ex10_1.htm


    Exhibit 10.1

    
 

    
      AMENDMENT
NO. 2 TO GUARANTY

      


      


      AMENDMENT
NO. 2 TO GUARANTY, dated as of July 8, 2008 (this “Amendment”), by and
between ANTHRACITE CAPITAL, INC., a Maryland corporation whose address is 40
East 52nd Street,
New York, New York 10022 (collectively, “Guarantor”) and
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking
institution whose address is 60 Wall Street, New York, New York 10005 (“Buyer”). Capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Guaranty (as hereinafter defined).

      


      RECITALS

      


      WHEREAS,
Anthracite Funding, LLC (“Seller”), AHR Capital
DB Limited (Removed
Seller”), Buyer and Deutsche Bank AG, London Branch (“Removed 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, and
as amended by that certain Amendment No. 1 to Annex I to Master Repurchase
Agreement Supplemental Terms and Conditions, dated February 8, 2007 (and as
otherwise amended, restated, supplemented or otherwise modified from time to
time, the “Repurchase
Agreement”); and

      


      WHEREAS,
Guarantor has entered into that certain Guaranty, dated December 23, 2004, in
favor of Buyer, as amended by that certain Amendment to Guaranty dated as of
February 27, 2007, whereby Guarantor guaranties all of Seller’s obligation to
Buyer under the Repurchase Agreement (and as otherwise amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty”)

      


      WHEREAS,
Buyer, Removed Buyer, Seller and Removed Seller desire to amend the terms of the
Repurchase Agreement pursuant to that certain Amendment No. 2 To Master
Repurchase Agreement And Annex I To Master Repurchase Agreement Supplemental
Terms And Conditions, dated as of the date hereof (the “Amendment to
MRA”);

      


      WHEREAS,  pursuant
to the Amendment to MRA Removed Buyer and Removed Seller are no longer parties
to the Transaction Documents (as defined in the Repurchase
Agreement);

      


      WHEREAS,
Buyer has requested, that as condition to the Amendment to MRA, Guarantor enter
into the Amendment; and

      


      WHEREAS,
Buyer and Guarantor desire to amend the Guaranty as more particularly set forth
herein.

      


      NOW
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer hereby agree as follows:

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION 1. Amendments.

      


      (a)       
Section 1 of the Guaranty is hereby amended by adding the following
definitions:

      


      "Committed Facility"
shall mean a credit facility under which Guarantor is a borrower and a party
acceptable to Buyer is lender, whereby (i) the lender thereunder is
unconditionally committed to make advances to Guarantor upon request by
Guarantor (other than any conditions acceptable to Buyer); (ii) no event of
default (or event which with notice or the passage of time, or both, would
constitute an event of default) has occurred thereunder; and (iii) the period
where such advances may be requested expires more than ninety (90) days from the
date of determination.

       

      “Marketable
Securities” means any of the following:

       

      (i)           100%
of the market value of negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of less than 1 year; or

       

      (ii)           95%
of the market value of negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of 1-10 years; or

       

      (iii)           90%
of the market value of negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of more than 10 years; or

       

      (iv)           90%
of the market value of single-class mortgage participation certificates ("FHLMC
Certificates") in book-entry form backed by single-family residential mortgage
loans, the full and timely payment of interest at the applicable certificate
rate and the ultimate collection of principal of which are guaranteed by the
Federal Home Loan Mortgage Corporation (excluding Real Estate Mortgage
Investment Conduit ("REMIC") or other multi-class pass-through certificates,
collateralized mortgage obligations, pass-through certificates backed by
adjustable rate mortgages, securities paying interest or principal only and
similar derivative securities); or

       

      (v)           90%
of the market value of single-class mortgage pass-through certificates ("FNMA
Certificates") in book-entry form backed by single-family residential mortgage
loans, the full and timely payment of interest at the applicable certificate
rate and ultimate collection of principal of which are guaranteed by the Federal
National Mortgage Association (excluding REMIC or other multi-class pass-through
certificates, pass-through certificates backed by adjustable rate mortgages
collateralized mortgage obligations, securities paying interest or principal
only and similar derivative securities); or

       

      (vi)           90%
of the market value of single-class fully modified pass-through certificates
("GNMA Certificates" in book-entry form backed by single-family residential
mortgage loans, the full and timely payment of principal and interest of which
is guaranteed by the Government National Mortgage Association (excluding REMIC
or other multi-class pass-through certificates, collateralized 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      mortgage
obligations, pass-through certificates backed by adjustable rate mortgages,
securities paying interest or principal only and similar derivatives
securities); or

       

      (vii)          85%
of all actively and regularly traded investment-grade residential
mortgage-backed securities; or

       

      (viii)         such
other collateral as Guarantor and Buyer may agree, with such valuation
percentage applied thereto as Buyer, in its sole discretion acting in good faith
shall deem appropriate.

       

      “Restructure Date”
shall mean July 8, 2008.

