EXHIBIT 10.11
CS FIRST BOSTON
CS First Boston (Hong Kong) Limited ▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Telephone (▇▇▇) ▇▇▇▇ ▇▇▇▇
Telex 66652 CSFBHX
Facsimile (▇▇▇) ▇▇▇▇ ▇▇▇▇
June 7, 1996
Lennar Corporation
Lennar Financial Services, Inc.
Lennar MBS, Inc.
Lennar Securities Holdings, Inc.
LFS Asset Corp.
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Dear Sirs:
CS first Boston (Hong Kong) Limited ("Buyer") hereby agrees to
enter into one or more reverse repurchase agreements with Lennar
Financial Services, Inc., Lennar MBS, Inc., Lennar Securities
Holdings, Inc., or LFS Asset Corp. (each a "Seller") whereby
Buyer shall, from time to time, purchase on a specified date
commercial mortgage pass-through certificates (the "Securities")
and whereby a Seller shall agree to repurchase such Securities on
a specified date (each such transaction, a "Transaction"),
subject to the terms and conditions set forth herein and in each
of four Global Master Repurchase Agreements Dated as of June 4,
1996 (the "Repurchase Agreement"), one of which has previously
been executed by each Seller and Buyer. It is acknowledged and
agreed that (i) Buyer and Lennar MBS, Inc. shall execute a
Transaction with respect to the Securities described in Exhibit A
and Buyer and Lennar Securities Holdings, Inc. shall execute two
Transactions with respect to the Securities described in Exhibits
B and C, all pursuant to the timetable set forth below and (ii)
the parties hereto may execute one or more additional
Transactions provided that the Securities which are the subject
of any proposed Transaction and the terms are acceptable to Buyer
in its sole discretion.
1. Subject to the terms and conditions hereof and the
provisions of the relevant Repurchase Agreement
(including, without limitation, the default and early
termination provisions hereof and thereof), any and all
Transactions will terminate on or before May 29, 1998.
2. Prior to the date of the first Transaction, Lennar
Corporation shall provide a guarantee. In form and
substance acceptable to Buyer, which shall guarantee the
obligations of each Seller under any Transaction pursuant
to the relevant Repurchase Agreement and this letter, and
shall upon Buyer's request provide customary legal
opinions as to enforceability.
3. The maximum aggregate Purchase Price for all
Transactions outstanding with all Sellers at any one
time shall not exceed U.S. $150,000,000.
4. Prior to the date of the first Transaction, Lennar
Corporation shall have paid a fee to Buyer of U.S.
$75,000 (i.e., 5 basis points on $150,000,000).
5. With respect to the Securities set forth in Exhibits A,
B and C, Buyer and Lennar MBS, Inc., and Buyer and
Lennar Securities Holdings, Inc., shall execute
Transactions, each in
CS FIRST BOSTON
an amount not to exceed U.S. $25,000,000, on June 17,
1996, June 24, 1996, July 1, 1996, respectively. All
other Transactions shall be additional Transactions
which are entered into by Buyer at its sole discretion.
6. Prior to the execution of any Transaction, the relevant
Seller shall have provided to Buyer the related
prospectus, pooling and servicing agreement, current
remittance reports, price/yield tables, and a
collateral tape containing property-related information
that Buyer, in its sole discretion, deems necessary in
determining the Market Value of the Securities, in a
form acceptable to Buyer. On a monthly basis, such
Seller shall provide to Buyer monthly remittance
reports, any material correspondence between such
Seller and the respective Master Servicer or Special
Servicer, and such property level information that
Buyer, in its sole discretion, deems necessary in
determining the Market Value of the Securities.
7. The price at which the Securities shall be repurchased
by any Seller on a Repurchase Date shall equal the
Purchase Price plus the Price Differential which has
accrued but not been paid as of such Repurchase Date.
The Price Differential shall accrue on a daily basis for
the Securities and be calculated on an actual/360 day
basis. The Price Differential shall be payable monthly
in arrears. The Pricing Rate used to calculate the Price
Differential shall equal the one-month LIBOR rate set
for such payment plus the Fixed Spread (as defined
below), and shall initially be set on the Purchase Date
of the Transaction.
The Fixed Spread for particular Securities which are the
subject of a Transaction is set forth below in paragraph
9 and corresponds to the lowest rating (the "Rating")
assigned to such Securities by any nationally
recognized rating agency that rated the Securities upon
their issuance.
8. The Buyer's Margin Amount for particular Securities
which are the subject of a Transaction is set forth
below in paragraph 9 and corresponds to the lowest
Rating assigned to such Securities. Paragraph 4(b) of
the relevant Repurchase Agreement shall not apply. The
relevant Seller shall maintain margin by transferring
to Buyer U.S. dollars.
9. The Fixed Spread and Buyer's Margin Amount with respect
to particular Securities in any particular Transaction
is set forth below:
Rating FIXED SPREAD BUYER'S MARGIN AMOUNT
BB or higher 75 basis points 120%
B or higher
(but less
than BB) 90 basis points 120%
Unrated or
less than B 120 basis points 125%
10. In addition to the default and early termination
provisions set forth in the relevant Repurchase
Agreement, Buyer's commitment to engage in the
Transactions referred to herein with all Sellers shall,
at the option of Buyer, terminate, and/or all
outstanding Transactions with all Sellers shall, at the
option of Buyer, terminate (and the Repurchase Date
shall be deemed to occur immediately), in the event
that:
CS FIRST BOSTON
(a) there shall been a material adverse change in
the business or financial condition of Lennar
Corporation and/or any Seller, as determined by
Buyer in its sole discretion;
(b) the rating of the Securities shall be
downgraded, withdrawn, or placed on review for a
possible downgrade, by the nationally recognized
rating agency that rated the Securities upon
their issuance; and
(c) either (i) a change of control of Lennar
Corporation and/or Seller shall have occurred;
(ii) either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President of Lennar
Financial Services, Inc. and Director of Lennar
Corporation or ▇▇▇▇▇▇ ▇▇▇▇▇▇, President of
Lennar Commercial Properties, Inc. and Vice
President of Lennar Corporation shall cease to
be employed by such entities and functioning in
their respective capacities and successors
acceptable to Buyer shall not have been employed
by such entities and commenced functioning in
such capacities;
PROVIDED, HOWEVER, if solely an event set forth in
Paragraph 10(b) hereof has occurred with respect to a
particular Transaction and the related Securities, then
Buyer's commitment to engage in the Transactions
referred to herein shall continue to be effective and
only such particular Transaction shall, at the option of
Buyer, terminate (and the Repurchase Date for such
Transaction shall be deemed to occur immediately).
11. In addition to the default and early termination
provisions set forth herein and in the relevant
Repurchase Agreement, Buyer shall not be committed
to engage in any additional Transactions referred to
herein if the Standard & Poors credit rating of
Lennar Corporation as of the date hereof shall be
downgraded or withdrawn (whether or not the
aggregate Purchase Price for all outstanding
Transactions with all Sellers at the time of such
downgrade or withdrawal equals U.S. $150,000,000);
provided, however, at the request of Seller, Buyer
shall be obligated to execute one additional
Transaction (with respect to any then existing
Transaction) with a term of up to 30 days,
commencing on the Repurchase Date of such then
existing Transaction provided that no other event of
default or early termination event provided herein
or in the relevant Repurchase Agreement (including,
without limitation the events provided in Paragraph
10 hereof) entitles the Buyer to establish an
earlier Repurchase Date with respect to such then
existing Transaction.
