Document:

exv10w14

EXHIBIT 10.14

Master Repurchase Agreement
 

September 1996 Version

	 	 	 

	Dated as of:

	 	May 9, 2011
	Between:

	 	Barclays Capital Inc.
	And:

	 	Provident Mortgage Capital Associates, 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;

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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);

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

3. Initiation; Confirmation; Termination

	 	(a)	 	An agreement to enter into a Transaction may be made orally or in writing at the initiation
of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities
shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an
account of Seller.
	 
	 	(b)	 	Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be
agreed, shall promptly deliver to the other party a written confirmation of each Transaction
(a “Confirmation”). The Confirmation shall describe the Purchased

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Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i)
the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction
is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the
Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent
with this Agreement. The Confirmation, together with this Agreement, shall constitute
conclusive evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates, unless with

respect to the Confirmation specific objection is made promptly after receipt thereof. In
the event of any conflict between the terms of such Confirmation and this Agreement, this
Agreement shall prevail.

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

4. Margin Maintenance

	 	(a)	 	If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by
notice to Seller require Seller in such Transactions, at Seller’s option, to transfer to
Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased
Securities”), so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or exceed such
aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such
date arising from any Transactions in which such Buyer is acting as Seller).
	 
	 	(b)	 	If at anytime 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

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	 	 	 	at or before the Margin Notice Deadline on any business day, the party receiving
such notice shall transfer cash or Additional Purchased Securities as provided in such
subparagraph no later than the close of business in the relevant market on such day. If
any such notice is given after the Margin Notice Deadline, the party receiving such
notice shall transfer such cash or Securities no later than the close of business in the
relevant market on the next business day following such notice.
	 
	 	(d)	 	Any cash transferred pursuant to this Paragraph shall be attributed to such
Transactions as shall be agreed upon by Buyer and Seller.
	 
	 	(e)	 	Seller and Buyer may agree, with respect to any or all Transactions hereunder,
that the respective lights 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

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the Purchased Securities with respect to all Transactions hereunder and all Income thereon
and other proceeds thereof.

7. Payment and Transfer

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately
available funds. All Securities transferred by one party hereto to the other party (i) shall be
in suitable form for transfer or shall be accompanied by duly executed instruments of transfer
or assignment in blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.

8. Segregation of Purchased Securities

To the extent required by applicable law, all Purchased Securities in the possession of
Seller shall be segregated from other securities in its possession and shall be identified as
subject to this Agreement. Segregation may be accomplished by appropriate identification on the
books and records of the holder, including a financial or securities intermediary or a clearing
corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the
Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall
preclude Buyer from engaging in repurchase transactions with the Purchased Securities or
otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such
transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller
pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or
apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.

Required Disclosure for Transactions in Which the Seller

Retains Custody of the Purchased Securities

Seller is not permitted to substitute other securities for those subject to
this Agreement and therefore must keep Buyer’s securities segregated at all times,
unless in this Agreement Buyer grants Seller the right to substitute other
securities. If Buyer grants the right to substitute, this means that Buyer’s
securities will likely be commingled with Seller’s own securities during the
trading day. Buyer is advised that, during any trading day that Buyer’s securities
are commingled with Seller’s securities, they [will]*
[may]** be subject to liens
granted by Seller to [its clearing bank]* [third parties]** and may be used by
Seller for deliveries on other securities transactions. Whenever the securities are
commingled, Seller’s ability to resegregate substitute securities for Buyer will be
subject to Seller’s ability to satisfy [the clearing]*
[any]** lien or to obtain
substitute securities.

 

			
	*	 	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.

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9. Substitution

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

10. Representations

Each of Buyer and Seller represents and warrants to the other that (i) it is duly
authorized to execute and deliver this Agreement, to enter into Transactions contemplated
hereunder and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance, (ii) it will engage in such Transactions as
principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of
any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the
person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on
behalf of any such disclosed principal), (iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the Transactions hereunder and
such authorizations are in full force and effect and (v) the execution, delivery and
performance of this Agreement and the Transactions hereunder will not violate any law,
ordinance, charter, 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

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	 		 	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 therefore on the Repurchase Date determined in
accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and
payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the
nondefaulting party and applied to the aggregate unpaid Repurchase Prices and any other
amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall
immediately deliver to the nondefaulting party any Purchased Securities subject to such
Transactions then in the defaulting party’s possession or control.
	 
	 	(c)	 	In all Transactions in which the defaulting party is acting as Buyer, upon tender by the
nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions,
all right, title and interest in and entitlement to all Purchased Securities subject to such
Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party
shall deliver all such Purchased Securities to the nondefaulting party.
	 
	 	(d)	 	If the nondefaulting party exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the
defaulting party, may:

	 	(i)	 	as to Transactions in which the defaulting party is acting as Seller, (A) immediately
sell, in a recognized market (or otherwise in a commercially reasonable manner) at such
price or prices as the nondefaulting party may reasonably deem satisfactory, any or all
Purchased Securities subject to such Transactions and apply the proceeds thereof to the
aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party
hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such
Purchased Securities, to give the defaulting party credit for such Purchased Securities in
an amount equal to the price therefore on such date, obtained from a generally recognized
source or the most recent closing bid quotation from such a source, against the aggregate
unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder;
and
	 
	 	(ii)	 	as to Transactions in which the defaulting party is acting as Buyer, (A) immediately
purchase, in a recognized market (or otherwise in a commercially reasonable manner) at
such price or prices as the nondefaulting party may reasonably deem satisfactory,
securities (“Replacement Securities”) of the same class and amount as any

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§
September 1996 § Master Repurchase Agreement

 

 

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 therefore in its sole discretion and
(3) all prices, bids and offers shall be determined together with accrued Income (except to the
extent contrary to market practice with respect to the relevant Securities).
	 
	 	(e)	 	As to Transactions in which the defaulting party is acting as Buyer, the defaulting party
shall be liable to the nondefaulting party for any excess of the price paid (or deemed paid)
by the nondefaulting party for Replacement Securities over the Repurchase Price for the
Purchased Securities replaced thereby and for any amounts payable by the defaulting party
under Paragraph 5 hereof or otherwise hereunder.
	 
	 	(f)	 	For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder
in respect of which the defaulting party is acting as Buyer shall not increase above the
	 
	 	 	 	amount of such Repurchase Price for such Transaction determined as of the date of the
exercise or deemed exercise by the nondefaulting party of the option referred to in
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 1l(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.

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§ September 1996 § Master Repurchase Agreement

 

 

12. Single Agreement

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each
Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions
hereunder constitute a single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all
of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply property held
by them in respect of any Transaction against obligations owing to them in respect of any
other Transactions hereunder and (iii) that payments, deliveries and other transfers made by
either of them in respect of any Transaction shall be deemed to have been made in
consideration of payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other transfers may
be applied against each other and netted.

13. Notices and Other Communications

Any and all notices, statements, demands or other communications hereunder may be given
by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address
specified in Annex II hereto, or so sent to such party at any other place specified in a
notice of change of address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by other communication
as specified in the preceding sentence.

14. Entire Agreement; Severability

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

15. Non-assignability; Termination

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

16. Governing Law

This Agreement shall be governed by the laws of the State of New York without giving
effect

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	 	 	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.
	 
	 	(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.

11     § September 1996 § Master Repurchase Agreement

 

 

	 	(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

12      § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	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, SPA
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.

	 	 	 	 	 	 	 	 	 	 	 

	Barclays Capital Inc.	 	 	 	Provident Mortgage Capital Associates,	 	 
	 	 	 	 	 	 	Inc	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ J. Kevin Walker
 

	 	 
	 	By:
	 	/s/ Mark E. Lefanowicz
 

	 	 
	Title:

	 	Director 

	 	 
	 	Title:
	 	Chief Financial Officer	 	 
	Date:

	 	May 24, 2011 
	 	 	 	Date:	 	May 12, 2011 
	 	 
	 

	 	 	 	 	 	 	 	 	 	 

13      § September 1996 § Master Repurchase Agreement

 

 

Annex I

Supplemental Terms and Conditions

This Annex I forms a part of the Master Repurchase Agreement dated as of May 9, 2011
(the “Agreement”) between Barclays Capital Inc. (“BCI”) and Provident Mortgage
Capital Associates, Inc. (“Counterparty”). Capitalized terms used but not defined in this
Annex I shall have the meanings ascribed to them in the Agreement.

1.
Other Applicable Annexes. In addition to this Annex I and
Annex II, the following
Annexes and any Schedules thereto shall form a part of this Agreement and shall be
applicable thereunder:

Schedule I.A (Investment Advisers)

Annex III (International Transactions)

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

Annex IV (Party Acting as Agent)

Schedule IV.A (List of Underlying Principals)

Annex V (Margin for Forward Transactions)

Annex VI (Buy/Sell Back Transactions)

Annex VII (Transactions Involving Registered Investment Companies)

Schedule VII.A (Supplemental Terms and Conditions of Transactions Involving Registered Investment Companies)

Annex VIII (Transactions in Equity Securities)

Schedule VIII.A (Additional Provisions Regarding Transactions in Equity Securities)

Annex IX Transactions Involving Certain Japanese Financial Institutions

2. Inconsistency. In the event of any inconsistency between the terms of the
Agreement and this Annex, this Annex shall govern.

3. Definitions. Paragraph 2 of the Agreement is hereby amended to add the following
definitions and, in any case where the definition already exists in Paragraph 2, the
definition is deleted in Paragraph 2 in its entirety and replaced with the following:

“Affiliate”, with respect to any party, means another entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by or is
under common control with such party. For purposes of this definition, the term
“control” means possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise. Without limiting the
generality of the foregoing, an entity shall be deemed to be controlled by another
entity if such other entity possesses, directly or indirectly, the power to elect a
majority of the board of directors or equivalent body of the first entity;

“Business Day” or “business day” with respect to any Transaction (other than an
International Transaction) hereunder, a day on which regular trading may occur in
the principal market for the Purchased Securities subject to such Transactions,
provided however, that for purposes of calculating Market Value, such term shall
mean a day on

14      § September 1996 § Master Repurchase Agreement

 

 

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 Saturday or Sunday be
considered a business day;

“Calculation Agent” shall mean BCI;

“Counterparty’s Liabilities” means, on any day, the sum of (i) the amount that
would, in conformity with generally accepted accounting principles in the United
States as in effect from time to time, be included on Counterparty’s consolidated
balance sheet under “Reverse repurchase agreements” (or such other name as is
assigned to this entry on the Counterparty’s consolidated balance sheet) on such
day plus (ii) any other indebtedness incurred by Counterparty;

“Liquid Securities” means (i) Securities issued by the United States of America,
the Federal National Mortgage Association, the Federal Home Mortgage Corporation,
the Federal Home Loan Bank or the Federal Farm Credit Bank, or (ii) fixed or
adjustable-rate mortgage passthroughs issued by the United States of America, the
Federal National Mortgage Association, the Federal Home Mortgage Corporation or
the Government National Mortgage Association.

“Margin Notice Deadline,” 10:00 A.M. (New York time), unless otherwise agreed to
between the parties with respect to any Transaction.”; and

“Market Value” means, (i) with respect to any Securities, except for Liquid
Securities, as of any date, the price for such Securities on such date as
determined by the Calculation Agent in its sole, good faith discretion, plus
accrued Income to the extent not included therein (other than any Income credited
or transferred to, or applied to the obligation of Seller pursuant to Paragraph 5
of the Agreement) and (ii) with respect to Liquid Securities as of any date, the
price for such Liquid 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 of the Agreement) as of such date (unless contrary to market
practice for such Liquid Securities.

“Stockholders’ Equity” means, on any day, the amount that would, in conformity with
generally accepted accounting principles in the United States as in effect from
time to time, be included on Counterparty’s consolidated balance sheet under “Total
shareholders’ equity” (or such other name as is assigned to this entry on the
Counterparty’s consolidated balance sheet) on such day.

4. Confirmations. (a) The first sentence of Paragraph 3(b) of the Agreement is
amended by inserting at the end thereof, “and for purposes of this Agreement, “written
confirmation” shall include confirmation sent by facsimile, telex, electronic messaging
system or other means agreed between the parties.”

15      § September 1996 § Master Repurchase Agreement

 

 

     (b) Any Confirmation sent with respect to a Transaction will be binding on the
party who did not prepare the Confirmation unless that party specifically objects, in
writing, within one business day of the receipt thereof. For the avoidance of doubt,
failure by the parties to confirm any Transaction in writing will not affect the validity
of that Transaction.

     (c) Confirmations, for the purposes of this Agreement, will be prepared by BCI.

