Master Repurchase Agreement
Exhibit 10.49
|
Master Repurchase Agreement |
September 1996 Version
Dated as December 15, 2005
Between:
XX Xxxxxx Xxxxx Bank, N.A.
and
CSE Mortgage LLC
1. Applicability
From time to time the parties hereto may enter into transactions in which one party (“Seller”)
agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such
Securities at a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing,
shall be governed by this Agreement, including any supplemental terms or conditions contained in
Annex I hereto and in any other annexes identified herein or therein as applicable hereunder.
2. Definitions
(a) “Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of
any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium,
dissolution, delinquency or similar law, or such party seeking the appointment or election of a
receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of
creditors for purposes of commencing any such case or proceeding or seeking such an appointment or
election, (ii) the commencement of any such case or proceeding against such party, or another
seeking such an appointment or election, or the filing against a party of an application for a
protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A)
is consented to or not timely contested by such party, (B) results in the entry of an order for
relief, such an appointment or election, the issuance of such a protective decree or the entry of
an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such
party of a general assignment for the benefit of creditors, or (iv) the admission in writing by
such party of such party’s inability to pay such party’s debts as they become due;
(b) “Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph
4(a) hereof;
(c) “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by
application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of
such date;
(d) “Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage
(which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the
absence of any such agreement, the percentage obtained by dividing the Market Value of the
Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such
Transaction;
(e) “Confirmation”, the meaning specified in Paragraph 3(b) hereof;
(f) “Income”, with respect to any Security at any time, any principal thereof and all interest,
dividends or other distributions thereon;
(g) “Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;
(h) “Margin Excess”, the meaning specified in Paragraph 4(b) hereof;
(i) “Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, Annex
I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin
maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such
agreement, the deadline for such purposes established in accordance with market practice);
(j) “Market Value”, with respect to any Securities as of any date, the price for such Securities on
such date obtained from a generally recognized source agreed to by the parties or the most recent
closing bid quotation from such a source, plus accrued Income to the extent not included therein
(other than any Income credited or transferred to, or applied to the obligations of, Seller
pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such
Securities);
(k) “Price Differential”, with respect to any Transaction as of any date, the aggregate amount
obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for
such Transaction on a 360 day per year basis for the actual number of days during the period
commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential previously paid by
Seller to Buyer with respect to such Transaction);
(l) “Pricing Rate”, the per annum percentage rate for determination of the Price Differential;
(m) “Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal
(or, if more than one such rate is published, the average of such rates);
(n) “Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to
Buyer;
(o) “Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are
transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise,
such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph
4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to
Paragraph 4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of Paragraph 5
hereof;
(p) “Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction
hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term
“Purchased Securities” with respect to any Transaction at any time also shall include Additional
Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities
returned pursuant to Paragraph 4(b) hereof;
(q) “Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from
Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11
hereof;
(r) “Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to
Seller upon termination of a Transaction, which will be determined in each case (including
Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as
of the date of such determination;
(s) “Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained
by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of
such date;
(t) “Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage
(which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the
absence of any such agreement, the percentage obtained by dividing the Market Value of the
Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such
Transaction.
3. Initiation; Confirmation; Termination
(a) An agreement to enter into a Transaction may be made orally or in writing at the initiation of
either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall
be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of
Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be
agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a
“Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number,
if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price,
(iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing
Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions
of the Transaction not inconsistent with this Agreement. The Confirmation, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with
respect to the Transaction to which the Confirmation relates, unless with respect to the
Confirmation specific objection is made promptly after receipt thereof. In the event of any
conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall be made by Buyer or
Seller, no later than such time as is customary in accordance with market practice, by telephone or
otherwise on or prior to the business day on which such termination will be effective. On the date
specified in such demand, or on the date fixed for termination in the case of Transactions having a
fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of
the Purchased Securities and any Income in respect thereof received by Buyer (and not previously
credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5
hereof) against the transfer of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Buyer is less than the aggregate
Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to
Seller require Seller in such Transactions, at Seller’s option, to transfer to Buyer cash or
additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that
the cash and aggregate Market Value of the Purchased Securities, including any such Additional
Purchased Securities, will thereupon equal or exceed such aggregate Buyer’s Margin Amount
(decreased by the amount of any Margin Deficit as of such date arising from any Transactions in
which such Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller’s
Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice
to Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after
deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed
such aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess as of such date
arising from any Transactions in which such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or
before the Margin Notice Deadline on any business day, the party receiving such notice shall
transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the
close of business in the relevant market on such day. If any such notice is given after the Margin
Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later
than the close of business in the relevant market on the next business day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed to such transactions as
shall be agreed upon by Buyer and Seller.
