provision of the Securities or this
     Indenture, no Holders of Securities shall be entitled to receive shares of
     Common Stock upon conversion of the Securities to the extent that receipt
     of such shares of Common Stock would cause any holder of beneficial
     interests (together with such holder's Affiliates) to exceed the Ownership
     Limit (as such term is defined in the Company's Articles of Amendment and
     Restatement in effect as of the date hereof). Any attempted conversion of
     Securities in excess of the Ownership Limit, in the absence of a waiver
     from the Company, shall be void ab initio to the extent of such excess, and
     the related Securities or portions thereof shall be returned by the Company
     to the Holder as promptly as practicable. The Company shall have no further
     obligation to the Holder with respect to such voided exchange and such
     Securities will be treated as if they had not been submitted for exchange.
     A Holder of returned Securities may resubmit such Securities for exchange
     at a later date subject to compliance with the terms hereof and the
     ownership limitations described in this Section 10.01(i).

     Section 10.02 Conversion Consideration.

          (a) Subject to the qualifications and the satisfaction of the
     conditions and during the periods described in Section 10.01(a), Holders
     shall be entitled to convert their Securities in denominations of $1,000
     principal amount or integral multiples thereof initially at a conversion
     rate of 92.7085 shares per $1,000 principal amount of Securities, which
     will be subject to adjustments as described in Sections 10.06 through
     10.11, but will not be adjusted for accrued interest (the "CONVERSION
     RATE"). The "CONVERSION PRICE" at any given time is equal to the principal
     amount of a Security divided by the Conversion Rate.

          (b) On the third Business Day following the expiration of the Cash
     Settlement Averaging Period, the Company shall deliver to the Holder,
     through the Conversion Agent, an amount (the "SETTLEMENT AMOUNT") equal to
     the sum of the Daily Settlement Amounts for each of the 20 consecutive
     Trading Days in the Cash Settlement Averaging Period, subject to the
     provisions of Section 10.02(d).


                                       49



          The "DAILY SETTLEMENT AMOUNT," for each of the 20 consecutive Trading
     Days in the Cash Settlement Averaging Period, shall consist of:

          (i) cash in an amount equal to the lesser of (x) $50 (the "DAILY
     MEASUREMENT VALUE") and (y) the Daily Conversion Value; and

          (ii) if the Daily Conversion Value exceeds the Daily Measurement
     Value, a number of shares of Common Stock equal to (x) the difference
     between the Daily Conversion Value and the Daily Measurement Value divided
     by (y) the Closing Sale Price of the Common Stock for such Trading Day as
     adjusted pursuant to Section 10.20.

          The "DAILY CONVERSION VALUE" means, for each of the 20 consecutive
     Trading Days during the Cash Settlement Averaging Period, one-twentieth
     (1/20th) of the product of (x) the Conversion Rate and (y) the Daily VWAP
     on such Trading Day.

          The "CASH SETTLEMENT AVERAGING PERIOD" with respect to any Securities
     means the 20-consecutive-Trading-Day period beginning (x) on the Redemption
     Date, if prior to the relevant Conversion Date the Company has called the
     Securities that are being converted for redemption, (y) on the 27th Trading
     Day immediately preceding the Stated Maturity, if the relevant Conversion
     Date is on or after the 30th day immediately preceding the Stated Maturity,
     and (z) in all other instances, on the second Trading Day after the
     relevant Conversion Date.

          The "DAILY VWAP" for the Common Stock means, for each of the 20
     consecutive Trading Days during the Cash Settlement Averaging Period, the
     per share volume-weighted average price on the New York Stock Exchange as
     displayed under the heading "Bloomberg VWAP" on Bloomberg page "AHR
     *equity** VAP" (or its equivalent successor if such page is not
     available) in respect of the period from scheduled open of trading until
     the scheduled close of trading of the primary trading session on such
     Trading Day (or if such volume-weighted average price is unavailable, the
     market value of one share of the Common Stock on such Trading Day
     determined by a nationally recognized independent investment banking firm
     retained for this purpose by the Company, using a volume-weighted method).
     The Daily VWAP will be determined without regard to after hours trading or
     any other trading outside of the regular trading session hours.

          (c) Any payments of cash and, if Common Stock is to be delivered, a
     stock certificate or certificates for the related number of shares of
     Common Stock, will be delivered to the Holders, or a book-entry transfer
     therefor through DTC will be made.

          (d) Notwithstanding the other provisions of this Article 10, any time
     on or prior to September 1, 2012 the Company may irrevocably elect, in its
     sole discretion without the consent of the Holders of the Securities, to
     deliver, upon conversion of Securities, in lieu of the Settlement Amount
     specified in Section 10.02(b), solely shares of Common Stock (and cash in
     lieu of fractional shares) in accordance with the provisions of this
     Section 10.02(d) (a "PHYSICAL SETTLEMENT ELECTION"). If the Company makes a
     Physical Settlement Election, the Company will deliver to Holders, in
     respect of


                                       50



     any Securities they convert, a number of shares of Common Stock equal to
     (i) the aggregate principal amount of Securities to be converted (ii)
     divided by $1,000 and (iii) multiplied by the Conversion Rate (which will
     include any increase to reflect any Additional Shares which Holders may be
     entitled to receive as described under Section 10.20). The Company will
     deliver such shares on the third Business Day after the Conversion Date.
     Prior to making any Physical Settlement Election, the Company may
     irrevocably elect to waive its right to make any such election, effective
     upon the Company's delivery to the Trustee of a notice that it is
     irrevocably waiving its ability to make a Physical Settlement Election at
     any time with respect to the Securities. If the Company makes a Physical
     Settlement Election, that election will be irrevocable and its right to
     waive the ability to make a Physical Settlement Election will expire.

          (e) The Company shall pay, in lieu of any fractional shares of Common
     Stock that would be otherwise issuable upon conversion of any Securities, a
     cash amount equal to the number of such fractional shares multiplied by the
     Daily VWAP on the Trading Day immediately preceding the Conversion Date.

     Section 10.03 Conversion Procedures. (a) To convert a Security, a Holder
shall (i) complete and manually sign a Conversion Notice or a facsimile of the
Conversion Notice, a form of which is on the back of the Security or may be
obtained from the Conversion Agent, and deliver such Conversion Notice to the
Conversion Agent, which notice shall be irrevocable, (ii) surrender the Security
to the Conversion Agent, (iii) if required by the Conversion Agent, furnish
appropriate endorsement and transfer documents, (iv) pay all transfer or similar
taxes required to be paid by such Holder pursuant to Section 10.04 and (v) if
required pursuant to Section 11.01(d), pay funds equal to interest payable on
the next Interest Payment Date. If a Person's interest is a beneficial interest
in a Global Security, to convert, such Person shall comply with requirements
(iii), (iv) and (v) above and comply with the Depositary's procedures for
converting a beneficial interest into a Global Security. The date a Holder
complies with all of the applicable requirements is the "CONVERSION DATE."

          (b) Securities will be deemed to have been converted immediately prior
     to the close of business on the Conversion Date and the converting Holder
     will be treated as a shareholder of record of the Company as of such time.

          (c) No payment or adjustment will be made for dividends on, or other
     distributions with respect to, any Common Stock except as provided in
     Sections 10.06 to 10.09 below. Upon conversion of a Security, a Holder will
     not receive any cash payment of interest (including Liquidated Damages and
     Additional Amounts, if any) unless such conversion occurs between a Record
     Date and the Interest Payment Date to which that Record Date relates.

          (d) If the last day on which a Security may be converted is not a
     Business Day, the Security may be surrendered on the next succeeding day
     that is a Business Day.

          (e) Provisions of this Indenture that apply to conversion of all of a
     Security also apply to conversion of a portion of a Security. Upon
     surrender of a Security that is converted in part, the Company shall
     execute, and the Trustee shall authenticate and


                                       51



     deliver to the Holder, a new Security or Securities in an authorized
     denomination equal in principal amount to the unconverted portion of the
     Security surrendered.

     Section 10.04 Taxes on Conversions. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of any shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued or delivered in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the Common
Stock is to be delivered in a name other than the Holder's name. Nothing herein
shall preclude any tax withholding required by law or regulations.

     Section 10.05 Company to Provide Stock. The Company shall, prior to
issuance of any Securities under this Article 10, and from time to time as may
be necessary, reserve out of its authorized but unissued shares of Common Stock
a sufficient number of shares of Common Stock to permit the conversion of the
Securities.

     Any shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable, and shall be free from preemptive or
similar rights and shall be free of any lien or adverse claim. The Company will
endeavor promptly to comply with all federal and state securities laws
regulating the offer and delivery of Common Stock, if any, upon conversion of
Securities, if any, and will list or cause to have quoted such shares of Common
Stock on each national securities exchange or in the over-the-counter market or
such other market on which the shares of Common Stock are then listed or quoted.

     Section 10.06 Adjustment for Change in Capital Stock. If, after the Issue
Date of the Securities, the Company:

          (a) pays a dividend or makes another distribution payable exclusively
     in shares of Common Stock on the Company's Common Stock;

          (b) subdivides the outstanding shares of Common Stock into a greater
     number of shares; or

          (c) combines the outstanding shares of Common Stock into a smaller
     number of shares;

then the Conversion Rate in effect immediately prior to such action shall be
adjusted based on the following formula:

                              CR(1) = CR(0) x OS(1)
                                              -----
                                              OS(0)


                                       52



where

     CR(0) = the Conversion Rate in effect immediately prior to the Ex-Dividend
     Date for such dividend or distribution, or the effective date of such share
     split or share combination;

     CR(1) = the new Conversion Rate in effect immediately after the Ex-Dividend
     Date for such dividend or distribution, or the effective date of such share
     split or share combination;

     OS(0) = the number of shares of Common Stock outstanding immediately prior
     to such Ex-Dividend Date, or effective date; and

     OS(1) = the number of shares of Common Stock outstanding immediately prior
     to such Ex- Dividend Date, or effective date but after giving effect to
     such dividend, distribution, share split or share combination.

     If any dividend or distribution described in this Section 10.06 is declared
but not so paid or made, the new Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.

     Section 10.07 Adjustment for Rights Issue. If, after the Issue Date of the
Securities, the Company distributes to all, or substantially all, holders of the
Company's Common Stock any rights, warrants or options entitling them, for a
period of not more than 60 days after the date of issuance thereof, to subscribe
for or to purchase shares of Common Stock at an exercise price per share of
Common Stock less than the average of the Closing Sale Prices of the Common
Stock for each Trading Day in the 10-consecutive-Trading-Day period ending on
the Trading Day immediately preceding the time of announcement of such issuance,
the Conversion Rate shall be adjusted in accordance with the following formula:

                           CR(1) = CR(0) x (OS(0) + X)
                                           -----------
                                           (OS(0) + Y)

where

     CR(0) = the Conversion Rate in effect immediately prior to the Ex-Dividend
     Date for such distribution;

     CR(1) = the new Conversion Rate in effect immediately after the Ex-Dividend
     Date for such distribution;

     OS(0) = the number of shares of Common Stock outstanding immediately prior
     to the Ex-Dividend Date for such distribution;

     X = the number of shares of Common Stock issuable pursuant to such rights,
     warrants or options; and

     Y = the number of shares of Common Stock equal to the quotient of (A) the
     aggregate price payable to exercise such rights, warrants or options and
     (B) the average of the


                                       53



     Closing Sale Prices of the Common Stock for each Trading Day in the
     10-consecutive-Trading Day period ending on the Trading Day immediately
     preceding the date of announcement for the issuance of such rights,
     warrants or options.

     For purposes of this Section 10.07, in determining whether any rights,
warrants or options entitle the Holders to subscribe for or purchase the
Company's Common Stock at less than the average of the Closing Sale Prices for
each Trading Day in the applicable 10-consecutive-Trading Day period, there
shall be taken into account any consideration the Company receives for such
rights, warrants or options and any amount payable on exercise thereof, with the
value of such consideration, if other than cash, to be determined by the
Company's Board of Directors.

     If any right, warrant or option described in this Section 10.07 is not
exercised prior to the expiration of the exercisability thereof, the new
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect if such right, warrant or option had not been so issued.

     Section 10.08 Adjustment for Other Distributions. If, after the Issue Date
of the Securities, the Company distributes to all, or substantially all, holders
of its Common Stock evidence of indebtedness or other assets or property,
excluding:

          (A) dividends, distributions, rights, warrants or options referred to
     in Section 10.06 or 10.07 above;

          (B) dividends or distributions paid exclusively in cash; and

          (C) Spin-Offs described below in this Section 10.08,

then the Conversion Rate will be adjusted based on the following formula:

                           CR(1) = CR(0) x     SP(0)
                                           -------------
                                           (SP(0) - FMV)

where

     CR(0) = the Conversion Rate in effect immediately prior to the Ex-Dividend
     Date for such distribution;

     CR(1) = the new Conversion Rate in effect immediately after the Ex-Dividend
     Date for such distribution;

     SP(0) = the average of the Closing Sale Prices of the Common Stock for each
     Trading Day in the 10-consecutive Trading-Day period ending on the Trading
     Day immediately preceding the Ex-Dividend Date for such distribution; and

     FMV = the fair market value (as determined in good faith by the Board of
     Directors) of the shares of Capital Stock, evidences of indebtedness,
     assets or property distributed with respect to each outstanding share of
     Common Stock on the earlier of the Record Date or the Ex-Dividend Date for
     such distribution.


                                       54



     With respect to an adjustment pursuant to this Section 10.08, where there
has been a payment of a dividend or other distribution to all, or substantially
all, holders of Common Stock of shares of Capital Stock of any class or series,
or similar equity interest, of or relating to any Subsidiary or other business
unit (a "SPIN-OFF"), the Conversion Rate in effect immediately before the close
of business on the effective date of the Spin-Off will be adjusted based on the
following formula:

                         CR(1) = CR(0) x (FMV(0)+MP(0))
                                         --------------
                                             MP(0)

where

     CR(0) = the Conversion Rate in effect immediately prior to the effective
     date of the Spin-Off;

     CR(1) = the new Conversion Rate after the Spin-Off;

     FMV(0) = the average of the Closing Sale Prices of the Capital Stock or
     similar equity interest distributed to holders of Common Stock applicable
     to one share of Common Stock over the first 10 consecutive Trading Days
     after, and including, the effective date of the Spin-Off; and

     MP(0) = the average of the Closing Sale Prices of the Common Stock over the
     10 consecutive Trading Days after, and including, the effective date of the
     Spin-Off.

     An adjustment to the Conversion Rate made pursuant to the immediately
preceding paragraph will occur on the 10th Trading Day from and including the
effective date of the Spin-Off; provided that in respect of any conversion
within the 10 Trading Days following, and including, the effective date of any
Spin-Off, references within this Section 10.08 to 10 Trading Days shall be
deemed replaced with such lesser number of Trading Days as have elapsed between
the effective date of such Spin-Off and the Conversion Date in determining the
Conversion Rate.

     If any such dividend or distribution described in this Section 10.08 is
declared but not paid or made, the new Conversion Rate shall be readjusted to be
the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.

     Section 10.09 Adjustment for Cash Dividends. If, after the Issue Date of
the Securities, the Company makes any cash dividend or distribution to all, or
substantially all, Holders of its outstanding Common Stock, other than regular
quarterly cash dividends (without regard to the actual period in which paid)
that do not exceed the Reference Dividend, the Conversion Rate will be adjusted
based on the following formula:

                           CR(1) = CR(0) x     SP(0)
                                           -----------
                                           (SP(0) - C)


                                       55



where

     CR(0) = the Conversion Rate in effect immediately prior to the Ex-Dividend
     Date for such distribution;

     CR(1) = the new Conversion Rate in effect immediately after the Ex-Dividend
     Date for such distribution;

     SP(0) = the average of the Closing Sale Prices of the Common Stock for each
     Trading Day in the 10-consecutive-Trading-Day period ending on the Trading
     Day immediately preceding the Ex-Dividend Date for such distribution; and

     C = the amount in cash per share that the Company distributes to holders of
     its Common Stock in respect of the applicable quarterly period that exceeds
     the Reference Dividend.

     If any dividend or distribution described in this Section 10.09 is declared
but not so paid or made, the new Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.

     The Reference Dividend amount is subject to adjustment in a manner
inversely proportional to adjustments to the Conversion Rate; provided that no
adjustment will be made to the Reference Dividend amount for any adjustment made
to the Conversion Rate under this Section 10.09.

     Notwithstanding the foregoing, if an adjustment is required to be made
under this Section 10.09 as a result of a distribution that is not a regular
quarterly dividend, the Reference Dividend amount will be deemed to be zero.

     Section 10.10 Adjustment for Company Tender Offer. If, after the Issue Date
of the Securities, the Company or any of its subsidiaries makes a payment in
respect of a tender offer or exchange offer for its Common Stock, to the extent
that the cash and value of any other consideration included in the payment per
share of its Common Stock exceeds the Closing Sale Price of a share of its
Common Stock on the Trading Day following the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer, the Conversion
Rate will be adjusted based on the following formula:

                     CR(1) = CR(0) x (AC + (SP(1) x OS(1)))
                                     ----------------------
                                           (SP(1) x OS(0))

where

     CR(0) = the Conversion Rate in effect on the day immediately following the
     date such tender or exchange offer expires;

     CR(1) = the new Conversion Rate in effect after such tender or exchange
     offer expires;


                                       56



     AC = the aggregate value of all cash and any other consideration (as
     determined by the Company's Board of Directors) paid or payable for the
     Company's Common Stock purchased in such tender or exchange offer;

     OS(0) = the number of shares of the Company's Common Stock outstanding
     immediately prior to the date such tender or exchange offer expires;

     OS(1) = the number of shares of the Company's Common Stock outstanding
     immediately after the date such tender or exchange offer expires (after
     giving effect to the purchase or exchange of shares pursuant to such tender
     or exchange offer); and

     SP(1) = the average of the Closing Sale Prices of the Company's Common
     Stock for each Trading Day in the 10-consecutive-Trading-Day period
     commencing on the Trading Day following the date such tender or exchange
     offer expires.

     The adjustment to the Conversion Rate under this Section 10.10 will occur
on the 10th Trading Day from, and including, the Trading Day following the date
such tender or exchange offer expires; provided that in respect of any
conversion within 10 Trading Days immediately following, and including, the
expiration date of any tender or exchange offer, references with respect to 10
Trading Days shall be deemed replaced with such lesser number of Trading Days as
have elapsed between the expiration date of such tender or exchange offer and
the Conversion Date in determining the Conversion Rate.

     Section 10.11 Additional Adjustments. (a) The Company may, in its sole
discretion, increase the Conversion Rate as its Board of Directors deems
advisable to avoid or diminish any income tax to Holders of its Securities
resulting from any dividend or distribution of Capital Stock issuable upon
conversion of the Securities (or rights to acquire Capital Stock) or from any
event treated as such for income tax purposes.

          (b) The Company may, from time to time, to the extent permitted by
     applicable law, increase the Conversion Rate by any amount for any period
     of at least 20 Business Days if its Board of Directors has determined that
     such increase would be in the Company's best interests. If its Board of
     Directors makes such determination, it will be conclusive. The Company will
     give Holders of Securities at least 15 days' prior notice of such an
     increase in the Conversion Rate.

