AMENDMENT NO. 4 TO MASTER REPURCHASE AGREEMENT AND ANNEX I TO MASTER REPURCHASE AGREEMENT SUPPLEMENTAL TERMS AND CONDITIONS

Exhibit 10.5

AMENDMENT NO. 4 TO MASTER REPURCHASE AGREEMENT AND ANNEX I TO

MASTER REPURCHASE AGREEMENT SUPPLEMENTAL TERMS AND

CONDITIONS

AMENDMENT NO. 4 TO MASTER REPURCHASE AGREEMENT AND ANNEX I TO MASTER REPURCHASE AGREEMENT SUPPLEMENTAL TERMS AND CONDITIONS , dated as of May 15, 2009 (this “ Amendment ”), by and among ANTHRACITE FUNDING, LLC (“ Delaware Seller ”), AHR CAPITAL DB LIMITED , an Irish private limited company (“ Irish Seller ”, and together with Delaware Seller, individually or collectively as the context may require, “ Seller ”), ANTHRACITE CAPITAL, INC. , a Maryland corporation (“ Sponsor ”) and DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH , a branch of a German banking institution (“ Buyer ”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as hereinafter defined).

RECITALS

WHEREAS, Seller and Buyer are parties to that certain Master Repurchase Agreement and Annex I to Master Repurchase Agreement Supplemental Terms And Conditions, dated as of December 23, 2004, as supplemented by the English Loan Supplement dated December 23, 2004, the Joinder, dated August 24, 2005, and the Joinder, dated October 24, 2005, as amended by that certain Amendment No. 1 to Annex I to Master Repurchase Agreement Supplemental Terms and Conditions, dated February 8, 2007, that certain Amendment No. 2 to Annex I to Master Repurchase Agreement Supplemental Terms and Conditions, dated July 8, 2008 (“ Amendment No. 2 ”), and that certain Amendment No. 3 to Master Repurchase Agreement and Annex I to Master Repurchase Agreement Supplemental Terms and Conditions, dated July 17, 2008 (“ Amendment No. 3 ”) (and as otherwise amended, restated, supplemented or otherwise modified from time to time, including by this Amendment, the “ Repurchase Agreement ”);

WHEREAS, by the terms of Amendment No. 2, the Irish Seller had, by a clerical error, been removed as a Seller under the Repurchase Agreement and the parties hereto wish to correct such clerical error by reinserting the Irish Seller as a party to the Repurchase Agreement;

WHEREAS, Irish Seller wishes to confirm and agree to the terms of Amendment No. 2 and Amendment No. 3;

WHEREAS, Seller and Buyer wish to further amend the Repurchase Agreement, as more particularly set forth herein;

WHEREAS, Sponsor as the borrower agent (in such capacity, the “ BANA Borrower Agent ”), the borrowers from time to time parties thereto (each, a “ BANA Borrower ,” and collectively, the “ BANA Borrowers ”) and Bank of America, N.A. (“ BANA ”), as lender (in such capacity, the “ BANA Lender ”) have agreed to amend (a) that certain Credit Agreement, dated as of March 17, 2006 (the “ Existing BANA Credit Agreement ”) by entering into that certain Omnibus Amendment to Credit Agreement and Custodial and Payment Application Agreement, dated as of the date hereof (the “ BOA Omnibus Amendment ”; the Existing BANA

Credit Agreement, as amended by the BOA Omnibus Amendment and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “ BANA Credit Agreement ”) and (b) that certain Custodial and Payment Application Agreement, dated as April 7, 2006 (the “ Existing BANA Custodial Agreement ,” and as amended by the BOA Omnibus Amendment and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “ BANA Custodial Agreement ”), by and among the BANA Borrower Agent, the BANA Lender and BANA, as successor-by-merger to LaSalle Bank National Association, as custodian and bank (in such capacity, the “ BANA Custodian ”)

WHEREAS, Banc of America Mortgage Capital Corporation (“ BAMCC ”) and BANA, as buyers (BAMCC and BANA, in such capacity, the “ BOA Buyers ”), BANA, as buyer agent (in such capacity, the “ BOA Buyer Agent ”; the BOA Buyer Agent, the BOA Buyers and the BANA Lender, collectively, the “ BOA Parties ”) and Anthracite Capital BOFA Funding LLC (the “ BOA Seller ”) have agreed to amend that certain Master Repurchase Agreement, dated as of July 20, 2007 (the “ Existing BOA Repurchase Agreement ”), by entering into that certain Amendment to Master Repurchase Agreement, dated as of the date hereof (the “ BOA Repurchase Amendment ”; the Existing BOA Repurchase Agreement, as amended by the BOA Repurchase Amendment and as further amended, restated, supplemented, or otherwise modified from time to time, the “ BOA Repurchase Agreement ”);

