Unassociated Document


    CREDIT
      AGREEMENT

     

    CREDIT
      AGREEMENT, dated as of March 7, 2008, between Anthracite Capital, Inc. and
      BlackRock Holdco 2, Inc. The parties hereto hereby agree as
      follows:

     

    ARTICLE
      I: DEFINITIONS

     

    Section
      1.1. Defined
      Terms.
      As used
      in this Agreement, the following terms have the meanings specified
      below:

     

    “Borrower”
means
      Anthracite Capital, Inc., a Maryland corporation. 

     

    “Borrowing
      Base”
means,
      at any time, the product of (a) the product of (i) the number of
      shares of Carbon Stock then pledged as Collateral pursuant to the Credit
      Documents and (ii) the Share Price and (b) 0.6.

     

    “Borrowing
      Base Certificate”
means
      a
      borrowing base certificate substantially in the form attached as Exhibit A.
      

     

    “Business
      Day”
means
      a
      day other than a Saturday, Sunday or any day on which commercial banks in New
      York, New York are authorized or required by law to close; provided
      that,
      when used in connection with the Loans when they are bearing interest based
      on
      LIBOR, the term “Business
      Day”
shall
      also exclude any day on which banks are not open for dealings in Dollar deposits
      in the London interbank market.

     

    “Carbon”
means
      Carbon Capital II, Inc., a Maryland corporation.

     

    “Carbon
      Stock”
means
      any shares in Carbon held by Borrower and pledged to Lender from time to time
      pursuant to the Credit Documents, which on the date hereof is 76,376
      shares.

     

    “Closing
      Date”
means
      the date on which the conditions specified in Section 4.1 are
      satisfied.

     

    “Collateral”
has
      the
      meaning set forth in Section 2.7.

     

    “Commitment”
means
      $60,000,000, as such amount may be reduced from time to time pursuant to the
      terms of this Agreement.

     

    “Consent”
means,
      the Consent and Control Agreement to be executed by Carbon in accordance with
      Section 5.10 hereof, consenting to the pledge by Borrower of the shares of
      Carbon held by Borrower.

     

    “Credit
      Documents”
means
      this Agreement, the Security Agreement, the Consent and any other documents
      hereafter delivered to Lender by Borrower or Carbon evidencing or securing
      the
      Loans or the Collateral.

     

    “Default”
means
      any event or condition which constitutes an Event of Default or which upon
      notice, lapse of time or both would, unless cured or waived, become an Event
      of
      Default.

     

    “Dollars”
or
      “$”
means
      the lawful money of the United States of America.

     

    “Event
      of Default”
has
      the
      meaning set forth in Article VI.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Extension
      Fee”
means
      0.25% of the Commitment. 

     

    “Fee
      Letter”
means
      that certain Fee Letter, dated as of February 29, 2008, from Lender to
      Borrower.

     

    “Final
      Maturity Date”
means
      (a) March 6, 2009, (b) such later date to which the Final Maturity Date has
      been extended pursuant to Section 2.2, or (c) such earlier date on which the
      Loans shall become due and payable in accordance with the terms of this
      Agreement, whether by acceleration or otherwise. 

     

    “Governing
      Documents”
means,
      with respect to any person, (a) the articles of incorporation or
      certificate of incorporation (or equivalent organizational document) of such
      person, (b) the bylaws (or equivalent governing document) of such person,
      and (c) any document setting forth the manner of election and duties of the
      directors or managing members of such Person (if any) and the designation,
      amount or relative rights, limitations and preferences of any class or series
      of
      such Person’s stock; in each case, as each may be amended, supplemented or
      otherwise modified from time to time in accordance with their terms and Section
      5.8 of this Agreement.

     

    “Governmental
      Authority”
means
      the government of the United States of America, any other nation or any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government.

     

    “Indebtedness”
of
      any
      Person means, without duplication, (a) all obligations of such Person for
      borrowed money or with respect to loans or advances of any kind, (b) all
      obligations of such Person evidenced by bonds, debentures, notes or similar
      instruments, (c) all obligations of such Person under conditional sale or other
      title retention agreements relating to property acquired by such Person, (d)
      all
      obligations of such Person in respect of the deferred purchase price of property
      or services, (e) all Indebtedness of others secured by any Lien on property
      owned or acquired by such Person, whether or not the Indebtedness secured
      thereby has been assumed (provided, however, that the amount of any Indebtedness
      under this clause (e) secured by any Lien on any particular property shall
      be
      limited to the lesser of the fair market value of such property and the amount
      of all Indebtedness of others secured by Liens on such property), (f) all
      guarantees by such Person of Indebtedness of others (provided, however, that
      the
      amount of any Indebtedness under this clause (f) subject to any particular
      guarantee shall be limited to the lesser of such person’s maximum liability
      under any such guarantee and the amount of Indebtedness of others guaranteed
      by
      such guarantee), (g) obligations that are required to be classified and
      accounted for as capital leases on a balance sheet of such Person under
      generally accepted accounting principles in the United States of America, (h)
      all obligations, contingent or otherwise, of such Person as an account party
      in
      respect of letters of credit and (i) all obligations, contingent or otherwise,
      of such Person in respect of bankers’ acceptances. The Indebtedness of any
      Person shall include the Indebtedness of any other entity (including any
      partnership in which such Person is a general partner) to the extent such Person
      is liable therefor as a result of such Person’s ownership interest in or other
      relationship with such entity, except to the extent the terms of such
      Indebtedness provide that such Person is not liable therefor. The Indebtedness
      of any Person shall not include current accounts payable incurred in the
      ordinary course of business.

     

    “Intangible
      Assets”
means
      the excess of the cost over book value of assets acquired, patents, trademarks,
      trade names, copyrights, franchises and other intangible assets (excluding
      in
      any event the value of any residual securities).

     

    
      
        
        

      

      
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    “Interest
      Period”
means
      with respect to any Loan based on LIBOR, the period commencing on the borrowing
      date for such Loan or on the last day of the immediately preceding Interest
      Period, as the case may be, and ending on the numerically corresponding day
      (or,
      if there is no numerically corresponding day, on the last day) in the calendar
      month that is one month, two months or three months thereafter; provided,
      however,
      that
      any Interest Period scheduled to end after the Final Maturity Date shall end
      on
      the Final Maturity Date; provided further
      that,
      with respect to any Interest Period commencing within the one month period
      immediately preceding the Final Maturity Date, such Interest Period shall have
      the duration selected by Lender in its sole discretion.

     

    “Lender”
means
      BlackRock Holdco 2, Inc.

     

    “LIBOR”
means
      with respect to any Interest Period, the rate as determined by Lender on the
      basis of the offered rates for deposits in Dollars for a period coextensive
      with
      that Interest Period which appears on the display referred to as “the Reuters
      Screen LIBOR01”
(or
      any
      display substituted therefor) of the Reuters U.S. Domestic Money Service
      transmitted through the Reuters monitor system as being the respective rates
      at
      which Dollars would be offered by the principal London offices of each of the
      banks named thereon to major banks in the London interbank market as of 11:00
      a.m., London time, on the day that is two Business Days preceding the first
      day
      of that Interest Period. 

     

    “Lien”
means,
      with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
      hypothecation, encumbrance, charge or security interest in, on or of such asset,
      (b) the interest of a vendor or a lessor under any conditional sale
      agreement, capital lease or title retention agreement (or any financing lease
      having substantially the same economic effect as any of the foregoing) relating
      to such asset and (c) in the case of securities, any purchase option, call
      or similar right of a third party with respect to such securities.

     

    “Loan”
means
      any Loan made pursuant to Section 2.1(a).

     

    “Margin”
means
      2.50% per annum.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the business, operations, financial
      condition or prospects of Borrower or (b)  the ability of Borrower to
      perform any obligations under any Credit Document.

     

    “Non-Recourse
      Indebtedness”
means,
      with respect to any Person, Indebtedness for borrowed money in respect of which
      recourse for payment (except for customary exceptions for fraud, misapplication
      of funds, environmental indemnities, and other customary exceptions to
      non-recourse provisions) is contractually limited to specific assets encumbered
      by a Lien securing such Indebtedness.

     

    “Note”
means
      the Note of Borrower, executed and delivered as provided in Section
      2.5.

     

    “Obligations”
means
      any now existing or hereafter arising obligations of Borrower to Lender, whether
      primary or secondary, direct or indirect, absolute or contingent, joint or
      several, secured or unsecured, due or not, liquidated or unliquidated, arising
      by operation of law or otherwise under any Credit Document whether for
      principal, interest, fees, expenses or otherwise, together with all costs of
      collection or enforcement, including, without limitation, reasonable attorneys’
fees incurred in any collection efforts or in any action or
      proceeding.