12. In the event that Buyer determines that the
aggregate Market Value of the Collateral has
declined, after sending notice to the relevant
Seller of a Margin Deficit, Buyer acknowledges that
such Seller may provide to Buyer additional or
different information during the period, if any,
specified In the relevant Repurchase Agreement prior
to which a margin call must be satisfied, which may
have been relevant to Buyer's determination.
Notwithstanding the foregoing, Buyer shall have no
obligation to change its determination of aggregate
Market Value and Buyer shall retain all of its
rights specified in the relevant Repurchase
Agreement.
13. Capitalized terms not defined herein have the
meanings given to them in the relevant Repurchase
Agreement.
CS FIRST BOSTON
14. The governing law provisions set forth in the relevant
Repurchase Agreement shall be applicable hereto. Except as
otherwise provided herein, the rights and obligations
provided pursuant to such Repurchase Agreement shall
remain in full force and effect.
Very truly yours,
CS FIRST BOSTON (HONG KONG) LIMITED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Legal & Compliance Department
AGREED AND ACCEPTED:
LENNAR CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Vice President
LENNAR FINANCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: VP/Treasurer
LENNAR MBS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: VP/Treasurer
LENNAR SECURITIES HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Vice President
CS FIRST BOSTON
LFS ASSET CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: VP/Treasurer
ACCEPTED AND AGREED TO SOLELY
IN ITS CAPACITY AS AGENT
CS FIRST BOSTON
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: DIRECTOR-CREDIT DEPT.
PSA ISMA
INTERNATIONAL SECURITIES MARKET ASSOCIATION
Public Securities Association
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VERSION I
GROSS PAY1NG SECURITIES
GLOBAL MASTER REPURCHASE AGREEMENT
This agreement is to be used for repos or reverse repos of securities
other than equities. U.S. Treasury Instruments Net Paying Securities
Dated as of JUNE 4, 1996
Between:
CS FIRST BOSTON (HONG KONG) LIMITED ("Party A")
and
LENNAR FINANCIAL SERVICES, INC. ("Party B")
1. Applicability
From time to time the parties hereto may enter into
transactions in which one party ("SELLER") agrees to sell to the other
("Buyer") securities and financial instruments (other than equities,
U.S. Treasury instruments and Net Paying Securities) ("SECURITIES")
against the payment of the purchase price in money by Buyer to Seller,
with a simultaneous agreement by Buyer to sell to Seller securities
equivalent to such Securities at a date certain or on demand against
the payment of the purchase price in money by Seller to Buyer. Each
such transaction shall be referred to herein as a "TRANSACTION" and
shall be governed by this Agreement, including any supplemental terms
or conditions contained in Annex I hereto, unless otherwise agreed in
writing.
2. Definitions
(a) "ACT OF INSOLVENCY" shall occur with respect to any party
hereto upon (i) its making a general assignment for the benefit of, or
entering into a reorganization, arrangement, or composition with
creditors, or (ii) its admitting in writing its inability to pay its
debts as they become due, or (iii) its seeking, consenting to or
acquiescing in the appointment of any trustee, administrator, receiver
or liquidator or analogous officer of it or any material part of its
property, or (iv) the presentation or filing of a petition in respect
of it (other than by the counterparty to this Agreement in respect of
any obligation under this Agreement) in any court or before any agency
alleging or for the bankruptcy, winding-up or other insolvency of such
party (or any analogous proceeding) or seeking any reorganization,
arrangement, composition, re-adjustment, administration, liquidation,
dissolution or similar relief under any present or future statute law
or regulation, such petition (except in the case of a petition for
winding-up or any analogous proceeding) not having been stayed or
dismissed within 30 days of its filing, or (v) the appointment of a
receiver, administrator, liquidator or trustee or analogous officer of
such party over all or any material part of such party's property;
(B) "ADDITIONAL PURCHASED SECURITIES", Securities transferred
by Seller to Buyer pursuant to paragraph 4(a) hereof;
(C) "BASE CURRENCY", the currency indicated in Annex I hereto:
(d) "BUSINESS DAY", (i)a day other than a Saturday or a
Sunday on which banks are open for business in London and in the
principal financial centre of the country of which the currency
in which the Purchase Price and the Repurchase Price are
denominated is the official currency (or, in the case of ECU,
Brussels) and (ii) in the event that the Transaction is to be
settled through CEDEL or Euroclear on a payment against delivery
basis, 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 and (iii) in the
event that the Transaction is to be settled otherwise than
through CEDEL or Euroclear on a payment against delivery basis, a
day on which the settlement system through which the Transaction
is to be settled is open to settle such Transaction and (iv)
where settlement is not being effected through a specific
settlement system, a day on which banks are open for business in
the place where delivery of the Securities the subject of such
Transaction is to be settled;
(e) "BUYER'S MARGIN AMOUNT", with respect to any
Transaction as of any date, the amount obtained by application of
a percentage to the Repurchase Price for such Transaction as of
such date, such percentage (which may be equal to the percentage
that is agreed to for the purposes of Seller's Margin Amount
under sub-paragraph (aa) of this paragraph) being a percentage
agreed to by Buyer and Seller for this purpose in relation to
that Transaction;
(f) "CEDEL", Cedel S.A.;
(g) "CONFIRMATION" the meaning specified in paragraph
3(b) hereof;
(h) "CONTRACTUAL CURRENCY",- the meaning specified in
paragraph 7(a) hereof;
(i) "DEFAULTING PARTY", the meaning specified in
paragraph 10 hereof;
(j) "DEFAULT MARKET VALUE" in relation to Securities on
any date (where Seller is the Defaulting Party) the Market value
of such Securities on such date; and (where Buyer is the
Defaulting Party) the amount it would cost to buy such Securities
at the best available offer price therefore (and where different
offer prices are available for different delivery dates, such
offer price in respect of the earliest available such delivery
date) on the most appropriate market on such date together with
all broker's fees and commissions, transfer taxes and all other
costs, fees and expenses that would be incurred in connection
therewith (calculated on the assumption that the aggregate
thereof is the least that could reasonably be expected to be paid
in order to carry out the Transaction), all as determined by
Seller; and for these purposes any sum in a currency other than
the Contractual Currency For the Transaction in question shall be
converted into such Contractual Currency at the Spot Rate;
(k) "EQUIVALENT SECURITIES", with respect to a
Transaction, securities of the same issuer, forming part of the
same issue and being of an identical type, nominal value,
description and (except where otherwise stated) amount to the
Purchased Securities under that Transaction. If and to the
extent that such Purchased Securities have been redeemed the
expression shall mean a sum of money equivalent to the proceeds
of the redemption;
(l) "EUROCLEAR", ▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels Branch, as operator of the Euroclear System;
(m) "EVENT OF DEFAULT", the meaning specified in
paragraph 10 hereof;
(n) "INCOME", with respect to any Security at any time,
all interest, dividends or other distributions thereon;
(o) "LIB0R" in relation to any sum in any currency, the
three-month London Inter Bank Offered Rate in respect of that
currency as quoted on Page 3750 on the Telerate Service (or such
other page as may replace Page 3750 on that service or such
other service as may be nominated for the time being by the
British Bankers' Association as the information vendor for the
purpose of displaying British Bankers' Association Interest
Settlement Rates) as of 11.00 a.m., London time, on the date on
