AMENDMENT TO MASTER REPURCHASE AGREEMENT

Exhibit 10.3

AMENDMENT TO MASTER REPURCHASE AGREEMENT

AMENDMENT TO MASTER REPURCHASE AGREEMENT, dated as of May 15, 2009 (this “ Amendment ”), to that certain Master Repurchase Agreement, dated as of July 20, 2007 (together with Annex I thereto (the (“ Existing Annex ”), as both are amended, restated, supplemented or otherwise modified and in effect prior to the date hereof, the “ Existing Repurchase Agreement ,” and as amended hereby and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “ Repurchase Agreement ”), by and among Anthracite Capital BOFA Funding LLC, a limited liability company organized under the laws of Delaware (“ Seller ”), as seller, Bank of America, N.A. (“ BANA ”), as a buyer (in such capacity, a “ Buyer ”), Banc of America Mortgage Capital Corporation (“ BAMCC ”), as a buyer (in such capacity, a “ Buyer ” and together with BANA, the “ Buyers ”) and BANA, as buyer agent (in such capacity, the “ Buyer Agent ”). Capitalized terms used but not otherwise defined herein shall have the meanings specified therefor in the Repurchase Agreement.

RECITALS

WHEREAS, the Seller, the Buyers and the Buyer Agent are parties to the Existing Repurchase Agreement;

WHEREAS, AHR Capital BOFA Limited (and together with the other borrowers party to the Credit Agreement from time to time, the “ Borrowers ”), as borrower, Anthracite Capital, Inc. (“ Sponsor ”), as borrower agent (in such capacity, the “ Borrower Agent ”, and BANA, as lender (in such capacity the “ Lender ”; the Lender, the Buyers, and the Buyer Agent, collectively, the “ BOA Parties ”) have agreed to amend that certain Credit Agreement, dated as of March 17, 2006 (as amended, restated, supplemented or otherwise modified and in effect prior to the date hereof, the “ Existing 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 CA Amendment ”; the Existing Credit Agreement, as amended by the BOA CA Amendment, the “ Credit Agreement ”);

WHEREAS, Deutsche Bank AG, Cayman Islands Branch (“ Deutsche Bank ”) as buyer, Anthracite Funding, LLC, as seller (“ AHR-DB Delaware Seller ”), and AHR Capital DB Limited, as seller (“ AHR-DB Irish Seller ”; together with AHR-DB Delaware Seller, collectively, “ AHR-DB Seller ”) have agreed to amend that certain Master Repurchase Agreement, dated as of December 23, 2004 (the “Existing DB Repurchase Agreement”), by entering into that certain Amendment No. 4 to the Master Repurchase Agreement, dated as of the date hereof (the “ DB Restructuring Amendment ”; the Existing DB Repurchase Agreement, as amended by the DB Restructuring Amendment and as further amended, restated, supplemented, or otherwise modified from time to time, the “ DB 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 Deutsche Bank 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 the Sponsor, Seller, the Borrowers, the Borrower Agent and AHR-DB 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 DB Repurchase Agreement, the Repurchase Agreement and the Credit Agreement, the “ Senior Secured Facilities ”);

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

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

WHEREAS, as a condition to the effectiveness of this Amendment, the BOA CA Amendment, the DB Amendment and the MS Loan Agreement, the Anthracite Parties have agreed to grant to each Secured Creditor subordinated second priority liens 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 CA Amendment, the DB Amendment and the MS Loan Agreement, Anthracite Secured Interest LLC (“ SPE Holdco ”, and together with AHR Ireland, the “New Entities”; the New Entities together with the Anthracite Parties, the “Loan Parties”), a wholly-owned subsidiary of the 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 ”), which securities 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, Bank of America, N.A., in its capacity as custodian thereunder and any additional pledgors from time to time party thereto (the “ Custodial and Account Control Agreement ”); and

WHEREAS, the Sponsor will cause all distributions received by the Sponsor from the 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;

 

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WHEREAS, the Buyers and the Buyer Agent have 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 1 of the Annex (Additional and Substitute Definitions) .