          (c) To the extent that the Company has a rights plan in effect upon
     any conversion of the Securities into Common Stock, a Holder will receive,
     in addition to the Common Stock, the rights under the rights plan, unless,
     prior to any conversion, the rights have separated from the Common Stock,
     in which case the Conversion Rate will be adjusted at the time of
     separation as described in Section 10.08. A further adjustment will occur
     as described in Section 10.08 above, if such rights become exercisable to
     purchase different securities, evidences of indebtedness or assets, subject
     to readjustment in the event of the expiration, termination or redemption
     of such rights.

          (d) Following:

          (A) any reclassification of the Company's Common Stock;


                                       57



          (B) a consolidation, merger, binding share exchange or combination
     involving the Company; or

          (C) a conveyance, transfer, sale, lease or other disposition to
     another Person or entity of all or substantially all of the Company's
     assets;

     the Settlement Amount in respect of the Company's conversion obligation
     will be computed as set forth in Section 10.02 above, based on the kind and
     amount of shares of stock, securities, other property or assets (including
     cash or any combination thereof) that Holders of the Company's Common Stock
     are entitled to receive in respect of each share of the Company's Common
     Stock in such transaction (the "REFERENCE PROPERTY") and Reference Property
     will be delivered in lieu of the shares of the Company's Common Stock that
     would have otherwise been deliverable upon conversion. If Holders of Common
     Stock would be entitled to elect the kind of consideration for their Common
     Stock received in any transaction described in the previous sentence, the
     Company shall make adequate provision (which shall be similar to the
     provisions of the election to be made holders of the Common Stock) whereby
     the Holders shall have the opportunity, on a timely basis, to determine the
     form of consideration into which all of the Notes, treated as a single
     class, shall be convertible. Such determination shall be based on the
     weighted average of elections made by Holders of the Notes who participate
     in such determination and shall be subject to any limitations to which all
     of the holders of the Common Stock are subject, such as pro rata reductions
     applicable to any portion of the consideration payable. If no Holders
     participate in such election than the kind of consideration for their
     Common Stock shall be based on the weighted average of the kind and amount
     of consideration received by the holders of the Company's Common Stock that
     affirmatively make such an election. The determination of the Reference
     Property will apply to all of the Securities and the Company will notify
     the Trustee of the composition of the Reference Property promptly after it
     is determined.

     All calculations under this Article 10 shall be made to the nearest
1/10,000th of a share, as the case may be.

     The Company will not take any action that would result in an adjustment
pursuant to this Section 10 without complying with the shareholder approval
rules of The New York Stock Exchange or any stock exchange on which the Common
Stock is listed at the relevant time.

     Section 10.12 When No Adjustment Required. No adjustment shall be made:

          (a) upon the issuance of any shares of Common Stock pursuant to any
     present or future plan providing for the reinvestment of dividends or
     interest payable on securities of the Company and the investment of
     additional optional amounts in shares of Common Stock under any plan;

          (b) upon the issuance of any shares of Common Stock or options or
     rights to purchase those shares pursuant to any present or future employee,
     director or consultant benefit plan or program of or assumed by the Company
     or any of its Subsidiaries;


                                       58



          (c) upon the issuance of any shares of Common Stock pursuant to any
     option, warrant, right or exercisable, exchangeable or convertible security
     and outstanding as of the date the Securities were first issued (unless
     explicitly otherwise provided in this Article 10);

          (d) for a change in the par value of the shares of Common Stock; or

          (e) for accrued and unpaid interest (including Liquidated Damages and
     Additional Amounts, if any).

     Section 10.13 De minimis Impact on Conversion Rate. Notwithstanding
anything in the foregoing provisions of this Article 10, to the contrary, the
Company will not be required to adjust the Conversion Rate unless the adjustment
would result in a change of at least 1% of the Conversion Rate. However, the
Company will carry forward any adjustments that are less than 1% of the
Conversion Rate and make such carried forward adjustments, regardless of whether
the aggregate adjustment is less than 1%, upon any conversion of the Securities.

     Section 10.14 Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice
briefly stating the facts requiring the adjustment and the manner of computing
it. The notice of adjustment shall be conclusive evidence that the adjustment is
correct. Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such notice of adjustment except to exhibit
the same to any Holder desiring inspection thereof.

     Section 10.15 Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to Section 10.02(d), 10.06,
10.07, 10.08, 10.09, 10.10, 10.11, 10.12 or 10.15 is conclusive, absent manifest
error.

     Section 10.16 Trustee's Adjustment Disclaimer. The Trustee has no duty to
determine when the Securities are convertible or when an adjustment under this
Article 10 should be made, how it should be made or what it should be. The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article 10. Each Conversion Agent shall have the same
protection under this Section 10.16 as the Trustee.

     Section 10.17 Simultaneous Adjustments. In the event that this Article 10
requires adjustments to the Conversion Rate under more than one of Sections
10.06, 10.07, 10.08 or 10.09, only one such adjustment shall made by applying,
first, the provisions of Section 10.06, second, the provisions of Section 10.08,
third, the provisions of Section 10.09 and, fourth, the provisions of Section
10.07.

     Section 10.18 Successive Adjustments. After an adjustment to the Conversion
Rate under this Article 10, any subsequent event requiring an adjustment under
this Article 10 shall cause an adjustment to the Conversion Rate as so adjusted.


                                       59



     Section 10.19 Limitation on Adjustments. The Company shall not take any
action that would result in an adjustment pursuant to the foregoing provisions
in this Article 10 if that adjustment would reduce the Conversion Price below
the then par value of the shares of Common Stock issuable upon conversion of the
Securities.

     Section 10.20 Adjustment to Conversion Rate Upon Certain Fundamental Change
Transactions. If, after the Issue Date of the Securities, the Fundamental Change
Effective Date of a Fundamental Change pursuant to paragraphs (i) or (iii) of
the definition of Fundamental Change set forth in Section 3.08, occurs prior to
September 1, 2012 and 10% or more of the consideration for the Company's Common
Stock in the transaction consists of consideration other than common stock that
is traded or scheduled to be traded immediately following such transaction on a
U.S. national or regional securities exchange (collectively, "LISTED COMMON
EQUITY") and the Securities are surrendered for conversion in connection with
such transaction, the Company will increase the Conversion Rate by a number of
additional shares of the Company's Common Stock (the "ADDITIONAL SHARES")
determined pursuant to this Section 10.20.

     A conversion of the Securities will be deemed for these purposes to be "IN
CONNECTION WITH" a Fundamental Change transaction if the related Conversion
Notice is received by the Conversion Agent during the period from and including
the Fundamental Change Effective Date until and including the 30th Business Day
following such Fundamental Change Effective Date.

     The Company shall mail to Holders not later than five Business Days prior
to the anticipated effective date of the Fundamental Change a notice describing
the Fundamental Change and the Holders' right to Additional Shares.

     The number of Additional Shares shall be determined by reference to the
table below with reference to the date such Fundamental Change transaction
becomes effective (the "FUNDAMENTAL CHANGE EFFECTIVE DATE") and the price (the
"SHARE PRICE") paid per share of Common Stock in such Fundamental Change
transaction. If the Holders of Common Stock receive only cash in the Fundamental
Change transaction, the Share Price shall be the cash amount paid per share of
Common Stock. Otherwise, the Share Price shall be the average of the Closing
Sale Prices of the Common Stock on the five Trading Days immediately prior to
but not including the Fundamental Change Effective Date.

     As of any date upon which the Conversion Rate is adjusted, the Share Prices
set forth in the first row of the table below shall be adjusted such that the
adjusted Share Prices shall equal the Share Prices applicable immediately prior
to such adjustment multiplied by a fraction, the numerator of which is the
Conversion Rate immediately prior to such adjustment and the denominator of
which is the Conversion Rate as so adjusted pursuant to Sections 10.06 through
10.11. If the Share Price is between two Share Prices in the table or the
Fundamental Change Effective Date is between two Effective Dates in the table,
the number of Additional Shares will be determined by straight-line
interpolation between the number of Additional Shares set forth for the higher
and lower Share Prices and the two Effective Dates, as applicable, based on a
365-day year. If the Share Price is in excess of $40.00 per share (subject to
adjustment as set forth herein), or if the Share Price is less than $9.18 per
share (subject to adjustment as set forth herein), no Additional Shares will be
added to the Conversion Rate.


                                       60



                                   SHARE PRICE



EFFECTIVE DATE       $9.18    $10.00    $10.79   $12.00   $14.00   $16.00   $18.00   $20.00   $25.00   $30.00   $40.00
- --------------       -----    ------    ------   ------   ------   ------   ------   ------   ------   ------   ------

August 23, 2007     16.2239   12.2915   9.1451   5.8748   3.0558   1.7040   0.9971   0.6315   0.3715   0.3582   0.1140
September 1, 2008   16.2239   12.2415   9.0802   5.7998   2.9915   1.6228   0.9637   0.6165   0.3315   0.2582   0.0000
September 1, 2009   16.2239   12.0915   8.9134   5.5665   2.7129   1.5165   0.9304   0.4665   0.3235   0.1948   0.0000
September 1, 2010   16.2239   11.9815   8.4036   4.8665   2.0344   0.9978   0.5748   0.3815   0.1955   0.1048   0.0000
September 1, 2011   16.2239   10.2115   6.2072   2.5998   0.4772   0.0665   0.0000   0.0000   0.0000   0.0000   0.0000
September 1, 2012   16.2239    7.2915   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000   0.0000


     Notwithstanding the foregoing, in no event will the number of Additional
Shares of Common Stock by which the Conversion Rate is adjusted pursuant to this
Section 10.20 exceed 16.2239 shares per $1,000 principal amount of Securities,
subject to adjustment in the same manner as the Conversion Rate pursuant to
Sections 10.06 through 10.11.

                                   ARTICLE 11

                               PAYMENT OF INTEREST

     Section 11.01 Payment of Interest. (a) The Company shall pay interest on
the Securities at a rate of 11.75% per annum, payable semi-annually in arrears
on September 1 and March 1 of each year (each, an "INTEREST PAYMENT DATE"),
commencing on March 1, 2008. For so long as the Securities are held in
book-entry only form, interest (including Liquidated Damages and Additional
Amounts, if any) on a Security shall be paid to the Holder of such Security at
the close of business on the Business Day before the Interest Payment Date
(each, a "RECORD DATE"). In the event that the Securities do not remain in
book-entry only form or are not in the form of a Global Certificate, the Company
will have the right to select Record Dates, which will be at least one Business
Day before an Interest Payment Date. Interest shall be computed on the basis of
a 360-day year comprised of twelve 30-day months and will accrue from August 29,
2007 or from the most recent date to which interest has been paid or duly
provided for. In the event of the maturity, conversion, redemption or repurchase
of a Security by the Company at the option of the Holder, interest shall cease
to accrue on such Security.

          (b) If any Interest Payment Date, Stated Maturity, Redemption Date or
     Repurchase Date (including upon the occurrence of a Fundamental Change)
     falls on a day that is not a Business Day, then the required payment will
     be made on the next succeeding Business Day with the same force and effect
     as if made on the date that the payment was due, and no additional interest
     will accrue on that payment for the period from and after the Interest
     Payment Date, Stated Maturity, Redemption Date or Repurchase Date, as the
     case may be, to such next succeeding Business Day.


                                       61



          (c) Upon conversion of a Security, (i) a Holder shall not receive any
     cash payment of interest (unless such conversion occurs between a Record
     Date and the Interest Payment Date to which it relates) and (ii) except as
     set forth in clause (d) below, the Company's delivery to a Holder of the
     full amount of cash and shares, if any, of Common Stock into which the
     Security is convertible together with any cash payment of factional shares
     shall be deemed to satisfy its obligation with respect to the principal
     amount of such Security, and any accrued but unpaid interest (including
     Liquidated Damages and Additional Amounts, if any). As a result, accrued
     but unpaid interest (including Liquidated Damages and Additional Amounts,
     if any) up to but excluding the Conversion Date will be deemed to be paid
     in full rather than cancelled, extinguished or forfeited.

          (d) If Securities are surrendered for conversion by a Holder after the
     close of business on any Record Date but prior to the opening of business
     on the Interest Payment Date to which such Record Date relates, Holders of
     such Securities at the close of business on the Record Date will receive an
     amount equal to the interest (including Liquidated Damages and Additional
     Amounts, if any) payable on the Securities on the corresponding Interest
     Payment Date notwithstanding the conversion. Such Securities, upon
     surrender for conversion, must be accompanied by funds equal to the amount
     of interest (including Liquidated Damages and Additional Amounts, if any)
     payable on the Securities so converted on the corresponding Interest
     Payment Date. However, no such payment shall be made:

          (i)   in connection with any conversion following the regular Record
                Date immediately preceding the Stated Maturity;

          (ii)  if the Company has specified a Redemption Date that is after a
                Record Date and on or prior to the corresponding Interest
                Payment Date;

          (iii) if the Company has specified a Fundamental Change Repurchase
                Date that is after a Record Date and on or prior to the
                corresponding Interest Payment Date;

          (iv)  if a scheduled Repurchase Date occurs after a Record Date and on
                or prior to the corresponding Interest Payment Date; or

          (v)   to the extent of any overdue interest (including overdue
                Liquidated Damages and Additional Amounts, if any) if overdue
                interest, Liquidated Damages or Additional Amounts exist at the
                time of conversion with respect to such Security.

     In addition, notwithstanding the forgoing, the Company shall pay, on the
Stated Maturity, accrued and unpaid interest to but excluding the Stated
Maturity on any Securities surrendered for conversion on or after August 1, 2027
to the converting Holder.

     Section 11.02 Additional Amounts. Notwithstanding the provisions
described in Section 6.02, the sole remedy under this Indenture and any Security
for an Event of Default relating to the failure to comply with the Company's
reporting obligations to the Trustee and the SEC, as set


                                       62



forth in this Indenture, and for any failure to comply with the requirements of
Section 314(a)(1) of the Trust Indenture Act, shall, for the 180 days after the
occurrence of such an Event of Default, consist exclusively of the right to
receive additional interest on the Securities at an annual rate equal to 0.25%
of the aggregate principal amount of the Securities (the "ADDITIONAL AMOUNTS").
Any such Additional Amounts shall be payable in the same manner and on the same
dates as the stated interest payable on the Securities. The Additional Amounts
shall accrue on all outstanding Securities from and including the date on which
such an Event of Default first occurs to, but not including, the 181st day
thereafter (or, if applicable, the earlier date on which such Event of Default
is cured or waived). If such Event of Default is continuing on the 181st day
after such Event of Default first occurs, the Securities shall be subject to
acceleration as provided in Section 6.02. The provisions of this Section 11.02
shall not affect the rights of Holders of Securities in the event of the
occurrence of any other Events of Default.

     Section 11.03 Defaulted Interest. Any installment of interest that is
payable, but is not punctually paid or duly provided for on any Interest Payment
Date ("DEFAULTED INTEREST") shall forthwith cease to be payable to the Holders
in whose names the Securities were registered on the Record Date applicable to
such installment of interest. The Company shall make payment of any Defaulted
Interest (including any interest on such Defaulted Interest) to the Holders in
whose names the Securities are registered at the close of business on a special
record date for the payment of such Defaulted Interest (a "SPECIAL RECORD
DATE"), which shall be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Holders entitled to such Defaulted Interest as provided in this
Section 11.03. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest, which shall be not more than 15 calendar
days and not less than ten calendar days prior to the date of the proposed
payment and not less than ten calendar days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be sent, first-class mail, postage
prepaid, to each Holder at such Holder's address as it appears in the
registration books of the Registrar, not less than ten calendar days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Holders in whose names the
Securities are registered at the close of business on such Special Record Date.

     Section 11.04 Interest Rights Preserved. Subject to the foregoing
provisions of this Article 11 and Section 2.06, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.


                                       63



                                   ARTICLE 12

                                  MISCELLANEOUS

     Section 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

     Section 12.02 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in Person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:

               if to the Company:

               Anthracite Capital, Inc.
               40 East 52nd Street
               New York, New York 10022
               Facsimile: 212-409-4000
               Attention: Richard Shea

               if to the Trustee:

               Wells Fargo Bank, National Association
               213 Court Street, Suite 703
               Middletown, Connecticut 06457
               Attention: Corporate Trust Services
               Telecopier No.: 860-704-6219

     The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.

     Any notice or communication given to a Holder shall be mailed to the
Holder, by first-class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be deemed
sufficiently given if so mailed within the time prescribed. Notices will be
deemed to have been given on the date of mailing.

     Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not received by the addressee.

     If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.

     Section 12.03 Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights


                                       64



under this Indenture or the Securities. The Company, the Trustee, the Registrar,
the Paying Agent, the Conversion Agent and anyone else shall have the protection
of TIA Section 312(c).

     Section 12.04 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

          (a) an Officers' Certificate stating that, in the opinion of the
     signers, all conditions precedent, if any, provided for in this Indenture
     relating to the proposed action have been complied with; and

          (b) if required by the Trustee, an Opinion of Counsel stating that, in
     the opinion of such counsel, all such conditions precedent (to the extent
     of legal conclusions) have been complied with.

     Section 12.05 Statements Required in Certificate or Opinion. Each Officers'
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:

          (a) a statement that each Person making such Officers' Certificate or
     Opinion of Counsel has read such covenant or condition;

          (b) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     Officers' Certificate or Opinion of Counsel are based;

          (c) a statement that, in the opinion of each such Person, he has made
     such examination or investigation as is necessary to enable such Person to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (d) a statement that, in the opinion of such Person, such covenant or
     condition has been complied with.

     Section 12.06 Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

     Section 12.07 Rules by Trustee, Paying Agent, Conversion Agent, and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, the Conversion Agent and the Paying Agent may make
reasonable rules for their functions.

     Section 12.08 Legal Holidays. A "LEGAL HOLIDAY" is a Saturday, a Sunday or
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest (or Additional
Amounts, if applicable) shall accrue for the intervening period. If a Record
Date is a Legal Holiday, the Record Date shall not be affected.


                                       65



     Section 12.09 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

     Section 12.10 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.

     Section 12.11 Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.

     Section 12.12 Multiple Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

     Section 12.13 Table of Contents; Headings. The table of contents and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.


                                       66



     IN WITNESS WHEREOF, ANTHRACITE CAPITAL, INC. has caused this Indenture to
be duly executed as a deed the day and year first before written.

                                        ANTHRACITE CAPITAL, INC.


                                        By: /s/ Richard M. Shea
                                            ------------------------------------
                                            Name:  Richard M. Shea
                                            Title: President and Chief Operating
                                                   Officer

     IN WITNESS WHEREOF, the undersigned, being duly authorized, has executed
this Indenture as of the date first above written.

                                        WELLS FARGO BANK, N.A., as Trustee


                                        By: /s/ Joseph P O'Donnell
                                            ------------------------------------
                                            Name:  Joseph P O'Donnell
                                            Title: Vice President



                                                                       EXHIBIT A

                                 [FACE OF NOTE]

THIS SECURITY AND THE SHARES OF COMMON STOCK ("COMMON STOCK") OF ANTHRACITE
CAPITAL, INC. (THE "COMPANY") ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER SECURITIES LAWS. NONE OF THIS SECURITY, THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS TWO YEARS AFTER THE ORIGINAL ISSUE DATE HEREOF ONLY
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE RIGHT OF THE COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM.