which it is to be determined;
(p) "MARGIN DEFICIT", the meaning specified in paragraph
4(a) hereof;
(q) "MARGIN EXCESS", the meaning specified in paragraph
4(b) hereof;
(r) "MARKET VALUE", with respect to any Securities as of
any time on any date, the price for such Securities at such time
on such date obtained from a generally recognized source agreed
to by the parties (and where different prices are obtained for
different delivery dates, the price so obtainable for the
earliest available such delivery date) (provided that the price
of Securities that are suspended shall (for the purposes of
paragraph 4 hereof) be nil unless the parties otherwise Agree
and (for all other purposes) shall be the price of those
Securities as of close of business on the Business Day last
preceding the date of suspension) plus the aggregate amount of
Income which, as of such date, has accrued but not yet been paid
in respect of the
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Securities to the extent not included in such price as of such date,
and for these purposes any sum in a currency other than the
Contractual Currency for the Transaction in question shall be
converted into such Contractual Currency at the Spot Rate;
(s) "NET PAYING SECURITIES", Securities in respect of which
any interest, dividend or other distribution payable by the issuer to
either Seller or buyer is required by law to be paid subject to
withholding or deduction for or on account of taxes or duties of
whatsoever nature imposed, levied, collected, withheld or assessed by
any authority having power to tax;
(t) "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 year basis, or 365 day year basis as agreed
between the parties for the Transaction) 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
calculation;
(u) "PRICING RATE", with respect to any Transaction, the per
annum percentage rate for calculation of the Price Differential
agrees to by Buyer and Seller in relation to that Transaction;
(v) "PURCHASE DATE", with respect to any Transaction, the
date on which Purchased Securities are to be sold by Seller to Buyer
in relation to that Transaction;
(w) "PURCHASE PRICE", (I) on the Purchase Date, the price at
which Purchased Securities are sold or are to be sold by Seller to
Buyer, and (ii) thereafter, such price increased by the amount of any
money paid by Buyer to Seller pursuant to paragraph 4(b) hereof and
decreased by the amount of any money paid by Seller to Buyer pursuant
to paragraph 4(a) hereof (and for this purpose any amount of money
not denominated in the Contractual Currency shall (subject to
paragraph (a)) be converted into the Contractual Currency at the
Spot Rate);
(x) "PURCHASED SECURITIES", with respect to any Transaction,
subject to paragraph 8 hereof, the Securities sold or to be sold by
Seller to Buyer under that Transaction. With respect to any
Transaction the term "PURCHASED SECURITIES" shal1 include Additional
Purchased Securities transferred pursuant to paragraph 4(a) and
attributed to that Transaction and shall exclude Purchased Securities
in respect of which Equivalent Securities have been transferred
pursuant to paragraph 4(b);
(y) "REPURCHASE DATE", with respect to any Transaction, the
date on which Buyer is to sell Equivalent Securities to Seller in
relation to that Transaction;
(z) "REPURCHASE PRICE", WITH respect to any Transaction and
as of any date the sum of the Purchase Price and the Price
Differential as of such date (and for this purpose any amount of
money not denominated in the Contractual Currency shall (subject to
paragraph 7(a)) be converted into the Contractual Currency at the
Spot Rate);
(aa) "SELLER'S MARGIN AMOUNT", WITH respect to any
Transaction as of any date, the amount obtained by application of a
percentage to the Repurchase Price, such percentage (which may be
equal to the percentage that is agreed to for the purposes of Buyer's
Margin Amount under sub-paragraph (e) of this paragraph) being a
percentage agreed to by Buyer and Seller for this purpose in relation
to that Transaction;
(bb) "SPOT RATE", where an amount in one currency is to be
converted into a second currency on any date, unless the parties
otherwise agree, at the spot rate of exchange quoted by Barclays 8ank
PLC in the London interbank market for the sale by it of such second
currency against a purchase by it of such first currency;
(cc) "TERM", with respect to any Transaction, the interval of
time commencing with the Purchase Date and ending with the
Repurchase Date; and
(dd) "TERMINATION", with respect to any Transaction, refers
to the requirement with respect to such Transaction for Buyer to
sell Equivalent Securities against payment by Seller of the
Repurchase Price in accordance with paragraph 3(d)(ii), and
references to a Transaction having a "fixed term or being
"terminable upon demand" shall be construed accordingly.
3. Initiation; Confirmation; Termination
(a) A Transaction may be entered into orally or in writing at
the initiation of either Buyer or 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 such Transaction (a
"CONFIRMATION").
3
The Confirmation shall describe the Purchased Securities
(including CUSIP or CINS or other identifying 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 (in which case the
Confirmation will say that it is so terminable), (iv) the Pricing
Rate applicable to the Transaction, (v) in respect of each party
the details of the bank account[s] to which payments to be made
hereunder are to be credited, and (vi) any additional terms or
conditions of the Transaction not inconsistent with this Agreement
and shall be substantially in the form of Annex II hereto or such
other form as the parties may agree.
The Confirmation relating to a Transaction shall, together
with this Agreement, constitute prima facie evidence of the terms
agreed between Buyer and Seller for that Transaction, unless
specific objection is made with respect to the Confirmation
promptly after receipt thereof. In the event of any conflict
between the terms of such Confirmation and this Agreement, this
Agreement shall prevail except in the case of those provisions in
relation to which the Agreement specifically states that the
parties may otherwise agree; and as to those provisions, the
Confirmation shall prevail.
(c) (i) In the case of on demand Transactions, demand for
Termination shall be made by Buyer or Seller, by telephone or
otherwise and shall provide for Termination to occur after not less
than the minimum period as is customarily required for the
settlement or delivery of money or Equivalent Securities of the
relevant kind.
(ii) Termination of a Transaction will be effected, in the
case of on demand Transactions, on the date specified for
Termination in such demand, and, in the case of fixed term
Transactions on the date fixed for Termination.
(d) (i) On the Purchase Date for a Transaction, the
Purchased Securities shall be transferred to Buyer or its agent
against the payment of the Purchase Price to Seller.
(ii) Termination of a Transaction will be effected on the
Repurchase Date by transfer to Seller or its agent of Equivalent
Securities against the payment by the Seller of the Repurchase
Price (less any amount then payable and unpaid by Buyer to Seller
pursuant to paragraph 5 hereof).
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all
Purchased Securities then subject to any Transaction in which a
particular party hereto is acting as Buyer is less than the
aggregate of the Buyer's Margin Amounts for all such Transactions
(the difference between such amounts being a "MARGIN DEFICIT"),
then Buyer may by notice to Seller in such Transactions require
Seller to pay money or, at Seller's option, to transfer additional
Securities reasonably acceptable to Buyer ("ADDITIONAL PURCHASED
SECURITIES"), so that the aggregate Market Value of the Purchase
Securities, including any such Additional Purchased Securities.
will thereupon equal or exceed an amount which equals the aggregate
of the Buyer's Margin Amounts for all such Transactions less the
amount of the Margin Deficit (if any) as of such date in respect of
all the Transactions in which such Buyer is acting as Seller. For
the purposes of this calculation all sums not denominated in the
Base Currency shall be converted into the Base Currency on the
relevant date at the Spot Rate.
