Exhibit 10.42
EXECUTION

     
(THE BOND MARKET ASSOCIATION LOGO) [w16788w1678800.gif]
  Master Repurchase
Agreement

September 1996 Version

     
Dated as of
  November 17, 2005
 
   
Between:
  Citigroup Global Markets Inc. (as “Buyer”)
 
   
and
  CSE Mortgage LLC (as “Seller”)

1.   Applicability       From time to time the parties hereto may enter into
transactions in which one party (“Seller”) agrees to transfer to the other
(“Buyer”) securities or other assets (“Securities”) against the transfer of
funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Securities at a date certain or on demand, against the transfer of funds by
Seller. Each such transaction shall be referred to herein as a “Transaction”
and, unless otherwise agreed in writing, shall be governed by this Agreement,
including any supplemental terms or conditions contained in Annex I hereto and
in any other annexes identified herein or therein as applicable hereunder.   2.
  Definitions

  (a)   “Act of Insolvency”, with respect to any party, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, moratorium, dissolution, delinquency or similar
law, or such party seeking the appointment or election of a receiver,
conservator, trustee, custodian or similar official for such party or any
substantial part of its property, or the convening of any meeting of creditors
for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the commencement of any such case or proceeding
against such party, or another seeking such an appointment or election, or the
filing against a party of an application for a protective decree under the
provisions of the Securities Investor Protection Act of 1970, which (A) is
consented to or not timely contested by such party, (B) results in the entry of
an order for relief, such an appointment or election, the issuance of such a
protective decree or the entry of an order having a similar effect, or (C) is
not dismissed within 15 days, (iii) the making by such party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by
such party of such party’s inability to pay such party’s debts as they become
due;     (b)   “Additional Purchased Securities”, Securities provided by Seller
to Buyer pursuant to Paragraph 4(a) hereof;

 

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  (c)   “Buyer’s Margin Amount”, with respect to any Transaction as of any date,
the amount obtained by application of the Buyer’s Margin Percentage to the
Repurchase Price for such Transaction as of such date;     (d)   “Buyer’s Margin
Percentage”, with respect to any Transaction as of any date, a percentage (which
may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller
or, in the absence of any such agreement, the percentage obtained by dividing
the Market Value of the Purchased Securities on the Purchase Date by the
Purchase Price on the Purchase Date for such Transaction;     (e)  
“Confirmation”, the meaning specified in Paragraph 3(b) hereof;     (f)  
“Income”, with respect to any Security at any time, any principal thereof and
all interest, dividends or other distributions thereon;     (g)   “Margin
Deficit”, the meaning specified in Paragraph 4(a) hereof;     (h)   “Margin
Excess”, the meaning specified in Paragraph 4(b) hereof;     (i)   “Margin
Notice Deadline”, the time agreed to by the parties in the relevant
Confirmation, Annex I hereto or otherwise as the deadline for giving notice
requiring same-day satisfaction of margin maintenance obligations as provided in
Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for
such purposes established in accordance with market practice);     (j)   “Market
Value”, with respect to any Securities as of any date, the price for such
Securities on such date obtained from a generally recognized source agreed to by
the parties or the most recent closing bid quotation from such a source, plus
accrued Income to the extent not included therein (other than any Income
credited or transferred to, or applied to the obligations of, Seller pursuant to
Paragraph 5 hereof ) as of such date (unless contrary to market practice for
such Securities);     (k)   “Price Differential”, with respect to any
Transaction as of any date, the aggregate amount obtained by daily application
of the Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days during the
period commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the date of determination (reduced by any amount of
such Price Differential previously paid by Seller to Buyer with respect to such
Transaction);     (l)   “Pricing Rate”, the per annum percentage rate for
determination of the Price Differential;     (m)   “Prime Rate”, the prime rate
of U.S. commercial banks as published in The Wall Street Journal (or, if more
than one such rate is published, the average of such rates);     (n)   “Purchase
Date”, the date on which Purchased Securities are to be transferred by Seller to
Buyer;