                                       A-1



                                                               CUSIP:

No.:

                     11.75% CONVERTIBLE SENIOR NOTE DUE 2027

     Anthracite Capital, Inc., a Maryland corporation, promises to pay to
__________________, or its registered assigns, the principal sum of __________ (
Dollars), or such lesser amount as is indicated in the records of the Trustee
and the Depositary, on September 1, 2027 and to pay interest thereon from August
29, 2007, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on September 1 and March 1 of each
year, commencing March 1, 2008, at the rate of 11.75% per annum, until the
principal hereof is paid or made available for payment. The interest so payable
on any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Note (or one or more predecessor Notes) is registered
at 5:00 p.m., New York City time, on the Record Date with respect to such
Interest Payment Date, which shall be the last Business Day prior to the
applicable Interest Payment Date.

     Interest on the Notes will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. If a payment date is not a Business Day,
payment will be made on the next succeeding Business Day with the same force and
effect as if made on the date the payment was due, and no additional interest
will accrue in respect of such payment by virtue of the payment being made on
such later date.

     Reference is made to the further provisions of this Note set forth on the
attached "Additional Terms of the Notes", which further provisions shall for all
purposes have the same effect as though fully set forth at this place.

     This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee under the Indenture.


                                       A-2



     IN WITNESS WHEREOF, Anthracite Capital, Inc. has caused this instrument to
be duly executed.

                                        ANTHRACITE CAPITAL, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

Dated:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

WELLS FARGO BANK, N.A

   as Trustee, certifies that this is one
   of the Notes referred to in the Indenture.


By:
   ----------------------------------
   Authorized Signatory


                                       A-3



                          ADDITIONAL TERMS OF THE NOTES

                     11.75% CONVERTIBLE SENIOR NOTE DUE 2027

     ANTHRACITE CAPITAL, INC., a Maryland corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), issued this Note under an Indenture, dated as of August
29, 2007 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and Wells Fargo,
N.A., as Trustee, to which reference is hereby made for a statement of the
respective rights, obligations, duties and immunities thereunder of the Trustee,
the Company and the Holders and of the terms upon which the Notes are, and are
to be, authorized and delivered. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of those terms. This Note is one of the Securities referred to
in the Indenture initially issued in an aggregate principal amount of
$______________.

1.   Further Provisions Relating to Interest

          (a) Liquidated Damages. The Holder of this Note shall be entitled to
     receive Liquidated Damages as and to the extent provided in the Indenture
     and that certain Registration Rights Agreement.

          (b) Additional Amounts. The Holder of this Note shall be entitled to
     receive Additional Amounts as and to the extent provided in the Indenture.

2.   Method of Payment

     The Company will pay interest on the Notes to the Persons who are
registered Holders of Notes at 5:00 p.m., New York City time, on the Record Date
with respect to the applicable Interest Payment Date even if Notes are canceled
after the Record Date and on or before the Interest Payment Date, except as
otherwise provided in the Indenture. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company will pay principal and interest
(including Liquidated Damages and Additional Amounts, if any) in money of the
United States of America that at the time of payment is legal tender for payment
of public and private debts.

     The Company shall make payments in respect of the Notes by check mailed to
a Holder's registered address or, with respect to Global Notes, by wire
transfer.

3.   Paying Agent and Registrar

     Initially, Wells Fargo Bank, N.A, (the "Trustee") will act as Paying Agent,
Registrar and Conversion Agent. The Company may appoint and change any Paying
Agent, Registrar or co-


                                       A-4



registrar or Conversion Agent without notice. The Company or any of its
domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar or co-registrar.

4.   Ranking

     The Notes are senior unsecured obligations of the Company and rank equal in
right of payment to all of the Company's existing and future unsecured and
unsubordinated indebtedness.

5.   Redemption

     The Notes will not be subject to redemption prior to September 1, 2012
except as set forth in Section 3.01(b) of the Indenture. On or after September
1, 2012, the Company shall have the right to redeem the Notes in whole or in
part, at any time or from time to time for a cash Redemption Price, as described
in the Indenture, plus any accrued and unpaid interest (including Liquidated
Damages and Additional Amounts, if any) thereon up to, but not including, the
Redemption Date.

     If the Redemption Date is on a date that is after a Record Date and on or
prior to the corresponding Interest Payment Date, the Company shall pay the
related interest (including Liquidated Damages and Additional Amounts, if any)
to the person to whom principal is payable.

6.   Repurchase at the Option of the Holder

     Pursuant to Section 3.07 of the Indenture, the Notes, in whole or in part,
shall be repurchased by the Company at the option of the Holder on September 1,
2012, September 1, 2017 and September 1, 2022 or the next Business Day following
such dates to the extent any such date is not a Business Day in U.S. legal
tender at 100% of the principal amount of Notes to be repurchased plus accrued
and unpaid interest, if any (including Liquidated Damages and Additional
Amounts, if any), thereon to, but excluding the Repurchase Date; provided that
if such Repurchase Date falls after a Record Date and on or prior the
corresponding Interest Payment Date, the Company shall pay the interest
(including Liquidated Damages and Additional Amounts, if any) thereon to the
person to whom principal is payable. No Notes may be repurchased by the Company
at the option of Holders if there has occurred and is continuing an Event of
Default with respect to the Notes, other than a default in the payment of the
Repurchase Price with respect to the Notes.

     Any Holder delivering to the Paying Agent a Repurchase Notice shall have
the right to withdraw such Repurchase Notice at any time prior to the close of
business on the second Business Day immediately preceding the Repurchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance the
provisions of the Indenture. If the Repurchase Notice is withdrawn during such
period, the Company will not be obligated to repurchase the related Notes.

7.   Repurchase at the Option of Holders Upon a Fundamental Change

     Pursuant to Section 3.08 of the Indenture, if a Fundamental Change occurs
prior to September 1, 2012, the Notes shall be repurchased by the Company, in
whole or in part, at the


                                       A-5



option of the Holder thereof, in cash, on a Fundamental Change Repurchase Date,
specified by the Company, that is not less than 20 Business Days nor more than
30 Business Days after the date of the Fundamental Change Notice delivered by
the Company, at a repurchase price equal to 100% of the principal amount plus,
accrued and unpaid interest, if any (including Liquidated Damages and Additional
Amounts, if any) to, but excluding, the Fundamental Change Repurchase Date;
provided that if such Fundamental Change Repurchase Date falls after a Record
Date and on or prior the corresponding Interest Payment Date, the Company shall
pay the interest (including Liquidated Damages and Additional Amounts, if any)
thereon to the person to whom principal is payable. No Notes may be repurchased
by the Company at the option of Holders upon a Fundamental Change if there has
occurred and is continuing an Event of Default with respect to the Notes, other
than a default in the payment of the Fundamental Change Repurchase Price with
respect to the Notes.

     If the Repurchase Notice is withdrawn during such period, the Company will
not be obligated to repurchase the related Notes.

8.   Conversion

     Subject to and upon compliance with the provisions of the Indenture, this
Note or any part hereof may be converted by a Holder into cash and shares of
Common Stock, if any, at any time prior to the close of business on the Business
Day immediately preceding the Stated Maturity; provided, however, that this Note
may be converted only during the periods and under the conditions specified in
clauses (i) through (vi) of Section 10.01(a) of the Indenture. The Settlement
Amount deliverable upon any such conversion shall be as described in Section
10.02 of the Indenture.

9.   Denominations, Transfer, Exchange

     The Notes are issuable in registered form without coupons in denominations
of $1,000 and any integral multiple thereof A Holder of this Note may transfer
or exchange Notes in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder of this Note, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture.

10.  Persons Deemed Owners

     The registered Holder of this Note may be treated as the owner of it for
all purposes.

11.  Unclaimed Money

     Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.

12.  Amendment, Waiver


                                      A-6



     Subject to certain exceptions set forth in the Indenture, (I) the Indenture
or the Notes may be amended without prior notice to any Holder but with the
written consent or affirmative vote of the Holders of at least a majority in
aggregate principal amount of the outstanding Notes and (ii) any Default or
Event of Default may be waived by Notice to the Trustee by the Holders of at
least a majority in aggregate principal amount of the outstanding Notes. In
certain circumstances set forth in the Indenture, the Company and the Trustee
may amend or supplement the Indenture or the Notes without the consent of any
Holder.

13.  Defaults and Remedies

     Subject to Section 11.02 of the Indenture, if an Event of Default (other
than an Event of Default specified in Section 6.01(viii) or 6.01(ix) with
respect to the Company) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the Notes then outstanding may
declare the principal of and accrued but unpaid interest, if any (including
Liquidated Damages and Additional Amounts, if any) on all the Notes to be due
and payable, except as provided in the Indenture. If an Event of Default
specified in Section 6.01(viii) or 6.01(ix) of the Indenture occurs with respect
to the Company, the principal of and interest, if any (including Liquidated
Damages and Additional Amounts, if any) on, all the Notes then outstanding will,
automatically and without any action by the Trustee or any Holder, become and be
immediately due and payable. Under certain circumstances, the Holders of a
majority in aggregate principal amount of the outstanding Notes may rescind any
such declaration with respect to the Notes and its consequences. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
impair, as among the Company and the Holder of the Notes, the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest (including Liquidated Damages and Additional Amounts, if any) on this
Note at the place, at the respective times, at the rate and in the coin or
currency herein and in the Indenture prescribed or to convert the Note as
provided in the Indenture.

14.  Trustee Dealings with the Company

     Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.

15.  Indenture and Notes Solely Corporate Obligations

     No recourse for the payment of the principal of or interest on any Notes or
for any claim based upon any Notes or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or in any supplemental indenture or in any Notes or because of the
creation of any indebtedness represented thereby shall be had against any
incorporator, stockholder, member, manager, employee, agent, officer, director
or subsidiary, as such, past, present or future, of the Company or any of the
Company's subsidiaries or of any successor thereto, either directly or through
the Company or any of the Company's subsidiaries or any successor thereto,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of the Indenture and the
issue of the Notes.


                                      A-7



16.  Authentication

     This Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the other side of this Note.

17.  Abbreviations

     Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with rights of Minors Act).

18.  GOVERNING LAW

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

19.  CUSIP and ISIN Numbers

     Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP and ISIN
numbers to be printed on the Notes and has directed the Trustee to use CUSIP and
ISIN numbers in all notices issued to Holders of this Note as a convenience to
such Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any such notice and reliance
may be placed only on the other identification numbers placed thereon.

     THE COMPANY WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE.


                                      A-8



                                CONVERSION NOTICE

TO:  ANTHRACITE CAPITAL, INC. and WELLS FARGO BANK, N.A, as Conversion Agent

     The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note, and directs that the check in payment for
cash and/or the shares of Common Stock, as the case may be, issuable and
deliverable upon such conversion, and any cash deliverable upon conversion in
lieu of fractional shares and any Notes representing any unconverted principal
amount hereof, be issued and delivered to the registered Holder hereof unless a
different name has been indicated below. Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Indenture. If
shares or any portion of this Note not converted are to be issued in the name of
a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all taxes or duties payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Note.

Dated: ________________


                                        ----------------------------------------


                                        ----------------------------------------
                                        Signature(s)

                                        Signature(s) must be guaranteed by an
                                        "eligible guarantor institution" meeting
                                        the requirements of the Registrar, which
                                        requirements include membership or
                                        participation in the Security Transfer
                                        Agent Medallion Program ("STAMP") or
                                        such other "signature guarantee program"
                                        as may be determined by the Registrar in
                                        addition to, or in substitution for,
                                        STAMP, all in accordance with the
                                        Securities Exchange Act of 1934, as
                                        amended.


                                        ----------------------------------------
                                        Signature Guarantee


                                      A-9



     Fill in the registration of shares of Common Stock, if any, if to be
issued, and Notes if to be delivered, and the person to whom cash, if any, and
payment in cash for fractional shares is to be made, if to be made, other than
to and in the name of the registered Holder:

Please print name and address


(Name)
                                    ____________________________________________

(Street Address)
                                    ____________________________________________

(City, State and Zip Code)
                                    ____________________________________________

                                    ____________________________________________

Principal amount to be converted
(if less than all):                 $
                                    ____________________________________________

Social Security or Other Taxpayer
Identification Number:
                                    ____________________________________________

NOTICE: The signature on this Conversion Notice must correspond with the name as
written upon the face of the Notes in every particular without alteration or
enlargement or any change whatever.


                                      A-10



                                REPURCHASE NOTICE

TO:  ANTHRACITE CAPITAL, INC. and WELLS FARGO BANK, N.A, as Conversion Agent

     The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Anthracite Capital, Inc. (the "Company")
regarding the right of Holders to elect to require the Company to repurchase the
Notes and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued and unpaid interest, if any, (including
Liquidated Damages and Additional Amounts, if any) to, but excluding, the
Repurchase Date to the registered Holder hereof. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in the Indenture.
The Notes shall be repurchased by the Company as of the Repurchase Date pursuant
to the terms and conditions specified in the Indenture.

Dated: ________________

                                            ------------------------------------


                                            ------------------------------------
                                            Signature(s)

NOTICE: The above signatures of the Holder(s) hereof must correspond with the
name as written upon the face of the Notes in every particular without
alteration or enlargement or any change whatever.

Notes Certificate Number (if applicable): ______

Principal amount to be repurchased

(if less than all, must be $1,000 or whole multiples thereof): ______

Social Security or Other Taxpayer Identification Number: ______


                                      A-11



                      FUNDAMENTAL CHANGE REPURCHASE NOTICE

TO:  ANTHRACITE CAPITAL, INC. and WELLS FARGO BANK, N.A, as Conversion Agent

     The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Anthracite Capital, Inc. (the "Company")
regarding the right of Holders to elect to require the Company to repurchase the
Notes and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued and unpaid interest, if any, (including
Liquidated Damages and Additional Amounts, if any) to, but excluding, the
Fundamental Change Repurchase Date to the registered Holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture. The Notes shall be repurchased by the Company as of the
Fundamental Change Repurchase Date pursuant to the terms and conditions
specified in the Indenture.

Dated: ________________

                                            ------------------------------------


                                            ------------------------------------
                                            Signature(s)

NOTICE: The above signatures of the Holder(s) hereof must correspond with the
name as written upon the face of the Notes in every particular without
alteration or enlargement or any change whatever.

Notes Certificate Number (if applicable): _____

Principal amount to be repurchased
(if less than all, must be $1,000 or whole multiples thereof): _____

Social Security or Other Taxpayer Identification Number: _____


                                      A-12



                                   ASSIGNMENT

     For value received _________________ hereby sell(s) assign(s) and
transfer(s) unto _____________ (Please insert social security or other Taxpayer
Identification Number of assignee) the within Notes, and hereby irrevocably
constitutes and appoints _________________ attorney to transfer said Notes on
the books of the Company, with full power of substitution in the premises.

     In connection with any transfer of the Notes prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant to
a registration statement that has become effective under the Securities Act),
the undersigned confirms that such Notes are being transferred:

     [_]  To Anthracite Capital, Inc. or a subsidiary thereof; or

     [_]  To a "qualified institutional buyer" in compliance with Rule 144A
          under the Securities Act of 1933, as amended; or

     [_]  Pursuant to and in compliance with Rule 144 under the Securities Act
          of 1933, as amended; or

     [_]  Pursuant to a Registration Statement which has become effective under
          the Securities Act of 1933, as amended, and which continues to be
          effective at the time of transfer.

     Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other than
the registered Holder thereof.

Dated: ________________

                                            ------------------------------------


                                            ------------------------------------
                                            Signature(s)

                                            Signature(s) must be guaranteed by
                                            an "eligible guarantor institution"
                                            meeting the requirements of the
                                            Registrar, which requirements
                                            include membership or participation
                                            in the Security Transfer Agent
                                            Medallion Program ("STAMP") or such
                                            other "signature guarantee program"
                                            as may be determined by the
                                            Registrar in addition to, or in
                                            substitution for, STAMP, all in
                                            accordance with the Securities
                                            Exchange Act of 1934, as amended.


                                            ------------------------------------
                                            Signature Guarantee


                                      A-13



NOTICE: The signature on this Assignment must correspond with the name as
written upon the face of the Notes in every particular without alteration or
enlargement or any change whatever.


                                      A-14

EX-10.1

BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.

                     $60,000,000 AGGREGATE PRINCIPAL AMOUNT

                            ANTHRACITE CAPITAL, INC.

                         11.75% CONVERTIBLE SENIOR NOTES

                                    DUE 2027

                      RESALE REGISTRATION RIGHTS AGREEMENT

                              DATED AUGUST 29, 2007



     RESALE REGISTRATION RIGHTS AGREEMENT, dated as of August 29, 2007, between
Anthracite Capital, Inc., a Maryland corporation (together with any successor
entity, herein referred to as the "COMPANY"), and Banc of America Securities LLC
and Deutsche Bank Securities Inc., as the initial purchasers (the "INITIAL
PURCHASERS") under the Purchase Agreement (as defined below).

     Pursuant to the Purchase Agreement, dated as of August 23, 2007, among the
Company, BlackRock Financial Management, Inc. (solely with respect to Section
1(b)) and the Initial Purchasers (the "PURCHASE AGREEMENT"), relating to the
initial placement (the "INITIAL PLACEMENT") of the Notes (as defined below), the
Initial Purchasers have agreed to purchase from the Company $60,000,000
($80,000,000 if the Initial Purchasers exercise their 13-day option to purchase
additional Notes in full) in aggregate principal amount of 11.75% Convertible
Senior Notes due 2027 (the "NOTES"). The Notes will be convertible, subject to
the terms thereof, into shares of common stock, par value $0.001 per share, of
the Company (the "COMMON STOCK"). To induce the Initial Purchasers to purchase
the Notes, the Company has agreed to provide the registration rights set forth
in this Agreement pursuant to Section 5(g) of the Purchase Agreement.

     The parties hereby agree as follows:

     1. Definitions. Capitalized terms used in this Agreement without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized terms shall have the following
meanings:

     "AFFILIATE" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "AGREEMENT": This Resale Registration Rights Agreement.

     "AMENDMENT EFFECTIVENESS DEADLINE DATE": has the meaning set forth in
Section 2(f) hereof.

     "BLUE SKY APPLICATION": has the meaning set forth in Section 6(a)(i)
hereof.

     "BUSINESS DAY": has the meaning set forth in the Indenture.

     "CLOSING DATE": The date of the first issuance of the Notes.

     "COMMISSION": U.S. Securities and Exchange Commission.



     "COMMON STOCK": has the meaning set forth in the preamble hereto.

     "COMPANY": has the meaning set forth in the preamble hereto.

     "EFFECTIVENESS DATE": has the meaning set forth in Section 2(a)(ii) hereof.

     "EFFECTIVENESS PERIOD": has the meaning set forth in Section 2(a)(iii)
hereof.

     "EFFECTIVENESS TARGET DATE": has the meaning set forth in Section 2(a)(ii)
hereof.

     "EXCHANGE ACT": Securities Exchange Act of 1934, as amended.

     "FINRA": Financial Industry Regulatory Authority, Inc. (successor to the
National Association of Securities Dealers, Inc.).

     "FREE WRITING PROSPECTUS": A free writing prospectus, as defined in Rule
405 under the Securities Act.

     "HOLDER": A Person who owns, beneficially or otherwise, Transfer Restricted
Securities.

     "INDEMNIFIED HOLDER": has the meaning set forth in Section 6(a) hereof.

     "INDENTURE": The Indenture, dated as of August 29, 2007 between the Company
and Wells Fargo Bank, N.A., as trustee (the "TRUSTEE"), pursuant to which the
Securities are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.

     "INITIAL PLACEMENT": has the meaning set forth in the preamble hereto.