(a) Section 1 of the Existing Annex is hereby amended by deleting the definitions of “Buyer’s Asset Margin Amount”, “Buyer’s Portfolio Margin Amount”, “CF Sweep Event” and “Unfunded Margin Amount” in their entirety.

(b) Section 2 of the Existing Annex 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, 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, Sponsor or any such direct or indirect Subsidiary thereof).”

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

““ Applicable Spread ” shall mean, with respect to a Transaction, (i) during the period from the Restructuring 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 3.00% 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 Annex 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.”

 

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

““ Credit Agreement ” shall mean that certain Credit Agreement, dated as of July 20, 2007, by and among Anthracite Capital, Inc. as borrower agent, AHR as a borrower, each of the borrowers from time to time party thereto and the Lender, as amended prior to the Restructuring Amendment Effective Date, as further amended by that certain Omnibus Amendment to Credit Agreement and Custodial and Payment Applications Agreement, dated as of the Restructuring Amendment Effective Date, and as further amended, restated, supplemented, or otherwise modified from time to time.”

(f) Section 2 of the Existing Annex is hereby amended by deleting the proviso in its entirety from the definition of “Eligible Loans”.

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

““ Guaranty ” shall mean that certain Second Amended and Restated Guaranty, dated as of May 15, 2009, from the Sponsor to the Buyer Agent, for the benefit of the Buyers, as the same may be amended, restated, supplemented or otherwise modified from time to time.”

(h) Section 2 of the Existing Annex is hereby amended by deleting the definition of “Material Adverse Change” in its entirety and inserting in lieu thereof the following:

““ 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.”

(i) Section 2 of the Existing Annex is hereby amended by deleting the definition of “Purchased Loans” in its entirety and inserting in lieu thereof the following:

““ Purchased Loans ” shall mean (a) with respect to any Transaction, the loans (i) that are transferred or purported to be transferred by Seller to the applicable Buyer in such Transaction until such loans are transferred to Seller by the applicable Buyer pursuant to this Agreement or (ii) subject to such Transaction over which a lien has been granted to the Buyer Agent, for the benefit of the Buyers, pursuant to this Agreement and (b) with respect to the Transactions in general, all loans (i) that are transferred or purported to be transferred by Seller to the applicable Buyer until such loans are transferred to Seller by the applicable Buyer pursuant to this Agreement or (ii) over which a lien has been granted to the Buyer Agent, for the benefit of the Buyers, pursuant to this Agreement.”

(j) Section 2 of the Existing Annex is hereby amended by deleting the definition of “Purchased Securities” in its entirety and inserting in lieu thereof the following:

““ Purchased Securities ” shall mean, (a) with respect to any Transaction, the real estate structured finance products (other than loans) (i) that are transferred or purported to be transferred by Seller to the applicable Buyer in such Transaction until such real estate structured finance products are transferred to Seller by the applicable Buyer pursuant to this Agreement or (ii) subject to such Transaction over which a lien has been granted to

 

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the Buyer Agent, for the benefit of the Buyers, pursuant to this Agreement and (b) with respect to the Transactions in general, all real estate structured finance products (other than loans) (i) that are transferred or purported to be transferred by Seller to the applicable Buyer until such real estate structured finance products are transferred to Seller by the applicable Buyer pursuant to this Agreement or (ii) over which a lien has been granted to the Buyer Agent, for the benefit of the Buyers, pursuant to this Agreement. Whenever Purchased Securities are rated by more than one Rating Agency and a split rating applies to such Purchased Securities (i.e., one Rating Agency rates such Purchased Securities at a lower rating level than the other of such Rating Agencies), then for all purposes of this Agreement where a rating is to be selected (including, without limitation, in the determination of any percentages pursuant to Schedule I A of this Annex I), the lower of the ratings shall apply.”

(k) Section 2 of the Existing Annex 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.”

