AMENDMENT TO GUARANTY

AMENDMENT TO GUARANTY dated as of February 27, 2007 (this “Amendment”) between
ANTHRACITE CAPITAL, INC. (“Guarantor”) and DEUTSCHE BANK AG, CAYMAN ISLANDS
BRANCH (“Buyer”).

W I T N E S S E T H:

WHEREAS, Anthracite Funding, LLC (“Seller”) and Buyer entered into a certain
Master Repurchase Agreement, dated as of December 23, 2004 (as amended, the
“Master Repurchase Agreement”), pursuant to which Buyer agreed to purchase
Eligible Loans and Eligible Securities from Seller and Seller agreed to
repurchase such Eligible Loans and Eligible Securities from Buyer, all in
accordance with the terms and conditions of the Master Repurchase Agreement;

WHEREAS, as a condition to the Master Repurchase Agreement, Guarantor executed a
certain Guaranty (the “Guaranty”), dated as of December 23, 2004; and

WHEREAS, Guarantor and Buyer desire to amend the Guaranty in the manner and on
the terms set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree amend the Guaranty as
follows.

1.

DEFINITIONS

1.1         The definition of “Consolidated Net Income” is hereby amended by
inserting the following text immediately before the period at the end thereof:
“as adjusted in accordance with the terms hereof.”

1.2         The definition of “Debt Service Coverage” is hereby deleted in its
entirety and replaced as follows:

“Debt Service Coverage” means the ratio of Funds From Operations to Cash
Interest Expense on recourse Indebtedness outstanding, it being understood that
such determination shall be made on a cash basis.

1.3         The definition of “Funds From Operations” is hereby deleted in its
entirety and replaced as follows:

“Funds From Operations” for any period means the Consolidated Net Income of the
Guarantor and its Subsidiaries determined on a cash basis for such period
without recognizing any trading portfolio gains or losses in general, and
specifically without giving effect to:

(a) depreciation and amortization,

 

 

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(b) gains or losses that are classified as “extraordinary” in accordance with
GAAP,

(c) capital gains or losses on sales of real estate,

(d) capital gains or losses with respect to the disposition of investments in
marketable securities,

(e) any provision/benefit for income taxes for such period,

(f) earnings from equity investments and unconsolidated joint ventures
determined in accordance with GAAP,

(g) losses attributable to the impairment of assets,

(h) incentive fees paid in the form of the issuance of the Guarantor’s common
stock,

(i) Cash Interest Expense,

(j) income or expense attributable to the ineffectiveness of hedging
transactions, and

(k) interest accretions, whether in favor or against the Guarantor.

Without limiting the foregoing, Consolidated Net Income shall be determined
before preferred stock dividends and shall include cash distributions from
equity investments and unconsolidated joint ventures.

1.4         The definition of “Interest Expense” is hereby deleted in its
entirety and replaced with “Cash Interest Expense” as follows:

“Cash Interest Expense” means for any period, total interest expense, both
expensed and capitalized, of Guarantor and its Subsidiaries for such period with
respect to all outstanding recourse Indebtedness of Guarantor and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letter of credit and bankers’
acceptance financing and net costs under interest rate protection agreements),
determined on a consolidated cash basis, for such period (determined on a
consolidated cash basis), and net of any interest accretions, whether in favor
or against, with respect to debt.

2.

DEBT SERVICE COVERAGE

Section 5(b) of the Guaranty is hereby deleted in its entirety and replaced with
the following language:

(b) Minimum Debt Service Coverage. Debt Service Coverage to be less than 1.20 to
1 in the aggregate.

 

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3.

REPRESENTATIONS AND WARRANTIES

3.1

Guarantor represents and warrants as follows:

3.1.1     The execution, delivery and performance by Guarantor of this Amendment
are within Guarantor’s power and authority, have been duly authorized by all
necessary action, do not violate any requirement of law or contractual
obligation of Guarantor and will not result in or require the creation of any
Lien (other than pursuant to the Master Repurchase Agreement) on any of
Guarantor’s properties or revenues pursuant to any such requirement of law or
contractual obligation.

3.1.2      No consent or authorization of or approval by, notice to, filing with
or other act by or in respect of, any Governmental Authority or any other Person
is required or necessary in connection with due execution, delivery, performance
or enforceability of this Amendment, except as previously obtained and currently
in full force and effect.

3.1.3     This Amendment, when executed and delivered by Guarantor, will be the
legal, valid and binding obligation of Guarantor, enforceable in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

3.1.4     There are no actions, suits, arbitrations, investigations or
proceedings of or before any arbitrator or Governmental Authority pending or, to
the knowledge of Guarantor, threatened against Guarantor or against any of its
properties or revenues, (i) with respect to this Amendment or any of the
transactions contemplated hereby or (ii) which could reasonably be expected to
have a material adverse effect.

3.1.5     As of the date hereof, Guarantor has received amendments or
modifications that are materially similar to the amendments above from all
creditors of Guarantor which have agreements with Guarantor to maintain
financial covenants.

3.2         Guarantor hereby reaffirms that as of the date hereof the
representations and warranties of Guarantor contained in the Guaranty as
previously qualified by Guarantor are true in all material respects.

4.

MISCELLANEOUS

4.1         Defined Terms. Capitalized terms used in this Amendment but not
defined herein have the meanings given to them in the Guaranty.

4.2         Agreements to Remain in Full Force and Effect. Except as amended
hereby, the Guaranty shall remain in full force and effect and is hereby
ratified, adopted and confirmed in all respects. All references to the Guaranty
in any other agreement or document shall hereafter be deemed to refer to the
Guaranty as amended hereby.

 

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4.3         Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, when taken together, shall
constitute but one and the same Amendment.

4.4         Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

4.5         Severability of Provisions. Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the enforceability of
such provision in any other jurisdiction.

4.6         Captions. The captions in this Amendment are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their representative officers thereunder duly authorized, as of the date
first above written.

 

 

 

ANTHRACITE CAPITAL, INC., a Maryland corporation, as Guarantor

 

By:

/s/ Richard M. Shea

 

 

 

Name:

Richard M. Shea

 

 

 

Title:

President and Chief Operating Officer

 

 

 

 

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, as Buyer

 

By:

/s/ Christine Belbusti

 

 

 

Name:

Christine Belbusti

 

 

 

Title:

Director

 

 

By:

/s/ Mary Brundage

 

 

 

Name:

Mary Brundage

 

 

 

Title:

Director