     "INITIAL PURCHASERS": has the meaning set forth in the preamble hereto.

     "ISSUER FREE WRITING PROSPECTUS": An issuer free writing prospectus, as
defined in Rule 433 under the Securities Act.

     "LIQUIDATED DAMAGES": has the meaning set forth in Section 3(a) hereof.

     "LIQUIDATED DAMAGES PAYMENT DATE": Each September 1 and March 1, if
applicable.

     "LOSSES": has the meaning set forth in Section 6(a) hereof.

     "MAJORITY OF HOLDERS": Holders holding over 50% of the aggregate principal
amount of Notes outstanding; provided that, for the purpose of this Agreement, a
holder of shares of Common Stock which constitute Transfer Restricted Securities
shall be deemed to hold an aggregate principal amount of the


                                        2



Notes (in addition to the principal amount of the Notes held by such holder)
equal to the quotient of (x) the number of such shares of Common Stock held by
such holder and (y) the conversion rate in effect at the time of their issuance
upon conversion of such holder's Notes as determined in accordance with the
Indenture.

     "MANAGING UNDERWRITER": The investment banker or investment bankers and
manager or managers that administer an underwritten offering, if any, conducted
pursuant to Section 8 hereof.

     "NOTES": has the meaning set forth in the preamble hereto.

     "NOTICE AND QUESTIONNAIRE" means a written notice executed by the
respective Holder and delivered to the Company containing substantially the
information called for by the Selling Securityholder Notice and Questionnaire
attached as Appendix A to the Offering Memorandum of the Company relating to the
Notes.

     "NOTICE HOLDER": On any date, any Holder of Transfer Restricted Securities
that has properly delivered a fully completed Notice and Questionnaire to the
Company on or prior to such date.

     "PERMITTED FREE WRITING PROSPECTUS": has the meaning set forth in Section
9(a) hereof.

     "PERSON": An individual, partnership, corporation, company, unincorporated
organization, trust, joint venture or a government or agency or political
subdivision thereof.

     "PURCHASE AGREEMENT": has the meaning set forth in the preamble hereto.

     "PROSPECTUS": The prospectus included in a Shelf Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.

     "RECORD HOLDER": With respect to any Liquidated Damages Payment Date, each
Person who is a registered holder of the Notes at the close of business on the
Business Day before the relevant Liquidated Damages Payment Date.

     "REGISTRATION DEFAULT": has the meaning set forth in Section 3(a) hereof.

     "REPRESENTATIVES": has the meaning set forth in the preamble hereto.

     "SECURITIES ACT": Securities Act of 1933, as amended.


                                        3



     "SHELF FILING DEADLINE": has the meaning set forth in Section 2(a)(i)
hereof.

     "SHELF REGISTRATION STATEMENT": has the meaning set forth in Section
2(a)(i) hereof.

     "SUSPENSION NOTICE": has the meaning set forth in Section 4(c) hereof.

     "SUSPENSION PERIOD": has the meaning set forth in Section 4(b)(ii) hereof.

     "TIA": Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder, in each case, as in effect on the date
the Indenture is qualified under the TIA.

     "TRANSFER RESTRICTED SECURITIES": Each Note and each share of Common Stock
issued upon conversion of Notes until the earliest of:

               (i) the date on which such Note or such share of Common Stock
          issued upon conversion has been effectively registered under the
          Securities Act and disposed of in accordance with the Shelf
          Registration Statement;

               (ii) the date on which such Note or such share of Common Stock
          issued upon conversion is transferred in compliance with Rule 144 (or
          any other similar provision then in force) under the Securities Act or
          transferable pursuant to paragraph (k) of Rule 144 under the
          Securities Act (or any other similar provision then in force);

               (iii) the date on which such Note or such share of Common Stock
          issued upon conversion ceases to be outstanding (whether as a result
          of redemption, repurchase and cancellation, conversion or otherwise);
          or

               (iv) the date on which such Note or such share of Common Stock
          has otherwise been transferred and a new Note or share of Common Stock
          not subject to transfer restrictions under the Securities Act has been
          delivered by or on behalf of the Company in accordance with Section
          2.06 of the Indenture.

     "UNDERWRITER": Any underwriter of Transfer Restricted Securities in
connection with an offering thereof under the Shelf Registration Statement.

     "UNDERWRITTEN REGISTRATION": A registration in which Transfer Restricted
Securities of the Company are sold to an underwriter for reoffering to the
public.


                                        4



     Unless the context otherwise requires, the singular includes the plural,
and words in the plural include the singular.

     2. Shelf Registration.

          (a) The Company shall:

               (i) use its commercially reasonable efforts within 120 days after
          the Closing Date) (the "SHELF FILING DEADLINE"), cause to be filed, or
          otherwise designate an existing filing with the Commission as, a
          registration statement pursuant to Rule 415 under the Securities Act
          or any similar rule that may be adopted by the Commission (the "SHELF
          REGISTRATION STATEMENT"), which Shelf Registration Statement shall
          provide for the registration and resales, on a continuous or delayed
          basis, of all Transfer Restricted Securities subject to the terms and
          conditions hereof;

               (ii) use commercially reasonable efforts to cause the Shelf
          Registration Statement to become effective under the Securities Act,
          or otherwise make available for use by Holders a previously filed
          effective Shelf Registration Statement, not later than 210 days after
          the date hereof (the "EFFECTIVENESS TARGET DATE", and the date of such
          effectiveness or availability, the "EFFECTIVENESS DATE"); and

               (iii) use commercially reasonable efforts to keep the Shelf
          Registration Statement continuously effective, supplemented and
          amended as required by the Securities Act and by the provisions of
          Section 4(b) hereof to the extent necessary to ensure that (A) it is
          available for resales by the Holders of Transfer Restricted Securities
          entitled, subject to the terms and conditions hereof, to the benefit
          of this Agreement and (B) conforms with the requirements of this
          Agreement and the Securities Act and the rules and regulations of the
          Commission promulgated thereunder as announced from time to time, for
          a period (the "EFFECTIVENESS PERIOD") from the date the Shelf
          Registration Statement becomes effective until the date that the Notes
          and the shares of Common Stock issuable upon exchange thereof have
          ceased to be Transfer Restricted Securities.

          (b) Not less than 30 days prior to the Effectiveness Target Date, the
     Company shall mail the Notice and Questionnaire to the Holders. Each Holder
     that becomes a Notice Holder (and provides such additional information as
     the Company reasonably may request) no later than 15 days following the
     earlier of such Holder's receipt of notice from the Company or the date
     notice shall have been deemed given by the


                                        5



     Company pursuant to Section 9(e) hereof of the filing or designation of the
     Shelf Registration Statement shall be named as a selling securityholder in
     the initial Registration Statement made available to Holders under the
     Shelf Registration Statement.

          (c) If the Shelf Registration Statement ceases to be effective for any
     reason at any time during the Effectiveness Period (other than because all
     Transfer Restricted Securities registered thereunder shall have been resold
     pursuant thereto or shall have otherwise ceased to be Transfer Restricted
     Securities), the Company shall use commercially reasonable efforts to
     obtain the prompt withdrawal of any order suspending the effectiveness
     thereof or file or designate a subsequent Shelf Registration Statement
     covering all of the securities that as of the date of such filing or
     designation are Transfer Restricted Securities. If such a subsequent Shelf
     Registration Statement is filed or designated (and is not already
     effective), the Company shall use commercially reasonable efforts to cause
     the subsequent Shelf Registration Statement to become effective as promptly
     as is practicable after such filing or designation and to keep such
     subsequent Shelf Registration Statement continuously effective until the
     end of the Effectiveness Period.

          (d) The Company shall use commercially reasonable efforts to
     supplement and amend the Shelf Registration Statement if required by the
     rules, regulations or instructions applicable to the registration form used
     by the Company for such Shelf Registration Statement, if required by the
     Securities Act or as reasonably requested by the Initial Purchasers or by
     the Trustee on behalf of the Holders of the Transfer Restricted Securities
     covered by such Shelf Registration Statement.

          (e) The Company shall cause the Shelf Registration Statement and the
     related Prospectus and any amendment or supplement thereto, as of the
     effective date of the Shelf Registration Statement or such amendment or
     supplement, and any Issuer Free Writing Prospectus, as of the date thereof,
     (i) to comply in all material respects with the applicable requirements of
     the Securities Act, and (ii) not to contain any untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary in order to make the statements therein (in the case
     of the Prospectus and any Issuer Free Writing Prospectus, in light of the
     circumstances under which they were made) not misleading.

          (f) Each Holder agrees that if such Holder wishes to sell Transfer
     Restricted Securities pursuant to a Shelf Registration Statement and
     related Prospectus, it will do so only in accordance with the terms and
     conditions of this Agreement. Each Holder wishing to sell Transfer
     Restricted Securities pursuant to a Shelf Registration Statement and
     related Prospectus from and after the Effectiveness Date agrees to deliver


                                        6



     a Notice and Questionnaire to the Company at least 10 Business Days prior
     to any intended distribution of Transfer Restricted Securities under the
     Shelf Registration Statement. From and after the Effectiveness Date, the
     Company shall, as promptly as practicable after the date a Notice and
     Questionnaire is delivered to it, and in any event upon the later of (x) 10
     Business Days after such date or (y) 10 Business Days after the expiration
     of any Suspension Period in effect when the Notice and Questionnaire is
     delivered or put into effect within 10 Business Days of such delivery date:

               (i) if required by applicable law, file with the SEC a
          post-effective amendment to the Shelf Registration Statement or
          prepare and, if required by applicable law, file a supplement to the
          related Prospectus or a supplement or amendment to any document
          incorporated therein by reference or file any other required document
          so that the Holder delivering such Notice and Questionnaire is named
          as a selling securityholder in the Shelf Registration Statement and
          the related Prospectus in such a manner as to permit such Holder to
          deliver such Prospectus to purchasers of the Transfer Restricted
          Securities in accordance with applicable law and, if the Company shall
          file a post-effective amendment to the Shelf Registration Statement,
          use commercially reasonable efforts to cause such post-effective
          amendment to become effective under the Securities Act as promptly as
          is practicable, but in any event by the date (the "AMENDMENT
          EFFECTIVENESS DEADLINE DATE") that is 45 days after the date such
          post-effective amendment is required by this clause to be filed;

               (ii) provide such Holder a copy of each document filed pursuant
          to Section 2(f)(i); and

               (iii) notify such Holder as promptly as practicable after the
          effectiveness under the Securities Act of any post-effective amendment
          filed pursuant to Section 2(f)(i);

provided that if such Notice and Questionnaire is delivered during a Suspension
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Suspension Period in accordance with Section
4(b); provided, however, that if a post-effective amendment to the Shelf
Registration Statement is required, the Company will not be obligated to file
more than one such amendment for all such Holders during any fiscal quarter
unless the principal amount of the Transfer Restricted Securities to be included
in such amendment is more than $5 million. Notwithstanding the preceding
sentence, the Company will not be obligated to file more than two such
supplements to the related Prospectus during any fiscal quarter. Notwithstanding
anything contained herein to the contrary, (i) the Company shall be under no
obligation to name any Holder that is


                                        7



not a Notice Holder as a selling securityholder in any Registration Statement or
related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall be
extended by up to 10 Business Days from the Expiration of a Suspension Period
(and the Company shall incur no obligation to pay Liquidated Damages during such
extension) if such Suspension Period shall be in effect on the Amendment
Effectiveness Deadline Date.

     3. Liquidated Damages.

          (a) If:

               (i) the Shelf Registration Statement is not filed, or on file,
          with the Commission prior to or on the Shelf Filing Deadline;

               (ii) the Shelf Registration Statement has not become effective,
          or a previously effective Shelf Registration Statement has not been
          made available, prior to or on the Effectiveness Target Date;

               (iii) the Company has failed to perform its obligations set forth
          in Section 2(f) within the time periods required therein;

               (iv) any post-effective amendment to a Shelf Registration filed
          pursuant to Section 2(f)(i) has not become effective under the
          Securities Act on or prior to the Amendment Effectiveness Deadline
          Date;

               (v) except as provided in Section 4(b)(ii) hereof, the Shelf
          Registration Statement is filed and has become effective but, during
          the Effectiveness Period, shall thereafter cease to be effective or
          fail to be usable for its intended purpose for more than 10
          consecutive Business Days; or

               (vi) Suspension Periods (as defined below) exceed an aggregate of
          90 days in any 360-day period;

     (each such event referred to in foregoing clauses (i) through (vi), a
     "REGISTRATION DEFAULT"), the Company hereby agrees to pay interest
     ("LIQUIDATED DAMAGES") with respect to the Transfer Restricted Securities
     from and including the day following the Registration Default to but
     excluding the earlier of (1) the day on which the Registration Default has
     been cured and (2) the date the Shelf Registration Statement is no longer
     required to be kept effective, accruing at a rate:

                    (A) in respect of the Notes, to each holder of Notes, (x)
               with respect to the first 90-day period during which a
               Registration Default shall have occurred and be continuing,


                                        8



               equal to 0.25% per annum of the aggregate principal amount of the
               Notes, and (y) with respect to the period commencing on the 91st
               day following the day the Registration Default shall have
               occurred and be continuing, equal to 0.50% per annum of the
               aggregate principal amount of the Notes; provided that in no
               event shall Liquidated Damages accrue at a rate per year
               exceeding 0.50% of the aggregate principal amount of the Notes;
               and

                    (B) in respect of the Notes that are Transfer Restricted
               Securities submitted for conversion into Common Stock during the
               existence of a Registration Default with respect to the Common
               Stock, the holder will not be entitled to receive any Liquidated
               Damages with respect to such Common Stock but (x) will be
               entitled to a conversion rate adjustment in accordance with the
               terms of the Notes as set forth in the Indenture and (y) will
               receive from the Company on the settlement date with respect to
               such conversion, accrued and unpaid Liquidated Damages calculated
               in accordance with paragraph (A) to the Conversion Date (as
               defined in the Indenture); and

                    (C) in respect of Common Stock issued upon conversion of
               Notes, each holder of such Common Stock will not be entitled to
               any Liquidated Damages if the Registration Default with respect
               to such Common Stock occurs after the holder has converted the
               Notes into Common Stock.

          (b) All accrued Liquidated Damages shall be paid in arrears to Record
     Holders by the Company on each Liquidated Damages Payment Date. Upon the
     cure of all Registration Defaults relating to any particular Transfer
     Restricted Security, the accrual of applicable Liquidated Damages will
     cease.

     All obligations of the Company set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.

     4. Registration Procedures.

          (a) In connection with the Shelf Registration Statement, the Company
     shall comply with all the provisions of Section 4(b) hereof and shall use
     commercially reasonable efforts to effect such registration to


                                        9



     permit the sale of the Transfer Restricted Securities, and pursuant
     thereto, shall as expeditiously as possible prepare and file with the
     Commission a Shelf Registration Statement relating to the registration on
     any appropriate form under the Securities Act, or otherwise make available
     for use by Holders a previously filed Shelf Registration Statement.

          (b) In connection with the Shelf Registration Statement and any
     Prospectus required by this Agreement to permit the sale or resale of
     Transfer Restricted Securities, the Company shall:

               (i) Subject to any notice by the Company in accordance with this
          Section 4(b) of the existence of any fact or event of the kind
          described in Section 4(b)(iv)(D), use commercially reasonable efforts
          to keep the Shelf Registration Statement continuously effective during
          the Effectiveness Period; upon the occurrence of any event that would
          cause the Shelf Registration Statement or the Prospectus contained
          therein (A) to contain a material misstatement or omission or (B) not
          to be effective and usable for resale of Transfer Restricted
          Securities during the Effectiveness Period, the Company shall file
          promptly a post-effective amendment to the Shelf Registration
          Statement or an amendment or supplement to the related Prospectus or
          file any other required document, in the case of clause (A),
          correcting any such misstatement or omission, and, in the case of
          either clause (A) or (B), use commercially reasonable efforts to cause
          any such amendment to become effective and the Shelf Registration
          Statement and the related Prospectus to become usable for their
          intended purposes as soon as practicable thereafter;

               (ii) Notwithstanding Section 4(b)(i) hereof, the Company may
          suspend the effectiveness of the Shelf Registration Statement (each
          such period, a "SUSPENSION PERIOD"):

                    (x) if an event occurs and is continuing as a result of
          which the Shelf Registration Statement, the Prospectus, any amendment
          or supplement thereto, or any document incorporated by reference
          therein would, in the Company's judgment, contain an untrue statement
          of a material fact or omit to state a material fact required to be
          stated therein or necessary to make the statements therein not
          misleading; and

                    (y) if the Company determines in good faith that the
          disclosure of a material event at such time may be detrimental to the
          Company and its subsidiaries.


                                       10



          Upon the occurrence of any event described in clauses (x) and (y) of
          this Section 4(b)(ii), the Company shall give notice to the Holders
          that the availability of the Shelf Registration is suspended and, upon
          actual receipt of any such notice, each Holder agrees not to sell any
          Transfer Restricted Securities pursuant to the Shelf Registration
          until such Holder's receipt of copies of the supplemented or amended
          Prospectus provided for in Section 4(b) hereof. The Suspension Period
          shall not exceed an aggregate of 90 days in any 360-day period. The
          Company shall not be required to specify in the written notice to the
          Holders the nature of the event giving rise to the Suspension Period.

                    (iii) Prepare and file with the Commission such amendments
               and post-effective amendments to the Shelf Registration Statement
               as may be necessary to keep the Shelf Registration Statement
               effective during the Effectiveness Period; cause the Prospectus
               to be supplemented by any required Prospectus supplement, and as
               so supplemented to be filed pursuant to Rule 424 under the
               Securities Act, and to comply fully with the applicable
               provisions of Rule 424 under the Securities Act in a timely
               manner; and comply with the provisions of the Securities Act with
               respect to the disposition of all Transfer Restricted Securities
               covered by the Shelf Registration Statement during the applicable
               period in accordance with the intended method or methods of
               distribution by the sellers thereof set forth or to be set forth
               in the Shelf Registration Statement or supplement to the
               Prospectus;

                    (iv) Advise the selling Holders and any Initial Purchaser
               that has provided in writing to the Company a telephone or
               facsimile number and address for notices, promptly and, if
               requested by such selling Holders, to confirm such advice in
               writing (which notice pursuant to clauses (B) through (E) below
               shall be accompanied by an instruction to suspend the use of the
               Prospectus until the Company shall have remedied the basis for
               such suspension):

                         (A) when the Prospectus, any Prospectus supplement, any
                    post-effective amendment or any Issuer Free Writing
                    Prospectus has been filed, and, with respect to the Shelf
                    Registration Statement or any post-effective amendment
                    thereto, when the same has become effective,

                         (B) of any request by the Commission for amendments or
                    supplements to the Shelf Registration Statement, the
                    Prospectus or any Issuer Free Writing Prospectus or for
                    additional information relating thereto,


                                       11



                         (C) of the issuance by the Commission of any stop order
                    suspending the effectiveness of the Shelf Registration
                    Statement under the Securities Act or of any notice that
                    would prevent its use, or of the suspension by any state
                    securities commission of the qualification of the Transfer
                    Restricted Securities for offering or sale in any
                    jurisdiction, or the threatening or initiation of any
                    proceeding for any of the preceding purposes,

                         (D) of the existence of any fact or the happening of
                    any event, during the Effectiveness Period, that makes any
                    statement of a material fact made in the Shelf Registration
                    Statement, the Prospectus, any amendment or supplement
                    thereto, or any document incorporated by reference therein
                    untrue, or that requires the making of any additions to or
                    changes in the Shelf Registration Statement or the
                    Prospectus in order to make the statements therein (in the
                    case of the Prospectus, in the light of the circumstances
                    under which they were made) not misleading, or

                         (E) when any Issuer Free Writing Prospectus includes
                    information that may conflict with the information contained
                    in the Registration Statement.