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

““ Repurchase Price ” shall mean, with respect to any Purchased Assets as of any date, a price determined in each case as the sum of the Purchase Price of such Purchased Assets (including, for the avoidance of doubt, any Contingent Purchase Price actually paid by the applicable Buyer in respect of such Purchased Assets pursuant to Section 3.13 of this Annex I) and the Price Differential with respect to such Purchased Assets as of the date of such determination, minus all Income and cash actually received by the applicable Buyer or the Buyer Agent (for the account of the applicable Buyer), as applicable, in respect of such Transaction pursuant to Sections 5.2 , 5.3 , and 5.4 of this Annex I; provided that, on each Reallocation Date, on a date prior to a Permitted Disposal and at any time upon the occurrence of a Reallocation Credit Event, the Buyer Agent, may in its sole and absolute discretion modify the Repurchase Price in respect of any Purchased Asset; provided further that, in no event will any such modification of the Repurchase Price increase either the aggregate Repurchase Price for all Purchased Assets or the aggregate amount of the obligations of the Seller pursuant to this Agreement.”

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

““ Termination Date ” shall mean September 30, 2010, or such other date on which this Agreement shall be extended or terminated in accordance with Section 3.5 or such other date as otherwise provided in this Agreement.”

 

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(n) Section 2 of the Existing Annex 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, this Annex I, any other applicable Annexes to the Agreement, the Guaranty, the Custodial Agreement, the Parent Pledge Agreement, Additional Collateral Documents, the Second Priority Documents, the Borrower Security Agreement, all Confirmations executed pursuant to the Agreement and this Annex I in connection with specific Transactions, and all other security documents hereafter delivered to the Buyer Agent granting a Lien on any property of any Person to secure the obligations and liabilities of the Seller under any of the foregoing.”

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

““ Acceptable Adjustment Information ” shall have the meaning set forth in Section 24.13 hereof.

“ Additional Collateral ” shall have the meaning set forth in the Credit Agreement.

“ Additional Collateral Documents ” shall have the meaning set forth in the Credit Agreement.

“ Additional Parent Pledge Agreement (AHR Ireland) ” shall have the meaning set forth in the Credit Agreement.

“ Additional Parent Pledge Agreement (SPE Holdco) ” shall have the meaning set forth in the Credit Agreement.

“ Additional Share Charge Agreement ” shall have the meaning set forth in the Credit Agreement.

“ Aggregate Extension Criteria ” shall mean, collectively:

(a) the Extension Criteria;

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

(c) the “Extension Criteria,” as defined in the DB Repurchase Agreement; and

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

“ AHR-DB Delaware Seller ” shall mean Anthracite Funding, LLC.

“ AHR-DB Irish Seller ” shall mean AHR Capital DB Limited.

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

“ 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.

 

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“ 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 Restructuring Amendment Effective Date and (ii) 50% of the base management fees due and payable to BlackRock Financial Management by Anthracite and its Subsidiaries.

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

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

“ BlackRock Management Agreement ” shall have the meaning set forth in the Credit Agreement.

“ BlackRock Entities ” shall mean BlackRock Financial Management Inc. and any of its Subsidiaries or Affiliates (other than the Sponsor or the Seller).

“BOA Parties ” shall mean, collectively, the Buyer Agent, the Buyers and the Lender.

“ BOA Primary Collateral ” shall have the meaning set forth in the Credit Agreement.

“ BOA Primary Interests ” shall have the meaning set forth in the Credit Agreement.

“ BOA Secondary Collateral ” shall have the meaning set forth in the Credit Agreement.

“ Borrower Security Agreement ” shall have the meaning set forth in the Credit Agreement.

“ Budget ” shall mean a month-to-month budget prepared by the Borrower Agent for the period from the Restructuring Amendment Effective Date through the initial Termination Date; and after the initial Termination Date, any Extension Budget accepted by the Buyer Agent.

“ Capital Stock ” shall have the meaning set forth in the Credit Agreement.

