Exhibit 10.15

 

PSA

THE BOND MARKET

TRADE ASSOCIATION

 

MASTER

REPURCHASE AGREEMENT

SEPTEMBER 1996 VERSION

 

Dated as of June 22, 2004

 

Between:

 

NOMURA SECURITIES INTERNATIONAL, INC.

 

and

 

AETHER SYSTEMS INC. 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;

 

(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);

 

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(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 THEREFORE 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

 

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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,

 

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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 he 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.

 

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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.

 

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.

 

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(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, 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.

 

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(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 THEREFORE 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
THEREFORE 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.

 

8

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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 therefore 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 NON-DEFAULTING 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

 

9

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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.

 

10

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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 HE 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 TIDE [SIC]
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 TIDE [SIC] 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 TIDE [SIC] 11 OF THE UNITED STATES CODE, AS AMENDED.

 

11

--------------------------------------------------------------------------------

 

(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 TIDE [SIC] 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)                                 TO 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 1 SC 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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NOMURA SECURITIES INTERNATIONAL, INC. 

AETHER SYSTEMS, INC. by FBR
INVESTMENT MANAGEMENT,INC.,
as AGENT 

 

 

 

 

By:

 

 

By:

 

 

Name:

David J. Isaacs

 

Name:

 

 

Title:

Managing Director

 

Title:

 

 

 

 

--------------------------------------------------------------------------------

As further specified in Annex IV hereto, 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.

 

13

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ANNEX I
Supplemental Terms and Conditions

 

This Annex 1 forms a part of The Master Repurchase Agreement dated as of
June 22, 2004 (the “Agreement”) between NOMURA SECURITIES INTERNATIONAL, INC.
and AETHER SYSTEMS INC 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,
to the extent applicable, shall form a part of this Agreement and shall be
applicable thereunder, as indicated below.  If no indication below is made, such
Annexes do not form a part of this Agreement:

 

[Please initial as appropriate]

 

[          ]

 

Annex III

 

(International Transactions)

[          ]

 

Annex IV

 

(Party Acting as Agent)

[          ]

 

Annex V

 

(Margin for Forward Transactions)

[          ]

 

Annex VI

 

(Buy/Sell Back Transactions)

[          ]

 

Annex VII

 

(Transactions Involving Registered Investment Companies)

 

 

 

 

 

[          ]

 

INITIAL HERE IF NONE OF THE ABOVE

 

2.                                       Repurchase/Substitution. The following
two 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 10:00 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, 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 10:00 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 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.

 

3.                                       Jurisdiction.  Each of the parties (a)
consents to submit itself to The personal jurisdiction of the US Federal Court
for The Southern District of New York or any other New York state court in The
Borough of Manhattan, in the event any dispute arises out of this Agreement (b)
agrees That it shall not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, and (c) agrees that it
shall not being any action relating to this Agreement or the transactions
contemplated herein in any court other than The US Federal Court for The
Southern District of New York or any other New York state court in The Borough
of Manhattan. This provision does not preclude either party from bringing
proceedings in any other jurisdiction on order to enforce any judgment obtained
in any proceedings referred to in the preceding sentence.

 

NOMURA SECURITIES INTERNATIONAL, INC.

AETHER SYSTEMS, INC. by FBR
INVESTMENT MANAGEMENT, INC.,
as AGENT

 

 

 

 

By:

 

 

By:

 

 

Name:

David J. Isaacs

Name:

 

 

Title:

Managing Director

Title:

 

 

 

4.

Other Terms and Conditions.

 

(Insert new page if needed)

 

15

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Annex II
Names and Addresses for Communications Between Parties

 

Documentation Issues

 

Nomura Securities International, Inc.

Two World Financial Center

Building B, 18th Floor, Legal

New York, NY 10281-1198

Jay Gracin, Director, Assistant General Counsel

Phone: (212) 667-9480

Fax: (212) 667-1024

Leslie Faison – Legal Department

Tel: (212) 667-9796

Fax: (212) 667-1024

 

Operational Issues and Trading

 

Nomura Securities International, Inc.

Two World Financial Center

Building B, 21st Floor

New York, NY 10281

Attention:  David J. Isaacs, Managing Director

Tel: (212) 667-2130

Fax: (212) 667-1044

 

Aether Systems Inc.

11500 Cronridge Drive

Owings Mills, MD 21117

Attn: Steven Bass

Tel: (443) 394-5250

Fax: (443) 356-8699

 

FBR Investment Management, Inc.

1001 Nineteenth Street North

Arlington, VA 22209

Attn: Brian Bowers

Tel: (703) 469-1148

Fax: (703) 312-9721

 

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Annex III
International Transactions

 

This Annex III (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of                      (the “Agreement”) between
                     and                     .  Capitalized terms used but not
defined in this Annex III shall have the meanings ascribed to then in the
Agreement.