5. Additional Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default under the Agreement and entitle the
non-defaulting party to exercise the termination rights under Paragraph 11 of the
Agreement:

(a) if either party shall have been suspended or expelled from membership or
participation in any national securities exchange, registered national securities
association or registered clearing agency of which it is a member or any other
self-regulatory organization to whose rules it is subject or if it is suspended
from dealing in securities by any federal or state government agency thereof; or

(b) if
either party shall have its license, charter, or other authorization
necessary to conduct a material portion of its business withdrawn, suspended or
revoked by any applicable federal or state government or agency thereof; or

(c) a default, event of default or other similar condition or event (however
described) shall have occurred under any agreement between (1) the parties hereto
or (2) X and an Affiliate of Y; where (i) “X” is a party to this Agreement and is
the defaulting (or otherwise affected) party under another relevant agreement and
(ii) “Y” is the other party to this Agreement.

6. Additional Events of Default of Counterparty. The occurrence of any
one or more of the following events shall constitute an Event of Default under the
Agreement and entitle BCI to exercise its rights under Paragraph 11 of the Agreement:

(a) Counterparty, as of each fiscal quarter-end, has Stockholders’ Equity of less
than the higher of (i) $200,000,000 and (ii) 75% of the highest Stockholders’
Equity from the date of this Agreement;

(c) Counterparty, or its Investment Adviser loses or has withdrawn from it or fails
to obtain renewal of any necessary license or regulatory authorization from any
regulatory authority which results in Counterparty or the Investment Adviser
becoming legally unable to perform any of its respective obligations under this
Agreement and provided that, with respect to the Investment Adviser only, if the
Investment Adviser is not promptly replaced by another investment adviser,
reasonably acceptable to BCI, that has any such necessary license or regulatory
authorization;

(d) Counterparty’s Liabilities (as of each fiscal quarter-end) exceed an amount
equal to Stockholders’ Equity (at such time) (the “Leverage Ratio”) times 12;

(e) Counterparty’s Stockholders’ Equity, in any fiscal quarter-end, declines by
more than 15%;

(f) Counterparty’s Stockholders’ Equity, in any fiscal year-end, declines by more
than 25%;

16      § September 1996 § Master Repurchase Agreement

 

 

(g) Counterparty’s publicly traded stock is delisted or otherwise
involuntarily removed from the New York Stock Exchange;

(e) Counterparty fails to file applicable 10K or 10Q within 45 calendar days of
the relevant fiscal quarter end;

(f) at any time a judicial, regulatory or administrative proceeding, or formal
investigation is commenced by a governmental or regulatory entity or authority
with respect to Counterparty, the Investment Adviser, its Affiliates, or any of
the key personnel of the foregoing, which could reasonably be expected to
adversely affect BCI’s rights under this Agreement.

	 	7.	 	Default Rights. (a) In addition to any rights of set-off a party may
have as a matter of law or otherwise, upon the occurrence of an Event of Default with
respect to a party hereto (“X”), the other party (“Y”) shall have the right (but
shall not be obligated) without prior notice to X or any other person to set off any
obligations of X owing to Y or any Affiliate of Y (whether or not arising under this
Agreement, whether or not matured and whether or not
contingent) against any obligations of Y or any Affiliate of Y owing to
X (whether or not arising under this Agreement, whether or not matured and whether
or not contingent). Y will give notice to X of any set-off effected under this
Section 6; provided, however, that failure to give any such notice will not limit
the validity or effectiveness of any such setoff.

(b) Nothing in this Section 6 will have the effect of creating a charge or other
security. This Section 6 shall be without prejudice and in addition to any right of
set-off, combination of accounts, lien or other rights to which any party is at any
time otherwise entitled (whether by operation of law, contract or otherwise).

8. Purchase Price Maintenance. 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
transferred to Buyer or Seller upon termination of the Transaction pursuant to Paragraph
5(ii) of the Agreement.

9. Mini Close-Out. (a) Notwithstanding clauses (i) and (ii) of the introductory
paragraph of Paragraph 11 of the Agreement, if Seller fails to deliver Purchased Securities
to Buyer on the applicable Purchase Date or Buyer fails to deliver Purchased Securities to
Seller on the applicable Repurchase Date, the non-defaulting party may, at its option,
terminate the relevant Transaction and execute a buy-in (including a deemed buy-in) of such
securities, and an Event of Default shall not be deemed to occur by reason of such event
unless and until the defaulting party either (x) fails to repay any Purchase Price or
Repurchase Price which had been previously paid by the non-defaulting party with respect to
such non-delivered Purchased Security, as the case may be, or (y) fails to reimburse the
non-defaulting party for the purchase price of the replacement securities, including
brokers fees and commissions and all other reasonable costs, fees and expenses related to
such purchase (the “Buy-in Price”). For the avoidance of doubt, the rights given to Buyer
and Seller in this paragraph are in addition to, and not in lieu of, any provisions of
Paragraph 11 of the Agreement and the non-defaulting party may, upon the occurrence of any
event discussed in clauses (i) and (ii) of the introductory paragraph of Paragraph 11 of
the Agreement, either declare an Event of Default or exercise its rights as set forth in
this paragraph.

17      § September 1996 § Master Repurchase Agreement

 

 

     (b) Any payment of the Purchase Price, the Repurchase Price or the Buy-in Price
pursuant to the preceding paragraph shall be due and payable after notice from the party
entitled to receive such payment within the time period specified in Paragraph 4(c) of the
Agreement, as amended by this Annex.

10. Termination of Transactions. Notwithstanding the provisions of Paragraph 3(c)
of the Agreement, in the case of Transactions terminable upon demand, such demand shall be
made by Buyer or Seller by telephone, by email or otherwise in accordance with the
Agreement no later than 10:00 a.m. New York City time on a Business Day if termination is
to occur on that Business Day.

11. Pledge as Security. Any pledge to Buyer under Paragraph 6 of the Agreement
shall be deemed to have been granted as of the Purchase Date.

12. Additional Representations and Warranties. Each party represents and warrants
to the other that, in its capacity as Seller delivering Purchased Securities to the Buyer,
and in its capacity as Buyer redelivering identical securities, under any Transaction, such
party shall have good, valid and marketable title to the Securities to be transferred to
the other party in such Transaction; such party has the unqualified right to sell,
transfer, assign and pledge such Securities; and all such Securities, upon delivery to the
other party (or its custodian, as the case may be) will be free and clear of any lien,
security interest, charge, encumbrance or other adverse claim, except such as may exist in
favor of the other party. Each party shall be deemed to have made the foregoing
representations and warranties as of each such delivery or redelivery, as the case may be.

13. No Reliance. In addition to the representations and warranties set forth in
Paragraph 10 of the Agreement, each party hereby makes the following representations and
warranties in connection with the Agreement and each Transaction thereunder, which shall
continue during the term of any such Transaction:

(a) unless there is a written agreement with the other party to the contrary, it is
not relying on any advice (whether written or oral) of the other party, other than
the representations expressly set out in the Agreement and this Annex I;

(b) it has made and will make its own decisions regarding the entering into of any
Transaction based upon its own judgment and upon advice from such professional
advisers as it has deemed it necessary to consult; and

(c) it understands the terms, conditions and risks of each Transaction and is
willing to assume (financially and otherwise) those risks.

14. Submission to Jurisdiction and Waiver of Trial by Jury. Each party irrevocably
and unconditionally (i) submits to the non-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, (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
and (iii) waives any and all right to trial by jury in any legal proceeding arising out of
or relating to the Agreement or any Transaction hereunder.

18      § September 1996 § Master Repurchase Agreement

 

 

15. Waiver of Immunity. 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 setoff 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.

16. Recording. The parties agree that each may electronically record all telephone
conversations between them and that any such recordings may be submitted in evidence in
any legal proceedings for the purpose of establishing any matters relating to this
Agreement or any Transactions hereunder.

17. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall be considered one and the same
agreement.

18. Existing Transactions. All Transactions entered into between the parties
hereto prior to the date of the Agreement which are outstanding at the date of the
Agreement are hereby deemed to have been entered into pursuant to the Agreement and are
governed by its terms.

19. Construction. Save for the amendments made hereby, the parties agree that the
text of the body of the Agreement is intended to conform with the Master Repurchase
Agreement dated September 1996 promulgated by The Bond Market Association and shall be
construed accordingly.

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19      § September 1996 § Master Repurchase Agreement

 

 

IN WITNESS WHEREOF, the parties have caused this Annex I to be executed by their respective
officers, thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 

	Barclays Capital Inc.	 	 	 	Provident Mortgage Capital Associates, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

Title:

	 	/s/ J. Kevin Walker
 

Director
	 	  
	 	By:

Title:
	 	/s/ Mark E. Lefanowicz
 

Chief Financial Officer
	 	 
	Date:

	 	May 24, 2011 
	 	 
	 	Date:
	 	May 12, 2011	 	 

20      § September 1996 § Master Repurchase Agreement

 

 

Schedule I.A 

Investment Advisers

This
Schedule I.A forms a part of Annex I to the Master Repurchase Agreement dated as of May 9,
2011 (the “Agreement”) between Barclays Capital Inc. (“BCI”) and Provident Mortgage Capital
Associates, Inc. (“Counterparty”). Capitalized terms
used but not defined in this Schedule I.A
shall have the meanings ascribed to them in Annex I or in the Agreement.

	1.	 	Investment Advisers. Counterparty agrees with BCI that, so long as either party has
or may have any obligations under the Agreement:

(a) Any amounts payable by BCI under the Agreement shall be deemed satisfied when paid by
BCI to the Investment Adviser;

(b) BCI may continue to act in all respects under the Agreement with the Investment
Adviser and on the Investment Adviser’s instructions until such time as BCI has been
notified by Counterparty in writing that with effect from the date so specified in the
notice, which date must be at least five Business Days following the effective receipt of
such notice by BCI, that there has been a change in, limitation of, rescission of all or
any of the powers of the Investment Adviser to act on behalf of Counterparty; and

(c) Counterparty shall be bound as principal of any such Agent Executed Transaction
entered into or purported to be entered into by the Investment Adviser as agent for
Counterparty notwithstanding any lack of power or authority of the Investment Adviser or
the person representing the Investment Adviser in entering into any such Agent Executed
Transaction.

	2.	 	Additional Representations. In addition to the representations and warranties set
forth in Paragraph 10 of the Agreement and in Annex I, Counterparty hereby makes the
following representations and warranties in connection with the Agreement and each
Transaction thereunder, which shall continue during the term of any such Transaction:

	 	(a)	 	it has appointed PMF Advisors, LLC (the “Investment Adviser”) to act
as its agent under the Agreement and in respect of each Transaction entered into
on its behalf by the Investment Adviser (each an “Agent Executed Transaction”)
Counterparty has delegated to the Investment Adviser all powers necessary for the
Investment Adviser to act on behalf of Counterparty under the Agreement and each
Agent Executed Transaction in every and all respects; and
	 
	 	(b)	 	that any person, including the Investment Adviser or the person
representing the Investment Adviser, signing the Agreement on behalf of
Counterparty is, and any person, including the Adviser or the person representing
the Investment Adviser, representing it in entering into any such Transaction, is
duly authorised to do so on its behalf.

21      § September 1996 § Master Repurchase Agreement

 

 

ANNEX II

Names and Addresses for Communications Between Parties

Barclays Capital Inc.

For all legal notices under this Agreement:

Barclays Capital Inc.

Legal Department

745 Seventh Avenue

New York, NY 10019

Immediate Attention: General Counsel

Telephone: (212) 526-2606

Fax: (212) 548-9188

For operational questions or problems:

Ms Nancy Denig

Barclays Capital Services LLC

1301 Sixth Avenue

New York Metro Campus

New York, NY 10019

Telephone: (212) 320-0793

Fax: (646) 758-1412

PROVIDENT MORTGAGE CAPITAL ASSOCIATES INC.

Provident Mortgage Capital Associates, Inc.