                    (v) If at any time the Commission shall issue any stop order
               suspending the effectiveness of the Shelf Registration Statement
               or any notice that would prevent its use, or any state securities
               commission or other regulatory authority shall issue an order
               suspending the qualification or exemption from qualification of
               the Transfer Restricted Securities under state securities or Blue
               Sky laws, the Company shall use commercially reasonable efforts
               to obtain the withdrawal or lifting of such order at the earliest
               possible time, including, if necessary, by filing an amendment to
               the Shelf Registration Statement or a new Shelf Registration
               Statement and using commercially reasonable efforts to have such
               amendment or new Shelf Registration Statement declared effective,
               and will provide to each Holder who is named in the Shelf
               Registration Statement prompt notice of the withdrawal of any
               such order or of the filing or effectiveness of any such
               amendment or new registration statement;

                    (vi) Make available at reasonable times for inspection by
               one or more representatives of the selling Holders, designated in
               writing by a Majority of Holders whose Transfer Restricted
               Securities are included in the Shelf Registration Statement, and
               any attorney or accountant retained by such selling Holders and
               any


                                       12



               underwriter participating in any disposition pursuant to the
               Shelf Registration Statement, all financial and other records,
               pertinent corporate documents and properties of the Company as
               shall be reasonably necessary to enable them to conduct a
               reasonable investigation within the meaning of Section 11 of the
               Securities Act, and cause the Company's officers, directors,
               managers and employees to supply all information reasonably
               requested by any such representative or representatives of the
               selling Holders, attorney or accountant in connection therewith;

                    (vii) If requested by any selling Holders or the
               Representatives, promptly incorporate in the Shelf Registration
               Statement or Prospectus, pursuant to a supplement or
               post-effective amendment if necessary, such information as such
               selling Holders may reasonably request to have included therein,
               including, without limitation, information relating to the "Plan
               of Distribution" of the Transfer Restricted Securities;

                    (viii) Deliver to each selling Holder, without charge, as
               many copies of the Prospectus (including each preliminary
               Prospectus) and any amendment or supplement thereto, and any
               Issuer Free Writing Prospectus, as such Persons reasonably may
               request; subject to Section 4(b)(ii) and subject to any notice by
               the Company in accordance with this Section 4(b) of the existence
               of any fact or event of the kind described in Section 4(b)(iv)(B)
               through (E), the Company hereby consents to the use of such
               Prospectus and any such amendment or supplement thereto, and any
               such Issuer Free Writing Prospectus, by each of the selling
               Holders in connection with the offering and the sale of the
               Transfer Restricted Securities covered by the Prospectus or any
               amendment or supplement thereto;

                    (ix) Before any public offering of Transfer Restricted
               Securities, cooperate with the selling Holders and their counsel
               in connection with the registration and qualification of the
               Transfer Restricted Securities under the securities or Blue Sky
               laws of such jurisdictions in the United States as the selling
               Holders may reasonably request and use its commercially
               reasonable efforts to do any and all other acts or things
               necessary or advisable to enable the disposition in such
               jurisdictions of the Transfer Restricted Securities covered by
               the Shelf Registration Statement; provided, however, that the
               Company shall not be required (A) to register or qualify as a
               foreign corporation or a dealer of securities where it is not now
               so qualified or to take any action that would subject it to the
               service of process in any jurisdiction where it is not now so
               subject, other than service of process for suits arising out of
               the


                                       13



               Initial Placement or any offering pursuant to the Shelf
               Registration Statement, or (B) to subject itself to general or
               unlimited service of process or to taxation in any such
               jurisdiction if they are not now so subject;

                    (x) Unless any Transfer Restricted Securities shall be in
               book-entry form only, cooperate with the selling Holders to
               facilitate the timely preparation and delivery of certificates
               representing Transfer Restricted Securities to be sold and not
               bearing any restrictive legends (unless required by applicable
               securities laws); and enable such Transfer Restricted Securities
               to be in such denominations and registered in such names as the
               Holders may request at least two Business Days before any sale of
               Transfer Restricted Securities;

                    (xi) Use commercially reasonable efforts to cause the
               Transfer Restricted Securities covered by the Shelf Registration
               Statement to be registered with or approved by such other U.S.
               governmental agencies or authorities as may be necessary to
               enable the seller or sellers thereof to consummate the
               disposition of such Transfer Restricted Securities;

                    (xii) Subject to Section 4(b)(ii) hereof, if any fact or
               event contemplated by Section 4(b)(iv)(B) through (D) hereof
               shall exist or have occurred, use commercially reasonable efforts
               to prepare a supplement or post-effective amendment to the Shelf
               Registration Statement, related Prospectus (including by means of
               an Issuer Free Writing Prospectus), relevant Issuer Free Writing
               Prospectus or any document incorporated therein by reference or
               to file any other required document so that, as thereafter
               delivered to the purchasers of Transfer Restricted Securities,
               none of the Registration Statement, the Prospectus or any Issuer
               Free Writing Prospectus will contain an 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
               the case of the Prospectus and any such Issuer Free Writing
               Prospectus, in the light of the circumstances in which they are
               made) not misleading;

                    (xiii) Provide CUSIP numbers for all Transfer Restricted
               Securities not later than the effective date of the Shelf
               Registration Statement and provide the Trustee under the
               Indenture with certificates for the Notes that are in a form
               eligible for deposit with The Depository Trust Company;

                    (xiv) Cooperate and assist in any filings required to be
               made with the FINRA and in the performance of any due diligence


                                       14



               investigation by any underwriter that is required to be
               undertaken in accordance with the rules and regulations of the
               FINRA;

                    (xv) Otherwise use commercially reasonable efforts to comply
               with all applicable rules and regulations of the Commission and
               all reporting requirements under the rules and regulations of the
               Exchange Act;

                    (xvi) Make generally available to its security holders an
               earnings statement satisfying the provisions of Section 11(a) of
               the Securities Act as soon as practicable after the effective
               date of the Shelf Registration Statement and in any event no
               later than 40 days after the end of the 12-month period (or 75
               days, if such period is a fiscal year) beginning with the first
               month of the Company's first fiscal quarter commencing after the
               effective date of the Shelf Registration Statement;

                    (xvii) Cause the Indenture to be qualified under the TIA not
               later than the effective date of the Shelf Registration Statement
               required by this Agreement (or the time when the registration as
               to the Notes under the Shelf Registration Statement is required
               to become effective hereunder), and, in connection therewith,
               cooperate with the Trustee and the holders of Notes to effect
               such changes to the Indenture as may be required for such
               Indenture to be so qualified in accordance with the terms of the
               TIA; and execute and use commercially reasonable efforts to cause
               the Trustee thereunder to execute all documents that may be
               required to effect such changes and all other forms and documents
               required to be filed with the Commission to enable such Indenture
               to be so qualified in a timely manner. In the event that any such
               amendment or modification referred to in this Section 4(b)(xvi)
               involves the appointment of a new trustee under the Indenture,
               the Company shall appoint a new trustee thereunder pursuant to
               the applicable provisions of the Indenture;

                    (xviii) Cause all Common Stock covered by the Shelf
               Registration Statement to be listed or quoted, as the case may
               be, on the primary securities exchange or automated quotation
               system on which Common Stock is then listed or quoted;

                    (xix) Provide to each Holder upon written request each
               document filed with the Commission pursuant to the requirements
               of Section 13 and Section 15 of the Exchange Act after the
               effective date of the Shelf Registration Statement, unless such
               document is available through the Commission's EDGAR system;


                                       15



                    (xx) In connection with any underwritten offering conducted
               pursuant to Section 8 hereof, make such representations and
               warranties to the Holders of Securities registered thereunder and
               the underwriters, in form, substance and scope as are customarily
               made by issuers to underwriters in primary underwritten offerings
               and covering matters including, but not limited to, those set
               forth in the Purchase Agreement;

                    (xxi) In connection with any underwritten offering conducted
               pursuant to Section 8 hereof, obtain opinions of counsel to the
               Company and updates thereof (which counsel and opinions (in form,
               scope and substance) shall be reasonably satisfactory to the
               Managing Underwriters) addressed to each selling Holder and the
               underwriters, if any, covering such matters as are customarily
               covered in opinions requested in underwritten offerings and such
               other matters as may be reasonably requested by such Holders and
               underwriters;

                    (xxii) In connection with any underwritten offering
               conducted pursuant to Section 8, hereof, obtain "comfort" letters
               and updates thereof from the independent registered public
               accountants of the Company (and, if necessary, any other
               independent registered public accountants of any subsidiary of
               the Company or of any business acquired by the Company for which
               financial statements and financial data are, or are required to
               be, included in the Shelf Registration Statement), addressed to
               the underwriters, in customary form and covering matters of the
               type customarily covered in "comfort" letters in connection with
               primary underwritten offerings; and

                    (xxiii) In connection with any underwritten offering
               conducted pursuant to Section 8 hereof, deliver such documents
               and certificates as may be reasonably requested by the Majority
               Holders and the Managing Underwriters, including those to
               evidence compliance with Section 4(b)(iii) hereof and with any
               customary conditions contained in the Purchase Agreement or other
               agreement entered into by the Company.

                    (xxiv) In connection with underwritten offering conducted
               pursuant to Section 8 hereof, the Company shall, if requested,
               promptly include or incorporate in a Prospectus supplement or
               post-effective amendment to the Shelf Registration Statement such
               information as the Managing Underwriters reasonably agree should
               be included therein and to which the Company does not reasonably
               object and shall make all required filings of such Prospectus
               supplement or post-effective amendment as soon as


                                       16



          practicable after it is notified of the matters to be included or
          incorporated in such Prospectus supplement or post-effective
          amendment.

               (xxv) Use commercially reasonable efforts to take all other steps
          necessary to effect the registration of the Transfer Restricted
          Securities covered by the Shelf Registration Statement.

               (xxvi) Enter into customary agreements (including, if requested,
          an underwriting agreement in customary form) and take all other
          appropriate actions in order to expedite or facilitate the
          registration or the disposition of the Transfer Restricted Securities,
          and in connection therewith, if an underwriting agreement is entered
          into, cause the same to contain indemnification provisions and
          procedures no less favorable than those set forth in Section 6 hereof.

     The actions set forth in clauses (xx), (xxi), (xxii) and (xxiii) of this
Section 4(b) shall be performed at (A) the effectiveness of the Shelf
Registration Statement and each post-effective amendment thereto; and (b) each
closing under any underwriting or similar agreement as and to the extent
required thereunder.

          (c) Each Holder agrees by acquisition of a Transfer Restricted
     Security that, upon receipt of any notice (a "SUSPENSION NOTICE") from the
     Company of the existence of any fact of the kind described in Section
     4(b)(iv)(B) through (E) hereof, such Holder will forthwith discontinue
     disposition of Transfer Restricted Securities pursuant to the Shelf
     Registration Statement and use of the Prospectus and any related Free
     Writing Prospectuses until:

               (i) such Holder has received copies of the supplemented or
          amended Prospectus or applicable Issuer Free Writing Prospectus
          contemplated by Section 4(b)(xi) hereof; or

               (ii) such Holder is advised in writing by the Company that the
          use of the Prospectus and any applicable Issuer Free Writing
          Prospectus may be resumed, and has received copies of any additional
          or supplemental filings that are incorporated by reference in the
          Prospectus.

If so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities and any Issuer Free Writing Prospectus that was current at the time
of receipt of such Suspension Notice.


                                       17



          (d) Each Holder agrees by acquisition of a Transfer Restricted
     Security, that no Holder shall be entitled to sell any of such Transfer
     Restricted Securities pursuant to a Registration Statement, or to receive a
     Prospectus relating thereto, unless such Holder has furnished the Company
     with a fully completed Notice and Questionnaire as required pursuant to
     Section 2(b) or Section 2(f) hereof (including the information required to
     be included in such Notice and Questionnaire) and the information set forth
     in the next sentence. The Company may require each Notice Holder of Notes
     to be sold pursuant to the Shelf Registration Statement to furnish to the
     Company such information regarding the Holder and the distribution of such
     Notes as the Company may from time to time reasonably require for inclusion
     in such Registration Statement. Each Notice Holder agrees promptly to
     furnish to the Company all information required to be disclosed in order to
     make the information previously furnished to the Company by such Notice
     Holder not misleading and any other information regarding such Notice
     Holder and the distribution of such Transfer Restricted Securities as the
     Company may from time to time reasonably request in writing. Any sale of
     any Transfer Restricted Securities by any Holder shall constitute a
     representation and warranty by such Holder that the information relating to
     such Holder and its plan of distribution is as set forth in the Prospectus
     delivered by such Holder in connection with such disposition, that such
     Prospectus does not as of the time of such sale contain any untrue
     statement of a material fact relating to or provided by such Holder or its
     plan of distribution and that such Prospectus does not as of the time of
     such sale omit to state any material fact relating to or provided by such
     Holder or its plan of distribution necessary to make the statements in such
     Prospectus, in light of the circumstances under which they were made not
     misleading. The Company may exclude from such Shelf Registration Statement
     the Notes of any Holder that unreasonably fails to furnish such information
     within a reasonable time after receiving such request.

     5. Registration Expenses.

          All expenses incident to the Company's performance of or compliance
     with this Agreement shall be borne by the Company regardless of whether a
     Shelf Registration Statement becomes effective, including, without
     limitation:

          (a) all registration and filing fees and expenses (including filings
     made with the FINRA);

          (b) all fees and expenses of compliance with federal securities and
     state Blue Sky or securities laws, if required;


                                       18



          (c) all expenses of printing (including printing of Prospectuses,
     Issuer Free Writing Prospectuses and certificates for the Common Stock to
     be issued upon conversion of the Notes) and the Company's expenses
               for messenger and delivery services and telephone;

          (d) all reasonable and documented fees and disbursements of counsel to
     the Company;

          (e) all application and filing fees in connection with listing (or
     authorizing for quotation) the Common Stock on a national securities
     exchange or automated quotation system pursuant to the requirements hereof;
     and

          (f) all fees and disbursements of independent registered public
     accountants of the Company.

     The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company. The Company shall pay all expenses customarily borne by issuers in an
underwritten offering as set forth in Section 8(c) hereof.

     6. Indemnification And Contribution.

          (a) The Company agrees to indemnify and hold harmless each Holder of
     Transfer Restricted Securities (including each Initial Purchaser), its
     directors, officers, employees and agents, and each person, if any, who
     controls any Holder within the meaning of the Securities Act or the
     Exchange Act (each, an "INDEMNIFIED HOLDER"), against any loss, claim,
     damage, liability or expense, as incurred, or any action in respect thereof
     (including, but not limited to, any loss, claim, damage, liability or
     expense relating to resales of the Transfer Restricted Securities)
     (collectively, "LOSSES"), to which such Indemnified Holder may become
     subject, insofar as any such Loss arises out of or is based upon:

               (i) any untrue statement or alleged untrue statement of a
          material fact contained in (A) the Shelf Registration Statement as
          originally filed or in any amendment thereof, or (B) any blue sky
          application or other document or any amendment or supplement thereto
          prepared or executed by the Company (or based upon written information
          furnished by or on behalf of the Company expressly for use in such
          blue sky application or other document or amendment or supplement)
          filed in any jurisdiction specifically for the purpose of qualifying
          any or all of the Transfer Restricted Securities under the securities
          law of any state or other jurisdiction


                                       19



          (such application or document being hereinafter called a "BLUE SKY
          APPLICATION"), or, in each case, the omission or alleged omission to
          state therein any material fact required to be stated therein or
          necessary to make the statements therein not misleading; or

               (ii) any untrue statement or alleged untrue statement of a
          material fact contained in any Issuer Free Writing Prospectus, any
          preliminary prospectus or the Prospectus (or any amendment or
          supplement thereto), or the omission or alleged omission therefrom of
          a material fact, in each case, necessary in order to make the
          statements therein, in the light of the circumstances under which they
          were made, not misleading,

     and to reimburse each Indemnified Holder for any and all reasonable
     expenses (including the fees and disbursements of counsel) as they are
     incurred by such Indemnified Holder in connection with investigating,
     defending, settling, compromising or paying any such Loss; provided,
     however, that the foregoing indemnity agreement shall not apply to any Loss
     to the extent, but only to the extent, arising out of or based upon any
     untrue statement or alleged untrue statement or omission or alleged
     omission made in reliance upon and in conformity with written information
     furnished to the Company by or on behalf of such Holder (or its related
     Indemnified Holder) expressly for use therein (including, without
     limitation, information within such Holder's Notice and Questionnaire). The
     indemnity agreement set forth in this Section 6(a) shall be in addition to
     any liabilities that the Company may otherwise have.

          The Company also agrees to indemnify as provided in this Section 6(a)
     or contribute as provided in Section 6(e) hereof to Losses of each
     underwriter, if any, of Transfer Restricted Securities registered under a
     Shelf Registration Statement, their directors, officers, employees or
     agents and each person who controls such underwriter on substantially the
     same basis as that of the indemnification of the Initial Purchasers and the
     selling Holders provided in this Section 6(a) and shall, if requested by
     any Holder, enter into an underwriting agreement reflecting such agreement,
     as provided in Section 4(b)(xxvi) hereof.

          (b) Each Holder agrees, severally and not jointly, to indemnify and
     hold harmless the Company, each of its directors, each of its officers who
     sign the Shelf Registration Statement and each person, if any, who controls
     the Company within the meaning of the Securities Act or the Exchange Act
     (i) to the same extent as the foregoing indemnity from the Company to each
     such Holder, but only with reference to written information relating to
     such Holder furnished to the Company by or on


                                       20



     behalf of such Holder specifically for inclusion in the documents referred
     to in the foregoing indemnity and (ii) against any Loss, joint or several,
     including, but not limited to, any Loss relating to resales of the Transfer
     Restricted Securities, to which such person may become subject, insofar as
     any such Loss arises out of, or is based upon any Free Writing Prospectus
     used by such Holder without the prior consent of the Issuer, and in
     connection with any underwritten offering, the underwriters, provided that
     the indemnification obligation in this clause (ii) shall be several, not
     joint and several, among the Holders who used such Free Writing Prospectus.
     This indemnity agreement set forth in this Section shall be in addition to
     any liabilities which any such Holder may otherwise have.