 

1.                                       Definitions.  For purposes of the
Agreement and this Annex III:

 

(a)                                  The following terms shall have the
following meanings:

 

“Base Currency”, United States dollars or such other currency as Buyer and
Seller may agree in the Confirmation with respect to any International
Transaction or otherwise in writing;

 

“Business Day” or “business day”:

 

(i)                                     in relation to any International
Transaction which (A) involves an International Security and (B) is to be
settled through CEDEL or Euroclear, a day on which CEDEL or, as the case may be,
Euroclear is open to settle business in the currency in which the Purchase Price
and the Repurchase Price are denominated;

 

(ii)                                  in relation to any International
Transaction which (A) involves an International Security and (B) is to be
settled through a settlement system other than CEDEL or Euroclear, a day on
which that settlement system is open to settle such International Transaction;

 

(iii)                               in relation to any International Transaction
which involves a delivery of Securities not falling within (i) or (ii) above, a
day on which banks are open for business in the place where delivery of the
relevant Securities is to be effected; and

 

(iv)                              in relation to any International Transaction
which involves an obligation to make a payment not falling within (I) or (ii)
above, a day other than a Saturday or Sunday on which banks are open for
business in the principal financial center of the country of which the currency
in which the payment is denominated is the official currency and, if different,
in the place where any account designated by the parties for the making or
receipt of the payment is situated (or, in the case of ECU, a day on which ECU
clearing operates);

 

“CEDEL”, CEDEL Bank, société anonyme;

 

“Contractual Currency”, the currency in which the International Securities
subject to any International Transaction are denominated or such other currency
as may be specified in the Confirmation with respect to any International
Transaction;

 

--------------------------------------------------------------------------------

 

“Euroclear”, Morgan Guaranty Trust Company of New York, Brussels Branch, as
operator of the Euroclear System;

 

“International Security’, any Security that (i) is denominated in a currency
other than United States dollars or (ii) is capable of being cleared through a
clearing facility outside the United States or (iii) is issued by an issuer
organized under the laws of a jurisdiction other than the United States (or any
political subdivision thereof);

 

“International Transaction”, any Transaction involving (i) an International
Security or (ii) a party organized under the laws of a jurisdiction other than
the United States (or any political subdivision thereof) or having its principal
place of business outside the United States or (iii) a branch or office outside
the United States designated in Annex I by a party organized under the laws of
the United States (or any political subdivision thereof) as an office through
which that party may act;

 

“LIBOR”, in relation to any sum in any currency, the offered rate for deposits
for such sum in such currency for a period of three months which appears on the
Reuters Screen LIBO page as of 11:00A.M., London time, on the date on which it
is to be determined (or, if more than one such rate appears, the arithmetic mean
of such rates);

 

“Spot Rate”, where an amount in one currency is to be converted into a second
currency on any date, the spot rate of exchange of a comparable amount quoted by
a major money-center bank in the New York interbank market, as agreed by Buyer
and Seller, for the sale by such bank of such second currency against a purchase
by it of such first currency.

 

(b)                                 Notwithstanding Paragraph 2 of the
Agreement, the term “Prime Rate” shall mean, with respect to any International
Transaction, LIBOR plus a spread, as may be specified in the Confirmation with
respect to any International Transaction or otherwise in writing.

 

2.                                       Manner of Transfer.  All transfers of
International Securities (i) shall be in suitable form for transfer and
accompanied by duly executed instruments of transfer or assignment in blank
(where required for transfer) and such other documentation as the transferee may
reasonably request, or (ii) shall be transferred through the book-entry system
of Euroclear or CEDEL, or (iii) shall be transferred through any other agreed
securities clearing system or (iv) shall be transferred by any other method
mutually acceptable to Seller and Buyer.

 

3.                                       Contractual Currency.

 

(a)                                  Unless otherwise mutually agreed, all funds
transferred in respect of the Purchase Price or the Repurchase Price in any
International Transaction shall be in the Contractual Currency.

 

(b)                                 Notwithstanding subparagraph (a) of this
Paragraph 3, the payee of any payment may, at its option, accept tender thereof
in any other currency; provided, however,

 

18

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that, to the extent permitted by applicable law, the obligation of the payor to
make such payment will be discharged only to the extent of the amount of the
Contractual Currency that such payee may, consistent with normal banking
procedures, purchase with such other currency (after deduction of any premium
and costs of exchange) for delivery within the customary delivery period for
spot transactions in respect of the relevant currency

 

(c)                                  If for any reason the amount in the
Contractual Currency so received, including amounts received after conversion of
any recovery under any judgment or order expressed in a currency other than the
Contractual Currency, falls short of the amount in the Contractual Currency due
in respect of the Agreement, the party required to make the payment shall
(unless an Event of Default has occurred and such party is the nondefaulting
party) as a separate and independent obligation (which shall not merge with any
judgment or any payment or any partial payment or enforcement of payment) and to
the extent permitted by applicable law, immediately pay such additional amount
in the Contractual Currency as may be necessary to compensate for the shortfall.

 

(d)                                 If for any reason the amount of the
Contractual Currency received by one party hereto exceeds the amount in the
Contractual Currency due such party in respect of the Agreement, then (unless an
Event of Default has occurred and such party is the nondefaulting party) the
party receiving the payment shall refund promptly the amount of such excess.

 

4.                                       Notices. Any and all notices,
statements, demands or other communications with respect to International
Transactions shall be given in accordance with Paragraph 13 of the Agreement and
shall be in the English language.

 

5.                                       Taxes.

 

(a)                                  Transfer taxes, stamp taxes and all similar
costs with respect to the transfer of Securities shall be paid by Seller.