WHEREAS, Morgan Stanley Mortgage Servicing Limited, as security trustee under the MS Loan Agreement (defined below) (“ MS Servicing ”) and Morgan Stanley Principal Funding, Inc., as agent and lender under the MS Loan Agreement (Morgan Stanley Principal Funding, Inc. and together with MS Servicing, collectively, “ Morgan Stanley ”; Morgan Stanley together with Buyer and the BOA Parties, collectively, the “ Secured Creditors ”), as lenders, and AHR Capital MS Limited, as borrower (“ AHR-MS Borrower ”; and AHR-MS Borrower, together with Sponsor, BOA Seller, the BOA Borrowers, the BOA Borrower Agent and Seller, the “ Anthracite Parties ”), have agreed to amend and restate the Third Amended and Restated Multicurrency Facility Agreement, dated as of December 31, 2008, by entering into the Fourth Amended and Restated Multicurrency Facility Agreement, dated as of the date hereof (as amended, restated, supplemented, or otherwise modified from time to time, the “ MS Loan Agreement ”; the MS Loan Agreement, together with the Repurchase Agreement, the BOA Repurchase Agreement and the BANA Credit Agreement, the “ Senior Secured Facilities ”);

WHEREAS, Sponsor has guaranteed the obligations of (i) the AHR-BOA Borrower under the BOA Credit Agreement, (ii) the AHR-BOA Seller under the BOA Repurchase Agreement, (iii) the Seller hereunder and (iv) the AHR-MS Borrower under the MS Loan Agreement to the applicable Secured Creditors;

WHEREAS, AHR Capital Limited (“ AHR Ireland ”) is a wholly-owned subsidiary of Sponsor;

WHEREAS, the Secured Creditors have appointed Bank of America, N.A. as collateral agent (in such capacity and together with any successor collateral agent appointed pursuant to the Collateral Agency Agreement, the “ Collateral Agent ”) pursuant to the Collateral Agency Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Collateral Agency Agreement ”), among the Secured Creditors, the Anthracite Parties and the Collateral Agent;

 

-2-

WHEREAS, as a condition to the effectiveness of this Amendment and to the amendment and amendment and restatement, as applicable, of the other Senior Secured Facilities, the Anthracite Parties have agreed to grant to each Secured Creditor a subordinated second priority lien on all Primary Interests (as defined below) securing the obligations to the other Secured Creditors under the other Senior Secured Facilities;

WHEREAS, the Secured Creditors and the Collateral Agent have entered into the Intercreditor Agreement, dated as of the date hereof (the “ Intercreditor Agreement ”), to set forth the relative rights of the Secured Creditors in the Primary Interests;

WHEREAS, as a condition to effectiveness of this Amendment, the BOA Amendment and the MS Agreement, Anthracite Secured Interest LLC (“ SPE Holdco ,”; SPE Holdco together with the Anthracite Parties, the “ Loan Parties ”), a wholly-owned subsidiary of Sponsor, has agreed to provide the Collateral Agent, for the benefit of the Secured Creditors, with a security interest in all of its assets (the “ Additional Collateral ”) to the Collateral Agent for the benefit of the Secured Creditors pursuant to the SPE Holdco Security Agreement (as defined below), which security interest constitutes a “securities contract” as contemplated by Section 741(7)(A)(xi) of the Bankruptcy Code as a security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in Section 741(7)(A) of the Bankruptcy Code;

WHEREAS the Anthracite Parties, SPE Holdco and the Secured Creditors have agreed to the distribution of the proceeds of the Additional Collateral by the Collateral Agent pursuant to the terms of the Custodial and Account Control Agreement, dated as of the date hereof, between the Collateral Agent, SPE Holdco, Sponsor and Bank of America, N.A., in its capacity as custodian thereunder (the “ Custodial and Account Control Agreement ”);

WHEREAS, Sponsor will cause all distributions received by Sponsor from AHR Ireland to be deposited in the Cash Management Account (as defined in the Custodial and Account Control Agreement) and applied pursuant to the Custodial and Account Control Agreement; and

WHEREAS, Buyer has agreed, subject to the terms and conditions hereof, that the Existing Repurchase Agreement shall be amended as set forth in this Amendment;

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Amendments to Section 2 of the Repurchase Agreement (Additional and Substitute Definitions) .

(a) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definitions of “Buyer’s Margin Percentage,” “CF Sweep Event,” “CF Sweep

 

-3-

Purchase Percentage,” “Credit Gain,” “Credit Loss,” “Deficit Cure Amount,” “English Loan,” “English Loan Supplement”, “Exit Fee”, “Margin Deficit,” “Margin Excess,” “Margin Notice Deadline,” “Market Value,” “Transition Down Date,” and “Transition Up Date,” in their entirety.