          (c) Promptly after receipt by an indemnified party under this Section
     6 of notice of the commencement of any action, such indemnified party will,
     if a claim in respect thereof is to be made against an indemnifying party
     under this Section 6, notify the indemnifying party in writing of the
     commencement thereof, but the failure to notify the indemnifying party (i)
     will not relieve it from liability under paragraph (a) or (b) above unless
     and to the extent it did not otherwise learn of such action and such
     failure results in the forfeiture by the indemnifying party of substantial
     rights and defenses and (ii) will not, in any event, relieve the
     indemnifying party from any obligations to any indemnified party other than
     the indemnification obligation provided in paragraph (a) or (b) above. In
     case any such action is brought against any indemnified party and such
     indemnified party seeks or intends to seek indemnity from an indemnifying
     party, the indemnifying party will be entitled to participate in, and, to
     the extent that it shall elect, jointly with all other indemnifying parties
     similarly notified, by written notice delivered to the indemnified party
     promptly after receiving the aforesaid notice from such indemnified party,
     to assume the defense thereof with counsel satisfactory to such indemnified
     party; provided, however, if the defendants in any such action include both
     the indemnified party and the indemnifying party and the indemnified party
     shall have reasonably concluded that a conflict may arise between the
     positions of the indemnifying party and the indemnified party in conducting
     the defense of any such action or that there may be legal defenses
     available to it and/or other indemnified parties that are different from or
     additional to those available to the indemnifying party, the indemnified
     party or parties shall have the right to select separate counsel to assume
     such legal defenses and to otherwise participate in the defense of such
     action on behalf of such indemnified party or parties. Upon receipt of
     notice from the indemnifying party to such indemnified party of such
     indemnifying party's election so to assume the defense of such action and
     approval by the indemnified party of counsel, the indemnifying party will
     not be liable to such indemnified party under this Section 6 for any legal
     or other expenses subsequently incurred by such indemnified party in
     connection with the defense thereof unless (i) the


                                       21



     indemnified party shall have employed separate counsel in accordance with
     the proviso to the preceding sentence (it being understood, however, that
     the indemnifying party shall not be liable for the expenses of more than
     one separate counsel (other than local counsel), reasonably approved by the
     indemnifying party, representing the indemnified parties who are parties to
     such action) or (ii) the indemnifying party shall not have employed counsel
     satisfactory to the indemnified party to represent the indemnified party
     within a reasonable time after notice of commencement of the action, in
     each of which cases the fees and expenses of counsel shall be at the
     expense of the indemnifying party.

          (d) The indemnifying party under this Section 6 shall not be liable
     for any settlement of any proceeding effected without its written consent,
     which shall not be withheld unreasonably, but if settled with such consent
     or if there is a final judgment for the plaintiff, the indemnifying party
     agrees to indemnify the indemnified party against any Loss by reason of
     such settlement or judgment. Notwithstanding the foregoing sentence, if at
     any time an indemnified party shall have requested an indemnifying party to
     reimburse the indemnified party for fees and expenses of counsel as
     contemplated by Section 6(c) hereof, the indemnifying party agrees that it
     shall be liable for any settlement of any proceeding effected without its
     written consent if (i) such settlement is entered into more than 30 days
     after receipt by such indemnifying party of the aforesaid request and (ii)
     such indemnifying party shall not have reimbursed the indemnified party in
     accordance with such request prior to the date of such settlement. No
     indemnifying party shall, without the prior written consent of the
     indemnified party, effect any settlement, compromise or consent to the
     entry of judgment in any pending or threatened action, suit or proceeding
     in respect of which any indemnified party is or could have been a party and
     indemnity was or could have been sought hereunder by such indemnified
     party, unless such settlement, compromise or consent (x) includes an
     unconditional release of such indemnified party from all liability on
     claims that are the subject matter of such action, suit or proceeding and
     (y) does not include a statement as to or an admission of fault,
     culpability or a failure to act, by or on behalf of any indemnified party.

          (e) If the indemnification provided for in this Section 6 is for any
     reason unavailable to or otherwise insufficient to hold harmless an
     indemnified party in respect of any Loss referred to therein, then each
     indemnifying party shall contribute to the aggregate amount paid or payable
     by such indemnified party, as incurred, as a result of any Loss referred to
     therein:

               (i) in such proportion as is appropriate to reflect the relative
          benefits received by the Company, on the one hand, and


                                       22



          the Holders, on the other hand, from the offering and sale of the
          Transfer Restricted Securities, on the one hand, and a Holder with
          respect to the sale by such Holder of the Transfer Restricted
          Securities, on the other hand, or

               (ii) if the allocation provided by Section (6)(e)(i) above is not
          permitted by applicable law, in such proportion as is appropriate to
          reflect not only the relative benefits referred to in Section 6(e)(i)
          above but also the relative fault of the Company, on the one hand, and
          the Holders, on the other hand, in connection with the statements or
          omissions or alleged statements or omissions that resulted in such
          Loss, as well as any other relevant equitable considerations.

     The relative benefits received by the Company, on the one hand, and the
     Holders, on the other hand, in connection with such offering and such sale
     of the Transfer Restricted Securities pursuant to this Agreement shall be
     deemed to be in the same respective proportions as the total net proceeds
     from the offering of the Notes purchased under the Purchase Agreement
     (before deducting expenses) received by the Company and the total proceeds
     received by the Holders with respect to their sale of Transfer Restricted
     Securities. The relative fault of the Company, on the one hand, and the
     Holders, on the other hand, shall be determined by reference to, among
     other things, whether any such untrue or alleged untrue statement of a
     material fact or omission or alleged omission to state a material fact
     relates to information supplied by the Company, on the one hand, or the
     Holders, on the other hand, and the parties' relative intent, knowledge,
     access to information and opportunity to timely correct or prevent such
     statement or omission. The Company and the Holders agree that it would not
     be just and equitable if contribution pursuant to this Section 6(e) were
     determined by pro rata allocation (even if the Holders were treated as one
     entity for such purpose) or by any other method of allocation that does not
     take account of the equitable considerations referred to in this Section
     6(e).

          The amount paid or payable by a party as a result of the Loss referred
     to above shall be deemed to include, subject to the limitations set forth
     in Section 6(c), any legal or other fees or expenses reasonably incurred by
     such party in connection with investigating or defending any action or
     claim.

          Notwithstanding the provisions of this Section 6, in no event will (i)
     any Holder be required to undertake liability to any person under this
     Section 6 for any amounts in excess of the dollar amount of the proceeds to
     be received by such Holder from the sale of such Holder's Transfer
     Restricted Securities (after deducting any fees, discounts and commissions


                                       23



     applicable thereto) pursuant to any Shelf Registration Statement under
     which such Transfer Restricted Securities are to be registered under the
     Securities Act and (ii) any underwriter be required to undertake liability
     to any person hereunder for any amounts in excess of the discount or
     commission payable to such underwriter with respect to the Transfer
     Restricted Securities underwritten by it and distributed to the public. No
     Person guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the Securities Act) shall be entitled to contribution from
     any Person who was not guilty of such fraudulent misrepresentation. The
     Holders' obligations to contribute as provided in this Section 6(e) are
     several and not joint.

          (f) The provisions of this Section 6 shall remain in full force and
     effect, regardless of any investigation made by or on behalf of any Holder
     or the Company or any of the officers, directors, employees, agents or
     controlling persons referred to in Section 6 hereof, and will survive the
     sale by a Holder of Transfer Restricted Securities.

     7. Rule 144A and Rule 144. The Company agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any period
in which the Company (i) is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request of any Holder, to such Holder of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities designated by such Holder, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

     8. Underwritten Registrations.

          (a) Any Holder of Transfer Restricted Securities who desires to do so
     may sell Transfer Restricted Securities (in whole or in part) in an
     underwritten offering; provided that (i) the Electing Holders of at least
     33-1/3% in aggregate principal amount of the Transfer Restricted Securities
     then covered by the Shelf Registration Statement shall request such an
     offering and (ii) at least such aggregate principal amount of such Transfer
     Restricted Securities shall be included in such offering (which shall be no
     less than $15 million aggregate principal amount); and provided further
     that the Company shall not be obligated to participate in more than one
     underwritten offering during the Effectiveness Period. Upon receipt of such
     a request, the Company shall provide all Holders of Transfer Restricted
     Securities written notice of the request, which notice shall inform such
     Holders that they have the opportunity to participate in the offering. If
     any of the Transfer Restricted Securities covered by the Shelf


                                       24



     Registration Statement are to be sold in an underwritten offering, the
     Managing Underwriters shall be selected by the Majority Holders.

          (b) No person may participate in any underwritten offering pursuant to
     the Shelf Registration Statement unless such person (i) agrees to sell such
     person's Transfer Restricted Securities on the basis reasonably provided in
     any underwriting arrangements approved by the persons entitled hereunder to
     approve such arrangements; (ii) completes and executes all questionnaires,
     powers of attorney, indemnities, underwriting agreements and other
     documents reasonably required under the terms of such underwriting
     arrangements; and (iii) if such Holder is not then a Notice Holder, such
     Holder returns a completed and signed Notice and Questionnaire to the
     Company in accordance with Section 2(b) or Section 2(f) hereof within a
     reasonable amount of time before such underwritten offering.

          (c) The Holders participating in any underwritten offering shall be
     responsible for any underwriting discounts and commissions and fees and,
     subject to Section 5 hereof, expenses of their own counsel. The Company
     shall pay all expenses customarily borne by issuers in an underwritten
     offering, including but not limited to filing fees, the fees and
     disbursements of its counsel and independent public accountants and any
     printing expenses incurred in connection with such underwritten offering.
     Notwithstanding the foregoing or the provisions of Section 4(b)(xxiv)
     hereof, upon receipt of a request from the Managing Underwriter or a
     representative of holders of a majority of the Transfer Restricted
     Securities to be included in an underwritten offering to prepare and file
     an amendment or supplement to the Shelf Registration Statement and
     Prospectus in connection with an underwritten offering, the Company may
     delay the filing of any such amendment or supplement for up to 90 days if
     the Board of Directors of the Company shall have determined in good faith
     that the Company has a bona fide business reason for such delay.

     9. Miscellaneous.

          (a) Free Writing Prospectuses. Each Holder represents that it has not
     prepared or had prepared on its behalf or used or referred to, and agrees
     that it will not prepare or have prepared on its behalf or use or refer to,
     any Free Writing Prospectus, and has not distributed and will not
     distribute any written materials in connection with the offer or sale of
     the Transfer Restricted Securities without the prior express written
     consent of the Company and, in connection with any underwritten offering,
     the underwriters. Any such Free Writing Prospectus consented to by the
     Company and, if applicable, the underwriters, as the case may be, is
     hereinafter referred to as a "PERMITTED FREE WRITING PROSPECTUS." The
     Company represents and agrees that it has treated and will treat, as the


                                       25



     case may be, each Permitted Free Writing Prospectus as an Issuer Free
     Writing Prospectus, including in respect of timely filing with the
     Commission, legending and recordkeeping.

          (b) Actions Affecting Transfer Restricted Securities. The Company
     shall not, directly or indirectly, take any action with respect to the
     Transfer Restricted Securities as a class that would adversely affect the
     ability of the Holders of Transfer Restricted Securities to include such
     Transfer Restricted Securities in a registration undertaken pursuant to
     this Agreement.

          (c) No Inconsistent Agreements. The Company has not, as of the date
     hereof, entered into, nor shall it, on or after the date hereof, enter
     into, any agreement with respect to its securities that is inconsistent
     with the rights granted to the Holders in this Agreement or otherwise
     conflicts with the provisions hereof. In addition, the Company shall not
     grant to any of its securityholders (other than the Holders of Transfer
     Restricted Securities in such capacity) the right to include any of its
     securities in the Shelf Registration Statement provided for in this
     Agreement other than the Transfer Restricted Securities.

          (d) Amendments and Waivers. This Agreement may not be amended,
     modified or supplemented, and waivers or consents to or departures from the
     provisions hereof may not be given, unless the Company has obtained the
     written consent of a Majority of Holders; provided, however, that with
     respect to any matter that directly or indirectly adversely affects the
     rights of any Initial Purchaser hereunder, the Company shall obtain the
     written consent of each such Initial Purchaser against which such
     amendment, qualification, supplement, waiver or consent is to be effective.
     Notwithstanding the foregoing (except the foregoing proviso), a waiver or
     consent to depart from the provisions hereof with respect to a matter that
     relates exclusively to the rights of Holders whose securities are being
     sold pursuant to a Shelf Registration Statement and does not directly or
     indirectly adversely affect the rights of other Holders, may be given by
     the Majority Holders, determined on the basis of Transfer Restricted
     Securities being sold rather than registered under such Shelf Registration
     Statement.

          (e) Notices. All notices and other communications provided for or
     permitted hereunder shall be made in writing by hand delivery, first class
     mail (registered or certified, return receipt requested), facsimile
     transmission, or air courier guaranteeing overnight delivery:

               (i) if to a Holder, at the address set forth on the records of
          the registrar under the Indenture or the transfer agent of the Common
          Stock, as the case may be; and


                                       26



               (ii) if to the Company, initially at its address set forth in the
          Purchase Agreement,

                    With a copy to:

                    Matthew J. Mallow, Esq.
                    Skadden, Arps, Slate, Meagher & Flom LLP
                    Four Times Square
                    New York, New York 10036

          All such notices and communications shall be deemed to have been duly
     given: at the time delivered by hand, if personally delivered; four
     Business Days after being deposited in the mail, postage prepaid, if
     mailed; when receipt acknowledged, if transmitted by facsimile; and on the
     next Business Day, if timely delivered to an air courier guaranteeing
     overnight delivery.

     Any party hereto may change the address for receipt of communications by
giving written notice to the others.

          (f) Successors and Assigns. This Agreement shall inure to the benefit
     of and be binding upon the successors and assigns of each of the parties,
     including without limitation and without the need for an express
     assignment, subsequent Holders of Transfer Restricted Securities. The
     Company hereby agrees to extend the benefit of this Agreement to any Holder
     and any such Holder may specifically enforce the provisions of this
     Agreement as if an original party hereto.

          (g) Counterparts. This Agreement may be executed in any number of
     counterparts and by the parties hereto in separate counterparts (including
     by facsimile), each of which when so executed shall be deemed to be an
     original and all of which taken together shall constitute one and the same
     agreement.

          (h) Notes Held by the Company or Their Affiliates. Whenever the
     consent or approval of Holders of a specified percentage of Transfer
     Restricted Securities is required hereunder, Transfer Restricted Securities
     held by the Company or its Affiliates (other than subsequent Holders if
     such subsequent Holders are deemed to be Affiliates solely by reason of
     their holding of such Transfer Restricted Securities) shall not be counted
     in determining whether such consent or approval was given by the Holders of
     such required percentage.

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


                                       27



          (j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
     IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

          (k) Severability. If any one or more of the provisions contained
     herein, or the application thereof in any circumstance, is held invalid,
     illegal or unenforceable, the validity, legality and enforceability of any
     such provision in every other respect and of the remaining provisions
     contained herein shall not be affected or impaired thereby, it being
     intended that all of the rights and privileges of the parties shall be
     enforceable to the fullest extent permitted by law.

          (l) Entire Agreement. This Agreement is intended by the parties as a
     final expression of their agreement and intended to be a complete and
     exclusive statement of the agreement and understanding of the parties
     hereto in respect of the subject matter contained herein. There are no
     restrictions, promises, warranties or undertakings, other than those set
     forth or referred to herein with respect to the registration rights granted
     by the Company with respect to the Transfer Restricted Securities. This
     Agreement supersedes all prior agreements and understandings between the
     parties with respect to such subject matter.


                                       28



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                        ANTHRACITE CAPITAL, INC.


                                        By /s/ Richard M. Shea
                                           -------------------------------------
                                           Name:  Richard M. Shea
                                           Title: President and Chief Operating
                                                  Officer


                                        BANC OF AMERICA SECURITIES LLC
                                        DEUTSCHE BANK SECURITIES INC.
                                        Acting severally on behalf of themselves
                                        and the several Initial Purchasers

                                        By BANC OF AMERICA SECURITIES LLC


                                        By /s/ Craig W. McCracken
                                           -------------------------------------
                                           Authorized Representative


                                        By DEUTSCHE BANK SECURITIES INC.


                                        By /s/ Devin Murphy
                                           -------------------------------------
                                           Authorized Representative


                                        By /s/  Brian Mendell
                                           -------------------------------------
                                           Authorized Representative


                                       29

EX-10.2

                                 PROMISSORY NOTE

$50,000,000.00                                                   August 27, 2007

     1. Promise To Pay.

     FOR VALUE RECEIVED, ANTHRACITE CAPITAL, INC., a Maryland corporation,
having an address at 40 East 52nd Street, New York, New York 10022 (the
"Borrower"), promises to pay to the order of KEYBANK NATIONAL ASSOCIATION, a
national banking association having an address at 127 Public Square, Cleveland,
Ohio 44114 (the "Lender"), the principal sum of FIFTY MILLION DOLLARS
($50,000,000.00) or so much thereof as may be advanced from time to time, with
interest thereon, or on the amount thereof from time to time outstanding, to be
computed, as hereinafter provided, on each advance from the date of its
disbursement until such principal sum shall be fully paid. Interest shall be
payable in arrears monthly on the last Business Day (as defined below) of each
month commencing September 28, 2007 at a rate equal to the aggregate of: (i) one
and one-half percent (1.5%); plus (ii) the LIBOR Rate (as defined below). Any
amounts then due that are not paid within two (2) Business Days after demand by
the Lender shall accrue interest at a rate equal to the aggregate of: (i) four
percent (4%); plus (ii) the Variable Rate (as defined below). Interest will be
calculated on the basis of a 360 day year and the actual number of days elapsed.
The total principal sum, or the amount thereof outstanding, together with any
accrued but unpaid interest, shall be due and payable in full on November 27,
2007 (the "Initial Maturity Date") subject however to acceleration or extension
as provided herein. As long as no Event of Default exists the Borrower may
extend the Initial Maturity Date until February 27, 2008 (the "Extended Maturity
Date") upon: (i) prior written notice to the Lender from the Borrower requesting
such extension at least ten (10) days but no more than thirty (30) days prior to
the Initial Maturity Date, and (ii) payment to the Lender of an extension fee of
fifty (50) basis points of the then outstanding balance of this Note. (The
initial Maturity Date and the Extended Maturity Date collectively the "Maturity
Date".) Any amounts repaid hereunder may not be reborrowed.

     2. Definitions.

     As used herein the following terms shall have the following meanings:

          a. Adjusted Federal Funds Rate means the Federal Funds Rate plus fifty
(50) basis points.

          b. Business Day means any day of the year on which offices of KeyBank
National Association are not required or authorized by law to be closed for
business in Boston, Massachusetts. If any day on which a payment is due is not a
Business Day, then the payment shall be due on the next day following which is a
Business Day. Further, if there is no corresponding day for a payment in the
given calendar month (i.e., there is no "February 30th"), the payment shall be
due on the last Business Day of the calendar month.

          c. Federal Funds Rate means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight


                                       1



Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to the Lender on such day on such
transactions as reasonably determined by the Lender.

          d. LIBOR Rate means, the rate per annum (rounded upward, if necessary,
to the nearest one hundred-thousandth of a percentage point) as determined on
the basis of the offered rates for deposits in U.S. dollars for thirty (30) days
which appears on the Telerate page 3750 (or its successor publication) as of
11:00 a.m. London time on the day that is two London Banking Days preceding the
first day of such loan; provided, however, if the rate described above does not
appear on the Telerate System on any applicable interest determination date, the
LIBOR Rate shall be the rate (rounded upwards as described above, if necessary)
determined on the basis of the offered rates for deposits in U.S. dollars for
thirty (30) days which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2)
London Banking Days preceding the first day of such loan as selected by the
Lender. The principal London office of each of the four major London banks will
be required to provide a quotation of its U.S. dollars deposit offered rate. If
at least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for thirty (30) days
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is two London Banking Days preceding the first day of
such loan. In the event that the Lender is unable to obtain any such quotation
as provided above, it will be deemed that the LIBOR Rate cannot be determined
and interest shall accrue at the Variable Rate. In the event that the Board of
Governors of the Federal Reserve System shall impose a Reserve Percentage with
respect to LIBOR Rate deposits of the Lender, then for any period during which
such Reserve Percentage shall apply, the LIBOR Rate shall be equal to the amount
determined above divided by an amount equal to 1 minus the Reserve Percentage.
"Reserve Percentage" shall mean the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against "Euro-Currency
Liabilities" as defined in Regulation D of the Federal Reserve Board.

          e. London Banking Day means any day on which dealings in deposits in
U.S. Dollars are transacted in the London interbank market.

          f. Prime Rate means the per annum rate of interest so designated from
time to time by KeyBank National Association as its prime rate. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
being charged to any customer.

          g. Variable Rate means a per annum rate equal at all times to the
greater of (a) Prime Rate and (b) Adjusted Federal Funds Rate. Changes in the
Variable Rate shall be effective simultaneously with any change in the Prime
Rate or Federal Funds Rate, as applicable.