Attn: Mark E Lefanowicz, Chief Financial Officer

1633 Bayshore Hwy., Ste 331

Burlingame, CA 94010

Ph: 855/653-4300

Fax: 855/653-4301

22      § September 1996 § Master Repurchase Agreement

 

 

Annex III

International Transactions

This Annex
III (including any Schedules hereto) forms a part of the Master Repurchase Agreement
dated as of May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage
Capital Associates, Inc. Capitalized terms used but not defined in this Annex III shall have the
meanings ascribed to them in the Agreement

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

	 	(a)	 	The following terms shall have the following
meanings;
	 
	 	 	 	“Base Currency”, United States dollars or such other currency as Buyer and Seller may
agree in the Confirmation with respect to any International Transaction or otherwise in
writing;
	 
	 	 	 	“Business Days” or “business day”:

	 	(i)	 	in relation to any International Transaction which (A) involves an
International Security and (B) is to be settled through CEDEL or Euroclear, a day
on which CEDEL or, as the case may be, Euroclear is open to settle business in
the currency in which the Purchase Price and the Repurchase Price are
denominated;
	 
	 	(ii)	 	in relation to any International Transaction which (A) involves an
International Security and (B) is to be settled through a settlement system other
than CEDEL or Euroclear, a day on which that settlement system is open to settle
such International Transaction;
	 
	 	(iii)	 	in relation to any International Transaction which involves a delivery of
Securities not falling within (i) or (ii) above, a day on which banks are open for
business in the place where delivery of the relevant Securities is to be effected: and
	 
	 	(iv)	 	in relation to any International Transaction which involves an obligation to
make a payment not falling within (i) or (ii) above, a day other than a Saturday or
Sunday on which banks are open for business in the principal financial center of
the country of which the currency in which the payment is denominated is the
official currency and, if different, in the place where any account designated by
the parties for the making or receipt of the payment is situated (or, in the case
of ECU, a day on which ECU clearing operates);

“CEDEL”, CEDEL Bank, societe anonyme;

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

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

“International Security”, any Security that (i) is denominated in a currency other
than United States dollars or (ii) is capable of being cleared through a clearing
facility

23      § September 1996 § Master Repurchase Agreement

 

 

outside the United States or (iii) is issued by an issuer organized under the laws
of a jurisdiction other than the United States (or any political subdivision thereof);

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

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

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

	(b)	 	Notwithstanding Paragraph 2 of the Agreement, the term ‘Prime Rate” shall mean, with
respect to any International Transaction, LIBOR plus a spread, as may be specified in
the Confirmation with respect to any International Transaction or otherwise in writing
	 
	2.	 	Manner of Transfer. All transfers of International Securities (i) shall be in suitable form
for transfer and accompanied by duly executed instruments of transfer or assignment in blank
(where required for transfer) and such other documentation as the transferee may reasonably
request, or (ii) shall be transferred through the book-entry system of Euroclear or CEDEL, or
(iii) shall be transferred through any other agreed securities clearing system or (iv) shall
be transferred by any other method mutually acceptable to Seller and Buyer.
	 
	3.	 	Contractual Currency.

	 	(a)	 	Unless otherwise mutually agreed, all funds transferred in respect of the Purchase
Price or the Repurchase Price in any International Transaction shall be in the
Contractual Currency.
	 
	 	(b)	 	Notwithstanding subparagraph (a) of this Paragraph 3, the payee of any payment may,
at its option, accept tender thereof in any other Currency; provided, however, that, to
the extent permitted by applicable law, the obligation of the payor to make such payment
will be discharged only to the extent of the amount of the Contractual Currency that such
payee may, consistent with normal banking procedures, purchase with such other currency
(after deduction of any premium and costs of exchange) for delivery within the customary
delivery period for spot transactions in respect of the relevant currency.
	 
	 	(c)	 	If for any reason the amount in the Contractual Currency so received, including
amounts received after conversion of any recovery under any judgment or order expressed
in a currency other than the Contractual Currency, falls short of the amount in the
Contractual Currency due in respect of the Agreement, the party required to make the
payment shall (unless an Event of Default has occurred and such party is the
nondefaulting party) as a separate and independent obligation (which shall not merge with
any

24      § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	judgement or any payment or any partial payment or enforcement of payment) and
to the extent permitted by applicable laws, immediately pay such additional amount
in the Contractual Currency as may be necessary to compensate for the shortfall.
	 
	 	(d)	 	If for any reason the amount of the Contractual Currency received by one
party hereto exceeds the amount in the Contractual Currency due such party in
respect of the Agreement, then (unless an Event of Default has occurred and such
party is the nondefaulting party) the party receiving the payment shall refund
promptly the amount of such excess.

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

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

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

	 	(ii)	 	In the case of any Tax required to be withheld or deducted from any
money payable to a party hereto acting as Payee by the other party hereto acting
as Payor, Payee agrees to deliver to Payor (or, if applicable, to the authority
imposing the Tax) any certificate or document reasonably requested by Payor that
would entitle Payee to an exemption from, or reduction in the rate of,
withholding or deduction of Tax from money payable by Payor to Payee.
	 
	 	(iii)	 	Each party hereto agrees to notify the other party of any circumstance
known or reasonably known to it (other than a Change of Tax Law, as defined in
Paragraph 6 hereof) that causes a certificate or document provided by it pursuant
to subparagraph (b) (ii) of this Paragraph to fail to be true.
	 
	 	(iv)	 	Notwithstanding subparagraph (b) (i) of this Paragraph, no additional
amounts shall be payable by Payor to Payee in respect of an International
Transaction to the extent that such additional amounts are payable as a result
of a failure by Payee to comply

25      § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	with its obligations under subparagraph (b) (ii) or (b) (iii) of this
Paragraph with respect to such International Transaction.

	6.	 	Tax Event.

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

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

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

	 	(b)	 	If so requested by the other party, the notifying party will furnish the other
party with an opinion of a suitably qualified adviser that an event referred to in
subparagraph (a) (i) or (a) (ii) of this Paragraph 6 has occurred and affects the
notifying party.
	 
	 	(c)	 	Where this Paragraph 6 applies, the party giving the notice referred to in
subparagraph (a) above may, subject to subparagraph (d) below, terminate the
International Transaction effective from a date specified in the notice, not being
earlier (unless so agreed by the other party) than 30 days after the date of such notice,
by nominating such date as the Repurchase Date.
	 
	 	(d)	 	If the party receiving the notice referred to in subparagraph (a) of this Paragraph
6 so elects, it may override such notice by giving a counter-notice to the other party.
If a counter-notice is given, the party which gives such counter-notice will be deemed to
have agreed to indemnify the other party against the adverse effect referred to in
subparagraph (a) of this Paragraph 6 so far as it relates to the relevant International
Transaction and the original Repurchase Date will continue to apply.
	 
	 	(e)	 	Where an International Transaction is terminated as described in this Paragraph 6,
the party which has given the notice to terminate shall indemnify the other party against
any reasonable legal and other professional expenses incurred by the other party by
reason of the termination, but the other party may not claim any sum constituting
consequential loss or damage in respect of a termination in accordance with this
Paragraph 6.
	 
	 	(f)	 	This Paragraph 6 is without prejudice to
Paragraph 5 of this Annex III; but an
obligation to pay additional amounts pursuant to Paragraph 5
of this Annex III may, where
appropriate, be a circumstance which causes this Paragraph 6 to apply.

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

	8.	 	Events of Default.

	 	(a)	 	In addition to the Events of Default set forth in Paragraph 11 of the Agreement, it
shall be an additional “Event of Default” if either party fails, after one business day’s
notice, to

26    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	perform any covenant or obligation required to be performed
by it under this Annex III,
including, without limitation, the payment of taxes or additional amounts as required by
Paragraph 5 of this Annex III.

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

27    § September 1996 § Master Repurchase Agreement

 

 

Schedule III.A

International Transactions Relating to [Relevant Country]

This
Schedule III.A forms a part of Annex III to the Master Repurchase Agreement dated as of
May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital
Associates, Inc. Capitalized terms used but not defined in this Schedule III.A shall have the
meanings ascribed to them in Annex III.

[Insert provisions applicable to relevant country.]

28    § September 1996 § Master Repurchase Agreement

 

 

Annex IV

	 	 	 	Party Acting as Agent

	 	 	 	This Annex IV forms a part of the Master Repurchase Agreement
dated as of May 9, 2011 (the
“Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital Associates, Inc.
This Annex IV sets forth the terms and conditions governing all transactions in which a party
selling securities or buying, securities, as the case may be (“Agent”), in a Transaction is
acting as agent for one or more third parties (each, a “Principal”). Capitalized terms used
but not defined in this Annex IV shall have the meanings ascribed to them in the Agreement.

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

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

	3.	 	Limitation of Agent’s Liability. The parties expressly acknowledge that if the
representations of Agent under the Agreement, including this Annex IV, are true and correct in
all material respects during the term of any Transaction and Agent otherwise complies with the
provisions of this Annex IV, then (a) Agent’s obligations under the Agreement shall not
include a guarantee of performance by its Principal or Principals and (b) the other party’s
remedies shall not include a right of setoff in respect of rights or obligations, if any, of
Agent arising in

29    § September 1996 § Master Repurchase Agreement

 

 

	 		 	other transactions in which Agent is acting as principal.

	4.	 	Multiple Principals.

	 	(a)	 	In the event that Agent proposes to act for more than one Principal hereunder,
Agent and the other party shall elect whether (i) to treat Transactions under the
Agreement as transactions entered into on behalf of separate Principals or (ii) to
aggregate such Transactions as if they were transactions by a single Principal. Failure
to make such an election in writing shall be deemed an election to treat Transactions
under the Agreement as transactions on behalf of separate Principals.
	 
	 	(b)	 	In the event that Agent and the other party elect (or are deemed to elect) to treat
Transactions under the Agreement as transactions on behalf of separate Principals, the
parties agree that (i) Agent will provide the other party, together with the notice
described in Paragraph 2 (b) of this Annex IV, notice specifying the portion of each
Transaction allocable to the account of each of the Principals for which it is acting (to
the extent that any such Transaction is allocable to the account of more than one
Principal); (ii) the portion of any individual Transaction allocable to each Principal
shall be deemed a separate Transaction under the Agreement: (iii) the margin maintenance
obligations of Buyer and Seller under Paragraph 4 of the Agreement shall be determined on
a Transaction-by-Transaction basis (unless the parties agree to determine such
obligations on a Principal-by-Principal basis); and (iv) Buyer’s and Seller’s remedies
under the Agreement upon the occurrence of an Event of Default shall be determined as if
Agent had entered into a separate Agreement with the other party on behalf of each of its
Principals.
	 
	 	(c)	 	In the event that Agent and the other party elect to treat Transactions under the
Agreement as if they were transactions by a single Principal, the parties agree that (i)
Agent’s notice under Paragraph 2(b) of this Annex IV need only identify the names of its
Principals but not the portion of each Transaction allocable to each Principal’s account;
(ii) the margin maintenance obligations of Buyer and Seller under Paragraph 4 of the
Agreement shall, subject to any greater requirement imposed by applicable law, be determined on an aggregate basis for all Transactions entered into by Agent on behalf of any
Principal; and (iii) Buyer’s and Seller’s remedies upon the occurrence of an Event of
Default shall be determined as if all Principals were a single Seller or Buyer, as the
case may be.
	 
	 	(d)	 	Notwithstanding any other provision of the Agreement (including, without limitation,
this Annex IV), the parties agree that any Transactions by Agent on behalf of an employee
benefit plan under ERISA shall be treated as Transactions on behalf of separate
Principals in accordance with Paragraph 4 (b) of this Annex IV (and all margin
maintenance obligations of the parties shall be determined on a
Transaction-by-Transaction basis).

	5.	 	Interpretation of Terms. All references to “Seller” or ‘Buyer” as the case may be, in the
Agreement shall, subject to the provisions of this Annex IV (including, among other
provisions, the limitations on Agent’s liability in Paragraph 3 of this Annex IV), be
construed to reflect that (i) each Principal shall have, in connection with any Transaction or
Transactions entered into by Agent on its behalf, the rights, responsibilities, privileges and
obligations of a “Seller” or “Buyer”, as the case may be, directly entering into such
Transaction or Transactions with the other party under the Agreement, and (ii) Agent’s
Principal or Principals have designated Agent as their sole agent for performance of Seller’s
obligations to Buyer or Buyer’s obligations to Seller, as the case may be, and for receipt of
performance by Buyer of its obligations

30    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	 to Seller or Seller of its obligations to Buyer, as the case may be, in connection with
any Transaction or Transactions under the Agreement (including, among other things, as Agent for
each Principal in connection with transfers of Securities, cash or other property and as agent for
giving and receiving all notices under the Agreement). Both Agent and its Principal or Principals
shall be deemed “parties” to the Agreement and all references to a “party” or “either party” in the
Agreement shall be deemed revised accordingly (and any Act of Insolvency with respect to Agent or
any other Event of Default by Agent under Paragraph 11 of the Agreement shall be deemed an Event of
Default by Seller or Buyer, as the case may be).

31    § September 1996 § Master Repurchase Agreement

 

 

	Schedule IV.A

	 	 	List of Underlying Principals

This Schedule IV.A forms a part of Annex IV to the Master Repurchase Agreement dated as of
May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital
Associates, Inc. Capitalized terms used but not defined in this
Schedule IV.A shall have the
meanings ascribed to them in Annex IV or the Agreement.

	 	 	Name of Underlying Principal

32    § September 1996 § Master Repurchase Agreement

 

 

Annex V

     Margin for Forward Transactions

     This
Annex V forms a part of the Master Repurchase Agreement dated as of May 9, 2011 (the
“Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital Associates, Inc.
Capitalized terms used but not defined in this Annex V shall have the meanings ascribed to them in
the Agreement.

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

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

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

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

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

	2.	 	Margin Maintenance.

	 	(a)	 	If at any time a party (the “In-the-Money Party”) shall have a Net Unsecured Forward
Exposure to the other party (the “Out-of-the-Money Party”) under one or more Forward
Transactions, the In-the-Money Party may by notice to the Out-of-the-Money Party require
the Out-of-the-Money Party to transfer to the In-the-Money Party Securities or cash
reasonably acceptable to the In-the-Money-Party (together with any Income thereon and
proceeds thereof, “Forward Collateral”) having a Market Value sufficient to eliminate such
Net Unsecured Forward Exposure. The Out-of-the-Money Party may by notice to the
In-the-Money Party require the In-the-Money Party to transfer to the Out-of-the Money Party
Forward Collateral having a Market Value that exceeds the In-the-Money Party’s Net Forward
Exposure (“Excess Forward Collateral Amount”). The rights
of the parties under this
subparagraph shall be in addition to their rights under subparagraphs (a) and (b) of
Paragraph 4 and any other provisions of the Agreement.
	 