(b) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Affiliate” in its entirety and inserting in lieu thereof the following:

““ Affiliate ” shall mean, in respect of any specified Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person. For the purposes of this definition, “Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative thereto; provided , that any Person which owns directly or indirectly 25% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 25% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) shall be deemed to control such corporation or other Person. Notwithstanding the forgoing, for all purposes hereunder, neither BlackRock Financial Management, Inc., Sponsor nor any direct or indirect Subsidiary thereof shall be an “Affiliate” of Bank of America Corporation or any of its Subsidiaries (except BlackRock Financial Management, Inc., Sponsor or any such direct or indirect Subsidiary thereof).”

(c) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Applicable Spread” in its entirety and inserting in lieu thereof the following:

““ Applicable Spread ” shall mean (i) during the period from the Amendment Effective Date until the Extension Effectiveness Date, a rate per annum equal to 3.50% and (ii) thereafter, a rate per annum equal to 4.00%; provided that, the then-applicable Applicable Margin shall be increased by a rate per annum equal to 4.00% commencing as of the date an Event of Default has occurred and so long as such Event of Default is continuing.”

(d) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Collection Period” in its entirety and inserting in lieu thereof the following:

““ Collection Period ” shall mean the period from (and including) a Remittance Date to (but excluding) the next Remittance Date.”

 

-4-

(e) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Custodial Agreement” in its entirety and inserting in lieu thereof the following:

““ Custodial Agreement ” shall mean the Custodial Agreement, dated as of December 23, 2004, by and among the Custodian, the Seller and the Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.”

(f) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Guaranty” in its entirety and inserting in lieu thereof the following:

““ Guaranty ” shall mean that certain Guaranty, dated December 23, 2004, given by Sponsor in favor of Buyer, as reaffirmed by that certain Reaffirmation of Guaranty dated as of February 27, 2007, and amended by that certain Amendment No. 2 to Guaranty dated as of July 8, 2008, and further amended by that certain Amendment No. 3 to Guaranty, dated as of the date hereof, as the same may be amended, restated, supplemented or otherwise modified from time to time.”

(g) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Remittance Date” in its entirety and inserting in lieu thereof the following:

““ Remittance Date ” shall mean the day falling two (2) Business Days prior the day by which Paydown Target Deficiencies must be communicated pursuant to the definition of “Paydown Target Deficiency” (as such term is defined in the Custodial and Account Control Agreement) and, for the month in which the Termination Date falls, the Termination Date.”

(h) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Repurchase Date” in its entirety and inserting in lieu thereof the following:

““ Repurchase Date ” shall mean September 30, 2010, or such other date on which this Agreement shall be extended or terminated in accordance with Section 3(e) or such other date as otherwise provided in this Agreement.”

(i) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Transaction Documents” in its entirety and inserting in lieu thereof the following:

““ Transaction Documents ” shall mean, collectively, the Agreement, any applicable Annexes to the Agreement, the Guaranty, the Custodial Agreement, all Confirmations executed pursuant to the Agreement in connection with specific Transactions, the Parent Pledge Agreement, the Seller Security Agreement, the Additional Collateral Documents and the Second Priority Collateral Documents.”

(j) Schedule I-D (Pricing Rate) of the Existing Repurchase Agreement is hereby amended by amending the definition of “LIBOR Floor” by replacing “3.00%” with “2.00%.

 

-5-

(k) Section 2 of the Existing Repurchase Agreement is hereby amended by inserting the following new definitions in proper alphabetical order:

“” Acceptable Adjustment Information ” shall have the meaning set forth in Section 16 (J) hereof.

“ Additional Collateral ” shall mean the unencumbered assets held by AHR Ireland and SPE Holdco pledged to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Additional Collateral Documents.

“ Additional Collateral Documents ” shall mean the SPE Holdco Security Agreement, the Additional Parent Pledge Agreement (SPE Holdco), the Additional Share Charge Agreement (AHR Ireland) and the Additional Parent Pledge Agreement (AHR Ireland) and all other security documents which are hereinafter delivered to the Collateral Agent granting a Lien to the Collateral Agent for the benefit of the Secured Creditors on any property of any Person to secure the obligations and liabilities of any Anthracite Party or Affiliate thereof under any Senior Secured Facility.

“ Additional Parent Pledge Agreement (AHR Ireland) ” shall mean that certain First Priority Irish Share Charge, dated as of May 15, 2009, made by Sponsor in favor of the Collateral Agent for the benefit of the Secured Creditors, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Additional Parent Pledge Agreement (SPE Holdco) ” shall mean that certain Equity Pledge and Security Agreement, dated as of May 15, 2009, made by Sponsor in favor of the Collateral Agent for the benefit of the Secured Creditors, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Additional Share Charge Agreement (AHR Ireland) ” shall mean that certain First Priority Irish Share Charge, dated as of May 15, 2009, made by Sponsor in favor of the Collateral Agent for the benefit of the Secured Creditors, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Aggregate Extension Criteria ” shall mean, collectively:

(l) the Extension Criteria;

(m) the “Extension Criteria,” as defined in the BANA Credit Agreement;

(n) the “Extension Criteria,” as defined in the BOA Repurchase Agreement; and

 

-6-

(o) the extension criteria, as specified in Section 9.3 of the MS Loan Agreement.