(e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require
the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised
whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction
hereunder (calculated without regard to any other Transaction outstanding under this Agreement).
5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in
respect of the Securities that is not otherwise received by Seller, to the full extent it would be
so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree
with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall
reasonably determine in its discretion), on the date such Income is paid or distributed either (i)
transfer to or credit to the account of Seller such Income with respect to any Purchased Securities
subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment
or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of
such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding
sentence (A) to the extent that such action would result in the creation of a Margin Deficit,
unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional
Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default
with respect to Seller has occurred and is then continuing at the time such Income is paid or
distributed.
6. Security Interest
Although the parties intend that all Transactions hereunder be sales and purchases and not loans,
in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged
to Buyer as security for the performance by Seller of its
obligations under each such Transaction, and shall be deemed to have granted to Buyer a security
interest in, all of the Purchased Securities with respect to all Transactions hereunder and all
Income thereon and other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately
available funds. All Securities transferred by one party hereto to the other party (i) shall be in
suitable form for transfer or shall be accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book-entry system of
a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to
Seller and Buyer.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the possession of Seller
shall be segregated from other securities in its possession and shall be identified as subject to
this Agreement. Segregation may be accomplished by appropriate identification on the books and
records of the holder, including a financial or securities intermediary or a clearing corporation.
All of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase Date and,
unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from
engaging in repurchase transactions with the Purchased Securities or otherwise selling,
transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall
relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph
3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the
obligations of, Seller pursuant to Paragraph 5 hereof.
Required Disclosure for Transactions in Which the Seller Retains Custody of the
Purchased Securities
Purchased Securities
Seller is not permitted to substitute other securities for those subject to this Agreement and
therefore must keep Buyer’s securities segregated at all times, unless in this Agreement Buyer
grants Seller the right to substitute other securities. If Buyer grants the right to substitute,
this means that Buyer’s securities will likely be commingled with Seller’s own securities during
the trading day. Buyer is advised that, during any trading day that Buyer’s securities are
commingled with Seller’s securities, they [will]* [may]** be subject to liens granted by Seller to
[its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities
transactions. Whenever the securities are commingled, Seller’s ability to resegregate substitute
securities for Buyer will be subject to Seller’s ability to satisfy [the clearing]* [any]** lien or
to obtain substitute securities.
*Language to be used under 17 C.F.R. ß403.4(e) if Seller is a government securities broker or
dealer other than a financial institution.
**Language to be used under 17 C.F.R. ß403.5(d) if Seller is a financial institution.
9. Substitution
(a) Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for
any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other
Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased Securities, the parties expressly
agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have
agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased
Securities; provided, however, that such other Securities shall have a Market Value at least equal
to the Market Value of the Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to
execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to
perform its obligations hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) it will engage in such Transactions as
principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any
Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person
signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any
such disclosed principal), (iv) it has obtained all authorizations of any governmental body
required in connection with this Agreement and the Transactions hereunder and such authorizations
are in full force and effect and (v) the execution, delivery and performance of this Agreement and
the Transactions hereunder will not violate any law, ordinance, charter, by-law or rule applicable
to it or any agreement by which it is bound or by which any of its assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.
11. Events of Default
In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon
the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased
Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
Paragraph 4 hereof, (iv) Buyer fails, after one business
day’s notice, to comply with Paragraph 5
hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation
made by Seller or Buyer shall have
been incorrect or untrue in any material respect when made or repeated or deemed to have been made
or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention
not to, perform any of its obligations hereunder (each an “Event of Default”):
(a) The nondefaulting party may, at its option (which option shall be deemed to have been exercised
immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have
occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date
for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to
occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as
of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately
canceled). The nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give
notice to the defaulting party of the exercise of such option as promptly as practicable.