     

    “Person”
means
      any natural person, corporation, limited liability company, limited partnership,
      trust, joint venture, association, company, partnership, Governmental Authority
      or other entity.

     

    
      
        
        

      

      
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    “Prime
      Rate”
shall
      mean a fluctuating rate per annum equal to the rate of interest publicly
      announced by Wachovia Bank, National Association, at its principal office from
      time to time as its prime rate or base rate. Any change in the Prime Rate shall
      be effective on the date such change is announced.

     

    “Security
      Agreement”
means
      the Ownership Interests Pledge and Security Agreement, dated as of the date
      hereof, executed by Borrower.

     

    “Share
      Funding Notice”
has
      the
      meaning set forth in Section 2.14(a).

     

    “Share
      Funding Price”
has
      the
      meaning set forth in Section 2.14(a). 

     

    “Share
      Price”
means
      the fair market value of the shares of Carbon Stock as determined by BlackRock
      Financial Management, Inc., consistent with its method of valuing similar
      assets.

     

    “Share
      Purchase Notice”
means
      a
      written notice delivered to Borrower by Lender indicating Lender’s election to
      exercise its option to purchase all or a portion of the shares of Carbon Stock
      then constituting Collateral. 

     

    “Share
      Purchase Price”
means
      the product of (a) the total number of shares of Carbon Stock to be
      purchased pursuant to a Share Purchase Notice and (b) the Share Price,
      determined as of the date of the Share Purchase Notice.

     

    “Solvent”
means,
      with respect to any Person and as at the date on which a determination of
      solvency is to be made, that (i) the present fair saleable value of the assets
      of such Person is, on such date, greater than the total amount of liabilities
      (including, without limitation, contingent and unliquidated liabilities) of
      such
      Person as of such date, (ii) as of such date, such Person is able to pay all
      liabilities of such Person as such liabilities mature, and (iii) as of such
      date, such Person does not have unreasonably small capital with which to carry
      on its business. In computing the amount of contingent or unliquidated
      liabilities at any time, such liabilities shall be computed at the amount which,
      in light of all the facts and circumstances existing at such time, represents
      the amount that can reasonably be expected to become an actual or mature
      liability.

     

    “Tangible
      Net Worth”
means,
      as of a particular date, (i) all amounts that would be included under
      stockholder’s equity on a balance sheet of Borrower and its consolidated
      subsidiaries at such date, determined in accordance with GAAP, less
      (ii) the
      sum of (A) amounts owing to Borrower and its consolidated subsidiaries from
      affiliates and (B) Intangible Assets of Borrower and its consolidated
      subsidiaries.

     

    “Total
      Recourse Indebtedness”
means,
      for any period, the aggregate Indebtedness (excepting any Non-Recourse
      Indebtedness) of Borrower and its consolidated subsidiaries during such
      period.

     

    “Transactions”
means
      the execution, delivery, and performance by Borrower and Carbon of the Credit
      Documents, the borrowing and repayment of the Loans, the pledge, assignments
      or
      grant of the security interests in the Collateral pursuant to the Credit
      Documents, the payment of interest and fees thereunder and the use of the
      proceeds of the Loans.

     

    “Unused
      Fee”
has
      the
      meaning set forth in Section 2.12.

     

    Section
      1.2. Terms
      Generally.
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes,” and “including” shall be deemed to be followed by the
      phrase “without limitation.” The word “will” shall be construed to have the same
      meaning and effect as the word “shall.” Unless the context requires otherwise
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth herein), (b) any reference herein to any Person shall be
      construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof,” and “hereunder,” and words of similar import, shall be
      construed to refer to this Agreement in its entirety and not to any particular
      provision hereof, (d) all references herein to Articles, Sections, and
      Schedules shall be construed to refer to Articles and Sections of, and Schedules
      to, this Agreement and (e) the words “asset” and “property” shall be
      construed to have the same meaning and effect and to refer to any and all
      tangible and intangible assets and properties, including cash, securities,
      accounts and general intangibles. 

     

    
      
        
        

      

      
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    Section
      1.3. Specified
      Times and Dates; Determinations.
      All
      times specified in this Agreement shall be determined, unless stated
      specifically herein to the contrary, on the basis of the prevailing time in
      New
      York City. Unless stated specifically herein to the contrary, if any day or
      date
      specified in this Agreement for any notice, action or event is not a Business
      Day, then the due date for such notice, action or event shall be extended to
      the
      immediately succeeding Business Day; provided
      that
      interest shall accrue on any payments due by Borrower which are extended by
      the
      operation of this Section 1.3. Any determination by Lender hereunder shall,
      in
      the absence of manifest error, be conclusive and binding. 

     

    ARTICLE
      II: THE
      LOANS

     

    Section
      2.1. Loans.

     

    (a) Loans.
      Subject
      to the terms and conditions and relying upon the representations and warranties
      herein set forth, Lender hereby agrees to make loans to Borrower at any time
      and
      from time to time, on any Business Day on or after the Closing Date to the
      Final
      Maturity Date, in an aggregate principal amount at any time outstanding not
      to
      exceed the lesser of the Borrowing Base and the Commitment. Subject to the
      foregoing, Borrower may borrow, repay and reborrow the Loans.

     

    (b) Borrowing
      Procedure.
      All
      requests for Loans shall be made by Borrower by delivering a borrowing request
      substantially in the form attached as Exhibit B to Lender in writing in
      accordance with the time periods set forth in Section 2.3(f). Such request
      shall
      be irrevocable and shall specify (i) the requested borrowing date (which
      shall be a Business Day), (ii) whether the Loan is to bear interest based
      on LIBOR or the Prime Rate, and (iii) the amount of such Loan. Each
      borrowing shall be in an aggregate amount of not less than $5,000,000 or an
      integral multiple of $500,000 in excess thereof.

     

    Section
      2.2. Repayment
      of Loans.
      Any
      principal of any Loan not previously paid shall be payable on the Final Maturity
      Date. No later than 60 days prior to the then current Final Maturity Date,
      Borrower may request that Lender extend the Final Maturity Date up to a Business
      Day which is up to 364 days after the then current Final Maturity Date (but
      such
      Business Day shall be no later than March 2, 2011). Borrower acknowledges that
      Lender’s decision shall be made in the sole and absolute discretion of Lender
      and that Lender shall have no obligation to extend the Final Maturity Date.
      No
      later than 30 days prior to the then current Final Maturity Date, Lender shall
      notify Borrower of Lender’s decision. If Lender fails to so notify Borrower,
      Lender shall be deemed to have notified Borrower that it shall not extend the
      Final Maturity Date. If Lender notifies Borrower that it shall extend the Final
      Maturity Date, the Final Maturity Date shall be extended if, and only if, on
      the
      then current Final Maturity Date, each of the conditions specified in Section
      4.3 shall be satisfied. 

     

    
      
        
        

      

      
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    Section
      2.3. Interest.

     

    (a) Loans.
      The
      Loans shall bear interest on the unpaid principal amount thereof from the
      borrowing date thereof until payment in full thereof. Interest shall be payable
      in arrears on (i) in the case of Loans based on LIBOR, the last day of each
      Interest Period, (ii) in the case of Loans based on the Prime Rate, on the
      last Business Day of each calendar quarter commencing on June 30, 2008,
      (iii) the date of each prepayment (on the principal amount prepaid), and
      (iv) the Final Maturity Date. 

     

    (b) Interest
      Rate.
      The
      interest rate for each Loan shall be selected in accordance with Section 2.3(f).
      The interest rate for each Loan bearing interest based on the Prime Rate shall
      be equal to the Prime Rate for each such day plus the Margin. The interest
      rate
      for each Loan bearing interest based on LIBOR shall be fixed on the first day
      of
      such Loan for the entire Interest Period of such Loan and shall be equal to
      LIBOR for such Interest Period plus the Margin.

     

    (c) Default
      Interest.
      After
      the occurrence and during the continuance of an Event of Default, to the extent
      permitted by applicable law, Borrower shall pay on demand, on the principal
      amount of the outstanding Loans, interest at a rate per annum equal to 3% per
      annum plus
      the
      higher of (i) the Prime Rate and (ii) the interest rate applicable to
      the Loans.

     

    (d) Maximum
      Interest Rate.
      Notwithstanding anything in any Credit Document to the contrary, in no event
      shall the interest charged under any Credit Document exceed the maximum rate
      of
      interest permitted under applicable law. Any payment made which if treated
      as
      interest would cause the interest charged to exceed the maximum rate permitted
      shall instead be held by Lender to the extent of such excess as additional
      Collateral hereunder and applied to future interest payments as and when such
      amount becomes due and payable hereunder.

     

    (e) Calculations.
      Interest shall be calculated on the basis of a year of 360 days. In computing
      interest on the Loans (or interest on such interest), the date of the making
      of
      the Loans shall be included and the date of payment of the Loans shall be
      excluded.

