Exhibit 10.21


 


Execution Version


 


CONFIRMATION TO MASTER REPURCHASE
AGREEMENT


 


The purpose of this
communication (this “Confirmation”), dated June 30, 2009, is to
amend the terms and conditions of certain repurchase transactions entered into
prior to the date hereof as well as set forth the terms and conditions of a new
repurchase transaction entered into on the initial Purchase Date specified
below, in each case between FSA Capital Management Services LLC (“FSA
Capital Management”), FSA Capital Markets Services LLC (“FSA Capital
Markets”) and FSA Asset Management LLC (“FSAM”).  This Confirmation constitutes a “Confirmation”
as referred to in the Master Repurchase Agreement (defined below).


 


Prior to the date hereof
and pursuant to the Original Master Repurchase Agreements, the parties hereto
entered into certain repurchase transactions related to the issuance of secured
guaranteed investment contracts (each, a “Secured GIC Repurchase Transaction”).  This Confirmation shall amend the terms of
each such Secured GIC Repurchase Transaction as set forth below and as a result
each such Secured GIC Repurchase Transaction shall be replaced by the single
portfolio repurchase transaction between the parties having the terms set forth
in this Confirmation (the “Transaction”).


 


This Confirmation
supplements, forms a part of and is subject to the Master Repurchase Agreement
and all provisions contained in, or incorporated by reference in, the Master
Repurchase Agreement shall govern this Confirmation, except as expressly modified
below.  In the event of any conflict
between the terms and provisions of this Confirmation and the Master Repurchase
Agreement, the terms and provisions of this Confirmation shall prevail.


 


Terms used but not
defined herein shall have the meanings assigned such terms in the Master
Repurchase Agreement or the Pledge and Administration Agreement referred to in
the Master Repurchase Agreement.


 


The terms of the
Transaction to which this Confirmation relates are as follows:


 


1.                                      GENERAL TERMS


 


	
  Purchase Date:

  	
   

  	
  June 30, 2009 or any date of renewal of this
  Transaction as contemplated by “Repurchase Date” below.

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Each of FSA Capital Management and FSA Capital
  Markets, severally but not jointly. Notwithstanding anything contrary in the
  Master Repurchase Agreement but subject to the terms of this Confirmation,
  this Transaction constitutes a single agreement between the Seller and each
  Buyer having the terms set forth in this Confirmation.

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  FSAM

  
	
   

  	
   

  	
   

  
	
  Purchase Price:

  	
   

  	
  The aggregate outstanding principal balance of all
  GIC Contracts issued by the Buyers as of the Purchase Date.

  



 


1

















 


	
  GIC Contract:

  	
   

  	
  Each guaranteed investment contract of a Buyer
  outstanding on the Purchase Date.

  
	
   

  	
   

  	
   

  
	
  Scheduled Repurchase Date:

  	
   

  	
  The date that is eight months after the Purchase
  Date (or if such date is not a Business Day, the immediately preceding
  Business Day), subject to the terms of “Transaction Renewal” below.

  
	
   

  	
   

  	
   

  
	
  Transaction Renewal:

  	
   

  	
  If a Buyer and Seller (or, as described below, FSA
  as Secured Party Representative, on all of their behalfs) agree to renew this
  Transaction on or prior to any Scheduled Repurchase Date, then (i) a new
  Purchase Date shall occur on the Scheduled Repurchase Date and (ii) a new Scheduled
  Repurchase Date will occur on the date that is eight months after the prior
  Scheduled Repurchase Date (or if such date is not a Business Day, the
  immediately preceding Business Day). On any such new Purchase Date, the
  transfers of Purchased Securities to Seller on the Scheduled Repurchase Date
  and to Buyer on the new Purchase Date, and the payments of the Repurchase
  Price and GIC Carry Amount (if applicable) by Seller and of Purchase Price
  and GIC Carry Amount (if applicable) by Buyer, respectively shall each be
  netted and deemed set off and satisfied in full. 