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  (o)   “Purchase Price”, (i) on the Purchase Date, the price at which Purchased
Securities are transferred by Seller to Buyer, and (ii) thereafter, except where
Buyer and Seller agree otherwise, such price increased by the amount of any cash
transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased
by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph
4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of
Paragraph 5 hereof;     (p)   “Purchased Securities”, the Securities transferred
by Seller to Buyer in a Transaction hereunder, and any Securities substituted
therefor in accordance with Paragraph 9 hereof. The term “Purchased Securities”
with respect to any Transaction at any time also shall include Additional
Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall
exclude Securities returned pursuant to Paragraph 4(b) hereof;     (q)  
“Repurchase Date”, the date on which Seller is to repurchase the Purchased
Securities from Buyer, including any date determined by application of the
provisions of Paragraph 3(c) or 11 hereof;     (r)   “Repurchase Price”, the
price at which Purchased Securities are to be transferred from Buyer to Seller
upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase Price
and the Price Differential as of the date of such determination;     (s)  
“Seller’s Margin Amount”, with respect to any Transaction as of any date, the
amount obtained by application of the Seller’s Margin Percentage to the
Repurchase Price for such Transaction as of such date;     (t)   “Seller’s
Margin Percentage”, with respect to any Transaction as of any date, a percentage
(which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by
dividing the Market Value of the Purchased Securities on the Purchase Date by
the Purchase Price on the Purchase Date for such Transaction.

3.   Initiation; Confirmation; Termination

  (a)   An agreement to enter into a Transaction may be made orally or in
writing at the initiation of either Buyer or Seller. On the Purchase Date for
the Transaction, the Purchased Securities shall be transferred to Buyer or its
agent against the transfer of the Purchase Price to an account of Seller.    
(b)   Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or
both), as shall be agreed, shall promptly deliver to the other party a written
confirmation of each Transaction (a “Confirmation”). The Confirmation shall
describe the Purchased Securities (including CUSIP number, if any), identify
Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price,
(iii) the Repurchase Date, unless the Transaction is to be terminable on demand,
(iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and
(v) any additional terms or conditions of the Transaction not inconsistent with
this Agreement. The Confirmation, together with this Agreement, shall constitute
conclusive evidence of the terms agreed between Buyer and Seller with respect to
the Transaction to which the Confirmation relates, unless

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      with respect to the Confirmation specific objection is made promptly after
receipt thereof. In the event of any conflict between the terms of such
Confirmation and this Agreement, this Agreement shall prevail.     (c)   In the
case of Transactions terminable upon demand, such demand shall be made by Buyer
or Seller, no later than such time as is customary in accordance with market
practice, by telephone or otherwise on or prior to the business day on which
such termination will be effective. On the date specified in such demand, or on
the date fixed for termination in the case of Transactions having a fixed term,
termination of the Transaction will be effected by transfer to Seller or its
agent of the Purchased Securities and any Income in respect thereof received by
Buyer (and not previously credited or transferred to, or applied to the
obligations of, Seller pursuant to Paragraph 5 hereof ) against the transfer of
the Repurchase Price to an account of Buyer.

4.   Margin Maintenance

  (a)   If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions
(a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such
Transactions, at Seller’s option, to transfer to Buyer cash or additional
Securities reasonably acceptable to Buyer (“Additional Purchased Securities”),
so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions in which such Buyer
is acting as Seller).     (b)   If at any time the aggregate Market Value of all
Purchased Securities subject to all Transactions in which a particular party
hereto is acting as Seller exceeds the aggregate Seller’s Margin Amount for all
such Transactions at such time (a “Margin Excess”), then Seller may by notice to
Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or
Purchased Securities to Seller, so that the aggregate Market Value of the
Purchased Securities, after deduction of any such cash or any Purchased
Securities so transferred, will thereupon not exceed such aggregate Seller’s
Margin Amount (increased by the amount of any Margin Excess as of such date
arising from any Transactions in which such Seller is acting as Buyer).     (c)
  If any notice is given by Buyer or Seller under subparagraph (a) or (b) of
this Paragraph at or before the Margin Notice Deadline on any business day, the
party receiving such notice shall transfer cash or Additional Purchased
Securities as provided in such subparagraph no later than the close of business
in the relevant market on such day. If any such notice is given after the Margin
Notice Deadline, the party receiving such notice shall transfer such cash or
Securities no later than the close of business in the relevant market on the
next business day following such notice.     (d)   Any cash transferred pursuant
to this Paragraph shall be attributed to such Transactions as shall be agreed
upon by Buyer and Seller.

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  (e)   Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both) under
subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin
Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount
or a specified percentage of the Repurchase Prices for such Transactions (which
amount or percentage shall be agreed to by Buyer and Seller prior to entering
into any such Transactions).     (f)   Seller and Buyer may agree, with respect
to any or all Transactions hereunder, that the respective rights of Buyer and
Seller under subparagraphs (a) and (b) of this Paragraph to require the
elimination of a Margin Deficit or a Margin Excess, as the case may be, may be
exercised whenever such a Margin Deficit or Margin Excess exists with respect to
any single Transaction hereunder (calculated without regard to any other
Transaction outstanding under this Agreement).