     

    (f) Interest
      Rate Options.
      Borrower may specify in a notice to Lender whether any of the following Loans
      shall bear interest based on the Prime Rate or on LIBOR, and if LIBOR, the
      duration of the Interest Period therefor: (i) any Loans being requested
      pursuant to Section 2.1(b), (ii) any Loans bearing interest based on the Prime
      Rate which Borrower desires to convert into Loans bearing interest based on
      LIBOR, and (iii) any Loans bearing interest based on LIBOR for which the
      Interest Period shall expire prior to the Final Maturity Date. Any such notice
      shall be delivered to Lender in writing to request, convert or continue a Loan
      to bearing interest based on (x) LIBOR, within at least four Business Days
      and
      (y) the Prime Rate, within at least two Business Days, or, in each case, such
      shorter period as shall be agreed to by Lender (it being understood that the
      parties have agreed that the notice periods have been waived for the initial
      advance on the Closing Date), before the borrowing date, the requested date
      of
      the conversion or the expiration of the then current Interest Period, as the
      case may be. If Borrower shall fail to deliver any such notice or after the
      occurrence and during the continuation of any Event of Default, Lender may,
      in
      its sole discretion, designate whether any Loans or which Loans shall bear
      interest based on the Prime Rate or on LIBOR, and, if LIBOR, the duration of
      the
      Interest Period therefor.

     

    Section
      2.4. Prepayment
      of Loans.

     

    (a) Optional.
      Borrower shall have the right on not less than four Business Days prior written
      notice to Lender to prepay the Loans (as designated by Borrower) at any time
      in
      whole or from time to time in part; provided
      that
      such any prepayment shall be in a minimum amount of not less than $250,000.
      

     

    
      
        
        

      

      
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    (b) Mandatory.
      (i) If
      at any time the aggregate principal amount of the Loans outstanding shall exceed
      the lesser of (A) the Commitment and (B) the Borrowing Base, Borrower
      shall immediately repay the outstanding Loans to the extent required to
      eliminate such excess, and (ii) Borrower shall prepay the outstanding Loans
      to the extent required under Section 7.14. 

     

    (c) Breakfunding
      Costs.
      In the
      event Borrower prepays all or any portion of the Loans, whether as a result
      of
      acceleration or otherwise, Borrower will pay to Lender, a break funding charge
      to cover actual loss, cost and expense attributable to such an event
      (“Breakfunding
      Costs”).
      Breakfunding Costs shall be deemed to include but not be limited to an amount
      determined by Lender as follows: (i) calculate Lender’s remaining interest
      cost based on (A) LIBOR then applicable to the Loan or Loans being prepaid,
      times (B) the principal amount of the prepayment, amortized accordingly,
      times (C) the remaining period of time until the end of the Interest Period
      applicable to the Loan or Loans being prepaid, dayweighted accordingly;
      (ii) calculate Lender’s implied reinvestment rate based on (A) the
      U.S. Treasury rate as of the prepayment date for a period approximately equal
      to
      the period from the prepayment date until the end of the Interest Period
      applicable to the Loan or Loans being prepaid, times (B) the principal
      amount of the prepayment amortized accordingly, times (C) the remaining
      period of time until the end of the Interest Period applicable to the Loan
      or
      Loans being prepaid, dayweighted accordingly; and (iii) if the amount
      calculated pursuant to clause (ii) is equal to or greater than the amount
      calculated pursuant to (i), the Breakfunding Costs will be zero ($0), and if
      the
      amount calculated pursuant to (i) exceeds the amount calculated pursuant to
      clause (ii), the Breakfunding Costs will be calculated using Lender’s discounted
      cash flow formula to determine the present value of the excess of the amount
      calculated pursuant to clause (i) less the amount calculated pursuant to clause
      (ii). Breakfunding Costs shall be payable to Lender on the prepayment date
      of
      any Loan to the extent requested by Lender prior to such prepayment date;
provided,
      however,
      that
      any Breakfunding Costs which are not determinable or which, for any other
      reason, are not requested prior to such prepayment date shall be paid by
      Borrower thereafter promptly upon receipt by Borrower from Lender of a request
      therefor. Such Breakfunding Costs shall be specified in a certificate delivered
      by Lender which sets out in reasonable detail the basis therefor.

     

    Section
      2.5. Note.
      The
      Loans made by Lender to Borrower are not evidenced by Notes on the Closing
      Date.
      At any time upon request by Lender, the Loans made by Lender to Borrower shall
      be evidenced by one or more Notes, duly executed by or on behalf of Borrower,
      delivered and payable to Lender in an aggregate principal amount equal to the
      Commitment. Lender shall maintain its records to reflect the amount and date
      of
      the Loans and of each payment of principal and interest thereon. All such
      records shall, absent manifest error, be conclusive as to the outstanding
      principal amount hereof; provided,
      however,
      that
      the failure to make any notation to Lender’s records shall not limit or
      otherwise affect the obligations of Borrower to repay the Loans.

     

    Section
      2.6. Payments.
      All
      payments by Borrower shall be payable on the due date thereof, in immediately
      available funds in Dollars, without any setoff, counterclaim, withholding or
      deduction of any kind; provided
      that
      payments required pursuant to Section 2.4(b) shall be due 2 Business Days from
      the date Borrower has knowledge that such payment is required. In addition,
      each
      time any payment is not received within 5 days of the applicable due date (other
      than any payment due on the Final Maturity Date) such missed payment shall
      be
      assessed a late charge of 5% of the aggregate amount then due. All
      payments shall be applied by Lender as follows: first, to the payment of all
      accrued but unpaid fees, costs or expenses under the Credit Documents; second,
      to the payment of all accrued but unpaid interest under the Credit Documents;
      third, to the repayment of then outstanding principal amount of the Loans;
      and
      fourth, the balance, if any, to Borrower or to whomsoever may be entitled to
      such amounts as determined by Lender in its reasonable discretion.

     

    
      
        
        

      

      
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    Section
      2.7. Collateral.
      The
      Obligations of Borrower under the Credit Documents shall be secured by the
      shares of Carbon Stock as more fully described in the Security Agreement (the
      "Collateral"). Borrower may at any time reduce the number of shares of Carbon
      Stock pledged to Lender pursuant to the Security Agreement but only if (a)
      Borrower shall make a corresponding proportionate reduction to the Commitment
      and (b) such reduction in the number of shares of Carbon Stock pledged would
      not
      cause the Borrowing Base to be less than 115% of the Commitment (after giving
      effect to the reduction to the Commitment).

     

    Section
      2.8. Illegality.
      If
      Lender determines at any time that any law or regulation or any change therein
      or in the interpretation or application thereof makes or will make it unlawful
      for Lender to maintain the Loans or to claim or receive any amount payable
      to it
      hereunder based on LIBOR, Lender shall give advance notice of such determination
      to Borrower as shall be reasonable under the circumstances, whereupon the Loans
      shall thereafter bear interest at the Prime Rate.

     

    Section
      2.9. Capital
      Adequacy.
      If
      Lender shall have determined that, after the date hereof, the adoption of any
      applicable law, rule or regulation regarding capital adequacy, or any change
      therein, or any change in the interpretation or administration thereof by any
      Governmental Authority charged with the interpretation or administration
      thereof, or any request or directive regarding capital adequacy (whether or
      not
      having the force of law, but if not having the force of law, the compliance
      with
      which is in accordance with the general practice of Lender for borrowers
      similarly situated to Borrower with respect to extensions of credit of the
      type
      contemplated by this Agreement) of any such Governmental Authority has or would
      have the effect of reducing the rate of return on the capital of Lender (or
      any
      Person controlling Lender (its “Parent”))
      as a
      consequence of Lender’s obligations hereunder to a level below that which Lender
      (or its Parent) could have achieved but for such adoption, change or compliance
      (taking into consideration Lender’s policies with respect to capital adequacy)
      by an amount deemed by Lender to be material, then from time to time, within
      15
      days after demand by Lender, Borrower shall pay to Lender (or its Parent, as
      the
      case may be) such additional amount or amounts as will compensate Lender (or
      its
      Parent, as the case may be) for such reduction. Lender agrees that it will
      not
      request payment from Borrower under this Section 2.9 unless it makes a request
      for payment from all of Lender’s similarly situated customers under provisions
      of the type described in this Section 2.9.

     

    Section
      2.10. Reserved.
      

     

    Section
      2.11. Reduction
      and Termination of the Commitment.
      (a) Borrower may, upon at least 4 Business Days notice to Lender, terminate
      in whole or reduce in part the unused portions of the Commitment; provided
      that
      each partial reduction shall be in an aggregate amount of not less than
      $5,000,000 or an integral multiple of $500,000 in excess thereof and
      (b) the Commitment shall be reduced by the purchase amount as determined
      pursuant to Section 2.14 and Section 7.14.