“ 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.

 

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“ Custodial and Payment Application Agreement ” shall have the meaning set forth in the Credit Agreement.

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

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

“ Deferred Restructuring Fee ” shall mean the sum of the Guaranteed Deferred Restructuring Fee and the Secondary Deferred Restructuring Fee, which amount is payable to the Buyer Agent, for the benefit of the Buyers, and the Lender, without duplication, in connection with the Credit Agreement and this Agreement. For the avoidance of doubt, the aggregate amount of the Deferred Restructuring Fee payable to the Buyer Agent, for the benefit of the Buyers, and the Lender pursuant to the Credit Agreement and this Agreement shall not exceed $12,230,000.

“ Deutsche Bank ” shall have the meaning set forth in the Restructuring Amendment.

“ Equity Pledge Agreement (Holdco) ” shall have the meaning set forth in the Credit Agreement.

“ Existing Indebtedness ” shall have the meaning provided in Section 11.9.5 hereof.

“ Extension Acceptance ” shall have the meaning provided in Section 3.5 hereof.

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

“ Extension Criteria ” shall mean the following:

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

(b) no Paydown Target Deficiency exists; and

(c) no Event of Default hereunder, or under the Credit Agreement, has occurred and is continuing.

“ Extension Effectiveness Date ” shall have the meaning provided in Section 3.5 hereof.

“ Extension Request ” shall have the meaning provided in Section 3.5 hereof.

“ Guaranteed Deferred Restructuring Fee ” shall mean an amount equal to $1,529,000, which amount is payable to the Buyer Agent, for the benefit of the Buyers,

 

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and the Lender, without duplication, in connection with the Credit Agreement and this Agreement. For the avoidance of doubt, the aggregate amount of the Guaranteed Deferred Restructuring Fee payable to the Buyer Agent, for the benefit of the Buyers, and the Lender pursuant to the Credit Agreement and this Agreement shall not exceed $1,529,000.

“ Indebtedness ” shall have the meaning set forth in the Credit Agreement.

“ 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 have the meaning set forth in the Credit Agreement.

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

“ Investment ” shall have the meaning set forth in the Credit Agreement.

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

“ Loan Documents ” shall have the meaning set forth in the Credit Agreement.

“ Lockbox Account ” shall have the meaning set forth in the Credit Agreement.

“ Monetary Credit Event ” shall mean any event or occurrence, including, without limitation, any Reallocation Credit Event, that the Buyer Agent 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 Second Amended and Restated Parent Pledge Agreement, dated May     , 2009, made by the Sponsor in favor of Bank of America, N.A., as collateral agent for the BOA Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Parent Pledge Agreement ” shall have the meaning set forth in the Credit Agreement.

 

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“ Paydown Target Deficiency ” shall have the meaning provided in Section 3.14 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 Credit Agreement, (ii) Section 3.14 and Exhibit XI of the Repurchase Agreement, (c) Exhibit C of the DB 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 Agent’s Lien in accordance with Sections 3.4 and 3.6 , (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) meet the requirements of Section 11.9.7 of this Agreement; (ii) have a final maturity date no earlier than December 31, 2011; (iii) 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; (iv) 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 (v) 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 Agent shall receive the Release Price with respect to such Purchased Asset upon the occurrence of such Indebtedness.

“ 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 Anthracite Capital, Inc.’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 the 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 the Sponsor to any BlackRock Entity, so long as such distributions are made with the unanimous written consent of the Independent Directors of the Sponsor; and

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

 

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“ 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 Eligible Assets (as defined in the Credit Agreement), the Purchased Assets or other BOA Primary Interests to or by a third party in an 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 Agent) directly into the English Sub-Collection Account (as defined in the Credit Agreement) or the Cash Management Account on terms satisfactory to the Buyer Agent.

“ Permitted Refinancing Indebtedness ” shall have the meaning set forth in Section 11.9.7 .

“ Primary Interests ” as defined in the Intercreditor Agreement.