(b) If at any time the aggregate Market Value of all
Purchase Securities then subject to any Transaction in which a
particular party hereto is acting as Seller exceeds the aggregate
of the Seller's Margin amounts for all such Transactions (the
difference between such amounts being "Margin Excess"), then
Seller may by notice to Buyer in such Transactions require Buyer
to pay money or, at Buyer's option, to transfer Equivalent
Securities to Seller in an amount such that the aggregate Market
Value of all Purchased Securities will thereupon not exceed an
amount which equals the aggregate of the Seller's Margin Amounts
for allsuch Transactions plus the amount of the Margin Excess (If
any) as of such date in respect of all the Transactions in which
such Seller is acting as Buyer. For the purposes of this
calculation all sums not denominated in the Base Currency shall be
converted into the Base Currency on the relevant date at the Spot
Rate.
(c) Any money paid or Securities transferred pursuant to
this paragraph shall be attributed as between all the different
Transactions then outstanding as shall be agreed upon by Buyer and
Seller and, failing such agreement, as determined by the party
receiving such money or Securities. Any money paid shall be paid
in the currency agreed therefor between Buyer and Seller and
failing such agreement in the Base Currency.
(d) The parties may agree, with respect to any or ail
Transactions, that their respective rights under sub-paragraphs
(a) and (b) of this paragraph may be exercised only where a
Margin Deficit or a Margin Excess exceeds an agreed amount or an
agreed percentage of the aggregate of the Repurchase Prices of
the relevant Transactions.
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(e) The parties may agree that their respective rights under
sub-paragraphs (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 in respect of an individual Transaction whenever &
Margin Deficit or Margin Excess (calculated on the basis that
Transaction is the only Transaction then outstanding) exists with
respect to it.
(f) Where the Seller or Buyer becomes obliged under either of
sub-paragraph (a) or (b) of this paragraph to pay money or to transfer
Securities or Equivalent Securities, it shall pay or transfer the same
within the minimum period specified in Annex I or, if no period is
there specified, such minimum period as is customarily required for the
settlement or delivery of money, Securities or Equivalent Securities of
the relevant kind.
5. Income Payments
Unless otherwise agreed, where a particular Transaction's Term
extends over an Income payment date in respect of any Securities
subject to that Transaction, Buyer shall on the date such Income is
paid transfer to or credit to the account of Seller an amount equal to
(and in the same currency as) such Income payment or payments.
6. Payment and Transfer
(a) Unless otherwise agreed, all money paid hereunder shall be
in immediately available, freely convertible funds of the relevant
currency. All Securities transferred hereunder (i) shall be in suitable
form for transfer and shall be accompanied by duly executed instruments
of transfer or assignment in blank (where required for transfer) and
such other documentation as the transferee party 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 clearance system, or (iv) shall be transferred by any
other method mutually acceptable to Seller and Buyer.
(b) Unless otherwise agreed, all money payable by one party to
the other in respect of any 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, unless the withholding or deduction
of such taxes or duties is required by law. In that event, unless
otherwise agreed, the paying party shall pay such additional amounts as
will result in the net amounts receivable by the other party (after
taking account of such withholding or deduction) being equal to such
amounts as would have been received by it had no such taxes or duties
been required to be withheld or deducted.
(c) Unless otherwise agreed in writing between the parties,
under each Transaction transfer of Purchased Securities by Seller and
payment of Purchase Price payable by Buyer against the transfer of such
Purchased Securities shall be made simultaneously and transfer of
Equivalent Securities by Buyer and payment of Repurchase Price payable
by Seller against the transfer of such Equivalent Securities shall be
made simultaneously.
(d) In the case of any Transaction where, pursuant to the
provisions of this Agreement, a party performs an obligation to
transfer Securities or to pay money at a time when the other party, in
accordance with this Agreement, is required to perform an obligation to
pay money or transfer Securities simultaneously with the performance of
the first party's obligation but, nevertheless, the second party's
obligation is not performed simultaneously, the second party shall hold
on trust for the first party any assets (including money or Securities)
that it receives from the first party prior to the performance of its
own obligation being completed provided always that the second party
shall be at liberty to dispose of any such assets to the extent such
disposal occurs in the ordinary course of its business and provided
further that any such trust shall terminate upon the completion of the
performance of the aforesaid obligations of the second party or
disposal of such assets whichever shall first occur.
(e) Subject to and without prejudice to the provisions of
sub-paragraph 6(c), either party may from time to time in accordance
with market practice and in recognition of the practical difficulties
in arranging simultaneous delivery of Securities and money waive in
relation to any Transaction its rights under this Agreement to receive
simultaneous transfer and/or payment provided that transfer and/or
payment shall. notwithstanding such waiver, be made on the Same day and
provided also that no such waiver in respect of one Transaction shall
affect, or bind it in respect of, any other Transaction.
(f) The parties shall execute and deliver all necessary
documents and take all necessary steps to procure that all right, title
and interest in any Purchased Securities and any Equivalent Securities
shall pass to the party to which transfer is being made upon transfer
of the same in accordance with this Agreement, free from all
liens, claims, charges and encumbrances.
5
(g) Notwithstanding the use of expressions such as "Repurchase
Date", "Repurchase Price", "Margin", "Margin Excess" and Margin
Deficit which are used to reflect terminology used in the market for
transactions of the kind provided for in this Agreement, all right,
title and interest in and to Securities and money transferred or paid
under this Agreement Shall pass to the transferee upon transfer or
payment (subject to the trust provided for in paragraph 6(d) of this
Agreement), the obligation of the party receiving Purchased
Securities being an obligation to transfer Equivalent Securities. For
the avoidance of doubt all right, title and interest in and to
Securities and money transferred or paid pursuant to paragraphs 4(a)
and (b) shall pass in like manner.
(h) Time shall be of the essence in this Agreement.
(i) Subject to paragraph 10 hereof, all amounts in the same
currency payable by each party to the other under any Transaction or
hereunder on the same date shall be combined in a single calculation
of a net amount payable by one party to the other.
(j) Subject to paragraph 10 hereof, all Securities of the
same issue, denomination, currency and series, transferable by each
party to the other under any transaction or hereunder on the same
date shall be combined in a single calculation of a net quantity of
Securities transferable by one party to the other.
7. Contractual Currency
(a) All the payments made in respect of the Purchase Price or
the Repurchase Price of any Transaction shall be made in the
currency of the Purchase Price (the "CONTRACTUAL CURRENCY") save as
provided in paragraph 10(b)(ii). Notwithstanding the foregoing, the
payee of any money 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 payer to pay Such money will
be discharged only to the extent of the amount of original 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 on the second Business Day
following its receipt of such currency.
(b) If for any reason the amount in the original currency
received by a party, including amounts received after conversion of
any recovery under any judgment or order expressed in a currency
other than the original currency, Falls short of the amount in the
original currency due and payable, the party required to make the
payment will, as a separate and independent obligation, to the
extent permitted by applicable law, immediately transfer such
additional amount in the original currency as may be necessary to
compensate for the shortfall.
(c} If for any reason the amount in the original currency
received by a party exceeds the amount of the original currency due
and payable, the party, receiving the transfer will refund promptly
the amount of such excess.
8. Substitution
In relation to any Transaction, at any time between the
Purchase Date and the Repurchase Date Seller may, subject to
agreement with and acceptance by Buyer, substitute other Securities
for any Purchased Securities, provided, however, that such
substitute Securities shall have a Market Value at least equal to
the Market Value of the Purchased Securities for which they are
substituted as at the date of substitution. Such substitution shall
be made by transfer to Buyer of such other Securities and
simultaneous transfer to Seller of the relevant amount of Equivalent
Securities in respect of the Purchased Securities being substituted.