5.   Income Payments       Seller shall be entitled to receive an amount equal
to all Income paid or distributed on or in respect of the Securities that is not
otherwise received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may agree
with respect to any Transaction (or, in the absence of any such agreement, as
Buyer shall reasonably determine in its discretion), on the date such Income is
paid or distributed either (i) transfer to or credit to the account of Seller
such Income with respect to any Purchased Securities subject to such Transaction
or (ii) with respect to Income paid in cash, apply the Income payment or
payments to reduce the amount, if any, to be transferred to Buyer by Seller upon
termination of such Transaction. Buyer shall not be obligated to take any action
pursuant to the preceding sentence (A) to the extent that such action would
result in the creation of a Margin Deficit, unless prior thereto or
simultaneously therewith Seller transfers to Buyer cash or Additional Purchased
Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of
Default with respect to Seller has occurred and is then continuing at the time
such Income is paid or distributed.   6.   Security Interest       Although the
parties intend that all Transactions hereunder be sales and purchases and not
loans, in the event any such Transactions are deemed to be loans, Seller shall
be deemed to have pledged to Buyer as security for the performance by Seller of
its obligations under each such Transaction, and shall be deemed to have granted
to Buyer a security interest in, all of the Purchased Securities with respect to
all Transactions hereunder and all Income thereon and other proceeds thereof.  
7.   Payment and Transfer       Unless otherwise mutually agreed, all transfers
of funds hereunder shall be in immediately available funds. All Securities
transferred by one party hereto to the other party (i) shall be in suitable form
for transfer or shall be accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as the party receiving
possession may reasonably request, (ii) shall be transferred on the book-entry
system of a Federal Reserve Bank, or (iii) shall be transferred by any other
method mutually acceptable to Seller and Buyer.

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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.
* Language to be used under 17 C.F.R. ß403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.

** Language to be used under 17 C.F.R. ß403.5(d) if Seller is a financial
institution.

9.   Substitution

  (a)   Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such substitution
shall be made by transfer to Buyer of such other Securities and transfer to
Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.     (b)   In Transactions
in which Seller retains custody of Purchased Securities, the parties expressly
agree that Buyer shall be deemed, for purposes of subparagraph (a) of this
Paragraph, to have agreed to and accepted in this Agreement substitution by
Seller of other Securities for Purchased Securities; provided, however, that
such other Securities shall have a Market Value at least equal to the Market
Value of the Purchased Securities for which they are substituted.

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10.   Representations       Each of Buyer and Seller represents and warrants to
the other that (i) it is duly authorized to execute and deliver this Agreement,
to enter into Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) it will engage in such Transactions as principal
(or, if agreed in writing, in the form of an annex hereto or otherwise, in
advance of any Transaction by the other party hereto, as agent for a disclosed
principal), (iii) the person signing this Agreement on its behalf is duly
authorized to do so on its behalf (or on behalf of any such disclosed
principal), (iv) it has obtained all authorizations of any governmental body
required in connection with this Agreement and the Transactions hereunder and
such authorizations are in full force and effect and (v) the execution, delivery
and performance of this Agreement and the Transactions hereunder will not
violate any law, ordinance, charter, by-law or rule applicable to it or any
agreement by which it is bound or by which any of its assets are affected. On
the Purchase Date for any Transaction Buyer and Seller shall each be deemed to
repeat all the foregoing representations made by it.   11.   Events of Default  
    In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to
repurchase or Buyer fails to transfer Purchased Securities upon the applicable
Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof,
(iv) Buyer fails, after one business day’s notice, to comply with Paragraph 5
hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi)
any representation made by Seller or Buyer shall have been incorrect or untrue
in any material respect when made or repeated or deemed to have been made or
repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or
its intention not to, perform any of its obligations hereunder (each an “Event
of Default”):

  (a)   The nondefaulting party may, at its option (which option shall be deemed
to have been exercised immediately upon the occurrence of an Act of Insolvency),
declare an Event of Default to have occurred hereunder and, upon the exercise or
deemed exercise of such option, the Repurchase Date for each Transaction
hereunder shall, if it has not already occurred, be deemed immediately to occur
(except that, in the event that the Purchase Date for any Transaction has not
yet occurred as of the date of such exercise or deemed exercise, such
Transaction shall be deemed immediately canceled). The nondefaulting party shall
(except upon the occurrence of an Act of Insolvency) give notice to the
defaulting party of the exercise of such option as promptly as practicable.    
(b)   In all Transactions in which the defaulting party is acting as Seller, if
the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s
obligations in such Transactions to repurchase all Purchased Securities, at the
Repurchase Price therefor on the Repurchase Date deter-mined 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.