(b) In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting
party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this
Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased
Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all
Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and
applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting
party hereunder, and (iii) the defaulting party shall immediately deliver to the nondefaulting
party any Purchased Securities subject to such Transactions then in the defaulting party’s
possession or control.
(c) In all Transactions in which the defaulting party is acting as Buyer, upon tender by the
nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all
right, title and interest in and entitlement to all Purchased Securities subject to such
Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall
deliver all such Purchased Securities to the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the defaulting
party, may:
| i. | as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party |
| hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and | ||
| ii. | as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities (“Replacement Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source. |
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Securities
subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the
absence of a generally recognized source for prices or bid or offer quotations for any Security,
the nondefaulting party may establish the source therefor in its sole discretion and (3) all
prices, bids and offers shall be determined together with accrued Income (except to the extent
contrary to market practice with respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall
be liable to the nondefaulting party for any excess of the price paid (or deemed paid) by the
nondefaulting party for Replacement Securities over the Repurchase Price for the Purchased
Securities replaced thereby and for any amounts payable by the
defaulting party under Paragraph 5 hereof or otherwise hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in
respect of which the defaulting party is acting as Buyer shall not increase above the amount of
such Repurchase Price for such Transaction determined as of the date of the exercise or deemed
exercise by the nondefaulting party of the option referred to in subparagraph (a) of this
Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for (i) the amount of all
reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a
result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees,
expenses and commissions) of entering into replacement transactions and entering into or
terminating hedge transactions in connection with or as a result of an Event of Default, and (iii)
any other loss, damage, cost or expense directly arising or resulting from the occurrence of an
Event of Default in respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party shall be liable to the
nondefaulting party for interest on any amounts owing by the defaulting party hereunder, from the
date the defaulting party becomes liable for such amounts
hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full
by the exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable by the
defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to
the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise
available to it under any other agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction
hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder
constitute a single business and contractual relationship and have been made in consideration of
each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in
respect of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that
each of them shall be entitled to set off claims and apply property held by them in respect of any
Transaction against obligations owing to them in respect of any other Transactions hereunder and
(iii) that payments, deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments, deliveries and other
transfers in respect of any other Transactions hereunder, and the obligations to make any such
payments, deliveries and other transfers may be applied against each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder may be given by a party
to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified in
Annex II hereto, or so sent to such party at any other place specified in a notice of change of
address hereafter received by the other. All notices, demands and
requests hereunder may be made orally, to be confirmed promptly in writing, or by other
communication as specified in the preceding sentence.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing general terms
and conditions for repurchase transactions. Each provision and agreement herein shall be treated as
separate and independent from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
15. Non-assignability; Termination
(a) The rights and obligations of the parties under this Agreement and under any Transaction shall
not be assigned by either party without the prior written consent of the other party, and any such
assignment without the prior written consent of the other party shall be null and void. Subject to
the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns. This Agreement may be
terminated by either party upon giving written notice to the other, except that this Agreement
shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or
otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11
hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to the
conflict of law principles thereof.
17. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall constitute a waiver of
any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a
waiver of its right to exercise any other remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the parties hereto. Without
limitation on any of the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b)
hereof will not constitute a waiver of any right to do so at a later date.
18. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of the Employee Retirement
Income Security Act of 1974 (“ERISA”) are intended to be used by either party hereto (the “Plan
Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction.
The Plan Party shall represent in writing to the other party that the Transaction does not
constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other
party may proceed in reliance thereon but shall not be required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall
proceed only if Seller furnishes or has furnished to Buyer its most recent available audited
statement of its financial condition and its most recent subsequent unaudited statement of its
financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to
represent to Buyer that since the date of Seller’s latest such financial statements, there has been
no material adverse change in Seller’s financial condition which Seller
has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited
statements of its financial condition as they are issued, so long as it is a Seller in any
outstanding Transaction involving a Plan Party.