Where ether or both of such transfers is or are settled on a payment
against delivery basis the parties shall make such payments as
between each other as will ensure that the aggregate amount paid by
each party equals the aggregate amount received by it. After
substitution, the substituted Securities shall be deemed to be
Purchased Securities and the original Purchased Securities so
substituted shall cease to be Purchased Securities.
9. Representations
Each party represents and warrants to the other that (i) it
is duly authorized to execute and deliver this Agreement, to enter
into the Transactions contemplated hereunder and to perform its
obligations hereunder and thereunder and has taken all necessary
action to authorize such execution, delivery and performance, (ii)
it will engage in this Agreement and the Transactions contemplated
hereunder as principal, (iii) the person signing this Agreement on
its behalf is, and any person representing it in entering into a
Transaction will have been, duly authorized to do so on its behalf,
(iv) it has obtained all authorizations of any governmental body
required in connection with this Agreement and the Transactions
contemplated hereunder and such authorizations are in full force
and effect, (v) the execution, delivery and performance of
6
this Agreement and the Transactions contemplated 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, (vi) it has
satisfied itself and will continue to satisfy itself as to the tax
implications, if any, of the Transactions contemplated hereunder, (vii) when
acting as Seller, at the time of transfer to the Buyer of any Purchased
Securities it will have the full and unqualified right to make such transfer
and that upon such transfer of Purchased Securities the Buyer will receive the
same free and clear of any lien, claim, charge or encumbrance, (viii) when
acting as Buyer, at the time of transfer to the Seller of any Equivalent
Securities it will have the full and unqualified right to make such transfer
and that upon such transfer of Equivalent Securities the Seller will receive
the same free and clear of any lien, claim, charge or encumbrance and (ix)
when acting as Seller, the paying and collecting arrangements applied in
relation to any Purchased Securities prior to their transfer to the Buyer will
not have resulted in the payment of any Income to the Seller in respect of
such Purchased Securities under deduction or withholding for or on account of
UK tax. On the date on which any Transaction is entered into pursuant hereto,
and on each day on which Securities or Equivalent Securities are to be
transferred under any Transaction, Buyer and Seller shall each be deemed to
repeat all the foregoing representations made by it. For the avoidance of
doubt and notwithstanding any arrangements which the Seller or the Buyer may
have with any third party, each party will be liable as a principal for its
obligations under this Agreement and each Transaction.
10. Events of Default
If any of the following events (each an "Event of Default") occurs in
relation to either party (the "Defaulting Party", the other party being the
"Non-defaulting Party") whether acting as Seller or Buyer (i) Buyer fails to
pay the Purchase Price or Seller fan's to deliver Securities upon the
applicable Purchase ▇▇▇▇ or Seller fan's to pay the Repurchase Price or Buyer
fan's to deliver Equivalent Securities upon the applicable Repurchase Date,
and the non-Defaulting Party serves written notice on the Defaulting Party, or
(ii) Seller or Buyer fails. after one Business Day's written notice, to comply
with paragraph 4 hereof, and the non-Defaulting Party serves written notice on
the Defaulting Party, or (iii) Buyer fan's to comply with paragraph S hereof,
and the non-Defaulting Party serves written notice on the Defaulting Party, or
(iv) an Act of Insolvency occurs with respect to Seller or Buyer and (except
in the case of an Act of Insolvency which is the presentation of a petition
for winding-up or any analogous proceeding or the appointment of a liquidator
or analogous officer of the Defaulting Party in which case no such notice
shall be required) the non-Defaulting Party serves notice on the Defaulting
Party, or (v) any representations 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, and the non-Defaulting Party serves written notice
on the Defaulting Party, or (vi) Seller or Buyer shall admit to the other its
inability to, or its intention not to, perform any of its obligations
hereunder and/or in respect of any Transaction and the non-Defaulting Party
serves written notice on the Defaulting Party, or (vii) Seller or Buyer shall
be suspended or expelled from membership of or participation in any securities
exchange or association or other self regulating organization, or suspended
from dealing in securities by any government agency, or any of the assets of
either of them or the assets of investors held by these or to their order
shall be transferred or ordered to be transferred to a trustee by a regulatory
authority pursuant to any securities regulating legislation and the
non-Defaulting Party serves notice on the Defaulting Party, or (viii) Seller
or Buyer shall fail to perform any other of its obligations hereunder and
shall not remedy such failure within 30 days after the non-Defaulting Party
serves written notice relating to such failure on it; then:
(a) the Repurchase Date for each Transaction hereunder shall be
deemed immediately to occur,
(b) (i) the Default Market Value of the Equivalent Securities
to be transferred and the Repurchase Prices to be paid by each party
shall be established by the non-Defaulting Party for all Transactions
as at the Repurchase Date; and
(ii) on the basis of the sums so established an account
shall be taken (as at the Repurchase Date) of what is due from each
party to the other under this Agreement (on the basis that each party's
claim against the other in respect of the transfer to it of Equivalent
Securities under this Agreement equals the Default Market Value
therefor) and the sums due from one party shall be set-off against the
sums due from the other and only the balance of the account shall be
payable (by the party having the claim valued at the lower amount
pursuant to the foregoing) and such balance shall be due and payable on
the Repurchase Date For the purposes of this calculation. all sums not
denominated in the Base Currency shall be converted into the Base
Currency on the relevant date at the Spot Rate; and
(iii) interest shall accrue (as well after as before
judgement) on any sum payable by the Defaulting Party to the
non-Defaulting Party under this sub-paragraph 10(b) at LIBOR on a day
to day basis from the date on which such sum becomes due and payable
to the date of payment:
7
(c) the Defaulting Party shall be liable to the non-Defaulting
Party for the amount of all reasonable legal and other expenses
incurred by the non-Defaulting Party in connection with or as a
consequence of an Event of Default, together with interest thereon at
LIBOR or (in the case of an expense attributable to a particular
Transaction, and if greater than LIBOR) the Pricing Rate for the
relevant Transaction; and
(d) the non-Defaulting Party shall have, in addition to its
rights hereunder, any rights otherwise available to it under any other
agreement or applicable law.
Each party shall immediately notify the other if an Event of Default occurs in
relation to it.
11. Withholding of Payment or Delivery
Without prejudice to the provisions of paragraph 10 hereof, in the case
of transfers to be made otherwise than on a payment against delivery basis,
neither party shall be obliged on any Repurchase Date to transfer Equivalent
Securities or to pay the Repurchase Price to the other in respect of a
particular Transaction unless it is satisfied that the other party will pay or
deliver to it on such date the Repurchase Price or, as the case may be, the
relevant Equivalent Securities. If it is not so satisfied it shall by not
later than the time, if any, specified in Annex I notify the other party sad
request assurances of that other party's ability to make such delivery or
payment to it, as the case may be, and unless the other party gives such
assurances which are reasonably adequate to the notifying party, the notifying
party shall (provided ;t is itself in a position, and willing, to perform its
own obligations) be entitled to withhold delivery or payment to the other
party (but where it exercises such entitlement it shall immediately give
notice thereof to the other party) and in this event the procedures set out in
paragraph 10(b) hereof shall have effect and be applied (on the basis that
such other party is the Defaulting Party) but only in relation to the
particular Transaction in question and for this purpose the Contractual
Currency of that Transaction shall be treated as the 3ase Currency.