	 	(b)	 	The parties may agree, with respect to any or all Forward Transactions hereunder,
that the respective rights of the parties under subparagraph (a) of this Paragraph
may be exercised only where a Net Unsecured Forward Exposure or Excess Forward
Collateral Amount, as the case may be, exceeds a specified dollar amount or other
specified threshold for such Forward Transactions (which amount or threshold shall
be agreed to by the parties prior to entering into any such Forward Transactions).
	 
	 	(c)	 	The parties may agree, with respect to any or all Forward Transactions hereunder,
that the respective rights of the parties under subparagraph (a) of this Paragraph to
require

33    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	the elimination of a Net Unsecured Forward Exposure or Excess Forward Collateral
Amount, as the case may be, may be exercised whenever such a Net Unsecured Forward
Exposure or Excess Forward Collateral Amount exists with respect to any single Forward
Transaction hereunder (calculated without regard to any other Forward Transaction
outstanding hereunder).

	 	(d)	 	The parties may agree, with respect to any or all Forward Transactions hereunder,
that (i) one party shall transfer to the other party Forward Collateral having a Market
Value equal to a specified dollar amount or other specified threshold no later than the
Margin Notice Deadline on the day such Forward Transaction is entered into by the parties
or (ii) one party shall not be required to make any transfer otherwise required to be made
under this Paragraph if, after giving effect to such transfer, the Market Value of the
Forward Collateral held by such party would be less than a specified dollar amount or
other specified threshold (which amount or threshold shall be agreed to by the parties
prior to entering into any such Forward Transactions).
	 
	 	(e)	 	If any notice is given by a party to the other under subparagraph (a) of this
Paragraph at or before the Margin Notice Deadline on any business day, the party receiving
such notice shall transfer Forward Collateral as provided in such subparagraph no later
than the close of business in the relevant market on such business day. If any such notice
is given after the Margin Notice Deadline, the party receiving such notice shall transfer
such Forward Collateral no later than the close of business in the relevant market on the
next business day.
	 
	 	(f)	 	Upon the occurrence of the Purchase Date for any Forward Transaction and the
performance by the parties of their respective obligations to transfer cash and Securities on
such date, any Forward Collateral in respect of such Forward Transaction, together with
any Income thereon and proceeds thereof, shall be transferred by the party holding such
Forward Collateral to the other party; provided, however, that neither party shall be
required to transfer such Forward Collateral to the other if such transfer would result in
the creation of a Net Unsecured Forward Exposure of the transferor.
	 
	 	(g)	 	The Pledgor (as defined below) of Forward Collateral may, subject to agreement with
and acceptance by the Pledgee (as defined below) thereof, substitute other Securities
reasonably acceptable to the Pledgee for any Securities Forward Collateral. Such
substitution shall be made by transfer to the Pledgee of such other Securities and
transfer to the Pledgor of such Securities Forward Collateral. After substitution, the
substituted Securities shall constitute Forward Collateral.

	3.	 	Security Interest.

	 	(a)	 	In addition to the rights granted to the parties under Paragraph 6 of the Agreement,
each party (“Pledgor”) hereby pledges to the other party (“Pledgee”) as security for the
performance of its obligations hereunder, and grants Pledgee a security interest in and
right of setoff against, any Forward Collateral and any other cash, Securities or
property, and all proceeds of any of the foregoing, transferred by or on behalf of Pledgor
to Pledgee or due from Pledgee to Pledgor in connection with the Agreement and the Forward
Transactions hereunder.
	 
	 	(b)	 	Unless otherwise agreed by the parties, a party to whom Forward Collateral has
been transferred shall have the right to engage in repurchase transactions with
Forward

34    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	Collateral or otherwise sell, transfer, pledge or hypothecate Forward Collateral,
including in respect of loans or other extensions of credit to such party that may be in
amounts greater than the Forward Collateral such party is entitled to as security for
obligations hereunder, and that may extend for periods of time longer than the periods
during which such party is entitled to Forward Collateral as security for obligations
hereunder; provided, however, that no such transaction shall relieve such party of its
obligations to transfer Forward Collateral pursuant to Paragraph 2 or 4 of this Annex V or
Paragraph 11 of the Agreement.

	4.	 	Events of Default.

	 	(a)	 	In addition to the Events of Default set forth in Paragraph 11 of the Agreement, it
shall be an additional “Event of Default” if either party fails, after one business day’s
notice, to perform any covenant or obligation required to be performed by it under
Paragraph 2 or any other provision of this Annex.
	 
	 	(b)	 	In addition to the other rights of a nondefaulting party under Paragraphs 11 and 12
of the Agreement, if the nondefaulting party exercised or is deemed to have exercised the
option referred to in Paragraph 11 (a) of the Agreement:

	 	(i)	 	The nondefaulting party, without prior notice to the defaulting party, may
(A) immediately sell, in a recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the nondefaulting party may reasonably
deem satisfactory, any or all Forward Collateral subject to any or all Forward
Transactions hereunder and apply the proceeds thereof to any amounts owing by the
defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling
all or a portion of such Forward Collateral, to give the defaulting party credit for
such Forward Collateral in an amount equal to the price therefor on such date,
obtained from a generally recognized source or the most recent closing bid quotation
from such a source, against any amounts owing by the defaulting party hereunder.
	 
	 	(ii)	 	Any Forward Collateral held by the defaulting party, together with any Income
thereon and proceeds thereof, shall be immediately transferred by the defaulting party
to the nondefaulting party. The non defaulting party may, at its option (which option
shall be deemed to have been exercised immediately upon the occurrence of an Act of
Insolvency), and without prior notice to the defaulting party, (i) immediately
purchase, in a recognized market (or otherwise in a commercially reasonable manner) at
such price or prices as the nondefaulting party may reasonably deem satisfactory,
securities (“Replacement Securities”) of the same class and amount as any Securities
Forward Collateral that is not delivered by the defaulting party to the nondefaulting
party as required hereunder or (ii) in its sole discretion
elect, in lieu of
purchasing Replacement Securities, to be deemed to have purchased Replacement
Securities at the price therefor on such date, obtained from a generally recognized
source or the most recent closing offer quotation from such a source, whereupon the
defaulting party shall be liable for the price of such Replacement Securities together
with the amount of any cash Forward Collateral not delivered by the defaulting party
to the nondefaulting party as required hereunder.

	 	 	 	Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Forward
Collateral subject to any Forward Transaction hereunder are instruments traded in a recognized
market, (2) in the absence of a generally recognized source for prices or bid quotations for any
Forward Collateral, the nondefaulting party may establish the source therefor

35    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	in its sole discretion and (3) all prices and bids shall be determined together with
accrued Income (except to the extent contrary to market practice with respect to the relevant
Forward Collateral).

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

36    § September 1996 § Master Repurchase Agreement

 

 

Annex VI

     Buy/Sell Back Transactions

     This
Annex VI forms a part of the Master Repurchase Agreement dated as of May 9, 2011 (the
“Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital Associates, Inc.
Capitalized terms used but not defined in this Annex VI shall have the meanings ascribed to them in
the Agreement.

	1.	 	In the event of any conflict between the terms of this Annex VI and any other term of the
Agreement, the terms of this Annex VI shall prevail.
	 
	2.	 	Each Transaction shall be identified at the time it is entered into and in the relevant
Confirmation as either a Repurchase Transaction or a Buy/Sell Back Transaction.
	 
	3.	 	In the case of a Buy/Sell Back Transaction, the Confirmation delivered in accordance
with Paragraph 3 of the Agreement may consist of a single document in respect of both of
the transfers of funds against Securities which together form the Buy/Sell Back
Transaction or separate Confirmations may be delivered in respect of each such transfer.
	 
	4.	 	Definitions. The following definitions shall apply to Buy/Sell Back Transactions:

	 	(a)	 	“Accrued Interest”, with respect to any Purchased Securities subject to a
Buy/Sell Back Transaction, unpaid Income that has accrued during the period from (and
including) the issue date or the last Income payment date (whichever is later) in
respect of such Purchased Securities to (but excluding) the date of calculation. For
these purposes unpaid Income shall be deemed to accrue on a daily basis from (and
including) the issue date or the last Income payment date (as the case may be) to
(but excluding) the next Income payment date or the maturity date (whichever is
earlier);
	 
	 	(b)	 	“Sell Back Differential”, with respect to any Buy/Sell Back Transaction as of any
date, the aggregate amount obtained by daily application of the Pricing Rate for such
Buy/Sell Back Transaction to the Purchase Price for such Buy/Sell Back Transaction on a
360 day per year basis (unless otherwise agreed by the parties for the Transaction) for
the actual number of days during the period commencing on (and including) the Purchase
Date for such Buy/Sell Back Transaction and ending on (but excluding) the date of
determination;
	 
	 	(c)	 	“Sell Back Price”, with respect to any Buy/Sell Back Transaction:

	 	(i)	 	in relation to the date originally specified by the parties as the
Repurchase Date pursuant to Paragraph 2 (q) of the Agreement, the price agreed by
the Parties in relation to such Buy/Sell Back Transaction, and
	 
	 	(ii)	 	in any other case (including for the purposes of the application of
Paragraph 4 or Paragraph 11 of the Agreement), the product of the formula (P +
D) - (IR + C), where —

	 	 	 	P = the Purchase Price
	 
	 	 	 	D = the Sell Back Differential
	 
	 	 	 	IR = the amount of any Income in respect of the Purchased Securities paid by
the issuer on any date falling between the Purchase Date and the
Repurchase Date

37    § September 1996 § Master Repurchase Agreement

 

 

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

	5.	 	When entering into a Buy/Sell Back Transaction the parties shall also agree on the Sell Back
Price and the Pricing Rate to apply in relation to such Buy/Sell Back Transaction on the
scheduled Repurchase Date. The parties shall record the Pricing Rate in at least one
Confirmation applicable to such Buy/Sell Back Transaction.
	 
	6.	 	Termination of a Buy/Sell Back Transaction shall be effected on the Repurchase Date by
transfer to Seller or its agent of Purchased Securities against the payment by Seller of (i) in
a case where the Repurchase Date is the date originally agreed to by the parties pursuant to
Paragraph 2 (q) of the Agreement, the Sell Back Price referred to in Paragraph 4 (c) (i) of
this Annex; and (ii) in any other case, the Sell Back Price referred to in Paragraph 4 (c) (ii)
of this Annex.
	 
	7.	 	For the avoidance of doubt, the parties acknowledge and agree that the Purchase Price and
the Sell Back Price in Buy/Sell Back Transactions shall include Accrued Interest (except to the
extent contrary to market practice with respect to the Securities subject to such Buy/Sell Back
Transaction, in which event (i) an amount equal to the Purchase Price plus Accrued Interest to
the Purchase Date shall be paid to Seller on the Purchase Date and shall be used, in lieu of
the Purchase Price, for calculating the Sell Back Differential, (ii) an amount equal to the
Sell Back Price plus the amount of Accrued Interest to the Repurchase Date shall be paid to
Buyer on the Repurchase Date, and (iii) the formula in Paragraph 4 (c) (ii) of this Annex VI
shall be replaced by the formula “(P + AI + D) - (IR
+ C) ”, where “AI” equals Accrued
Interest to the Purchase Date).
	 
	8.	 	Unless the parties agree in Annex I to the Agreement that a Buy/Sell Back Transaction is not
to be repriced, they shall at the time of repricing agree on the Purchase Price, the Sell Back
Price and the Pricing Rate applicable to such Transaction.
	 
	9.	 	Paragraph 5 of the Agreement shall not apply to Buy/Sell Back Transactions. Seller agrees, on
the date such Income is received, to pay to Buyer any Income received by Seller in respect of
Purchased Securities that is paid by the issuer on any date falling between the Purchase Date
and the Repurchase Date.
	 
	10.	 	References to “Repurchase Price” throughout the Agreement shall be construed as references to
“Repurchase Price or the Sell Back Price, as the case may be.”
	 
	11.	 	In 11 of the Agreement, references to the “Repurchase Prices” shall be construed as
references to “Repurchase Prices and Sell Back Prices.”

38    § September 1996 § Master Repurchase Agreement

 

 

	 	 	Annex VII
	 
	 	 	Transactions Involving Registered Investment Companies
	 
	 	 	This Annex VII (including any Schedules hereto) forms a part of the Master Repurchase Agreement
dated as of May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage
Capital Associates, Inc. (“Counterparty”) and each investment company identified on Schedule
VII.A hereto (as such schedule may be amended from time to time) acting on behalf of its
respective series of portfolios identified on such Schedule VII. A, or in the case of those
investment companies for which no separate series or portfolios are identified on such Schedule
VII. A, acting for and on behalf of itself (each such series, portfolio or investment company,
as the case may be, hereinafter referred to as a “Fund”). In the event of any conflict between
the terms of this Annex VII and any other term of the Agreement, the terms of this Annex VII
shall prevail. Capitalized terms used but not defined in this Annex VII shall have the meanings
ascribed to them in the Agreement.
	 
