Exhibit 10.14

 

Master Repurchase
Agreement

 

September 1996 Version

 

Dated as of

 

June 22, 2004

 

 

 

Between:

 

Countrywide Securities Corporation

 

 

 

and

 

Aether Systems, Inc. (‘Seller’)

 

 

by: FBR Investment Management Inc., as Agent

 

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;

 

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(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;

 

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(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.

 

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(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

 

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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).

 

(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.

 

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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

 

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.

 

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*  Language to be used under 17 C.F.R. §403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.

**Language to be used under 17 C.F.R. §403.5(d) if Seller is a financial
institution.

 

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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, bylaw 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,

 

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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

 

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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 1, 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.

 

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(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.

 

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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

 

11

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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.

 

12

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Countrywide Securities Corporation

Aether Systems, Inc. (‘Seller’) by: FBR

 

 

 

Investment Management Inc., as Agent

 

 

 

 

By:

 

 

By:

 

 

 

Name:

Patrick Hildreth

 

Name:

 

 

 

Title:

Senior Vice President

 

Title:

 

 

 

Date:

 

 

Date:

 

 

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Annex I
Supplemental Terms and Conditions

 

This Annex I forms a part of the Master Repurchase Agreement dated as of June
22, 2004 (the “Agreement”) between Countrywide Securities Corporation and Aether
Systems, Inc. (‘Seller’) by: FBR Investment Management Inc., as Agent.
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 this Agreement and shall be applicable thereunder:

 

2.                                       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 am (New York
time) on such business day, to substitute substantially the same Securities for
any Purchased Securities; provided, however, that Buyer may elect, 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 am (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.

 

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Countrywide Securities Corporation

Aether Systems, Inc. (‘Seller’) by: FBR

 

 

 

Investment Management Inc., as Agent

 

 

 

 

By:

 

 

By:

 

 

 

Name:

Patrick Hildreth

 

Name:

 

 

 

Title:

Senior Vice President

 

Title:

 

 

 

Date:

 

 

Date:

 

 

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Annex II
Names and Addresses for Communication Between the Parties

 

If to Countrywide Securities Corporation:

 

Countrywide Securities Corporation
26745 Malibu hills Road, Mail Stop MH-9
Calabasas Hills, CA 91301-5355
Attn:  Patrick Hildreth
(818) 871-2410
(818) 871-2600 Fax

 

If to Aether Systems, Inc. (‘Seller’) by:  FBR Investment Management Inc., as
Agent:

 

 

 

 

 

FBR Investment Management, Inc. is acting solely as agent for Seller and not as
principal in any transactions. Subject to Agent’s representations set forth in
the Letter of Trading Authorization Issued to Buyer and dated June 15, 2004,
Agent in such capacity as ‘Agent’, shall have no liability to Buyer whatsoever
for any of Seller’s obligations hereunder or otherwise, including without
limitations for any Transaction entered into by the Agent on Seller’s behalf
hereunder, or for margin calls, maintenance calls or settlement of Transactions.

 

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