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  (c)   In all Transactions in which the defaulting party is acting as Buyer,
upon tender by the nondefaulting party of payment of the aggregate Repurchase
Prices for all such Transactions, all right, title and interest in and
entitlement to all Purchased Securities subject to such Transactions shall be
deemed transferred to the nondefaulting party, and the defaulting party shall
deliver all such Purchased Securities to the nondefaulting party.     (d)   If
the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, the nondefaulting party,
without prior notice to the defaulting party, may:

  (i)   as to Transactions in which the defaulting party is acting as Seller,
(A) immediately sell, in a recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the nondefaulting party may
reasonably deem satisfactory, any or all Purchased Securities subject to such
Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase
Prices and any other amounts owing by the defaulting party hereunder or (B) in
its sole discretion elect, in lieu of selling all or a portion of such Purchased
Securities, to give the defaulting party credit for such Purchased Securities in
an amount equal to the price therefor on such date, obtained from a generally
recognized source or the most recent closing bid quotation from such a source,
against the aggregate unpaid Repurchase Prices and any other amounts owing by
the defaulting party hereunder; and     (ii)   as to Transactions in which the
defaulting party is acting as Buyer, (A) immediately purchase, in a recognized
market (or otherwise in a commercially reasonable manner) at such price or
prices as the nondefaulting party may reasonably deem satisfactory, securities
(“Replacement Securities”) of the same class and amount as any Purchased
Securities that are not delivered by the defaulting party to the nondefaulting
party as required hereunder or (B) in its sole discretion elect, in lieu of
purchasing Replacement Securities, to be deemed to have purchased Replacement
Securities at the price therefor on such date, obtained from a generally
recognized source or the most recent closing offer quotation from such a source.

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

  (e)   As to Transactions in which the defaulting party is acting as Buyer, the
defaulting party shall be liable to the nondefaulting party for any excess of
the price paid (or deemed paid) by the nondefaulting party for Replacement
Securities over the Repurchase Price for the Purchased Securities replaced
thereby and for any amounts payable by the defaulting party under Paragraph 5
hereof or otherwise hereunder.     (f)   For purposes of this Paragraph 11, the
Repurchase Price for each Transaction hereunder in respect of which the
defaulting party is acting as Buyer shall not

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      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 sub-paragraph (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 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.

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14.   Entire Agreement; Severability       This Agreement shall supersede any
existing agreements between the parties containing general terms and conditions
for repurchase transactions. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.

15.   Non-assignability; Termination

  (a)   The rights and obligations of the parties under this Agreement and under
any Transaction shall not be assigned by either party without the prior written
consent of the other party, and any such assignment without the prior written
consent of the other party shall be null and void. Subject to the foregoing,
this Agreement and any Transactions shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns. This
Agreement may be terminated by either party upon giving written notice to the
other, except that this Agreement shall, notwithstanding such notice, remain
applicable to any Transactions then outstanding.     (b)   Subparagraph (a) of
this Paragraph 15 shall not preclude a party from assigning, charging or
otherwise dealing with all or any part of its interest in any sum payable to it
under Paragraph 11 hereof.

16.   Governing Law       This Agreement shall be governed by the laws of the
State of New York without giving effect to the conflict of law principles
thereof.

17.   No Waivers, Etc.       No express or implied waiver of any Event of
Default by either party shall constitute a waiver of any other Event of Default
and no exercise of any remedy hereunder by any party shall constitute a waiver
of its right to exercise any other remedy hereunder. No modification or waiver
of any provision of this Agreement and no consent by any party to a departure
here-from shall be effective unless and until such shall be in writing and duly
executed by both of the parties hereto. Without limitation on any of the
foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b)
hereof will not constitute a waiver of any right to do so at a later date.

18.   Use of Employee Plan Assets

  (a)   If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 (“ERISA”) are intended to be
used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party
shall so notify the other party prior to the Transaction. The Plan Party shall
represent in writing to the other party that the Transaction does not constitute
a prohibited transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required so to
proceed.