12. Interest
Without prejudice to the provisions of paragraph 10 hereof and to the
extent permitted by applicable law, if any sum of money payable hereunder or
under any Transaction is not paid when due, interest shall accrue on such
unpaid sum as a separate debt at the greater of the Pricing Rate for the
Transaction to which such sum relates (where such sum is referable to s
Transaction) and LIBOR on a 360 day year basis, or a 365 day year basis, as
shall have been agreed for this purpose, for the actual number of days during
the period from and including the date on which payment was due to, but
excluding, the date of payment.
13. Single Agreement
Buyer and Seller acknowledge that, and have entered into this
Agreement 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 mate 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,
sad that a default in the performance of any such obligations shall
constitute a default by it in respect of all Transactions hereunder. and (ii)
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.
14. Notices and Other Communications
Unless another address has been specified in writing by the party to
whom any notice or other communication is to be given hereunder, all such
notices or other communications shall be in writing in the English language
and shall be delivered personally or sent by mail (first class mail in the UK
and by air mail if overseas) or by telex or by telefax. and delivered at the
respective addresses set forth in Annex III hereto or to such other person,
address, telex number or telefax number as either party may specify by notice
in writing to the other.
In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:--
(a) if delivered personally, when left at the address referred
to above
(b) if sent by mail other than air mail, two days after
posting it:
(c) if sent by air mail. six days after posting it;
8
(d) if sent by telex, when the proper answer-back is
received; and
(e) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of
the recipient in legible form, it being agreed that the
burden of proving receipt will be on thc sender and will
not be met by a transmission report generated by the
sender's facsimile machine
15. Entire Agreement; Severability
This Agreement shall supersede any existing agreements
between the parties containing general terms and conditions for
Transactions. Each provision and agreement herein shall be treated
as separate from any other provision or agreement herein and shall
be enforceable notwithstanding the unenforceability of any such
other provision or agreement.
16. Non-assignability; Termination of Agreement
The rights and obligations of the parties under this
Agreement and under any Transaction shall not be assigned. charged
or otherwise dealt with by either party without the prior written
consent of the other party. Subject to thc foregoing, this Agreement
and any Transactions shall be binding upon ant 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.
All remedies hereunder shall survive Termination in respect
of the relevant Transaction and termination of this Agreement.
17. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of England. Buyer and Seller hereby
irrevocably submit for all purposes of or in connection with
this Agreement and each Transaction to the jurisdiction of the
Courts of England.
Party A hereby appoints the person identified in Annex [V
hereto as its agent to receive on its behalf service of process in
such courts. Party A shall promptly appoint, and notify Party B of
the identity of, a new agent in England if such agent ceases to be
its agent.
Party B hereby appoints the person identified in Annex V
hereto as its agent to receive on its behalf service of process in
such courts. Party B shall promptly appoint, and notify Party A of
the identity of, a new agent in England if such agent ceases to be
its agent.
Nothing in this paragraph shall limit the right of any party
to take proceedings in the courts of any other country of competent
jurisdiction.
18. 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 modification, waiver or consent
shall be in writing and duly executed by both of the parties hereto.
Without limitation on any of the foregoing, the failure to give &
notice pursuant to sub-paragraphs 4(a) or 4(b) hereof will not
constitute a waiver of any right to do so at a later date.
19. Waiver of Immunity
Each party hereto hereby waives, to the fullest extent
permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, attachment (both before
and after judgment) and execution to which it might otherwise h
entitled in any action or proceeding in the Courts of
9
England or of any other country or jurisdiction. relating in any
way to this Agreement or any Transaction, and agrees that it will
not raise, claim or cause to be pleaded any such immunity at or in
respect of any such action or proceeding.
CS FIRST BOSTON (HONG KONG) LIMITED LENNAR FINANCIAL SERVICES, INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- ----------------------------
Title ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title VP/Treasurer
Vice President
Date June 22, 1996 Date 6/13/96
10
ANNEX I
Supplemental Terms or Conditions
Paragraph references are to paragraphs in the Agreement.
1. The following elections shall apply:
(a) paragraph 2(c). The Base Currency shall be: U.S. Dollars.
(i) for the purposes of paragraph 4 hereof, U.S. Dollars.
(ii) for the purposes of paragraph 10 hereof, where the
Defaulting Party is Party A, U.S. Dollars and where the
Defaulting Party is Party B, U.S. Dollars or the
currency of incorporation of Party A.
(b) paragraph 2(r). The pricing source for calculation of Market
Value shall be Telerate, Reuters or Bloomberg.
(c) paragraph 2(bb). Spot Rate: If applicable, to be as defined in
paragraph 2(bb) or as is otherwise agreed by the parties
hereto.
(d) paragraph 3(b). Both Seller and Buyer to deliver a
Confirmation in respect of each Transaction.
(e) paragraph 4(c). Attribution to Transactions of money or
Securities transferred under margin maintenance provisions
will be as mutually agreed upon by both parties at the time of
each Transaction.
(f) paragraph 4(e). Margin maintenance provisions to apply on a
net aggregate basis.
(g) paragraph 4(f). Delivery period for margin calls to be
standard practice in the principal financial center of the
country of which the currency in which the Purchase Price and
Repurchase Price are denominated in the official currency.
(h) paragraph 11. Latest time, if any, for issue of request for
assurance under paragraph 11 to be: twenty-four hours (24)
London time.
(i) paragraph 12. Interest calculated on a basis according to the
agreed terms of the transaction and specified in the
Confirmation and if not so specified on an actual/360 basis.
2. The following Supplement Terms and Conditions shall apply:
Pursuant to the terms of Paragraph 1 of the Global Master Repurchase
Agreement (the "Agreement"), Buyer and Seller agree to be governed by
the Supplemental Terms and Conditions stated herein. To the extent
that any provisions in these Supplemental Terms and Conditions are in
conflict with provisions contained in the Agreement the provisions of
these Supplemental Terms and Conditions shall prevail.
11 - a
1. All Transactions under the Agreement shall constitute sales and
purchases of Securities. Notwithstanding any other language to the
contrary, this Agreement will constitute a Securities Lending Agreement
under Internal Revenue Code Section 1058 for U.S. Federal income tax
purposes. As such, any reference to "sell", "payment", or any
derivation thereof, shall be replaced with the word "transfer". For the
avoidance of doubt, absolute title to all Purchased Securities shall
pass to the Buyer and nothing in this Agreement shall prevent the Buyer
from engaging in transactions with the Purchased Securities but no such
transaction shall relieve the Buyer of its obligations to deliver
Equivalent Securities to the Seller pursuant to this Agreement, or of
the Buyer's obligations under Paragraph 5 hereof (as amended by
Paragraph 5 of these Supplemental Terms and Conditions).
2. Paragraph I is amended by deleting the words "at a date certain or" in
the first sentence thereof.
3. The last sentence of Paragraph 3(b) of the Agreement is amended to
read as follows:
"In the event of any conflict between the terms of such
Confirmation and this Agreement, such Confirmation shall
prevail."
4. Paragraph 3(c)(i) is amended by adding the words "but under no
circumstances shall such notice exceed 5 business days" after the
word "kind". Paragraph 3(c)(ii) is amended by deleting the words
"and, in the case of fixed term Transactions on the date fixed for
Termination".