“ AHR Ireland ” shall have the meaning set forth in the Restructuring Amendment.

“ AHR Ireland Loan Agreement ” shall mean that certain Multicurrency Facility Agreement, dated as of January 27, 2006, between Sponsor, as lender, and AHR Ireland, as borrower.

“ AHR-MS Borrower ” shall have the meaning set forth in the Restructuring Amendment.

“ Anthracite Parties ” shall have the meaning set forth in the Restructuring Amendment.

“ Asset Attributable Repurchase Price ” shall mean, in respect of each Purchased Asset, the outstanding Repurchase Price of the Transaction attributable to such Purchased Asset (excluding accrued Price Differential); provided that, on each Reallocation Date and at any time upon the occurrence of a Reallocation Credit Event, the Buyer may, in its sole and absolute discretion, modify the Asset Attributable Repurchase Price in respect of any Purchased Asset; provided further that, in no event will any such modification of the Asset Attributable Repurchase Price increase the aggregate outstanding Repurchase Price for all Transactions.

“ BlackRock Cash Fee ” shall mean an amount equal to the lesser of (i) the net interest payment reductions associated with Permitted Refinancing Indebtedness effective after the Amendment Effective Date and (ii) 50% of the base management fees due and payable to BlackRock Financial Management by Sponsor and its Subsidiaries.

“ BlackRock Credit Agreement ” shall mean that certain Credit Agreement, dated as of March 7, 2008, between Sponsor and BlackRock Holdco 2, Inc., as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ BlackRock Entity ” shall mean BlackRock Financial Management Inc., BlackRock, Inc., and any of their Subsidiaries or Affiliates.

“ BlackRock Financial Management ” shall mean BlackRock Financial Management, Inc.

“ BlackRock Management Agreement ” shall mean that certain Amended and Restated Investment Advisory Agreement by and between Sponsor and BlackRock Financial Management, dated as of March 31, 2008, as amended by that certain First Amendment and Extension dated as of March 11, 2009, as the same may be further amended, modified or extended.

 

-7-

“ BOA Parties ” shall have the meaning set forth in the Restructuring Amendment.

“ BOA Repurchase Agreement ” shall have the meaning set forth in the Restructuring Amendment.

“ Budget ” shall mean a month-to-month budget prepared by Sponsor for the period from the Amendment Effective Date through the initial Repurchase Date; and after the initial Repurchase Date, any Extension Budget accepted by the Buyer in its good faith business judgment.

“ Capital Lease Obligations ” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“ Capital Stock ” shall mean all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, and all similar ownership interests in a Person (other than a corporation), including, without limitation, non-managing member membership interests and limited partnership interests, and any and all warrants or options to purchase any of the foregoing.

“ Collateral Agency Agreement ” shall have the meaning set forth in the Restructuring Amendment.

“ Collateral Agent ” shall have the meaning set forth in the Restructuring Amendment.

“ Custodial and Account Control Agreement ” shall have the meaning set forth in the Restructuring Amendment.

“ DB Additional Collateral ” shall mean all assets over which a Lien has been granted to the Collateral Agent for the benefit of Buyer pursuant to the Additional Collateral Documents.

“ DB Primary Interests ” shall mean Buyer’s (i) rights in assets purchased under the Repurchase Agreement and in other Property pledged as additional security for all of the obligations of Seller under the Repurchase Agreement (collectively, the “ DB Subject Assets ”) and (ii) other rights under the Repurchase Agreement and the other Transaction Documents.

“ DB Secondary Collateral ” shall mean all assets over which a Lien has been granted to the Collateral Agent for the benefit of Buyer pursuant to the Second Priority Collateral Documents.

 

-8-

“ Deferred Restructuring Fee ” shall mean the sum of the Guaranteed Deferred Restructuring Fee and the Secondary Deferred Restructuring Fee, without duplication.

“ Existing Indebtedness ” shall have the meaning provided in Section 11 hereof.

“ Extension Acceptance ” shall have the meaning provided in Section 3(e) hereof.

“ Extension Budget ” shall mean a month-to-month budget prepared by the Sponsor for the period from the then current Repurchase Date through the requested extended Repurchase Date, which budget shall be delivered by the Sponsor to the Buyer concurrently with the Extension Request.

“ Extension Criteria ” shall mean the following:

(a) the Buyer receives an Extension Budget at least thirty (30) days prior to the then-current Repurchase Date, in form and substance satisfactory to the Buyer in its sole discretion exercised in good faith;

(b) no Paydown Target Deficiency has occurred and is continuing; and

(c) no Event of Default hereunder has occurred and is continuing.

“ Extension Effectiveness Date ” shall have the meaning provided in Section 3(e) hereof.

“ Extension Request ” shall have the meaning provided in Section 3(e) hereof.