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  (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 out-standing
Transaction involving a Plan Party.

19.   Intent

  (a)   The parties recognize that each Transaction is a “repurchase agreement”
as that term is defined in Section 101 of Title 11 of the United States Code, as
amended (except insofar as the type of Securities subject to such Transaction or
the term of such Transaction would render such definition inapplicable), and a
“securities contract” as that term is defined in Section 741 of Title 11 of the
United States Code, as amended (except insofar as the type of assets subject to
such Transaction would render such definition inapplicable).     (b)   It is
understood that either party’s right to liquidate Securities delivered to it in
connec-tion with Transactions hereunder or to exercise any other remedies
pursuant to Paragraph 11 hereof is a contractual right to liquidate such
Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended.     (c)   The parties agree and acknowledge that if a
party hereto is an “insured depository insti-tution,” as such term is defined in
the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction
hereunder is a “qualified financial contract,” as that term is defined in FDIA
and any rules, orders or policy statements thereunder (except insofar as the
type of assets subject to such Transaction would render such definition
inapplicable).     (d)   It is understood that this Agreement constitutes a
“netting contract” as defined in and subject to Title IV of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment
entitlement and payment obligation under any Transaction hereunder shall
constitute a “covered contractual payment entitlement” or “covered contractual
payment obligation”, respectively, as defined in and subject to FDICIA (except
insofar as one or both of the parties is not a “financial institution” as that
term is defined in FDICIA).

20.   Disclosure Relating to Certain Federal Protections       The parties
acknowledge that they have been advised that:

  (a)   in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection

11 • September 1996 • Master Repurchase Agreement

 

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      Corporation has taken the position that the provisions of the Securities
Investor Protection Act of 1970 (“SIPA”) do not protect the other party with
respect to any Transaction hereunder;     (b)   in the case of Transactions in
which one of the parties is a government securities broker or a government
securities dealer registered with the SEC under Section 15C of the 1934 Act,
SIPA will not provide protection to the other party with respect to any
Transaction hereunder; and     (c)   in the case of Transactions in which one of
the parties is a financial institution, funds held by the financial institution
pursuant to a Transaction hereunder are not a deposit and therefore are not
insured by the Federal Deposit Insurance Corporation or the National Credit
Union Share Insurance Fund, as applicable.

Citigroup Global Markets Inc.
By: /s/ Barrie Ringelheim
Name: Barrie Ringelheim
Title: Managing Director
CSE Mortgage LLC
By: CapitalSource Inc., as Manager
By: /s/ Thomas A. Fink
Name: Thomas A. Fink
Title: Senior Vice President and Chief Financial Officer

 

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EXECUTION
ANNEX I
Supplemental Terms and Conditions
This Annex I supplements and forms a part of the Master Repurchase Agreement
dated as of November 17, 2005 (the “Agreement”) between Citigroup Global Markets
Inc. and CSE Mortgage LLC. Capitalized terms used but not defined in this Annex
I shall have the meanings ascribed to them in the Agreement.
1. Other Applicable Annexes. In addition to this Annex I and Annex II, the
following Annexes and any Schedules thereto shall form a part of the Agreement
and shall be applicable thereunder.
Annex IV – Party Acting as Investment Manager

Schedule A – Letter Repo Acceptable Collateral
2. Definitions. For purposes of the Agreement and this Annex I, the following
terms shall have the following meanings:
“Margin Notice Deadline” means 10:00 A.M. New York time.
“Business Day” or “business day”, with respect to any Transaction hereunder, a
day on which regular trading may occur in the principal market for the Purchased
Securities subject to such Transaction, which includes shortened trading days,
days on which trades are permitted to occur but do not in fact occur and days on
which the Purchased Securities are subject to percentage of movement or volume
limitations, provided, however, that for purposes of calculating Market Value,
such term shall mean a day on which regular trading occurs in the principal
market for the assets the value of which is being determined. Notwithstanding
the foregoing, (i) for purposes of Paragraph 4 of the Agreement, “business day”
shall mean any day on which regular trading occurs in the principal market for
any Purchased Securities or for any assets constituting Additional Purchased
Securities under any outstanding Transaction hereunder and “next business day”
shall mean the next day on which a transfer of Additional Purchased Securities
may be effected in accordance with Paragraph 7 of the Agreement, and (ii) in no
event shall a Saturday or Sunday be considered a business day.
3. Initiation; Confirmation: Termination. Paragraph 3 (a) is hereby amended and
restated in its entirety to read as follows:
     “(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. Buyer
hereby agrees that its agent for such purposes shall be Citigroup Global Markets
Inc.
4. Threshold Amount. Paragraph 4(e) is hereby amended and restated in its
entirety to read as follows:
     “(e) Seller and Buyer hereby agree, with respect to all Transactions
hereunder, that the respective rights of Buyer or Seller 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 the lesser of (a) $500,000 USD, or
(ii) 1% of the aggregate Purchase Price for all Transactions outstanding
hereunder on such day.”
5. Purchase Price Maintenance.
(a) The parties agree that in any Transaction hereunder whose term extends over
an Income payment date for the Securities subject to such transaction, Buyer
shall on the date such income is paid transfer to or credit to the account of
Seller an amount equal to such Income payment or payments pursuant to Paragraph
5(i) and shall not apply the Income payment or payments to reduce the amount to
be