“ 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 24.9 .

“ Quarterly Paydown Date ” shall mean each date set forth on Exhibit XI .

“ Quarterly Paydown Target ” shall mean the “Cumulative Quarterly Payment Target” specified set forth on Exhibit XI .

“ 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

 

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(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.

(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 Restructuring 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 greater of

(a) the sum of

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

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

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

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

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

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

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

“ 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;

 

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(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 of the Loan Documents or 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.

“ Restricted Payment ” shall have the meaning set forth in the Credit Agreement.

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

 

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“ Restructuring Amendment Effective Date ” shall mean the “Amendment Effective Date”, as defined in the Restructuring Amendment.

“ Restructuring Cash Management Account ” shall mean the “Cash Management Account” as such term is defined in the Custodial and Account Control Agreement.

“ Secondary Deferred Restructuring Fee ” shall mean an amount equal to $10,701,000, which amount is payable to the Buyer Agent, for the benefit of the Buyers, and the Lender, without duplication, in connection with the Credit Agreement and this Agreement. For the avoidance of doubt, the aggregate amount of the Secondary Deferred Restructuring Fee payable to the Buyer Agent, for the benefit of the Buyers, and the Lender pursuant to the Credit Agreement and this Agreement shall not exceed $10,701,000.

“ 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 have the meaning set forth in the Credit Agreement.

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

“ Specified Cash Proceeds ” shall mean the aggregate amount of principal and Repurchase Price reduced from (i) the application of proceeds under Sections 3.1.1(D)(i) (but only in respect of regularly scheduled principal payments), 3.1.1(E), 3.1.1(F) and 3.1.1(G) of the Custodial and Payment Application Agreement, (ii) the application of proceeds under Sections 5.3.4(i) (but only in respect of regularly scheduled principal payments), 5.3.5, 5.3.6 and 5.3.7 of this Agreement and (iii) the application of amounts received by the Lender and the Buyer Agent from the Restructuring Cash Management Account pursuant to Section 2(d)(iii)(c) and (e) of the Custodial and Account Control Agreement, in each case, received by the Lender and/or the Buyers after the Restructuring Amendment Effective Date, without duplication.

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

“ SPE Holdco Security Agreement ” shall have the meaning set forth in the Credit Agreement.

“ Subsidiary ” shall have the meaning set forth in the Credit Agreement.

“ Underlying Asset ” shall mean, in respect of any Purchased Asset, the income-producing commercial real estate, loan, 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 the Sponsor and its Affiliates listed on Exhibit X .

 

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SECTION 2. Amendments to Section 3 of the Annex (Initiation; Confirmation; Termination; Fees) .

(a) Section 3 of the Existing Annex is hereby amended by deleting Sections 3.1 and 3.2 in their respective entirety and inserting in lieu thereof the following:

“3.1 Reserved .

3.2 Notwithstanding anything contained herein to the contrary and in addition to any other amounts payable hereunder, Seller, hereby promises to pay to the Buyer Agent and the Lender, without duplication, the Deferred Restructuring Fee. The Deferred Restructuring Fee shall be due and payable to the Lender and the Buyers for their respective accounts on any date that is the earlier of (a) the date on which (i) all Loans (as defined in the Credit Agreement) and (ii) the Repurchase Price for all Purchased Assets, in each case, are prepaid, paid or repaid (as applicable) in full, (b) the Termination Date and (c) any date on which the Termination Date for the Transactions is declared, or becomes automatically, accelerated pursuant to Section 14 of the Repurchase Agreement; provided , that if (x) the Lender, in its sole discretion, agrees to release its Liens on all Eligible Assets (as defined in the Credit Agreement) and (y) the Buyer Agent and the Buyers agree to the repurchase by the Seller of all Purchased Assets and have otherwise released all other Liens on the Collateral, in each case, prior to the payment of the Secondary Deferred Restructuring Fee, then any outstanding Secondary Deferred Restructuring Fee shall be deemed waived.”