“ First Priority DB Seller Security Agreement ” shall mean the First Priority DB Seller Security Agreement, dated as of the date hereof, delivered by Seller in favor of the Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.”

“ Guaranteed Deferred Restructuring Fee ” shall mean an amount equal to $716,453.65.

“ Indebtedness ” shall mean, for any Person without duplication: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued

 

-9-

expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days after the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (i) Indebtedness of general partnerships of which such Person is a general partner; (j) Hedging Transactions and (k) all off balance sheet obligations of such Person.

“ Independent Director ” shall mean a director meeting the criteria for an “independent director” as set forth in NYSE, Inc., Listed Company Manual § 303(A) (or such successor regulation or standard); provided that, in addition, references to “the company” therein shall include BlackRock Financial Management and its Affiliates.

“ Intercompany Subordination Agreement ” shall mean an intercompany subordination agreement executed on behalf of Seller by a Responsible Officer of Seller acceptable to Buyer in its sole discretion, such discretion exercised in good faith.

“ Intercreditor Agreement ” shall have the meaning set forth in the Restructuring Amendment.

“ Investment ” shall mean in respect of any Person, any loan or advance to such Person, any purchase or other acquisition of any Capital Stock of such Person, any capital contribution to such Person or any other investment or interest in such Person.

“ Lien ” shall mean any mortgage, lien, pledge, charge, security interest or similar encumbrance.

“ Lockbox Account ” shall mean the “Pledgor’s Account,” as defined in the Custodial and Account Control Agreement.

“ Material Adverse Change ” shall mean a material adverse change on (a) any of the Property, business, operations or financial condition of (i) Sponsor and its consolidated Subsidiaries, taken as a whole, or (ii) Seller, (b) the ability of Sponsor or Seller to perform its obligations under any of the Transaction Documents to which it is a party, (c) the validity or enforceability of any of the Transaction Documents or (d) the rights and remedies of the Buyer under any of the Transaction Documents.

 

-10-

“ Monetary Credit Event ” shall mean any event or occurrence, including, without limitation, any Reallocation Credit Event, that the Buyer has determined, in its sole discretion to have had, or is likely to have, a material adverse effect on the ability of any Purchased Asset to generate current or future cash flows.

“ Morgan Stanley ” shall have the meaning set forth in the Restructuring Amendment.

“ MS Loan Agreement ” shall have the meaning set forth in the Restructuring Amendment.

“ Net Interest Savings ” shall have the meaning set forth in Section 16 (J) hereof.

“ New Entities ” shall have the meaning set forth in the Restructuring Amendment.

“ Parent Pledge Agreement ” shall mean that certain Parent Pledge Agreement, dated as of the date hereof, made by Sponsor in favor of the Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.”

“ Paydown Target Deficiency ” shall have the meaning provided in Section 3(l)  hereof.

“ Paydown Targets ” shall mean the quarterly paydown targets in respect of each Secured Creditor, as specified in (i) Section 2.06(f) and Schedule 2.06(f) of the BOA Credit Agreement, (ii) Section 3.14 and Exhibit XI of the BOA Repurchase Agreement, (c) Exhibit C of the Restructuring Amendment and (iv) Section 10.3 and Schedule 18 of the MS Loan Agreement.

“ Permitted Asset Refinancing ” shall mean Indebtedness, including, without limitation, any refinancings, refundings, renewals or extensions of credit, secured by any asset (a) released from the Buyer’s Lien in accordance with Section 3(d) or (f) , (b) released from another Secured Creditor’s Lien pursuant to the terms of the corresponding Senior Secured Facility or (c) released from the Collateral Agent’s Lien pursuant to the Additional Collateral Documents, and, in each case, transferred to a Person who is not an Anthracite Party nor a New Entity; provided that, (A) such Indebtedness shall (i) have a final maturity date no earlier than December 31, 2011; (ii) the terms of such new Indebtedness shall provide that an Event of Default shall not constitute a default or acceleration event under such new Indebtedness; (iii) have representations and warranties, covenants, defaults and events of default which are not materially more restrictive, when taken as a whole, than the applicable representations and warranties, covenants, defaults and events of default in this Agreement; and (iv) be recourse only to such asset and is not otherwise secured by any Primary Interest or Additional Collateral; and (B) if such asset was a Purchased Asset subject to the terms of this Agreement, the Buyer shall receive the Release Price with respect to such Purchased Asset upon the occurrence of such Indebtedness.