 

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transferred to Buyer or Seller upon termination of the Transaction pursuant to
Paragraph 5(ii) of the Agreement.
(b) Notwithstanding the definition of Purchase Price in Paragraph 2 of the
Agreement and the provisions of Paragraph 4 of the Agreement, the parties agree
(i) that the Purchase Price will not be increased or decreased by the amount of
any cash transferred by one party to the other pursuant to Paragraph 4 of the
Agreement and (ii) that transfer of such cash shall be treated as if it
constituted a transfer of Securities (with a Market Value equal to the U.S.
dollar amount of such cash) pursuant to Paragraph 4(a) or (b), as the case may
be (including for purposes of the definition of “Additional Purchased
Securities”).
(c ) The parties agree that any cash transferred by Seller to Buyer pursuant to
Paragraph 4 of the Agreement shall earn interest at a rate equal to the Fed
Funds effective rate.
6. Submission to Jurisdiction and Waiver of Immunity.
Each party irrevocably and unconditionally (i) submits to the exclusive
jurisdiction of any United States Federal or New York State court sitting in
Manhattan, and any appellate court from any such court, solely for the purpose
of any suit, action or proceeding brought to enforce its obligations under the
Agreement or relating in any way to the Agreement or any Transaction under the
Agreement and (ii) waives, to the fullest extent it may effectively do so, any
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court and any right of jurisdiction on account of its place of
residence or domicile.
To the extent that either party has or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit or proceeding, from
jurisdiction of any court or from set off or any legal process (whether service
or notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) with respect to itself or any of
its property, such party hereby irrevocably waives and agrees not to plead or
claim such immunity in respect of any action brought to enforce its obligations
under the Agreement or relating in any way to the Agreement or any Transaction
under the Agreement.
Each party hereto hereby irrevocably waives all right to trial by jury in any
action or proceeding arising out of or relating to this Agreement or any
Transaction hereunder.
7. Cross Default.
Each party to this agreement (such party, “Party X”) agrees that, upon (a) the
insolvency of Party X or any of its affiliates, or (b) the default of Party X or
any of its affiliates under any transaction with the other party hereto or any
of such other party’s affiliates (such other party or any of its affiliates, a
“Non-Defaulting Party”) and the exercise by such Non-Defaulting Party of its
rights and remedies under such transaction as a result of such default, then
each Non-Defaulting Party may, without prior notice to Party X: (i) liquidate
any transaction between Party X and any Non-Defaulting Party (which liquidation
may include the conversion of amounts denominated in multiple currencies into a
single currency if deemed necessary or desirable by the Non-Defaulting Party),
(ii) reduce any amounts due and owing to Party X under any transaction between
Party X and any Non-Defaulting Party by setting off against such amounts any
amounts due and owing to a Non-Defaulting Party by Party X, and (iii) treat all
security for, and all amounts due and owing to Party X under, any transaction
between Party X and any Non-Defaulting Party as security for all transactions
between Party X and any Non-Defaulting Party; provided, however, that the
exercise of the remedies described in clauses (i), (ii) and (iii) above (or in
any other similar provision in any agreement between the parties) shall be
deemed to occur immediately subsequent to, but independent of, the exercise of
any netting, liquidation, set-off or other similar provision contained in any
master agreement between the parties; provided further that each provision and
agreement hereof shall be treated as independent from any other provision or
agreement herein and shall be enforceable notwithstanding the unenforceability
of any such other provision or agreement. For purposes of the foregoing, the
term “affiliate” shall not include any entity that controls or is under common
control with Citigroup Global Markets Holdings Inc., but in any event such term
shall include