   

  Unless any party notifies each of the other parties
  hereto of its intent not to renew this Transaction, (i) the delivery by the
  Administrator of the monthly report scheduled to be delivered in accordance
  with Section 10.5(a) of the Pledge and Administration Agreement on the first
  calendar day of the month which precedes the month in which the Scheduled
  Repurchase Date is to occur shall constitute an offer by the Administrator on
  behalf of each Buyer to renew this Transaction on the coming Scheduled
  Repurchase Date and (ii) the delivery by the Administrator of the monthly
  report scheduled to be delivered in accordance with Section 10.5(a) of the
  Pledge and Administration Agreement on the first calendar day of the month in
  which the Scheduled Repurchase Date is to occur shall constitute an
  acceptance by the Administrator on behalf of the Seller of the Buyers’ offer
  to renew this Transaction on the coming Scheduled Repurchase Date. 

   

  FSA as the Secured Party Representative may elect to
  renew this Transaction on each party’s behalf on 

  



 


2

















 


	
   

  	
   

  	
  or after the second Business Day prior the Scheduled
  Repurchase Date, unless an FSAM Lien Release Date has occurred. 

   

  The foregoing provisions are without prejudice to
  the rights of the parties to renew this Transaction in any other manner or to
  elect not to renew this Transaction.

  
	
   

  	
   

  	
   

  
	
  GIC Carry Amount Payment by Seller:

  	
   

  	
  On any Scheduled Repurchase Date other than a
  Scheduled Repurchase Date that occurs on or after a date on which an FSAM
  Lien Release Date has occurred, Seller shall pay to Buyer, in addition to the
  Repurchase Price, the GIC Carry Amount determined on such Repurchase Date.

  
	
   

  	
   

  	
   

  
	
  GIC Carry Amount Payment by Buyer:

  	
   

  	
  On any Purchase Date occurring pursuant to
  “Transaction Renewal” above and on a Scheduled Repurchase Date on which
  Seller is required to make payment of the GIC Carry Amount, Buyer shall make
  a corresponding payment of the GIC Carry Amount to Seller.

  
	
   

  	
   

  	
   

  
	
  GIC Carry Amount:

  	
   

  	
  On any Scheduled Repurchase Date other than a
  Scheduled Repurchase Date that occurs on or after a date on which an FSAM
  Lien Release Date has occurred, an amount equal to: 

   

  (i) the Spread Component of the GIC Business Costs
  Amount that would be determined under the Dexia CSAs on the basis of
  Permitted Investments consisting solely of overnight investments of cash
  balances at the federal funds rate, as determined by the Secured Party
  Representative in a commercially reasonable manner, minus 

   

  (ii) the actual Spread Component of the GIC Business
  Costs Amount determined under the Dexia CSAs, as most recently determined on
  such Repurchase Date. 

   

  For the avoidance of doubt, a GIC Carry Amount shall
  not be payable on any Repurchase Date (including, but not limited to, a
  Repurchase Date occurring as a result of any acceleration or early
  termination of the Transaction following a Dexia Event of Default or
  otherwise), other than a Scheduled Repurchase Date occurring prior to a FSAM Lien
  Release Date.

  



 


3

















 


	
  Repurchase Date:

  	
   

  	
  Each of (i) the Scheduled Repurchase Date and (ii)
  any GIC Contract Business Day on which a payment of principal is due to be
  made under one or more GIC Contracts. 

   

  The obligation of a Buyer to transfer the Purchased
  Securities on the Repurchase Date shall be understood to be such Buyer’s
  obligation to transfer (A) in the case of (i) in the definition of Repurchase
  Date, a par amount of Purchased Securities selected by Buyer having a Market
  Value Percentage equal to the relevant GIC Principal Percentage and (B) in
  the case of (ii) in the definition of Repurchase Date, a par amount of
  Purchased Securities (selected by the Secured Party Representative) having a
  Market Value Percentage equal to the relevant GIC Principal Repayment
  Percentage.