	1.	 	Multiple Funds. For any Transaction in which a Fund is acting as Buyer (or Seller, as the
case may be), each reference in the Agreement and this Annex VII to Buyer (or Seller, as the
case may be) shall be deemed a reference solely to the particular Fund to which such
Transaction relates, as identified to Seller (or Buyer, as the case may be) by the Fund and as
may be specified in the Confirmation therefor. In no circumstances shall the rights,
obligations or remedies of either party with respect to a particular Fund constitute a right,
obligation or remedy applicable to any other Fund. Specifically, and without otherwise
limiting the scope of this Paragraph: (a) the margin maintenance obligations of Buyer and
Seller specified in Paragraph 4 or any other provisions of the Agreement and the single agreement provisions of Paragraph
12 of the Agreement shall be applied based solely upon Transactions entered into by a
particular Fund, (b) Buyer’s and Seller’s remedies under the Agreement upon the occurrence
of an Event of Default shall be determined as if each Fund had entered into a separate
Agreement with Counterparty, and (c) Seller and Buyer shall have no right to set off claims
related to Transactions entered into by a particular Fund against claims related to
Transactions entered into by any other Fund.
	 
	2.	 	Margin Percentage. For any Transaction in which a Fund is acting as Buyer, the Buyer’s
Margin Percentage shall always be equal to at least 100%, or such other percentage as the
parties hereto may from time to time mutually determine; provided, that in no event
shall such percentage be less than 100%. For any Transaction in which a Fund is acting as
Seller, the Buyer’s Margin Percentage shall be such percentage as the parties hereto may
from time to time mutually determine; provided, that in no event shall such percentage be
less than 100%.
	 
	3.	 	Confirmations. Unless otherwise agreed, Counterparty shall promptly issue a Confirmation
to the Fund pursuant to Paragraph 3 of the Agreement. Upon the transfer of substituted or
Additional Purchased Securities by either party, Counterparty shall promptly provide
notice to the Fund confirming such transfer.
	 
	4.	 	Financial Condition. Each party represents that it has delivered the following financial
information to the other party to the Agreement: in the case of a party that is a
registered broker-dealer, its most recent statements required to be furnished to
customers by Rule 17a- 5(c) under the 1934 Act; in the case of a party that is a Fund,
its most recent audited or unaudited financial statements required to be furnished to
its shareholders by Rule 30d-l under the Investment Company Act of 1940; in the case of
any other party, its most recent audited or unaudited statements of financial condition or
other comparable information concerning

39    § September 1996 § Master Repurchase Agreement

 

 

	 	 	its financial condition.
	 
	 	 	Each party represents that the financial statements or information so delivered fairly reflect
its financial condition and, if applicable, its net capital ratio, on the date as of which such
financial statements or information were prepared. Each party agrees that it will make
available and deliver to the other party, promptly upon request, all such financial statements
that subsequently are required to be delivered to its customers or shareholders pursuant to
Rule 17a-5(c) or Rule 30d-1, as the case may be, or, in the case of a party that is neither a
registered broker-dealer nor a Fund, all such financial information that subsequently becomes
available to the public.
	 
	 	 	Each Fund acknowledges and agrees that it has made an independent evaluation of the
creditworthiness of the other party that is required pursuant to the Investment Company Act of
1940 or the regulations thereunder. Each Fund agrees that its agreement to enter into each
Transaction hereunder shall constitute an acknowledgment and agreement that it has made such an
evaluation.
	 
	5.	 	Segregation of Purchased Securities. Unless otherwise agreed by the parties, any transfer
of Purchased Securities to a Fund shall be effected by delivery or other transfer (in the
manner agreed upon pursuant to Paragraph 7 of the Agreement) to the custodian or subcustodian
designated for such Fund in Schedule VII.A hereto (“Custodian”) for credit to the Fund’s
custodial account with such Custodian. If the party effecting such transfer is the Fund’s
Custodian, such party shall, unless otherwise directed by the Fund, (a) transfer and maintain
such Purchased Securities to and in the Fund’s custodial account with such party and (b) so
indicate in a notice to the Fund.

40    § September 1996 § Master Repurchase Agreement

 

 

	 	 	Schedule VII.A
	 
	 	 	Supplemental Terms and Conditions of Transactions 

Involving Registered
Investment Companies
	 
	 	 	This Schedule VII.A forms a part of Annex VII to the Master Repurchase Agreement dated as of May
9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital Assocates,
Inc. Capitalized terms used but not defined in this Schedule VII.A shall have the meanings
ascribed to them in Annex VII.
	 
	1.	 	This Agreement is entered into by or on behalf of the following Funds, and unless otherwise
indicated by the appropriate Fund in connection with a Transaction, the following Custodians
are designated to receive transfers of Purchased Securities on behalf of such Funds for credit
to the appropriate Fund’s custodial account:
	 
	 	 	Name of Fund                Custodian
	 
	2.	 	Financial Condition. Each of the parties acknowledges that its agreement to enter
into each Transaction under the Agreement shall constitute a representation and warranty that
there has been no material adverse change in its financial condition that such party has not
disclosed to the other party in writing since the date of the latest statement provided by
such party to the other party pursuant to Paragraph 4 of Annex VII.
	 
	3.	 	Additional Representations. In addition to the representations and warranties set
forth in Paragraph 10 of the Agreement, (a) Seller represents and warrants to Buyer that, with
respect to each Transaction, it will have the right to transfer the Purchased Securities
(including any substituted or Additional Purchased Securities) to Buyer in accordance with the
terms of the Agreement and that, upon such transfer, such Securities will be free and clear of
any prior lien, claim, security interest or other encumbrance on the Purchase Date, and (b)
Buyer represents and warrants to Seller that, with respect to each Transaction, it will have
the right to transfer the Purchased Securities (after adjustment for any substituted or
Additional Purchased Securities) to Seller in accordance with the terms of the Agreement and
that, upon such transfer, such Securities will be free and clear of any prior lien, claim,
security interest or other encumbrance on the Repurchase Date.
	 
	4.	 	Additional Event of Default. In addition to the Events of Default set forth in
Paragraph 11 of the Agreement, it shall be an additional “Event of Default” if a revocation or
suspension of any authorization obtained by Buyer or Seller pursuant to Paragraph 10(iv) of
the Agreement occurs.
	 
	 	 	Payment and Transfer. In accordance with Paragraph 7 of the Agreement, the parties
agree that (i) Buyer shall pay the Purchase Price and Seller shall pay the Repurchase Price
only against delivery or transfer of the Purchase Securities (after adjustment for any
substituted or Additional Purchased

41    § September 1996 § Master Repurchase Agreement

 

 

	 	 	Securities); (ii) any transfer of Securities or cash required by Paragraph 4 of the Agreement
shall be made free to the other party; and (iii) any release of Purchased Securities permitted
by Paragraph 9 of the Agreement shall be made only against delivery or transfer of the
substituted Securities. Any transfer on a book-entry system shall be made in compliance with the
rules of such system and applicable law.

42    § September 1996 § Master Repurchase Agreement

 

 

	 	 	Annex VIII
	 
	 	 	Transactions in Equity Securities
	 
	 	 	This Annex VIII (including any Schedules hereto) forms a part of the Master Repurchase Agreement
dated as of May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage
Capital Associates, Inc. This Annex VIII sets forth supplemental terms and conditions governing
all Transactions in U.S. and non-U.S. Equity Securities. In the event of any conflict between
the terms of this Annex VIII and any other term of the Agreement, the terms of this Annex VIII
shall prevail. Capitalized terms used but not defined in this Annex VIII shall have the meanings
ascribed to them in the Agreement.
	 
	1.	 	Definitions. For the purposes of the Agreement and this Annex VIII, the following terms
shall have the following meanings:
	 
	 	 	“Equity Security”, any stock or similar security; or any security convertible, with or without
consideration, into such a security; or carrying any warrant or right to subscribe to or
purchase such a security; or any such warrant or right; or any other “equity security” within
the meaning of Section 3(a)(11) of the Exchange Act and the rules thereunder;
	 
	 	 	“Exchange Act”, the Securities Exchange Act of 1934, as amended, and all rules and regulations
promulgated thereunder;
	 
	 	 	“Market Value”, with respect to Equity Securities, the meaning given in Paragraph 9 of this
Annex;
	 
	 	 	“Purchased Securities” (including any “Additional Purchased Securities”), the meaning specified
in the Agreement, except that if any new or different Security or other consideration shall be
exchanged for any Purchased Security by recapitalization, merger, consolidation or other
corporate action, such new or different Security or other consideration shall, effective upon
such exchange, be deemed to become a Purchased Security, in substitution for the former
Purchased Security for which such exchange is made;
	 
	 	 	“Securities Act”, the Securities Act of 1933, as amended, and all rules and regulations
promulgated thereunder;
	 
	 	 	“Standard Settlement Date”, the standard date for settlement of transactions in an Equity
Security, established in accordance with Rule 15c6-1 under the Exchange Act, where applicable, or
otherwise in accordance with customary market practice for such Equity Security, unless the parties
agree to the contrary.
	 
	2.	 	Termination. Notwithstanding Paragraph 3(c) of the Agreement, in the case of Transactions in
respect of Equity Securities terminable upon demand, the termination date specified in any
notice by Seller shall be a business day no earlier than the Standard Settlement Date for
trades of Purchased Securities entered into at the time of such notice.
	 
	3.	 	Margin Maintenance. In addition to any agreement by the parties under Paragraph 4(f) of
the Agreement, Buyer and Seller may agree, with respect to any or all Transactions under
the Agreement, that the respective rights of Buyer and Seller under subparagraphs (a) and
(b) of Paragraph 4 of the Agreement to require the elimination of a Margin Deficit or a
Margin

43    § September 1996 § Master Repurchase Agreement

 

 

	 	 	Excess as the case may be, may be exercised whenever such a Margin Deficit or a Margin Excess
exists with respect to any class of Transactions under the Agreement (calculated without regard
to any other class of Transactions outstanding under the Agreement). The classes designated by
the parties under this Paragraph may include, without limitation, Transactions in Equity
Securities and Transactions in non-Equity Securities.
	 
	4.	 	Dividends, Distributions, etc.

	 	(a)	 	In accordance with Paragraph 5 of the Agreement, Seller shall be entitled to receive an
amount equal to all Income paid or distributed on or in respect of Purchased Securities
that is not otherwise received by Seller, to the full extent it would be so entitled if
Purchased Securities had not been sold to Buyer. The parties expressly acknowledge and
agree, for the avoidance of doubt, that such Income shall include, but not be limited to:
(i) cash and all other property, (ii) stock dividends, (iii) Securities received as a
result of split ups of Purchased Securities and distributions in respect thereof, (iv)
interest payments and (v) all rights to purchase additional Securities (except to the
extent that any amounts included in the foregoing clauses (i) through (v) would be deemed
to be Purchased Securities under Paragraph 1 of this Annex).
	 
	 	(b)	 	Cash Income paid or distributed on or in respect of Purchased Securities, which Seller
is entitled to receive pursuant to subparagraph (a) of this Paragraph, shall be treated in
accordance with Paragraph 5 of the Agreement. Notwithstanding Paragraph 5 of the Agreement,
non-cash Income received by Buyer shall be added to the Purchased Securities on the date of
distribution and shall be considered such for all purposes, subject to Buyer’s obligation
to transfer Purchased Securities to Seller upon termination of
the relevant Transaction in accordance with the terms of the Agreement.

	5.	 	Payment and Transfer. In addition to the transfer methods set forth in Paragraph 7 of the
Agreement, Equity Securities transferred by one party hereto to the other party may be
transferred through The Depository Trust Company.
	 
	6.	 	Additional Representations. In addition to the representations and warranties set forth
in Paragraph 10 of the Agreement, the following representations and warranties shall
apply, unless otherwise agreed by the parties:

	 	(a)	 	on the Purchase Date for any Transaction and again on each date that Additional
Purchased Securities that are Equity Securities are transferred pursuant to Paragraph 4(a)
of the Agreement, Seller represents and warrants that (i) Seller is familiar with the
provisions of Rule 144 under the Securities Act, (ii) Seller is not, and within the preceding
three months has not been, an “affiliate” of the issuer of any Purchased Securities or
Additional Purchased Securities as that term is used in Rule 144, and (iii) any Purchased
Securities or Additional Purchased Securities transferred to Buyer by Seller are not
“restricted securities” within the meaning of Rule 144 or otherwise subject to any legal,
regulatory or contractual restrictions on transfer; and
	 
	 	(b)	 	on the Repurchase Date for any Transaction and on each date that Purchased
Securities that are Equity Securities are transferred pursuant to Paragraph 4(b) of
the Agreement, Buyer represents and warrants that (i) Buyer is familiar with the
provisions of Rule 144 under the Securities Act, (ii) Buyer is not, and within the
preceding three months has not been, an “affiliate” of the issuer of any Purchased
Securities as that term is used in Rule

44    § September 1996 § Master Repurchase Agreement

 

 

	 	 	 	144, and (iii) assuming the accuracy and completeness of Seller’s representations under
subparagraph (a) of this Paragraph, any Purchased Securities transferred to Seller by Buyer
are not “restricted securities” within the meaning of Rule 144 or otherwise subject to any
legal, regulatory or contractual restrictions on transfer.