 

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Citigroup Global Markets Holdings Inc. and any entity controlled by it; for
purposes of this Agreement, CSE Mortgage LLC shall be deemed to have no
affiliates.
8. “Open” Transactions.
Whenever the parties enter into a Transaction on an “open basis”, it is
understood that the Transaction will terminate on the next succeeding Business
Day, and that on any day that a Transaction is terminating, the parties may
enter into a new Transaction (which may be accomplished by resetting the rate)
which will, itself, terminate on the next succeeding Business Day. In all cases,
unless the parties have agreed otherwise, “open” Transactions will settle
following termination in accordance with the normal timeframe determined in
accordance with market practice.
9. Resale of Purchased Securities.
The parties hereto acknowledge that from time to time the Purchased Securities
may consist of Securities that have not been registered under the United States
Securities Act of 1933 (the “Securities Act”). Accordingly, Buyer agrees that if
any Purchased Securities consist of Securities that have not been registered
under the Securities Act, Buyer will not resell or otherwise transfer such
Purchased Securities except in accordance with Regulation S or Rule 144A or
other available exemption under the Securities Act and in accordance with all
applicable laws and regulations in each jurisdiction in which it offers, sells
or delivers Purchased Securities. In addition, if any Purchased Securities
consist of bearer debt securities issued by a non-U.S. entity and if Buyer
resells or otherwise transfers any such obligations, Buyer agrees that it will
do so only under procedures adequate to satisfy the restrictions of applicable
U.S. Treasury regulations relating to an original issuance of bearer bonds.
10. Representations. The following additional representation and warranty shall
be added to Paragraph 10 of the Agreement:
(vi) from and after December 31, 2005, as of the last day of each calendar
month, CSE Mortgage LLC shall have a minimum shareholder’s equity of
$300 million and maximum leverage (calculated as the ratio of liabilities to
shareholder’s equity) of 20 to 1, in each case as determined by reference to the
unaudited balance sheet of CSE Mortgage LLC as of the last day of such calendar
month.
11. Limited Recourse. Paragraph 11(i) of the Agreement is hereby amended and
restated in its entirety to read as follows:
     “(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; provided, however, that notwithstanding any other provision of
this Agreement, Buyer shall have no recourse to Seller in excess of the Recourse
Amount (as defined below), and Seller shall have no obligation to Buyer in
excess of the Recourse Amount, with respect to (i) any claims against Seller
(either in law or equity) arising under or in connection with this Agreement or
otherwise in connection with the transactions contemplated hereby, or (ii) the
payment or performance of any other debt, liability, obligation, covenant or
duty owing under this Agreement or otherwise in connection with the transactions
contemplated hereby. For purposes of this Agreement, “Recourse Amount” means, as
of any date upon which an Event of Default occurs hereunder, an aggregate amount
equal to 10% of the aggregate Purchase Price of all Transactions outstanding
hereunder on such day. For the avoidance of doubt, in the case of an Event of
Default in which the defaulting party is Seller hereunder, nothing in this
Paragraph 11(i) shall in any way limit or impair the rights of Buyer to exercise
its rights pursuant to Paragraph 11(d) of the Agreement and to have full
recourse against all Purchased Securities subject to Transactions on the date of
such Event of Default.”
12. Delivery by Buyer of Purchased Securities on Repurchase Date. For the
avoidance of doubt, Buyer and Seller hereby acknowledge and agree that on each
Repurchase Date, Buyer shall transfer back to Seller all right, title and
interest to the exact same Purchased Securities that were transferred to Buyer
by Seller on the Purchase Date.

 

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13. Intent. Paragraph 19 is hereby amended by adding the following:
     “(e) For the avoidance of doubt, the parties clarify that they intend to
treat each Transaction as a secured financing transaction for purposes of U.S.
federal income tax, and agree not to act in a manner inconsistent with such
treatment of each Transaction.”
In the event of any inconsistency between the provisions of this Annex and the
provisions of the Master Repurchase Agreement attached hereto, the terms
contained in this Annex shall prevail.

                  Citigroup Global Markets Inc.       CSE Mortgage LLC
 
               
 
          By: CapitalSource Inc., as Manager    
 
               
By:
  /s/ Barrie Ringelheim       /s/ Thomas A. Fink    
Name:
 
 
Barrie Ringelheim      
 
Name: Thomas A. Fink    
 
  Managing Director       Title: Senior Vice President and Chief    
 
          Financial Officer    

 

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ANNEX II
Names and Addresses for Communications Between Parties
CITIGROUP GLOBAL MARKETS INC.