     

    Section
      2.12. Unused
      Fee.
      Borrower shall pay to Lender a fee (the “Unused
      Fee”)
      of
      .15% per annum on the daily amount by which the Commitment exceeds the
      outstanding amount of the Loans. The Unused Fee shall be payable in arrears
      on
      each June 30, September 30, December 31 and March 31, commencing June 30,
      2008.

     

    Section
      2.13. Taxes.
      (a) Any and all payments made by Borrower hereunder shall be made free and
      clear of and without deduction for any present or future taxes, levies, imposts,
      deductions, charges, or withholdings, and all liabilities with respect thereto
      to the extent attributable to the Loans or the Collateral, excluding
      (i) taxes imposed on net income and (ii) all income and franchise
      taxes of the United States of America, any political subdivisions thereof,
      and
      any state of the United States of America, and any political subdivisions
      thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
      withholdings and liabilities being hereinafter referred to as “Taxes”).
      (b) If Borrower shall be required by law to deduct any Taxes from or in
      respect of any sum payable hereunder, (i) the sum payable shall be
      increased as may be necessary so that after making all required deductions
      (including deductions applicable to additional sums payable under this Section
      2.13) Lender shall receive an amount equal to the sum it would have received
      had
      no such deductions been made, (ii) Borrower shall make such deductions and
      (iii) Borrower shall pay the full amount deducted to the relevant taxation
      authority or other authority in accordance with applicable law. (c) Borrower
      shall pay and hereby indemnifies Lender from any documentary stamp Taxes in
      connection with the execution or delivery of any Credit Document. Within 30
      days
      after the date of any payment of Taxes, Borrower will furnish Lender with
      evidence of payment thereof. Borrower hereby indemnifies Lender for the full
      amount of Taxes (including, without limitation, any Taxes imposed by any
      jurisdiction on amounts payable under this Section) paid by Lender and any
      liability (including penalties, interest and expenses) arising therefrom or
      with
      respect thereto, whether or not such Taxes were correctly or legally asserted.
      Payment pursuant to this indemnification obligation shall be made upon written
      demand therefor. The obligations of Borrower under this Section 2.13 shall
      survive the termination of this Agreement. 

     

    
      
        
        

      

      
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    Section
      2.14. Share
      Funding.
      

     

    (a) Lender
      may, at its option, in lieu of funding all or any portion of a Loan requested
      pursuant to Section 2.1(b), purchase, for cash, shares of Carbon Stock from
      Borrower. In order to exercise its rights under this Section 2.14, Lender shall
      deliver written notice (a “Share
      Funding Notice”)
      to
      Borrower, no later than 2 Business Days following receipt of a borrowing notice
      from Borrower, setting forth Lender’s election to exercise its rights under this
      Section 2.14 and specifying (i) the amount of the Loan requested by Borrower
      pursuant to Section 2.1(b) that Lender desires to fund through the purchase
      of
      shares of Carbon Stock (such amount, the “Share
      Funding Price”)
      and
      (ii) the date on which Lender desires to consummate such purchase and sale;
      provided
      that if
      the Share Funding Price or the number of shares to be purchased by Lender has
      not been determined by the date of such requested advance, Lender shall make
      an
      interim Loan on the date of such requested advance pursuant to and upon the
      terms in the borrowing notice, which interim Loan shall be repaid upon
      consummation of the purchase of the shares of Carbon Stock by Lender pursuant
      to
      this Section 2.14(a). If Lender delivers a Share Funding Notice, Borrower shall
      be obligated to sell to Lender, and Lender shall be required to purchase from
      Borrower, a number of shares of Carbon Stock determined by dividing (i) the
      Share Funding Price by (ii) the Share Price (determined as of the date of
      the Share Funding Notice); provided
      that
      Lender may, at any time, prior to consummation of the purchase of the shares
      of
      Carbon Stock under this Section 2.14 elect to instead fund all or any portion
      of
      the Share Funding Price in accordance with the original Loan request. In the
      event the number of shares of Carbon Stock are not divisible exactly into the
      Share Funding Price, the parties shall agree to adjust the Share Funding Price
      accordingly.

     

    (b) At
      the
      closing of the purchase and sale of the shares of Carbon Stock pursuant to
      Section 2.14(a), Borrower shall promptly take all necessary and desirable
      actions requested by Lender in connection with the consummation of the purchase
      and sale of the shares of Carbon Stock pursuant to Section 2.14(a), including
      the execution of such customary agreements and such instruments (including
      stock
      powers or other instruments of transfer) for transactions of this type. Upon
      consummation of purchase of shares of Carbon Stock hereunder the Commitment
      shall be automatically reduced by the Share Funding Price.

     

    
      
        
        

      

      
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    ARTICLE
      III: REPRESENTATIONS
      AND WARRANTIES

     

    Borrower
      represents and warrants to Lender on the date hereof and on the date of the
      making of each Loan that:

     

    Section
      3.1. Organization;
      Powers; Authorization; Enforceability, Etc.
      (a) Borrower is duly organized or formed, validly existing and in good
      standing (if and to the extent applicable) under the laws of the jurisdiction
      of
      its organization or formation, has all requisite power and authority to carry
      on
      its business as now conducted and, except where the failure to do so,
      individually or in the aggregate, could not reasonably be expected to result
      in
      a Material Adverse Effect, is qualified to do business in every jurisdiction
      where such qualification is required. (b) The Transactions are within the
      powers of Borrower and have been duly authorized by all necessary action for
      Borrower. (c) Each Credit Document to which it is a party has been duly
      executed and delivered by Borrower and constitutes its legal, valid and binding
      obligation, enforceable in accordance with its terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium or other laws affecting
      creditors’ rights generally and subject to general principles of equity,
      regardless of whether considered in a proceeding in equity or at law.
      (d) The Transactions (i) do not require any consent or approval of,
      registration or filing with, or any other action by, any Governmental Authority,
      (ii) will not violate any applicable law or regulation or the charter,
      by-laws, trust agreement or other organizational documents of Borrower or any
      order of any Governmental Authority binding on Borrower, (iii) will not
      violate or result in a default under any indenture, agreement or other
      instrument binding upon Borrower or its assets, or give rise to a right
      thereunder to require any payment to be made by Borrower to the extent that
      such
      violation, or such default or right to payment could be reasonably expected
      to
      result in a Material Adverse Effect, and (iv) will not result in the
      creation or imposition of any Lien on any asset of Borrower other than pursuant
      to the Credit Documents. (e) There are no actions, suits or proceedings by
      or before any arbitrator or Governmental Authority pending against or, to the
      knowledge of Borrower, threatened against or affecting Borrower (i) as to
      which there is a reasonable possibility of an adverse determination or that,
      if
      adversely determined, could reasonably be expected, individually or in the
      aggregate, to result in a Material Adverse Effect or (ii) that involve the
      Credit Documents, the Collateral or the Transactions. (f) Borrower is in
      compliance with all laws, regulations and orders of any Governmental Authority
      applicable to it or its property and all indentures, agreements and other
      instruments binding upon it or its property, to the extent that any
      noncompliance therewith could be reasonably expected to result in a Material
      Adverse Effect. (g) No Default has occurred and is continuing.

     

    Section
      3.2. Investment
      Company Status.
      Borrower is not an “investment company” as defined in, or subject to regulation
      under, the Investment Company Act of 1940.

     

    Section
      3.3. Security
      Interests; Certain Information.
      Lender
      has a valid and perfected first priority Lien on all of the Collateral and
      all
      filings and other actions necessary for the perfection and first priority status
      of such Liens have been duly made or taken and remain in full force and
      effect.

     

    Section
      3.4. Taxes.
      (a) Borrower has timely filed or caused to be filed all tax returns and
      reports required to have been filed (giving effect to any extensions), all
      such
      reports were correct and complete in all material respects and Borrower has
      paid
      or caused to be paid all taxes required to have been paid by it, except taxes
      that are being contested in compliance with Section 5.4. (b) Borrower does
      not intend to and shall not treat the Loans and Transactions as being a
“reportable transaction” (within the meaning of Treasury Regulation
      Section 1.6011-4). In the event Borrower determines to take any action
      inconsistent with such intention or treatment, (i) Borrower will promptly
      notify Lender thereof and (ii) Borrower acknowledges that Lender may treat
      the Loans as part of a transaction that is subject to Internal Revenue Code
      Section 6112 and the Treasury Regulations thereunder, and that Lender may file
      such IRS forms or maintain such lists and other records to the extent required
      by such statute and regulations. No part of the proceeds of any Loan will be
      used directly or indirectly in connection with any “listed transaction” (within
      the meaning of Treasury Regulation Section 1.6011-4(b)(2)).