	7.	 	Rights of Buyer in Purchased Securities. Except as otherwise agreed by the parties, Seller
waives the right to vote, or to provide any consent or to take any similar action with respect
to, Purchased Securities that are Equity Securities in the event that the record date or
deadline for such vote, consent or other action falls during the term of a Transaction.
	 
	8.	 	Events of Default. In addition to the Events of Default set forth in Paragraph 11 of the
Agreement, it shall be an additional “Event of Default” if either party fails to perform any
covenant or obligation required to be performed by it under this
Annex VIII, provided, however,
that to the extent that Paragraphs 3 and 4 hereof supplement and amend, respectively,
Paragraphs 4 and 5 of the Agreement, any such failure under Paragraphs 3 or 4 hereof shall
constitute an “Event of Default” only after the expiration of the notice period, if any,
specified in the Agreement with respect to the occurrence of an Event of Default for such a
failure under such Paragraph 4 or 5 of the Agreement, as applicable.
	 
	9.	 	Market Value

	 	(a)	 	Unless otherwise agreed, if the principal market for the Equity Securities to be valued
is a national securities exchange in the United States, their Market Value shall be
determined by their last sale price on such exchange on the preceding business day or, if
there was no sale on that day, by the last sale price on the next preceding business day on
which there was a sale on such exchange, all as quoted on the Consolidated Tape or, if not
quoted on the Consolidated Tape, then as quoted by such exchange.
	 
	 	(b)	 	Except as provided in subparagraph (c) of this Paragraph or as otherwise agreed, if the
principal market for the Equity Securities to be valued is the over-the-counter market,
their Market Value shall be determined as follows. If the Equity Securities are quoted on
The Nasdaq Stock Market (“Nasdaq”), their Market Value shall be the closing sale price on
Nasdaq on the preceding business day or, if the Equity Securities are issues for which last
sale prices are not quoted on Nasdaq, the closing bid price on such day. If the Equity
Securities to be valued are not quoted on Nasdaq, their Market Value shall be the highest
bid quotation as quoted in any of The Wall Street Journal, the OTC Bulletin Board service,
quotations sheets of registered market makers and, if necessary, dealers’ telephone
quotations on the preceding business day. In each case, if the relevant quotation did not
exist on such day, then the relevant quotation on the next preceding business day in which
there was such a quotation shall be the Market Value.
	 
	 	(c)	 	Unless otherwise agreed, if the Equity Securities to be valued are principally cleared
and settled outside the United States, their Market Value shall be determined as of the
close of business on the preceding business day in accordance with market practice in the
principal market for such Equity Securities.
	 
	 	(d)	 	All determinations of Market Value under subparagraphs (a), (b) and (c) of this
Paragraph shall include, where applicable, accrued Income to the extent not already
included therein (other than any Income transferred to the other party pursuant to
Paragraph 4 of this Annex), unless market practice with respect to the valuation of
such Equity Securities in connection with repurchase agreements is to the contrary.

45    § September 1996 § Master Repurchase Agreement

 

 

	10.	 	 Additional Covenant. Except to the extent required by applicable law or regulation or as
otherwise agreed, Seller and Buyer agree that Transactions hereunder shall in no event be
“exchange contracts” for purposes of the rules of any securities exchange and that
Transactions hereunder shall not be governed by the buy-in or other rules of any such
exchange, registered national securities association or other self-regulatory organization.

46    § September 1996 § Master Repurchase Agreement

 

 

Schedule VIII.A

Additional Provisions Regarding Transactions in Equity Securities

This Schedule VIII.A forms a part of Annex VIII to the Master Repurchase Agreement dated as of
May 9, 2011 (the “Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital
Associates, Inc. Capitalized terms used but not defined in this
Schedule VIII.A shall have the
meanings ascribed to them in Annex VIII or the Agreement.

1. The parties hereby agree that Barclays Capital Inc. may only act as the Seller in connection
with any Transactions in Equity Securities pursuant to this Agreement.

2. The following words shall be inserted at the end of Paragraph 2 of Annex VIII of the Agreement:
“or five business days, whichever is less”

3. Paragraph 7 of Annex VIII is hereby deleted in its entirety and replaced with the following:

“Right of Buyer in Purchased Securities. Buyer agrees that Seller shall retain all rights to vote,
or to provide any consent or to take any similar action with respect to Purchased Securities that
are Equity Securities in the event that the record date or deadline for such vote, consent or other
action falls during the term of a Repurchase Transaction, provided, however, that all such rights
shall become vested fully with Buyer automatically and without further action at such time as Buyer
exercises its rights with respect to such Purchased Securities in connection with an Event of
Default by the Seller.”

47    § September 1996 § Master Repurchase Agreement

 

 

Annex IX

Transactions Involving Certain Japanese Financial Institutions

This Annex
IX forms part of the Master Repurchase Agreement dated as of May 9, 2011 (the
“Agreement”) between Barclays Capital Inc. and Provident Mortgage Capital Associates, Inc.
Capitalized terms used but not defined in this Annex IX shall have the meanings ascribed to them in
the Agreement. Paragraph references are to paragraphs in the Agreement unless otherwise set out
herein.

1. This Annex IX shall apply only to those Transactions where (a) one of the parties is, and
the other party is not, resident in Japan for tax purposes and (b) where the parties have agreed
that the Securities (whether Purchased Securities or Additional Purchased Securities) utilized in
Transactions conducted pursuant to the Agreement will comprise or include Exempt Securities. For
the purposes of this Annex IX, “Exempt Securities” means Securities which are specified in the Tax
Special Measurement Law (sozei tokubetsu sochi hou) of Japan (Law No.26 of 1957), as amended (the
“Tax Special Measurement Law”), and the Cabinet Order of the Tax Special Measurement Law (Cabinet
Order No.43 of 1957), as amended (the “Cabinet Order”), for the purpose of the exemption from the
withholding of the interests received from certain Japanese financial institutions as specified in
the Tax Special Measurement Law and the Cabinet Order, with respect to the transactions of sale and
repurchase of, or those of the sale and purchase with buy/sell back conditions of, Securities;
provided that such transactions meet the requirements as provided in the relevant laws and
regulations. Notwithstanding the above, this Annex IX shall not apply to any Transactions which
utilize Securities (whether Purchased Securities or Additional Purchased Securities) issued in
Japan (including, for example, Securities issued by a private entity organized under the laws of
Japan, or those issued by public or Japanese government entities, such as Japanese Government
Bonds).

2. In the event of any conflict between the terms and conditions of this Annex IX and any other
term of the Agreement or any Annex to the Agreement, the terms in this Annex shall prevail to the
extent of such inconsistency.

3. Delete “or other assets” between the word “securities” and “(“Securities”)” in the second line
of Paragraph 1.

4. Notwithstanding Paragraph 2, clauses (a)(i) and (a)(ii) in the Master Repurchase Agreement, “Act
of Insolvency” shall occur with respect to any party hereto immediately upon the voluntary or
involuntary filing of a petition in respect of it (including by the counterparty to the Agreement
in respect of any obligation under the Agreement) with any court in Japan for the bankruptcy
(hasan), corporate reorganization (kaisha kosei) or civil rehabilitation (minji saisei) of such
party (the “Close-out Netting Event”).

5. For the avoidance of doubt, and in addition to any other remedies available to the parties under
Paragraph 11, immediately upon the occurrence of a Close-out Netting Event, regardless of the
intent of the parties, without taking any procedure or entering into any arrangement, such as a
notice or demand from one party to the other or any agreement between the parties, the sum due from
one party in respect of all Transactions under the Agreement shall be set off against the sum due
from the other in respect of all Transactions under the Agreement and only the balance shall be due
and payable and constitute a single obligation or claim; provided that the conversion or valuation
of the currency or the Securities for the purpose of the set-off shall be made in accordance with
the Enforcement Regulations for the Law concerning Close-out Netting of Specified Transactions
Entered into by Financial Institutions, etc. (The joint Ministerial Ordinance of the Prime
Minister’s Office and Ministry of Finance No.48 of 1998). In the event that (a) Annex III to the
Agreement has been executed and made part of the

48    § September 1996 § Master Repurchase Agreement

 

 

Agreement, and (b) the conversion or valuation described in the prior sentence conflicts with
the Contractual Currency, the conversion or valuation described in the prior sentence will
prevail.

6. Add the following clause to Paragraph 19:

“(e) It is understood that this Agreement is intended to constitute a “Master Agreement” as
defined in the Law concerning Close-out Netting of Specified Financial Transactions Entered into by
Financial Institutions, etc. (Law No. 108 of 1998), as amended (the “Close-out Netting Law”) and if
any provision concerning the netting or set-off contained in the Agreement or Annexes is
inconsistent with or conflicts with the provisions of the Close-out Netting Law, the Enforcement
Regulations for the Close-out Netting Law (the “Enforcement Regulations”), or the Enforcement Order
for the Close-out Netting Law (the “Close-out Cabinet Order”), then the provisions of the Close-out
Netting Law, Enforcement Regulations or the Close-out Cabinet Order shall prevail.”

Except as amended herein, the Agreement shall continue to have full force and effect in all respects.

43    § September 1996 § Master Repurchase Agreementexv10w15

EXHIBIT 10.15

Master Repurchase  Agreement

September 1996 Version

Dated as of May 11, 2011

	 	 	 

	Between:

	 	NOMURA SECURITIES INTERNATIONAL, INC.
	 
	 	 
	and

	 	PROVIDENT MORTGAGE CAPITAL ASSOCIATES, 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;
	 
	 	(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
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.
	 
	 	(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.
	 
	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.

	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.
	 
	 	(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
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.
	 
	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 herefrom shall be effective unless and until such shall be in writing and duly
executed by both of the parties hereto. Without limitation on any of the foregoing, the
failure to give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a
waiver of any right to do so at a later date.
	 
	18.	 	Use of Employee Plan Assets

	 	(a)	 	If assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party
hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other
party prior to the Transaction. The Plan Party shall represent in writing to the other
party that the Transaction does not constitute a prohibited transaction under ERISA or
is otherwise exempt there from, and the other party may proceed in reliance thereon but
shall not be required so to proceed.
	 
	 	(b)	 	Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most
recent available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.
	 
	 	(c)	 	By entering into a Transaction pursuant to this Paragraph, Seller shall be
deemed (i) to represent to Buyer that since the date of Seller’s latest such financial
statements, there has been no material adverse change in Seller’s financial condition
which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future
audited and unaudited statements of its financial condition as they are issued, so long
as it is a Seller in any outstanding Transaction involving a Plan Party.

	19.	 	Intent

	 	(a)	 	The parties recognize that each Transaction is a “repurchase agreement” as that
term is defined in Section 101 of Title 11 of the United States Code, as amended (except
insofar as the type of Securities subject to such Transaction or the term of such
Transaction would render such definition inapplicable), and a “securities contract” as
that term is defined in Section 741 of Title 11 of the United States Code, as amended
(except insofar as the type of assets subject to such Transaction would render such
definition inapplicable).
	 
	 	(b)	 	It is understood that either party’s right to liquidate Securities delivered to
it in connection with Transactions hereunder or to exercise any other remedies pursuant
to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described
in Sections 555 and

 

 

	 	 	 	559 of Title 11 of the United States Code, as amended.
	 
	 	(c)	 	The parties agree and acknowledge that if a party hereto is an “insured
depository institution,” as such term is defined in the Federal Deposit Insurance Act,
as amended (“FDIA”), then each Transaction hereunder is a “qualified financial
contract,” as that term is defined in FDIA and any rules, orders or policy statements
thereunder (except insofar as the type of assets subject to such Transaction would
render such definition inapplicable).
	 
	 	(d)	 	It is understood that this Agreement constitutes a “netting contract” as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation
under any Transaction hereunder shall constitute a “covered contractual payment
entitlement” or “covered contractual payment obligation”, respectively, as defined in
and subject to FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that term is defined in FDICIA).