19. Intent
(a) The parties recognize that each Transaction is a “repurchase agreement” as that term is defined
in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of
Securities subject to such Transaction or the term of such Transaction would render such definition
inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of
the United States Code, as amended (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable).
(b) It is understood that either party’s right to liquidate Securities delivered to it in
connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11
hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of
Title 11 of the United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an “insured depository
institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”),
then each Transaction hereunder is a “qualified financial contract,” as that term is defined in
FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).
(d) It is understood that this Agreement constitutes a “netting contract” as defined in and subject
to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and
each payment entitlement and payment obligation under any Transaction hereunder shall constitute a
“covered contractual payment entitlement” or
“covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except
insofar as one or both of the parties is not a “financial institution” as that term is defined in
FDICIA).
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or dealer registered with
the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of
1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the
provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government securities broker or a
government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will
not provide protection to the other party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial institution, funds
held by the financial institution pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union
Share Insurance Fund, as applicable.
| JPMORGAN CHASE BANK, N.A. | CSE MORTGAGE LLC | |||||||||
By:
|
/s/ Xxxxxxxx Xxxxx | By: | /s/ Xxxxxx X. Xxxx | |||||||
| Name: Xxxxxxxx Xxxxx | Name: Xxxxxx X. Xxxx | |||||||||
| Title: Managing Director | Title: Chief Financial Officer and Senior Vice President | |||||||||
ANNEX I
SUPPLEMENTAL TERMS AND CONDITIONS
SUPPLEMENTAL TERMS AND CONDITIONS
This Annex I supplements and forms a part of the Master Repurchase Agreement dated as of December
15, 2005 (the “Agreement”) between JPMorgan Chase Bank, N.A. (“Buyer”) and CSE Mortgage LLC
(“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. In addition to this Annex I and Annex II, the following
Annexes and any Schedules thereto shall form a part of the Agreement and shall be applicable
thereunder.
Schedule 1 (Transactions)
2. Definitions. For purposes of the Agreement and this Annex I, the following terms shall
have the following meanings:
“Margin Notice Deadline” means 10:00 A.M. New York time.
“Business Day” or “business day”, with respect to any Transaction hereunder, a day on which regular
trading may occur in the principal market for the Purchased Securities subject to such Transaction,
which includes shortened trading days, days on which trades are permitted to occur but do not in
fact occur and days on which the Purchased Securities are subject to percentage of movement or
volume limitations, provided, however, that for purposes of calculating Market Value, such
term shall mean a day on which regular trading occurs in the principal market for the assets the
value of which is being determined. Notwithstanding the foregoing, (i) for purposes of Paragraph 4
(c) of the Agreement, “business day” shall mean any day on which regular trading occurs in the
principal market for any Purchased Securities or for any assets constituting Additional Purchased
Securities under any outstanding Transaction hereunder and “next business day” shall mean the next
day on which a transfer of cash or Additional Purchased Securities may be effected in accordance
with Paragraph 7 of the Agreement, and (ii) in no event shall a Saturday or Sunday be considered a
business day.
3. Purchase Price Maintenance.
(a) The parties agree that in any Transaction hereunder whose term extends over an Income payment
date for the Securities subject to such Transaction, Buyer shall on the date such income is paid
transfer to or credit to the account of Seller an amount equal to such Income payment or payments
pursuant to Paragraph 5(i) and shall not apply the Income payment or payments to reduce the amount
to be transferred to Buyer or Seller upon termination of the Transaction pursuant to Paragraph
5(ii) of the Agreement.
(b) Notwithstanding the definition of Purchase Price in Paragraph 2 of the Agreement and the
provisions of Paragraph 4 of the Agreement, the parties agree (i) that the Purchase Price will not
be increased or decreased by the amount of any cash transferred by one party to the other pursuant
to Paragraph 4 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) or (b), as the case may be (including for purposes of the
definition of “Additional Purchased Securities”).
(c ) The parties agree that any cash transferred by Seller to Buyer pursuant to Paragraph 4 of the
Agreement shall earn interest at a rate equal to the Fed Funds target rate.