     

    
      
        
        

      

      
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    Section
      3.5. Solvency.
      Borrower is Solvent and will be Solvent after giving effect to the
      Transactions.

     

    Section
      3.6. Disclosure.
      None of
      the written reports, financial statements, certificates or other written
      information (other than financial projections and pro
      forma
      information) furnished by or on behalf of Borrower to Lender in connection
      with
      the negotiation of the Credit Documents or delivered hereunder (as modified
      or
      supplemented by other information so furnished) contains any material
      misstatement of fact or omits to state any material fact necessary to make
      the
      statements therein, in the light of the circumstances under which they were
      made, not misleading. 

     

    ARTICLE
      IV: CONDITIONS

     

    Section
      4.1. Closing
      Date.
      The
      obligations of Lender to make any Loan to Borrower hereunder shall not become
      effective until each of the following conditions is satisfied:

     

    (a) Lender
      shall have received the following documents:

     

    (i) a
      counterpart of this Agreement executed by Borrower; 

     

    (ii) the
      Security Agreement executed by Borrower; 

     

    (iii) a
      completed Borrowing Base Certificate; 

     

    (iv) a
      certificate of a responsible officer of each of Borrower and Carbon certifying
      as to its Governing Documents.

     

    (b) Lender
      shall have received Lien searches against each of Borrower and Carbon indicating
      that there are no Liens against the Collateral.

     

    (c) Lender
      shall have received payment of the Commitment Fee described in the Fee Letter,
      and all other fees and expenses (including reasonable fees and expenses of
      counsel) due and payable on or before the Closing Date (including all such
      fees
      described in the Fee Letter).

     

    (d) Lender
      shall have received certification from Borrower that there is no pending
      litigation or other proceedings, the result of which could reasonably be
      expected to have a Material Adverse Effect. 

     

    (e) Lender
      shall be satisfied that all necessary consents and approvals with respect to
      the
      Transactions shall have been obtained and shall be satisfactory to Lender.
      

     

    (f) Lender
      shall be satisfied that there has been no condition that Lender deems to be
      material and adverse in the business, operations, financial condition or
      prospects of the Collateral. 

     

    (g) Lender
      shall have received such documents, certificates and legal opinions regarding
      each of Borrower and Carbon, as requested by Lender and all in form and
      substance reasonably satisfactory to Lender and its counsel.

     

    Section
      4.2. Additional
      Conditions to Loans.
      On the
      date on which each Loan is to be made:  (a) Lender shall have
      received a request for such Loan executed by Borrower; (b) the
      representations and warranties set forth in Article III hereof and in any
      documents delivered herewith, shall be true and correct with the same effect
      as
      though made on and as of such date; (c) Borrower and Carbon shall be in
      compliance with all the terms and provisions contained herein and in the Credit
      Documents to be observed or performed; (d) Lender shall have received a
      completed Borrowing Base Certificate reflecting that after giving effect to
      such
      borrowing the aggregate amount of the Loans outstanding shall not exceed the
      lesser of (i) the Commitment, and (ii) the Borrowing Base; and (e) no
      Default shall have occurred and be continuing. 

     

    
      
        
        

      

      
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    Section
      4.3. Conditions
      to Extension.
      On each
      date on which the then current Final Maturity Date is to be extended pursuant
      to
      Section 2.2: (a) no Default shall have occurred and be continuing and (b)
      Borrower shall have paid the Extension Fee to Lender.

     

    ARTICLE
      V: COVENANTS

     

    Until
      the
      termination of the Commitment and the principal of and interest on the Loans
      and
      all fees and other Obligations payable under the Credit Documents shall have
      been paid in full, Borrower covenants and agrees with Lender that:

     

    Section
      5.1. Reporting
      Requirements.
      Borrower shall furnish to Lender each of the following:

     

    (a) Within
      90
      days following the end of each fiscal year, a consolidated balance sheet, an
      income statement, a statement of changes in shareholders’ equity and a statement
      of cash flows of Borrower as of the end of such fiscal year, setting forth
      in
      comparative form consolidated figures for the preceding fiscal year, all such
      financial information described above to be in reasonable form and detail and
      audited by an independent certified public accounting firm of recognized
      national standing reasonably acceptable to Lender, and whose opinion shall
      be to
      the effect that such financial statements have been prepared in accordance
      with
      GAAP and shall not be limited as to the scope of the audit or qualified as
      to
      the status of Borrower as a going concern or otherwise.

     

    (b) Within
      45
      days following the end of each fiscal quarter of Borrower (other than the fourth
      fiscal quarter, in which case 90 days after the end thereof) an unaudited
      consolidated balance sheet, income statement and statement of changes in
      shareholders’ equity of Borrower as of the end of such fiscal quarter, all such
      financial information described above to be in reasonable form and detail and
      reasonably acceptable to Lender.

     

    (c) Promptly
      and in no event later than the last day of each calendar month a completed
      Borrowing Base Certificate as of such day.

     

    (d) Within
      a
      reasonable period of time after a request from Lender, such other financial
      data
      or information as Lender may reasonably request with respect to any of the
      Pledged Interests

     

    (e) Within
      a
      reasonable period of time after a request from Lender, complete copies of all
      federal and state tax returns and supporting schedules of Borrower.

     

    (f) Promptly
      upon receipt thereof, a copy of any other report or “management letter”
submitted by independent accountants to Borrower in connection with any annual,
      interim or special audit of the books of Borrower.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (g) With
      reasonable promptness upon any such request, such other information regarding
      the business, properties or financial condition of Borrower as Lender may
      reasonably request.

     

    Section
      5.2. Information
      and Notices.
      Borrower will furnish or will cause to be furnished to Lender promptly following
      any request therefor, such other information regarding the operations, business
      affairs and financial condition of Borrower, or compliance with the terms of
      the
      Credit Documents, as Lender may reasonably request. Borrower will furnish to
      Lender prompt written notice of the following:  (a) the
      occurrence of any Default and (b) the filing or commencement of any action,
      suit or proceeding by or before any arbitrator or Governmental Authority against
      or affecting Borrower, Carbon that, if adversely determined, could reasonably
      be
      expected to result in a Material Adverse Effect. Each notice delivered under
      this Section shall be accompanied by a statement of Borrower setting forth
      the
      details of the event or development requiring such notice and any action taken
      or proposed to be taken with respect thereto.

     

    Section
      5.3. Books
      and Records; Inspection Rights; Access.
      Borrower will keep proper books of record and account in which full, true and
      correct entries are made of all dealings and transactions in relation to its
      business and activities. Borrower will permit any representatives designated
      by
      Lender, during normal business hours and upon reasonable advance notice, to
      visit and inspect its properties, to examine and make extracts from its books
      and records, and to directly discuss its affairs, finances and condition with
      its partners or trustees (or its designee), officers and independent
      accountants, as applicable.

     

    Section
      5.4. Existence;
      Payment of Obligations; Compliance with Laws.
      Borrower will do or cause to be done all things necessary to preserve, renew
      and
      keep in full force and effect its legal existence and the rights, licenses,
      permits, privileges and franchises material to the conduct of its business.
      Borrower will pay its liabilities including tax liabilities, that, if not paid,
      could reasonably be expected to result in a Material Adverse Effect before
      the
      same shall become delinquent or in default, except where (a) the validity
      or amount thereof is being contested in good faith by appropriate proceedings,
      (b) Borrower has set aside on its books adequate reserves with respect
      thereto and (c) the failure to make payment pending such contest could not
      reasonably be expected to result in a Material Adverse Effect. Borrower will
      comply with all laws, rules, regulations and orders of any Governmental
      Authority applicable to it, except where the failure to do so, individually
      or
      in the aggregate, could not reasonably be expected to result in a Material
      Adverse Effect.

     

    Section
      5.5. Use
      of
      Proceeds.
      The
      proceeds of the Loans shall be used by Borrower for working capital and general
      corporate purposes. No part of the proceeds of any Loan will be used directly
      or
      indirectly for the purpose of purchasing or carrying margin stock within the
      meaning of Regulations T, U, or X of the Federal Reserve Board. 

     

    Section
      5.6. Indebtedness;
      Liens; Restrictions on Subsidiaries.
      

     

    (a) Borrower
      shall not voluntarily repay any Indebtedness prior to its scheduled maturity
      unless the Loans have been repaid in full and the Commitment has been
      terminated.

     

    (b) No
      Obligor shall permit any Liens to exist on the Collateral except Liens created
      pursuant to the Credit Documents.

     

    (c) The
      Obligations are at least pari passu with all other obligations of
      Borrower.