 

-11-

“ Permitted BlackRock Payments ” shall mean the following:

(a) payment of interest under the BlackRock Credit Agreement; so long as (i) such payments are made solely from cash flow of Sponsor’s investment in Carbon Capital II, Inc. and (ii) no default or event of default under any Senior Secured Facility has occurred and is continuing; provided further that BlackRock Holdco 2, Inc. may accept the collateral securing the BlackRock Credit Agreement in full satisfaction of all obligations thereunder;

(b) payments made by issuers of collateralized debt obligations and other third parties (excluding Sponsor, any other Anthracite Party and their respective Subsidiaries) directly to BlackRock Financial Management in respect of administrative, accounting and service fees pursuant to the existing agreements for said services;

(c) BlackRock Cash Fees payable in accordance with the Custodial and Account Control Agreement;

(d) distributions of Capital Stock in Sponsor to any BlackRock Entity, so long as such distributions are made with the unanimous written consent of the Independent Directors of Sponsor; and

(e) payments to any BlackRock Entity pursuant to the Budget.

“ Permitted CDO Acquisition ” shall mean an investment by an issuer of a collateralized debt obligation in any transaction or series of transactions (i) made using cash of such issuer not permitted to be released to its equity holders, and (ii) not resulting in a reduction of such issuer’s free cash flow from the amount of free cash flow that existed immediately prior to such transaction or transactions.

“ Permitted Disposal ” shall mean (a) a disposition or (b) a Permitted Asset Refinancing, in either case, of all or any portion of the DB Primary Collateral to or by a third party in a arm’s-length transaction (i) in which the proceeds thereof are not less than the Release Price and (ii) requiring the payment of all such proceeds (less transaction costs satisfactory to the Buyer) directly into the Cash Management Account (as such term is defined in the Repurchase Agreement) on terms satisfactory to the Buyer.

“ Permitted Refinancing Indebtedness ” shall have the meaning set forth in Section 11(g) of the Restructuring Amendment.

“ Primary Interests ” as defined in the Intercreditor Agreement.

 

-12-

“ Property ” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Protective Cure Amounts ” shall have the meaning set forth in Section 16(F) of the Restructuring Amendment.

“ Purchased Assets ” shall mean the Purchased Loans and Purchased Securities, as applicable, it being understood that the “Purchased Loans” or “Purchased Securities” shall be deemed to be “Purchased Loans” or “Purchased Securities” for all purposes of this Agreement.

“ Quarterly Paydown Date ” shall mean each date set forth on Exhibit C of the Restructuring Amendment, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Quarterly Paydown Target ” shall mean the “Cumulative Quarterly Payment Target” set forth on Exhibit C of the Restructuring Amendment.

“ Reallocation Credit Event ” shall mean any of the following events shall have occurred and be continuing:

(a) with respect any Purchased Asset that is a mezzanine loan or B note:

(i) an event of default under the underlying loan agreement, participation or other financing document with respect to such Purchased Asset (after the expiration of all applicable cure periods, including cure periods afforded to lenders under any applicable intercreditor agreement and/or participation agreement);

(ii) the occurrence of any act of God that causes a material adverse effect on the operations of the Underlying Asset with respect to such Purchased Asset;

(iii) the occurrence of any transfer prohibited (i.e., triggering due-on-sale or due-on-encumbrance provisions) under the underlying loan agreement, participation or other financing document with respect to such Purchased Asset; or

(iv) the occurrence of a casualty or a condemnation at an Underlying Asset with respect to a Purchased Asset which causes a material adverse effect on the operations of such Underlying Asset.

 

-13-

(b) with respect any Purchased Asset that is a CMBS security or other real estate-related financial product:

(i) the downgrade by any Rating Agency of such Purchased Asset;

(ii) the placement by any Rating Agency of such Purchased Asset on a watchlist; or

(iii) the issuance by any Rating Agency of a negative outlook report with respect to such Purchased Asset.

“ Reallocation Date ” shall mean the 15th calendar day of each month, commencing with the first such date after the Amendment Effective Date; provided , that if any such date is not a Business Day, the “Reallocation Date” shall be the immediately succeeding Business Day.

“ Release Price ” shall mean, with respect to any Purchased Asset, the greatest of:

(a) the sum of:

(i) the Asset Attributable Repurchase Price for such Purchased Asset, plus

(ii) Price Differential accrued thereon, plus

(iii) the pro rata share of any other amount payable hereunder (excluding any amount payable in respect of the Deferred Restructuring Fee), plus

(iv) reasonable transaction costs relating to the Permitted Disposal in respect of such Purchased Asset, plus

(v) an amount equal to 25% of the Asset Attributable Repurchase Price for such Purchased Asset;

(b) an amount equal to 30% of the face amount of such Purchased Asset;

(c) 100% of the proceeds (less costs satisfactory to Buyer in its sole discretion exercised in good faith) in connection with any Permitted Disposal of such Purchased Asset; and

provided that, the Release Price of any Purchased Asset may be decreased by the Buyer in its sole discretion, exercised in good faith.