(b) Section 3.4 of the Existing Annex is hereby amended by deleting the second sentence thereof it in its entirety and inserting in lieu thereof the following:

“Seller shall be entitled to terminate a Transaction in whole or in part only pursuant to a Permitted Disposal and, in connection therewith, Seller shall repurchase all or a portion of the Purchased Assets subject to such Transaction on any Business Day prior to the Termination Date (an “ Early Termination Date ”); provided , however , that:”

(c) Section 3.4.3 of the Existing Annex is hereby amended by deleting it in its entirety and inserting in lieu thereof the following:

“3.4.3 on such Early Termination Date, Seller pays to the Buyer Agent, for the account of the applicable Buyer, an amount equal to the sum of the aggregate Release Price for all Purchased Assets subject to such Transaction and any other amounts payable under this Agreement (excluding the Deferred Restructuring Fee), without duplication, with respect to the repurchase of such Purchased Asset which is subject to a Permitted Disposal against transfer to Seller or its agent of such Purchased Assets.”

(d) Section 3 of the Existing Annex is hereby amended by deleting Sections 3.5 and 3.6 in their respective entirety and inserting in lieu thereof the following:

“3.5 On the Termination Date, termination of the applicable Transactions will be effected by the transfer to Seller or its agent of the Purchased Assets and any Income in respect thereof received by Buyer Agent, for the account of the applicable Buyer (and not previously credited or transferred to, or applied to the obligations of Seller pursuant to Section 5 of this Annex I) against the simultaneous (i) transfer of the Repurchase Price and all other amounts owed by Seller to the Buyer Agent and the Buyers, (ii) satisfaction in full of the Obligations under the Credit Agreement and (iii) payment by the Seller and the Borrowers to the Buyer Agent and the

 

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Lender of the Deferred Restructuring Fee. Notwithstanding the foregoing, on a date that is not earlier than thirty (30) days prior to the then-current Termination Date, if the Extension Criteria shall be satisfied, the Seller may request (such request, the “ Extension Request ”) that the Buyer Agent extend the Termination Date to March 30, 2011. The Buyer Agent 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 the Buyer Agent (the “ Extension Effectiveness Date ”). Any failure by the Buyer Agent to deliver such Extension Acceptance shall be deemed to be the Buyer Agent’s determination not to extend the then-current Termination Date.

If, notwithstanding the satisfaction of the Extension Criteria on the date that the Buyer Agent receives the Extension Request and the date that is five (5) Business Days prior to the then-current Termination Date, the Buyer Agent determines not to extend the then-current Termination Date, the Buyers and the other BOA Parties shall, upon the Termination Date, (i) accept only the BOA Primary Interests in full satisfaction of all obligations under the Repurchase Agreement and all Obligations, including, without limitation, the obligation of Sponsor, the Borrowers and the Seller to pay the Deferred Restructuring Fee, and (ii) upon the effective transfer of all BOA Primary Interests to the Lender and the Buyers (or their respective designees), free and clear of all other Liens or interests of third parties, including, without limitation, any Liens or interests held by the Collateral Agent for the benefit of the other Secured Creditors, cease to enjoy the benefit of, and otherwise release, all Liens granted to the BOA Parties, or to the Collateral Agent for the benefit of the BOA Parties, pursuant to the Second Priority Collateral Documents and the Additional Collateral Documents.

3.6 (a) In connection with a Permitted Disposal and repurchase of a Purchased Asset pursuant to Section 3.4, promptly upon the payment in full in cash of the Release Price for such Purchased Asset and upon Seller’s written request, each BOA Party shall grant the Seller release of such BOA Party’s Lien on such Purchased Asset, substantially in the form of Exhibit XIV (as the same shall be amended from time to time, as may be necessary under the laws of the relevant jurisdiction to effect a complete and unconditional release by such BOA Party of all its right, title and interest in, to and under such Purchased Asset) and, effective on such date, such asset shall thereupon no longer be deemed a Purchased Asset hereunder. All cost and expenses in connection with the necessary release documents shall be paid by Sponsor and its Subsidiaries upon demand.