                                       2



     3. Acceleration; Event of Default.

     Upon the occurrence of any one or more of the following events (herein,
"Events of Default"), any and all liabilities of the Borrower to the Lender
shall become immediately due and payable, at the option of the Lender and
without notice or demand. Upon the occurrence of any Event of Default described
in Subsection (ix) any and all liabilities of the Borrower to the Lender shall
become due and payable immediately without any further act on the part of the
Lender. The occurrence of any Event of Default shall also constitute, without
notice or demand, a default under all other agreements between the Lender, and
the Borrower and instruments and papers given the Lender by the Borrower,
whether such agreements, instruments, or papers now exist or hereafter arise.:

               (i) The failure by the Borrower to pay upon demand any amount due
     under this Note when due.

               (ii) The failure by the Borrower to pay, when due, any other
     liabilities, obligations, or indebtedness to the Lender (the
     "Obligations").

               (iii) The determination by the Lender that any representation or
     warranty heretofore, now or hereafter made by the Borrower to the Lender,
     in any documents, instrument, agreement, or paper was not true or accurate
     when given in any material respect.

               (iv) The occurrence of any event such that any material
     indebtedness in excess of $10 million of the Borrower from any lender other
     than the Lender could be accelerated, notwithstanding that such
     acceleration has not taken place.

               (v) The occurrence of any event which would cause a lien
     creditor, as that term is defined in Section 9-102 of the U.S. bankruptcy
     code, to take priority over advances made by the Lender with respect to any
     security or collateral given to secure this Note.

               (vi) A filing against or relating to the Borrower of (A) a
     federal tax lien in favor of the United States of America or any political
     subdivision of the United States of America, or (B) a state tax lien in
     favor of any state of the United States of America or any political
     subdivision of any such state, in each case that is not removed with in
     thirty (30) days of the filing thereof.

               (vii) The occurrence of any event of default under any agreement
     between the Lender and the Borrower or instrument or paper given the Lender
     by the Borrower, whether such agreement, instrument, or paper now exists or
     hereafter arises (notwithstanding that the Lender may not have exercised
     its rights upon default under any such other agreement, instrument or
     paper).

               (viii) Any act by, against, or relating to the Borrower, or its
     property or assets, which act constitutes the application for, consent to,
     or sufferance of the appointment of a receiver, trustee or other person,
     pursuant to court action or otherwise, over all, or any part of the
     Borrower's property (in the case of an involuntary proceeding, that is not
     dismissed within 45 days of filing).

               (ix) The granting of any trust mortgage or execution of an
     assignment for the benefit of the creditors of the Borrower, or the
     occurrence of any other voluntary


                                       3



     or involuntary liquidation (in the case of an involuntary liquidation, that
     is not dismissed within 45 days of filing) or extension of debt agreement
     for the Borrower; the failure by the Borrower to generally pay the debts of
     the Borrower as they mature; adjudication of bankruptcy or insolvency
     relative to the Borrower; the entry of an order for relief or similar order
     with respect to the Borrower in any proceeding pursuant to Title 11 of the
     United States Code entitled "Bankruptcy" (hereinafter the "Bankruptcy
     Code") or any other federal bankruptcy law; the filing of any complaint,
     application, or petition by or against the Borrower initiating any matter
     in which the Borrower is or may be granted any relief from the debts of the
     Borrower pursuant to the Bankruptcy Code or any other insolvency statute or
     procedure (in the case of an involuntary proceeding, that is not dismissed
     within 45 days of filing); the calling or sufferance of a meeting of
     creditors of the Borrower; the meeting by the Borrower of a formal or
     informal creditor's committee; the offering by or entering into by the
     Borrower of any composition, extension or any other arrangement seeking
     relief or extension for the debts of the Borrower, or the initiation of any
     other judicial or non-judicial proceeding or agreement by, against or
     including the Borrower which seeks or intends to accomplish a
     reorganization or arrangement with creditors (in the case of an involuntary
     proceeding, that is not dismissed within 45 days of filing).

               (x) The entry of any judgment(s) in excess of $10 million against
     the Borrower, which judgment(s) is not satisfied or appealed from (with
     execution or similar process stayed) within fifteen (15) days of its entry.

               (xi) The entry of any final court order which enjoins, restrains
     or in any way prevents the Borrower from conducting all or any part of its
     business affairs in the ordinary course of business.

               (xii) The service of any process upon the Lender seeking to
     attach by trustee process any funds of the Borrower on deposit with the
     Lender.

               (xiv) Any change in the identity, authority or responsibilities
     of any person having management or policy authority with respect to the
     Borrower and/or any merger or direct or indirect change in the ownership of
     substantially all of the capital stock of the Borrower from that existing
     at the execution of this Agreement.

               (xv) The occurrence of any material uninsured loss, theft, damage
     or destruction to any material asset(s) of the Borrower.

               (xvi) [intentionally deleted].

               (xvii) The termination of existence, dissolution, or liquidation
     of the Borrower, or the ceasing to carry on actively any substantial part
     of the Borrower's current business.

               (xviii) The security interest granted to the Lender by the
     Borrower shall, at any time after its execution and delivery and for any
     reason, cease (A) to create a valid and perfected first priority security
     interest in and to the property purported to be subject to such agreement;
     or (B) to be in full force and effect or shall be declared null and void,
     or the validity or enforceability hereof shall be contested by the Borrower
     or any guarantor of the Borrower denies it has any further liability or
     obligation hereunder.


                                       4



               (xix) Any of the following events occur or exist with respect to
     the Borrower or any affiliate (as defined in the Employee Retirement Income
     Security Act of 1974, as amended ("ERISA")): (A) any "prohibited
     transaction" (as defined in Section 406 of ERISA or Section 4975 of the
     Internal Revenue Code) involving any Plan; (B) any "reportable event" (as
     defined in Section 4043 of ERISA and the regulations issued under such
     Section) shall occur with respect to any Plan; (C) The filing under Section
     4041 of ERISA of a notice of intent to terminate any Plan or the
     termination of any Plan; (D) any event or circumstance exists which might
     constitute grounds entitling the Pension Benefit Guaranty Corporation
     (PBGC) to institute proceedings under Section 4042 of ERISA for the
     termination of, or for the appointment of a trustee to administer, any
     Plan, or the institution by the PBGC of any such proceedings; (E) or
     partial withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer
     Plan or the reorganization, insolvency, or termination of any Multiemployer
     Plan; and in each case above, such event or condition, together with all
     other events or conditions, if any, could in the opinion of the Lender
     subject the Borrower to any tax, penalty, or other liability to a Plan, a
     Multiemployer Plan, the PBGC, or otherwise.

     4. Certain Waivers, Consents and Agreements.

     Each and every party liable hereon or for the indebtedness evidenced hereby
whether as maker, endorser, guarantor, surety or otherwise hereby: (a) waives
presentment, demand, protest, suretyship defenses and defenses in the nature
thereof; (b) agrees to any substitution, exchange, release, surrender or other
delivery of any security or collateral now or hereafter held hereunder, and to
the addition or release of any other party or person primarily or secondarily
liable; (c) agrees that if any security or collateral given to secure this Note
shall be found to be unenforceable in full or to any extent, or if the Lender or
any other party shall fail to duly perfect or protect such collateral, the same
shall not relieve or release any party liable hereon or thereon nor vitiate any
other security or collateral given for any obligations evidenced hereby or
thereby; (d) agrees to pay all costs and expenses incurred by the Lender or any
other holder of this Note in connection with the collection of the indebtedness
evidenced hereby and the enforcement of rights and remedies hereunder, whether
or not suit is instituted; and (e) consents to all of the terms and conditions
contained in this Note, and all other instruments now or hereafter executed
evidencing or governing all or any portion of any security or collateral given
for this Note.

     5. Delay Not A Bar.

     No delay or omission on the part of the holder in exercising any right
hereunder or any right under any instrument or agreement now or hereafter
executed in connection herewith, or any agreement or instrument which is given
or may be given to secure the indebtedness evidenced hereby, or any other
agreement now or hereafter executed in connection herewith shall operate as a
waiver of any such right or of any other right of such holder, nor shall any
delay, omission or waiver on any one occasion be deemed to be a bar to or waiver
of the same or of any other right on any future occasion.

     6. Partial Invalidity.

     The invalidity or unenforceability of any provision hereof, or of any other
instrument, agreement or document now or hereafter executed in connection with
this Note shall not impair


                                       5



or vitiate any other provision of any of such instruments, agreements and
documents, all of which provisions shall be enforceable to the fullest extent
now or hereafter permitted by law.

     7. Compliance With Usury Laws.

     All agreements between the Borrower and the Lender are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to the Lender for the use or the
forbearance of the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof, provided, however, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then this Note shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of the Borrower and
the Lender in the execution, delivery and acceptance of this Note to contract in
strict compliance with the laws of the Commonwealth of Massachusetts from time
to time in effect. If, under or from any circumstances whatsoever, fulfillment
of any provision hereof at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limit
of such validity, and if under or from any circumstances whatsoever the Lender
shall ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements
between the Borrower and the Lender.

     8. Governing Law and Consent to Jurisdiction.

     8.1. Substantial Relationship. It is understood and agreed that this Note
was negotiated and delivered in the Commonwealth of Massachusetts, which State
the parties agree has a substantial relationship to the parties and to the
underlying transactions embodied by this Note.

     8.2. Place of Delivery. The Borrower agrees to furnish to the Lender at the
Lender's office in Boston, Massachusetts all further instruments, certifications
and documents to be furnished hereunder.

     8.3. Governing Law. This Note shall in all respects be governed, construed,
applied and enforced in accordance with the internal laws of the Commonwealth of
Massachusetts without regard to principles of conflicts of law.

     8.4. Consent to Jurisdiction. The Borrower hereby consents to personal
jurisdiction in any state or Federal court located within the City of Boston,
Commonwealth of Massachusetts.

     9. Waiver of Jury Trial.

     THE BORROWER AND THE LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY
COURSE OF CONDUCT, COURSE OF


                                       6



DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER TO ACCEPT THIS NOTE AND
MAKE THE LOAN EVIDENCED HEREBY.

     10. Security.

     This Note is secured by certain Collateral as set forth in a certain Pledge
and Security Agreement of even date.

     11. No Oral Change.

     This Note may only be amended, terminated, extended or otherwise modified
by a writing signed by the party against which enforcement is sought. In no
event shall any oral agreements, promises, actions, inactions, knowledge, course
of conduct, course of dealing, or the like be effective to amend, terminate,
extend or otherwise modify this Note.

     12. Rights of the Holder.

     This Note and the rights and remedies provided for herein may be enforced
by the Lender or any holder hereof. Wherever the context permits each reference
to the term "holder" herein shall mean and refer to the Lender or the then
holder of this Note.

     13. Survival.

     This Note shall survive and continue in full force and effect beyond and
after the payment and satisfaction of the obligations hereunder in the event
that the Lender is required to disgorge or return any payment or property
received as a result of any laws pertaining to preferences, fraudulent transfers
or fraudulent conveyances but such survival and continuation shall be limited to
the amount of such disgorgement or return.

     14. Replacement of Lost Note.

     Upon receipt of an affidavit of an officer of the Lender as to the loss,
theft, destruction or mutilation of this Note, the Borrower will issue, in lieu
thereof, a replacement Note in the same principal amount thereof and otherwise
of like tenor.

                          (signature on following page)


                                       7



     IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
as of the date set forth above as a sealed instrument.

                                        BORROWER:

                                        ANTHRACITE CAPITAL, INC.


                                        By: /s/ Richard Shea
                                            ------------------------------------
                                            Name: Richard Shea
                                            Title: President


                   Signature Page to $50,000,000 Promissory Note

EX-10.3

                OWNERSHIP INTERESTS PLEDGE AND SECURITY AGREEMENT

1. Grant of Security Interest. ANTHRACITE CAPITAL, INC., a Maryland corporation,
having an address at 40 East 52nd Street, New York, New York 10022 ("Pledgor"),
does hereby pledge, assign, transfer and deliver to KeyBank National
Association, a national banking association, having an address at 127 Public
Square, Cleveland, Ohio 44114 (the "Lender"), a continuing security interest in
the Collateral (as hereinafter defined) to secure the payment and performance in
full of the Obligations (as hereinafter defined).

2. Promissory Note and Defined Terms. This agreement ("Pledge and Security
Agreement" or "Agreement") is delivered pursuant to the terms of that certain
Promissory Note (the "Promissory Note"), dated of even date hereof, from
Pledgor, as borrower, to the Lender. Capitalized terms used herein which are not
otherwise specifically defined herein shall have the same meaning herein as in
the Promissory Note.

3. Collateral. The term "Collateral" shall mean and include the following
property, wherever located:

     (a)  all of Pledgor's right, title and interest (including, without
          limitation, Pledgor's voting rights) in the investments described on
          Exhibit A as "Pledged Interests" (all interests in the Collateral
          pursuant to this clause (a) or clause (b) below of this Section 3 are
          referred to herein as "Pledged Interests");

     (b)  all certificates or other instruments, if any, representing a Pledged
          Interest;

     (c)  all Pledgor's income, cash flow, rights of distribution (whether in
          cash, property or equity interests), dividends, interest, proceeds,
          accounts, fees, profits, rights of redemption or other rights to
          payment which in any way relate to or arise out of the Pledged
          Interests; and

     (d)  all rights of access arising from the Pledged Interests to books,
          records, information and electronically stored data relating to any of
          the foregoing.

4. Obligations. The term "Obligations" shall mean all obligations of Pledgor to
the Lender, whether now existing or hereafter arising, direct or indirect,
absolute or contingent, under any one or more of: (i) this Agreement; (ii) the
Promissory Note; (iii) all other documents executed in connection with the loan
made by the Lender to Pledgor pursuant to the Promissory Note (the "Loan
Documents"); and (iv) each of the same as hereafter modified, amended, extended
or replaced in accordance with the terms thereof.

5. Warranties and Representations. Pledgor warrants and represents to, and
agrees with, the Lender that:

     5.1  Pledgor is the owner of the Collateral free and clear of all pledges,
          liens, security interests and other encumbrances of every nature
          whatsoever, except for (i) any


                                      -1-



          liens or encumbrances in effect as of the date hereof which have been
          disclosed to the Lender; or (ii) any such liens or encumbrances in
          favor of the Lender;

     5.2  Pledgor has the full right, power and authority to pledge the
          Collateral and to grant the security interest in the Collateral as
          herein provided;

     5.3  There are no restrictions on, or consents required with respect to,
          the transfer of the Collateral to the Lender hereunder, or with
          respect to any subsequent transfer thereof or realization thereupon by
          the Lender;

     5.4  Each Pledged Interest listed on Exhibit A is as described and set
          forth on Exhibit A attached hereto and made a part hereof;

     5.5  True and complete copies of the organizational documents of each of
          the entities listed on Exhibit A have been delivered by Pledgor to the
          Lender, and, as of the date hereof, the same have not been further
          amended or modified in any respect whatsoever;

     5.6  All of the warranties and representations made by or in respect of
          Pledgor under the Promissory Note are true and accurate;

     5.7  The execution, delivery and performance of this Agreement by Pledgor
          does not and shall not result in the violation of any mortgage,
          indenture, material contract, instrument, agreement, judgment, decree,
          order, statute, rule or regulation to which Pledgor is subject, or by
          which it or any of its property is bound; and

     5.8  This Agreement has been duly authorized, executed and delivered by
          Pledgor and constitutes a legal, valid and binding obligation of
          Pledgor, enforceable in accordance with the terms hereof, subject to
          bankruptcy, insolvency and similar laws of general application
          affecting the rights and remedies of creditors.