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

	 	(a)	 	in the case of Transactions in which one of the parties is a broker or dealer
registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the
Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection
Corporation has taken the position that the provisions of the Securities Investor
Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any
Transaction hereunder;
	 
	 	(b)	 	in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC under
Section 1 SC of the 1934 Act, SIPA will not provide protection to the other party with
respect to any Transaction hereunder; and
	 
	 	(c)	 	in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

	 	 	 	 	 	 	 	 	 	 	 

	NOMURA SECURITIES INTERNATIONAL, INC.	 	 	 	PROVIDENT MORTGAGE CAPITAL	 	 
	 	 	 	 	 	 	ASSOCIATES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Brad Wolfthal 
 

	 	 
	 	By:
	 	/s/ Mark E. Lefanowicz
 

	 	 
	Name:

	 	Brad Wolfthal 
 

	 	 
	 	Name:
	 	Mark E. Lefanowicz
 

	 	 
	Title:

	 	Managing Director 
 

	 	 
	 	Title:
	 	Chief Financial Officer
 

	 	 
	Date:

	 	 
 

	 	 
	 	Date:
	 	May 11, 2011
 

	 	 

 

 

ANNEX I

Supplemental Terms and Conditions

This Annex I forms a part of the Master Repurchase Agreement dated as of May 11, 2011 (the
“Agreement”) between Nomura Securities International, Inc. (“Party A”) and Provident Mortgage
Capital Associates, Inc. (“Party B”). Capitalized terms used but not defined in this Annex I shall
have the meanings ascribed to them in the Agreement.

	1.	 	Applicable Annexes. In addition to this Annex I and Annex II, Annex V, Margin
for Forward Transactions, Annex VI, Buy/Sell Back Transactions shall apply.
	 
	2.	 	Definitions.

	 	(a)	 	“Business Day” or “business day”, with respect to any Transaction, shall mean any day
on which Buyer and Seller are both open for business and on which Securities can be
transferred. In no event shall a Saturday or Sunday be considered a business day.
	 
	 	(c)	 	“Margin Notice Deadline”, the deadline for giving notice, referenced in Paragraph
2(i) of the Agreement, shall be 10:00 a.m. (New York time) and such notice may be made
orally and need not be confirmed in writing.
	 
	 	(d)	 	The definition of the term “Market Value” in Paragraph 2(j) of the Agreement is
amended by adding, after “a generally recognized source agreed to by the parties,” the
following: “(and, in the absence of such agreement, determined by Party A).”

	3.	 	Extensions, Renewals and Roll-Overs of Transactions. Neither party shall be required
to enter into, extend, renew or “roll-over” any Transaction including, but not limited to, any
Transaction executed on an “open” or “demand” basis with the other party, notwithstanding past
practice or market custom. The parties agree that if, from time to time, one party extends,
renews or rolls-over a Transaction, the other party has no right to, and shall not, rely on the
first party to further extend, renew or roll-over that or any other Transaction.
	 
	4.	 	Confirmations. The first sentence of Paragraph 3(b) of the Agreement shall be
replaced with the following: “Upon agreeing to enter into a Transaction hereunder, Party A
shall promptly deliver to Party B a written confirmation of such Transaction (a
“Confirmation”).”
	 
	5.	 	Transactions Terminable Upon Demand. The first sentence of Paragraph 3(c) of the
Agreement shall be replaced with the following: In the case of Transactions terminable upon
demand, if such demand is made by Buyer or Seller by telephone, e-mail or otherwise in
accordance with the Agreement, at or before 10:00 a.m. (New York time) on a Business Day, then
termination of such Transaction shall be effective on the same Business Day and if such demand
is provided after 10:00 a.m. (New York time), then termination of such Transaction shall be
effective at or prior to the close of business on the next Business Day.
	 
	6.	 	Margin Maintenance. Each of the first and second sentences of Paragraph 4(c) of the
Agreement shall be amended by replacing the phrase, “the close of business in the relevant
market”, with “by close of the Fedwire for money transfers.”

 

 

	7.	 	Purchase Price Maintenance.

	 	(a)	 	Notwithstanding the definition of the term “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
a 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 the term “Additional Purchased Securities”).
	 
	 	(b)	 	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 transferred to
Buyer or Seller upon termination of the Transaction pursuant to Paragraph
5(ii) of the Agreement. For the avoidance of doubt, Buyer shall not be
obligated to take any action pursuant to the preceding sentence, (i) to
the extent 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 (ii) if an Event of Default with respect to
Seller has occurred and is then continuing.

	8.	 	Additional Representations and Warranties. In
addition to the representations and warranties made pursuant to Paragraph 10 of
the Agreement, each party represents, warrants and agrees that:

	 	(a)	 	It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgement and upon advice from such advisors as it has deemed necessary.
Unless there is a written agreement to the contrary, it has not and will
not rely on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into a Transaction; it
being understood that information and explanations related to the terms
and conditions of a Transaction shall not be considered investment advice
or a recommendation to enter into that Transaction. No communication
(written or oral) received by the other party shall be deemed to be an
assurance or guarantee as to the expected results of any Transaction;
	 
	 	(b)	 	It is capable of assessing the merits of and
understanding (based upon its own judgment and upon advice from such
professional advisers as it has deemed it necessary to consult), and has
made and will make its own independent decisions regarding the terms,
conditions and risks of each Transaction. It is also capable (financially
and otherwise) of assuming, and assumes, the risks of each Transaction;
and
	 
	 	(c)	 	It is not acting as a fiduciary for or an adviser to the other party in
respect of any Transaction.
	 
	 	(d)	 	Representation by Investment Manager. Party B
represents that at no time at which the terms of this Agreement or any
Transaction entered into hereunder, will Party B be subject to (i) Title I
of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), (ii) Section 4975 of the Internal Revenue Code of 1986, as
amended (the “Code”), or (iii) in the event any investor

 

 

	 	 	 	in Party B is a governmental or other plan, any federal, state, local law,
regulation, rule, policy or procedure with is similar to Section 406 of ERISA or Section
4975 of the Code.

	9.	 	Additional Events of Default. In addition to the Events of Default set forth in
Paragraph 11 of the Agreement, it shall be an “Event of Default” if:

	 	(a)	 	Party B fails after one business day’s notice to make, on the due date thereof, any
payment of the Price Differential under any Transaction.
	 
	 	(b)	 	The representations and warranties made by Party B in Annex I is incorrect or untrue
in any material respect when made or repeated or deemed to have been made or repeated.
	 
	 	(c)	 	Party A or any affiliate of Party A declares a default, event of default,
termination event or other similar event (however described) (a “Default Event”) to have
occurred with respect to Party B or a Default Event occurs with respect to Party B, in
each case, under any agreement (regardless of whether there is a transaction outstanding
thereunder) between Party B and Party A or any affiliate of Party A (each, an “Other
Agreement”), or
	 
	 	(d)	 	Decline in Equity Capital. On any day during the term hereof, Party A in its sole
discretion determines that Party B (i) has experienced a decline in its Equity Capital
during any three-month period preceding such date of 10 percent
or more, or (ii) has
experienced a decline in its Equity Capital during any twelve-month period preceding such
date of 25 percent or more. For the purpose of the foregoing Termination Event, Party B
shall be the Affected Party.
	 
	 	(e)	 	Minimum Equity Capital. On any day during the term hereof, Party A in its sole
discretion determines that Party B has failed to maintain minimum Equity Capital in an
amount equal to USD $200 million or 50% of the highest historical year-end Equity
Capital. For the purpose of the foregoing Termination Event, Party B shall be the
Affected Party.
	 
	 	 	 	“Equity Capital” means common equity, preferred stock, paid-in capital, retained earnings,
unrealized gain or loss on available for sale investments, and foreign currency
translation adjustments, less treasury stock.
	 
	 	(f)	 	Party B fails to maintain its status as a REIT
	 
	 	(g)	 	Party B fails to raise at least USD 250 million in its initial public offering of
securities.

	10.	 	Additional Remedies: Set-Off. In addition to the remedies available to the
nondefaulting party set forth in Paragraph 11 of the Agreement, upon the occurrence of an
Event of Default with respect to the defaulting party (“Party X”), the nondefaulting party
(“Party Y”) may, without prior notice to Party X set-off any Obligation (as such term is
defined below) owed by Party X to Party Y or any affiliate of Party Y (“Party Y’s Set-Off
Amount”) against any Obligation owed by Party Y or any affiliate
of Party Y to Party X
(“Party X’s Set-Off Amount”). Party Y will give notice to Party X of any set-off effected
under this Section.
	 
	 	 	For purposes of this Section, the term “Obligation” means any sum or obligation, whether
arising under this Agreement or otherwise, whether matured or un-matured, whether or not
contingent and irrespective of the currency, place of payment or booking office of the sum or
obligation.

 

 

	 	 	For this purpose, either Party Y’s Set-Off Amount or Party X’s Set-Off Amount (or the
relevant portion of such amounts) may be converted at Party Y’s option into the currency in
which the other set-off amount is denominated at the rate of exchange at which Party Y would
be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of
such currency.
	 
	 	 	If an Obligation is unascertained, Party Y may in good faith estimate that Obligation and
set-off in respect of the estimate, subject to the relevant party accounting to the other
when the Obligation is ascertained.
	 
	 	 	This Section shall be without prejudice and in addition to any right of set-off, combination
of accounts, lien or other right to which any party is at any time otherwise entitled (whether
by operation of law, contract or otherwise).

	11.	 	Submission to Jurisdiction; Waiver of Immunity and Waiver of Jury Trial.

	 	(a)	 	Each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction
of any United States Federal or New York State court sitting in the County and State of
New York, 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.
	 
	 	(b)	 	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.
	 
	 	(c)	 	EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

	12.	 	The U.S. Treasury Securities Fail Charge Trading Practice. published by the Treasury
Market Practice Group and the Securities Industry Financial Markets Association, as amended
from time to time, shall apply to any Transaction the Securities related to which are U.S.
Treasury securities.
	 
	13.	 	Recording of Conversations. Each party to this Agreement acknowledges and agrees to
the tape recording of conversations between trading and marketing personnel of the parties to
this Agreement whether by one or both of the parties or their agents.
	 
	14.	 	Counterparts. The Agreement may be executed in any number of counterparts, each of
which counterpart shall be deemed to be an original, and all of which counterparts together
shall constitute one and the same instrument.

 

 

	15.	 	1996 Master Repurchase Agreement. The parties agree that the text of the body of
the Agreement is intended to conform with the Master Repurchase Agreement dated September 1996
promulgated by The Securities Industry and Financial Markets Association and shall be construed
accordingly.

 

 

Accepted and Agreed:

	 	 	 	 	 	 	 	 	 

	NOMURA SECURITIES INTERNATIONAL, INC.	 	 	 	PROVIDENT MORTGAGE CAPITAL ASSOCIATES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Brad Wolfthal 	 	 	 	By:
	 	/s/ Mark E. Lefanowicz
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Brad Wolfthal 	 	 	 	Name:
	 	Mark E. Lefanowicz
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Managing Director
	 	 	 	Title:
	 	 Chief
Financial Officer
	Date:

	 	 

	 	 	 	Date:
	 	 May 11,
2011
	 

	 	 

	 	 	 	 	 	 

 

 

Annex II

Names and Addresses for Communication Between Parties

Documentation Issues

Nomura Securities International, Inc.

Two World Financial Center, Building B

New York, NY 10281-1198

Attention: Legal Department

Tel: 212-667-9300

Fax: 212-667-1047

Operational Issues and Trading

Nomura Securities International, Inc.

Two World Financial Center

Building B, 21st Floor

New York, NY 10281

Attention: Operations

Tel: 212-667-9746

Fax: 646-587-1972

COUNTERPARTY CONTACT/ADDRESS

Provident Mortgage Capital Associates, Inc.

1633 Bayshore Hwy., Ste 331

Burlingame, CA 94010

Attn: Mark E. Lefanowicz, Chief Financial Officer

Tel: 855/653-4300

Fax: 855/653-4301

 

 

Annex V

Margin for Forward Transactions

This Annex
V forms a part of the Master Repurchase Agreement dated as of May 11, 2011 (the
“Agreement”) between Party A and Party B. Capitalized terms used but not defined in this Annex V
shall have the meanings ascribed to them in the Agreement.

	1.	 	Definitions. For purposes of the Agreement and this Annex V, the following terms shall have
the following meanings:
	 
	 	 	“Forward Exposure”, the amount of loss a party would incur upon canceling a Forward
Transaction and entering into a replacement transaction, determined in accordance with
market practice or as otherwise agreed by the parties;
	 
	 	 	“Forward Transaction”, any Transaction agreed to by the parties as to which the Purchase
Date has not yet occurred;
	 
	 	 	“Net Forward Exposure”, the aggregate amount of a
party’s Forward Exposure to the other
party under all Forward Transactions hereunder reduced by the aggregate amount of any
Forward Exposure of the other party to such party under all Forward
Transactions hereunder;
	 
	 	 	“Net Unsecured Forward Exposure”, a party’s Net Forward Exposure reduced by the Market Value
of any Forward Collateral transferred to such party (and not returned) pursuant to Paragraph
2 of this Annex V.