(b) Without limiting the provisions of Section 3.4 above, promptly upon the payment in full of all obligations under this Agreement (including, without limitation, the payment in full of the aggregate Repurchase Price for all Purchased Assets) and the payment in full of all Obligations, (including, without limitation, the payment of the Deferred Restructuring Fee), (i) the Buyers shall transfer the Purchased Assets to the Seller or its agent and (ii) the Buyer Agent and each of the other BOA Parties shall (1) grant the Anthracite Parties and the New Entities a release by such Person of all its right, title and interest in, to and under all Purchased Assets, the other BOA Primary Interests, the Additional Collateral and the BOA Secondary Collateral and (2) execute and deliver such other documents as may be necessary under the laws of the relevant jurisdiction to effect a complete and unconditional release. All cost and expenses in connection with all necessary release documents shall be paid by Sponsor and its Subsidiaries upon demand. If, after giving effect to any transfer or release pursuant to Section 3.4 above or this Section 3(f), no Purchased Assets remain subject to any Transaction and no Eligible Assets would remain as Collateral under the Credit Agreement, then simultaneously with such release, the BOA Parties shall cease to enjoy the benefit of, and otherwise release, all Liens granted to any BOA Party pursuant to the Second Priority Collateral Documents and the Additional Collateral Documents.”

 

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SECTION 3. Amendments to Section 3 of the Annex (Initiation; Confirmation; Termination; Fees) . Section 3 of the Existing Annex is hereby amended by deleting Sections 3.12 and 3.13 in their entirety and replacing them with the following:

“3.12 Reserved.

3.13 Notwithstanding anything contained herein or in any other Transaction Document to the contrary, the Buyers shall have no obligation to enter into any Transactions on or after January 28, 2009.”

SECTION 4. Amendments to Section 3 of the Annex (Initiation; Confirmation; Termination; Fees) . Section 3 of the Existing Annex is hereby amended by including the following as new Sections 3.14 and 3.15:

“3.14 Beginning with the quarter ending September 30, 2009, if on any Quarterly Paydown Date, the Specified Cash Proceeds received by the Buyer Agent and the Lender as of such Quarterly Paydown Date is less than the Quarterly Paydown Targets specified for such Quarterly Paydown Date (the “ Paydown Target Deficiency ”), then, in accordance with the terms of the Custodial and Account Control Agreement, the Buyer Agent and the Lender shall provide the Collateral Agent with written notice of such Paydown Target Deficiency on or before the applicable Remittance Date. Any amounts received by the Buyer Agent pursuant to Section 2(d)(iii) of the Custodial and Account Control Agreement, shall be applied pursuant to Section 5 of this Agreement.”

3.15 The net cash proceeds received by Sponsor or any of its Subsidiaries from the sale or issuance of Capital Stock or from any Indebtedness permitted under Section 11.9.7 hereof shall be deposited in the Cash Management Account for application in accordance with Section 2(d)(iii) of the Custodial and Account Control Agreement.”

SECTION 5. Amendments to Section 4 of the Annex (Margin Maintenance) . The Existing Repurchase Agreement is hereby amended by deleting Section 4 in its entirety and replacing it with the following:

“4. Notwithstanding anything contained herein or in any other Transaction Document to the contrary, all Repo Deferred Payments or any other payments due and owing in respect of any Asset Margin Deficit or Portfolio Margin Deficit (each as defined in this Agreement prior to giving effect to the Restructuring Amendment), are hereby waived.

SECTION 6. Amendments to Section 5 of the Annex (Income Payments and Principal Payments) .

(a) Section 5.1 of the Existing Annex is hereby amended by deleting the last sentence thereof in its entirety and inserting in lieu thereof the following:

“Such Income shall be remitted by the Account Bank in accordance with the applicable provisions of Sections