Exhibit 10.16
Annex I
Supplemental Terms and Conditions
This Annex I forms a part of the Master Repurchase Agreement dated as of
March 20, 2002 (the "Agreement") between LIQUID FUNDING, LTD. ("Buyer") and LNR
CMBS HOLDINGS CORP. ("Seller"). Capitalized terms used but not defined in this
Annex I shall have the meanings ascribed to them in the Agreement.
1. Other Applicable Annexes. Please select any/all of the optional Annexes
below to form a part of the Agreement. The Annexes which are initialed will
apply hereunder.
Initials
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(a) Xxxxx XXX (International Transactions) ________
(b) Xxxxx XX (Party Acting as Agent) ________
(c) Xxxxx X (Margin for Forward Transactions) ________
(d) Xxxxx XX (Buy/Sell Back Transactions) ________
(e) Annex VII (Transactions Involving Registered Investment Companies) ________
2. "Margin Notice Deadline" means 10:00 a.m. (New York time).
3. Xxxxxx calls may be made orally by telephone directly to one of the
individuals set forth on Xxxxx XX (but in no event by voice mail), and
shall be confirmed in writing within two (2) Business Days of such margin
call, provided however, that the failure to provide such written
confirmation shall not release any party from satisfying its margin
maintenance obligations when due.
4. Definitions. The following definition shall be added to Paragraph 2:
(u) "Transaction", with respect to this Master Repurchase
Agreement, means all transactions under this Master Repurchase
Agreement and does not include transactions under any other
master repurchase agreement or any other agreement.
5. Notwithstanding the definition of Purchase Price in Paragraph 2 of the
Agreement and the provisions of Paragraph 4(a)(i) or 4(b) of the Agreement,
the parties agree (i) that the Purchase Price will not be increased or
decreased by the amount of any cash or securities transferred by one party
to the other pursuant to Paragraph 4(a)(i) or 4(b) of the Agreement and
(ii) that transfer of such cash shall be treated as if it constituted a
transfer of Securities (with a Market Value equal to the U.S. dollar amount
of such cash) pursuant to Paragraph 4(a)(i) or 4(b), as the case may be
(including for purposes of the definition of "Additional Purchased
Securities").
6. The following 2 paragraphs shall be added to Paragraph 9 of the Agreement:
(c) In the case of any Transaction for which the Repurchase Date is other
than the Business Day immediately following the Purchase Date and with
respect to which Seller does not have any existing right to substitute
substantially the same Securities for the Purchased Securities, Seller
shall have the right, subject to the proviso to this sentence, upon notice
to Buyer, which notice shall be given at or prior to 10 a.m. (New York
time) on such Business Day, to substitute substantially the same Securities
for any Purchased Securities; provided, however, that Buyer may elect in
the exercise of its good faith business judgment, by the close of business
on the Business Day notice is received, or by the close of the next
Business Day if notice is given after 10 a.m. (New York time) on such day,
not to accept such substitution. In the event such substitution is accepted
by Buyer, such substitution shall be made by Seller's transfer to Buyer of
such other Securities and Buyer's transfer to Seller of such Purchased
Securities, and after such substitution, the substituted Securities shall
be deemed to be Purchased Securities. In the event Buyer elects not to
accept such substitution, Buyer shall offer Seller the right to terminate
the Transaction.
(d) In the event Seller exercises its right to substitute or terminate
under sub-paragraph (c), Seller shall be obligated to pay to Buyer, by the
close of the Business Day of such substitution or termination, as the case
may be, an amount equal to (A) Buyer's actual cost (including all fees,
expenses and commissions) of (i) entering into replacement transactions;
(ii) entering into or terminating hedge transactions; and/or (iii)
terminating transactions or substituting securities in like transactions
with third parties in connection with or as a result of such substitution
or termination, and (B) to the extent Buyer determines not to enter into
replacement transactions, the loss incurred by Buyer directly arising or
resulting from such substitution or termination. The foregoing amounts
shall be solely determined and calculated by Buyer in good faith. Upon the
request of Seller, Buyer shall provide a good faith estimate of such
amounts which Buyer expects to incur upon Seller's substitution or
termination under sub-paragraph (c); provided, however, that Buyer's actual
costs or loss under this paragraph (d) shall not be limited to the amount
provided to Seller in such estimate.