       

      (b)       Section
5 of the Guaranty is hereby replaced in its entirety as follows:

      


      5.         Certain Financial
Covenants.

       

      (a)           Guarantor
shall not permit with respect to itself any of the following to be breached, as
determined on a consolidated basis in conformity with GAAP:

       

      (i)        
   Tangible Net Worth.
As of the end of any quarter, the Tangible Net Worth of the Guarantor to be less
than the sum of (i) $400,000,000 plus (ii) an amount equal to 75% of any equity
proceeds received by Guarantor on or after the Restructure Date;

       

      (ii)           Quarterly Tangible Net Worth
Maintenance. As of any date, the Tangible Net Worth of the Guarantor to
decline by 20% or more from Guarantor’s Tangible Net Worth as of the last
Business Day in the third month preceding such date;

       

      (iii)           Yearly Tangible Net Worth
Maintenance. As of any date, the Tangible Net Worth of the Guarantor to
decline by 40% or more from Guarantor’s Tangible Net Worth as of the last
Business Day in the twelfth month preceding such date;

       

      (iv)           Minimum Debt Service
Coverage. As of the end of any quarter, the Debt Service Coverage to be
less than 1.4 to 1.0;

       

      (v)           Minimum Liquidity. As
of any date, the sum of the Guarantor’s (x) cash, (y) Marketable Securities, and
(z) subject to the following proviso, availability under
any Committed Facility that is unrestricted and not subject to Liens, to be less
than 5.0% of the Guarantor’s Indebtedness which is subject to mark-to-market
provisions; provided, however ̧ that the maximum amount of
availability under any Committed Facility that is unrestricted and not subject
to Liens that may be included for purposes of satisfying the requirements of
this Section 5(a)(v) shall not exceed 1.25% 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      of
the Guarantor’s Indebtedness which is subject to mark-to-market
provisions;

       

      (vi)           Maintenance of Ratio of
Recourse Indebtedness to Tangible Net Worth.  As of the end of
any quarter, the ratio of Indebtedness which is recourse to the Guarantor to the
Tangible Net Worth of the Guarantor to be greater than 3:1; and

       

      (vii)          Minimum Net Income.
Guarantor’s net income to be less than $1.00 for any two consecutive calendar
quarters.

       

      (b)         
 Guarantor agrees that with respect to any financing agreement (including,
but not limited to, a credit agreement) or guaranty which the Guarantor enters
into and delivers after the date hereof which contains financial covenants that
are applicable to the Guarantor, Guarantor shall deliver a certified copy of
such agreement or guaranty (each, a “Subsequent Guaranty”)
to Buyer.

       

      SECTION
2.      Affirmation of
Guaranty. Guarantor hereby represents, warrants and covenants to Buyer
that (a) it has no offset, counterclaim or defense with respect to either the
Repurchase Agreement or the Guaranty and (b) each of the Repurchase Agreement
and the Guaranty is valid and existing and in full force and effect; (iii) all
references in the Guaranty to the Repurchase Agreement are to the Repurchase
Agreement, as defined herein. Additionally, Guarantor hereby ratifies, confirms
and reaffirms each and every covenant, condition, term and obligation contained
in the Guaranty, and that the Guaranty is valid and existing in full force and
effect.

       

      SECTION
3.      Representation and
Warranties. Guarantor hereby represents, covenants and warrants to Buyer
that the representations and warranties contained in the Guaranty are true and
correct as of the date hereof.

       

      SECTION
3.      Conditions
Precedent.  This Amendment and its provisions shall become
effective on the first date on which this Amendment is executed and delivered by
a duly authorized officer of each of the Seller and the Buyer (the “Amendment Effective
Date”).

       

      


      SECTION 4.     
Counterparts. This
Amendment may be executed by each of the parties hereto on any number of
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment in Portable Document Format
(PDF) or by facsimile transmission shall be effective as delivery of a manually
executed original counterpart thereof.

       

      


             SECTION
5.     GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.




    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.

    


    


    
      	 
      	 
      	
              GUARANTOR

            
	 
      	 
      	 
      
	 
      	 
      	
              ANTHRACITE
      CAPITAL, INC.,

            
	 
      	 
      	
              a
      Maryland corporation

            
	 
      	 
      	 
      
	 
      	 
      	
              By:

            	
              /s/
      Richard Shea

            
	 
      	 
      	 
      	
              Name:  Richard
      Shea

            
	 
      	 
      	 
      	
              Title:    President

            
	 
      	 
      	 
      	 
      


    

    


    


    


    


    


    ACKNOWLEDGED
AND AGREED TO

    BY:

    


    
      	
              ANTHRACITE
      FUNDING, LLC, a

            	 
      
	
              Delaware
      limited liability company

            	 
      
	 
      	 
      	 
      
	
              By:

            	
              Anthracite
      Capital, Inc., a Maryland

            
	 
      	
              corporations,
      its sole member

            
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Richard Shea

            	
               

            
	 
      	 
      	
              Name:  Richard
      Shea

            
	 
      	 
      	
              Title:    
      President

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              AHR
      CAPITAL DB LIMITED,

            
	
              an
      Irish private limited company

            
	 
      
	
              By:

            	
              /s/
      Richard Shea

            	 
      
	 
      	
              Name:  Richard
      Shea

            	 
      
	 
      	
              Title:   
       Director

            	 
      


    

    


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              DEUTSCHE
      BANK AG, CAYMAN

            
	
              ISLANDS
      BRANCH

            
	 
      
	
              By:

            	
              /s/
      Christopher E. Tognola

            	
               

            
	 
      	
              Name:  Christopher
      E. Tognola

            
	 
      	
              Title:    
      Managing Director

            
	 
      	 
      
	
              By:

            	
              /s/
      Christine Belbusti

            	
               

            
	 
      	
              Name:  Christine
      Belbusti

            
	 
      	
              Title:   
       Director