  
	
   

  	
   

  	
   

  
	
  Market Value Percentage:

  	
   

  	
  With respect to any Purchased Securities on any
  date, a percentage figure equal to (i) the aggregate FSAM Asset Value for
  such Purchased Securities divided by (ii) the aggregate FSAM Asset Value of
  all Purchased Securities not yet repurchased by the Seller hereunder, with
  such FSAM Asset Values to be based on the FSAM Asset Values most recently
  determined in accordance with the Dexia CSAs. 

   

  If the Dexia Put Contracts have been terminated, the
  FSAM Asset Value of the relevant Purchased Securities shall be determined by
  the Administrator or FSA if the Administrator does not make such
  determination within one Business Day, pursuant to the procedures set forth in
  the Dexia CSAs as if such Dexia Put Contracts had not been terminated.

  
	
   

  	
   

  	
   

  
	
  GIC Principal Repayment Percentage:

  	
   

  	
  With respect to a Buyer and a Repurchase Date, a
  percentage equal to (i) the aggregate payments of principal due to be made on
  such Repurchase Date in respect of all GIC Contracts issued by such Buyer divided
  by (ii) aggregate payments of principal due to be made on such
  Repurchase Date in respect of all GIC Contracts.

  
	
   

  	
   

  	
   

  
	
  GIC Principal Percentage:

  	
   

  	
  With respect to a Buyer and any date of determination,
  a percentage equal to (i) the outstanding principal balance of all GIC
  Contracts issued by such Buyer divided  by (ii) the aggregate
  outstanding principal balance of all GIC Contracts.

  



 


4

















 


	
  GIC Contract Business Day:

  	
   

  	
  In respect of a GIC Contract, each day which is a
  business day under such GIC Contract.

  
	
   

  	
   

  	
   

  
	
  Periodic Payment of Price Differential:

  	
   

  	
  On any date on which a payment of interest is
  payable in respect of one or more GIC Contracts, a payment of Price
  Differential in relation to this Transaction shall be payable by Seller in an
  amount equal to, with respect to each Buyer, the aggregate interest payable
  in respect of each such GIC Contract issued by such Buyer. For the avoidance
  of doubt, such amount shall not be included in the Repurchase Price payable
  upon termination of this Transaction in whole or in part. 

   

  In case Seller fails to pay the Repurchase Price on
  a Repurchase Date, Seller shall continue to pay the Price Differential as if
  the Transaction had not been terminated (whether in part or in full), until
  such time as Seller has paid the Repurchase Price in full.

  
	
   

  	
   

  	
   

  
	
  Repurchase Price:

  	
   

  	
  In relation to each Buyer, the Seller shall pay (A)
  in the case of (i) in the definition of Repurchase Date, the aggregate
  outstanding principal balance on the Repurchase Date of all GIC Contracts
  issued by such Buyer, and (B) in the case of (ii) in the definition of
  Repurchase Date, the aggregate amount of principal payable on such Repurchase
  Date under the GIC Contracts issued by such Buyer.

  
	
   

  	
   

  	
   

  
	
  Additional GIC Principal Amount:

  	
   

  	
  If the principal amount of a GIC Contract increases
  as a result of the exercise of a right of a holder of such GIC Contract to
  invest additional amounts in such GIC Contract, the relevant Buyer shall
  transfer such additional investment amount in respect of a GIC Contract on
  the first Business Day after the receipt thereof from a holder of such GIC
  Contract, and the Purchase Price hereunder shall be deemed increased by such
  amount.

  
	
   

  	
   

  	
   

  
	
  Purchased Securities:

  	
   

  	
  All securities owned by Seller on the Purchase Date,
  including, without duplication, with respect to the initial Purchase Date,
  all securities that have been purchased by the Buyers under the Secured GIC
  Repurchase Transactions (notwithstanding that Seller may own such securities
  for accounting purposes). 