5. Income payments on the Securities subject to Transactions under the
Agreement pursuant to Paragraph 6(b) shall be treated as follows:
(1) DEDUCTION OR WITHHOLDING FOR TAX
Each party agrees to be liable to the relevant taxing
authority for the full amount of any Taxes required by
governing law to be deducted or withheld from payments or
distributions of income that the party receives from the
issuer of the Securities ("Income Payments"). AU payments
made by one party to the other party in respect of any
Transaction pursuant to this Agreement, including any Income
Payments payable by the Buyer to the Seller, shall be made
free and clear of, and without any, withholding or deduction
for or on account of any Taxes, unless such withholding or
deduction is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority.
If such withholding or deduction is so required, then the
payor shall (i) promptly notify the payee of such
requirement, (ii) pay to the relevant authorities the full
amount required to be deducted or withheld promptly upon
learning that such deduction or withholding is required (iii)
promptly forward to the payee an official receipt (or
certified copy), or other such documentation, evidencing such
payment to such authorities, and (iv) pay to the payee such
additional amounts as are necessary to yield and remit to the
payee an amount which, after deduction of all Taxes
(including any Taxes imposed on the additional amounts) so
withheld or deducted, equals the full amount that the payee
would have received had no such withholding or deduction been
required; provided, however, that in no event will Seller be
entitled to receive any amount in respect of any Income
Payment greater than Seller would have received had it not
entered into the relevant Transaction. If (i) the payor fails
to timely remit the appropriate amount to the relevant
governmental revenue authority in respect of any amount that
the payor is required to withhold or deduct from any payment
to the payee, and (ii) a liability for such amount is
assessed directly against the payee, then the payor shall in
addition to its liability to pay additional amounts to the
payee pursuant to the preceding sentence, be liable to the
payee for any interest or penalties that are thereby imposed
upon the
11 - b
payee by reason of such failure by the payor. In the
event of the Buyer failing to remit, either directly or
through its agent, the full amount owing to the Seller
pursuant to this Agreement, the Buyer hereby undertakes to
pay interest to the Seller (upon demand) on the amount due
and outstanding at the rate of the LIBOR Rate as it
fluctuates from day to day plus 1%. Such sum shall accrue
daily commencing on and inclusive of the third Business Day
after the relevant payment date, unless otherwise agreed
between the Parties.
(2) TAX COVENANTS
(A) Party A agrees to complete accurately and in a manner
reasonably satisfactory to Party B, and to execute
and deliver to Party B, a United States Internal
Revenue Service Form W-8 and a United States Internal
Revenue Service Form 1001, or any successor forms,
(i) upon the execution of this Agreement, (ii)
promptly, upon reasonable demand by Party B, and
(iii) promptly, upon learning that any such form
previously provided by Party A has become obsolete or
incorrect;
(B) Party A agrees to complete accurately and in a manner
reasonably satisfactory to Party B, and to execute
and deliver to Party B, a United States Internal
Revenue Service Form 4224, or any successor form, in
respect of any payments received or to be received by
Party A in connection with this Agreement that are
effectively connected or otherwise attributable to
its conduct of a trade or business in the United
States (i) before the first date on which any such
payment is or may be so connected or attributable,
(ii) promptly, upon reasonable demand by Party B, and
(iii) promptly, upon learning that any such form
previously provided has become obsolete or incorrect;
and
(C) Each party agrees to complete (accurately and in a
manner reasonably satisfactory to the other party),
execute, arrange for any required certification of,
and deliver to the other party or such government or
taxing authority as the other party directs, any
form or document that may be required or reasonably
requested in order to assist or enable the other
party to secure the benefit of any available
exemption or relief from any deduction or
withholding on account of any Tax or, if there is no
available exemption or relief as aforesaid, to
secure the benefit of any reduced rate of deduction
or withholding, in respect of any payment under this
Agreement, promptly upon the earlier of: (I)
reasonable demand by the other party, and (ii)
learning that the form or document is so required.
For purposes of subparagraph 6(b)(1) of this Agreement,
Seller's failure to comply with or perform any tax covenant
provided for hereunder will terminate Buyer's obligation to
pay any additional amount to Seller to the extent such
additional amount would not be required to be paid but for
such failure.
(3) EARLY TERMINATION DUE TO TAX EVENT
In the event a Tax Event occurs with respect to a party to
this Agreement, at the option of such party (exercised by
written notice to the other party, such notice being treated
as a demand pursuant to paragraph 3(c) of this Agreement),
the Repurchase Date for the Transaction with respect to
which the Tax Event occurred shall be immediately deemed to
occur and such Repurchase Date shall be treated as the date
of determination for purposes of calculating the Repurchase
Price.
11 - c
The occurrence with respect to either party of any of the
following events will constitute a Tax Event for purposes of
this subparagraph:
(A) the party shall be required on the next succeeding
payment date to pay to the other party an additional
amount under subparagraph 6(b)(1) as a result of a Change
in Tax Law;
(B) there is a substantial likelihood that the party will be
required on the next succeeding payment date to pay to
the other party an additional amount under subparagraph
6(b)(1) and such substantial likelihood results from an
action taken by a taxing authority or court of competent
jurisdiction, on or after the date on which such
Transaction was entered into (regardless of whether such
action was taken or brought with respect to a party to
this
Agreement); or
(C) the party will be required on the next succeeding payment
date to pay to the other party an additional amount under
subparagraph 6(b)(1) as a result of a consolidation,
amalgamation, merger or transfer of substantially all of
the assets of such other party by such other party.
(4) STAMP TAX
Each party agrees that it will pay any Stamp Tax levied or
imposed upon it or in respect of its execution or performance
of this Agreement by a jurisdiction in which it is
incorporated, organized, managed and controlled, or is
considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is
located (a "Stamp Tax jurisdiction") and will indemnify the
other party against any Stamp Tax levied or imposed upon the
other party or h respect of the other party's execution or
performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party. Notwithstanding the foregoing if a
party becomes a Defaulting Party under this Agreement, then
such party agrees to indemnify the other party for any Stamp
Taxes imposed upon such other party by reason of such other
party's enforcement and protection, as a result of such other
default, of its rights under this Agreement or any related
credit support document.
(5) DEFINITIONS
(A) "Change in Tax Law" means the enactment, promulgation,
execution or ratification of, or any change in or
amendment to, any law (or h the application or official
interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
(B) "Law" includes any treaty, law, rule or regulation (as
modified, h the case of tax matters, by the practice of
any relevant governmental revenue authority either
generally or with respect to a party to this Agreement)
and "Change in Tax Law" shall be construed accordingly.
(C) "Stamp Tax" means any stamp, registration,
documentation or similar tax.
(D) "Tax" means any present or future tax, levy, impost,
duty, charge, assessment or fee of any nature that is
imposed by any government or other taxing authority in
respect of any payment under this Agreement.
11 - d
6. Notwithstanding any provision contained in this Agreement or in any
additional terms or conditions contained in the Confirmation
relating to any Transaction, Transactions in Securities shall be
effected only if the Securities are (i) not listed h Hong Kong, (ii)
not Hong Kong stock which is unlisted in Hong Kong, and (iii) in the
event that Party B is a UK person or entity, are "securities" as
defined in Section 710 of the United Kingdom Income and Corporations
Taxes ▇▇▇ ▇▇▇▇.