	2.	 	Margin Maintenance.

	 	(a)	 	If at any time a party (the “In-the-Money Party”) shall have a Net Unsecured
Forward Exposure to the other party (the “Out-of-the-Money Party”) under one or more
Forward Transactions, the In-the-Money Party may by notice to the Out-of-the-Money
Party require the Out-of-the-Money Party to transfer to the In-the-Money Party
Securities or cash reasonably acceptable to the In-the-Money-Party (together with any
Income thereon and proceeds thereof, “Forward Collateral”) having a Market Value
sufficient to eliminate such Net Unsecured Forward Exposure. The Out-of-the-Money
Party may by notice to the In-the-Money Party require the In-the-Money Party to
transfer to the Out-of-the-Money Party Forward Collateral having a Market Value that
exceeds the In-the-Money Party’s Net Forward Exposure (“Excess Forward Collateral
Amount”). The rights of the parties under this subparagraph
shall be in addition to
their rights under subparagraphs (a) and (b) of Paragraph 4 and any other provisions
of the Agreement.
	 
	 	(b)	 	The parties may agree, with respect to any or all Forward Transactions
hereunder, that the respective rights of the parties under subparagraph (a) of this
Paragraph may be exercised only where a Net Unsecured Forward Exposure or Excess
Forward Collateral Amount, as the case may be, exceeds a specified dollar amount or
other specified threshold for such Forward Transactions (which amount or threshold
shall be agreed to by the parties prior to entering into any such Forward
Transactions).
	 
	 	(c)	 	The parties may agree, with respect to any or all Forward Transactions
hereunder, that the respective rights of the parties under subparagraph (a) of this
Paragraph to require the

Annex V, page 1

 

 

	 	 	 	elimination of a Net Unsecured Forward Exposure or Excess Forward Collateral Amount,
as the case may be, may be exercised whenever such a Net Unsecured Forward Exposure
or Excess Forward Collateral Amount exists with respect to any single Forward
Transaction hereunder (calculated without regard to any other Forward Transaction
outstanding hereunder).
	 
	 	(d)	 	The parties may agree, with respect to any or all Forward Transactions
hereunder, that (i) one party shall transfer to the other party Forward Collateral
having a Market Value equal to a specified dollar amount or other specified threshold
no later than the Margin Notice Deadline on the day such Forward Transaction is entered
into by the parties or (ii) one party shall not be required to make any transfer
otherwise required to be made under this Paragraph if, after giving effect to such
transfer, the Market Value of the Forward Collateral held by such party would be less
than a specified dollar amount or other specified threshold (which amount or threshold
shall be agreed to by the parties prior to entering into any such Forward
Transactions).
	 
	 	(e)	 	If any notice is given by a party to the other under subparagraph (a) of this
Paragraph at or before the Margin Notice Deadline on any business day, the party
receiving such notice shall transfer Forward Collateral as provided in such
subparagraph no later than the close of business in the relevant market on such
business day. If any such notice is given after the Margin Notice Deadline, the party
receiving such notice shall transfer such Forward Collateral no later than the close of
business in the relevant market on the next business day.
	 
	 	(f)	 	Upon the occurrence of the Purchase Date for any Forward Transaction and the
performance by the parties of their respective obligations to transfer cash and
Securities on such date, any Forward Collateral in respect of such Forward
Transaction, together with any Income thereon and proceeds thereof, shall be
transferred by the party holding such Forward Collateral to the other party; provided,
however, that neither party shall be required to transfer such Forward Collateral to
the other if such transfer would result in the creation of a Net Unsecured Forward
Exposure of the transferor.
	 
	 	(g)	 	The Pledgor (as defined below) of Forward Collateral may, subject to agreement
with and acceptance by the Pledgee (as defined below) thereof, substitute other
Securities reasonably acceptable to the Pledgee for any Securities Forward Collateral.
Such substitution shall be made by transfer to the Pledgee of such other Securities
and transfer to the Pledgor of such Securities Forward Collateral. After substitution,
the substituted Securities shall constitute Forward Collateral.

	3.	 	Security Interest.

	 	(a)	 	In addition to the rights granted to the parties under Paragraph 6 of the
Agreement, each party (“Pledgor”) hereby pledges to the other party (“Pledgee”) as
security for the performance of its obligations hereunder, and grants Pledgee a
security interest in and right of setoff against, any Forward Collateral and any other
cash, Securities or property, and all proceeds of any of the foregoing, transferred by
or on behalf of Pledgor to Pledgee or due from Pledgee to Pledgor in connection with
the Agreement and the Forward Transactions hereunder.
	 
	 	(b)	 	Unless otherwise agreed by the parties, a party to whom Forward Collateral has
been transferred shall have the right to engage in repurchase transactions with
Forward

Annex V, page 2

 

 

	 	 	 	Collateral or otherwise sell, transfer, pledge or hypothecate Forward Collateral,
including in respect of loans or other extensions of credit to such party that may
be in amounts greater than the Forward Collateral such party is entitled to as
security for obligations hereunder, and that may extend for periods of time longer
than the periods during which such party is entitled to Forward Collateral as
security for obligations hereunder; provided, however, that no such transaction
shall relieve such party of its obligations to transfer Forward Collateral pursuant
to Paragraph 2 or 4 of this Annex V or Paragraph 11 of the
Agreement.

	4.	 	Events of Default.

	 	(a)	 	In addition to the Events of Default set forth in Paragraph 11 of the
Agreement, it shall be an additional “Event of Default” if either party fails, after
one business day’s notice, to perform any covenant or obligation required to be
performed by it under Paragraph 2 or any other provision of this Annex.
	 
	 	(b)	 	In addition to the other rights of a nondefaulting party under Paragraphs 11
and 12 of the Agreement, if the nondefaulting party exercised or is deemed to have
exercised the option referred to in Paragraph 11(a) of the Agreement:

	 	(i)	 	The nondefaulting party, without prior notice to the defaulting
party, may (A) immediately sell, in a recognized market (or otherwise in a
commercially reasonable manner) at such price or prices as the nondefaulting
party may reasonably deem satisfactory, any or all Forward Collateral subject
to any or all Forward Transactions hereunder and apply the proceeds thereof to
any amounts owing by the defaulting party hereunder or (B) in its sole
discretion elect, in lieu of selling all or a portion of such Forward
Collateral, to give the defaulting party credit for such Forward Collateral in
an amount equal to the price therefor on such date, obtained from a generally
recognized source or the most recent closing bid quotation from such a source,
against any amounts owing by the defaulting party hereunder.
	 
	 	(ii)	 	Any Forward Collateral held by the defaulting party, together
with any Income thereon and proceeds thereof, shall be immediately transferred
by the defaulting party to the nondefaulting party. The nondefaulting party
may, at its option (which option shall be deemed to have been exercised
immediately upon the occurrence of an Act of Insolvency), and without prior
notice to the defaulting party, (i) immediately purchase, in a recognized
market (or otherwise in a commercially reasonable manner) at such price or
prices as the nondefaulting party may reasonably deem satisfactory, securities
(“Replacement Securities”) of the same class and amount as any Securities
Forward Collateral that is not delivered by the defaulting party to the
nondefaulting party as required hereunder or (ii) in its sole discretion elect,
in lieu of purchasing Replacement Securities, to be deemed to have purchased
Replacement Securities at the price therefore on such date, obtained from a
generally recognized source or the most recent closing offer quotation from
such a source, whereupon the defaulting party shall be liable for the price of
such Replacement Securities together with the amount of any cash Forward
Collateral not delivered by the defaulting party to the nondefaulting party as
required hereunder.
	 
	 	 	 	Unless otherwise provided in Annex I, the parties acknowledge and agree that
(1) the Forward Collateral subject to any Forward Transaction hereunder are

Annex V, page 3

 

 

	 	 	 	instruments traded in a recognized market, (2) in the absence of a generally
recognized source for prices or bid quotations for any Forward Collateral,
the nondefaulting party may establish the source therefore in its sole
discretion and (3) all prices and bids shall be determined together with
accrued Income (except to the extent contrary to market practice with
respect to the relevant Forward Collateral).

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

Annex V, page 4

 

 

Annex VI

Buy/Sell Back Transactions

This Annex VI forms a part of the Master Repurchase Agreement dated as of May 11, 2011
(the “Agreement”) between Party A and Party B. Capitalized terms used but not defined in this Annex
VI shall have the meanings ascribed to them in the Agreement.

	1.	 	In the event of any conflict between the terms of this Annex VI and any other term of the
Agreement, the terms of this Annex VI shall prevail.
	 
	2.	 	Each Transaction shall be identified at the time it is entered into and in the relevant
Confirmation as either a Repurchase Transaction or a Buy/Sell Back Transaction.
	 
	3.	 	In the case of a Buy/Sell Back Transaction, the Confirmation delivered in accordance with
Paragraph 3 of the Agreement may consist of a single document in
respect of both of the
transfers of funds against Securities which together form the Buy/Sell Back Transaction or
separate Confirmations may be delivered in respect of each such transfer.
	 
	4.	 	Definitions. The following definitions shall apply to Buy/Sell Back Transactions:

	 	(a)	 	“Accrued Interest”, with respect to any Purchased Securities subject to a
Buy/Sell Back Transaction, unpaid Income that has accrued during the period from (and
including) the issue date or the last Income payment date (whichever is later) in
respect of such Purchased Securities to (but excluding) the date of calculation. For
these purposes unpaid Income shall be deemed to accrue on a daily basis from (and
including) the issue date or the last Income payment date (as the case may be) to (but
excluding) the next Income payment date or the maturity date (whichever is earlier);
	 
	 	(b)	 	“Sell Back Differential”, with respect to any Buy/Sell Back Transaction as of
any date, the aggregate amount obtained by daily application of the Pricing Rate for
such Buy/Sell Back Transaction to the Purchase Price for such Buy/Sell Back
Transaction on a 360 day per year basis (unless otherwise agreed by the parties for
the Transaction) for the actual number of days during the period commencing on (and
including) the Purchase Date for such Buy/Sell Back Transaction and ending on (but
excluding) the date of determination;
	 
	 	(c)	 	“Sell Back Price” with respect to any Buy/Sell Back Transaction:

	 	(i)	 	in relation to the date originally specified by the parties as
the Repurchase Date pursuant to Paragraph 2(q) of the Agreement, the price
agreed by the Parties in relation to such Buy/Sell Back Transaction, and
	 
	 	(ii)	 	in any other case (including for the purposes of the application
of Paragraph 4 or Paragraph 11 of the Agreement), the product of the formula (P
+ D) - (IR + C), where:

	 	P   = 	 	the Purchase Price
	 
	 	D   = 	 	 The Sell Back Differential
	 
	 	IR  =  	 	 the amount of any Income in respect of the Purchased Securities paid by

Annex VI, page 1

 

 

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

	5.	 	When entering into a Buy/Sell Back Transaction the parties
shall also agree on the Sell Back Price and the Pricing Rate to apply in relation to such Buy/Sell Back Transaction on the
scheduled Repurchase Date. The parties shall record the Pricing Rate in at least one
Confirmation applicable to such Buy/Sell Back Transaction.
	 
	6.	 	Termination of a Buy/Sell Back Transaction shall be effected on the Repurchase Date by
transfer to Seller or its agent of Purchased Securities against the payment by Seller of (i)
in a case where the Repurchase Date is the date originally agreed to by the parties pursuant
to Paragraph 2(q) of the Agreement, the Sell Back Price referred to in Paragraph 4(c) (i) of
this Annex; and (ii) in any other case, the Sell Back Price referred to in Paragraph 4(c)
(ii) of this Annex.
	 
	7.	 	For the avoidance of doubt, the parties acknowledge and agree that the Purchase Price and
the Sell Back Price in Buy/Sell Back Transactions shall include Accrued Interest (except to
the extent contrary to market practice with respect to the Securities subject to such
Buy/Sell Back Transaction, in which event (i) an amount equal to the Purchase Price plus
Accrued Interest to the Purchase Date shall be paid to Seller on the Purchase Date and shall
be used, in lieu of the Purchase Price, for calculating the Sell Back Differential, (ii) an
amount equal to the Sell Back Price plus the amount of Accrued Interest to the Repurchase
Date shall be paid to Buyer on the Repurchase Date, and (iii) the formula in Paragraph 4(c)
(ii) of this Annex VI shall be replaced by the formula “(P
+ AI + D) - (IR + C)”, where “AI”
equals Accrued Interest to the Purchase Date).
	 
	8.	 	Unless the parties agree in Annex I to the Agreement that a Buy/Sell Back Transaction is not
to be repriced, they shall at the time of repricing agree on the Purchase Price, the Sell
Back Price and the Pricing Rate applicable to such Transaction.
	 
	9.	 	Paragraph 5 of the Agreement shall not apply to Buy/Sell Back Transactions. Seller agrees,
on the date such Income is received, to pay to Buyer any Income received by Seller in respect
of Purchased Securities that is paid by the issuer on any date falling between the Purchase
Date and the Repurchase Date.
	 
	10.	 	References to “Repurchase Price” throughout the Agreement shall be construed as references
to “Repurchase Price or the Sell Back Price, as the case may be.”
	 
	11.	 	In 11 of the Agreement, references to the “Repurchase Prices” shall be construed as
references to “Repurchase Prices and Sell Back Prices.”

Annex VI, page 2

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