4. Submission to Jurisdiction and Waiver of Immunity.
Each party irrevocably and unconditionally (i) submits to the non-exclusive jurisdiction of any
United States Federal or New York State court sitting in Manhattan, and any appellate court from
any such court, solely for the purpose of any suit, action or proceeding brought to enforce its
obligations under the Agreement or relating in any way to the Agreement or any Transaction under
the Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an
inconvenient forum to the
maintenance of such action or proceeding in any such court and any right of jurisdiction on account
of its place of residence or domicile.
To the extent that either party has or hereafter may acquire any immunity (sovereign or otherwise)
from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any
legal process (whether service or notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) with respect to itself or any of its
property, such party hereby irrevocably waives and agrees not to plead or claim such immunity in
respect of any action brought to enforce its obligations under the Agreement or relating in any way
to the Agreement or any Transaction under the Agreement.
5. Delivery by Buyer of Purchased Securities on Repurchase Date. For the avoidance of
doubt, Buyer and Seller hereby acknowledge and agree that on each Repurchase Date, Buyer shall
transfer back to Seller Purchased Securities with CUSIPs identical to the CUSIPs of the Purchased
Securities transferred to Buyer by Seller on the corresponding Purchase Date.
6. Intent. Paragraph 19 is hereby amended by adding the following:
“(e) For the avoidance of doubt, the parties clarify that they intend to treat each
Transaction as a secured financing transaction for purposes of U.S. federal income tax, and agree
not to act in a manner inconsistent with such treatment of each Transaction. This shall not affect
the characterization of the Transactions as purchases and sales for all other purposes hereunder.”
7. Financial Covenants.
It shall be an Event of Default under the Agreement if, as of the last day of each calendar quarter
(a) the ratio of total liabilities to shareholders’ equity of Seller and its subsidiaries on a
consolidated basis shall exceed 20 to 1,or (b) Seller shall have a shareholders’ equity of less
than $300 million, in each case as determined by reference to the unaudited, or audited, in the
case of a year end, balance sheet of Seller as of the last day of such calendar quarter. For the
avoidance of doubt, as used in this Section 7 the terms “liabilities” and “shareholders’ equity”
shall have the meaning given to such terms under GAAP.
In the event of any inconsistency between the provisions of any Annex or Schedule to the Agreement
and the provisions of the Agreement, the terms contained in such Annex or Schedule shall prevail.
[Signature Page Follows]
2
This Annex I is entered into as of the date first set forth above.
| CSE MORTGAGE LLC | JPMORGAN CHASE BANK, N.A. | |||||||||
By:
|
/s/ Xxxxxxxx Xxxxx | By: | /s/ Xxxxxx X. Xxxx | |||||||
| Name: Xxxxxxxx Xxxxx | Name: Xxxxxx X. Xxxx | |||||||||
| Title: Managing Director | Title: Chief Financial Officer and Senior Vice President | |||||||||
3
ANNEX II
NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES
NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES
BUYER
JPMorgan Chase Bank, N.A. Contacts:
| Finance Desk | Xxxxxx Xxxxxxxx | |||
| (000) 000-0000 | ||||
| Confirmations | JPMorgan Chase Bank, N.A. | |||
| Confirmations Processing | ||||
| 000 Xxxxxxx Xxxxxxxxxx Xxxx | ||||
| Xxxxxx, Xxxxxxxx 00000-0000 |
CSE MORTGAGE LLC
| Contract Issues: | ||||||
| CSE Mortgage LLC | ||||||
| 0000 Xxxxxxx Xxx. 00xx Xxxxx | ||||||
| Xxxxx Xxxxx, XX 00000 | ||||||
| Attn: General Counsel | ||||||
| Facsimile No.: 000-000-0000 | ||||||
| Other Issues: | ||||||
| CSE Mortgage LLC | ||||||
| 0000 Xxxxxxx Xxx. 00xx Xxxxx | ||||||
| Xxxxx Xxxxx, XX 00000 | ||||||
| Attn: Treasury | ||||||
| Facsimile No.: 000-000-0000 |