 

-14-

“ Reserved Matter ” shall mean any modification to the contractual relations between a Secured Creditor and any Anthracite Party which does or could:

(a) cause the date on which a payment is due from that Anthracite Party to fall sooner than agreed;

(b) increase the overall amount which that Anthracite Party is or will be obliged to pay over the life of those contractual relations or increase the amount of principal, interest fees or other amounts payable under those contractual relations or change the basis on which such amounts are calculated;

(c) change the Paydown Targets;

(d) change the way in which funds paid by that Anthracite Party are to be applied to amounts payable by that Anthracite Party;

(e) change the currency in which amounts due are payable;

(f) change the conditions of disposing of any interest in an asset of that Anthracite Party;

(g) change the ability of that Anthracite Party to agree to modify agreements between it and any of its debtors or other obligors;

(h) change the way in which amounts payable to that Anthracite Party are to be applied;

(i) change the Aggregate Extension Criteria;

(j) postpone, release or modify any obligation of that Anthracite Party to provide information, meet financial performance thresholds, not incur further Indebtedness or not grant new security;

(k) effect a change to the Secured Creditors or the Anthracite Parties;

(l) change any consent mechanism;

(m) vary the nature, scope or terms of any guarantee and indemnity; or

(n) have a material adverse effect on (i) the ability of the Anthracite Parties to fully and timely perform any of their obligations under any Transaction Document or (ii) any other Secured Creditor’s rights under its respective Senior Secured Facility and the applicable transaction documents thereunder.

“ Responsible Officer ” shall mean, as to any Person, the chief executive officer, the chief financial officer, the President, the Vice President, any director, the Secretary or the Treasurer or any other duly appointed officer of such Person or of its sole member or managing member customarily performing functions similar to those performed by any of the foregoing officers of such Person.

 

-15-

“ Restricted Payment ” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Capital Stock, or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof).

“ Restructuring Amendment ” shall mean that certain Amendment to the Repurchase Agreement, dated as of May 15, 2009, between Seller and Buyer.

“ Second Priority Collateral ” shall mean all assets of the Anthracite Parties over which a Lien has been granted to the Collateral Agent for the benefit of any Secured Creditor pursuant to the Second Priority Collateral Documents.

“ Second Priority Collateral Documents ” shall mean the Second Priority Security Agreement (BOA Collateral), the Second Priority Security Agreement (MS Collateral), the Second Priority Pledge Agreement (BOA Equity) and the Second Priority Pledge Agreement (MS Equity), the Second Priority Debenture (MS Collateral), the Second Priority Share Pledge (MS Equity), the Second Priority Collection Account Control Agreement (MS Collateral) and all other security documents which are hereinafter delivered to the Collateral Agent granting a second-priority Lien to the Collateral Agent for the benefit of the Buyer on any Property of any Person to secure the obligations and liabilities of any Anthracite Party or Affiliate thereof under any Loan Document or any Transaction Document.

“ Second Priority Collection Account Control Agreement (MS Collateral) ” shall mean the Second Priority Collection Account Security and Control Agreement, dated on or about the date hereof, among the AHR-MS Borrower, BANA, as Collateral Agent and BANA, as bank, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Second Priority Debenture (MS Collateral) ” shall mean Second Ranking Debenture, dated on or about the date hereof, made by the AHR-MS Borrower, in favor of Bank of America, N.A., as Collateral Agent, custodian and account bank, the Servicers (as defined therein) and Citco Corporate Services (Ireland) Limited, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Second Priority Pledge Agreement (BOA Equity) ” shall mean the Second Priority Parent Pledge Agreement to be executed and delivered by Sponsor in favor of the Collateral Agent for the ratable benefit of the Buyer and Morgan Stanley, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

-16-

“ Second Priority Pledge Agreement (MS Equity) ” shall mean the Second Priority Parent Pledge Agreement to be executed and delivered by Sponsor in favor of the Collateral Agent for the ratable benefit of the BOA Parties and Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Second Priority Security Agreement (BOA Collateral) ” shall mean the Second Priority Borrower Security Agreement to be executed and delivered by the BOA Seller in favor of the Collateral Agent for the ratable benefit of the Buyer and Morgan Stanley, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Second Priority Security Agreement (MS Collateral) ” shall mean the Second Priority Pledge and Security Agreement to be executed and delivered by the AHR-MS Borrower in favor of the Collateral Agent for the ratable benefit of the BOA Parties and Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Second Priority Share Pledge (MS Equity) ” shall mean the Second Priority Irish Share Charge, dated on or about the date hereof, made by Sponsor in favor of Bank of America, N.A. (as Collateral Agent for the ratable benefit of the Second Priority Secured Parties), as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Secondary Deferred Restructuring Fee ” shall mean an amount equal to $5,015,175.55.

“ Secured Creditors ” shall have the meaning set forth in the Restructuring Amendment.

“ Seller Security Agreement ” shall mean the Seller Security Agreement, dated as of the date hereof, delivered by the Seller in favor of the Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Senior Secured Facilities ” shall have the meaning set forth in the Restructuring Amendment.