     

    (d) Borrower
      shall not permit any of its Subsidiaries to agree to enter into or suffer to
      exist or become effective any consensual encumbrance or restriction of any
      kind
      on the ability of such subsidiary to pay dividends or make any other
      distribution or transfer of funds or assets or make loans or advances to, or
      pay
      any Indebtedness owed to, Borrower; except for restrictions on dividends and
      distributions during an event of default under and pursuant to the material
      agreements of such subsidiary.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
      5.7. Fundamental
      Changes.
      (a) Borrower shall not merge or consolidate with any other Person, or
      permit any other Person to merge or consolidate with it. (b) Borrower shall
      not sell, transfer, lease or otherwise dispose of (in one transaction or in
      a
      series of transactions) all or substantially all of its assets (in each case,
      whether now owned or hereafter acquired). (c) Borrower shall not
      distribute, sell, transfer, lease or otherwise dispose of (in one transaction
      or
      in a series of transactions) any Collateral except as expressly permitted
      herein. (d) Borrower shall not enter into any agreement or undertaking
      restricting its right or ability or the rights or ability of Lender to sell,
      assign or transfer any of the Collateral or proceeds thereof except as expressly
      permitted herein. (e) Borrower shall not, and shall not permit Carbon to
      alter, amend, modify or change its Governing Documents or other organizational
      documents in any manner which could have a Material Adverse Effect.

     

    Section
      5.8. Further
      Assurances.
      Borrower shall upon request by Lender (a) promptly correct any material
      defect or error that may be discovered in any Credit Document or in the
      execution, acknowledgement or recordation thereof and (b) do, execute,
      acknowledge, deliver, record, re-record, file, re-file, register and re-register
      any and all such further acts, deeds, conveyances, security agreements, pledge
      agreements, mortgages, deeds of trust, trust deeds, assignments, estoppel
      certificates, financing statements and continuation thereof, termination
      statements, notices of assignment, transfers, certificates, assurances and
      other
      instruments as Lender may require from time to time in order to (i) carry
      out more effectively the purposes of this Agreement or any other Credit
      Documents, (ii) subject to the Liens and security interests created by any
      of the Credit Documents any of Borrower’s properties, rights or interests
      covered or now or hereafter intended to be covered by any of the Credit
      Documents, (iii) perfect and maintain the validity, effectiveness and
      priority of any of the Credit Documents and the Liens and security interests
      intended to be created thereby and (iv) better assure, convey, grant,
      assign, transfer, preserve, protect and confirm unto Lender the rights granted
      or now or hereafter intended to be granted to Lender under any Credit Document.
      Lender shall upon request by Borrower promptly correct any material defect
      or
      error that may be discovered in any Credit Document or in the execution,
      acknowledgement or recordation thereof.

     

    Section
      5.9. Replacement
      Financing.
      Borrower shall use commercially reasonable efforts to obtain other financing,
      which financing shall be used to repay the Obligations hereunder, reduce the
      aggregate amount of Loans outstanding pursuant to this Agreement and replace
      the
      financing available under the Credit Documents; provided
      that the
      Borrower shall not be required to use the proceeds of other financing obtained
      for other purposes to repay the Obligations hereunder, reduce the aggregate
      amount of Loans outstanding pursuant to this Agreement or replace the financing
      available under the Credit Documents. 

     

    Section
      5.10. Consent.
      Borrower shall use commercially reasonable efforts to obtain the Consent
      executed by Carbon. 

     

    Section
      5.11. Ratio
      of Total Recourse Indebtedness to Tangible Net Worth.
      The
      ratio of Total Recourse Indebtedness to Tangible Net Worth at the end of each
      fiscal quarter shall not be greater than 3.0:1.0; provided
      that
      compliance with this Section 5.11 shall be determined by excluding the assets
      and liabilities of variable interest entities required to be consolidated under
      FIN 46R and without giving any effect to any change in or in the interpretation
      of FAS 140 after the date hereof.

     

    
      
        
        

      

      
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    ARTICLE
      VI: EVENTS
      OF DEFAULT

     

    Section
      6.1. If
      any of
      the following events (“Events
      of Default”)
      shall
      occur:

     

    (a) Borrower
      shall fail to pay any principal of or interest on the Loans when and as the
      same
      shall become due and payable, whether at the due date thereof or at a date
      fixed
      for prepayment thereof or otherwise;

     

    (b) Borrower
      shall fail to pay any fee or any other amount (other than an amount referred
      to
      in clause (a) of this Section 6.1) payable under any Credit Document, when
      and
      as the same shall become due and payable, and such failure shall continue
      unremedied for a period of five days after the receipt of written notice of
      the
      date on which the same shall become due and payable (it being understood that
      invoices by Lender to Borrower shall constitute such written
      notice);

     

    (c) any
      representation or warranty made or deemed made by or on behalf of Borrower
      in
      connection with any Credit Document or any amendment or modification thereof,
      or
      in any report, certificate, financial statement or other document furnished
      pursuant to or in connection with any Credit Document or any amendment or
      modification hereof shall prove to have been incorrect in any material respect
      when made or deemed made;

     

    (d) Borrower
      shall fail to observe or perform any covenant, condition or agreement contained
      in Sections 5.1, 5.5, 5.6, 5.7, 5.8 and 5.11 hereof or Sections 5.2, 5.3, 5.5,
      5.6 and 5.12 of the Security Agreement;

     

    (e) Borrower
      shall fail to observe or perform any covenant, condition or agreement contained
      in any Credit Document (other than those specified in clause (a), (b), (c)
      or
      (d) of this Section 6.1), and such failure shall continue unremedied for a
      period of 30 days after notice thereof from Lender to Borrower;

     

    (f) an
      involuntary proceeding shall be commenced or an involuntary petition shall
      be
      filed seeking (i) liquidation, reorganization or other relief in respect of
      Borrower or any subsidiary or its debts, or of a substantial part of their
      assets, under any federal, state or foreign bankruptcy, insolvency, receivership
      or similar law now or hereafter in effect or (ii) the appointment of a
      receiver, trustee, custodian, sequestrator, conservator or similar official
      for
      Borrower or any subsidiary or for a substantial part of its assets, and, in
      any
      such case, such proceeding or petition shall continue undismissed for 60 days
      or
      an order or decree approving or ordering any of the foregoing shall be
      entered;

     

    (g) Borrower
      or any subsidiary shall (i) voluntarily commence any proceeding or file any
      petition seeking liquidation, reorganization or other relief under any federal,
      state or foreign bankruptcy, insolvency, receivership or similar law now or
      hereafter in effect, (ii) consent to the institution of, or fail to contest
      in a timely and appropriate manner, any proceeding or petition described in
      clause (f) of this Section 6.1, (iii) apply for or consent to the
      appointment of a receiver, trustee, custodian, sequestrator, conservator or
      similar official for Borrower or any subsidiary or for a substantial part of
      their assets, (iv) file an answer admitting the material allegations of a
      petition filed against them in any such proceeding, (v) make a general
      assignment for the benefit of creditors or (vi) take any action for the
      purpose of effecting any of the foregoing;

     

    (h) Borrower
      or any subsidiary shall become unable, admit in writing or fail generally to
      pay
      its debts as they become due; 

     

    (i) one
      or
      more judgments for the payment of money in an aggregate amount in excess of
      (i) in the case of Borrower, (A) $5,000,000, if the net worth of
      Borrower is less than $250,000,000 or (B) $10,000,000, if the net worth of
      Borrower is greater than or equal to $250,000,000, and (ii) in the case of
      any subsidiary, $1,000,000, shall be rendered against Borrower or any subsidiary
      and the same shall remain undischarged for a period of 30 consecutive days
      during which execution shall not be effectively stayed, or any action shall
      be
      legally taken by a judgment creditor to attach or levy upon any assets of
      Borrower or any subsidiary to enforce any such judgment;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (j) any
      material provision of any Credit Document shall, for any reason, cease to be
      valid and binding on Borrower, or Borrower shall so state in writing; or any
      Credit Document shall, for any reason, cease to create a valid Lien on any
      of
      the Collateral purported to be covered thereby or any Lien granted to Lender
      shall cease to be a perfected first priority Lien, or Borrower shall so state
      in
      writing; and

     

    (k) Borrower
      or any subsidiary shall fail to make any payment on any Indebtedness of Borrower
      or any subsidiary, or any guaranty obligation in respect of any other Person,
      and such failed payment shall exceed, in the aggregate, (i) $5,000,000, if
      the net worth of Borrower is less than $250,000,000 or (ii) $10,000,000, if
      the net worth of Borrower is greater than or equal to $250,000,000; or any
      other
      event shall occur or condition exist under any agreement or instrument of
      Borrower or any subsidiary relating to such Indebtedness, if the effect of
      such
      event or condition is to accelerate, or permit (with the giving of notice or
      passing of time or both) the acceleration of, the maturity of such
      Indebtedness;

     

    then,
      and
      in every such event (other than an event with respect to Borrower described
      in
      clause (f), (g) or (h) of this Section 6.1), and at any time thereafter during
      the continuance of such event, Lender may by notice to Borrower, take any or
      all
      of the following actions, at the same or different
      times:  (i) terminate the Commitment, and thereupon the
      Commitment shall terminate immediately, and (ii) declare the Loans then
      outstanding to be due and payable in whole (or in part, in which case any
      principal not so declared to be due and payable may thereafter be declared
      to be
      due and payable), and thereupon the principal of the Loans so declared to be
      due
      and payable, together with accrued interest thereon and all fees and other
      Obligations of Borrower accrued hereunder, shall become due and payable
      immediately, without presentment, demand, protest or other notice of any kind,
      all of which are hereby waived by Borrower; and in case of any event with
      respect to Borrower described in clause (f), (g) or (h) of this Section 6.1,
      the
      Commitment shall automatically terminate and the principal of the Loans then
      outstanding, together with accrued interest thereon and all fees and other
      Obligations of Borrower accrued hereunder, shall automatically become due and
      payable, without presentment, demand, protest or other notice of any kind,
      all
      of which are hereby waived by Borrower.