 

(b)                                 (i)                                    
Unless otherwise agreed, all money payable by one party (the “Payor”) to the
other (the “Payee”) in respect of any International Transaction shall be paid
free and clear of, and without withholding or deduction for, any taxes or duties
of whatsoever nature imposed, levied, collected, withheld or assessed by any
authority having power to tax (a “Tax”), unless the withholding or deduction of
such Tax is required by law. In that event, unless otherwise agreed, Payor shall
pay such additional amounts as will result in the net amounts receivable by
Payee (after taking account of such withholding or deduction) being equal to
such amounts as would have been received by Payee had no such Tax been required
to be withheld or deducted; provided that for purposes of Paragraphs 5 and 6 the
term “Tax” shall not include any Tax that would not have been imposed but for
the existence of any present or former connection between Payee and the
jurisdiction imposing such Tax other than the mere receipt of payment from Payor
or the performance of Payee’s obligations under an International Transaction.
The parties acknowledge and agree, for the

 

19

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avoidance of doubt, that the amount of Income required to be transferred,
credited or applied by Buyer for the benefit of Seller under Paragraph 5 of the
Agreement shall be determined without taking into account any Tax required to be
withheld or deducted from such Income, unless otherwise agreed.

 

(ii)                                  In the case of any Tax required to be
withheld or deducted from any money payable to a party hereto acting as Payee by
the other party hereto acting as Payor, Payee agrees to deliver to Payor (or, if
applicable, to the authority imposing the Tax) any certificate or document
reasonably requested by Payor that would entitle Payee to an exemption from, or
reduction in the rate of, withholding or deduction of Tax from money payable by
Payor to Payee.

 

(iii)                               Each party hereto agrees to notify the other
party of any circumstance known or reasonably known to it (other than a Change
of Tax Law, as defined in Paragraph 6 hereof) that causes a certificate or
document provided by it pursuant to subparagraph (b) (ii) of this Paragraph to
fail to be true.

 

(iv)                              Notwithstanding subparagraph (b) (i) of this
Paragraph, no additional amounts shall be payable by Payor to Payee in respect
of an International Transaction to the extent that such additional amounts are
payable as a result of a failure by Payee to comply with its obligations under
subparagraph (b) (ii) or (b) (iii) of this Paragraph with respect to such
International Transaction.

 

6.                                       Tax Event.

 

(a)                                  This Paragraph 6 shall apply if either
party notifies the other, with respect to a Tax required to be collected by
withholding or deduction, that:

 

(i)                                     any action taken by a taxing authority
or brought in a court of competent jurisdiction after the date an International
Transaction is entered into, regardless of whether such action is taken or
brought with respect to a party to the Agreement; or

 

(ii)                                  a change in the fiscal or regulatory
regime after the date an International Transaction is entered into,

 

(each, a “Change of Tax Law”) has or will, in the notifying party’s reasonable
opinion, have a material adverse effect on such party in the context of an
International Transaction.

 

(b)                                 If so requested by the other party, the
notifying party will furnish the other party with an opinion of a suitably
qualified adviser that an event referred to in subparagraph (a) (i) or (a) (ii)
of this Paragraph 6 has occurred and affects the notifying party.

 

20

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(c)                                  Where this Paragraph 6 applies, the party
giving the notice referred to in subparagraph (a) above may, subject to
subparagraph (d) below, terminate the International Transaction effective from a
date specified in the notice, not being earlier (unless so agreed by the other
party) than 30 days after the date of such notice, by nominating such date as
the Repurchase Date.

 

(d)                                 If the party receiving the notice referred
to in subparagraph (a) of this Paragraph 6 so elects, it may override such
notice by giving a counter-notice to the other party. If a counter-notice is
given, the party which gives such counter-notice will be deemed to have agreed
to indemnify the other party against the adverse effect referred to in
subparagraph (a) of this Paragraph 6 so far as it relates to the relevant
International Transaction and the original Repurchase Date will continue to
apply.

 

(e)                                  Where an International Transaction is
terminated as described in this Paragraph 6, the party which has given the
notice to terminate shall indemnify the other party against any reasonable legal
and other professional expenses incurred by the other party by reason of the
termination, but the other party may not claim any sum constituting
consequential loss or damage in respect of a termination in accordance with this
Paragraph 6.

 

(f)                                    This Paragraph 6 is without prejudice to
Paragraph 5 of this Annex III; but an obligation to pay additional amounts
pursuant to Paragraph 5 of this Annex III may, where appropriate, be a
circumstance which causes this Paragraph 6 to apply.

 

7.                                       Margin. In the calculation of “Margin
Deficit” and “Margin Excess” pursuant to Paragraph 4 of the Agreement, all sums
not denominated in the Base Currency shall be deemed to be converted into the
Base Currency at the Spot Rate on the date of such calculation.

 

8.                                       Events of Default.

 

(a)                                  In addition to the Events of Default set
forth in Paragraph 11 of the Agreement, it shall be an additional “Event of
Default” if either party fails, after one business day’s notice, to perform any
covenant or obligation required to be performed by it under this Annex III,
including, without limitation, the payment of taxes or additional amounts as
required by Paragraph 5 of this Annex III.

 

(b)                                 In addition to the other rights of a
nondefaulting party under Paragraph 11 of the Agreement, following an Event of
Default, the nondefaulting party may, at any time at its option, effect the
conversion of any currency into a different currency of its choice at the Spot
Rate on the date of the exercise of such option and offset obligations of the
defaulting party denominated in different currencies against each other.

 

21

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Schedule III.A
International Transactions Relating to (Relevant Country]

 

This Schedule III.A forms a part of Annex III to the Master Repurchase Agreement
dated as of                     ,            (the “Agreement”) between
                     and                     . Capitalized terms used but not
defined in this Schedule III.A shall have the meanings ascribed to them in Annex
III.