“ Specified Cash Proceeds ” shall mean the aggregate amount of Repurchase Price reduced from the application of proceeds under:

(i) Section 5(d) (but only in respect of regularly scheduled principal payments);

(ii) Section 5(c)(iv);

 

-17-

(iii) Section 5(d) (but only in respect of any amounts received in excess of the Asset Attributable Repurchase Price);

(iv) Section 3(d) (but only in respect of any amounts received in excess of the Asset Attributable Repurchase Price) of this Agreement; and

(v) the application of amounts received by the Buyer from the Cash Management Account (as such term is defined in the Custodial and Account Control Agreement) pursuant to Section 2(d)(iii)(c) and Section 2(d)(iii)(e) of the Custodial and Account Control Agreement, in each case, received by the Buyer after the Amendment Effective Date, without duplication.

“ SPE Holdco ” shall have the meaning set forth in the Restructuring Amendment.

“ SPE Holdco Security Agreement ” shall mean that certain Pledge and Security Agreement to be executed and delivered by SPE Holdco in favor of the Collateral Agent for the benefit of the Secured Creditors, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Subsidiary ” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof Voting Power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have Voting Power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person; provided, that any issuer of certificated subordinate classes and residual equity interests in collateralized debt obligations, collateralized loan obligations or collateralized bond obligations (including, without limitation, any synthetic collateralized debt obligations or synthetic collateralized loan obligations) shall not be deemed a “Subsidiary” hereunder.

“ Underlying Asset ” shall mean, in respect of any Purchased Asset, the income-producing commercial real estate, loan note, bond, security or other asset which directly or indirectly secures such Purchased Asset or to which such Purchased Asset is otherwise related.

“ Unsecured Anthracite Notes ” shall mean the notes, preferred shares and other securities and obligations of Sponsor and its Affiliates listed on Schedule 1 .

“ Voting Power ” shall mean of any Voting Stock the number of votes such Voting Stock are entitled to cast for directors of Seller at any meeting of stockholders of such Seller.

 

-18-

“ Voting Stock ” shall mean all securities issued by Seller having the ordinary power to vote in the election of directors of Seller other than securities having such power only upon the occurrence of a default or any other extraordinary contingency.

SECTION 2. Amendments to Section 3 of the Repurchase Agreement (Initiation; Confirmation; Termination; Fees) . Section 3 of the Repurchase Agreement is hereby amended by:

(A) deleting Section 3(b) in its entirety and inserting the following in lieu thereof:

“(b) Notwithstanding anything contained herein to the contrary and in addition to any other amounts payable hereunder, Seller hereby promises to pay to the Buyer, without duplication, the Deferred Restructuring Fee. The Deferred Restructuring Fee shall be due and payable to the Buyer on any date that is the earlier of (a) the date on which the Repurchase Price for all Purchased Assets is repaid in full, (b) the Repurchase Date and (c) any date on which the balance of the Repurchase Price is declared, or becomes automatically, accelerated pursuant to Section 14 hereof; provided , that if the Buyer agrees to the repurchase by the Seller of all Purchased Assets and has otherwise released all other Liens on the Collateral, prior to the payment of the Secondary Deferred Restructuring Fee, then any outstanding Secondary Deferred Restructuring Fee shall be deemed waived.”

(B) deleting Sections 3(d)(iii), 3(d)(iv) and 3(d)(v) in their entirety and inserting the following in lieu thereof:

“(iii) on such Early Repurchase Date, Seller pays to Buyer an amount equal to the sum of the Asset Attributable Repurchase Price and any other amounts payable under this Agreement (including, without limitation, Section 3(i) of Annex I) with respect to the repurchase of such Purchased Asset which is subject to a Permitted Disposal.

(iv) Reserved.

(v) Reserved.”

(C) deleting Section 3(e) in its entirety and inserting the following in lieu thereof:

“3(e) Extension of the Repurchase Date .

(i) On the Repurchase Date, termination of the applicable Transactions will be effected by transfer to Seller or its agent of the Purchased Assets and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of Seller pursuant to Section 5). Notwithstanding the foregoing, on a date that is not earlier than thirty (30) days prior to the then current Repurchase Date, if the Extension Criteria shall be satisfied, the Seller may request (such request, the “ Extension Request ”) that the Buyer extend the

 

-19-

Repurchase Date to March 30, 2011. The Buyer may, in its sole discretion, agree to such Extension Request by providing written notice of such extension to the Seller (the “ Extension Acceptance ”) no later than five (5) Business Days prior to the then current Repurchase Date; provided that, any such extension shall be effective on the date that the Extension Acceptance is given by Buyer (the “ Extension Effectiveness Date ”). Any failure by the Buyer to deliver such Extension Acceptance shall be deemed to be the Buyer’s determination not to extend the then-current Repurchase Date.

(ii) If, notwithstanding the satisfaction of the Extension Criteria on the date that the Buyer receives the Extension Request and the date that is five (5) Business Days prior to the then-current Repurchase Date, the Buyer determines not to extend the then-current Repurchase Date, the Buyer shall, upon the Repurchase Date, (i) accept only t