     

    ARTICLE
      VII: MISCELLANEOUS

     

    Section
      7.1. Notices.
      All
      notices and other communications provided for herein shall be in writing and
      shall be delivered by hand or overnight courier service, mailed by U.S. mail
      or
      sent by telecopy (with confirmed receipt or followed by overnight delivery)
      to
      the addresses (or telecopy numbers) set forth on the signature pages hereof.
      Any
      party hereto may change its address or telecopy number for notices and other
      communications hereunder by notice to the other parties hereto. All notices
      and
      other communications given to any party hereto in accordance with the provisions
      of this Agreement shall be deemed to have been given on the date of receipt
      or,
      if mailed, the fifth Business Day following the date so mailed, if earlier.
      Telecopied notices shall be deemed to have been given on the day of receipt
      if
      received on a Business Day before 11:00 am (New York time), and otherwise,
      on
      the succeeding Business Day. 

     

    Section
      7.2. Amendment
      and Waiver.
      No
      alteration, modification, amendment or waiver of any terms and conditions of
      any
      of the Credit Documents shall be effective or enforceable against Lender unless
      set forth in a writing signed by Lender. Without limiting the generality of
      the
      foregoing, the making of each Loan shall not be construed as a waiver of any
      Default, regardless of whether Lender may have had notice or knowledge of such
      Default at the time.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
      7.3. Expenses;
      Indemnity; Damage Waiver.
      

     

    (a) Borrower
      shall pay all reasonable out-of-pocket expenses incurred by Lender, including
      but not limited to fees and disbursements of counsel for Lender, in connection
      with the negotiation and preparation of any Credit Documents, any amendments,
      modifications or waivers of the provisions thereto requested or agreed to by
      Borrower (whether or not the transactions contemplated hereby or thereby shall
      be consummated), the addition or release of any collateral or the enforcement
      or
      protection of Lender’s rights in connection with any Credit Document, including
      its rights under this Section in connection with the Loans made hereunder or
      any
      workout, restructuring or negotiations in respect thereof. Borrower hereby
      authorizes and directs Lender to pay any legal fees relating to this Agreement
      from the proceeds of any borrowings hereunder and any accounts of Borrower
      maintained with Lender.

     

    (b) Borrower
      shall indemnify Lender and each Affiliate, each director, officer, employee,
      member, manager, stockholder, partner, agent and representative of Lender and
      each Affiliate (each such Person being called an “Indemnitee”)
      against, and hold each Indemnitee harmless from, any and all losses, claims,
      damages, liabilities (or actions or other proceedings commenced or threatened
      in
      respect of) and related expenses, including the reasonable fees and
      disbursements of counsel for any Indemnitee (the “Losses”),
      incurred by or asserted against any Indemnitee arising out of, in connection
      with, or as a result of, any actual or prospective claim, litigation,
      investigation or proceeding relating to (i) the execution or delivery of
      any Credit Document, the performance of the parties hereto of their respective
      Obligations thereunder or the consummation of the Transactions or (ii) the
      Loans or the use of the proceeds therefrom, in each case, whether based on
      contract, tort or any other theory and regardless of whether any Indemnitee
      is a
      party thereto; provided
      that
      such indemnity shall not, as to any Indemnitee, be available to the extent
      that
      such Losses are determined by a final judgment of a court of competent
      jurisdiction to have been incurred by reason of gross negligence or willful
      misconduct of such Indemnitee. 

     

    (c) To
      the
      extent permitted by applicable law, Borrower shall not assert, and hereby
      waives, any claim against any Indemnitee, on any theory of liability, for
      special, indirect, consequential or punitive damages (as opposed to direct
      or
      actual damages) arising out of, in connection with, or as a result of, any
      Credit Document or any agreement or instrument contemplated thereby, the
      Transactions, each Loan or the use of the proceeds thereof.

     

    (d) All
      amounts due under this Section shall be payable promptly after written demand
      therefor. The Obligations of Borrower under this Section shall survive payment
      in full of the Loans.

     

    Section
      7.4. Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns, except that
      Borrower may not assign or otherwise transfer any of its rights or Obligations
      hereunder and any attempted assignment or transfer by Borrower shall be null
      and
      void. 

     

    Section
      7.5. Survival.
      All
      covenants, agreements, representations and warranties made by Borrower in any
      Credit Document and in the certificates or other instruments delivered in
      connection with or pursuant to any Credit Document shall be considered to have
      been relied upon by the other parties hereto and shall survive the execution
      and
      delivery of each Credit Document and the making of the Loans, regardless of
      any
      investigation made by any such other party or on its behalf and notwithstanding
      that Lender may have had notice or knowledge of any Default or incorrect
      representation or warranty at the time any credit is extended hereunder, and
      shall continue in full force and effect as long as the principal of or any
      accrued interest on the Loans or any fee or any other amount payable under
      any
      Credit Document is outstanding and unpaid. The provisions of Section 7.3 shall
      survive and remain in full force and effect regardless of the consummation
      of
      the transactions contemplated hereby, the repayment of the Loans or the
      termination of this Agreement or any provision hereof.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      7.6. Right
      of Setoff.
      If any
      amount payable hereunder or under any other Credit Document is not paid as
      and
      when due, Borrower hereby authorizes Lender and each affiliate of Lender to
      proceed, to the extent permitted by applicable law, without prior notice, by
      right of setoff, bankers’ lien, counterclaim or otherwise, against any assets of
      Borrower in any currency that may at any time be in the possession of Lender
      or
      such affiliate, at any branch or office, to the full extent of all amounts
      payable to Lender hereunder or thereunder. Lender shall give prompt notice
      to
      Borrower after any exercise of Lender’s rights under the preceding sentence, but
      the failure to give such notice shall not affect the validity of any of Lender’s
      actions.

     

    Section
      7.7. Severability.
      Any
      provision of any Credit Document held to be invalid, illegal or unenforceable
      in
      any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
      of
      such invalidity, illegality or unenforceability without effecting the validity,
      legality and enforceability of the remaining provisions thereof; and the
      invalidity of a particular provision in a particular jurisdiction shall not
      invalidate such provision in any other jurisdiction.

     

    Section
      7.8. Governing
      Law; Jurisdiction; Consent to Service of Process.
      

     

    (a) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

     

    (b) BORROWER
      HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT
      IN
      THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT
      AND
      RELATED TO OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF THE
      TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW
      YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY
      APPLICABLE LAW, BORROWER HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
      MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
      CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS,
      THAT
      THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
      VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY CREDIT DOCUMENT
      OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS.
      TO
      THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AGREES NOT TO SEEK AND HEREBY
      WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT
      OF
      ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
      ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY
      WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
      DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY CREDIT
      DOCUMENT.

     

    (c) Each
      party to this Agreement irrevocably consents to service of process in the manner
      provided for notices in Section 7.1. Nothing in this Agreement will affect
      the
      right of any party to this Agreement to serve process in any other manner
      permitted by law.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Section
      7.9. Headings.
      Article
      and Section headings used herein are for convenience of reference only, are
      not
      part of this Agreement and shall not affect the construction of, or be taken
      into consideration in interpreting, this Agreement.

     

    Section
      7.10.  Counterparts.
      This
      Agreement may be executed in counterparts (and by different parties hereto
      on
      different counterparts), each of which shall constitute an original, but all
      of
      which when taken together shall constitute a single contract. Delivery of an
      executed counterpart of a signature page of this Agreement or of any other
      Credit Document by facsimile or electronic transmission shall be effective
      as
      delivery of a manually executed counterpart of this Agreement or of such other
      Credit Document.