   

  With respect to the portion of the Transaction 

  



 


5

















 


	
   

  	
   

  	
  entered into on the initial Purchase Date and
  related to the Secured GIC Repurchase Transactions, the obligations of the
  Buyer and Seller to transfer the Purchase Price to Seller against the
  transfer of the Purchased Securities shall be deemed to have been satisfied
  by prior transfers of Purchased Securities from Seller to each Buyer and
  prior payments of Purchase Price from each Buyer to Seller under the
  applicable Original Master Repurchase Agreement (the Purchased Securities
  previously transferred under Secured GIC Repurchase Transactions the “Existing
  Purchased Securities”) with respect to such Secured GIC Repurchase
  Transactions. 

   

  Subject to Section 2 below, on the initial Purchase
  Date, the Seller shall sell to each Buyer a par amount of Purchased
  Securities equal to (A) the aggregate par amount of all Purchased Securities
  other than the Existing Purchased Securities multiplied  by (B)
  such Buyer’s Applicable Note Percentage (with respect to each Buyer, the “Non-Secured
  GIC Purchased Securities”).

  
	
   

  	
   

  	
   

  
	
  Applicable Note Percentage:

  	
   

  	
  With respect to a Buyer, a percentage equal to (i)
  the principal balance of Notes (as defined in Section 2 below) held by such
  Buyer on the initial Purchase Date divided  by (ii) the
  aggregate principal balance of the Notes.

  



 


2.                                      OTHER ADDITIONAL PROVISIONS


 


(a) The parties agree and acknowledge that Seller
and each Buyer has granted a security interest in its rights under this
Transaction (including in respect of transfers of the Purchased Securities and
the Repurchase Price) to the Collateral Agent pursuant to the Pledge and
Administration Agreement.


 


(b) The parties agree that they are entering into
this Transaction in connection with the repayment of the aggregate outstanding
principal amount of the Master Notes Series A and B, each dated October 29,
2001 and each issued by FSAM (together, the “Notes”), together with any
accrued and unpaid interest thereon. 
Upon entering into this Confirmation, each Buyer and FSAM agree that on
the date hereof (i) the Notes shall become due and payable, (ii) each
Buyer’s payment of the Purchase Price to Seller with respect to the Non-Secured
GIC Purchased Securities on the initial Purchase Date shall be deemed to have
been netted and set off against Seller’s obligation to redeem and repay the
Notes; and (iii) the outstanding principal of and interest on the Notes
shall be deemed paid in full.


 


Seller shall retain custody of the Non-Secured GIC
Purchased Securities as well as any other Purchased Securities, including any
Existing Purchased Securities, that are held by Seller on the initial Purchase
Date, with such securities to be held in the FSAM Collateral Account, or in the
case of assets that have been pledged to secure that FSA PAL Loan, the FSA PAL
Account, in each case, established 


 


6

















 


pursuant
to the Pledge and Administration Agreement (and subject to rehypothecation from
time to time in accordance therewith).


 


(c) In addition to
the acknowledgements made in Paragraph 19 of the Master Repurchase Agreement,
the parties agree and acknowledge that this Confirmation is intended to be a “securities
contract,” as such term is defined in Section 741(7) of the United
States Bankruptcy Code, with respect to which: (1) the contractual rights
of a party hereunder to cause the liquidation, termination or acceleration of a
securities contract are intended to be among those protected under Section 555
of the United States Bankruptcy Code; (2) the termination, netting and
collateral liquidation provisions of the Master Repurchase Agreement are
intended to be among those excepted from the automatic stay under Section 362(b)(6) of
the United States Bankruptcy Code; and (3) each transfer, payment and
delivery hereunder or in connection herewith is intended to be a “margin
payment”, as defined in Section 741(5) of the United States
Bankruptcy Code, and/or a “settlement payment” as defined in Section 741(8) of
the United States Bankruptcy Code, under a securities contract, and is
therefore, under Section 546(e) of the United States Bankruptcy Code,
not avoidable.


 


7

















 


Please confirm your agreement to be bound by the terms
of the foregoing by executing a copy of this Confirmation and returning it to
us at the contact information listed above.


 


 


Very truly yours,


 


	
  FSA ASSET MANAGEMENT LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  



 


 


	
  FSA CAPITAL MANAGEMENT
  SERVICES LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  



 


	
  FSA CAPITAL MARKETS
  SERVICES LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title: