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
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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,
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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
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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;
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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
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