7. In the event that Party B is a U.S. person or entity not registered
as a broker-dealer in the U.S.:
a. Each Transaction made under the Agreement shall be confirmed by
CS First Boston Corporation ("First Boston") as Agent for Buyer
and Seller on Purchase Date by authenticated telecommunication
and in writing, h accordance with Paragraph 3(b).
b. Notwithstanding the provisions of Paragraph 17, in those
instances where a provision or term of this Agreement, these
Supplemental Terms and Conditions, or any Confirmation expressly
refers to statutes, regulations or laws of the United States or
of any state thereof, such provision or term shall be construed
in accordance with the applicable provision of the laws of the
State of New York.
c. Notwithstanding anything to the contrary contained in the
Agreement, any Confirmation or any other agreements or
instruments delivered in connection with any Transaction
hereunder
(i) First Boston, as a broker-dealer registered with the
U.S. Securities and Exchange Commission ("SEC"), will
arrange, as Agent for each of Buyer and Seller, each
Transaction to be entered into pursuant to this
Agreement h accordance with Rule l5a-6 promulgated
under the Securities Exchange Act of 1934 (the
"Exchange Act). As Agent, first Boston will be
responsible for (i) effecting and settling all such
Transactions in compliance with said Rule 15a-6, (ii)
issuing all required confirmations and statements to
Buyer and Seller in compliance with Rule 15c3-1 under the
Exchange Act, (iii) maintaining books and records
relating to such Transactions as required by Rules 17a-3
and 17a-4 under the Exchange Act, and (iv) if requested
by Buyer or Seller, receiving, delivering, and
safeguarding such party's funds and securities in
connection with such Transactions in compliance with Rule
15c3-3 under the Exchange Act.
(ii) First Boston is participating in each Transaction solely
as Agent for Buyer and Seller. first Boston shall have no
responsibility or personal liability to Buyer and Seller
arising from any failure of Buyer or Seller to pay or
perform any obligation hereunder, including without
limitation, any obligation to maintain margin. Each of
Buyer and Seller agrees to proceed solely against the
other to collect or recover any securities or monies
owing to it in connection with or as a result of any
Transaction or otherwise hereunder. first Boston shall
otherwise have no liability in respect of this Agreement
or any Transaction, except that First Boston shall be
liable for its gross negligence or willful misconduct, or
its failure to comply with applicable U.S. securities
laws and regulations, in performing its cubes as Agent
hereunder.
8. The first sentence of Paragraph 9 is amended by deleting the words
"and (ix) when acting as Seller, the paying and collecting
arrangements applied in relation to any Purchased Securities prior
to their transfer to the Buyer will not have resulted in the
payment of any Income to the Seller in respect of such Purchased
Securities under deduction or withholding for or on account of U.K.
tax".
11 - e
9. The second subparagraph of Paragraph 16 is amended by inserting the
words "of not more than 5 days" after the words "written notice".
CS FIRST BOSTON (HONG KONG) LENNAR FINANCIAL SERVICES, INC.
LIMITED
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------- ----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Title: VP/Treasurer
Legal & Compliance Department
ACCEPTED AND AGREED TO SOLELY
IN ITS CAPACITY AS AGENT:
CS FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: DIRECTOR
11 - f
ANNEX II
Form of Confirmation
To: ___________________________
From: _________________________
Date: _________________________
Subject: Repurchase Transaction
(Reference Number: )
Dear Sirs,
The purpose of this [letter]/[facsimile]/[telex] is to set
forth the terms and conditions of the above repurchase transaction
entered into between us on the Contract Date referred to below.
This confirmation supplements and Corms pan of and is
subject to the Global Master Repurchase Agreement as entered into
between us as of as the same may be amended
from time to time (the "AGREEMENT"). All provisions contained in
the Agreement govern this confirmation except as expressly
modified below. Words and phrases defined in the Agreement and
used in this confirmation shall have the same meaning herein as
in the Agreement.
1. Contract Date:
2. Purchase Securities:
3. CUSIP, CINS or other identifying number:
4. Buyer:
5. Seller:
6. Purchase Date:
7. Purchase Price:
8. Contractual Currency:
[9. Repurchase Date]:
[9. Terminable on demand]:*
10. Pricing Rate:
11. Price Differential to be calculated on a [360/365]* tax year
basis:
12. Percentage for calculating Buyer's Margin Amount:
13. Percentage for calculating Seller's Margin Amount:
------------------
*Delete as appropriate
12
14. Buyer's Bank Account[s] Details:
15. Seller's Bank Account[s] Details:
[16. Additional Terms]:
Yours faithfully,
13
Names and Addresses for Communications Between Parties
1. Party A
CS FIRST BOSTON (HONG KONG) LIMITED
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
2. Party B
Lennar Financial Services, Inc.
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Vice President and Treasurer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
14
ANNEX IV
Name and Address of Party A's Agent for Service of Process
15
ANNEX V
Name and Address of Party B's Agent for Service of Process
16
June 13, 1996
CS First Boston Corporation
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Credit Department
Dear Sirs:
LENNAR CORPORATION ("Guarantor") hereby unconditionally guarantees the
full, complete, and prompt payment and performance by LENNAR FINANCIAL
SERVICES, INC., LENNAR MBS, INC., LENNAR SECURITIES HOLDINGS, INC. AND
LFS ASSET CORP. ("Obligors") of any and all liabilities, obligations, and
undertakings now or hereafter owing by Obligor (the "Guaranteed
Obligations") to CS First Boston Corporation ("CS First Boston"), or any
of CS First Boston's affiliates or subsidiaries (collectively, the
"Beneficiary"). Guarantor hereby agrees that if Obligor shall fail at any
time to make due and punctual payment to any beneficiary of any
Guaranteed Obligation then due and payable by Obligor to such
beneficiary, Guarantor will forthwith pay such amount, without demand
therefor.
Guarantor hereby waives any requirement that any beneficiary take legal
action against Obligor before enforcing this guarantee; agrees that its
obligation hereunder shall be unconditional, irrespective of the
validity, regularity, or enforceability of the Guaranteed Obligations;
waives diligence, presentment, demand of payment or notice of any kind
whatsoever; waives filing of claims with any court in case of the
insolvency, reorganization, or bankruptcy of the Obligor; waives any
fact, event, or circumstance which might otherwise constitute a legal or
equitable defense to or discharge of a guarantor; covenants that this
guarantee will not be discharged except by full, complete, and final
payment to beneficiary of the Guaranteed Obligations; and agrees that
this guarantee shall continue to be effective or be reinstated (as the
case may be) if at any time all or any part of any payment, or interest
thereon, by Obligor is avoided or must otherwise be restored by
beneficiary.
This guarantee is a continuing guarantee on the part of Guarantor, which
shall be governed by the laws of the State of New York without giving
effect to the conflict of law principles there of and shall remain
effective until written notice of termination is delivered to CS First
Boston's offices at the above address; provided, however, that
notwithstanding notice of termination, this guarantee shall remain
effective with respect to all obligations of Obligor incurred prior to CS
First Boston's receipt of such notice. Guarantor agrees to pay, on
demand, all out-of-pocket expenses (including legal fees and
disbursements) incurred by beneficiary by reason of the enforcement and
protection of its rights hereunder.
LENNAR CORPORATION Attest:/s/ [ILLEGIBLE]
------------------------------- --------------------------
Asst. Secretary
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Dated: June 13,1996
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
(Corporate seal)
Title: Financial Vice President (Corporate seal)