6. Pledgor's Agreements. Pledgor agrees so long as any of the Obligations remain
outstanding that:

     6.1  Pledgor shall execute all such instruments, documents and papers, and
          will do all such acts as the Lender may reasonably request from time
          to time to carry into effect the provisions and intent of this
          Agreement including, without limitation, the execution of
          stop-transfer orders, stock powers, notifications to obligors on the
          Collateral, the providing of notification in connection with
          book-entry securities or general intangibles, and the providing of
          instructions to the issuers of uncertificated securities, and will do
          all such other acts as the Lender may reasonably request with respect
          to the perfection and protection of the pledge and security interests
          granted herein and the assignments effected hereby including, without
          limitation, the execution and delivery of any amendments to this
          Agreement to evidence the investments or portions thereof included in
          the Collateral, and authorizes the Lender at any time and from time to
          time to file UCC financing statements,


                                      -2-



          continuation statements, and amendments thereto describing the
          Collateral without the signature of Pledgor;

     6.2  Except for any liens or encumbrances in effect as of the date hereof
          that have been disclosed to the Lender or liens or encumbrances
          permitted by the Promissory Note, Pledgor shall keep the Collateral
          free and clear of all liens, encumbrances, attachments, security
          interest pledges and charges;

     6.3  Pledgor shall not transfer the Collateral or any direct or indirect
          interest therein to any other person;

     6.4  Pledgor shall deliver to the Lender, if and when received by Pledgor,
          any item representing or constituting any of the Collateral. If under
          any circumstance whatsoever any such proceeds should be paid to or
          come into the hands of Pledgor, Pledgor shall hold the same in trust
          for immediate delivery to the Lender to be held as additional
          Collateral;

     6.5  Except as permitted by this Agreement, Pledgor shall not exercise any
          right with respect to the Collateral which would materially dilute or
          materially adversely affect the Lender's security interest in the
          Collateral;

     6.6  Pledgor shall not, without the prior written consent of the Lender in
          each instance, which consent shall not be unreasonably withheld,
          conditioned or delayed, vote the Collateral in favor of or consent to
          any resolution or action which does or might:

          (i)   impose any additional restrictions upon the sale, transfer or
                disposition of the Collateral other than restrictions, if any,
                the application of which is waived to the full satisfaction of
                the Lender as to the Collateral; or

          (ii)  result in the issuance of any additional interest in any of the
                investment entities listed on Exhibit A, or of any class of
                security, which issuance could reasonably be expected to
                materially adversely affect the value of the Collateral; or

          (iii) vest additional powers, privileges, preferences or priorities in
                any other class of interest in any of the investment entities
                listed on Exhibit A to the material detriment of the value of or
                rights accruing to the Collateral; or

          (iv)  permit any of the investment entities listed on Exhibit A to
                sell, transfer, assign, pledge, mortgage, or otherwise encumber
                any property, assets or investments owned by such entity, or to
                incur any new Indebtedness;

     6.7  Pledgor shall not enter into or consent to any amendment or
          modification of or with respect to the governing documents of any of
          the investment entities listed on Exhibit A which could reasonably be
          expected to materially adversely affect the value of the Collateral
          without the prior written consent of the Lender in each


                                      -3-



          instance, which consent shall not be unreasonably withheld,
          conditioned or delayed;

     6.8  Insofar as the same may be material or significant to the Lender's
          interests, Pledgor shall perform in all material respects all of its
          obligations as a partner, member or shareholder of each of the
          investment entities listed on Exhibit A and shall enforce, to the
          extent provided for it in the governing documents of such entities all
          of the obligations of the other shareholders, partners or members of
          such entity;

     6.9  Pledgor shall not itself or on behalf of any investment entities
          listed on Exhibit A take any action which would cause or result in a
          violation of any provisions of the Loan Documents;

     6.10 Pledgor shall take all such actions as may be necessary or desirable
          in order to insure that all of the Obligations of Pledgor under the
          Loan Documents are punctually and faithfully paid and performed in the
          manner provided for therein;

     6.11 Pledgor shall, with reasonable promptness, but in all events within
          ten (10) days after it has actual knowledge thereof, notify the Lender
          in writing of the occurrence of any act, event or condition which
          Pledgor, in its good faith determination, believes constitutes a
          default or Event of Default under any of the Loan Documents,
          specifying the nature and existence thereof. Such notification shall
          include a written statement of any remedial or curative actions which
          Pledgor proposes to undertake to cure or remedy such default or Event
          of Default;

     6.12 Pledgor agrees so long as any of the Obligations remain outstanding,
          it shall comply with each of the following covenants:

          6.12.1 Annual Statements. Within ninety (90) days following the end of
          each fiscal year, a consolidated balance sheet, an income statement, a
          statement of changes in shareholders' equity and a statement of cash
          flows of Pledgor as of the end of such fiscal year, setting forth in
          comparative form consolidated figures for the preceding fiscal year,
          all such financial information described above to be in reasonable
          form and detail and audited by an independent certified public
          accounting firm of recognized national standing reasonably acceptable
          to the Lender, and whose opinion shall be to the effect that such
          financial statements have been prepared in accordance with GAAP and
          shall not be limited as to the scope of the audit or qualified as to
          the status of Pledgor as a going concern or otherwise;

          6.12.2 Periodic Statements. Within forty-five (45) days following the
          end of each fiscal quarter of Pledgor (other than the fourth fiscal
          quarter, in which case ninety (90) days after the end thereof) an
          unaudited consolidated balance sheet, income statement and statement
          of changes in shareholders' equity of Pledgor as of the end of such
          fiscal quarter, all such financial information described above to be
          in reasonable form and detail and reasonably acceptable to the Lender;


                                      -4-



          6.12.3 Data Requested. Within a reasonable period of time after a
          request from the Lender, such other financial data or information as
          the Lender may reasonably request with respect to any of the Pledged
          Interests;

          6.12.4 Tax Returns. Within a reasonable period of time after a request
          from the Lender, complete copies of all federal and state tax returns
          and supporting schedules of Pledgor;

          6.12.5 Auditor's Reports. Promptly upon receipt thereof, a copy of any
          other report or "management letter" submitted by independent
          accountants to Pledgor in connection with any annual, interim or
          special audit of the books of Pledgor;

          6.12.6 Other Information. With reasonable promptness upon any such
          request, such other information regarding the business, properties or
          financial condition of Pledgor as the Lender may reasonably request;

          6.12.7 Restrictions on Liens. Pledgor shall not, without the prior
          written consent of the Lender (which consent may be withheld in the
          Lender's sole discretion) (a) further encumber the Pledged Interests;
          (b) alter in a material way the character or conduct of its business
          from that conducted as of the date hereof; (c) dissolve, terminate or
          liquidate, nor merge or consolidate with any other person;

          6.12.8 Place for Records, Inspection. Pledgor shall maintain all of
          its business records at the address specified at the beginning of this
          Agreement. Upon reasonable prior notice and at reasonable times during
          normal business hours, the Lender shall have the right (through such
          agents or consultants as the Lender may designate) to make copies of
          and abstracts from Pledgor's books of account, correspondence and
          other records and to discuss its financial and other affairs with any
          of its investors and any accountants hired by Pledgor;

          6.12.9 Expenses. Pledgor shall pay all costs and expenses reasonably
          incurred by the Lender in connection with the enforcement of the
          Lender's rights under the Loan Documents, including, without
          limitation, reasonable third party costs and expenses, including
          reasonable legal fees and disbursements, appraisal fees, inspection
          fees, plan review fees, travel costs, fees and out-of-pocket costs of
          consultants. Pledgor's obligations to pay such costs and expenses
          shall include, without limitation, all reasonable attorneys' fees and
          other costs and expenses reasonably incurred for preparing and
          conducting litigation or dispute resolution arising from any breach by
          Pledgor of any covenant, warranty, representation or agreement under
          any Loan Document;

          6.12.10 Compliance with Legal Requirements. Pledgor shall comply, in
          all material respects with all laws, rules, regulations, orders and
          decrees (including without limitation environmental laws) applicable
          to it, or to its properties ("Legal Requirements"). In furtherance of
          the foregoing and not in limitation thereof, Pledgor hereby agrees to
          provide the Lender with any additional information that the Lender
          reasonably requests from time to time in order to ensure compliance by


                                      -5-



          Pledgor with all applicable Anti-Money Laundering Laws. As used
          herein, the term "Anti-Money Laundering Laws" shall mean the USA
          Patriot Act of 2001, the Bank Secrecy Act, and Executive Order 13324 -
          Blocking Property and Prohibiting Transactions With Persons Who
          Commit, Threaten to Commit, or Support Terrorism, and any similar
          Legal Requirements;

          6.12.11 Insurance. Pledgor will maintain with financially sound and
          reputable insurers, insurance with respect to such properties and its
          business against such casualties and contingencies as shall be in
          accordance with the general practices of businesses engaged in similar
          activities in similar geographic areas and in amounts, containing such
          terms, in such forms and for such periods as may be reasonable and
          prudent;

          6.12.12 Taxes. Pledgor will pay or cause to be paid taxes, assessments
          and other governmental charges payable by it and file all returns and
          reports relating thereto before the same become delinquent including,
          without limitation, upon its income or profits. Promptly upon request
          by the Lender, Pledgor will provide evidence of the payment of such
          taxes, assessments and other governmental charges in the form of
          receipted tax bills or other form reasonably acceptable to the Lender,
          or evidence of the existence of applicable contests as permitted
          herein; and

          6.12.13 Existence of Pledgor, Maintenance of REIT Status. Pledgor will
          do or cause to be done all things necessary to preserve and keep in
          full force and effect its existence as a Maryland corporation. Pledgor
          will do all things commercially reasonable, to maintain its status as
          a REIT and not take any action which could lead to its
          disqualification as a REIT.

7. Events of Default.

     7.1  Upon the occurrence and during the continuance of any Event of
          Default, the Lender may exercise any one or more of the rights and
          remedies as hereinafter set forth or as set forth and provided for in
          each of the other Loan Documents.

     7.2  Prior to the occurrence of an Event of Default, and after the cure of
          such Event of Default (if cured prior to an acceleration of the
          Maturity Date by the Lender) and the reimbursement by Pledgor of all
          expenses incurred by the Lender resulting from such Event of Default,
          Pledgor shall be entitled to exercise any and all rights to receive
          cash dividends and distributions, consent, vote, approve, elect,
          determine, consult, propose, agree, and all other rights or
          prerogatives, if any, pertaining to the Collateral or any part
          thereof, to the extent permitted under the terms of the Promissory
          Note and other Loan Documents.

                                     -6-



8. After Event of Default

     8.1  Upon the occurrence and during the continuance of any Event of
          Default, and at any time the Lender shall have all of the rights and
          remedies of a secured party upon default under the Uniform Commercial
          Code as adopted in the Commonwealth of Massachusetts, in addition to
          which the Lender may sell or otherwise dispose of the Collateral or
          any portion thereof and/or enforce and collect the Collateral or any
          portion thereof (including, without limitation, the liquidation of
          debt instruments or securities and the exercise of conversion rights
          with respect to convertible securities, whether or not such
          instruments or securities have matured, and whether or not any
          penalties or other charges are imposed on account of such action) for
          application towards (but not necessarily in complete satisfaction of)
          the Obligations. The proceeds of any such collection or of any such
          sale or other disposition of the Collateral, or any portion thereof
          shall be applied as the Lender shall determine. Pledgor shall remain
          liable to the Lender for any deficiency remaining following such
          application. Any surplus remaining after payment in full of all
          Obligations shall be paid over to Pledgor or to whomsoever may be
          lawfully entitled to receive such surplus.

     8.2  Unless the Collateral is perishable, threatens to decline speedily in
          value, or is of a type customarily sold on a recognized market (in
          which event the Lender shall give Pledgor such notice as may be
          practicable under the circumstances), the Lender shall give Pledgor at
          least the greater of the minimum notice required by law or ten (10)
          days' prior written notice of the date, time and place of any public
          sale thereof, or of the time after which any private sale or any other
          intended disposition is to be made.

     8.3  Pledgor acknowledges that any exercise by the Lender of Lender's
          rights upon an Event of Default will be subject to compliance by the
          Lender with the applicable statutes, regulations, ordinances,
          directives and orders of any federal, state, municipal or other
          governmental authority including, without limitation, any of the
          foregoing which may restrict the sale or disposition of securities.
          The Lender in its sole discretion, but in good faith, at any such sale
          or in connection with any such disposition may restrict the
          prospective bidders or purchasers as to the nature of business,
          investment intention, or otherwise, including, without limitation, a
          requirement that the persons making such purchases represent and agree
          to the satisfaction of the Lender that they are purchasing the
          Collateral, or some portion thereof, for their own account, for
          investment and not with a view towards the distribution or a sale
          thereof, or that they otherwise fall within some lawful exemption from
          registration under applicable laws.

9. Actions By the Lender. Pledgor hereby appoints the Lender, or any agent
designated by the Lender, as the attorney-in-fact of Pledgor after an Event of
Default has occurred and is continuing to: (a) endorse in favor of the Lender
any of the Collateral; (b) cause the transfer of any of the Collateral in such
name as the Lender may from time to time determine; (c) renew, extend or roll
over any Collateral; (d) make, demand and initiate actions to enforce any of the
Collateral or rights therein; and (e) file financing statements, continuation
statements, and amendments thereto describing the Collateral without the
signature of Pledgor. The Lender may


                                      -7-



take such action with respect to the Collateral as the Lender may reasonably
determine to be necessary to protect and preserve its interest in the
Collateral. The Lender shall also have and may exercise at any time after an
Event of Default has occurred and is continuing all rights, remedies, powers,
privileges and discretions of Pledgor with respect to and under the Collateral.
The within designation and grant of power of attorney is coupled with an
interest and is irrevocable until this Pledge and Security Agreement is
terminated by a written instrument executed by a duly authorized officer of the
Lender or until all Obligations have been paid or fulfilled and the obligation
of the Lender to make Loans under the Promissory Note has terminated. The power
of attorney under this Section 9 shall not be affected by subsequent disability
or incapacity of Pledgor. The Lender shall not be liable for any act or omission
to act pursuant to this Section 9, except for any act or omission to act which
constitutes gross negligence or willful misconduct.

10. Rights and Remedies. The rights, remedies, powers, privileges and
discretions of the Lender hereunder (hereinafter, the "Rights and Remedies")
shall be cumulative and not exclusive of any rights, remedies, powers,
privileges or discretions which it may otherwise have. No delay or omission by
the Lender in exercising or enforcing any of the Rights and Remedies shall
operate as, or constitute, a waiver thereof. No waiver by the Lender of any
default or any Event of Default or of any default under any other Loan Document
shall operate as a waiver of any other default or Event of Default or of any
other default under any Loan Document. No exercise of any Rights and Remedies
shall preclude any other exercise of the Rights and Remedies. No waiver by the
Lender of any of the Rights and Remedies on any one occasion shall be deemed a
waiver on any subsequent occasion nor shall it be deemed a continuing waiver.
All Rights and Remedies and all of the Lender's rights, remedies, powers,
privileges and discretions under any other agreement or transaction in respect
of the Collateral are cumulative and not alternative or exclusive and may be
exercised by the Lender at such time or times in such order of preference as the
Lender in its sole and absolute discretion may determine.

11. Pledgor's Consent and Waiver. Pledgor hereby agrees that the Lender may
enforce its rights as against Pledgor or the Collateral, or as against any other
party liable for the Obligations, or as against any other collateral given for
any of the Obligations, in any order or in such combination as the Lender may in
its sole discretion determine, and Pledgor hereby expressly waives all
suretyship defenses and defenses in the nature thereof, agrees to the release or
substitution of any Collateral hereunder or otherwise, and consents to each and
all of the terms, provisions and conditions of the other Loan Documents. Pledgor
further: (a) waives presentment, demand, notice and protest with respect to the
Obligations and the Collateral; (b) waives any delay on the part of the Lender;
(c) assents to any indulgence or waiver which the Lender may grant or give any
other person liable or obliged to the Lender for or on account of the
Obligations; (d) authorizes the Lender to alter, amend, cancel, waive or modify
any term or condition of the obligations of any other person liable or obligated
to the Lender for or on account of the Obligations without notice to or further
consent from Pledgor; (e) agrees that no release of any property securing the
Obligations shall affect the rights of the Lender with respect to the Collateral
hereunder which is not so released; and (f) to the fullest extent that is
permitted by applicable law, waives the right to notice and/or hearing, it might
otherwise be entitled thereto, prior to the Lender's exercising the Rights and
Remedies upon an Event of Default.


                                      -8-



12. Lender May Assign. Pledgor agrees that upon any sale or transfer by the
Lender of the Loan Documents and the indebtedness evidenced thereby that is
permitted under the Promissory Note, the Lender may deliver the Collateral
disposed of as part of such a sale or transfer to the purchaser or transferee,
who shall thereupon become vested with all powers and rights given to the Lender
in respect thereto, and the Lender shall be thereafter forever relieved and
fully discharged from any liability or responsibility in connection therewith.

13. Limits on Lender's Duties. The Lender shall not have any duty as to the
collection or protection of the Collateral, or any portion thereof, or any
income or distribution thereon, beyond the safe custody of such Collateral as
may come into the actual possession of the Lender and the accounting for monies
actually received by the Lender hereunder, and the Lender shall not have any
duty as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Lender shall be deemed to have exercised reasonable care
in the custody and preservation of any Collateral in its possession of such
Collateral is accorded treatment equal to that which is accords its own
property. Nothing in this Agreement shall be construed as an undertaking by the
Lender of any of the liabilities or obligations of Pledgor as pledgor or any
other shareholder, member or partner of any of the investment entities listed on
Exhibit A, including but not limited to, the obligation to make contributions to
capital or the obligation to make any other payment to, for or on behalf of
Pledgor. The Lender's rights and obligations in respect of the Pledged Interests
are those only of a secured party under Massachusetts law.

14. Release; Termination.

          Upon the indefeasible payment in full of all Obligations and the
termination or expiration of the any obligation of the Lender to make loans
under the Promissory Note, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to Pledgor. Upon any such payment
and termination or expiration, the Lender will, at Pledgor's sole expense,
deliver to Pledgor all certificates and instruments, if any, evidencing the
Collateral held by the Lender hereunder, and execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination.

15. Miscellaneous.

     15.1 The Lender's Rights and Remedies may be exercised without resort to or
          regard to any other source of satisfaction of the Obligations.

     15.2 All of the agreements, obligations, undertakings, representations and
          warranties herein made by Pledgor shall inure to the benefit of the
          Lender and their respective successors and assigns and shall bind
          Pledgor and its successors and assigns.

     15.3 This Agreement and all other instruments executed in connection
          herewith constitute the entire agreement between Pledgor and the
          Lender pertaining to the subject matter hereof, and supersede all
          prior agreements, understandings, negotiations and discussions,
          whether oral or written, of such parties pertaining to the subject
          matter hereof.


                                      -9-



     15.4  No modification, amendment or waiver of any provisions of this
           Agreement shall be effective unless executed in writing by the party
           to be charged with such modification, amendment and waiver and, if
           such party be the Lender, then by a duly authorized officer thereof.

     15.5  This Agreement and all other documents in the Lender's possession
           which relate to the Obligations may be reproduced by the Lender by
           any photographic, photostatic microfilm, microcard, miniature
           photographic, xerographic or similar process and, with the exception
           of instruments constituting the Collateral, the Lender may destroy
           the original from which any document was so reproduced. Any such
           reproduction shall be admissible in evidence as the original itself
           in any judicial or administrative proceeding (whether or not the
           original is in existence and whether or not such reproduction was
           made in the regular course of business) and any enlargement,
           facsimile or further reproduction shall be likewise admissible in
           evidence.

     15.6  Captions in this Agreement are intended solely for convenience and
           shall not be deemed to affect the meaning or construction of any
           provision hereof.

     15.7  Each provision hereof shall be enforceable to the fullest extent
           permitted by applicable law. The invalidity and unenforceability of
           any provision(s) hereof shall not impair or affect any other
           provision(s) hereof which are valid and enforceable.

     15.8  This Agreement may be executed in several counterparts, each of which
           when executed and delivered is an original, but all of which together
           shall constitute one instrument. In making proof of this Agreement,
           it shall not be necessary to produce or account for more than one
           such counterpart which is executed by the party against whom
           enforcement of such agreement is sought.

     15.9  Any demand, notice or request by either party to the other shall be
           given in the manner provided therefor in the Promissory Note.

     15.10 In the event of any conflict between the provisions of this Agreement
           and the Promissory Note, the Promissory Note shall govern.

     15.11 This Agreement shall in all respects be governed, construed, applied
           and enforced in accordance with the laws of the Commonwealth of
           Massachusetts without regard to principles of conflicts of law.

16. WAIVER OF JURY TRIAL. PLEDGOR AND THE LENDER MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER


                                      -10-



VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE LENDER TO ACCEPT THIS AGREEMENT AND MAKE THE FACILITY.

                           [Signature pages attached]


                                      -11-



     This Pledge and Security Agreement has been executed and delivered as an
instrument under seal as of the 27th day of August, 2007.

                                        PLEDGOR:

                                        ANTHRACITE CAPITAL, INC.,
                                        a Maryland corporation


                                        By: /s/ Richard M. Shea
                                            ------------------------------------
                                            Richard M. Shea
                                            President


                                      -12-



                                        LENDER:

                                        KEYBANK NATIONAL ASSOCIATION


                                        By: /s/ Michael M Pomposelli
                                            ------------------------------------
                                            Name: Michael M Pomposelli
                                            Title: Vice President

 [Lender's Signature Page to Ownership Interests Pledge and Security Agreement]


                                      -13-



                                    EXHIBIT A

  Investment Entity           Investment                Pledged Interest
- ------------------------------------------------------------------------------
BlackRock Diamond      658.9262 Shares of Class C   658.9262 Shares of Class C
Property Fund, Inc.,   Common Stock of BlackRock    Common Stock of BlackRock
a Maryland
corporation
("BlackRock")

BlackRock              All rights of Pledgor with   All rights of Pledgor with
                       respect to redemption of     respect to redemption of
                       658.9262 Shares of Class C   658.9262 Shares of Class C
                       Common Stock of BlackRock    Common Stock of BlackRock


                                       -1-