7. Mandatory Early Repurchase Date
(a) Notwithstanding any provision of the Master Repurchase Agreement,
and subject to no condition precedent, the tenth Business Day following the
date on which an "Enforcement Event" (as defined below) occurs shall
automatically and irrevocably become the Repurchase Date in respect of all
Transactions hereunder (the "Mandatory Early Repurchase Date"), whether or
not the Enforcement Event is then continuing. In the event of the
occurrence of an Enforcement Event, in lieu of the delivery of the
Repurchase Price by Seller on the Mandatory Early Repurchase Date, Seller
shall be obliged to pay to Buyer an amount equal to the Repurchase Price as
of the Mandatory Early Repurchase Date minus the value (positive or
negative) of any agreement entered into by Buyer for the purpose of hedging
its interest rate exposure resulting from its entry into each Transaction
hereunder (the "Hedge Value"). Buyer shall promptly (but, in any event,
within three (3) Business Days) notify Seller of the occurrence of an
Enforcement Event and of the resulting Mandatory Early Repurchase Date,
which notice shall state that on the Mandatory Early Repurchase Date all
Transactions will be terminated in their
entirety and the amount of the Repurchase Price and Hedge Value as of the
Mandatory Early Repurchase Date.
(b) "Enforcement Event" will have the meaning specified in the Offering
Circular dated November 9, 2001 for Buyer's Global Medium Term Note
Program. A copy of the relevant excerpt is attached hereto as Exhibit A.
(c) "Security Trustee" means The Chase Manhattan Bank, or such other person
as may then be acting as security trustee for certain of Xxxxx's creditors.
8. Miscellaneous.
(a) No Proceedings against Buyer. Seller hereby agrees (which agreement
shall, pursuant to the terms of this Master Repurchase Agreement, be
binding upon its successors and assigns) that it shall not institute
against, or join any other person in instituting against, Buyer any
bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding, or other proceeding under any Bermuda or United States federal
or state bankruptcy or similar law, for two years and a day after the
latest maturing commercial paper note, medium term note or other rated
indebtedness issued by Buyer is paid. The provisions of this Paragraph 8(b)
shall survive the termination of this Master Repurchase Agreement.
(b) Acknowledgement of Security. Pursuant to that certain Collateral
Trust and Security Agreement dated as of November 9, 2001 among Buyer, The
Chase Manhattan Bank, as trustee (the "Security Trustee") and Bear Xxxxxxx
Securities Corp., as securities intermediary, Buyer has granted to the
Security Trustee a first priority security interest in all of Buyer's
right, title and interest in and to this Master Repurchase Agreement and
each Transaction hereunder. Seller acknowledges such security interest and
understands that the Security Trustee has the right to enforce the rights
of Buyer hereunder, including the right of Buyer to give notices to Seller,
to declare a Termination Date on behalf of Buyer hereunder, to determine
Market Value and to calculate the Repurchase Price and Hedge Value as of
the Mandatory Early Repurchase Date, that the Security Trustee is an
express third party beneficiary of this Master Repurchase Agreement and in
no event will the Security Trustee incur any obligations or liabilities
hereunder.
(c) No Recourse. No recourse shall be had against any incorporator,
shareholder, affiliate (except with respect to any affiliate of Seller
which has Contiguous Affirmative Control over any Related Purchased
Security and has delivered the right to exercise such Contiguous
Affirmative Control to Buyer and, as to such affiliate, such exception
shall only be applicable with respect to a breach of any agreement
regarding the delivery of such Contiguous Affirmative Control), officer,
director, employee or agent of Buyer or Seller with respect to any of the
covenants, agreements, representations or warranties of the other party
hereto contained in this Master Repurchase Agreement.
(e) Pricing Information. Seller agrees to make available to Buyer any
Bloomberg or Intex passwords in the possession of Seller which Buyer may
reasonably require to enable Buyer to determine the Market Value of any
Purchased Security (including the cashflows due thereon).
LIQUID FUNDING, LTD. LNR CMBS HOLDINGS CORP.
BY:_________________________ BY:_________________________
TITLE:______________________ TITLE:______________________
DATE:_______________________ DATE:_______________________
Exhibit A
Excerpt from Offering Circular
(a complete copy of the Offering Circular will be provided upon request)
The occurrence of any of the following events shall constitute an "Enforcement
Event":
(i) the occurrence of an "Event of Default" with respect to the Notes of any
Series (subject to any applicable cure period);
(ii) a failure of the Issuer to make a payment with respect to Commercial
Paper which shall not have been cured within one (1) Business Day;
(iii) the declaration of an "Early Termination Date" as a result of the
occurrence of an "Event of Default" under any Hedging Transaction where
the Issuer is the defaulting party;
(iv) the occurrence of an "Event of Default" under any Liquidity Facility
(subject to any applicable cure period);
(v) any Note shall be rated below "A" or "A2" (as the case may be) by any
Rating Agency which has been engaged by the Issuer to provide a rating on
such Note;
(vi) the occurrence of a Capital Adequacy Failure;
(vii) the failure of the Interest Rate Neutrality Test to be satisfied for five
(5) consecutive Business Days; or
(viii) the failure of the Liquidity Sufficiency Test to be satisfied for five
(5) consecutive Business Days.