exv10w7







Exhibit 10.7





Master Repurchase
Agreement




	 	 	September 1996 Version
	 
	 	 	Dated as of [           ]
	 
	 	 	Between:
[           ]
	 
	 	 	and
Orchid Island Capital, Inc.






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






	2.	 	Definitions






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




 









 








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




2 • September 1996 • Master Repurchase Agreement





 









 









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






	3.	 	Initiation; Confirmation; Termination






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





September 1996 • Master Repurchase Agreement • 3





 









 









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.




4 • September 1996 • Master Repurchase Agreement





 












 






	 	(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.





September 1996 • Master Repurchase Agreement • 5




 









 









	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. β403.4(e) if Seller is a government securities broker or
dealer other than a financial institution.
	 
	**	 	Language to be used under 17 C.F.R. β403.5(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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• September 1996 • Master Repurchase Agreement




 









 









	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.
	 
	 	(b)	 	In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting
party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this
Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased
Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all
Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and
applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting
party hereunder, and (iii) the defaulting party shall immediately deliver to the nondefaulting party
any Purchased Securities subject to such Transactions then in the defaulting party’s possession or
control.





September 1996 • Master Repurchase Agreement • 7




 









 









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






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






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






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





8 • September 1996 • Master Repurchase Agreement





 












 








	 	 	 	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
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.



September 1996
• Master Repurchase Agreement • 9





 









 






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.





10 • September 1996 • Master Repurchase Agreement




 









 









	 	(b)	 	Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most
recent available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.
	 
	 	(c)	 	By entering into a Transaction pursuant to this Paragraph, Seller shall be
deemed (i) to represent to Buyer that since the date of Seller’s latest such financial
statements, there has been no material adverse change in Seller’s financial condition
which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with
future audited and unaudited statements of its financial condition as they are issued,
so long as it is a Seller in any outstanding Transaction involving a Plan Party.





19. Intent





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





20. Disclosure Relating to Certain Federal Protections




     The parties acknowledge that they have been advised that:




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





September 1996
• Master Repurchase Agreement • 11




 









 









	 	 	 	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.





	 	 	 	 	 	 	 

	[Name of Party]
	 	Orchid Island Capital, Inc.

	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ [          ]
	 	By:
	 	 /s/ [          ]
	 

	 	 
	 	 	 	 
	 

	 	Title: [          ]

Date: [          ]
	 	 	 	Title: [          ]

Date: [          ]






12 •
September 1996 • Master Repurchase Agreement