 

 

[Insert provisions applicable to relevant country.]

 

--------------------------------------------------------------------------------

 

Annex IV
Party Acting as Agent

 

This Annex IV forms a part of the Master Repurchase Agreement dated as of
                     (the “Agreement”) between                      and
                      This Annex TV sets forth the terms and conditions
governing all transactions in which a party selling securities or buying
securities, as the case may be (“Agent”), in a Transaction is acting as agent
for one or more third parties (each, a “Principal”). Capitalized terms used but
not defined in this Annex IV shall have the meanings ascribed to them in the
Agreement.

 

1.                                       Additional Representations. In addition
to the representations set forth in Paragraph 10 of the Agreement, Agent hereby
makes the following representations, which shall continue during the term of any
Transaction: Principal has duly authorized Agent to execute and deliver the
Agreement on its behalf, has the power to so authorize Agent and to enter into
the Transactions contemplated by the Agreement and to perform the obligations of
Seller or Buyer, as the case may be, under such Transactions, and has taken all
necessary action to authorize such execution and delivery by Agent and such
performance by it.

 

2.                                       Identification of Principals. Agent
agrees (a) to provide the other party, prior to the date on which the parties
agree to enter into any Transaction under the Agreement, with a written list of
Principals for which it intends to act as Agent (which list may be amended in
writing from time to time with the consent of the other party), and (b) to
provide the other party, before the close of business on the next business day
after orally agreeing to enter into a Transaction, with notice of the specific
Principal or Principals for whom it is acting in connection with such
Transaction. If (i) Agent fails to identify such Principal or Principals prior
to the close of business on such next business day or (ii) the other party shall
determine in its sole discretion that any Principal or Principals identified by
Agent are not acceptable to it, the other party may reject and rescind any
Transaction with such Principal or Principals, return to Agent any Purchased
Securities or portion of the Purchase Price, as the case may be, previously
transferred to the other party and refuse any further performance under such
Transaction, and Agent shall immediately return to the other party any portion
of the Purchase Price or Purchased Securities, as the case may be, previously
transferred to Agent in connection with such Transaction; provided, however,
that (A) the other party shall promptly (and in any event within one business
day) notify Agent of its determination to reject and rescind such Transaction
and (B) to the extent that any performance was rendered by any party under any
Transaction rejected by the other party, such party shall remain entitled to any
Price Differential or other amounts that would have been payable to it with
respect to such performance if such Transaction had not been rejected. The other
party acknowledges that Agent shall not have any obligation to provide it with
confidential information regarding the financial status of its Principals; Agent
agrees, however, that it will assist the other party in obtaining from Agent’s
Principals such information regarding the financial status of such Principals as
the other party may reasonably request.

 

3.                                       Limitation of Agent’s Liability. The
parties expressly acknowledge that if the representations of Agent under the
Agreement, including this Annex TV, are true and correct in all material
respects during the term of any Transaction and Agent otherwise complies with
the provisions of this Annex IV, then (a) Agent’s obligations under the

 

--------------------------------------------------------------------------------

 

Agreement shall not include a guarantee of performance by its Principal or
Principals and (b) the other party’s remedies shall not include a right of
setoff in respect of rights or obligations, if any, of Agent arising in other
transactions in which Agent is acting as principal.

 

4.                                       Multiple Principals.

 

(a)                                  In the event that Agent proposes to act for
more than one Principal hereunder, Agent and the other party shall elect whether
(1) to treat Transactions under the Agreement as transactions entered into on
behalf of separate Principals or (ii) to aggregate such Transactions as if they
were transactions by a single Principal.  Failure to make such an election in
writing shall be deemed an election to treat Transactions under the Agreement as
transactions on behalf of separate Principals.

 

(b)                                 In the event that Agent and the other party
elect (or are deemed to elect) to treat Transactions under the Agreement as
transactions on behalf of separate Principals, the parties agree that (i) Agent
will provide the other party, together with the notice described in Paragraph
2(b) of this Annex IV, notice specifying the portion of each Transaction
allocable to the account of each of the Principals for which it is acting (to
the extent that any such Transaction is allocable to the account of more than
one Principal); (ii) the portion of any individual Transaction allocable to each
Principal shall be deemed a separate Transaction under the Agreement; (iii) the
margin maintenance obligations of Buyer and Seller under Paragraph 4 of the
Agreement shall be determined on a Transaction-by-Transaction basis (unless the
parties agree to determine such obligations on a Principal-by-Principal basis);
and (iv) Buyer’s and Seller’s remedies under the Agreement upon the occurrence
of an Event of Default shall be determined as if Agent had entered into a
separate Agreement with the other party on behalf of each of its Principals.

 

(c)                                  In the event that Agent and the other party
elect to treat Transactions under the Agreement as if they were transactions by
a single Principal, the parties agree that (1) Agent’s notice under Paragraph
2(b) of this Annex IV need only identify the names of its Principals but not the
portion of each Transaction allocable to each Principal’s account; (ii) the
margin maintenance obligations of Buyer and Seller under Paragraph 4 of the
Agreement shall, subject to any greater requirement imposed by applicable law,
be determined on an aggregate basis for all Transactions entered into by Agent
on behalf of any Principal; and (iii) Buyer’s and Seller’s remedies upon the
occurrence of an Event of Default shall be determined as if all Principals were
a single Seller or Buyer, as the case maybe.

 

(d)                                 Notwithstanding any other provision of the
Agreement (including, without limitation, this Annex IV), the parties agree that
any Transactions by Agent on behalf of an employee benefit plan under ERISA
shall be treated as Transactions on behalf of separate Principals in accordance
with Paragraph 4(b) of this Annex IV (and all margin maintenance obligations of
the parties shall be determined on a Transaction-by-Transaction basis).

 

24

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5.                                       Interpretation of Terms.  All
references to “Seller” or “Buyer” as the case may be, in the Agreement shall,
subject to the provisions of this Annex IV (including, among other provisions,
the limitations on Agent’s liability in Paragraph 3 of this Annex IV), be
construed to reflect that (i) each Principal shall have, in connection with any
Transaction or Transactions entered into by Agent on its behalf, the rights,
responsibilities, privileges and obligations of a “Seller” or “Buyer” as the
case may be, directly entering into such Transaction or Transactions with the
other party under the Agreement, and (ii) Agent’s Principal or Principals have
designated Agent as their sole agent for performance of Seller’s obligations to
Buyer or Buyer’s obligations to Seller, as the case may be, and for receipt of
performance by Buyer of its obligations to Seller or Seller of its obligations
to Buyer, as the case may be, in connection with any Transaction or Transactions
under the Agreement (including, among other things, as Agent for each Principal
in connection with transfers of Securities, cash or other property and as agent
for giving and receiving all notices under the Agreement). Both Agent and its
Principal or Principals shall be deemed “parties” to the Agreement and all
references to a party or “either party” in the Agreement shall be deemed revised
accordingly (and any Act of Insolvency with respect to Agent or any other Event
of Default by Agent under Paragraph 11 of the Agreement shall be deemed an Event
of Default by Seller or Buyer, as the case may be).

 

25

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Annex V
Margin for Forward Transactions

 

This Annex V forms a part of the Master Repurchase Agreement dated as of
                    ,          (the “Agreement”) between                     and
Capitalized terms used but not defined in this Annex V shall have the meanings
ascribed to them in the Agreement.

 

1.                                       Definitions. For purposes of the
Agreement and this Annex V, the following terms shall have the following
meanings:

 

“Forward Exposure”, the amount of loss a party would incur upon canceling a
Forward Transaction and entering into a replacement transaction, determined in
accordance with market practice or as otherwise agreed by the parties;

 

“Forward Transaction”, any Transaction agreed to by the parties as to which the
Purchase Date has not yet occurred;

 

“Net Forward Exposure”, the aggregate amount of a party’s Forward Exposure to
the other party under all Forward Transactions hereunder reduced by the
aggregate amount of any Forward Exposure of the other party to such party under
all Forward Transactions hereunder;

 

“Net Unsecured Forward Exposure”, a party’s Net Forward Exposure reduced by the
Market Value of any Forward Collateral transferred to such party (and not
returned) pursuant to Paragraph 2 of this Annex V

 

2.                                       Margin Maintenance.

 

(a)                                  If at any time a party (the “In-the-Money
Party”) shall have a Net Unsecured Forward Exposure to the other party (the
“Out-of-the-Money Party”) under one or more Forward Transactions, the
In-the-Money Party may by notice to the Out-of-the-Money Party require the
Out-of-the-Money Party to transfer to the In-the-Money Party Securities or cash
reasonably acceptable to the In-the-Money-Party (together with any Income
thereon and proceeds thereof, “Forward Collateral”) having a Market Value
sufficient to eliminate such Net Unsecured Forward Exposure. The
Out-of-the-Money Party may by notice to the In-the-Money Party require the
In-the-Money Party to transfer to the Out-of-the-Money Party Forward Collateral
having a Market Value that exceeds the In-the-Money Party’s Net Forward Exposure
(“Excess Forward Collateral Amount”). The rights of the parties under this
subparagraph shall be in addition to their rights under subparagraphs (a) and
(b) of Paragraph 4 and any other provisions of the Agreement.

 

(b)                                 The parties may agree, with respect to any
or all Forward Transactions hereunder, that the respective rights of the parties
under subparagraph (a) of this Paragraph may be exercised only where a Net
Unsecured Forward Exposure or Excess Forward Collateral Amount, as the case may
be, exceeds a specified dollar amount or other specified threshold for such
Forward Transactions (which amount or threshold shall be agreed to by the
parties prior to entering into any such Forward Transactions).

 

--------------------------------------------------------------------------------

 

(c)                                  The parties may agree, with respect to any
or all Forward Transactions hereunder, that the respective rights of the parties
under subparagraph (a) of this Paragraph to require the elimination of a Net
Unsecured Forward Exposure or Excess Forward Collateral Amount, as the case may
be, may be exercised whenever such a Net Unsecured Forward Exposure or Excess
Forward Collateral Amount exists with respect to any single Forward Transaction
hereunder (calculated without regard to any other Forward Transaction
outstanding hereunder).

 

(d)                                 The parties may agree, with respect to any
or all Forward Transactions hereunder, that (i) one party shall transfer to the
other party Forward Collateral having a Market Value equal to a specified dollar
amount or other specified threshold no later than the Margin Notice Deadline on
the day such Forward Transaction is entered into by the parties or (ii) one
party shall not be required to make any transfer otherwise required to be made
under this Paragraph if, after giving effect to such transfer, the Market Value
of the Forward Collateral held by such party would be less than a specified
dollar amount or other specified threshold (which amount or threshold shall be
agreed to by the parties prior to entering into any such Forward Transactions).

 

(e)                                  If any notice is given by a party to the
other under subparagraph (a) of this Paragraph at or before the Margin Notice
Deadline on any business day, the party receiving such notice shall transfer
Forward Collateral as provided in such subparagraph no later than the close of
business in the relevant market on such business day. If any such notice is
given after the Margin Notice Deadline, the party receiving such notice shall
transfer such Forward Collateral no later than the close of business in the
relevant market on the next business day.

 

(f)                                    Upon the occurrence of the Purchase Date
for any Forward Transaction and the performance by the parties of their
respective obligations to transfer cash and Securities on such date, any Forward
Collateral in respect of such Forward Transaction, together with any Income
thereon and proceeds thereof, shall be transferred by the party holding such
Forward Collateral to the other party; provided, however, that neither party
shall be required to transfer such Forward Collateral to the other if such
transfer would result in the creation of a Net Unsecured Forward Exposure of the
transferor.

 

(g)                                 The Pledgor (as defined below) of Forward
Collateral may, subject to agreement with and acceptance by the Pledgee (as
defined below) thereof, substitute other Securities reasonably acceptable to the
Pledgee for any Securities Forward Collateral. Such substitution shall be made
by transfer to the Pledgee of such other Securities and transfer to the Pledgor
of such Securities Forward Collateral. After substitution, the substituted
Securities shall constitute Forward Collateral.

 

3.                                       Security Interest.

 

(a)                                  In addition to the rights granted to the
parties under Paragraph 6 of the Agreement, each party (“Pledgor”) hereby
pledges to the other party (“Pledgee”) as security for the performance of its
obligations hereunder, and grants Pledgee a security interest in and right of
setoff against, any Forward Collateral and any

 

27

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other cash, Securities or property, and all proceeds of any of the foregoing,
transferred by or on behalf of Pledgor to Pledgee or due from Pledgee to Pledgor
in connection with the Agreement and the Forward Transactions hereunder.

 

(b)                                 Unless otherwise agreed by the parties, a
party to whom Forward Collateral has been transferred shall have the right to
engage in repurchase transactions with Forward Collateral or otherwise sell,
transfer, pledge or hypothecate Forward Collateral, including in respect of
loans or other extensions of credit to such party that may be in amounts greater
than the Forward Collateral such party is entitled to as security for
obligations hereunder, and that may extend for periods of time longer than the
periods during which such party is entitled to Forward Collateral as security
for obligations hereunder; provided, however, that no such transaction shall
relieve such party of its obligations to transfer Forward Collateral pursuant to
Paragraph 2 or 4 of this Annex V or Paragraph 11 of the Agreement.

 

4.                                       Events of Default.

 

(a)                                  In addition to the Events of Default set
forth in Paragraph 11 of the Agreement, it shall be an additional “Event of
Default” if either party fails, after one business day’s notice, to perform any
covenant or obligation required to be performed by it under Paragraph 2 or any
other provision of this Annex.

 

(b)                                 In addition to the other rights of a
nondefaulting party under Paragraphs 11 and 12 of the Agreement, if the
nondefaulting party exercised or is deemed to have exercised the option referred
to in Paragraph 11(a) of the Agreement:

 

(i)                                     The nondefaulting party, without prior
notice to the defaulting party, may (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 Forward
Collateral subject to any or all Forward Transactions hereunder and apply the
proceeds thereof to any amounts owing by the defaulting party hereunder or (B)
in its sole discretion elect, in lieu of selling all or a portion of such
Forward Collateral, to give the defaulting party credit for such Forward
Collateral 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 any amounts owing by the defaulting party hereunder

 

(ii)                                  Any Forward Collateral held by the
defaulting party, together with any Income thereon and proceeds thereof, shall
be immediately transferred by the defaulting party to the nondefaulting party.
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), and
without prior notice to the defaulting party, (i) 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
Securities Forward Collateral that is not delivered by the

 

28

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defaulting party to the nondefaulting party as required hereunder or (ii) in its
sole discretion elect, in lieu of purchasing Replacement Securities, to be
deemed to have purchased Replacement Securities at the price therefore on such
date, obtained from a generally recognized source or the most recent closing
offer quotation from such a source, whereupon the defaulting party shall be
liable for the price of such Replacement Securities together with the amount of
any cash Forward Collateral not delivered by the defaulting party to the
nondefaulting party as required hereunder

 

Unless otherwise provided in Annex I, the parties acknowledge and agree that (1)
the Forward Collateral subject to any Forward Transaction hereunder are
instruments traded in a recognized market, (2) in the absence of a generally
recognized source for prices or bid quotations for any Forward Collateral, the
nondefaulting party may establish the source therefor in its sole discretion and
(3) all prices and bids shall be determined together with accrued Income (except
to the extent contrary to market practice with respect to the relevant Forward
Collateral).

 

5.                                       No Waivers, Etc.  Without limitation of
the provisions of Paragraph 17 of the Agreement, the failure to give a notice
pursuant to subparagraph (a), (b), (c) or (d) of Paragraph 2 of this Annex V
will not constitute a waiver of any right to do so at a later date.

 

29

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Annex VI
Buy/Sell Back Transactions

 

This Annex VI forms a part of the Master Repurchase Agreement dated as of
                     (the “Agreement”) between                     and
                    .  Capitalized terms used but not defined in this Annex VI
shall have the meanings ascribed to them in the Agreement.

 

1.                                       In the event of any conflict between
the terms of this Annex VI and any other term of the Agreement, the terms of
this Annex VI shall prevail.

 

2.                                       Each Transaction shall be identified at
the time it is entered into and in the relevant Confirmation as either a
Repurchase Transaction or a Buy/Sell Back Transaction.

 

3.                                       In the case of a Buy/Sell Back
Transaction, the Confirmation delivered in accordance with Paragraph 3 of the
Agreement may consist of a single document in respect of both of the transfers
of funds against Securities which together form the Buy/Sell Back Transaction or
separate Confirmations may be delivered in respect of each such transfer.

 

4.                                       Definitions. The following definitions
shall apply to Buy/Sell Back Transactions:

 

(a)                                  “Accrued Interest”, with respect to any
Purchased Securities subject to a Buy/Sell Back Transaction, unpaid Income that
has accrued during the period from (and including) the issue date or the last
Income payment date (whichever is later) in respect of such Purchased Securities
to (but excluding) the date of calculation.  For these purposes unpaid Income
shall be deemed to accrue on a daily basis from (and including) the issue date
or the last Income payment date (as the case may be) to (but excluding) the next
Income payment date or the maturity date (whichever is earlier);

 

(b)                                 “Sell Back Differential”, with respect to
any Buy/Sell Back Transaction as of any date, the aggregate amount obtained by
daily application of the Pricing Rate for such Buy/Sell Back Transaction to the
Purchase Price for such Buy/Sell Back Transaction on a 360 day per year basis
(unless otherwise agreed by the parties for the Transaction) for the actual
number of days during the period commencing on (and including) the Purchase Date
for such Buy/Sell Back Transaction and ending on (but excluding) the date of
determination;

 

(c)                                  “Sell Back Price’s with respect to any
Buy/Sell Back Transaction:

 

(i)                                     in relation to the date originally
specified by the parties as the Repurchase Date pursuant to Paragraph 2(q) of
the Agreement, the price agreed by the Parties in relation to such Buy/Sell Back
Transaction, and

 

(ii)                                  in any other case (including for the
purposes of the application of Paragraph 4 or Paragraph 11 of the Agreement),
the product of the formula (P + D) - (IR + C), where:

 

P

 

=

 

the Purchase Price

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

D

 

=

 

The Sell Back Differential

 

 

 

 

 

IR

 

=

 

the amount of any Income in respect of the Purchased Securities paid by the
issuer on any date falling between the Purchase Date and the Repurchase Date

 

 

 

 

 

C

 

=

 

the aggregate amount obtained by daily application of the Pricing Rate for such
Buy/Sell Back Transaction to any such Income from (and including) the date of
payment by the issuer to (but excluding) the date of calculation.

 

5.                                       When entering into a Buy/Sell Back
Transaction the parties shall also agree on the Sell Back Price and the Pricing
Rate to apply in relation to such Buy/Sell Back Transaction on the scheduled
Repurchase Date. The parties shall record the Pricing Rate in at least one
Confirmation applicable to such Buy/Sell Back Transaction.

 

6.                                       Termination of a Buy/Sell Back
Transaction shall be effected on the Repurchase Date by transfer to Seller or
its agent of Purchased Securities against the payment by Seller of (i) in a case
where the Repurchase Date is the date originally agreed to by the parties
pursuant to Paragraph 2(q) of the Agreement, the Sell Back Price referred to in
Paragraph 4(c) (i) of this Annex; and (ii) in any other case, the Sell Back
Price referred to in Paragraph 4(c) (ii) of this Annex.

 

7.                                       For the avoidance of doubt, the parties
acknowledge and agree that the Purchase Price and the Sell Back Price in
Buy/Sell Back Transactions shall include Accrued Interest (except to the extent
contrary to market practice with respect to the Securities subject to such
Buy/Sell Back Transaction, in which event (i) an amount equal to the Purchase
Price plus Accrued Interest to the Purchase Date shall be paid to Seller on the
Purchase Date and shall be used, in lieu of the Purchase Price, for calculating
the Sell Back Differential, (ii) an amount equal to the Sell Back Price plus the
amount of Accrued Interest to the Repurchase Date shall be paid to Buyer on the
Repurchase Date, and (iii) the formula in Paragraph 4(c) (ii) of this Annex VI
shall be replaced by the formula “(P + AI + D) - (IR + C) “, where “AI” equals
Accrued Interest to the Purchase Date).

 

8.                                       Unless the parties agree in Annex Ito
the Agreement that a Buy/Sell Back Transaction is not to be repriced, they shall
at the time of repricing agree on the Purchase Price, the Sell Back Price and
the Pricing Rate applicable to such Transaction.

 

9.                                       Paragraph 5 of the Agreement shall not
apply to Buy/Sell Back Transactions. Seller agrees, on the date such Income is
received, to pay to Buyer any Income received by Seller in respect of Purchased
Securities that is paid by the issuer on any date falling between the Purchase
Date and the Repurchase Date.

 

10.                                 References to “Repurchase Price” throughout
the Agreement shall be construed as references to “Repurchase Price or the Sell
Back Price, as the case may be.”

 

11.                                 In 11 of the Agreement, references to the
“Repurchase Prices” shall be construed as references to “Repurchase Prices and
Sell Back Prices.”

 

31

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Annex VII
Transactions Involving Registered Investment Companies

 

This Annex VII (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of                     ,          (the
“Agreement’) between (“Counterparty”) and each investment company identified on
Schedule VII.A hereto (as such schedule may be amended from time to time) acting
on behalf of its respective series or portfolios identified on such
Schedule VII.A, or in the case of those investment companies for which no
separate series or portfolios are identified on such Schedule VII.A, acting for
and on behalf of itself (each such series, portfolio or investment company, as
the case may be, hereinafter referred to as a “Fund”). In the event of any
conflict between the terms of this Annex VII and any other term of the
Agreement, the terms of this Annex VII shall prevail. Capitalized terms used but
not defined in this Annex VII shall have the meanings ascribed to them in the
Agreement.

 

1.                                       Multiple Funds.  For any Transaction in
which a Fund is acting as Buyer (or Seller, as the case may be) each reference
in the Agreement and this Annex VII to Buyer (or Seller, as the case may be)
shall be deemed a reference solely to the particular Fund to which such
Transaction relates, as identified to Seller (or Buyer, as the case may be) by
the Fund and as may be specified in the Confirmation therefore.  In no
circumstances shall the rights, obligations or remedies of either party with
respect to a particular Fund constitute a right, obligation or remedy applicable
to any other Fund. Specifically, and without otherwise limiting the scope of
this Paragraph: (a) the margin maintenance obligations of Buyer and Seller
specified in Paragraph 4 or any other provisions of the Agreement and the single
agreement provisions of Paragraph 12 of the Agreement shall be applied based
solely upon Transactions entered into by a particular Fund, (b) Buyer’s and
Seller’s remedies under the Agreement upon the occurrence of an Event of Default
shall be determined as if each Fund had entered into a separate Agreement with
Counterparty, and (c) Seller and Buyer shall have no right to set off claims
related to Transactions entered into by a particular Fund against claims related
to Transactions entered into by any other Fund.

 

2.                                       Margin Percentage.  For any Transaction
in which a Fund is acting as Buyer, the Buyer’s Margin Percentage shall always
be equal to at least         %, or such other percentage as the parties hereto
may from time to time mutually determine; provided, that in no event shall such
percentage be less than 100%. For any Transaction in which a Fund is acting as
Seller, the Buyer’s Margin Percentage shall be such percentage as the parties
hereto may from time to time mutually determine: provided, that in no event
shall such percentage be less than 100%.

 

3.                                       Confirmations.  Unless otherwise
agreed, Counterparty shall promptly issue a Confirmation to the Fund pursuant to
Paragraph 3 of the Agreement. Upon the transfer of substituted or Additional
Purchased Securities by either party, Counterparty shall promptly provide notice
to the Fund confirming such transfer.

 

4.                                       Financial Condition.  Each party
represents that it has delivered the following financial information to the
other party to the Agreement: in the case of a party that is a registered
broker-dealer, its most recent statements required to be furnished to customers
by Rule 17a-5(c) under the 1934 Act; in the case of a party that is a Fund, its
most recent audited or unaudited financial statements required to be furnished
to its shareholders by Rule

 

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30d-1 under the Investment Company Ant of 1940; in the case of any other party,
its most recent audited or unaudited statements of financial condition or other
comparable information concerning its financial condition.

 

Each party represents that the financial statements or information so delivered
fairly reflect its financial condition and, if applicable, its net capital
ratio, on the date as of which such financial statements or information were
prepared. Each party agrees that it will make available and deliver to the other
party, promptly upon request, all such financial statements that subsequently
are required to be delivered to its customers or shareholders pursuant to Rule
17a-5 (c) or Rule 30d-1, as the case may be, or, in the case of a party that is
neither a registered broker-dealer nor a Fund, all such financial information
that subsequently becomes available to the public.

 

Each Fund acknowledges and agrees that it has made an independent evaluation of
the creditworthiness of the other party that is required pursuant to the
Investment Company Act of 1940 or the regulations thereunder. Each Fund agrees
that its agreement to enter into each Transaction hereunder shall constitute an
acknowledgment and agreement that it has made such an evaluation.

 

5.                                       Segregation of Purchased Securities. 
Unless otherwise agreed by the parties, any transfer of Purchased Securities to
a Fund shall be effected by delivery or other transfer (in the manner agreed
upon pursuant to Paragraph 7 of the Agreement) to the custodian or subcustodian
designated for such Fund in Schedule VII.A hereto (“Custodian”) for credit to
the Fund’s custodial account with such Custodian. If the party effecting such
transfer is the Fund’s Custodian, such party shall, unless otherwise directed by
the Fund, (a) transfer and maintain such Purchased Securities to and in the
Fund’s custodial account with such party and (b) so indicate in a notice to the
Fund.

 

33

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Section VII.A
Supplemental Terms and Conditions of Transactions
Involving Registered Investment Companies

 

This Schedule VII.A forms a part of Annex VII to the Master Repurchase Agreement
dated as of                     ,          (the “Agreement”) between
                     and                     .  Capitalized terms used but not
defined in this Schedule VII.A shall have the meanings ascribed to them in Annex
VII.

 

1.                                       This Agreement is entered into by or on
behalf of the following Funds, and unless otherwise indicated by the appropriate
Fund in connection with a Transaction, the following Custodians are designated
to receive transfers of Purchased Securities on behalf of such Funds for credit
to the appropriate Fund’s custodial account:

 

Name of Fund

 

Custodian

 

 

 

 

 

 

 

o Limitation of Liability.  If the Fund is organized as a business trust (or a
series thereof), the. parties agree as follows:  [insert appropriate language
limiting liability of trustees, officers and others].

 

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