     
Contract Issues:
   
 
  Citigroup Global Markets Inc.
 
  Attention: Gail Shanley
 
  111 Wall Street, 4th Floor
 
  New York, NY 10005
 
  Telephone: 212-657-1650
 
  Telefax: 646-291-1551
 
   
Operations Issues:
   
 
  Citigroup Global Markets Inc.
 
  Patrick Kirby
 
  333 West 34th Street –4th Floor
 
  New York, NY 10001
 
  Telephone: 212-615-8804
 
   
 
  CSE MORTGAGE LLC
 
   
Contract Issues:
   
 
  CSE Mortgage LLC
 
  4445 Willard Ave. 12th Floor
 
  Chevy Chase, MD 21815
 
  Attn: General Counsel
 
  Facsimile No.: 301-841-2380
 
   
Other Issues:
   
 
  CSE Mortgage LLC
 
  4445 Willard Ave. 12th Floor
 
  Chevy Chase, MD 21815
 
  Attn: Treasury
 
  Facsimile No.: 301-841-2307

 

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EXECUTION
Annex IV
Party Acting as Investment Manager
This Annex IV forms a part of the Master Repurchase Agreement dated as of
November 17, 2005 (the “Agreement”) between CSE Mortgage LLC (“CSE”) and
Citigroup Global Markets Inc. (“CGMI”). This Annex IV sets forth the terms and
conditions governing all transactions in which BlackRock Financial Management,
Inc. (“Investment Manager”) is authorized to enter into on behalf of CSE in
accordance with the terms of the Investment Manager Agreement dated as of
November 14, 2005. Capitalized terms used but not defined in this Annex IV shall
have the meanings ascribed to them in the Agreement.

  1.   Additional Representations. The Investment Manager hereby makes, for the
benefit of CSE and CGMI, the representations set forth in Paragraph 10 of the
Agreement. In addition, the Investment Manager hereby makes the following
representations, which shall continue during the term of any Transaction: CSE
has duly authorized the Investment Manager to execute and deliver the Agreement
on its behalf, has the power to so authorize Investment Manager 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
Investment Manager and such performance by it.     2.   Limitation of Investment
Manager’s Liability. The parties expressly acknowledge that if the
representations of the Investment Manager under the Agreement, including this
Annex IV, are true and correct in all material respects during the term of any
Transaction and the Investment Manager otherwise complies with the provisions of
this Annex IV, then (a) the Investment Manager’s obligations under the Agreement
shall not include a guarantee of performance by CSE and (b) the other party’s
remedies shall not include a right of setoff in respect of rights or
obligations, if any, of the Investment Manager arising in other transactions in
which the Investment Manager is acting as principal.     3.   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 the Investment Manager’s liability in
Paragraph 2 of this Annex IV), be construed to reflect that (i) CSE shall have,
in connection with any Transaction or Transactions entered into by the
Investment Manager 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) CSE has designated the Investment Manager as its sole Investment Manager
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 Investment Manager for CSE in connection with
transfers of Securities, cash or other property and as the Investment Manager
for giving and receiving all notices under the Agreement). Both the Investment
Manager and CSE shall be deemed “parties” to the Agreement and all references to
a “party” or “either party” in the Agreement shall be deemed revised accordingly
(excluding any Act of Insolvency with respect to Investment Manager). An Event
of Default by Investment Manager under Paragraph 11

 

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      of the Agreement (excluding any Act of Insolvency with respect to
Investment Manager) shall be deemed an Event of Default by Seller or Buyer, as
the case may be.

                  Citigroup Global Markets Inc.       CSE Mortgage LLC
 
               
 
          By: CapitalSource Inc., as Manager    
 
               
By:
  /s/ Barrie Ringelheim       /s/ Thomas A. Fink    
Name:
 
 
Barrie Ringelheim      
 
Name: Thomas A. Fink    
 
  Managing Director       Title: Chief Financial Officer and    
 
          Senior Vice President    

Acknowledged and Agreed to by:
BlackRock Financial Management, Inc. as
Investment Manager for CSE Mortgage LLC

         
By:
  /s/ Robert S. Kapito    
Name:
 
 
Robert S. Kapito    
Title:
  Vice Chairman