     

    Section
      7.11. No
      Reliance.
      Borrower acknowledges that it is making its own independent decision to enter
      into the transactions under the Credit Documents and has determined that such
      transactions are appropriate and proper based upon its own judgment and upon
      advice from such advisers as it has deemed necessary. Borrower acknowledges
      that
      it is not relying on any communication (written or oral) from any Indemnitee
      (as
      defined in Section 7.3(b)) as investment or tax advice or as a recommendation
      to
      enter into such transactions and specifically agrees and acknowledges that
      any
      information and explanation relating to the terms and conditions of such
      transactions shall not be considered investment or tax advice or a
      recommendation from any Indemnitee to enter into such transactions. No
      communication (written or oral) from any Indemnitee regarding such transactions
      shall be deemed to be an assurance or guarantee as to the expected results,
      benefits, outcomes or characteristics (economic, tax or otherwise) of such
      transactions. Borrower acknowledges that it is capable of assessing the merits
      of and understands (on its own behalf or through independent professional
      advice), and accepts, the terms, conditions and risks of such transactions
      and
      that it is also capable of assuming and assumes the risks of such transactions.
      Borrower acknowledges that no Indemnitee is acting as a fiduciary or an adviser
      to Borrower in respect of such transactions. 

     

    Section
      7.12. [Intentionally
      Omitted]

     

    Section
      7.13. Power
      of Attorney.
      Borrower hereby authorizes and does hereby make, constitute and appoint Lender
      and legal counsel to Lender, each with power to act separately, as Borrower’s
      true and lawful attorney-in-fact, to make mutually agreed-upon revisions to
      each
      of the Credit Documents including this Agreement and any borrowing notices,
      as
      appropriate, and to complete any blanks contained therein, such acts to include
      completing any blanks contained therein, changing the dates or borrowing
      amounts, inserting or changing the date of each Credit Document and inserting
      the account numbers of any accounts in which any Collateral is held. Borrower
      hereby approves and ratifies all acts of said attorney or designee, and hereby
      agreed that they shall not be liable for any acts of commission or omission,
      nor
      for any error or judgment or mistake of fact or law except for its own gross
      negligence or willful misconduct. This power of attorney shall be irrevocable
      as
      long as any of the Obligations shall be outstanding. Lender may exercise this
      power of attorney at any time on and after the Closing Date. 

     

    Section
      7.14. Share
      Purchase. 

     

    (a) Subject
      to the limitations set forth in this Section 7.14, Lender shall, at any time
      prior to the Final Maturity Date, have the option to purchase all or any portion
      of the shares of Carbon Stock constituting Collateral at such time at the Share
      Purchase Price by delivering a Share Purchase Notice to Borrower, which notice
      shall specify (i) the number of shares of Carbon Stock that Lender desires
      to
      purchase, (ii) the Share Purchase Price of the shares to be purchased and
      (iii) the date on which Lender desires to consummate such purchase and sale
      (which date shall be no less than 5 Business Days after the date of the Share
      Purchase Notice). Subject to the other provisions of this Section 7.14, if
      Lender delivers to Borrower a Share Purchase Notice, Borrower shall be obligated
      to sell to Lender, and Lender shall be required to purchase from Borrower,
      that
      number of shares of Carbon Stock set forth in the Share Purchase Notice (as
      the
      same may be adjusted as provided below); provided
      that
      Lender may, at any time prior to the consummation of a purchase and sale of
      shares of Carbon Stock in respect of a Share Purchase Notice, elect to withdraw
      such Share Purchase Notice with respect to all or any portion of the shares
      of
      Carbon Stock elected to be purchased (without any liability or obligation to
      Borrower or any other Person), in which case Lender shall have no obligation
      to
      purchase the shares of Carbon Stock so withdrawn.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (b) At
      the
      closing of the purchase and sale of the shares of Carbon Stock pursuant to
      this
      Section 7.14, Borrower shall take all necessary and desirable actions requested
      by Lender in connection with the consummation of any purchase and sale of the
      shares of Carbon Stock, including the execution of such customary agreements
      and
      such instruments (including stock powers or other instruments of transfer)
      for
      transactions of this type. Upon consummation of purchase and sale of shares
      of
      Carbon Stock under this Section 7.14: (i) the Commitment shall be automatically
      reduced by the Share Purchase Price set forth on such Share Purchase Notice
      and
      actually paid at the closing; and (ii) the Share Purchase Price actually
      paid at the closing shall be applied to repay the outstanding Loans and the
      other Obligations as if Borrower had prepaid such Loans and the other
      Obligations pursuant to the terms of Section 2.4 hereof.

     

    (c) Notwithstanding
      anything contained in this Section 7.14 to the contrary, in connection with
      each
      and any election by Lender to purchase shares of Carbon Stock under this Section
      7.14, in no event will the Share Purchase Price, and the applicable number
      of
      shares of Carbon Stock that may be purchased by Lender in connection therewith,
      exceed the greater of (i) the outstanding Commitment or (ii) an amount
      which would be required to repay the outstanding Loans and the other Obligations
      in full, in each case, determined as of the date of the applicable Share
      Purchase Notice; provided
      in the
      event that Lender would be required to purchase one or more fractional shares
      of
      Carbon Stock, the parties shall agree to adjust the Share Purchase Price
      accordingly.

     

    (d) Notwithstanding
      anything contained in this Section 7.14 to the contrary, in lieu of selling
      shares of Carbon Stock to Lender pursuant to this Section 7.14 following receipt
      of a Share Purchase Notice, Borrower may elect to either: (i) prepay, in
      full, all outstanding Loans and any other Obligations and terminate the
      Commitment; or (ii) prepay, in full, the outstanding Loans and any other
      Obligations in an amount equal to the Share Purchase Price and reduce the
      Commitment by the same amount. If Borrower, after receiving the Share Purchase
      Notice from Lender desires to exercise its rights pursuant to this Section
      7.14(d), Borrower must: (A) deliver written notice to Lender no later than
      3
      Business Days following the date Borrower receives such Share Purchase Notice
      (such written notice being irrevocable without the consent of Lender) specifying
      whether Borrower elects to effectuate the prepayment pursuant to clause (i)
      or
      (ii) above; and (B) cause prepayment of the applicable amount to be made to
      Lender, in full, no later than 10 Business days following delivery of the Share
      Repayment Notice. Failure of Borrower to meet any of the deadlines outlined
      in
      this clause (d) shall result in the automatic forfeiture by Borrower of its
      right to effectuate a prepayment pursuant to this clause (d) in respect of
      the
      applicable Share Purchase Notice.

     

    Remainder
      of Page Intentionally Left Blank

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the day and year first
      above written.

    
      	 	 	 
	 	
              BORROWER:

            
	 	 
	 	
              ANTHRACITE
                CAPITAL, INC.

            
	 
 	 
 	 
 
	
            	By 	/s/
              Chris Milner
	 	
              
Name:
              Chris Milner
	 	Title:
              Chief Executive Officer


    

     

    
      
        	 	Notice Address:
	 	 
	 	c/o BlackRock Financial Management,
                Inc.
	 	40 East 52nd
                Street
	 	New York, New York 10022
	 	Attn: Richard Shea
	 	Fax: (212) 810-8758
	 	 
	 	With a copy to:
	 	 
	 	Anthracite Capital, Inc.
	 	
                c/o
                  BlackRock Financial Management, Inc.

              
	 	One PNC Plaza, 19th
                Floor
	 	249 Fifth Avenue
	 	Pittsburgh, PA 15222
	 	Attn: Janice DeJulio
	 	Fax: (412) 762-4546
	 	 
	 	and a copy to:
	 	 
	 	
                Anthracite
                  Capital, Inc.

              
	 	c/o BlackRock Realty Advisors
	 	50 California Street
	 	San Francisco, CA 94115
	 	
                Attn:
                  Herman H. Howerton, Esq.

              
	 	Fax: (415)
                835-0092


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      	 	 	 
	 	LENDER:
	 	 
	 	BLACKROCK HOLDCO 2,
              INC.
	 
 	 
 	 
 
	
            	By  	/s/
              Ann Marie Petach
	 	
              
Name:
              Ann Marie Petach
	 	Title:
              Managing Director


    

     

    
      
        	 	Notice Address:
	 	 
	 	c/o BlackRock, Inc.
	 	40 East 52nd
                Street
	 	New York, New York 10022
	 	Attn: Ann Marie Petach
	 	Fax: (212) 810-8765
	 	 
	 	With a copy to:
	 	 
	 	c/o BlackRock, Inc.
	 	40 East 52nd
                Street
	 	
                New
                  York, New York 10022

              
	 	
                Attn:
                  Robert P. Connolly, Esq.

              
	 	
                Fax:
                  (212) 810-3744

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    BORROWING
      BASE CERTIFICATE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    BORROWING
      REQUEST